There Are Two Ways Of Looking At The World -- Gun Rights Edition

As I have written before, for example here, when it comes to politics there are two diametrically opposite ways of looking at the world.  One way is the progressive orthodoxy, pervasive here in Manhattan, and the other way is my way, probably best called libertarian.  The difference has been on full display in the recent debate over gun control in the aftermath of the shootings in Sandy Hook, Connecticut.

Both philosophies start from the premise that human society is filled with flawed behavior and unfair results.  In the progressive view, there is a simple solution to every such human problem:  the government can fix it with new laws ordering people to behave properly, or alternatively through the power to spend money.  The libertarian view sees major problems with these seemingly simple solutions, including that many people do not obey rules, that government actors are themselves flawed and often corrupt, that people engage in evasive strategies, that there are endless unintended consequences, and that the effort to make things perfect through more rules actually makes things worse because of loss of freedom.

Consider the recent debate over gun control.  Probably the leading spokespersons for the progressive position have been President Obama and Mayor Mike Bloomberg of New York.  I’ll let them speak for themselves.  Here are excerpts from President Obama’s speech at Sandy Hook a few days after the shootings:

[T]here have been an endless series of deadly shootings across the country. . . .  We can't tolerate this anymore. These tragedies must end. And to end them, we must change. We will be told that the causes of such violence are complex, and that is true. . . . . But that can't be an excuse for inaction. Surely, we can do better than this. If there is even one step we can take to save another child, or another parent, or another town . . .  then surely we have an obligation to try. 

Mayor Bloomberg issued a statement shortly after the tragedy.  Here are key excerpts:

President Obama rightly sent his heartfelt condolences to the families in Newtown. But the country needs him to send a bill to Congress to fix this problem. Calling for ‘meaningful action’ is not enough. We need immediate action. We have heard all the rhetoric before. What we have not seen is leadership – not from the White House and not from Congress. That must end today.

That captures the progressive view perfectly.  You “send a bill to Congress” and that will “fix the problem.”  No ifs, ands, or buts.  Of course everyone will do what Congress orders them to do, and law enforcement will perform flawlessly.

Unfortunately I think things are a lot more complicated than that.  The best statement I have seen of the other side of the question comes from a guy named Larry Correia, writing at a site called Monster Hunter Nation.  His post is long and should be read in full.  Here are some excerpts:

Police are awesome. I love working with cops. However any honest cop will tell you that when seconds count they are only minutes away.

In the case of Sandy Hook, it took the police  a full 20 minutes to arrive.  That was plenty of time for the shooter to kill 26 people, whether or not he had some fancy “assault weapon.”

The average number of people shot in a mass shooting event when the shooter is stopped by law enforcement: 14. The average number of people shot in a mass shooting event when the shooter is stopped by civilians: 2.5. The reason is simple. The armed civilians are there when it started. . . . 

Gun Free Zones are hunting preserves for innocent people. . . .

The man that attacked the midnight showing of Batman didn’t attack just any theater.  There were like ten to choose from.  He didn’t attack the closest.  It wasn’t about biggest or smallest.  He attacked the one that was posted NO GUNS ALLOWED.

There were four mass killing attempts this week.  Only one made the news because it helped the agreed upon media narrative.

1. Oregon.  NOT a gun free zone.  Shooter confronted by permit holder.  Shooter commits suicide.  Only a few casualties.

2. Texas.  NOT a gun free zone.  Shooter killed immediately by off duty cop.  Only a few casualties.

3. Connecticut.  GUN FREE ZONE.  Shooter kills until the police arrive.  Suicide.  26 dead.

4.  China.  GUN FREE COUNTRY.  A guy with a KNIFE stabs 22 children.

So what exactly is the legislation that will “fix the problem”?   The proposals on the table, generally involving renewing the lapsed Federal restrictions on “assault weapons,” are completely meaningless in my view.  They certainly would not have had any meaningful effect in the Connecticut event.

Is there an alternative proposal?  Ban gun ownership by civilians entirely and authorize the police to search everyone’s house and seize the weapons?  Then we have a world where millions of law-abiding citizens have their guns taken and guns are owned only by the police and by the worst of violent criminals, who of course will pay no attention to the ban.  Improvement?

The most amazing aspect of this is that the leading spokespersons for the progressive position all have their own armed protection.  President Obama has the secret service.  Mayor Bloomberg has 24-hour armed protection from the New York City police.  Diane Feinstein, leading Senate proponent of new gun restrictions, is a gun permit holder.  Love this picture from Instapundit.  Is President Obama's life more important than mine, or yours?

Who Could Be Against Disability Pensions?

A heroic first responder is injured on the job and ends up permanently disabled.  Should he be able to retire on a decent pension?  Almost everyone would say yes.  But it turns out that programs that pay extra for alleged disabilities are subject to unbelievable amounts of systematic overpayment if not outright fraud.

Examples are legion.  The latest comes from the front page of yesterday's New York Times, which reports that the New York City Department of Health has just issued a very large study comparing cancer incidence in World Trade Center responders versus the general public.  Result:  no evidence of heightened risk of cancer in the WTC responders.

Oops, that was the wrong answer.  They studied over 55,000 people, and seem to have done very careful work.  Meanwhile, the New York and New Jersey Congressional delegations spent years trying to get Federal payouts for WTC responders who had subsequently contracted cancer.  After failing in several efforts, they finally broke a Senate filibuster and got the so-called "Zadroga" Act passed in the lame duck session after the big Republican election victory in 2010.  The Zadroga Act opened up the WTC victims compensation fund -- the spigot of Federal dollars -- to additional categories of people, including potentially those who subsequently contracted cancer.  It then went to the National Institute of Occupational Safety and Health to decide which cancers to include.  NIOSH issued the list, including most every form of cancer, just two months ago, in October 2012.  And now the New York City Department of Health comes along to spoil the party with an actual study.  Who wants to take bets on whether the payments go forward anyway?

And by the way, who was Zadroga?  He was a New York City policeman who was a first responder at the WTC and died in 2007 of lung disease at the age of 34.  That certainly sounds like a compelling case for compensation.  Oops again:  the New York City Medical Examiner's office did an autopsy and determined that his lung disease and death were caused by self-injection of prescription drugs.  But that didn't stop Zadroga from becoming the poster child for expanded compensation programs for former Ground Zero workers who have contracted cancer or respiratory disease.  Besides the Federal act named after him, there is also a New York State law, passed in 2006, making cancer and respiratory disease in Ground Zero workers a presumptive ground to get a disability pension.  A disability pension carries enhanced payouts and also exemption from state and local income taxes as compared to a regular pension.  In other words, billions of dollars of extra payouts, and now it turns out that there is no basis for the causal connection.

The more you look at disability pensions the worse it gets.  Here is an article from the New York Post in March 2012 reporting that some three-quarters of New York City firemen who retire get disability pensions.  Does anyone think that could possibly be honest?  The article focuses on the story of one Cliff Stabner, retired since 2003 on a New York City disability pension of $95,000 per year, who now works as an emergency worker at NASCAR races.  Wait, we thought he was disabled!

But of course the 75% "disability" rate of New York City firemen is small time compared to the rate of Long Island Rail Road workers, which was more like 97% for years until someone thought to actually take a look.  Turns out almost all of them are fraudulent.

Nor is this confined to New York.  Here's a report from Quincy, Massachusetts in 2009.  The best vignette: 

It was a knee injury that Bruce Pollitt said kept him out of work for months as he collected his full pay as a Carver police officer. But after town officials accused him of faking it and voted to fire him, they let him resign instead. He then applied for, and got, a lifetime disability pension for being injured on the job.

His job-related disability: high blood pressure.

In the Long Island Rail Road case, almost all of the disabilities were things like "soft tissue injury" and "lower back pain."  Somewhere along the line it has become legitimate to treat the government as an infinite source of money to be gamed.  Sorry, this won't work.  I wonder if it's actually possible to have a government-run program for disability payments without having it explode because of endemic fraud.

How Did The United States Get In The Position Of Supporting The Deadbeats In Argentina?

In the realm of bad economic policy ideas, the country of Argentina has to rank near the top of almost everyone's list.  OK, the Soviet Union was worse, but they're gone.   Cuba, North Korea, Venezuela -- there are a few more.  But Argentina was once one of the world's wealthiest countries, and then went into a tailspin for what is now over two generations.

The United States once knew what good economic policy looked like.  It made us the wealthiest country in the world.  Today, we have mostly forgotten.  We have forgotten so badly that we even support Argentina in its folly.  Most recently the U.S. government has supported Argentina in its efforts to avoid collection of judgments issued by U.S. courts to enforce repudiated Argentine debt.

The era of good economic policy in the United States is not of course the recent era of fancy Ph.D.s from Ivy League schools at Treasury and the Fed.  Rather, it is the founding era.  The prime motivation for the founding was that the government under the Articles of Confederacy had no taxing power and couldn't pay the Revolutionary War debt.  The founders recognized that they needed a government that could pay its debts and establish its credit.

Literally the first thing that the government of the new United States did on the founding was to create a plan for paying off the Revolutionary War debt at full value.  One of the best accounts I have read is in the Ron Chernow biography of Hamilton.  Significantly, much of the debt had been bought up at steep discounts after being in default for long periods.  But Washington and Hamilton recognized that the way to establish the credit of the new country and make it a player on the world stage was to pay off the debt at par.  Clearly this is not the only reason that the United States took off as an economic power, but it is one of the top few reasons.  The United States had top international credit from the time of the founding through the Obama administration, when it received its first downgrade.

Now shift to today's Argentina.   The list of destructive economic policies is long.  Here is an article from the Wall Street Journal on August 8 with a good summary: crony capitalism on steroids; subsidies for everything; currency controls with special exchange rates for friends of the government; expropriation of the big Spanish oil company YPF; raging inflation; tariffs that make most manufacturing impossible; and so on.  But high on anyone's list must be the fact that in 2001 Argentina repudiated some $80 billion of bonds that it had issued in the 1990s.

Today the United States thinks that the way to live your life, as an individual or a country, is to spend unsustainably and take on as much debt as you can get away with.  Then you do a "bailout" or a "restructuring" and resume with another round of unsustainable spending and debt.  Here is the quote of their philosophy from an amicus brief submitted last April in support at Argentina's continuing efforts to avoid paying the repudiated debt:

[T]he district court's interpretation of the pari passu provision could enable a single creditor to thwart the implementation of an internationally supported restructuring plan, and thereby undermine the decades of effort the United States has expended to encourage a system of cooperative resolution of sovereign debt crises.  Allowing creditors recourse to such an enforcement mechanism would have adverse consequences on the prospects for voluntary sovereign debt restructuring , on the stability of international financial markets, and on the repayment of loans extended by international financial institutions.

It may seem briefly that these "internationally supported restructuring plans" promote "stability," but over time it is a fallacy.   The seeming "stability" just enables the next round of overspending and bad policies to continue.  The route to economic success is the one taken by the United States.  But the word is that the United States intends to continue to submit another amicus brief in support of the Argentine repudiation in the next round in the Second Circuit taking place over the next couple of months.  We'll see how badly they embarrass themselves.

Hurricane Sandy Relief Requests Will Show Whether Anyone Is Serious About Controlling Spending

As the tax/debt/deficit talks proceed in Washington, the Republicans supposedly are trying to put some limits on the explosion of Federal spending.  Can they trim, nip or tuck a little bit of the entitlement gusher?  Even as their attention is focused on entitlements, ten other things are taking off like a rocket, from food stamps, to Social Security disability, to student loans, and so forth.  Let's look at just one "little" item on the current Federal list:  spending for disaster relief from Hurricane Sandy.  Last week President Obama put out a number of $60.4 billion as what he wants the current Congress to appropriate right now as Sandy relief before going home for the year.

The lead story in the New York section of Saturday's Wall Street Journal was "Return Favor, Donors Tell Republicans," a report on how major Republican donors from New York are currently engaged in lobbying the Republican members of Congress to get behind President Obama's $60.4 billion Sandy relief request.   It seems that certain wealthy New Yorkers who contributed to the campaigns of Republican congressmen around the country are trying to use the clout from their donations to ensure passage of the relief package.  For example, here is Ken Langone (of Home Depot fame): "There's a time for all of us to pull together, and there's a time for all my colleagues in business to pick up the phone, and call all of those people up and say, 'OK, now you can do something for us.'"

I know I am a contrarian, but if the Congress can't resist this one, we might as well just throw in the towel.  Even if you believe that the Federal government should act as the infinite insurer of everything, and should draw on the infinite credit card to pay every dollar of every demonstrable loss from every hurricane or other natural disaster, there is still the issue that this $60 billion number is wildly, wildly inflated and is really just a thinly-disguised bailout of the budgets of three of the most fiscally irresponsible states, New York, New Jersey and Connecticut.

How do I know that the $60 billion is wildly inflated?  Because I've been paying attention.

Here's a story I previously linked from Crain's New York Business of November 26 describing how New York's Governor Andrew Cuomo put together his $40 billion demand for Federal funds.  A few tidbits:  "Mr. Cuomo is seeking 100% reimbursement from Washington for the recovery, citing the precedent of Hurricane Katrina and other disasters."  And what items are included?  How about: "$5.7 billion in lost gross product in the city, most of it among the city's small businesses."  How about $4.9 billion "to cover storm victims who lack insurance."  (Aren't those two duplicative?)  And here is my favorite:  "[A]n additional $9 billion for what Mr. Cuomo described as 'mitigation [and] prevention." 

In other words, give us an extra $9 billion for things that we can't even tell you what they are now and have no idea of how much they will ultimately cost and whether they will do any good.

Let's take a little closer look at another one of the items in the New York request, $4.7 billion for the MTA to get the subways and other trains up and running after the storm.  As I previously wrote here, this number is a very large multiple of anything remotely reasonable for repair of these facilities.  Included is $600 million for "repair" of the station at South Ferry that was just built new and opened in 2009 at a cost of $530 million.  It is absolutely not possible that even a full year repair project on this station could cost more than the four-plus year construction project to build it from scratch just a few years ago, including digging the gigantic hole.  Besides which the $530 million for just one station was wildly inflated to begin with.  Milan, Italy is currently building a 3.5 mile underground subway line with seven stations for $700 million.  Here is an article comparing New York's transit construction costs to those of other international cities -- we are a large multiple in every case.  I can understand that we might be 20% higher, or even 50% higher, but how could it be that our costs are more than 10 times as high?  To run up $600 million to repair this station over a year, you'd have to pay 2000 people $300,000 each.  There are nothing like 2000 people working on this.  Can't anyone recognize that this is a ridiculous sham?  They're going to spend maybe $100 million to repair this station -- even that far more than necessary -- and the rest of the money will disappear into a black hole.  The same comments go for the rest of the MTA's $4.7 billion.  It is preposterous.  Almost all of the system is already back up and running.  They would have had to have more than a hundred thousand people working on the repair to run up that much cost that fast.  The real number is less than a tenth of that.

Finally, a comment on New Jersey.  As I wrote here, Governor Christie initially came up with a wildly inflated figure of $29.4 billion, and then immediately got "out bid" by Cuomo's ridiculous $40 billion.  But in particular Christie, a man not otherwise known for lack of chutzpah, hadn't thought to toss in an extra stack of billions for future "mitigation."  On seeing Cuomo's $40 billion, including $9 billion of this imaginary "mitigation," Christie promptly upped his demand by $7.4 billion.  I like the .4 at the end -- it gives an air of precision, as if it was not a totally made-up number.  He should have made it $7.413 billion.

To just appropriate the $60.4 billion without seeing and scrutinizing the actual costs is the worst possible thing that Congress can do.   There is no possibility that legitimate Hurricane Sandy costs are remotely in that range.  And if we're just giving out handouts to anyone and everyone, then inevitably everything will get rebuilt bigger and better on the barrier islands ready to get hit by the next storm.

This infinite credit card stuff is a really dangerous game.  Republicans, show what you are made of! 

Do Our Monetary Authorities Know What They Are Doing?

I’m looking for some kind of indication that our economic and monetary officials know what they are doing.  I’m not finding anything.  All indications are that they don’t have a clue.

Let’s look at this from the lead article on the front page of Friday’s Wall Street Journal.

The Fed said Wednesday, at the conclusion of its last policy meeting of the year, that it would enter 2013 with a plan to purchase $85 billion a month of mortgage-backed securities, part of a continuing attempt to drive down long-term interest rates to encourage borrowing, spending and investing.  The Fed said it didn’t expect to touch short-term rates until it saw the unemployment rate fall to 6.5% or lower, as long as inflation forecasts remain near its 2% target.

So they now have the idea that they can just multiply the monetary base by a factor of five or so and there will be no inflationary effect?  I like that phrase “as long as inflation forecasts remain near its 2% target.”  Who is making these so-called forecasts, and where did they buy their crystal ball?  Did it occur to them to take into account that the monetary base is in the process of  multiplying by 5 without the economy growing much at all?  Exactly how do you even make a forecast of inflation without the monetary base/GDP ratio as your primary input?

According to data from the St. Louis Fed  here, the entire monetary base of the United States as of November 2008 was around $800 billion.  Then we had QE1, and suddenly it was about $1.7 trillion.  Then QE2 and suddenly around $2.7 trillion.  And now we’re going to be buying $85 billion more of assets per month, effectively monetizing all or nearly all of trillion-dollar-plus annual deficits.  Should be approaching $4 trillion by the end of 2013.  But don’t worry, our “forecast” is for inflation not to exceed 2%!

Here is the statement of the Fed's mission from Section 2A the Federal Reserve Act:

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

That's rather an explicit statement of what they're supposed to do:  maintain monetary aggregates in a stable relationship with the economy, which in turn will lead to maximum employment, price stability, and "moderate" interest rates.   Now they've just turned everything around 180 degrees.  Our new number one goal is to drive unemployment down to 6.5%.  We'll do that by having a blow-out expansion of the monetary base.  Where do they possibly get the idea that they have control over the rate of unemployment, other than very indirectly influencing it through the blessing of stable money?  Can anyone give one example from history where a five-fold expansion of the money supply without substantial economic growth moved unemployment down a few points and did not ignite inflation?  Well, this is what is called hubris.  Unfortunately, we know what follows hubris.

Here's a little news for them.  No one knows when the inflation will come, but when it does come the value of the currency (against other currencies, or against gold or a basket of commodities) could drop to half (or maybe to a fifth) in the blink of an eye.  And they will have no ability to stop it, because they have already done the damage.  When you run your monetary policy like an Argentina or a Brazil or a Venezuela at the heights of their folly, sooner or later your currency will behave like the currencies of those countries.  

On The Irrational Attachment To Ponzi Schemes

Every day as I read about Social Security and Medicare and the fiscal debates in Washington, I am reminded of an event that happened about 44 years ago when I was a freshman in college.  Today, my older daughter sent me a link to a Washington Post editorial that makes clear the relevance.

In 1968 when I was a freshman at Yale my three new friends in the room next door came over one day in a state of excitement.  They had received a chain letter.  Just send $20 to a name two levels up the chain, it said, and then send out 10 copies of the letter to people you know.  Wait for the letter to progress to a second level beyond you, and you will receive $2000, as if by magic.  At the time, $2000 was almost equal to the year’s tuition at Yale.  The sender of the letter assured that this had worked perfectly for everyone in the scheme to date.

Somehow at that early date I had already become aware that monetary chain letters were treated as criminal frauds by Federal prosecutors, and I believed I understood why.  Hey, I was a future math major, and my friends had to be rather bright to have been admitted to Yale.  So I set out to explain to them why this was really a fraud and why it couldn’t possibly work.  To me it was just some simple math.  Did they realize that to progress to a tenth level this scheme would have to enlist more people than existed on the earth?

To my complete surprise, they would have none of my arguments.  In the short time between when they got the chain letter and when they first talked to me about it, they had become excited about and emotionally invested in the project.  Not only were they going to do it, but they kept trying to get me to do it too.  I didn’t.  They did.  I think one of them got his $20 back.  The others did not.

Skip forward to yesterday’s editorial in the Washington Post.   Compared to other voices of the left, this one takes a relatively sane approach, conceding the essential fact that the main entitlements are on an unsustainable growth path:

But the underlying fiscal problem is that federal expenditures are slated to rise faster than economic growth because of rising health-care costs and an aging population. The long-term drivers are Medicare, Medicaid, Social Security and subsidies for the health-care exchanges established by the Affordable Care Act.

That’s not a partisan statement. It is reality.

I’ll let the commenters take it from there:

The editorial board of this once decent rag has been bought and paid for by the sadistic, genocidal monsters at the Fix the Debt commission. The few remaining reasonable writers on this rag have admitted that SS does NOT drive the deficit, and that seniors PAID FOR their benefits, but the editorial board will not be happy until millions of seniors are dying of starvation on the streets. And that is not hyperbole. For shame, you sadistic lying pieces of excrement.

Social Security Insurance is paid for and is not an entitlement. Medicare is paid for and not an entitlement.
Medicaid is necessary and not an entitlement. The word entitlement is used rather loosely in the beltway.

Think – Exercise your brain. What system do real 21st century countries use to address universal medical care? Can you think about that and get back to me?

Well, is this just a matter of emotion or can we please address the math and whether it can possibly work as currently constructed?  You can call people evil when they point out the impossibility of the existing structure, but that will not keep the whole thing from crashing down like Madoff when there aren’t enough new entrants to keep it going. There are just two ways of looking at the world.  I'm looking at it the other way.  I guess that’s why I’m the Manhattan Contrarian.