Life, Liberty & The Pursuit of Happiness

Global revolt of the masses?

by Rakinder Grover

In today's WSJ, Daniel Henninger writes that electorates around the world are casting no-confidence votes against incumbent politicians and bureaucrats.  While I personally am not ready to call this a sustainable trend, it's something to keep an eye on - "green shoots"?  An excerpt:

Some search for an ideological trend toward the left or right in these votes, but the only evident trend is to strike out at whichever blob is currently in power. Even as Americans turned over their country to liberal Democrats, opinion polls showed that the British people were turning toward the Conservatives for relief from listless Labour.

What accounts for the global electorate's growing disgust with the political overclass? Try this: No matter the ideological cast of these governments, they all hold in common one policy: the inexorable upward march of national indebtedness. It has arrived at the edge of the cliff.

We can't get reform with backroom deals

by Rakinder Grover

This post in Mish Shedlog's blog is quite revealing.  Do we think we'll get real change/reform if the government cuts such deals and lines the pockets of the existing players? Liberals like Arianna Huffington are getting quite upset about this. And this is certainly not the free market working.  In a few years after the excitement of "doing something" dies down and when people start to realize that things have not really changed (and likely have gotten worse), see insurance and pharma companies still making profits - they'll blame the free market and capitalists.  The problem is the "reformers", even those with "good intentions", are not working to cause real reform.  That requires breaking the cozy relationship of government and business and they are not going to bite the hand that feeds them.

Be scared!

by Reena Kapoor

Here is an excellent video The American Form of Government which provides a real civics education.  Besides providing more evidence for the fact that public education has failed (how many Americans know we were designed to be a Republic and not a Democracy) it also offers great illustration of why Democracy (which US was not designed to be) is often antithetical to liberty.  We should be scared! And while I hate the cynicism that has come upon my own thinking I am convinced USA has turned into a tyranny of the elite - an oligarchy - where the rest of us are ...well...not important.  Wall Street + Obama's henchmen, Obama + UAW + GM or Obamacare + AMA .....   The only thing that remains to be debated is how soon the police state will descend upon our everyday lives. 

China Goes Brazilian

by AW

John Lee, author of Will China Fail? writes in his article Is China Really An East Asian Success Story

McKinsey & Co suggested that the average Total Factor Productivity of large state-owned and state-controlled industrial firms was half that of privately owned firms. Bear in mind that the 152 centrally managed state-owned-enterprises or SOEs are the most efficient of the state-owned and state-controlled entities. Even then, 80% of profits from all centrally managed SOEs come from fewer than a dozen firms such as China Mobile, Sinopec, and China National Petroleum Corporation—all operating in virtual monopoly environments.

In other words, the vast majority of even the centrally managed SOEs, despite easy credit and protected environments, are poor performers. Most of the approximately 120,000 provincial state-owned or state-controlled enterprises and collectives perform even worse. To put the situation in perspective, China’s overall use of capital is twice as inefficient as India’s when measured in terms of capital inputs used to produce additional output.

The absolute size of China means that even if its economy falters, China will continue to be a major presence in the region. However, given the weaknesses in its economic strategy and civil society, we need to consider the possibility that China is becoming more like an unbalanced South American giant such as Brazil than an East Asian success story such as Taiwan and South Korea.

Climate Change Apostates Rising

by AW

Kimberley Strassel of WSJ notes in her column Climate Change Climate Change

Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers.

African Dead Aid

by AW

There is a new voice speaking clearly on an old issue. The African ex-investment banker Dambisa Moyo makes a strong case against foreign aid to Africa in her new book Dead Aid.

In her WSJ article, Moyo nails the development economics issue...

Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa. Yet real per-capita income today is lower than it was in the 1970s, and more than 50% of the population -- over 350 million people -- live on less than a dollar a day, a figure that has nearly doubled in two decades.

And one of its major causes: aid-propped corrupt governments.

A Lynch Mob! ... and the disengagement of private enterprise

by Rakinder Grover

A good article by David R. Kotok in The Big Picture compares the recent action in the House of Representatives with that of a lynch mob.  Besides the issues of the violation of the rule of law, the abrogation of contracts and property rights, that have been raised by some over the last few days, he also highlights the real and immediate risk of businesses becoming extremely cautious.  Careful, lest their profit seeking activity attract the ire of a populist lynch mob, private enterprise is likely to try and stay as far as it can from government. With the expanding scope of government, that is becoming increasingly harder to do, so the risk translates to a retrenchment of private enterprise unsure of the rules, risks and rewards.  This does not portend well for economic recovery, innovation and freedom in general.

Michael Lewis on AIG Bonus Ballyhoo

by AW

Michael Lewis offers timely wisdom on AIG bailout. Clear reasoning on a passion-arousing topic.

The complexity of the issues at the heart of the crisis paralyzes the political processes’ ability to deal with them intelligently. I have no doubt that, by the time this saga ends, we will all know what happened to every penny of that $165 million in bonuses and each have our opinion of the morality of it.

I doubt seriously we will ever understand the morality of the $173 billion payment that is the far more serious issue. For instance, Goldman Sachs, which received about 8 percent of the pile, or $13 billion, has claimed publicly that the money was, to them, a matter of indifference, as Goldman had hedged itself against a possible collapse of AIG -- by making bets against AIG.

This suggests that it was clear to at least one market player, before the collapse, that AAA-rated AIG was behaving in ways that might lead to its demise -- which is to say that there was really no responsible place to lay off these bets. (So why bail out those who made them?)

It also suggests that it is a matter of indifference to Goldman Sachs whether AIG lived or died, as either way it was protected. (So why bail it out?)

Soviet vs. Russia

by Anurag Wadehra

The Soviet gulags may have faded from the public eye. Today, Russia is viewed as a nationalist, corrupt state that jails its few billionaires and kills its few brave dissidents. A bone-chilling review of the book Inside The Stalin Archives by Jonathan Brent illustrates just how far has the country traveled from its previous political model - and in what way it is still pinned to its past.

The books shows that the Soviet political model was based on three points: an ideological view that human nature was socially constructed putty, that the policy tool for shaping humans was terror and this required active destruction of any and all laws. 

"How We Got Into This Frackin' Mess" Chart

by Anurag Wadehra

Stephen Hicks has a conceptually elegant but simple chart explaining the pathologies of a mixed economy - when free market is "mixed" with government intervention. For fancier titles of the chart, Dr. Hicks suggests...

Academic title: “The Sociology of Dysfunctional Nonstandard Political-Economic Systems.”

Public Intellectual title: “The Evolution of the Mixed Economy.”

I wonder if there is a similar attempt by the Socialists to explain their worldview. At least their arguments - good, bad and ugly - could be laid bare.