According to a Cato Institute study published last year, the combined expenditures for Federal and state governments directed to means-tested public assistance — “welfare” — is approximately $1 trillion (yes, with a “T”) a year.
There are approximately 48 million people in the US with incomes at the poverty level or below.
The application of advanced mathematics — long division, and I did it in my head thank you very much — tells us that’s about $21,000 per person per year. Obviously, that’s $84,000 for a family of four.
That’s got a problem, though. According to the 2013 Federal Poverty Guidelines, the poverty level for a family of four is $23,950. The total of $84,000 is roughly 380 percent of the federal poverty guidelines.
Obviously, there’s no poverty left in America.
Unless, of course, that money isn’t actually being spent on the poor people at all. I wonder where it goes?
Here are some VERY SMALL apartments for sale in Manhattan. Prices range from about $1000 to $2500 per square foot. They serve as a nice illustration of the economic concept of “hedonic prices”. Sure, it’s a lot less expensive to live in a 5000 square foot home in many places, but of course there must be reasons for the price differences. And keep in mind, if you want to focus on supply, that there are many smaller towns throughout the nation where prices are comparatively “cheaper”.
For those who expressed concerns that political gridlock may be impeding the performance of valuable government functions, here is proof positive that such fears are unwarranted. We can all rest assured knowing that the government is on the job protecting the public by regulating piano teachers:
In March of this year, a small nonprofit in Cincinnati—the Music Teachers National Association—received a letter from the FTC. The agency was investigating whether the association was engaged in, uh, anticompetitive practices.
The whole article is fun to read and suggests, if nothing else, that FTC bureaucrats might have way too much time on their hands.
Professor Somin points out in his book that theories of democratic participation require voters to possess significant amounts of information. Most voters, however, know little or nothing about government, and do not even come close to achieving the required levels of information. Professor Somin carefully documents the problem, but also offers some constructive solutions.
Ilya Somin is a professor at the George Mason University School of Law, an adjunct scholar at the Cato Institute, a blogger for Volokh Conspiracy, and a former co-editor of the Supreme Court Economic Review.
The talk is open to the public and takes place at 1:30 in Miriam 121 on the campus of the University of Dayton.
The video below provides a sneak preview of Professor Somin discussing the problem of political ignorance.
A couple of years ago, if we recall correctly, Harvard economist Greg Mankiw was being shown a new app and subscription service that helps drivers to more quickly locate scarce downtown parking spots. Instead of marveling at the innovation and technology, Mankiw unexpectedly replied dryly, “This tells me that the city is not charging enough for parking.” Indeed, the shortage of parking spaces that necessitates the app would be eliminated if the city just raised parking fees to their market-clearing level. At the market-clearing price, the demand for spaces would no longer exceed supply, meaning that spaces would become readily available. Since drivers could find spaces without wasting time searching, they would have no need or incentive to pay for the app or subscription service. Charging market-clearing prices renders the app obsolete!
Entrepreneurs who want to sell these apps needn’t worry, however, because government-enforced price ceilings create opportunities all around the world. The latest comes from Venezuela, where a resourceful chap has developed an app to help consumers locate, yup, toilet paper.
Venezuelan Jose Augusto Montiel developed a crowd-sourced, Google Maps-based Android app and a website, Abasteceme (“Supply Me”), that consumers can use to track down stores carrying toilet paper and other scarce products.
Toilet paper got hard to find after the government tried to impose a ceiling on the price. The price controls on toilet paper and other goods are the government’s attempt to reign in a 54 percent inflation rate which was created, of course, by the government.
[W]hile Venezuela’s approximately 28.5 million people typically go through 125 million rolls of toilet paper every month, rising demand called for an additional 40 million. That’s why the government decided to import 50 million rolls that month, trying to satisfy irate consumers who regularly stand in line outside stores — which do things like limit purchases to 12 rolls per person…Meanwhile, late last week the government announced a supervised sale of 21,140 toilet paper rolls seized from manufacturers or distributors, which the government has often accused of hoarding.
Those dastardly toilet paper hoarders! Amazing the problems that beset socialist governments. But not content to stop there, the government decided to take over the manufacturing plants.
On Sept. 20, President Nicolas Maduro and a new economic panel ordered national price regulator Sundecop to “temporarily” seize plants owned by Manufacturas de Papel CA, or Manpa, the company that supplies 40 percent of the country’s demand for toilet paper and personal-care paper goods. Their reasoning? To oversee production, because consumers can’t seem to find enough rolls of toilet paper.
The paper plants are just the latest of approximately 1,000 companies that the government has seized during the past decade. And based on the government’s track record in running these companies, Venezuelans shouldn’t expect the supply of toilet paper to increase anytime soon.
Those curious about where the latest takeover will lead should examine Hugo Chavez’s nationalization of paper company Venepal eight years ago (renamed Invepal by Chavez). One of the first companies seized by Chavez, Invepal still suffers from production problems, its output numbers remain secret, and it relies on the state to cover its recurring losses. As Venezuelan economist Jose Toro Hardy aptly put it in a Sept. 25 tweet referring to the state’s damaging role: “Nothing is more dangerous than mixing incompetence with ideology.”
Well, as Milton Friedman said, “If you put the federal government in charge of the Sahara desert, in 5 years there’d be a shortage of sand.”
Apparently, about the only good the government is capable is producing is humor.
Elias Eljuri, head of the National Statistics Institute, said in late May that toilet paper scarcity showed “Venezuelans are eating more.” He quickly became the — pardon the pun — butt of jokes on Twitter. Comedian Andres Schmucke tweeted a tongue-in-cheek view on May 23: “According to Elias Eljuri the toilet paper shortage happens because people are eating more. Man, we comedians will be out of a job.”
For some reason, toilet paper in particular seems to be one of the primary casualties of socialism. In his book The Anti-Soviet Soviet Union, Vladimir Voinovich tells the story of his friend who all of a sudden started quoting Lenin frequently in conversation. Since his friend was not a communist, Voinovich was puzzled, until he found out that, due to a shortage of toilet paper, his friend had brought Lenin’s The State and Revolution into the bathroom.
But getting back to Venezuela, the price controls and business expropriations are part and parcel of the Chavistic regime’s ongoing commitment to ‘social justice.’ That’s right! That same social justice agenda advocated by liberal arts professors, and the United Nations.
United Nations officials today lauded the commitment of Hugo Chávez to the cause of social justice, as the General Assembly paid tribute to the memory of the late President of Venezuela…
“Throughout his term in office, he remained committed to the cause of social justice, working hard to improve the lives of Venezuelans, especially the most underprivileged amongst them.
If you ever find yourself unable to purchase toilet paper, you can be sure that you’re living under a government that’s pulling out all the stops to achieve ‘social justice.’
Sometimes people ask us why we decided to put up this website. One reason is that we don’t ever want to find ourselves having to bring Paul Krugman’s The Conscience of a Liberal into the bathroom.
With the Thanksgiving holiday now upon us, millions of children will hear the story of the First Thanksgiving of 1621. The standard story as told in schools and the media depicts the First Thanksgiving as a celebration of the Pilgrims’ bountiful harvest and cooperation with the Indians. What the schools do not teach, however, is that a fuller account of the Pilgrims’ story reveals a failure of socialism and a triumph of private property and free enterprise.
The Plymouth Colony started as a type of commune, or socialist community.
The members of the Plymouth colony had arrived in the New World with a plan for collective property ownership. Reflecting the current opinion of the aristocratic class in the 1620s, their charter called for farmland to be worked communally and for the harvests to be shared.
Interestingly, the colonists’ communist ideology was derived not from Karl Marx, who had not yet been born, but from Plato.
The charter of the Plymouth Colony reflected the most up-to-date economic, philosophical and religious thinking of the early 17th century. Plato was in vogue then, and Plato believed in central planning by intellectuals in the context of communal property, centralized state education, state centralized cultural offerings and communal family structure…This collectivist impulse reflected itself in various heretical offshoots of Protestant Christianity with names like The True Levelers, and the Diggers, mass movements of people who believed that property and income distinctions should be eliminated, that the wealthy should have their property expropriated and given to what we now call the 99%.
The experiment in collectivism failed.
What resulted is recorded in the diary of Governor William Bradford, the head of the colony. The colonists collectively cleared and worked land, but they brought forth neither the bountiful harvest they hoped for, nor did it create a spirit of shared and cheerful brotherhood.
The less industrious members of the colony came late to their work in the fields, and were slow and easy in their labors. Knowing that they and their families were to receive an equal share of whatever the group produced, they saw little reason to be more diligent their efforts. The harder working among the colonists became resentful that their efforts would be redistributed to the more malingering members of the colony. Soon they, too, were coming late to work and were less energetic in the fields.
As Governor Bradford explained in his old English (though with the spelling modernized):
“For the young men that were able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without recompense. The strong, or men of parts, had no more division of food, clothes, etc. then he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and food, clothes, etc. with the meaner and younger sort, thought it some indignant and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc. they deemed it a kind of slavery, neither could man husbands brook it.”
Because of the disincentives and resentments that spread among the population, crops were sparse and the rationed equal shares from the collective harvest were not enough to ward off starvation and death. Two years of communism in practice had left alive only a fraction of the original number of the Plymouth colonists.
To their credit, the colonists finally realized their error and changed course. They re-introduced private property, and allowed families to keep or trade whatever surplus they produced. As a result, conditions for the colonists improved significantly. As Governor Bradford recorded in his diary
By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. And the effect of their planting was well seen, for all had, one way or other, pretty well to bring the year about, and some of the abler sort and more industrious had to spare, and sell to others, so as any general want or famine hath not been amongst them since to this day.
And Governor Bradford seems to have interpreted the experience of the colony as an empirical rejection of Platonic communism.
The experience that was had in this common course [common property] and condition, tried sundry years, and that amongst the Godly and sober men, may well convince of the vanity and conceit of Plato’s and other ancients; — that the taking away of property, and bringing into a common wealth, would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed confusion and discontent, and retard much employment that would have been to their benefit and comfort.
So there you have it; the lesson of the First Thanksgiving is a triumph of freedom arising out of a failed attempt at socialism. The story must be quite damaging to progressivism, because during the Thanksgiving season three years ago, a progressive propaganda sheet known as The New York Times attempted to refute it. The progressive counterargument is based on two main points. First, common property in the Plymouth Colony did not result in famine, and the colony’s abandonment of common property was not due to failure. Second, the Plymouth Colony, as a for-profit corporation, cannot fairly be deemed socialist.
The first point seems to be contradicted by the evidence, in particular, by Bradford’s journal, in which he mentioned hunger and famine numerous times.
Now the wellcome time of harvest aproached, in which all had their hungrie bellies filled. But it arose but to a litle, in comparison of a full years supplie; partly by reason they were not yet well aquainted with the manner of Indean corne, (and they had no other,) allso their many other imployments, but cheefly their weaknes for wante of food, to tend it as they should have done. Also much was stolne both by night and day, before it became scarce eatable, and much more after ward…
So how do progressives explain why the colonists abandoned communal property?
Bradford did get rid of the common course — but it was in 1623, after the first Thanksgiving, and not because the system wasn’t working. The Pilgrims just didn’t like it. In the accounts of colonists, Mr. Pickering said, “there was griping and groaning.”
“Bachelors didn’t want to feed the wives of married men, and women don’t want to do the laundry of the bachelors,” he said.
In other words, the system was working except that it wasn’t. Which is why people were “griping and groaning”–the system had failed. And it failed for the very reason we would expect, namely, a Tragedy of the Commons that undermined incentives (“Bachelors didn’t want to feed the wives of married men…”).
Now consider the progressives’ second major point.
Historians say that the settlers in Plymouth, and their supporters in England, did indeed agree to hold their property in common — William Bradford, the governor, referred to it in his writings as the “common course.” But the plan was in the interest of realizing a profit sooner, and was only intended for the short term; historians say the Pilgrims were more like shareholders in an early corporation than subjects of socialism.
“It was directed ultimately to private profit,” said Richard Pickering, a historian of early America…
Well, words have meaning, and a society that replaces private property with collective ownership of the means of production meets the textbook definition of socialism. If that’s not socialism, then the word has no meaning. This remains true even if the colony as a whole sought to make a profit by trading with the rest of the world. The Pilgrims may have been capitalists when it came to exporting furs, but the essential fact is that production for domestic consumption was organized socialistically.
In summary, the story of the First Thanksgiving illuminates two crucial and eternal truths. First, collectivism always fails. Second, progressives, to defend their socialist beliefs, will deploy the most appalling sophistry, specious reasoning, and intellectual dishonesty.
The New York Times somehow neglected to interview Leo “The Miller” Martin, a local historian in Plymouth. In the first video below, Leo narrates the saga of the Pilgrims, and addresses the economic issues specifically at the 23:30 mark. The second video below also does a good job laying out the basic facts.
Happy Thanksgiving everyone!
Advocates of socialized medicine often claim that government-run medical systems are more efficient than the mostly private and for-profit system that prevails in the United States. As evidence, advocates of socialized medicine cite the fact that the U.S. spends a greater percentage of GDP on medical care than do countries with government-run systems. So popular is this argument that when we participated in a live debate a few years ago at UD, our opponent deployed it against us. Similarly, this PBS report suggests that U.S. healthcare is relatively inefficient because the U.S. spends more on medical care than does any other OECD country.
Undoubtedly the U.S. system contains significant inefficiencies, and some aspects of care are no doubt more efficient in other countries. We cannot, however, deduce efficiency of the system as a whole by looking at costs alone, because the quantity and quality of healthcare in the U.S. is generally greater. Americans pay more, but they also get more, as evinced by the far greater number of MRI machines per capita, as well as significantly higher cancer survival rates.
The PBS article tries to argue, to the contrary, that U.S. medical care is no better.
[M]any OECD countries use strong regulation to set prices that hospitals can charge for different services, and some of them even set budgets for how much hospitals can spend. The quality of care delivered in hospitals in these countries are comparable to that in the U.S., and universities are still able to attract the best students to medicine.
Price controls, of course, lead to shortages, which in turn require the use of waiting lists for treatment. Waiting for treatment creates hidden costs such as lost wages, pain, and suffering that are not included in official healthcare costs.
Furthermore, regarding the claim that care in other OECD countries is “comparable” to the U.S., the PBS article contradicts itself, because several paragraphs further down the article reveals that the quality of care is in fact better in the U.S.
[T]he U.S. leads the world in health care research… The U.S. has also led the way on safer hospitals and health care quality, with programs such as the Institute of Healthcare Improvement’s 100,000 Lives campaign triggering far-reaching cultural shifts in the several thousand hospitals and clinical facilities that signed. Innovative centers such as the Mayo Clinic and Johns Hopkins that bring laboratory research and clinical practice together have also benefited patients enormously.
Personally, we would very much prefer to seek treatment in the U.S. than in OECD countries like Italy, Chile, or Turkey, and we certainly would be horrified to find ourselves at one of the UK’s filthy and dilapidated public hospitals. Former New York mayor Rudy Giuliani points out that, over the years, many people asked him for political favors, but “I’ve never had anybody ask me for help to get into a Cuban hospital or a Canadian hospital or an English hospital.”
John Stossel, in the video below, has more to say about efficiency and the role of the profit motive in medical care. But before the video, here is a nice summary of the issue by student Allison Bruns.
While it may at first seem so, the fact that total expenditures for treatment, as a percentage of GDP, are lower in countries that practice socialized medicine like Canada and the UK than they are in the US does not establish that socialist systems are more efficient than the US system. There are many costs in systems of socialized medicine that are essentially hidden from reported expenditures.
Governments impose price controls in order to keep the costs of paying for medical care in socialized medicine systems from taking up so much of their budgets. These costs associated with price controls are concealed, so it appears that medical care will be less expensive to supporters of socialized medicine. The prices are artificially low, as they are set by price controls instead of supply and demand.
The quality of medical is heavily reduced in countries that practice socialized medicine, but this is not reflected in the dollar amount of total expenditures for treatment. The biggest example that shows the decrease in quality is the amount of time that doctors spend with patients. For example, after Canada established socialized medicine in Quebec, the number of telephone consultations went down, office visits went up and the time per visit went down. Medical conditions that were not necessarily serious enough o require an office visit took up more time by the patient and the doctor, thus reducing the time available to those with more serious conditions. Looking at patients who needed to have elective surgery in 2001, 27% of patients in Canada had to wait four months while only 5% of patients in the US had to wait that long. In terms of MRI units, there are 5.5 per million people in Canada and 26.6 per million in the United States. The quality of medical is severely reduced in socialized s ystems, and this the total expenditures for treatment fails to show this additional cost.
There are also quantitative consequences not reflected in the cost of medical care in socialist systems. In 2004, the average waiting time in Canada from receiving an appointment with a specialist to actual treatment was 15 weeks for ophthalmology and 24 weeks for orthopedic surgery. If an American who receives a surgery in three weeks after diagnosis pays $2,000 more than a Canadian to receive the same surgery, the overall cost to the American will be less. The Canadian would lose an extra 12 weeks of pay from waiting for the surgery which would add up to more than $2000 (using $167 per week as the average earnings per week in Canada of lost pay). The expenditures of medical care that are used by supporters of socialized medicine do not include these hidden costs. These unaccounted costs of waiting long times for treatment, like lost pay, pain, debilitation and death, are forgone in coming up with the total expenditures, so it cannot be said that socialist systems are more effective than the US medical system.
Congratulations to 22 year old Norwegian Magnus Carlson for winning the world chess title. He is the highest rated player in history and joins Knute Rockne and Edvard Munch on the short list of Norway’s most famous people.
We usually just ignore the stories on the Front Porch of porches.udayton.edu, and scroll down the page to get to the place where we can access our email. But today’s story made us throw up a little bit in our mouths.
Today, Friday, Nov. 22, flowers will sit at the base of the John F. Kennedy statue outside the student union named in his honor in memory of the 50th anniversary of the young president’s assassination.
Which legacy of Kennedy’s would that be?
Would it be his legacy as a feckless and inept president?
Or perhaps would it be his legacy as a creepy, lecherous bastard?
The Lusty Lady in San Francisco was the only unionized strip joint in America. Sadly, the Lusty Lady went belly-up and closed its doors this past September. In The Atlantic, a former stripper reminisces about her experiences at the club. Let’s see if we can figure out why the club failed.
On the peep show’s Kearney Street façade, among the enticements for “Live Nudes and Movies” and “Private Booths” curling out in Olde Tyme script, is a telling graphic flourish: Two hands pointing to a banner stating “Free Admission.” Upon close observation, you realize that the fingers pointing to the banner are middle fingers. That, to me, is the Lusty Lady encapsulated: Come one! Come all! F. you!…
The Lusty had many distinguishing characteristics—a cocky feminist underpinning that couldn’t be found in any other strip club or peep show in the country…
Customers weren’t allowed to dictate the show in any way, but that didn’t stop of some them from pantomiming stage direction through the glass. A “whoop de doo” finger spiraling in the air meant “turn around.” Fingers together and flapping out like fish fins meant “spread ‘em.” Poor lambs, to each motioned command, the answer was the same: No.
If this seems an insignificant detail, it is anything but. That the terms of interaction were non-negotiable underscored for many dancers a valuable aspect of sexual self-awareness: This is mine. In private or shown for hire, clothed or bare, it’s mine. After a few weeks at the Lusty, when I walked down the street, I felt less threatened by men talking shit to me. My posture changed. If it wasn’t liberating, it was certainly uplifting.
Oh, it was liberating alright. It liberated the dancers from their jobs.
To many of us, dancers, patrons, and support staff alike, the closing of the Lusty Lady means not just the demise of a singular San Francisco institution, but another nail in the coffin of the Bay Area’s Bohemian class—a triumph of capitalism over native culture.
Indeed, a triumph of capitalism it was. But she says that like it’s a bad thing. Look, telling your customers, basically, “F. you” and not giving them what they want is not a viable business model. And that is in fact the beauty of the capitalist system: the customer is free to take his money elsewhere. Likewise, what protects the workers, in this case the dancers, is competition for their valuable skills; they too are free to go elsewhere.
The video embedded below chronicles the story of the Lusty Lady from a pro-union perspective. The narration is standard pro-union tripe, but the images are terrific. Before listening to the pro-union spiel, however, it’s worth investigating how well strippers make out when they don’t have a union to ‘protect’ them. Apparently, if they work a full schedule for a full year, their income can reach six figures.
Menagerii, on an average night, says she can take home between $500 to $1,500. On a great night? She said $3,345, but this was after a double shift.
A monthly estimate of her salary could not be ascertained as she said she works on an extremely flexible schedule which included university studies and months spent travelling. However, she did say she can bring home as much as $120,000 per year, that is before taxes. Yes, she said she pays taxes…
“I get asked all the time, ‘How much money do strippers make?’ Well, it varies from a good night to a bad night, but suppose a stripper only averages $200 per shift and she works four times a week. That is $800 per week or $40,000 per year. If she works five times a week that is $1,000 per week or $50,000 per year. When I first posted this article in the fall of 2007, most of the strippers I knew were averaging $500 per shift, working four shifts a week, which translated to a six figure business,” she says.
Not exactly Marx’s “immiseration of the workers.”