Friday, May 27, 2011
Wednesday, May 25, 2011
Common Sense Versus Nonsense
by Walter Williams
William J. McGee, the consumer advocate on the Department of Transportation's Future of Aviation Advisory Committee wrote "Forcing the F.A.A. to Fly Blind" in The New York Times (April 9, 2011), where he laments Congress' cut in the FAA budget, saying, "A $4 billion cut will necessarily reduce the work force further. And it's hard to imagine this will not diminish safety." Mr. McGee suggests there will be shortcuts in aircraft maintenance.
Here are a few facts and then a question. Each Boeing 747 costs $317 million, its 777 goes for $284 million and its 737 sells for $80 million. Airbus' giant 555-plus passenger A380 sells for $375 million. Here's a true or false statement: If it weren't for the FAA, airline company CEOs would not take the necessary measures to ensure that their aircraft took off and landed safely.
I'd say the statement is false. Even if CEOs didn't give a hoot about passengers, I'm betting that they do care, without FAA edicts, whether billions of dollars worth of aircraft landed and took off safely, and they will spend enough on maintenance to ensure that.
Mr. McGee might say that without the FAA mandates, airlines would spend less on safety. Whether we acknowledge it or not, there is such a thing as being too safe, as well as being not safe enough. Typically, it's only the effects of not being safe enough that are visible. There are the crashes, injuries and fatalities.
The effects of being over-safe are less visible. They are revealed when we recognize that too many safety measures such as unnecessary maintenance, early parts replacements and inspections costs money. If airline companies are to remain profitable and in business, passenger fares must reflect such costs. Because of higher fares, some families will opt to drive to their destination. Highway travel is not nearly as safe as air travel. Therefore, some highway fatalities might be because higher fares have forced people to drive instead of fly.
Witnessing a highway fatality, few would attribute it to FAA edicts. By the way, FAA officials have an incentive to err on the side of being over-safe because the victims of their policy are invisible and the agency suffers no public embarrassment and blame.
Speaking of safety, too many of us buy into the notions like "You can never be too safe" and "If it will save one life, it's worth it." Let's put this in perspective. There's a non-zero probability that our automobile hydraulic brake line system has a just-about-ready-to-fracture crack that could cause a serious accident that could be easily prevented by a routine daily inspection.
Yet how many of us bother to inspect our car's hydraulic brake lines before we start the engine and head off to work? Doing so would be safer than simply assuming that the lines were intact. After all, NASA doesn't act so "irresponsibly." Prior to launch, they make no safety assumptions. They go through a detailed inspection of all systems, taking nothing for granted. As far as our cars are concerned, we decide that such a level of safety is not worth it.
How about the frequently heard claim "If it will save just one life, it's worth it"? As a generality, it, too, is nonsense. According to 2009 data from the Department of Transportation's National Highway Traffic Safety Administration, 33,808 people died in car crashes. I'm guessing that if Congress would mandate and enforce a 5 or 10 mph speed limit, at least 30,000 American lives would be saved.
How many people would support such a mandate? "Williams," you say, "that's a ridiculous and impractical proposal!" I'd agree but put it more truthfully, though politically incorrect. People wouldn't support such a congressional mandate because those 30,000 lives that would be saved just aren't worth all the inconvenience and costs we have to bear by having to drive at 5 or 10 mph.
William J. McGee, the consumer advocate on the Department of Transportation's Future of Aviation Advisory Committee wrote "Forcing the F.A.A. to Fly Blind" in The New York Times (April 9, 2011), where he laments Congress' cut in the FAA budget, saying, "A $4 billion cut will necessarily reduce the work force further. And it's hard to imagine this will not diminish safety." Mr. McGee suggests there will be shortcuts in aircraft maintenance.
Here are a few facts and then a question. Each Boeing 747 costs $317 million, its 777 goes for $284 million and its 737 sells for $80 million. Airbus' giant 555-plus passenger A380 sells for $375 million. Here's a true or false statement: If it weren't for the FAA, airline company CEOs would not take the necessary measures to ensure that their aircraft took off and landed safely.
I'd say the statement is false. Even if CEOs didn't give a hoot about passengers, I'm betting that they do care, without FAA edicts, whether billions of dollars worth of aircraft landed and took off safely, and they will spend enough on maintenance to ensure that.
Mr. McGee might say that without the FAA mandates, airlines would spend less on safety. Whether we acknowledge it or not, there is such a thing as being too safe, as well as being not safe enough. Typically, it's only the effects of not being safe enough that are visible. There are the crashes, injuries and fatalities.
The effects of being over-safe are less visible. They are revealed when we recognize that too many safety measures such as unnecessary maintenance, early parts replacements and inspections costs money. If airline companies are to remain profitable and in business, passenger fares must reflect such costs. Because of higher fares, some families will opt to drive to their destination. Highway travel is not nearly as safe as air travel. Therefore, some highway fatalities might be because higher fares have forced people to drive instead of fly.
Witnessing a highway fatality, few would attribute it to FAA edicts. By the way, FAA officials have an incentive to err on the side of being over-safe because the victims of their policy are invisible and the agency suffers no public embarrassment and blame.
Speaking of safety, too many of us buy into the notions like "You can never be too safe" and "If it will save one life, it's worth it." Let's put this in perspective. There's a non-zero probability that our automobile hydraulic brake line system has a just-about-ready-to-fracture crack that could cause a serious accident that could be easily prevented by a routine daily inspection.
Yet how many of us bother to inspect our car's hydraulic brake lines before we start the engine and head off to work? Doing so would be safer than simply assuming that the lines were intact. After all, NASA doesn't act so "irresponsibly." Prior to launch, they make no safety assumptions. They go through a detailed inspection of all systems, taking nothing for granted. As far as our cars are concerned, we decide that such a level of safety is not worth it.
How about the frequently heard claim "If it will save just one life, it's worth it"? As a generality, it, too, is nonsense. According to 2009 data from the Department of Transportation's National Highway Traffic Safety Administration, 33,808 people died in car crashes. I'm guessing that if Congress would mandate and enforce a 5 or 10 mph speed limit, at least 30,000 American lives would be saved.
How many people would support such a mandate? "Williams," you say, "that's a ridiculous and impractical proposal!" I'd agree but put it more truthfully, though politically incorrect. People wouldn't support such a congressional mandate because those 30,000 lives that would be saved just aren't worth all the inconvenience and costs we have to bear by having to drive at 5 or 10 mph.
Tuesday, May 24, 2011
The Best Way To Innovation? – An Important Lesson from India
From Forbes
by Karl Moore
Innovation seems to be a prime directive at almost any firm I run into, regardless of industry. How do you get more of it? In these tough times the answer is no longer to throw money at it. What we increasingly need is frugal innovation, what the Indians call Jugaad. It is an idea, whose time has come.
Earlier this year I had the pleasure of traveling to India with 30 McGill MBA and B.Com. students to meet with executives of a number of large companies in New Delhi, Mumbai, and Bangalore as part of the ongoing Hot Cities of the World Tour. The word Jugaad turned out to be the word of the trip. A word that I believe should be adopted by many firms in the West.
We first ran into the word in London enroute to Delhi. What would have otherwise been an unfortunate 15 hour layover at Heathrow on the way to India, was made quite enjoyable thanks to few activities in London, including a visit to the offices of The Economist. We sat down with Adrian Wooldridge, Management Editor and Schumpeter Columnist, who had just returned from India and was glad to share some of his thoughts with us.
One of the hot topics: frugal innovation, the essence of which is captured by the Jugaad mindset, a Hindi word that in a nutshell refers to making do with what one has to solve one’s problems (also implying a certain degree of improvisation). In a business context it means bringing innovative products to market despite limited resources – if not thanks to limited resources, since it is the financial constraints of producers or customers (or both) that drive the innovation in the first place. Frugal innovation results in great value: no-frills, good quality, functional products that are also affordable to the customer with modest means. If you want to hear more of what Adrian said about frugal innovation, listen to the youtube video below. It is only a recording, there is nothing to watch due to technical problems.
Throughout the trip’s many discussions three examples of frugal innovation stood out. One that everyone has heard of is the Nano, unveiled by Tata Motors in 2008, which now retails for just over US$ 3,000. Equipped with only the bare essentials, the car is mainly aimed at the domestic market where it is not uncommon to see a family of four crowd onto a motorcycle or scooter. Though it is still too early to say whether the Nano will truly become “The People’s Car”, we were told that it problems with working on really hot days, it nonetheless provides a good example of frugal engineering.
New low-cost technology in healthcare also has everyone talking. For instance, GE, which operates tech centers in Hyderabad and Bangalore, has introduced breakthrough items such as an electrocardiogram in a backpack and a computer-based portable ultrasound machine. They sell for only US$ 1,000 and $15,000 respectively (fractions of the usual prices for those devices) and are said to have the potential to revolutionize access to healthcare in developing countries. These products are now also being sold in the US. Interestingly enough, frugal innovation reverses the historical notion that multinationals innovate in rich countries in order to sell their products in poor countries. Hats off to the late C.K. Prahalad and his book, The Fortune At the Bottom of the Pyramid.
The concept of Jugaad, however, is not just about developing new technology. In fact, we witnessed firsthand the work of the Dabbawalas in Mumbai who demonstrated exactly that. The business model is simple: Dabbawalas collect freshly cooked meals in boxes from the homes of Mumbai residents and deliver them to the workplace for a (very) modest monthly fee (Dabbawala means “one who carries a box” in Marathi). What is not so simple is the delivery process. 5,000 Dabbawalas deliver 200,000 boxes per day using only bicycles and various modes of public transportation. Their supply chain is made up of a complex series of collection zones, sorting points, and delivery zones, supported only by an elaborate manual coding system. The codes are made up of only numbers and colors because 50% of the employees are illiterate.
The only modern technology used in the process are a website and a text message receiving system which allow customers to request deliveries in real time. Forbes Magazine awarded its Six Sigma certification in 2001 to the Dabbawalas based on a 99.999999 percent delivery accuracy rate (1 error for every 16 million transactions).
We spent over an hour at one of the sorting points observing the Dabbawalas, doing our best not to get in the way of the constant exchanges of packets between bicycles, a sort of controlled chaos (which we came to learn describes much of Indian city life). We recounted a few lessons that we took away from the experience. For one, frugal innovation goes beyond clever R&D. It has a lot to do with process – in this case, maximizing the efficiency of the supply chain. Second, sometimes less is indeed more. No fuel, no capital investment, almost no modern technology, and yet a high quality of service: that’s frugality at its best. And third, the circumstances of the operating environment matter a great deal when it comes to frugal innovation. One of the main reasons the Dabbawalas are so successful in Mumbai but haven’t yet expanded to other cities is that their system is built on a combination of characteristics that is unique to Mumbai.
A few days in Bangalore and Mysore allowed us to spend some time with two companies that are at the other end of the tech spectrum: Wipro and Infosys, two of India’s top IT companies. At Wipro, much of the discussion centered around cloud computing which, I must admit, was a indeed a little cloudy prior to this informative session. Cloud computing is frugal because it eliminates the need for expensive local storage on computers, and optimizes the use of remote data servers due to scale advantages.
But how is frugal innovation sustained? A tour of Infosys’s spectacular 335-acre campus in Mysore and a visit to its Leadership Institute made it clear to us that the company doesn’t leave that up to chance. Gone are the days when Indian IT companies could rely on their access to cheap labor to compete on price with foreign multinationals – the fact that IBM is now the second largest private sector employer in India is just one example of why. So the differentiating factor is quality of service, which must be upheld by constant innovation. Much of Infosys’ ability to continually innovate can be attributed to its emphasis on recruitment and training. The campus in Mysore alone produces 10,000 graduates every year while grooming another 500+ employees, chosen from offices around the world, to eventually hold senior leadership positions. Infosys has grown from 7 employees and US$ 250 in 1981 to a truly global company with over 130,000 employees and a market cap of over $US 35B today, so there must be something about its model that works.
How do we use frugal innovation back here in the West? Actually, I think we are doing a lot of it now but given where our economies are I believe we need to use it more. With one big airline that I am working with I am encouraging senior managers to adopt this approach.
The airline industry today simply does not have money to throw after their problems, if it ever did. There is still room for CEO led big hunkin’ transformational change. But I think the dominate route to corporate transformation is to allow a 1,000 flowers to bloom, fertilize the best and then when they haven proven themselves in pilots, scale them up and spread the key few winning innovations across the organization. This connects middle managers that are close to the customers and the day-to-day work of the airline with the real business problems of today’s airline industry. As middle managers they have credibility and access to the senior executives who, correctly, control the purse strings. In my mind, Jugaad is a concept that appears to work in India and back here in the West.
This column was with written with a great deal of input from two McGill students who joined me on the trip to India this year, Veronica Dasovich from St. Paul, MN, one of our many wonderful U.S. students at McGill and Daniel Novak, a native Montrealer.
by Karl Moore
Innovation seems to be a prime directive at almost any firm I run into, regardless of industry. How do you get more of it? In these tough times the answer is no longer to throw money at it. What we increasingly need is frugal innovation, what the Indians call Jugaad. It is an idea, whose time has come.
Earlier this year I had the pleasure of traveling to India with 30 McGill MBA and B.Com. students to meet with executives of a number of large companies in New Delhi, Mumbai, and Bangalore as part of the ongoing Hot Cities of the World Tour. The word Jugaad turned out to be the word of the trip. A word that I believe should be adopted by many firms in the West.
We first ran into the word in London enroute to Delhi. What would have otherwise been an unfortunate 15 hour layover at Heathrow on the way to India, was made quite enjoyable thanks to few activities in London, including a visit to the offices of The Economist. We sat down with Adrian Wooldridge, Management Editor and Schumpeter Columnist, who had just returned from India and was glad to share some of his thoughts with us.
One of the hot topics: frugal innovation, the essence of which is captured by the Jugaad mindset, a Hindi word that in a nutshell refers to making do with what one has to solve one’s problems (also implying a certain degree of improvisation). In a business context it means bringing innovative products to market despite limited resources – if not thanks to limited resources, since it is the financial constraints of producers or customers (or both) that drive the innovation in the first place. Frugal innovation results in great value: no-frills, good quality, functional products that are also affordable to the customer with modest means. If you want to hear more of what Adrian said about frugal innovation, listen to the youtube video below. It is only a recording, there is nothing to watch due to technical problems.
Throughout the trip’s many discussions three examples of frugal innovation stood out. One that everyone has heard of is the Nano, unveiled by Tata Motors in 2008, which now retails for just over US$ 3,000. Equipped with only the bare essentials, the car is mainly aimed at the domestic market where it is not uncommon to see a family of four crowd onto a motorcycle or scooter. Though it is still too early to say whether the Nano will truly become “The People’s Car”, we were told that it problems with working on really hot days, it nonetheless provides a good example of frugal engineering.
New low-cost technology in healthcare also has everyone talking. For instance, GE, which operates tech centers in Hyderabad and Bangalore, has introduced breakthrough items such as an electrocardiogram in a backpack and a computer-based portable ultrasound machine. They sell for only US$ 1,000 and $15,000 respectively (fractions of the usual prices for those devices) and are said to have the potential to revolutionize access to healthcare in developing countries. These products are now also being sold in the US. Interestingly enough, frugal innovation reverses the historical notion that multinationals innovate in rich countries in order to sell their products in poor countries. Hats off to the late C.K. Prahalad and his book, The Fortune At the Bottom of the Pyramid.
The only modern technology used in the process are a website and a text message receiving system which allow customers to request deliveries in real time. Forbes Magazine awarded its Six Sigma certification in 2001 to the Dabbawalas based on a 99.999999 percent delivery accuracy rate (1 error for every 16 million transactions).
We spent over an hour at one of the sorting points observing the Dabbawalas, doing our best not to get in the way of the constant exchanges of packets between bicycles, a sort of controlled chaos (which we came to learn describes much of Indian city life). We recounted a few lessons that we took away from the experience. For one, frugal innovation goes beyond clever R&D. It has a lot to do with process – in this case, maximizing the efficiency of the supply chain. Second, sometimes less is indeed more. No fuel, no capital investment, almost no modern technology, and yet a high quality of service: that’s frugality at its best. And third, the circumstances of the operating environment matter a great deal when it comes to frugal innovation. One of the main reasons the Dabbawalas are so successful in Mumbai but haven’t yet expanded to other cities is that their system is built on a combination of characteristics that is unique to Mumbai.
A few days in Bangalore and Mysore allowed us to spend some time with two companies that are at the other end of the tech spectrum: Wipro and Infosys, two of India’s top IT companies. At Wipro, much of the discussion centered around cloud computing which, I must admit, was a indeed a little cloudy prior to this informative session. Cloud computing is frugal because it eliminates the need for expensive local storage on computers, and optimizes the use of remote data servers due to scale advantages.
But how is frugal innovation sustained? A tour of Infosys’s spectacular 335-acre campus in Mysore and a visit to its Leadership Institute made it clear to us that the company doesn’t leave that up to chance. Gone are the days when Indian IT companies could rely on their access to cheap labor to compete on price with foreign multinationals – the fact that IBM is now the second largest private sector employer in India is just one example of why. So the differentiating factor is quality of service, which must be upheld by constant innovation. Much of Infosys’ ability to continually innovate can be attributed to its emphasis on recruitment and training. The campus in Mysore alone produces 10,000 graduates every year while grooming another 500+ employees, chosen from offices around the world, to eventually hold senior leadership positions. Infosys has grown from 7 employees and US$ 250 in 1981 to a truly global company with over 130,000 employees and a market cap of over $US 35B today, so there must be something about its model that works.
How do we use frugal innovation back here in the West? Actually, I think we are doing a lot of it now but given where our economies are I believe we need to use it more. With one big airline that I am working with I am encouraging senior managers to adopt this approach.
The airline industry today simply does not have money to throw after their problems, if it ever did. There is still room for CEO led big hunkin’ transformational change. But I think the dominate route to corporate transformation is to allow a 1,000 flowers to bloom, fertilize the best and then when they haven proven themselves in pilots, scale them up and spread the key few winning innovations across the organization. This connects middle managers that are close to the customers and the day-to-day work of the airline with the real business problems of today’s airline industry. As middle managers they have credibility and access to the senior executives who, correctly, control the purse strings. In my mind, Jugaad is a concept that appears to work in India and back here in the West.
This column was with written with a great deal of input from two McGill students who joined me on the trip to India this year, Veronica Dasovich from St. Paul, MN, one of our many wonderful U.S. students at McGill and Daniel Novak, a native Montrealer.
Saturday, May 21, 2011
The Wages of Envy
By Robert Knight
The Washington Times
7:14 p.m., Friday, May 20, 2011
Every so often, a single incident epitomizes larger truths. One of these larger truths is that all issues, whether social or fiscal, are moral issues.
International Monetary Fund (IMF) chief Dominique Strauss-Kahn's arrest on charges of sexually assaulting a New York hotel maid is a snapshot into the relationship between the ruling class and the working poor. I mean, assuming the allegation is true, didn't she know her place? According to police, she tried to get away from the French Socialist Party luminary.
For socialists, the little people are valued mainly as pawns for expanding government power. That's why the IMF keeps propping up socialist governments such as those in Greece and Portugal.
Socialist policies create more poor people, who, in turn, are supposed to be grateful to those who dole out money extracted from the middle class. Because socialists think they need to destroy the old society in order to build the new socialist man, traditional sex mores are just some of the rules that get in the way. Social immorality is the fuel for fiscal immorality, as government expands to pick up the pieces.
The poor suffer the most from this uneven arrangement, even though the ultimate target of the ruling echelon is the middle class. These latter folks embody traditional values that the rulers despise: faith, marriage, family, deferred gratification, hard work, gun rights, patriotism. The suckers.
America's own socialists are Oscar-quality actors during the run-up to elections, when they pose as advocates for the working middle class. Actually, they are pretty good at this year-round. But a look at Vice President Joe Biden's microscopic charity donations is all it takes to see through the Joe Six-Pack facade.
Ronald Reagan called the left's embrace of social and class warfare "alien and discredited."
"Since when," he asked, "do we in America believe that our society is made up of two diametrically opposed classes - one rich, one poor - both in a permanent state of conflict and neither able to get ahead except at the expense of the other?"
The cardinal sin of socialism is the cultivation of envy. From this deadly sin spring all sorts of schemes to rob Peter to pay Paul - and ensure Paul's vote. It's not always just about money. The liberal attempt to steal the moral capital of marriage and bestow it on nonmarital unions is a form of theft.
The gap between the rhetoric of "fairness" and "equality" and the actual behavior of the ruling class is becoming too stark to cover up, even for the liberal media.
In April, businesses in Speaker of the House Nancy Pelosi's San Francisco district received 38 of 204 waivers from Obamacare doled out by the Department of Health and Human Services, according to the Daily Caller. The lucky recipients in Mrs. Pelosi's ZIP code include health spas, nightclubs, hotels and gourmet restaurants that most Americans can't afford.
In 2009, Mrs. Pelosi helped ram Obamacare down America's throat. The system is preying on anyone not protected by the ruling cadre. If this sounds familiar, it's the way things work in communist countries, where party leaders pick which of their subjects merit exceptions to the misery they impose on everyone else.
Back in the 1970s and '80s, this double standard was derided as the lifestyle of "limousine liberals," who hypocritically spare their families and friends the consequences of their ill-advised policies. It still works. Think of Al Gore, who owns electricity-sucking mansions while jetting around in fuel-guzzling planes and railing against carbon emitted by the rest of us. Or John Edwards lecturing us on income inequality.
Consider President Obama, who sends his daughters to the hyperexclusive Sidwell Friends School while railing against "the rich." Meanwhile, his cronies worked to deny vouchers to parents seeking to save their kids from the failed D.C. schools.
Linda Chavez, former staff director of the U.S. Commission on Civil Rights, has noted how the rulers' envy is selectively expressed: "The populist zeal to seek revenge on those who make a lot of money is targeted almost exclusively at corporations. I haven't heard outcries about Hollywood actors who make millions per film."
No, that would be biting the hand that feeds them. Speaking of Hollywood, liberal Republican Arnold Schwarzenegger went from defending marriage in his last campaign to refusing to defend California's Proposition 8 marriage amendment in court. I don't think it's unfair to ask whether his having cheated on his wife and sired a "love child" had something to do with his liberated outlook on sexual unions. And, by the way, I'm not saying that conservatives are immune to temptation. Whenever a longtime conservative develops strange, new respect for liberal social policies, it may be time for his spouse to check his phone and hotel records.
This tendency of the ruling class to pose as champions of virtue while making up its own rules is part of the temptation of power. If you can legally take money from one group and give to another, why not take anything else you want?
When socialism was rising in France in the mid-19th century, Frederic Bastiat saw clearly how socialists misused the law to create what he called "legal plunder." In 1850, in his classic book "The Law," he wrote, "Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another."
Since the New Deal, legal plunder has become the guiding principle in America. Its proponents, protected by a servile media, are growing bolder by the day. Mr. Obama's National Labor Relations Board is trying to stop the Boeing Co. from opening its new, $750-million factory in South Carolina, where an assembly line is ready to roll out new Dreamliner 787s. The unions that back Mr. Obama don't like those jobs going to a conservative, right-to-work state instead of closed-shop Washington state. Is this plunder? Yes.
After the government takeover of General Motors, Democratic Rep. Barney Frank of Massachusetts, who helped broker the GM deal, made a phone call and reversed the cancellation of a GM distribution center in Norton, Mass. It's this kind of commissarlike behavior that prompted Rep. Michele Bachmann to declare on the House floor that America was in the grip of "gangster government."
Given the extent of the corruption here and abroad, it might be best to take the long view so we won't get too discouraged. The moral laws given to us by God may be flouted, but they cannot be repealed.
Wanting what is not yours and taking from others may work in the short run, but it bears a heavy cost, as we are reminded by Mr. Strauss-Kahn's predicament and by Proverbs 14:30: "Envy is rottenness to the bones."
Robert Knight is senior fellow for the American Civil Rights Union and a columnist for The Washington Times.
The Washington Times
7:14 p.m., Friday, May 20, 2011
Every so often, a single incident epitomizes larger truths. One of these larger truths is that all issues, whether social or fiscal, are moral issues.
International Monetary Fund (IMF) chief Dominique Strauss-Kahn's arrest on charges of sexually assaulting a New York hotel maid is a snapshot into the relationship between the ruling class and the working poor. I mean, assuming the allegation is true, didn't she know her place? According to police, she tried to get away from the French Socialist Party luminary.
For socialists, the little people are valued mainly as pawns for expanding government power. That's why the IMF keeps propping up socialist governments such as those in Greece and Portugal.
Socialist policies create more poor people, who, in turn, are supposed to be grateful to those who dole out money extracted from the middle class. Because socialists think they need to destroy the old society in order to build the new socialist man, traditional sex mores are just some of the rules that get in the way. Social immorality is the fuel for fiscal immorality, as government expands to pick up the pieces.
The poor suffer the most from this uneven arrangement, even though the ultimate target of the ruling echelon is the middle class. These latter folks embody traditional values that the rulers despise: faith, marriage, family, deferred gratification, hard work, gun rights, patriotism. The suckers.
America's own socialists are Oscar-quality actors during the run-up to elections, when they pose as advocates for the working middle class. Actually, they are pretty good at this year-round. But a look at Vice President Joe Biden's microscopic charity donations is all it takes to see through the Joe Six-Pack facade.
Ronald Reagan called the left's embrace of social and class warfare "alien and discredited."
"Since when," he asked, "do we in America believe that our society is made up of two diametrically opposed classes - one rich, one poor - both in a permanent state of conflict and neither able to get ahead except at the expense of the other?"
The cardinal sin of socialism is the cultivation of envy. From this deadly sin spring all sorts of schemes to rob Peter to pay Paul - and ensure Paul's vote. It's not always just about money. The liberal attempt to steal the moral capital of marriage and bestow it on nonmarital unions is a form of theft.
The gap between the rhetoric of "fairness" and "equality" and the actual behavior of the ruling class is becoming too stark to cover up, even for the liberal media.
In April, businesses in Speaker of the House Nancy Pelosi's San Francisco district received 38 of 204 waivers from Obamacare doled out by the Department of Health and Human Services, according to the Daily Caller. The lucky recipients in Mrs. Pelosi's ZIP code include health spas, nightclubs, hotels and gourmet restaurants that most Americans can't afford.
In 2009, Mrs. Pelosi helped ram Obamacare down America's throat. The system is preying on anyone not protected by the ruling cadre. If this sounds familiar, it's the way things work in communist countries, where party leaders pick which of their subjects merit exceptions to the misery they impose on everyone else.
Back in the 1970s and '80s, this double standard was derided as the lifestyle of "limousine liberals," who hypocritically spare their families and friends the consequences of their ill-advised policies. It still works. Think of Al Gore, who owns electricity-sucking mansions while jetting around in fuel-guzzling planes and railing against carbon emitted by the rest of us. Or John Edwards lecturing us on income inequality.
Consider President Obama, who sends his daughters to the hyperexclusive Sidwell Friends School while railing against "the rich." Meanwhile, his cronies worked to deny vouchers to parents seeking to save their kids from the failed D.C. schools.
Linda Chavez, former staff director of the U.S. Commission on Civil Rights, has noted how the rulers' envy is selectively expressed: "The populist zeal to seek revenge on those who make a lot of money is targeted almost exclusively at corporations. I haven't heard outcries about Hollywood actors who make millions per film."
No, that would be biting the hand that feeds them. Speaking of Hollywood, liberal Republican Arnold Schwarzenegger went from defending marriage in his last campaign to refusing to defend California's Proposition 8 marriage amendment in court. I don't think it's unfair to ask whether his having cheated on his wife and sired a "love child" had something to do with his liberated outlook on sexual unions. And, by the way, I'm not saying that conservatives are immune to temptation. Whenever a longtime conservative develops strange, new respect for liberal social policies, it may be time for his spouse to check his phone and hotel records.
This tendency of the ruling class to pose as champions of virtue while making up its own rules is part of the temptation of power. If you can legally take money from one group and give to another, why not take anything else you want?
When socialism was rising in France in the mid-19th century, Frederic Bastiat saw clearly how socialists misused the law to create what he called "legal plunder." In 1850, in his classic book "The Law," he wrote, "Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another."
Since the New Deal, legal plunder has become the guiding principle in America. Its proponents, protected by a servile media, are growing bolder by the day. Mr. Obama's National Labor Relations Board is trying to stop the Boeing Co. from opening its new, $750-million factory in South Carolina, where an assembly line is ready to roll out new Dreamliner 787s. The unions that back Mr. Obama don't like those jobs going to a conservative, right-to-work state instead of closed-shop Washington state. Is this plunder? Yes.
After the government takeover of General Motors, Democratic Rep. Barney Frank of Massachusetts, who helped broker the GM deal, made a phone call and reversed the cancellation of a GM distribution center in Norton, Mass. It's this kind of commissarlike behavior that prompted Rep. Michele Bachmann to declare on the House floor that America was in the grip of "gangster government."
Given the extent of the corruption here and abroad, it might be best to take the long view so we won't get too discouraged. The moral laws given to us by God may be flouted, but they cannot be repealed.
Wanting what is not yours and taking from others may work in the short run, but it bears a heavy cost, as we are reminded by Mr. Strauss-Kahn's predicament and by Proverbs 14:30: "Envy is rottenness to the bones."
Robert Knight is senior fellow for the American Civil Rights Union and a columnist for The Washington Times.
Friday, May 20, 2011
Thursday, May 5, 2011
The Rube Goldberg Gas Tax - Unintended Consequences
The Obama administration is floating a transportation authorization bill that would tax automobile drivers based on how many miles they drive. This new tax is being considered to make up for lost gas tax revenue as cars and drivers become more energy efficient.
The proposed “Transportation Opportunities Act” would mandate a vehicle miles traveled (VMT) tax that’s calculated by installing electronic equipment on each car and at filling stations. VMT calculation and payment would take place electronically every time you buy gas at the pump. Buying and maintaining the equipment would undoubtedly be at a cost to service stations and vehicle owners, and non-compliance will likely result in hefty fines. The plan is a part of an administration’s draft proposal obtained by Transportation Weekly.
Call me a pragmatist, but if the Obama administration wants to make up lost revenue because people are being more energy efficient, why not just increase the gas tax? The federal excise tax on gasoline is already 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. Increasing this tax fixes the lost revenue problem. It’s a simple solution that doesn’t require that we all buy expensive equipment for our cars to essentially pay a new gas tax.
I believe VMT should be called the Rube Goldberg Gas Tax because while it’s objective is the same as the gas tax, the way it collects revenue is extremely complex, costly and cumbersome. It’s understandable that the administration wishes to avoid the stigma of increasing gas prices when the price of gas is about $4 per gallon, but VMT is so close to a gas tax that it’s going to be called that anyway.
The administration’s answer to falling federal revenue from lower energy use should be higher energy taxes. This encourages even less energy use, which is in line with our national energy policy, and it maintains revenues without creating more forms of federal taxation.
Source:http://blogs.forbes.com/rickferri/2011/05/05/the-rube-goldberg-gas-tax/
The proposed “Transportation Opportunities Act” would mandate a vehicle miles traveled (VMT) tax that’s calculated by installing electronic equipment on each car and at filling stations. VMT calculation and payment would take place electronically every time you buy gas at the pump. Buying and maintaining the equipment would undoubtedly be at a cost to service stations and vehicle owners, and non-compliance will likely result in hefty fines. The plan is a part of an administration’s draft proposal obtained by Transportation Weekly.
Call me a pragmatist, but if the Obama administration wants to make up lost revenue because people are being more energy efficient, why not just increase the gas tax? The federal excise tax on gasoline is already 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. Increasing this tax fixes the lost revenue problem. It’s a simple solution that doesn’t require that we all buy expensive equipment for our cars to essentially pay a new gas tax.
I believe VMT should be called the Rube Goldberg Gas Tax because while it’s objective is the same as the gas tax, the way it collects revenue is extremely complex, costly and cumbersome. It’s understandable that the administration wishes to avoid the stigma of increasing gas prices when the price of gas is about $4 per gallon, but VMT is so close to a gas tax that it’s going to be called that anyway.
The administration’s answer to falling federal revenue from lower energy use should be higher energy taxes. This encourages even less energy use, which is in line with our national energy policy, and it maintains revenues without creating more forms of federal taxation.
Source:http://blogs.forbes.com/rickferri/2011/05/05/the-rube-goldberg-gas-tax/
Tuesday, May 3, 2011
The "Decline or Demise" of U.S. Farming?
In this post on manufacturing's declining share of GDP for both the U.S. and global economies, Scott Grannis writes:
"In this same vein, I would add that agriculture was once about half of total US GDP, whereas now it is only a small fraction, yet we feed ourselves and are a net exporter of food. Here again we see how tremendous productivity gains have enabled us to devote fewer and fewer resources to the production of essential goods. This is as it should be."
MP: The chart above shows agriculture's declining share of U.S. GDP using annual BEA data from 1947-2010. From a high of almost 9% of GDP in 1948, the agriculture sector's share of total output has declined steadily and fell below 1% by 2002. And yet we produce more food today than at any time in history and it's cheaper as a share of disposable income than ever before. Thanks to productivity gains, farm employment today represents only about 2.5% of total employment compared to more than 12% of America's workforce in 1950.
Going all the way back to the early 1800s, more than 80 percent of both U.S. employment and output were directly tied to a relatively inefficient (by today’s standards), labor-intensive agriculture sector of the economy. Food products were very expensive and consumed a large part of a typical household’s income. Over time, technology revolutionized farming, resulting in the same trends we observe today in manufacturing: huge increases in farm worker productivity, reduced farm employment, significantly lower and more affordable prices leading to a reduced share of food in both household income and national income (GDP).
And yet, when have you heard anybody claim that "U.S. farming is dead," or talk about the "decline or demise of America's agriculture industry?" Probably never. But a lot of people talk about the "decline of U.S. manufacturing" even though it's going through the same long-term trend as farming - jobs and output are declining as a share of GDP, but manufacturing output and productivity are increasing. And we're much better off because of it.
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