Saturday, November 24, 2007

Is the "Collapse" of Housing Prices a Good Thing?

Sure is.

If you think that lower gas prices, lower tuition prices, lower insurance premiums, etc. are a good idea, then why wouldn't lower house prices also be good? Because maybe you have a house to sell? Well, someone else has your house to buy, so that's good for that someone else.

Or perhaps it would be "good for the economy" if, say, food prices doubled because it would mean better times for supermarkets and food shippers?

Why didn't the "collapse" of the price of memory chips, and for that matter, almost all technologies, prove ruinous for the economy?

What is an "economy" anyway?

Ideally, housing prices should drop to nothing. Just as the price of everything should drop to nothing in an ideal world of unlimited abundance. Unfortunately, though, they won't -- so, if you own a house, you'll always be able to sell it for something.

And, probably for much more that what you originally paid -- notwithstanding "collapsing prices" hysteria.

Are Slavery Reparations a Smart Idea?

Are slavery reparations a smart idea?


1. Some people (who happened to white) enslaved others (who happened to be black). How does this lead to, generations later, other people (who happen to be black) having a claim on the money of other people (who happen to be white)?

2. Having a claim on someone's money is the same as having a claim on the work they did to produce value. That is, reparations are also slavery. Therefore, legitimizing reparations is identical to legitimizing slavery. But if slavery is legitimized, then by what basis can anyone claim a right to the slavery known as "reparations" -- other than "you have something, so I'm taking it"?

For argument's sake, let's accept the fiction that white people's wealth (including white people who recently migrated to the USA) is somehow related to the slavery of black people many generations ago -- and that black people (even if they do not have American ancestry) have a claim on all white people:

3. If blacks have a claim on whites, then it's a safe assumption that Jews have a claim on Germans. But blacks also have a claim on (white) American Jews. So, would it be efficient to simply bypass the Jews and have Germans pay American blacks directly? Or do Jews have a bigger claim on Germans than blacks have on Jews? How does one calculate this?

4. Care to sort out the Balkans to figure out who owes what to whom?

5. Exactly how does one calculate the amount to be turned over, even in relatively clear cases? It would require the rewriting of history to estimate, among many possible outcomes, what would have happened if slavery had not occurred. Would American blacks otherwise be affluent? Or would there be no American blacks, as their ancestors would have been left in Africa?

And now, let's assume that we do have the ability to develop alternative outcomes, had slavery not happened:

6. The American enslavement of blacks, as we learned above, was not unique. Throughout history, each group had its turn to enslave (and murder) people in other groups. At which point do we rewrite history? At the start of American slavery? Or when man began to walk upright? Or in 1970? The selection of a start date changes everything, as the enslaved of yesterday might have been the slave owners on the day before.

Conclusion: Any group, any injustice, and any date can be selected to justify a claim of some people on others. If you go in with your mind made up that people in some category should take things from people in a different category, then it is a simple matter to choose your favorite history to justify anything.

Friday, November 2, 2007

Can Tax Cuts be Harmful?

Can Tax Cuts be Harmful?

Perhaps so.

In yesterday's Wall Street Journal, "Pete" du Pont points out that lower tax rates increase tax revenues. (The Heritage Foundation keeps a more permanent thesis on low taxes = more revenue here.)

So, let's accept this premise: Lower tax rates encourage production, which then raises incomes, which then increases government revenue. Win, win, win, win, win.

But what will the government do with this extra revenue? They will spend it. And they will spend it on either government employees or some other part of the parasitic sector: Expanded government agencies, new entitlements, idiotic programs, etc., etc., etc. And that will tend to shift people from productive work to the parasitic dole. Instead of being productive, they will be net consumers of resources.

Now, doesn't that bring us to a disturbing paradox; i.e., lowering taxes might actually expand the stagnating welfare state.

Does that mean that raising taxes might sometimes be beneficial precisely because it reduces government revenue?

Of course, there's some point where raising taxes, to say, 100% reduces revenue and productivity. But can a 1% tax increase be beneficial if it lowers government spending?

I don't know -- and apparently neither Pete nor The Heritage Foundation cared to look into this.