Wednesday, August 24, 2011

What does defense spending produce?

In reading, Victor Davis Hanson's article on the myth of World War II spending, I had some thoughts about economics that are quite tangential to VDH's point.

VDH points out how liberal's are changing their story about the Keynesian effects of spending during the Depression and WWII.

In reading this, my mind jumped back to Economics 101 in the classic Guns versus Butter choice. As you all remember, this is the choice that we as a society through government have to make whether we want more guns or more butter, but we can't have both. Laying aside one of the flaws of this dichotomy that good spending increases the size of the economic pie, so you end up with both, there are some inherent teases in this set of false choices that drives much liberal economic thinking.

Since most liberals only use economics classes to recite catch phrases and not dig any deeper, this guns versus butter is one of their favorites. In their eyes the choice is quickly converted into a choice of welfare versus defense spending. The notion for them is that if there are limited dollars, money spent on either welfare (using government distributed butter as the image) or guns (using army rifles as the image) is gone once spent. The choice must be made. The compassionate minded must choose butter and reduce spending on guns.

I do not dispute the fundamental choice that guns versus butter was supposed to teach. The lesson is supposed to be that must make choices in government spending. The problem is that the images are misleading to the uninquiring so they create false confidence among liberals that they understand economics.

Let's dig deeper. Butter represents welfare spending and other government spending on the domestic front like building highways or public schools. Guns represent the army, navy, and marines. (I am not sure where the FBI, ATF, or state and local police fit in most liberals minds. I suspect that the FBI and ATF are guns because I believe they are non-union and that police are butter because they are often union. Am I jaded?)

For the simple minded, purchasing guns is bad. Analysis done.

For the deeper minded, let's keep exploring what these images really represent and whether a better set of images are available.

Butter as domestic spending has the feel-good aspect that anything spent at home gets a better society. Guns as military spending has no feel-good aspect to the average liberal. The choice seems easy. Not knowing anything about the author of this method of teaching, I wonder what his motivations were.

In the real world, this dichotomy is a disaster. Most federal domestic spending is far beyond the scope of what is allowed under the US Constitution. Education? No. Welfare? No. Social Security? No. Medicaid? No. Obamacare? No. Liberals feel good but have no legal basis for their programs.

The problem with most of these programs is that they are grant programs. As a lawyer, I look at transactions to see if each party to the transaction gives something of value to promote the exchange. If so, there is a contract. If not, there is a grant or a gift. Both would be legal transactions for individuals, but not necessarily for constitutional governments. The problem with most liberal, grant programs is that the government is not a party receiving a benefit back from the other party. The programs produce no value because it is simply the transfer of money. The recipient may have strict restrictions, like the Program formerly known as Food Stamps or Medicaid, where misspending is a felony. Other programs have no restrictions on the expenditures, like Social Security or unemployment benefits.

Of those that go for specific purposes, like the Program formerly known as Food Stamps or Medicaid, the government gets nothing, but the program beneficiaries get specific goods or services. Since the government gets nothing, it has no accounting method to show that the government balance sheet has increased. It gets the benefit that fewer food riots will occur or old people attacking the car of the Chairman of House Ways and Means. The food providers or medical providers who receive the money on the beneficiary's behalf do increase their cash flow and hopefully their wealth through retained earnings after paying expenses. The program beneficiaries have little incentive to change their behavior within the program. Their choice is pass or fail: stay in the program or quit. Most economic choices are ones of timing of expenditures, size of expenditures, and selection of goods and services purchased balanced against choices on how to obtain more resources to use in the next round of purchases. These government programs destroy the choice about how to garner more resources.

On the guns side of the equation, most people have trouble explaining what gun purchases in a time of peace buy for the general public. Buying more and bigger guns is not what we are talking about here. What we are talking about here is buying sufficient guns, military talent, and logistical capabilities that are most likely enemies fear to attack us at home or to attack our citizens abroad. We are buying peace of mind. Most liberals believe this is just as much conservative feel good as butter programs are liberal feel good.

If we are discussing whether to buy a multi-million dollar airplane because it is cool, I would agree with the liberal. If we are talking about projecting power with that airplane to the four corners of the earth so that we don't have to put boots on the ground in every corner of the earth, I would beg to differ with the liberal.

Ultimately, buying peace of mind with the military is a difficult concept to grasp. Why do we want peace of mind? As a liberal hiking in the mountains of ancient Persia, will you be arrested as a spy? We know from recent history the answer is yes. The fear of arrest overseas in that type of situation is an example where the US has not bought sufficient peace of mind. As a conservative businessman traveling in Venezuela, are you likely to be arrested as a spy? Not that I am aware, no. The US has bought sufficient peace of mind there. Can an American travel to the Caribbean and avoid arrest? Absolutely. The travel is cheaper than Venezuela and less personal security is probably needed. I would suggest the quiet presence of the US Coast Guard and US Navy in and around the old pirate-haven Caribbean is a major reason.

The guns choice allows American citizens to move around the world more cheaply under fewer threats which in turns allows more commerce.

A similar domestic guns choice of welfare versus police demonstrates that higher police presence reduces crime where high welfare spending has no causation at all. But high welfare spending and inadequate police presence guarantees a safe incubator for criminal activity. Commerce disappears. Jobs disappear. Wealthy families leave.

Just think how many private transaction are peace of mind purchases: psychiatry, massage therapy, gift shops filled with useless knick-knacks, nice restaurants, flower shops, mega-groceries, luxury homes and cars, etc. If we converted our economy into one that refused to sell anything that offer peace of mind, we would have politburo-run grocery with lines out the door and no food on the shelves.

We buy peace of mind every day. The military is first and last line of defense from foreign threats to our daily bliss. The police are our second-to-last line of defense (don't forget the Second Amendment is the source of the last line of domestic defense) to domestic threats to our daily bliss.

The stronger we are perceived by our enemies, the more likely are enemies go elsewhere.

The guns versus butter analysis is one of the greatest sources of liberals complete disconnect from reality when we discuss government spending. They misapply its true lessons and superimpose their own notions of right and wrong choices. Now all guns choices are bad and all butter choices are good.

The real choices are between expenditures that reduce the daily cost of living for self-sufficient citizens and those that increase the financial burdens on the self-sufficient. The choice is the great wide open versus prison.

Expenditures on highways reduce the daily cost of living by allowing more independent movement of infinite variety. (Some Constitutional questions remain about whether the federal government is properly the dominant player.) Highways give government a general use product that no other provider can provide efficiently and widely. The benefits of highways are easily and objectively measured by traffic counts and value of commerce passing over it. This allows a systematic analysis of good places to place or expand highways. It allows successful governments to build infrastructure for actual growth occurring, not wishful thinking. (Yes, politicians with earmarking and pork barreling ignore these objective measures. That is a reflection of decisions made at the wrong level of government than a bad use of money.)

Expenditures for grant programs with no reciprocated consideration are undesirable. (The individual states need to be aware of these economic problems arising from grant programs, but are not Constitutionally prohibited from pursuing them.) Grant programs benefit only one person or organization at a time. The benefits are diffuse and not subject to measurements of benefits that not subjective. The consolidation of benefits mostly go to the politicians who support the benefit and not to a community.

Once we become aware of the inherent fallacies of liberal reliance on guns versus butter, we are better able to deal with the real problems on the side of the equation called "butter." "Guns" can be expensive, especially during a hot war, but are easier to identify and corral. "Butter" is budget busting, as Obama has demonstrated, and harder to fix.

Tuesday, August 23, 2011

The incomprehensible lack of diversity of diversity education

Why is diversity education always taught the same way?

I can just imagine if other subjects were taught the same way:
Newtonian physics taught as a man pushing a box over level ground, even if the real point was gravity's acceleration.
Algebra taught as long addition writ large.
English as "Jack and Jill."
Botany as the study of an oak leaf.
Chemistry as the study of table salt.

The constant refrain of diversity education is that we should learn to appreciate the differences in one another.

The problem that I find is that the people who are best trained in diversity are the least appreciative of the differences in one another.

If a black student comes into class and proclaims his love for his white brothers, he is hailed as living up to the diversity creed. If a white student takes no interest in the fact that the black student next to him has a different skin color, he is racist for not appreciating the differences.

Diversity classes tell us that we look different but share common experiences but discourage actually learning about each others' pasts that might expose different experiences and different opinions. They are discouraged from accounting for differences in skin color, hair characteristics, childhood experiences that don't fit the template, and monetary habits. Heaven forbid a student mention that another person's statement of reality is wrong. There is only one opinion allowed but many observations of facts; so long as the observations support the allowed opinion.

Skin color tells you nothing about the person's character. Got that?

A person who truly appreciates diversity will learn about medieval English madrigals from a black man from the inner city of Washington, DC.

A person who truly appreciates diversity will seek out friends of other races because of similarities of interests and learn about their new friend's family and life experiences over a beer (or root beer for minors). He will ask tough questions that challenge his interlocutor's understanding of reality. Then both friends will challenge their differing opinions. They will laugh that one uses more sun tan lotion than the other. That one's hair is straighter than the other. That one's mother kept money in a shoebox and the other's mother kept money at a bank that went out of business. They will return to the joys of their similarities of interest and look forward to their next meeting.

Anyone who shouts about the importance of diversity scares me as a person who wishes to find only people who agree with him. Diversity studied is diversity ignored.

It does not have to be that way, but diversity training is the domain of the liberals and is just a way to use corporate money to enforce liberal orthodoxy (i.e., correct belief) just as the Spanish Inquisition was about enforcing correct Catholic orthodoxy.

As I watch my child grow, he has friends of all races and cares not one whit. Only as teachers in school tell him to look at all the other kids and teaches my son to place value on being different from his multi-racial circle of friends does he start to have a race-oriented mindset.

Diversity training does more damage that it solves. No member of the KKK will go into diversity training and confess his sins and repent of his racism. No member of the NAACP will go into diversity training and confess that the NAACP is damaging the black community. But put a multi-racial circle of young friends in diversity training and they will start to question their natural open-mindedness.

What's worse is inserting diversity training into history classes.

As a life-long student of history, I have found that the only way to truly learn history is to accept that each era has their biases that cause corrupting influences. The now-beloved Progressives were heavily exposed to racist ideology with many proposing programs to serve their racist goals. Study the history of the early Progressives by getting mad at their racism makes little sense. It is hard to truly learn about what motivated the Progressive's racism if you as a historian are angry.

As history meets the present, that emotional detachment can and should change. The only way a human being can affect the future is by his thoughts, feelings, and actions be carried out in the present.

A passionate pursuit of righteous behavior that interacts with other persons based solely on the content of their character is the best form of antidote to racism.

Diversity training is like taking the heroin addict and waiving a filled syringe in front of their eyes to demonstrate the evils of heroin. It does not work but it feeds the worst elements of the addiction.