TIme to Start Things Up

We have dutifully followed the recommendations for older people to stay at home mainly and to keep their distance when going out.  I have encouraged others to do the same. I thought and still think that as an epidemic of a contagious disease from a new virus with unknown characteristics, lethality, and susceptibility to treatment  spread in this country, it was appropriate to give the experts in public health the benefit of the doubt and to do as they said while realizing that with so much not known, we might be overreacting.

Now I think it is time to open the country back up, and for most people to return to normal life – carefully, incrementally, and at different rates in different places. The dire and frightening things predicted by officials and projected in the early models have not happened.   The stated objective of preventing exponential growth in the number of infections – flattening the curve -  has been met.  Results of random tests indicate that such a high percentage of people carry the virus  - often without having been noticeably sick - that the disease’s actual rate of mortality is likely far lower overall than earlier guessed.    Meanwhile the damage to the economy and to people’s lives from the shutdown is serious, growing, and in some cases disastrous. 

We also have more data about  levels  of risk among various types of people. Though things still are not as clear as one would like, the risk of serious harm from covid 19 seems to be small for healthy people under sixty five or so.  Statistics indicate that older people and people in chronically and seriously  bad health have more to worry about and probably should be careful longer. (I don’t know how much that applies to healthy, active older people. I have not seen  enough data on that and plan to be careful until I do.) Inmates of nursing homes, almost all of whom are both old and in bad health, have a lot to worry about. I expect things will need to done differently at nursing homes until a vaccine or some proven, reliable treatments are on the market.

One of the most unpleasant things coming out of the shutdown is what it has shown about the character and desires of some politicians and their public relations flacks in the traditional media. Many Democrats seem to be enjoying this and yearning for their "new normal" in ways that ought to make the rest of us  wary and a little worried. ( I do not mean their  liking a damaged economy because they hope it will hurt Trump. That is just ordinary slimy politics. This is something worse.)  From banning the purchase of vegetable seeds to calling on people to become police informers against their neighbors  to spying on citizens with drones to threatening to close  churches that hold unapproved services permanently to policing  gatherings of relatives in private homes, leftist officials are using  emergency powers in ways that are arbitrary, often idiotic, frequently unconstitutional, and sometimes downright scary.  One hopes  residents of places such as Michigan and New York will be able to make their civil masters  back down quickly after  this blow over. I also hope that people will remember  how much the officials relished bullying them and pushing them around  - often for no good reason -   and do something about it in future elections.

Bailout

A few days ago Senator Schumer said that the present economic  trouble is so big and significant that private individuals and organizations cannot fix it, and only the government can deal with it. He was right in one sense, though probably not in the way he meant. Only the government can create money out of thin air in whatever quantity it likes. (It has a monopoly on that and guards it vigorously. Anyone trying to run his own stimulus program by running off a few hundred dollar bills on his color printer would be stopped by our public servants and treated harshly.) That is one of the jobs of the federal reserve.  Also only the government can, so far, float debt seemingly without limit.

 The politicians have decided that the danger of a catastrophic decline in economic activity justifies the cost and risk of throwing two trillion dollars of direct payments and guarantees of (often forgivable) loans into the economy.  Whether they are right or not, the passing of the bill illustrates a couple of things to notice. The people running the government tend to prefer the dangers of inflation and debt to the dangers of deflation and credit crisis. They do not want to repeat the 1930s or anything slightly like it.  Also in this very prosperous country there are enough individuals, companies, and state and local governments without sufficient reserves to go two or three months without revenue that officials thought a bailout was needed. Both are useful information  that can help  tell people something about how to invest and manage their assets  and lives going forward.

Of course a scare like this may convince more people and organizations to increase their reserves and build up emergency and rainy day funds. That would be a good thing.  I do think many people will decide never again to be caught with a nearly  empty pantry or only a few days of basic supplies. That would be a good thing too. One does not have to go as far as the Mormons or the survivalists do to admit that they are onto something.

Politics and the Pope

The combination of economic freedom, markets,  openness to technological innovation, respect for property rights, and rule of law which is sometimes given the name capitalism has lifted many societies throughout the world out of poverty  and misery. It has transformed societies, even deeply flawed societies such as China which have embraced it only partially, for the better.  Except when stopped by war or actions and failures of governments, it has done so every place it has been tried broadly throughout a society.

Socialism on the other hand has never lifted any society out of poverty and misery.  In the Soviet empire, in  much of Africa, and in China and Vietnam until it was abandoned de facto, socialism has failed to improve the lives of people and usually made them worse. The record is clear, and the reasons are well understood both in economic theory and through the history of the last hundred years.

So some people are puzzled that  the present leftist pope fulminates against capitalism and people’s desires to improve their well being while embracing communists and  socialists and favoring many of their ideas. They should not be.  Catholicism has never lifted a society out of poverty and  misery either or made an effort to do so.  It has often been an impediment to the process.  The  pope is following a long tradition within his organization of condemning, opposing or retarding forces, conditions, and activities  enabling human progress.   

Reasonable and humane people who care about the world’s poor having opportunities for improving their lives should ignore, oppose,  or laugh off the pope’s attacks on free markets and capitalism.  

And perhaps  economically successful Catholics should take his screeds against money to heart and refrain from polluting the organization he heads by donating their vile  cash to it. 

Neither Prepper nor Faithful Sheep

The false dichotomy is one of the favorite rhetorical tricks of those in the American left.  We are told people must either love Obama as a great leader or secretly hate him because he is black, or that people must either approve of homosexuality fully and joyously or condemn it as a sin, or that people must either favor state control of the health care professions and industries or want their fellow citizens to suffer without access to health care, and so on.  Sad to say, there seem to be enough people with poor enough analytic skills that they often get away with it.

 

We get another example from the traditional financial media – the false dichotomy between  fully trusting the establishment’s politicians,bureaucrats,  and financiers and becoming a whacked out “prepper” who thinks civilization or at least the world’s economy is about to collapse.  Every false dichotomy hides something and diverts attention from other real possibilities and options. In this case it allows writers serving the establishment to avoid both serious questions about how competent and trustworthy those politicians, bureaucrats,  and financiers really are and serious reasons why people might want to  take a few precautions and acquire a little insurance against trouble even without believing crazily in a coming  economic apocalypse.

The recent financial crisis and the reactions to it from both Republicans and Democrats should  be enough to justify some skepticism about the competence of the politicians, bureaucrats, and financiers, irrespective of worries about a total collapse.  And since it is fairly obvious that we now have the most dangerous, aggressive, mendacious, and anti-growth government since at least the 1970’s, there should be some doubts about its trustworthiness quite apart from any apocalyptic concerns.

As to taking precautions, one does not have to believe civilization is about to end to see value in storing  some food. All one has to do is notice that storms, labor problems, or government policies and decrees can disrupt deliveries of food to grocery stores. One does not have to believe the dollar is about to become worthless to see value in holding a portion of one’s assets in precious metals. All one has to do is notice that governments around the world are on a binge of printing money,  that all major currencies in the world are fiat currencies, and that under present political condition holding some of one’s wealth in an anonymous and hard to trace form might not be a bad idea. One does not have to believe the civil order will collapse or the government will become totalitarian to see value in being armed. All one has to do is notice that there are criminals  out there who want to do others harm and that an armed citizenry is the surest defense against  any government’s tending toward tyranny. One does not have to be a prepper to see value in being prepared for trouble. All one has to do is notice that trouble sometimes comes and be willing to act on that information.

  

College

It is a widely held belief in our society and a major article of faith among our politicians that going to college is a very good thing and that more young people should be doing it. Most people seem to think that going to college pays off handsomely financially, and a good number believe that attending college is the best or even the only way to acquire what people used to call a liberal education.   This is completely understandable. The last time I looked, the mean income for college graduates was  higher than the mean income for high school graduates, with the mean income for people who attended college but did not graduate falling in between. It is also true that most students do wind up taking some courses in science, mathematics, and arts and  humanities and that most colleges try to give the impression of taking those things seriously.

However, there are reasons to question both assumptions. It is difficult to decide how much of the difference in average incomes is due to college and how much is due to the fact that the population attending college contains a higher percentage  of people who are more prone to success due to intelligence, attitude, determination, ability to make and follow long term plans to meet long range goals,  patience, ability to and learn the house rules and know the score, expectations, or other factors.  The problem is complicated further by the fact that some high paying professions such as law, engineering, and medicine require certifications based at least in part on having a college degree. Excluding that, it is possible that college  is responsible for far less of the differences in average incomes than is usually supposed.

Then there is the obvious fact that college is very expensive, far more expensive than it used to be. One can ask: would  a young person be better off to reach the age of twenty two with a fresh bachelors degree and the contacts and career-focused skills he acquired  on campus, having spent and/or borrowed sixty to two hundred thousand dollars to get them, or would the same person be better off with four years of experience on a job, the contacts he made there, and that same sixty to two hundred thousand dollars in his pocket and/or off the debt portion of his personal balance sheet?  It is clear that  the answer will vary with circumstances, but it is by no means clear that the first  option will be the right answer for most people.

There are also reasons to question the assumptions about a liberal education. Beyond the obvious fact that there are many educated, cultured, well read people who never attended college, there is the less obvious fact that what passes for a liberal education in colleges has changed. Many programs in many colleges require no more than a few perfunctory “general education” courses taught at not much if anything above what used to be a high school level and often blown off by students interested only in their career-focused major programs.  Also, political correctness had done its work on the curricula  at many colleges.  It is an exaggeration to say that race and gender studies, post-modernism, and tendentious and mediocre diversity-based subject matter have crowded out  Shakespeare,  Sophocles, and Mozart, but there is a trend. There are also lots of places, online and otherwise, for an interested young person to pursue (and find help and stimulation in pursuing) a liberal education these days.

I worked in colleges  for many years. I think they are good places for young people to learn, explore life, and have fun and are the best places for a lot of things.  But the vast majority of students do not become doctors, lawyers, scientists, professional scholars, or engineers.  Nor do they attend Ivy League or equivalent institutions and make contacts and get degrees that function as gilt edged union cards. For many of those students these days, the value proposition is very shaky.

Colleges and universities have been on the gravy train since the end of World War II. Their product has been in high demand. They have been able to raise prices pretty much at will, and governments have subsidized them lavishly.  People running and working at colleges have had few worries. Yet college is a product people choose to purchase.  If it becomes too expensive or the public’s perception of its value declines too much or if attractive competitors enter the market too successfully, the easy good times could end.