Quotulatiousness

January 8, 2013

Obesity meta-study challenged the media narrative

Filed under: Government, Health, Media, Science — Tags: , , , — Nicholas @ 10:00

In sp!ked, Timandra Harkness explains why the publication of “Association of All-Cause Mortality With Overweight and Obesity Using Standard Body Mass Index Categories” in the Journal of the American Medical Association (JAMA) got such a strongly negative reaction from the media and various government spokespeople:

The reason this unassuming paper drew howls of outrage was the same as the reason the benefits of moderate alcohol intake are never noted without criticism: it spoils the headline health message that Fat is Bad.

Even worse, it blows the cover on the great myth — that an epidemic of Bad Fatness is sweeping the developed world. By including the dangerously obese, the innocuously tubby and the healthily plump in one category, ‘overweight including obese’, 60 per cent of the English population are labelled as potentially At Risk.

Being At Risk means these people need guidance and protection from their own vulnerable state, from the temptations of our obesogenic world and the frailties of their own sugar-addicted brains. At such a time of national peril, no measure is too extreme.

But less than a quarter of English adults are obese, according to new figures released just before Christmas, a fraction almost unchanged since 2007. And the ‘morbidly obese’ category — BMI over 40, the ones for whom it really might be worth shedding a few pounds, medically speaking — also remains steady since 2009 at 2.5 per cent of the UK population.

If only one in 40 of us is in significant weight-related danger, why do the other 97.5 per cent of us need to be protected by the state against sugary cereals and fizzy drinks? Could it be because only a few of us have fallen, but all of us are in peril? Weak, foolish and easily led astray, we need to be frightened back on to the right path. Thus Tam Fry, spokesman for the National Obesity Forum — who has called for children to be monitored from birth for signs of obesity — told the Independent: ‘If people read this and decide they are not going to die… they may find themselves lifelong dependents on medical treatment for problems affecting the heart, liver, kidney and pancreas — to name only a few.’

So there we have it. Those extra post-Christmas pounds aren’t going to kill you. If you’re approaching an age at which there’s any real prospect you will die, they probably have a tiny protective effect. But if you’re told the truth, suggest the obesity obsessives, you’ll gorge yourself into a disgusting ball of flab.

January 7, 2013

Paul Wells examines the (virtual) entrails

Filed under: Cancon, Government, Politics — Tags: , , , — Nicholas @ 11:58

In Maclean’s, Paul Wells looks deeply into the hidden meanings of the Prime Minister’s rare interview utterances:

The Prime Minister’s year-end interviews are always worth close reading. Partly because he gives few interviews. Partly because those interviews, widely spaced, show how his thinking changes as circumstances do. This year the changes are stark.

The part I’ve just quoted came when Friesen asked Harper about the possibility that Bashar al-Assad might use chemical weapons against Syrian opponents of his regime.

Would NATO intervene? “Well, I don’t want to speculate.”

Is the use of what we used to call weapons of mass destruction a “red line,” as the Obama administration has called it? That was the question that got Harper talking about risks and caution. “What we can continue to do, as I say, is try to work with elements of the opposition and others to try to push that country to a better solution and try to avoid further escalation of this conflict.”

This is what being Prime Minister does to you. A decade ago, when conversation turned to the use of chemical or biological weapons and the theatre was Iraq, it was Jean Chrétien talking about risks and caution and Harper urging red lines. I dare hope we’ll never get to test the hypothetical in Syria, but it was not only when it came to Assad that this year’s Harper was notably less cocky than previous years’. Chastened, one might say, by a year when the world turned out to be more complex than advertised.

Discounting for total political dysfunction

Filed under: Business, Economics, Government, USA — Tags: , , , , , — Nicholas @ 10:30

The Economist reports on last week’s “deal” in Congress and why the markets are still able to function in spite of the almost unprecedented level of political uncertainty:

Markets now live in the policy equivalent of Beirut in 1982. They have adjusted to perpetual political dysfunction. Over the last eight weeks, as the fiscal cliff talks stumbled, revived, collapsed, then came to life again, market movements were surprisingly narrow, and much of them could be explained by tax considerations as investors prepared for higher capital gains and dividend rates. The sang froid perplexed many of us who follow the policy process for a living and knew how high the stakes were. But perhaps we were too close to it. You can steep yourself in the intricacies of political coalitions, the electoral calendar, the makeup of the executive, senate and house, the interaction of permanent and temporary fiscal policy and such arcana as reconciliation, filibusters and blue slips, and yet still not know how to model the outcome. The fiscal cliff perfectly illustrated this: the people closest to the process didn’t know any better how it would end than those reading the newspapers, or not reading the newspapers, for that matter. There were just too many moving parts.

Richard Bookstaber once attributed the evolutionary success of the cockroach to coarse decision rules: it ignores most of the information around it and responds only to simple signals. Investors do something similar when confronted with hopeless complexity. They boil it down to a binary question: disaster/no disaster. Then they ignore all the idiosyncratic inputs and ask: what does experience suggest the probability of disaster is? Four times in the last two years, politicians went up to some do-or-die deadline without going over: in December, 2010, when the Bush tax cuts first came up for expiration; in April, 2011, when the federal government nearly shut down for lack of discretionary spending authority; the following August, when Treasury was days away from hitting the hard debt ceiling; and December, 2011, when the payroll tax cut first came up for expiration. In each case, one side, or both blinked; tax rates never went up, the government never shut down, and Treasury did not stop paying bills, much less default. It was, arguably, a better record than in 1995-96 when the federal government shut down twice and Bill Clinton threatened to suspend social security payments if Newt Gingrich’s Republicans didn’t raise the debt ceiling. Ignore the specifics of the latest episodes, and the logical conclusion is that despite their differences, both sides have powerful incentives to avoid disaster, so they will.

And who are the policy experts to say otherwise? For all the twists and turns, the cliff negotiations ended up where the median market participant a few months ago assumed they would: with a short-term fix and the remainder stuffed in a can and kicked down the road.

What’s that odd whistling sound coming from Wall Street?

January 5, 2013

Jeffrey Simpson on the First Nations’ “Dream Palace”

Filed under: Cancon, Government, History — Tags: , , , , — Nicholas @ 13:19

I didn’t expect to read this in the Globe and Mail which is usually an institution that discusses First Nations issues very carefully indeed:

Large elements of aboriginal Canada live intellectually in a dream palace, a more comfortable place than where they actually reside.

Inside the dream palace, there are self-reliant, self-sustaining communities — “nations,” indeed — with the full panoply of sovereign capacities and the “rights” that go with sovereignty. These “nations” are the descendants of proud ancestors who, centuries ago, spread across certain territories before and, for some period, after the “settlers” arrived.

Today’s reality, however, is so far removed in actual day-to-day terms from the memories inside the dream palace as to be almost unbearable. The obvious conflict between reality and dream pulls some aboriginals to warrior societies; others to a rejection of dealing with the “Crown” at all; others to fights for the restoration of “rights” that, even if defined, would make little tangible difference in the lives of aboriginal people; and still others, such as Attawapiskat Chief Theresa Spence, to go on a hunger strike.

Chief Spence, leading a group or “nation” of about 1,500 people on the shores of James Bay, demanded at the beginning of her strike a series of meetings with the Governor-General and the Prime Minister. This demand reflected a very old and very wrong idea (part of dream-palace thinking) that the “Crown” is somehow an independent agency with which aboriginal “nations” have a direct relationship, whereas the “Crown” is nothing of the sort.

The “Crown” is the Government of Canada, a matter of clearly established constitutional law, which is why Chief Spence made her demand to meet the Prime Minister, too. Stephen Harper was correct in refusing a face-to-face meeting, since a prime minister should not be blackmailed into doing what any group or individual wants.

Bryan Caplan’s “Libertarian Purity Test”

Filed under: Government, Liberty, Politics — Tags: — Nicholas @ 12:56

I’m nowhere near as doctrinaire a libertarian as I used to be: I scored only 79 (out of a possible 160) on this test. It’s clearly my minarchist tendencies that kept me in the bottom half of the scoring (I prefer the “nightwatchman” state with police, courts, and military still being valid activities for the government: to a true anarchist that makes me a splitter if not an actual traitor).

This is the Libertarian Purity Test, which is intended to measure how libertarian you are. It isn’t intended to be any sort of McCarthyite purging device — just a form of entertainment, hopefully thought-provoking. I like it a lot better than the more famous “World’s Shortest Political Quiz” because I haven’t stated the questions with any intent to give an upward bias to a test-taker’s score, and because it gives a clearer breakdown between hard and soft-core libertarians. Enjoy, suggest your friends try it out, and see how you compare to other test-takers…

A note on meaning: The word privatized as used throughout the survey means that a given government service is henceforth supplied by the free market and paid for by consumers. It is distinguished from sub-contracting in which the government uses tax money to hire a private firm to provide a government service.

January 4, 2013

On politicians needing to kick their own asses

Filed under: Government, Media, Politics, USA — Tags: , , , , — Nicholas @ 11:58

Nick Gillespie responds to a recent Bob Woodward column:

In sort-of documenting the dysfunction of a government that can’t even trim chump change from its petty cash drawer, much less write and pass a goddamned budget, Woodward manages to also illustrate why press solons are pretty useless in this whole process too. Sequestration cuts aren’t odious, except to congenital pants-wetters on both sides of the aisle (such as the neo-con defense hawks at the American Enterprise Institute and Leon Panetta, who can’t abide a single dollar ever being cut from any military budget, even after the Second Coming of Christ and the beating of swords into non-voting GM shares). We’ve been racking up trillion-dollar annual deficits for years now, and the idea of cutting $3 trillion from future deficits over a 10-year period causes things to explode? That shouldn’t be a reach under any circumstances, but especially under one in which both parties agree that we need to stop spending money we don’t have on things we don’t need. If the leadership of both parties couldn’t agree to $3 trillion in deficit trims over a decade in which they expect to spend between $40 trillion and $47 trillion, they weren’t going to agree to cuts of $1.2 trillion anyway. That’s the the real story, and it’s one that need to be retold every single day.

Woodward’s invocation of today’s “vulture politics” and his by-comparison invocation of the good old Reagan days is ridiculously ahistorical, especially coming from one of the guys who presided over the past 40-plus years of American history. Today’s political situation isn’t unique in its “demonization” of the opposition. Jesus Christ, George McGovern likened Nixon to Hitler and Reagan was attacked in similar terms. As was Clinton (by Jerry Falwell, who credited the Man from Hope with multiple murders in Arkansas). And then there was also the Bushitler stuff and novels and faux-documentaries about Dubya’s assassination. Somehow, both sides somehow managed to pass budgets (as awful as they were). The fact that Boehner takes a lot of man-tan heat and Obama is called a socialist is light fare by comparison. What is different is the inability of our top men to freaking complete the most basic tasks required of them: to hash out what they government is going to spend each year according to basic and simple-to-understand legislative rule.

In the end, that is not something mystical or overly complicated or tough because they belong to different parties. It’s the easiest thing in the world to get done and while of course “staffers” will do most of the grunt work, Boehner and Obama — and Harry Reid, the hugely incompetent Senate leader who is arguably the single-most responsible villain in the whole dramedy, need to be running the show.

And when it comes to kicking their own asses, our triumvirate of leaders — Obama, Boehner, and Reid — should get in line behind the rest of us. In the end, we pay their tab, so we should be at the front of the line.

January 3, 2013

Rhode Island’s 38 Studios the new poster child for crony capitalism

Filed under: Business, Gaming, Government, Media, Technology — Tags: , — Nicholas @ 11:14

The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn’t just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business.

Former Boston Red Sox pitcher Curt Schilling, an iconic figure in New England after anchoring a historic playoff comeback which ended a legendary 86-year title drought, founded 38 Studios near the end of his baseball career in the hopes of becoming a big shot in the intensely competitive multi-player gaming world.

Since 2006, Schilling invested millions of his own fortune into 38 Studios, and with the self-assured bravado he exhibited as a major league baseball player, set out to find investors to infuse his company with the roughly $50 million needed to complete 38 Studios’ first game. Although Schilling is the kind of local legend who could get a meeting with every venture capitalist in New England, Massachussets VCs passed on 38 Studios. WPRI-TV’s Ted Nesi reported that one such potential investor said “it would have taken a lot of babysitting to do a deal with Schilling because he was inexperienced and the management was inexperienced.”

Enter Gov. Donald Carcieri (R-R.I.), term-limited and searching for a legacy after presiding over one of the worst state economies in the U.S., featuring long spells of double-digit employment and frequent last-place finishes in rankings of business friendliness. In a classic spasm of “do something, anything” government desperation, Carcieri made it his mission to lure 38 Studios from its headquarters in Maynard, Massachusetts to Rhode Island.

Using his bully pulpit as both governor and chairman of the Rhode Island Economic Devlopment Corporation (RIEDC), a quasi-public agency whose mission is to promote business in the state, Carcieri pushed hard for 38 Studios to receive a $75 million taxpayer-guaranteed loan.

Each loan guarantee must be approved by the Rhode Island legislature, and when the votes were cast in 2010, only one lawmaker voted against it. Rep. Bob Watson (R-Greenwich) noted “a lot of red flags” in a “very risky” deal that was “too fast, too loose, and frankly, a scandal waiting to happen.” Watson added “more often than not, politicians are very poor when it comes to making business decisions.”

Comitology and the EU

Filed under: Bureaucracy, Europe, Government, Humour — Tags: , — Nicholas @ 10:58

Alexandra Swann notes that the great C. Northcote Parkinson predicted the EU’s decision-making mechanics with great accuracy:

If we listen to Daniel Guéguen, Professor of European Political and Administrative studies at the College of Europe, the Europhile madrassa, the equation spells the downfall of the European Union.

Guéguen has worked as a Brussels lobbyist for 35 years; he is a full time federast and one of the remaining true believers in the EU. Given his commitment to the EU project, when he deems its system of governance, comitology, “an infernal system” perhaps it’s time to listen.

The concept of Comitology was invented by the incomparable Professor C Northcote-Parkinson in his seminal work Parkinson’s law of 1958. It was meant as a satire but, like many of the best jokes, they either get elected or, in this case, embedded in the bureaucracy. Here is the Professor explaining the comitology and his equation:

    x=(mo(a-d))/(y+p b1/2)

    Where m = the average number of members actually present; o = the number of members influenced by outside pressure groups; a = the average age of the members; d = the distance in centimetres between the two members who are seated farthest from each other; y = the number of years since the cabinet or committee was first formed; p = the patience of the chairman, as measured on the Peabody scale; b = the average blood pressure of the three oldest members, taken shortly before the time of meeting. Then x = the number of members effectively present at the moment when the efficient working of the cabinet or other committee has become manifestly impossible. This is the coefficient of inefficiency and it is found to lie between 19.9 and 22.4. (The decimals represent partial attendance; those absent for a part of the meeting.)

This beautifully encapsulates the terrifying silliness of what is going on in the tubular steel and stripped Swedish pine chairs of Brussels, and for anyone with an interest in transparency or good governance, it is a serious concern. After all, under various estimates upwards of 75 per cent of our laws, the laws that govern the minutiae of our lives are made in the sterile Committee rooms of the Breydel, Berlyamont, Justis Lupsius and other buildings in the EU quarter of Brussels. That this cosmic joke now governs our lives is just a factor of the brobdingnagian reality of our membership of the EU.

January 2, 2013

The corporate welfare pork in the fiscal cliff negotiations

Filed under: Business, Government, USA — Tags: , , , , — Nicholas @ 09:57

As widely expected, Congress did finally put something to a vote to “save” the country from going over the fiscal cliff. And as everyone should have expected, even a bill to “save” the country was still amply provided with pork for certain corporations:

Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on.

The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well. One of the core shifts in the Reagan era was the convergence of wealthy individuals who wanted to pay less in taxes — many from the growing South — with corporations that wanted tax breaks. Previously, these groups fought over the pie, because the idea of endless deficits did not make sense. Once Reagan figured out how to finance yawning deficits, the GOP was able to wield the corporate sector and the new sun state wealthy into one force, epitomized today by Grover Norquist. What Obama is (sort of) trying to do is split this coalition, and the extenders are the carrot he’s dangling in front of the corporate sector to do it.

Most tax credits drop straight to the bottom line — it’s why companies like Enron considered its tax compliance section a “profit center”. A few hundred billion dollars of tax expenditures is a major carrot to offer. Surely, a modest hike in income taxes for people who make more than $400k in income and stupid enough not to take that money in capital gain would be worth trading off for the few hundred billion dollars in corporate pork. This is what the fiscal cliff is about — who gets the money. And by leaving out the corporate sector, nearly anyone who talks about this debate is leaving out a key negotiating partner.

December 30, 2012

The Gross National Happiness hoax

Filed under: Asia, Economics, Government, Media — Tags: , , , , , — Nicholas @ 12:14

Remember the brief flicker of media interest in replacing the Gross National Product measurement with something called Gross National Happiness? It didn’t seem to catch on, which is fortunate, because the poster child for GNH is Bhutan:

Mainstream economists and almost all national bureaucracies around the world use measures such as Gross Domestic Product (GDP) or Gross National Product (GNP) to measure and track economic activity. These measurements are evidence-based. Hard data is aggregated and analyzed to come up with a picture of a national economy that is accurate and reliable. Based on such data, sound economic and development policies can be formulated. Not so for the Kingdom of Bhutan — a country ruled with an iron fist by its northern-based Buddhist Drukpa monarchy and elite with a transparent façade of democracy designed to obscure the true state of affairs in that country.

Having engaged in a massive ethnic cleansing campaign against its Lhotsampa minority of Nepalese origin from the mid 1980’s to the early 1990’s, Bhutan’s leadership prefers to use the amorphous and malleable measure of Gross National Happiness (GNH) to claim that their citizens — at least the ones that were not forcibly evicted from the country — are among the “happiest” in the world. Being a wholly subjective measure that utilizes no quantifiable data, GNH has been creatively utilized as a propaganda tool by the Drukpa leadership to project an image of Bhutan as a country of smiling Buddha’s. Little do most outside observers know the dark underbelly of this seemingly innocuous portrayal. It willfully ignores the history of ethnic cleansing and institutionalized racial intolerance against Lhotsampas inside Bhutan that continue unabated to this day.

[. . .]

With its record of ethnic cleansing and intolerance, it is morbidly amusing to hear propaganda that Bhutan is some sort of mythic “last Shangri-La,” a land of harmony and peace. Nothing could be more removed from the truth. The charade of ushering in a constitutional monarchy in the last few years and the ascension of the charismatic 31-year-old Oxford-educated King Jigme Khesar Namgyal Wangchuk has led to a fresh burst of official Bhutanese propaganda expounding the unique nature of their happy people and of Gross National Happiness in general.

“We Have Passed The Point Of No Return”

Filed under: Economics, Government, Politics, USA — Tags: , , , , , , — Nicholas @ 11:22

Zero Hedge recommends that everyone listen to outgoing Congressman Ron Paul’s analysis of the fiscal cliff negotiations:

In a little under three minutes, Ron Paul explains to a somewhat nonplussed CNBC anchor just how ridiculous the charade that is occurring in D.C. actually is. This succinct spin-free clip should be required viewing for each and every asset-manager, talking-head, propagandist, and mom-and-pop who are viewing the last-minute idiocy of the ‘fiscal cliff’ debacle with some hope that things will be different this time. “We have passed the point of no return where we can actually get our house back in order,” Paul begins, adding that “they pretend they are fighting up there, but they really aren’t. They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it.” With social safety nets available to rich and poor, there is no impetus for change and “the country loses,” but Paul concludes, the markets are starting to say “there is a limit to this.”

December 28, 2012

The new Zero-Sum era of American politics

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 10:18

P.J. O’Rourke offers some mild congratulations to President Obama for a few accomplishments during his first term, then explains why the way he won his second term is a bad thing both for the United States and for the rest of the world:

You sent a message to America in your re-election campaign. Therefore you sent a message to the world. The message is that we live in a zero-sum universe.

There is a fixed amount of good things. Life is a pizza. If some people have too many slices, other people have to eat the pizza box. You had no answer to Mitt Romney’s argument for more pizza parlors baking more pizzas. The solution to our problems, you said, is redistribution of the pizzas we’ve got — with low-cost, government-subsidized pepperoni somehow materializing as the result of higher taxes on pizza-parlor owners.

In this zero-sum universe there is only so much happiness. The idea is that if we wipe the smile off the faces of people with prosperous businesses and successful careers, that will make the rest of us grin.

There is only so much money. The people who have money are hogging it. The way for the rest of us to get money is to turn the hogs into bacon.

Mr. President, your entire campaign platform was redistribution. Take from the rich and give to the . . . Well, actually, you didn’t mention the poor. What you talked and talked about was the middle class, something most well-off Americans consider themselves to be members of. So your plan is to take from the more rich and the more or less rich and give to the less rich, more or less. It is as if Robin Hood stole treasure from the Sheriff of Nottingham and bestowed it on the Deputy Sheriff.

But never mind. The evil of zero-sum thinking and redistributive politics has nothing to do with which things are taken or to whom those things are given or what the sum of zero things is supposed to be. The evil lies in denying people the right, the means, and, indeed, the duty to make more things.

The Military-Industrial Complex leads to “a bloated corporate state and a less dynamic private economy”

Filed under: Bureaucracy, Economics, Government, Military, USA — Tags: , , , , , — Nicholas @ 09:59

An older article from Christopher A. Preble, reposted at the Cato Institute website:

The true costs of the military-industrial complex, they explain, “have so far been understated, as they do not take into account the full forgone opportunities of the resources drawn into the war economy.” A dollar spent on planes and ships cannot also be spent on roads and bridges. What’s more, the existence of a permanent war economy, the specific condition which President Dwight Eisenhower warned of in his famous farewell address, has shifted some entrepreneurial behavior away from private enterprise, and toward the necessarily less efficient public sector. “The result,” Coyne and Duncan declaim, “is a bloated corporate state and a less dynamic private economy, the vibrancy of which is at the heart of increased standards of living.”

The process perpetuates itself. As more and more resources are diverted into the war economy, that may stifle — or at least impede — a healthy political debate over the proper size and scope of the entire national security infrastructure, another fact that Eisenhower anticipated. Simply put, people don’t like to bite the hand that feeds them.

And that hand feeds a lot of people. The Department of Defense is the single largest employer in the United States, with 1.4 million uniformed personnel on active duty, and more than 700,000 full-time civilians. The defense industry, meanwhile, is believed to employ another 3 million people, either directly or indirectly.

What’s more, these are high paying jobs. In 2010, when the average worker in the United States earned $44,400 in wages and benefits, the average within the aerospace and defense industry was $80,100, according to a study by the consulting firm Deloitte. And 80 percent of that industry’s revenue comes from the government.

December 26, 2012

QotD: Those who have given up liberty for “security”

Filed under: Government, Liberty, Quotations, USA — Tags: , , , , , — Nicholas @ 11:13

Furthermore, do we really want to live in a world of police checkpoints, surveillance cameras, metal detectors, X-ray scanners, and warrantless physical searches? We see this culture in our airports: witness the shabby spectacle of once proud, happy Americans shuffling through long lines while uniformed TSA agents bark orders. This is the world of government provided “security,” a world far too many Americans now seem to accept or even endorse. School shootings, no matter how horrific, do not justify creating an Orwellian surveillance state in America.

Do we really believe government can provide total security? Do we want to involuntarily commit every disaffected, disturbed, or alienated person who fantasizes about violence? Or can we accept that liberty is more important than the illusion of state-provided security? Government cannot create a world without risks, nor would we really wish to live in such a fictional place. Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens’ lives. We shouldn’t settle for substituting one type of violence for another. Government role is to protect liberty, not to pursue unobtainable safety.

Our freedoms as Americans preceded gun control laws, the TSA, or the Department of Homeland Security. Freedom is defined by the ability of citizens to live without government interference, not by safety. It is easy to clamor for government security when terrible things happen; but liberty is given true meaning when we support it without exception, and we will be safer for it.

Ron Paul, “Seeking Total Security Leads to a Totalitarian Society”, Eurasia Review, 2012-12-26

December 25, 2012

The market failure of Christmas

Filed under: Economics, Government — Tags: — Nicholas @ 09:44

Not to encourage miserliness and general miserability at Christmastime, but here’s a realistic take on the deadweight loss of Christmas gift-giving:

In strict economic terms, the most efficient gift is cold, hard cash, but exchanging equivalent sums of money lacks festive spirit and so people take their chance on the high street. This is where the market fails. Buyers have sub-optimal information about your wants and less incentive than you to maximise utility. They cannot always be sure that you do not already have the gift they have in mind, nor do they know if someone else is planning to give you the same thing. And since the joy is in the giving, they might be more interested in eliciting a fleeting sense of amusement when the present is opened than in providing lasting satisfaction. This is where Billy Bass comes in.

But note the reason for this inefficient spending. Resources are misallocated because one person has to decide what someone else wants without having the knowledge or incentive to spend as carefully as they would if buying for themselves. The market failure of Christmas is therefore an example of what happens when other people spend money on our behalf. The best person to buy things for you is you. Your friends and family might make a decent stab at it. Distant bureaucrats who have never met us – and who are spending other people’s money – perhaps can’t.

So when you open your presents next week and find yourself with another garish tie or an awful bottle of perfume, consider this: If your loved ones don’t know you well enough to make spending choices for you, what chance does the government have?

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