Sunday, January 31, 2010

Twisted up at yoga school

This weekend I visited a friend who's spending a few months at the Kripalu Center in Western Mass. Kripalu is a yoga center set up like a tall high school building overlooking what must be a beautiful lake (it was covered with snow while I was there).

Sometime in the last decade yuppies transformed into earthy-crunchy hippies. Products marketed as environmentally-friendly are now a status symbol, as a glance around the parking lot confirmed. The country club crowd is now a congregation of earthy-crunchy spiritual warriors and some of them pay to stay at Kripalu for a few days to take in spiritual classes, massages and yoga sessions.

My friend and host is there as a volunteer. She has a regular labor job at the Kripalu Center and in exchange shares a dormitory room with two others and gets to attend yoga classes and other Kripalu events. She said she had to pay a small sum, about $100, for her meals. She is not paid any money for her labor, but has most of her living requirements provided.

The Kripalu cafeteria was crammed with organic labels, gluten-free items, assorted sprouts and beans and little meat. There was a milk dispenser that boasted locally-produced, organic fat-free Jersey milk.

I found this confusing, because I still remember from my 4-H days that the selling point of Jersey milk is its high fat content. Making skim milk from Jersey milk is like going to Kentucky Fried Chicken and eating everything but the skin. My best guess to the label is that it's like how high-end restaurant menus make a big deal out of trivial details of an entree, like that the steak is from a particular country or the veal parmigiana is hand-breaded.

The book store at Kripalu was brimming with alternative medicine tomes, spiritual guidebooks, CDs of running water sounds and tarot cards. There was a $1,300 metal Buddha for sale and a lot of yoga gear.

I tried one of the yoga classes and found it generally enjoyable. The yoga instructor started things with a big group chant of "Om" but didn't dwell on New Age beliefs during the workout, which was a plus. She was good at reminding everyone not to push themselves beyond their safe limits and broad casted a gentle demeanor.

The Kripalu crowd showed one another a very warm, accepting manner. I was also glad to see that they had a limit on how much New Age, artsy pretension they could tolerate. My host and a few of her friends snuck out of an art film 10 minutes after it started. The film showed the artist naked and dimly-lit while making slow sweeping gestures over instrumental music. It was also terrible and a chore to watch.

What surprised me most was that the human element was so strong in this place of spiritual growth. Resident volunteers had spats with their roommates, there was gossip and romantic squabbles. Instead of a Tibetan monastery, the social scene can best be understood as a college where everyone majors in Eastern philosophy.

If there's one piece of wisdom I walked away with, is that people with different philosophies still think and behave pretty much the same way. From deeply religious societies to the secular world, all people believe peace, love and kindness are good things. People interact with each other in a universal way. We seek the acceptance of others, but do not give our own acceptance freely.

I enjoyed my visit to Kripalu. I didn't encounter the wall-to-wall New Age extravaganza I was expecting, but there was plenty of it around. If yoga classes in a giant public school building with no ringing cell phones is your thing, then Kripalu is right up your alley.

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Tuesday, January 26, 2010

How is military spending like education spending?

In a great post from The Economist about President Obama's plan to freeze non-security discretionary spending for three years, the author took a solid, principled position against unlimited military expansions:
"If it weren't enough that the proposal treats voters as children and a serious problem as a political football to be kicked around, the president's plan also appears to endanger an economy that hasn't meaningfully raised employment in over a decade and it solidifies defence spending as the untouchable budget category, when in fact it should be anything but."

Indeed, the American right has a fetish for military spending the same way the left sees educational spending. The right believes any cut to military spending would result in a less powerful military. What they should instead be asking is how many other government agencies do they trust to spend its money wisely.

They already believe that the public education system is sloppy with money, and that cutting educational spending won't mean dumber children. In both cases, you have a large government system with a lot of money and a near-unlimited goal for excellence. People do not believe there is a limit to how smart our students could be, or how few enemy attacks we should experience.

The source of the data in the above chart, USgovernmentspending.com, reports that total defense expenditures were 5.78 percent of the Gross Domestic Product in 2009, and will go up to 5.93 percent in 2010.

In the same time, total educational spending will go from 6.41 percent of GDP to a record-breaking 7.02 percent in 2010.

In inflation-adjusted dollars, spending looks this:

Please note this is not the story the left tells about military spending. While they are correct that it uses an awful lot of federal money, they often back it up with a data set like the following:


The above chart, which shows federal defense spending trumping education spending, is a subset of the previous chart. The two are wildly different, yet they describe the same country at the same time. The important difference is the first chart is the total budget, and the second one is merely the federal dollars in that budget.

That's because most defense spending is done on the federal level, while most education spending is on a local and state level. People who use the last chart are leaving out important information to skew the facts. I was shocked when I became a reporter and started covering towns in Maine to discover that two-thirds and three-quarters of town budgets go to the schools.

We've all seen a bumper sticker that read something like "It will be a great day when our schools get all the money they need and the air force has to hold a bake sale to buy a bomber." This just adds to the myth that only the military is out of control with its budget, and schools are underfunded.

In reality, both the military and the public education system are sprawling, inefficient tax sinks. They have important goals, but could reach them without wasting as much money as they do. In addition, people on both the left and right correctly identify the problems with one system and ignore the problems with the other.

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Monday, January 25, 2010

Obama missed the mark on health care tax

As I wrote back in December, the government needs to close the tax loophole of employer-provided health care.

Some employers agree to lower their workers' salaries a little, and in exchange buy them health insurance. Economists call this a non-monetary compensation. But currently this little accounting trick flies below the IRS's radar and the workers who enjoy this are not taxed for their health care benefits.

This came up in the 2008 presidential primaries, and I was glad to see that Obama reversed his opposition to this tax.

But that joy was premature, as the Democrats have caved in to union pressure and are exempting organized laborers, currently until everyone else has been taxed for five years.

As the New York Post put it:
The 40 percent excise tax on what have come to be called "Cadillac" health-care plans would exempt collective-bargaining contracts covering government employees and other union members until Jan. 1, 2018.

There really is no justification to give special treatment to government employees and cabal-organized workers. They have been on the wrong side of this issue, and their argument consisted of repeating their conclusion over and over again.

I really wanted to give Obama credit for something big. He's a really likable fellow, and our elected leader, but he screwed this one up. Instead of closing a silly loophole in our tax laws, he's given government employees and the already well-off union workers another advantage over everyone else. Shame on him.

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Saturday, January 23, 2010

Adam Smith was not a localist

I've been waiting for this.

The logical fallacies of the "buy local" movement are ancient. Economist Louis Johnston of College of Saint Benedict-Saint John's University said they go back to the Middle Ages. It was only a matter of time before America's right-wing jumped on board.

This week on Glenn Beck's website, thriller author Daniel Suarez typed an unconvincing essay on why buying local will bring us all "economic sovereignty."

After a series of cherry-picked statistics and anti-corporate populism, Suarez decided to invoke a famous and influential economist to support his claims:

"But what if all that money didn’t flow into distant corporate coffers but instead stayed right in your region? The balance of power would be turned upside down.

"Regional self-reliance is more than a 'buy local' movement -- it's the cornerstone of democracy. In fact, it always has been. When Adam Smith wrote The Wealth of Nations in 1776, he was describing an economic system not of multi-national corporations, but of individuals who would act in their own self-interest—human beings invested in their community. If your region wants self-determination, they need to be able to say 'no' to distant power brokers, and you can’t do that if you produce none of the products and services that support life."

Adam Smith spent chapter three of book IV of The Wealth of Nations arguing the exact opposite of what Suarez and other localists believe. Under the cumbersome chapter title Of the extraordinary Restraints upon the Importation of Goods of almost all Kinds, from those Countries with which the Balance is supposed to be disadvantageous, Smith demolished one of the cornerstones of the mercantilist view. Smith believed that imports can make a nation wealthier.

Let's make sure we're all on the same page. Mercantalists believed that the wealth of nations was in its precious metals. They believed nations could become rich by exporting as many goods as possible in exchange for gold and silver, while importing as few goods as possible. Wealth meant a stockpile of shiny metals.

Frustrated with this view, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. He argued that a nations wealth was in its resources, not its gold and silver, and sent mercantalism to the junkyard of history, next to magn├ętisme animal and metoposcopy.

The "buy local" argument is a proxy for mercantalism. Instead of gold and silver, localists believe the source of our wealth is in our dollar bills. But money is just a proxy for resources, and if you strip that layer away, you will see the flaw in their economic strategy.

Localists believe a community should export when possible and churn resources around in the community to generate wealth. They also oppose importing new resources into the community, and taking in only money.

This is a recipe for poverty, not wealth.

Let's look closer at one of Suarez's economic points.

"When Adam Smith wrote The Wealth of Nations in 1776, he was describing an economic system not of multi-national corporations, but of individuals who would act in their own self-interest—human beings invested in their community."
Adam Smith did write about why people prefer to buy from domestic companies instead of foreign ones, and why they will usually do so when prices are about the same. For example, in book IV, chapter two of The Wealth of Nations he said.

"...Every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock."
Smith did indeed list the gains from "buying domestic," but exclusively when the prices are nearly identical. Localists have never made this distinction, and have always advocated buying from nearby merchants even when costs are higher. Smith said no such thing.

However, saying people like to do something is not the same as saying people should do something. With Smith's wordy 18th century writing style, it's tempting to skim what he wrote without reading the full context. There are a few passages clustered around his famous "invisible hand" line that can sound like a localist, protectionist argument if read alone.

"It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage."
Smith did not argue for the same thing Suarez is advocating, nor should anyone who knows the impact from The Wealth of Nations believe he ever would. Using Adam Smith to argue mercantilist economics is like using Charles Darwin to argue Intelligent Design.

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Wednesday, January 20, 2010

Bureaucratic inaction in action

Following the tragic Haitian earthquake, private groups and government aid has been flooding the island nation with the intention of helping, but according to CNN a lot of it is getting bogged down on the way.

"It's terrible," said Eric Klein, head of disaster-relief agency CAN-DO. "There's got to be coordination."

Medical aid is particularly needed, Klein and others said.

"There are medical supplies just sitting at the frigging airport," Klein said while sitting in the cab of a 1,200-gallon water truck near the heavily damaged presidential palace.

Klein appears to be of the belief that coordination of such a large effort can be accomplished by using competent, trustworthy people in a top-down approach. However, another quote from the article is a little more revealing to the problem.
The Geneva, Switzerland-based Doctors Without Borders complained this weekend that U.S. air traffic controllers in charge of the Aeroport International Toussaint Louverture were diverting aircraft carrying medical supplies and other humanitarian aid. U.S. military flights were getting top priority, the doctors group said.
It appears we do have people in charge, and they are not placing value on the same things the activists are.

There are different categories of aid volunteers. Haiti needs people who can give medical attention to the sick, rescue people from debris, provide security from violent opportunists, distribute meals, rebuild houses and many less publicized tasks. All of these specialists are important to the relief effort, but as Friedrich Hayek wrote in the Road To Serfdom
"The illusion of the specialist that in a planned society he would secure more attention to the objectives for which he cares most is a more general phenomenon than the term specialist at first suggests... we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one."
It's normal for the medical volunteer to think that medical aid is more important than hunger aid, or for the security enforcer to believe more harm will come from unrestrained anarchy than lack of proper housing. All of these specialists are part of the solution, but the best way to fit them together is a puzzle too difficult for one person or committee.

Who can really say that feeding 100 people is more important than healing three, or protecting four businesses from looters for a week is more important than repairing the roof on one house? A central planner has to place a value on all these things, and its impossible to value them in a way everyone will agree upon.

One alternative to a centrally-planned system is a market system. Doctors Without Borders would be able to bid on runway time at the airport. The group may not be able to outbid the US military, but it could outbid a construction company.

That does mean some groups with more capital will be able to push their way around, but is that any different than what they are doing in the political process right now? Groups have to both possess capital and be willing to give it up for what its members believe has value.

How chaotic would such a system be? About as chaotic as the lines at a supermarket. Both are examples of "spontaneous order," where each player uses his own knowledge to act in a limited realm. When each supermarket shopper looks for the shortest line, all lines end up roughly equal and everything runs smoothly and peacefully.

Instead of a self-organizing system that uses the knowledge each individual player has, the Haitian recovering is bogged down with a centrally-planned system that is desperately trying to organize a flood of aid from all over the world with a limited supply of information. That is why there are crates of medical supplies sitting idle at the airport and volunteers stranded without transportation. It's not incompetent people in charge, it's reliance on an overloaded system that couldn't possibly coordinate this many parts.

This isn't merely hypothetical. Wal-Mart responded to help the victims of Hurricane Katrina faster than FEMA did. Partially that was motivated by good will, and partially for the PR, but for the people being helped, the motivation didn't matter.

U.S. Represenative Alan Grayson isn't a fan of anyone who criticizes the Haitian reconstruction effort or the government in c
harge of it:
"Rush Limbaugh, if you want to say one good thing about him, at least he's consistent. Maybe he thinks all those people who are trapped under the rubble in Haiti are going to be freed by the invisible hand of the free market."
Perhaps Rush Limbaugh didn't say that, but I am. While the invisible hand won't personally pluck heavy objects out of the way, it will allow aid groups to respond much faster and smarter than a centrally-planned system would.

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Saturday, January 16, 2010

"Offended" card dealt from the bottom of the deck


There's this fun new tactic from the left to stop people they don't like from speaking.

Inspired by Al Sharpton's success with the Don Imus non-incident, far-lefties have lengthened their motto from "I'm so offended" into the call to action "I'm so offended. Let's boycott his advertisers."

It's a pretty simple plan. Take a public figure the person disagrees with and wait patiently for them to say something that can be used against them. Then pretend to be offended and threaten their advertisers with a boycott. It's basic political opportunism.

This week it's Rush Limbaugh, who said that a central planning government made Haiti poor and vulnerable to natural disasters and our president is using the tragedy for political gain. The fake outrage camp sprouted up, and shifted gears and revamped when Limbaugh said that some relief programs are wasteful and that our tax dollars are already going to the same programs.

Republicans are no shining stars either. Last week people were still talking about when Harry Reid said voters would respond to Obama because he's light skinned, a smooth talker and only sounds urban if he wants to. Some Republic congressmen declared Reid must resign his house seat because his comments were so offensive.

But, on the side of sanity, black right-winger Ward Connerly wrote in the Wall Street Journal;

"For my part, I am having a difficult time determining what it was that Mr. Reid said that was so offensive."
Connerly continued:
"We are too quick to take offense about race when none was intended. Some are too anxious to manufacture outrage over matters that do not justify the attention that we give them."
Connerly also said the same individual people who usually cry offense and will not accept apologies changed their tune when it was a Democrat caught in the trap.

Today, the right is reminding us that disasters are not a time to throw money around with zero regard for how it's spent. In a parallel, it was a few years ago that the left reminded us that disasters are not a time to sacrifice our civil liberties with little regard. I don't see what's so offensive about either of these positions.

Which brings us back to today, and why anyone would boycott a show they don't watch or listen to.

What this really comes down to is an attempt to silence intellectual opponents. Don Imus lost his talk show. People who don't like Glenn Beck of Rush Limbaugh are hoping the same thing will happen to them. It's not enough that they don't want to hear those commentators - they don't want anyone else to have the opportunity either.

By all means, people should rail on, complain and criticize the opposition. Go for it, that's an important aspect of the free speech doctrine. It's when they try to silence people that it becomes grotesque.

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Wednesday, January 13, 2010

Is Google prepared to go to war with China?

It certainly looks that way.

After Chinese hackers targeted the gmail accounts of human rights activists, Google is posturing itself with a very deliberate, principled stand.
We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.
What's missing from Google's statement is wether the Chinese government is believed to be behind the hacking attempts. It's heavily implied, both by the targets of the attacks and Google's response to having a free speech version in China, or no version at all.


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One politicians solution to poverty - relabel it

A senator in the Washington state assembly has proposed to call poor children "at hope" children.

Sen. Rosa Franklin, D-Tacoma said the term "at-risk" was too negative, much like its predecessor "disadvantaged."

And before that, it was just "poor."

One of the rules of political correctness is that as soon as a PC term has gained wide acceptance and understanding, it must be replaced with something new and unfamiliar. That's because terms like "at-risk" describe negative things.

Poverty is a problem, and it can lead to some terrible things for those children. Any label we give it will soon be associated with poverty, and therefore become negative. So as soon as a normal person begins to associate the euphemism with its definition, it must be replaced.

Police used to search for a "suspect." Then it was someone "wanted for questioning." Because we heard those things enough times we had to come up with the clumsy "person of interest."

What's getting little attention is Franklin's reversal of the hyphen from "at-risk." Perhaps she has further plans to use all the hyphens freed up by this cosmetic legislation. More news on the hyphen will be posted here as it develops.

Thanks to Evan for the link.

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Tuesday, January 12, 2010

Favorite books I read in 2009

One more 2009 post and that's it, I promise.

Only one of these books actually came out in 2009, but I don't keep tabs on the hardcover world enough to justify a collection of new books. This is a slice of the books I read in the past year with an emphasis on thought provocation.

The Invisible Hook by Peter T. Leeson.

This is the one I looked forward to the most when I heard Leeson talk about his book in an interview with Russ Roberts. Leeson presents pirates in an unexpected way - intelligent, orderly men who were after profits - not violence.

Leeson, an economics professor argues convincingly than we can only understand the behavior of sea-faring pirates if we look at them through the lens of economics. Pirates had checks and balances, democracy and racial tolerance - and all before the American revolution. An intriguing book that teaches the reader about economics and pirates at the same time.

Prove It before You Promote It: How to Take the Guesswork Out of Marketing by Steve Cuno

Another combination book, Cuno teaches the reader marketing and critical thinking at the same time, and douses a lot of marketing myths along the way. I haven't read many marketing books, but after reading Cuno's book, I will feel compelled to roll my eyes whenever I heard someone claim marketing depends on creativity.

Cuno reminds the reader that point of marketing isn't to win hearts, entertain people or win awards - it's to generate sales. He offers a peak inside a marketing world where sensitive artists ignore sales goals in order to create their next masterpiece, and well-intentioned bookkeepers assume that if a marketing campaign is launched and sales increase, then it was the campaign at work and outside forces can be ignored.

From Harley Davidson to "Got Milk?" Cuno slays a lot of dragons and gives needed praise to a decades-old Wall Street Journal campaign that lacks flash, but dominates in results.

Pop Internationalism by Paul Krugman

I heard about this collection of essays from someone who used to be a Krugman fan but feels he's let political gain taint his scientific aims. They held this Clinton-era book up as an example of how informative and persuasive Krugman could be.

From my perspective, Pop Internationalism is pornography for right wing econ fans. Written by an outspoken liberal, this book trumpets the case for globalization and free trade loudly. Krugman has never been accused of being too kind to his intellectual opponents, and his treatment of Bill Clinton and his economic entourage, "common sense" economists, modern mercantilists and anti-globalizationists is a joy unto itself.

The book also includes a swan song for Lawrence Summers, who's bold criticisms of "pop internationalists" cost him a spot in the Clinton White House. Flash forward to the current day where we now have the same Lawrence Summers as
Director of the White House's National Economic Council. Although the economic policy of the Obama administration hasn't reflected the free trade world Krugman encouraged in this book, even Greg Mankiw believes Summers is too good for the administration to give up.

This book is very important for anyone who thinks they know how international trade works. Krugman gives the same lesson in different essays written for different audiences, but they are all worth reading.

Now for the biggest literary disappointment of the year.

The 5000 Year Leap: A Miracle That Changed the World by W. Cleon Skousen

I really wanted to like this book, but Skousen fought me at every turn.

I had The 5000 Year Leap presented as a history of the constitution. I thought the premise was going to be that the Founding Fathers were students of history, and looked at the failures of establishing a benevolent government as clues. They decided on a system of restrained governmental powers and the Republic it formed changed the world.

That would have been a great book, but instead I found myself reading a religious pamphlet that heavily implies that the Christian god gifted the constitution to our Founding Fathers.

Skousen's writtings drift out of bounds a few times. Pages 95 and 96 read:
"The mind, for example, will not accept the proposition that the forces of nature, churning about among themselves, would ever produce a watch, or even a lead pencil, let alone the marvelous intricacies of the human eye, the ear, or even the simplest of the organisms found in nature. All these are the product of intelligent design and high-precision engineering."

What was frustrating was that occasionally Skousen had some good points. For example, he argues that the constitution is not at risk of being outdated because the principal of limited power is eternal. We will always have human nature to grapple with. Sadly, he waters down this point by arguing against loans and debt, and for manifest destiny.

I don't pretend to know enough about our founding fathers religious lives to take a stance on Christianity's role in the founding of America. My secular influences tell me a lot of the Founding Fathers, like Thomas Paine, were deists and would probably have become atheists if exposed to Darwinian theory. Right-wing sources bring out a lot of actions and deeds from the Founding Fathers that include non-denominational support for Christianity in American government. Answering this question requires more research than my interest in the subject, so I must remain agnostic.

However, implying over and over that the constitution was a gift from God is an insult to the genius of America's founding, and I find this book to be too demeaning to the brilliance of man to respect.

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Friday, January 8, 2010

Is shooting a sleeping abuser self-defense?

Once again, a judge has let a woman go after executing her husband while he was asleep.

Clearly the victim, Mr. Cummings was an evil man: A white supremacist who was trying to make a dirty bomb. Amber Cummings also alleged that he was also a pedophile and sexual abuser.

But that doesn't justify a vigilante killing or premeditated "self defense." This was a murder, cold and simple. The shooter was in no immediate danger and chose to kill her husband instead of seeking help.

We have laws and rules in this country for a reason. Calling the police is supposed to be the first option when someone is in this situation. We also have a well-publicized system to take in and protect abused women. If someone is in an abusive situation in America, they always have somewhere to turn.

Well, as long as they're a woman or a child. If they're a man, we're not so concerned.

Also, there was no reference to a record of abuse before the murder. In the pursuit of justice, we should apply skepticism when someone makes an important claim over a matter as serious as domestic abuse. However, that's not the way things work out in practice.

Details like how both she and her husband slept with loaded guns simply raise more questions about exactly what was going on before she shot him in the head while their daughter was in the kitchen.

Maine's big alternative weekly, The Portland Phoenix, followed up when prison guards allegedly allowed three prisoners to savage a convicted child molester, who died a few days later. While in both of these cases it's hard to sympathize with the victim, an ordered society needs to leave these matters to its judicial system instead of the whims of violent vigilantes and mob justice.

It's really hard to muster up indignation when bad things happen to bad people. I don't think I could dedicate my life to protecting murderers and rapists from a system that must have some lapses here and there. There are other issues that resonate with me much more, but I'm glad there are people out there who care about this issue enough to get involved.

I won't hold my breath for The Phoenix to cover the Cummings killing as critically as the fatal prison beating. The staff has an ax to grind with the Maine prison system and they have been targeting the prison guards who did not intervene, not the prisoners who actually killed him. In the Cummings case, the murderer is a woman who's claiming abuse and has social activists backing her.

I wouldn't be surprised if they write an article slanted to her view. Not only was she let out with no jail time and no probation, she also escaped being institutionalized where she could receive mental health treatment.

From the Portland Press Herald article:

After [Justice Jeffrey] Hjelm left the courtroom, about 50 people wearing "Free Amber" stickers burst into applause.

Outside of the courthouse, Amber Cummings thanked people in the community for their support. Her husband was mentally ill, she said, and she didn't want people to be angry with him.

Well, at least she doesn't hate him. Instead of calling the police or a mental hospital, she must have put two .45 bullets into his head while he slept out of love.
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Monday, January 4, 2010

Top 10 political disasters by administration

A press release from the libertarian party suggests:

Top 10 disasters of the 2009 Obama administration (in no particular order):

1. Cash for Clunkers
2. War escalation in Afghanistan
3. Giant government health care expansion bill
4. Post office loses money hand over fist
5. Stimulus package
6. Expansion of "state secrets" doctrine
7. Big increase in unemployment
8. "Bailout" Geithner as Treasury Secretary
9. Skyrocketing federal spending
10. Huge federal deficits

Top 10 disasters of the 2001-2008 Bush administration:

1. Cash for Car Companies
2. War in Iraq
3. Giant Medicare expansion bill
4. Post office loses money hand over fist
5. Stimulus "rebate" checks
6. PATRIOT Act
7. Big increase in unemployment
8. "Bailout" Paulson as Treasury Secretary
9. Skyrocketing federal spending
10. Huge federal deficits

Thanks to Kids Prefer Cheese for the link.

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Sunday, January 3, 2010

"Buy black" campaign makes the same errors as "buy local"

Now that 2009 has come and gone, there's one national story that stands out as something I should have written about.

It's not the Gov. Rod Blagojevich of Illinois corruption crackdown, because a Democrat who hides his greed behind noble fables isn't news.

It's not the far-right push to replace the Federal Reserve with the gold standard. History lesson - we had both during the Great Depression, and the Federal Reserve's big mistake was not following its own rules. This issue attracts more flies than anything else.

It's not the Joe Wilson "you lie" outburst and its aftermath, because I covered that already, although I forgot to mention that if Wilson's point was that emergency rooms will still cover illegal immigrants because the Democrats took out measures to check for immigration status, then he was correct.

No, the story I missed is the birth of a "buy black" campaign out of Chicago (Don't act all surprised - you read this entry's headline). John and Maggie Anderson started "The Empowerment Experiment" to drum up support for black businesses. The idea is they would only purchase from businesses owned by other black people to make the black community richer.

It's unfortunate that this experiment involves such a touchy subject as race, because all of the criticism has been along racial lines. Critics have called this a discriminatory campaign, and it's very difficult to avoid following that lead. John Anderson attempted to defuse that angle when he told CNN:
"We're not advocating that anybody make purchases along racial lines. OK, that's not what we're advocating. What we are advocating, though, is that African-American do have a higher sense of duty to support black businesses that are investing in the community."
Unfortunately, that's not what the campaign has been telling people to do. It really has been advising people to purchase from black-owned stores - regardless of what those businesses do with their profits. I'm aware there are some serious ethical concerns here, but that distracts us from an important question. People have been so hung up on race that they haven't been asking if this plan will actually help the black community.

In a word, no. This is the same fallacy as the "buy local" movement, but instead of limiting purchases to the immediate area, participants are limiting their purchases along racial lines.

Like the "buy local" movement, the "buy black" movement looks at the increase in business the merchants will undoubtedly receive and calls that a success. What they are forgetting is the difficulties the black customers will experience - higher prices, inconveniences and lack of choices - and all in the name of an aesthetic choice.

The gains to the merchants will be smaller than the sacrifices paid by customer, due to lack of economics of scale and higher transaction costs. This campaign will make the overall black community poorer - not richer.

Don't believe me? Look at the first four paragraphs of the Associate Press story that got the whole thing started:
"It's been two months since 2-year-old Cori pulled the gold stud from her left earlobe, and the piercing is threatening to close as her mother, Maggie Anderson, hunts for a replacement.

It's not that the earring was all that rare—but finding the right store has become a quest of Quixotic proportions.

Maggie and John Anderson of Chicago vowed four months ago that for one year, they would try to patronize only black-owned businesses. The "Empowerment Experiment" is the reason John had to suffer for hours with a stomach ache and Maggie no longer gets that brand-name lather when she washes her hair. A grocery trip is a 14-mile odyssey.

'We kind of enjoy the sacrifice because we get to make the point ... but I am going without stuff and I am frustrated on a daily basis,' Maggie Anderson said"

Unlike localalists, the Anderson's report they have to drive 20 minutes to get groceries even though they live in a big city. So in a way, it's worse. Localists at least have the convince of buying from stores in the immediate vicinity. Black-owned businesses can be spread out pretty far. This does, however, give black-only consumers the ability to buy things online and have things mailed in.

Otherwise, the major economic errors are there. Broken window fallacy - check. Mercantilism - check. Protectionism - check. I don't see any of the hyper-nationalism of the buy local movement, but that's because the artificial lines on which stores to buy from are drawn in a different pattern.

I also haven't seen any Luddite tenancies from the "buy black" crowd but there's no reason the philosophy can't embrace them.

Since the year is up, it's reasonable to start expecting the results to pour in from The Empowerment Experiment. However, the web presence of the movement has been spotty. Their official web site hasn't been updated. Their Twitter account dropped off in July and their YouTube channel last put up a video in August. They have a fans page on Facebook, and I've seen Maggie Anderson post on the wall, but its content is limited to links for black businesses.

Just like the "buy local" movement, a campaign that promised to make the entire group wealthier spiraled into a mere advertising scheme for its merchants.

Now that it's 2010, I'm interested to see how the Andersons think their experiment went. However, as we've seen before with the "buy local" movement, it's very easy to call a campaign a success because of its fanfare when its original goals were never met.

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