Washington holds onto it's large Fannie. (great title for a post: can the post live up to the title? this an more to be seen below)

This Sunday morning I did what every good American does on their day of Sabbath... I watched a considerable amount of football while eating snacks and complaining about the world's problems...  mmmm the American dream tastes so sweet!  The aforementioned title came to me in a not-so-out-of-the-ordinary moment of self-criticism. 

My friend just pointed out to me the dichotomy that exists between Washington DC and New York.  It seems every time New York looses jobs, Washington DC gains them.   And--in theory because in reality this has never happened--on the other end of the spectrum every time Washington DC looses jobs New York gains them.  I think many people today might say that they would rather see more jobs in DC than New York: thus is illustrative of the ever growing skepticism of free markets.  However, I adamantly believe that wealth is generated in society when markets are allowed the freedom to evolve and self correct.  

If anyone can help me.  I have heard many people's account for why market skepticism exists today with such sway.   Why do people not believe in the self correction in a market?  My libertarian friends each proclaim a story for why this is so. Each of them offering differing perspectives for this market skepticism, each however is not based in rational or unbiased analysis.  I'm not discounting their advise or to say that there even exists an accurate assessment of this dilemma, but at the same time it sucks being alone and it sucks wanting to advise every young schmuck who brings ill-advised and generally not well thought through perspectives.  That's not me to boast perfect knowledge I don't know the answers but I do know that many people have not thought these issues through...

oh... loneliness... 

Freddie and Fannie (because its the trendy thing to write about)

I wanted to draw up an analogy between panda bears functioning in the wild who become impotent in captivity and Fannie and Freddie’s stratified existence stretched between natural-free-market signals as a proposed completely government owned status, which I feel is much like wild animals in a zoo. In all reality the more I think about the analogy the more it makes sense: except for the pressure Fannie and Freddie had to decrease interest rates to make housing "more affordable." What does make sense is that a zoo is a place that usually has really wild animals trapped and controlled in small cages where they are given controlled resources and their cages are painted to look like nature. I think that fits perfectly into a representation of how the government treated Fannie and Freddie. They controlled them and did not let natural processes take their toll/role. The most ironic part, which I personally love, is that panda bears have forgotten how to reproduce. This is a perfect representation of how when any entity is pulled away from a grind stone be it natural selection or creative destruction in the market place and brought under the protective wing of a subsidizing branch, like the government or a zoo that entity looses it's natural ability to compete. A firm cannot use price signals or profit measurements to gauge its effectiveness. God knows a panda bear is not even attempting to measure it's effectiveness at staying competitive when it gets into a zoo. I think more likely a panda bear is sitting on its haunches and getting fat. Fact this is probably why people work out. We can rationally process the fact that we are away form the grindstone of natural selection and therefore, on some level, strive to self-enact some force of evolution or betterment. Fortunately for humanely, most of us haven't realized that the only force that can effectively evolve a society is death; those who do try to enact that force again generally get put in prison. On the other hand we have many people who have learned this mechanism works the same way in markets and that it is good for markets to evolve. I only pray they let it happen, less we all end up like impotent pandas in a zoo.

EPA... Today

I used to really like the idea of the EPA, though I always realized that they did have rather large structural flaws. The entire concept is flawed to begin with. Crude regulation can never capture the complexity of nature and evolution. We try to regulate it, but we end up looking a lot like command and control on a skipping record. Recently at a Mercatus Center conference command and control policies were referred to as a 1970's car: you don't drive a 1970's car in 2008. It's not efficient or effective. Environmental regulation needs to fit the paradigm of the new technology it represents. This does not mean troubleshooting technology with regulation. By no means should regulation ever be ahead of technology on the margin of creation. I don't pretend to know the solution; I just want to point to some relevant flaws in the EPA.

Flaw number one:
1) They have historically been the puppet of the executive branch of the government to expedite the creation of trendy-no-good-boondoggle regulations that are structured to promote a single technology over another. Example Clear Skies which if you read into you will soon figure out is nothing more than the Bush administration's attempt at making Coal look good. Garbage. Not to mention they screwed up mercury legislation. Mercury disperses locally (that's called point source pollution) not globally. Clear skies attempted to regulate a local pollution on a national scale.

2) The EPA fails to understand that "government funded research" does not compare with the productivity and creativity that is present in a competitive free market. the incentives just aren't there. This is not a hard concept everyone knows this to be true. If there is no system for checks and balances, measurement, accountability, and creative destruction than things don't get done well: if at all. I don't want to say stop funding all research. That would be overstepping lowly status as a know-it-all associate. Rather, I would like to ask the question, "Why do we fund research?" and when ever anyone answers that question with anything but "we shouldn't be funding research" counter them with another "why," then another "why," and maybe another "why." Depending on how stubborn the person is and or how creative they are the point, in theory, may become evident some time next week. EPA, please help entrepreneurs but don't give them money. It's like a fat kid in a candy shop; do as all the good children’s books say, stop feeding them candy! I want people to think of Olympic athletes when they think of American creativity, not couch potatoes playing wii.

3) The final flaw I wish to draw attention to is the newest and freshest new kid on the block. It is talked about here. I purposefully did not read the entire article so as to avoid getting sick to my stomach or ripe and angry. The EPA is creating a legislation that would expand the influence of the Clean Air Act into other sectors in the economy, including small businesses, and homes. The rational is questionable and I would seriously like to hear an argument for this regulation outside of one that ends in "the sky is falling." Benefit of the doubt is always higher ground. If this is true, and it is not suppressing, than you can expect me to roll up my sleeves for the next couple of months and lay some verbal elbow-drop on these irrational eco-dorks.

Civic Duty

Recently, my family found out about a little moral dilemma I have been struggeling with (weather or not to vote) and I nearly got taken off the Christmas party list. Public choice economics has been making off the charts-heartbreaking-yet... rational argumets for a while now about the actual effects of an individual voter. This is not to say that my perspective is anything based in actual presidance but rather that there are some convincing arguments for not voting or more importantly not caring about voting.
Anyway my aunt sent me a rather agressive message about how it is my civic duty to vote and it got me thinking. What is Civic Duty? and if there is Civic Duty and it is important, why is it legal to not vote? The whole idea seems like it lacks scientific method, like it is the rhetoric of a campaign ... huh... Many people come down with vigar on the side of (what could be considered) voting fashism, while others, based upon the fact that supposeively many american don't vote, don't give a flying fudgesickle about politics. I wish I could find more of those Americans, every punk I have a conversation about this with wants to shove voting down my throat like a beer bong.

I wrote the following messge back to my aunt in responce to her message.

Dear Aunt,

You tone in the message makes me feel like you might be academically interested in my side of the conversation.

(this was sarcasm, her message came off strong winded, like a rock-the-vote)

Aunty, I have been trying to detach myself from party loyalty for the last couple of months. It has recently come to my attention that my party affiliation has been making me professionally and emotionally bias. I'm branded. It's like watching the 49ers play and I am supposed to be a honest critique on both. (I love the 49ers damn you ESPN East coast bias!) Normally I would be ok with being branded, but it's just not honest and that irks me. At this point in my life it is important for me to be honest and critical as I analyze the details of policy implications or at least what people think the implications are. The premise of this approach is that politics and intellectual debate has largely been running in circles over the past 5 to 6 decades. Both sides swear they are correct. and in all reality the actual issues have tended to shift sides as it becomes advantageous for a party to gain the vote. Republicans used to be the party of lincoln. Democrats used to be the party of the south. This has led me to believe that parties are phony, people are different than parties, and 98% of it is a big show to get voters. I want to understand the source of prosperity/wealth/health/happiness/candy in our society and what economic parameters actually make people better off. Some questions to ask that lead to this line of thinking are "how did the west get rich?" "How does knowledge work in our society?" "why do some people respond to emotion while others respond to reason or tradition?" "what type of world do I want my children to live in?"

Frankly I have been struggling the most with these questions, and more specifically where I come down on these two questions:
do you support policies with a short-term benefit and a long term cost.
or policies with a long term benefit and a short term cost.

Without question, I would answer the second best describes me. but when it gets down to the nitty gritty and gets applied to policy, it is a really tough question to answer.

The analogy I have been using lately is: do I give a bum money on the side of the road? why or why not?
I don't know the answer to that question.

Thank you for your concern about me voting. And you have to know that any information about grandpa warms my heart. Please trust that I am trying to be as honest to myself in my decision to vote or not. 

Cheers,

Lincoln McLain