Spirited animals
Who’s less rational–Washington or Wall Street?
National Review editor Kevin Williamson attacks the one-sided application of arguments about investor irrationality to justify government regulation of private markets:
The fallacy implicit in the conventional argument for more robust financial regulation is that animal spirits – the whole menagerie of greed, panic, pride, thrill-seeking, irrational exuberance – distort only profit-seeking activity. But they are at least as likely to distort efforts to regulate profit-seeking activity. In truth, the animal spirits of regulators probably are more dangerous than those of Wall Street sharks: Competition and the possibility of economic loss constrain players in the marketplace, but actors in the political realm have the power to compel conformity and uniformity among those under their jurisdiction. The entire economy is yoked to their animal spirits, and the housing bubble was a consequence of that fact. We have bred an especially dangerous hybrid creature in the “too big to fail” private corporation, the bastard offspring of a union between Wall Street’s animal spirits and Washington’s.
Williamson makes a good point. Politicians to do not soberly survey the landscape and objectively diagnose the causes of our financial ills. They are instead attempting to respond to and even anticipate outraged constituents. They’re also jostling with each other to have the most dramatic, headline-grabbing “deliverable” in today’s cluttered national spotlight.
Skirting the real question
David Broder writes out against individual accountability for potential Bush-era abuses. He’s not standing with those who defend the alleged practices, just worried the costs are too high:
In times like these, the understandable desire to enforce individual accountability must be weighed against the consequences. This country is facing so many huge challenges at home and abroad that the president cannot afford to be drawn into what would undoubtedly be a major, bitter partisan battle over prosecution of Bush-era officials. The cost to the country would simply be too great.
The problem with Broder’s reasoning is that’s it’s purely question begging. What, exactly, are the consequences? We didn’t drop the atomic bomb or intern Japanese-Americans during moments of leisure. Morally questionable actions usually take place because we’re facing challenges on multiple fronts.
That’s not to say Broder is wrong. The consequences of investigation and prosection of Bush-era authorizations may well outweigh the benefits. But that’s a conclusion, not a starting place.
–Sam
Segregation and Game Theory
Yesterday Marc asked:
…Should the government act to undo residential segregation that has occurred largely because of the choices individuals make about where to live (racist or not), as opposed to because of discriminatory laws or outright racism?
Here’s an interesting video that examines how slight racial preferences in terms of residential housing can lead to complete racial segregation, give time:
-Jake
Healthcare and human rights cont.
A response to the replies…to my response to Jonah Goldberg
I posted yesterday on healthcare and human rights in response to Jonah Goldberg at the National Review. The comments were interesting and I thought I might raise some issues and questions in response. I’ve written before that our collective understanding and agreement on what constitutes a human right is surprisingly limited, given how much moral weight people associate with the term.
1. Negative Rights vs. Positive Rights.
I was trying to argue that the distinction between negative rights (i.e. the right not to have one’s speech abridged) and positive rights (i.e. the provision of something, for example healthcare) isn’t as stark as it seems at first glance. They both require the government to do and not do certain things.
Libertarianism
What the Cato Institute doesn’t want you to know. Not really.
Libertarians are gaining political steam in light of the worries over Obama’s proposed healthcare changes. But what is libertarianism?
To describe any ‘ism’ is a challenge, but libertarianism presents a more modest task than its mainstream ideological friends, liberalism and conservatism. That is not to say that this analysis is exhaustive–far from it.
That said, there are two clear strains to libertarianism: the philosophical and the practical. I’ll attempt to outline them and present some critiques.
A. The philosophical one, popularized in recent decades by Robert Nozick, prioritizes the idea of rights.
Who gets Bubbles the chimp?
Michael Jackson and estate tax morality
Michael Jackson lived and died abnormally. His funeral, in the same vein, will likely feature a public viewing at his famed Neverland Ranch. Chances are he will be buried in his trademark costume. After that escapade, our memory of the gloved and sometimes loved one will fade. We will be left to wonder and witness what staying power his music will have in the coming decades. For a few people, however, Jackson’s legacy means more than music. It is a matter of M-O-N-E-Y. What will happen to his assets?
It’s been discovered recently that there might have been a will.
People’s right to pass on their assets after they’ve died is fraught with moral complications, as Sam discussed in an earlier post.
Genius and self-respect
Are we responsible for our willingness to work hard?
Continuing our David Brooks kick, the NYT columnist recently summarized two books on the formation of genius: The Talent Code by Daniel Coyle and Talent Is Overrated by Geoff Colvin.
He writes:
The key factor separating geniuses from the merely accomplished is not a divine spark. It’s not I.Q., a generally bad predictor of success, even in realms like chess. Instead, it’s deliberate practice. Top performers spend more hours (many more hours) rigorously practicing their craft.
The primary trait…is not some mysterious genius. It’s the ability to develop a deliberate, strenuous and boring practice routine.
This presents a challenge for many contemporary egalitarians, whose main argument is:
1. All people are equal morally and thus, ex ante, deserve the same amount of resources or welfare.
2. Inequalities in resources or welfare are justifiable only insofar as they reflect people’s choices, and not their random-luck.
3. The luck of being born with high intelligence, nurturing parents, wealthy parents, etc. significantly determines one’s resources and welfare.
Therefore, 4. Justice demands a massive resource redistribution. One does not deserve more than another merely due to luck.
However, what if diligent practice really is the biggest factor, as Brooks implies? That doesn’t logically invalidate the egalitarian moral argument (steps 1 and 2), but it complicates its policy conclusion (step 4), since the resource/welfare distribution might not parallel the distribution of luck, but rather the distribution of diligence levels.
Is the estate tax fair?
by Sam
Michael Kinsley takes on the estate tax in today’s Washington Post, in light of discrepancies between the tax in the House and Senate budgets. The House included Obama’s plan—45 percent on estates over $3.5 million. The Senate has been more lenient and “Ten [Senate] Democrats have joined the Republicans in calling for a $10 million exclusion and a 35 percent rate.”
Kinsley is appalled. The Senate plan essentially abolishes the estate tax (there aren’t a lot of $7 million and over households), which Kinsley lambastes as philosophically weak.
There are philosophical arguments against the estate tax that aren’t contemptible, though they also aren’t convincing. My favorite is that money is only one advantage that parents can pass on to their children. If you reduce the role of money in determining where people end up, you aren’t leveling the playing field. You’re just tilting it in favor of other inherited qualities such as talent or intelligence.
[. . .]
But why the populist fury over those AIG bonuses of a few million dollars while no one seems to care much about billions being transferred through inherited wealth? The obvious answer — that there’s a difference between what people do with our hard-earned money and what they do with their own hard-earned money — isn’t actually as persuasive as it seems.
The estate tax is one of those issues that seems to endlessly plague public policy debates, with each side outraged at the other.
While Kinsley canvasses the terrain of popular argumentation fairly well, he does miss what might be the crux of the debate: to whom does the money of the dead belong?
Early French sociologist Emile Durkheim famously railed against inheritance because his belief was that the state had a fair claim on the money after years of expending public resources (in police and courts) to protect it.
Over a hundred years after Durkheim wrote, the core question remains one of ownership. The arguments for the estate tax can focus on transfer (ownership cannot be transferred) or debt (you owe the government money for your protection, an obligation deferred until death). The arguments against estate tax are the converse, that ownership is limitlessly and freely transferrable or that it is absolute after income tax.
Debates over how the inheritance tax does or does not advantage the next generation are important and interesting, but they’re also ancillary. The question of ownership must be decided first. Both sides argue that there’s actually no “difference between what people do with our hard-earned money and what they do with their own hard-earned money”—they just disagree on whether it is, in fact, ours or theirs.
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