Tuesday, November 15, 2011

How to Rid the World of Lobbyists


Equality and Envy
The Proper Role of Government
By: Kim Moreland|Published: November 15, 2011

This is today’s Breakpoint, today not by Chuck Colson, but by Kim Moreland.  This column is generally good, pointing out that the kind of social/political equality that should interest Christians is not the current “income equality” that is currently so incessantly demanded.  Rather, it is equality before the law and within the political process.  From this Moreland goes on to say, “But the Christian tradition also puts limits on the size and scope of government.”

Amen, and amen.

Later, Moreland makes this comment:

But we should work to make sure that the law doesn’t treat them [those with larger incomes] more favorably than other, lesser-paid, people. That’s why, for example, lessening the influence of lobbyists is so desperately needed today. Their entire purpose is to shape the rules so that one group benefits at the expense of everybody else.

What needs to be said here, and was not in this column, is that if the proper limits are placed on government, the influence of lobbyists will approach zero.  If the state carefully avoided the matters of taxing to redistribute, of social engineering, of subsidizing businesses, of providing benefits to individuals, and all such manner of things, there would be nothing for lobbyists to do!!!!

Lobbyists today typically spend their time either trying to keep the government out of their business – in the broadest sense of that term - so that business is able to continue (can’t blame them for that) OR trying to get some favor from the government to give them a one-up on everyone else (can and should blame them for this).  But if governments simply stayed out of those areas, lobbying would soon become a thing of the past.

There is one possible exception here.  If governments removed themselves from these areas, people might employ lobbyists to try to persuade governments to re-enter these areas.  My only suggestion to help prevent this involves a liberal application of tar, feathers, and rock salt to such lobbyists, those who hire them, and any legislators who listen to them.

Sunday, November 13, 2011

Unjust Charges of Injustice

Charles Colson has a recent Breakpoint titled “Predators at Large.”  At first glance this conjures up pictures of pedophiles or perhaps those who mug helpless old ladies on walkers.  Perhaps that is the effect Colson wanted as he begins a discussion of so-called “payday lenders.”

These lenders make short-term loans at very high interest rates.  Why does anyone use these lenders?  As Colson points out, it is almost always because they are people whose credit history is so bad that no one else will lend to them.

Colson calls this “predatory lending” and says that those who take out such loans have “fallen victim to human greed.”  Colson condemns this whole practice in no uncertain terms, and this has been the attitude of much of Christendom for a long time.  It sounds horrible to talk about 390% APR loans, doesn’t it?

As is too often the case, we have here an example of Christians failing to do proper economic analysis.  Is there greed involved in these kinds of loans?  Most likely.  Sometimes it might be on the part of borrowers who refuse to delay their gratification until they have the cash in hand.  But more often, I am sure it is simply people who fall into hard economic times.

Are these lenders really “predatory”?  Colson gives a tear-jerking example of a lady who borrowed $500 to pay her car insurance and ended up paying much more than that in interest on her loan.  (As an aside, perhaps we should not be content to concede that everyone has some inalienable right to own a car – but that’s another matter.)

Suppose YOU decided to gather all your available cash:  your retirement savings, your bank accounts, and any other funds you could generate.  With these funds you decide to start a small, personal loan business.  When customers come to you with a credit history that indicates there is only a one-in-five probability that they will pay back the principle of their loan and they have no collateral to secure this loan, what kind of interest rate will you have to charge to keep your little company in business?  These aren’t your friends.  These are strangers with a shaky loan-repayment history.

The answer is, unless you are willing to lose your life savings that you have put into your little company, you are going to have to charge rates high enough to cover the likely default rates on the loans you make.  Since these people cannot even get a loan anywhere else, you are doing them a service by making one available to them.  And remember, they come to you and agree to the terms of the loan.

Colson says of these supposed victims that they “didn’t have any other options.”  But that is simply not true.  They had the options of continuing to shop for a better loan, or not borrowing at all.

To his credit, Colson does not call for the government to shut down such lenders.  He instead points to a church in Pittsburg that has set up program that offers $500 loans with thirteen days interest-free.  This program also encourages those who use it to become savers.

That is a wonderful idea, but it is a charity, not a business.  It is an admirable charity at that, but it’s still a charity.  And as Colson admits, “Not that there aren’t risks, but who ever said that fighting against injustice wouldn’t be costly?”  What is implicit here is this:  unless the clientele of this church’s charity program are somehow self-selecting better credit risks, the church will have a significant number of these loans that will never be repaid.

There is nothing wrong with this.  Clearly, this church is aware of that, and is willing to lose some of its money as part of this charitable endeavor.

But your little loan business is not a charity.  You have to make a profit, and that profit has to be in place even after many of your customers fail to repay all or part of the principle of their loans.  Your loan company, contra Colson, is not “unjust.”  It’s just not a charity.  

Thursday, November 10, 2011

Cut, Ricky, Cut

From ABC News:

GOP presidential candidate Rick Perry’s memory lapse at Wednesday night’s CNBC debate will go down as one of the worst debate flubs in history, but it may not mean the campaign kiss of death that the Twitterverse quickly proclaimed it to be.

Kent comments:

Here is the sort of garbage that has become the subject of political discussions.  I do not endorse Rick Perry.  But I also do not endorse the output of the stupid babblers who worry about a candidate having a bit of memory lapse during a so-called debate.  Two points need to be made here.

First, these side-shows of candidates answering idiotic questions from dimwitted news people are not debates.  I usually pay no attention to these displays of inanity.  Debates would be interesting and informative.  In a debate there are propositions that are affirmed or denied.  Participants give reasoned speeches in support of their contentions.

I don’t expect to see any debates because they are televised by networks that feature idiotic talking heads, and real debates do not require the presence of idiotic talking news heads.  I doubt if most network talking heads would understand a real debate.

As for Mr. Perry’s memory lapse – it does not cause me any concern.  What he could not remember was the name of the third government agency he wants to eliminate.  The reason it does not concern me is because no matter which agency name he recalls, it will be one that needs to be eliminated.  And there are so many that who could expect a candidate to remember them all?

Earlier I said that I did not endorse Rick Perry.  Mr. Perry, you say that if you are elected three executive branch agencies will be gone?  If you will add about a dozen more to your list (and feel free to write it down so you won’t forget), you can count on my vote.

Tuesday, November 1, 2011

It’s the Socialism, Stupid!

Here is an interesting post from The Heritage Foundation.  The key part is as follows:

But a new paper by Jason Richwine, Ph.D. and Andrew Biggs addresses the question of teacher pay head on and asks whether teachers today receive the right level of pay. They find that when benefits such as tenure, health care, and pensions are considered, the typical public-school teacher is well-paid: “We conclude that public-school-teacher salaries are comparable to those paid to similarly skilled private-sector workers, but that more generous fringe benefits for public-school teachers, including greater job security, make total compensation 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year.”

The same study goes on to say:

While union contracts help secure overcompensation for the average teacher, they may still leave the most valuable teachers underpaid. School administrators need to be able to hire and fire teachers as needed, basing personnel decisions on rigorous value-added evaluations and setting pay based on prevailing market rates.

But why should this surprise anyone?  It could be predicted without a study.  With government school teachers we have what is perhaps the worst of all possible situations:  socialism in bed with a union.  The devilish children of such a mating will always be horrible inefficiency and great cost to taxpayers.

We sometimes forget that governments owning schools – which they very directly do in most k-12 schooling – is the classic definition of ‘socialism.’

I have always wondered about the mentality of the person demanding more.  If teaching at a government school doesn’t pay as much as you want, why not try something else?  The study reveals the answer:  you are more likely to get more by lobbying the socialist state than by anything else you might do.

I am often amused by the constant calls of well-meaning people to ‘reform’ various school systems.  Hints of that appear in the second quote from the study above.

But you can’t ‘reform’ your way out of socialism.  Giving new power to officials in a socialist school system will not cure the problem.  The problem is socialism.  The ills of government schools are very predictable, and will be persistent, as long as we insist on using the socialist model.

To expect otherwise borders on insanity.