Archives for August 2011

Now that the dictatorial regime of Muammar Gaddafi is ending, we’re starting to see some people suggest that the outcome is a vindication of Barack Obama’s policy in Libya.

Let’s review the facts. First, Gaddafi was a dictator and he wasn’t an especially sane or pleasant man. Second, there are plenty of other countries run by unpleasant men. (They almost always seem to be men, don’t they?) Third, Libya had not attacked the United States or any other country.

Under these circumstances, there’s no sane reason for the United States (and other foreign powers) to send their military forces into the country to topple the government. It might make us all feel better — at least until the next guy becomes Dictator of the Week and arouses an outcry.

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Gambling is a hot political issue in some places, but the centerpiece of the economy in a few others. In all places, though, gambling is a bit like a tax on people who don’t understand math.

I don’t understand the allure of gambling, so it’s never been a temptation to me. (But the various other things considered vices have never been of interest to me, either, so that’s not a surprise.) But if people choose to waste their money on gambling as a form of entertainment, hey, it’s their money, not mine. The people who make arguments against gambling on religious grounds or social grounds are basically asserting the right to make the decision for other people — and that’s wrong.

A friend asked me this over the weekend:

“What do you think gambling does to the economy? Of course I don’t think it should be illegal, but I don’t think it’s necessarily good for our economy, either. But I don’t know because I don’t have enough information on that to make a decent conclusion. Now playing the lottery is what my cousin always called ‘the stupid tax’ (and I agree there, because you’re really just giving more money to the government unless you’re one of the very few who wins), but I wonder about casinos and such, too. It’s so intricate, because where there’s gambling there’s addiction and people going into debt.”

First, I agree completely with my friend about the legality of gambling. If you want to gamble, that’s your business. It’s your life. It’s your money. I don’t think it’s a wise decision, but you probably don’t think some of my decisions are wise. I don’t have the right to control you any more than you have the right to control me.

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During the round of “stimulus” spending two years ago, federal bureaucrats figured out how to stimulate the sign industry. They instructed states to spend millions of dollars for signs to post on highway projects telling motorists that the projects are funded by “stimulus” spending.

The example is outrageous, but it’s symptomatic of bureaucratic political thinking in monopoly situations. Getting the job done in the least expensive possible way wasn’t the priority. Clearly, the priority was delivering a political message. Although nobody can put a dependable figure on the cost of all those politically motivated signs, it’s clear that they cost millions of dollars — but why would anybody worry about spending small change like that?

Actually, many mainstream (Keynesian-influenced) economists wouldn’t complain about the cost. They’d say that the spending employs sign makers and installation workers — who pay taxes and spend their income — so it “obviously” has a “stimulative” effect. That’s the Keynesian theory that led the Fed and the U.S. government to pour money down various ratholes in the past few years.

Is all of the “stimulus” spending the equivalent of paying people to dig ditches and refill them (or post signs with a useless political message)? Of course not. Some sizable percentage of it ends up being spent for things that are nice (or at least, sort of nice) to have. Some roads get repaired or expanded. Some downtown areas get spruced up. Some playgrounds get built. It’s not bad stuff, but the things that are seen are just part of the story. What’s unseen is the part of this story that nobody talks about — and it’s a point that French writer Frederic Bastiat famously made in his 1850 story about a broken window. (Please take three minutes to read Bastiat’s story. It will help you understand the rest of what I have to say.)

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