Friday, September 14, 2007

Presidential Platform 2008

The Freakwenter hereby announces his candidacy for president of the United States. Unlike most candidates currently in the running, the Freakwenter has well-defined positions on every important issue. Therefore, the Freakwenter expects no difficulty in getting the job.

ABORTION: Leave it to the states to make anti-abortion proclaimations. If abortions are indeed heinous crimes that deserve strict consequences, the Freakwenter is deeply sorry. Practical considerations make enforcing anti-abortion laws difficult. Conveniently, ignoring the abortion issue allows natural selection to do its work by reducing the proliferation of people who don't like babies. More importantly (and a lot less crassly), unwanted-pregnancy prevention programs are more cost effective than anti-abortion programs in stopping abortion. The Freakwenter will include ample funding for free public birth control and education as part of the health care initiative, described below.


HEALTH CARE: The Freakwenter will phase out Medicaid and Medicare and simultaneously phase in medical clinics where people can walk in at any time and receive basic health care (excluding cosmetic surgery, heart transplants, certain other extremely expensive proceedures). The clinics will be located within 10 miles of most populated areas in the country. The clinics will be staffed using federal funds. Federal laws will protect doctors in these clinics from all but the most severe malpractice lawsuits. The government will subsidize tuition to medical school. This will increase the number of people going into the medical field and bring down the cost of hiring doctors for the clinics, by the law of supply and demand.

IMMIGRATION: The Freakwenter will increase funding for border security by about 30% and simultaneously increase funding to expedite the application process for entry into the US. Illegal immigrants currently in the US will be offered the opportunity to stay under the terms and conditions proposed by President Bush in his recent immigration proposal. The annual immigration cap will be 3% of the current US population, or about 9 million people. The first million will be accepted on the basis of value for the US economy. The rest will be chosen by lottery.

MILITARY and FOREIGN POLICY: The Freakwenter will pull all troops out of IRAQ within two months. The 200,000+ troops in other areas of the world will gradually pull out over a 5-year period. Most troops will be happy to go back to their normal lives and jobs in the US. Those who prefer to stay in the military for a career will be retrained to improve US border security, inspect cargo containers at major ports, and patrol high-profile terror targets within the US. The Freakwenter will discontinue the US nuclear weapons program, disarm all nuclear weapons and launch pads, and discontinue funding for most new weapons and weapons research. This will bring the annual military budget down to about $100 billion for a purely defensive force which train specifically for the purpose of coordinating a sophisticated insurgency in the event of an occupation by foreign forces. The Freakwenter will phase out all currently existing federal payments to overseas organizations (besides payments on loans) including Israel and Palestine. The general philosophy is that the US will attract fewer attacks on the homeland by not meddling in the affairs of other nations. Finally, the Freakwenter will establish a statehood application program that allows foreign nations to apply for statehood with the US.

MINIMUM WAGE: $1 per hour.

WELFARE: Cancel all existing welfare programs including social security. Everybody gets a non-taxable sum of $5,000 per year split into four quarterly payments. People who cannot make it (in combination with other income) on this are welcome to forfeit their free money and check themselves in at regional poor houses, which will be a humane dormitory-like environment that provides job training, drug rehab, and extremely basic living facilities for people who will never make it on their own.

BUDGET TAXES and SUBSIDIES: The Freakwenter will phase out all corporate taxes and agricultural subsidies. Most sales taxes will be eliminated. Exceptions include a 50% fossil fuel tax and harmful drug tax. Income taxes will rise as much as necessary to produce a 10% budget surplus to begin paying of the national debt. The income tax structure will be vastly simplified. "Exemptions" will no longer exist, even for parents (parents get paid the annual $5,000 welfare sum for each child under 18. However, the income tax will be progressive. For example, people who earn $1,000,000 per year will face perhaps a 60% tax rate; people earning $100,000 per year would pay about 35%; people who earn $20,000 year pay nothing; people who earn $2,000 or less per year (say they are working at the minimum wage of $1/hr) would be PAID a 300% subsidy on their earnings. The gaps would be filled in in such a way that earning more always results in having more to spend. Under this tax structure, the people with the greatest incentive to earn more would be those who aren't working at all and those who are making about $20,000 per year.

KATRINA and DISASTER RESPONSE: Areas ravaged by disaster of any kind will not receive special federal treatment. That's what the welfare program is for. Everybody who is poor has a perfectly valid excuse for it. People who lose their house to a flood deserve federal aid no more than people who were born incapable of taking care of themselves. FEMA will be redesigned to focus on immediate disaster relief, i.e., setting up tents for temporary shelter, providing food for short periods, and transporting people to poor houses if they have no other place to go.

AMENDMENTS TO THE CONSTITUTION: The Freakwenter will end Democracy as we know it and initiate a version of pollacracy (see An Introduction to Pollacracy) in which voting will be like jury duty. People who are randomly selected to vote will be required to sit in court for three weeks at different periods of the campaign season to discuss and weed out potential candidates and eventually participate in an election as citizens well-educated on the issues.

STEM CELL RESEARCH: The Freakwenter will deregulate the stem cell industry so researchers can finally figure out what the heck stem cells are and explain it to us.

Thursday, September 13, 2007

The Separation of Church and State

We can divide efforts for the common good into two big categories: attempts to make yourself promote the common good and attempts to make everyone else promote the common good.

Succeeding in the second goal (making everyone else behave) is clearly much more effective than succeeding in the first, assuming you're not the only person left on the planet. For example, if you want to establish a welfare system, you're going to want a tax law that makes everyone chip in to support the poor.

On the other hand, attempts to make everyone else behave can be counterproductive. You might think it is good for individuals to live on meager sums and donate all their other earnings to good causes. But the economy would probably collapse (or at least wind down to a communist grind) if you passed a law that makes everyone do this, since most people work only enough to earn the money that they are allowed to spend on themselves. Such a law would essentially be a mandate for communism, and communist societies tend to have even higher rates of poverty.

The counter-productivity (literally, in the above example) of trying to make everyone else behave is precisely what gives rise to the need for separation between church and state. When governments go too far in forcing individuals to promote the common good (or "God's good"), the common good suffers.

It is not always clear where to draw the line. Should the government legalize cocaine? Refraining from abusing drugs is beneficial for individuals, but enforcing laws that require everybody to refrain from doing cocaine often requires violent measures or long prison terms.

Morality , Psychology, and the Pursuit of the Common Good

What is Morality? The short answer is that nobody knows, but that doesn't matter. Here is a simple definition that will prove useful.

On a daily basis, you make decisions about how to direct their efforts and resources. You might go shopping for a new sports car to add to your collection, play with your kids, might help a friend fix their roof, volunteer at a community event, lobby for a non-special-interest political cause, or donate something to a global charity.

You have probably noticed the pattern in the list of activities above. Buying yourself a cool car benefits you directly. Playing with your kid may seem like a generous thing to do, but you really care about your kid, so you get a lot out of that activity. Helping your friends is generous but also selfish, because you know they are likely to return the favor. Volunteering for your community may help your reputation, but the clear material benefit goes to the community. Lobbying for a non-special-interest political cause, if successful, imparts great benefit to your nation as a whole, but is unlikely to be visibly worth your time. Contributing to a global charity is a complete waste of time and money for your household finances, and you might never know or personally care about the beneficiaries.

Your morality is a measure of how much more your action is justified in terms of the common good compared to your personal benefit. A completely moral action is one that supports the common good and you get no visible benefit.

Does morality exist? Not necessarily, but, again, that doesn't matter for the pursuit of the common good. What matters is that many people either perceive themselves as moral or want to be perceived as moral. It is the existence of perceptions of morality that will shape the reactions of the masses to the Freakwenter's attempts to clarify which personal behaviors bring about the common good.

In response to the blindingly bright and lusciously lucid comment of blog critic Justus below, the Freakwenter will take the unprecedented step of adding an extra clarification to the remarks on morality. As Justus noted, a more "bird's eye view" reveals how morality may be best viewed as a social construct, and as such, it can take many forms. If the Freakwenter had not been such an idiot, the above entry would have been more succinctly stated as something like, "Altruism is the dominant manifestation of the morality constructed or embodied by the philanthropic/nonprofit sector. Defining which behaviors most effectively promote the common good will influence the work of the this sector primarily through its love of altruism."

Saving the World: Identifying the Common Good

Improving the economy and increasing economic opportunities for the poor is the simplest and quickest way to save the world. This is a value judgment.

Wednesday, September 05, 2007

Common Good and the Personal Consumption of Yachts

Consumers concerned about strengthening the global economy and helping the poor often justify personal discretionary expenditures by stating that their spending creates jobs. For example, they would say that you buying a yacht for your lake provides vital employment for the workers in the yacht industry. This contribution to the yacht industry is also a contribution to the world economy, so you can float around your lake in peace knowing that you’ve made the world a better place. But you would be mistaken.

There are many measures (or definitions) for “welfare,” so we want to avoid becoming too distracted with a precise formulation. Let it suffice to say that the global welfare is highest when basic goods and services (food, shelter, heath-care, etc.) are widely affordable.

Two obvious factors determine the affordability of basic goods. Following the law of supply and demand, the production of more goods keeps prices lower. For people to afford the goods, they must have employment. Let’s recap: Employment and production are the faith and works of an economically healthy society. Production without employment is empty, since produce does no good to those without income to buy it, and employment without production is dead, because it’s not worth the effort to work for nothing.

Now let’s tie this back in with personal consumption. Does buying a yacht help the economy? Let’s think about it. Does it create employment? Check. Does it produce basic goods? NO! As a result, you’ve got a team of yacht-builders out there who are making a living for themselves but are not increasing the supply of goods that are desperately needed by the low-income sector.

One question remains. If you’re not going to spend your money on a yacht (or a car or a servant servant or a nice computer or any other form or luxury consumption goods), what is the best thing you can do with the money that will help the poor? This question is far more difficult than it may seem at first glance.

The pop-culture response is that you should just give all the money away to a reputable charity. This is usually a step in the right direction, but you have to be careful because the science of philanthropy is young, and economists have only begun to study the effects of local anti-poverty efforts on the global economy. Despite the difficulty determining the best place to put your charity, the bottom line remains: you feed the poor more efficiently if you pay them to produce the things they need instead of paying them to work for you. Take your pick. If you care about the poor, you'll dock your yacht.

Monday, September 03, 2007

A Nonprofit Proposal: In Memory of Ebenezer Scrooge before He Became a Lousy Liberal

The Freakwenter Foundation today announces the formation of [plans for] a new subsidiary dedicated to improving the purchasing power of the world's poor. The budding nonprophet, The Ebenezer Scrooge Fund, will achieve its mission through a simple process known to pretty much nobody as "civil monetary policy."

The Ebenezer Scrooge Fund, referred to as "the Fund" for simplicity, faces immense publicity obstacles getting off the ground. The annual publicity allocation is zero dollars and zero cents, and any genuine attempt at publicity is sure to backfire. The workings of civil monetary policy are so counterintuitive (and possibly misguided) that most attempts at indoctrinating the public will result in some combination of laughter and anger.

Here is how The Ebenezer Scrooge Fund works. The Fund accepts donations from regular people and invests all its funds in stocks, financial markets, and direct investment. All investment proceeds go directly back into The Ebenezer Scrooge Fund, and the only outflows are due to administrative costs and investment mistakes such loan defaults. The Ebenezer Scrooge Fund's holdings therefore accumulate rapidly.

With so much money at stake, the administrative guidelines are lengthly to ensure that that the Fund does not become derailed from its original mission. But in terms of day-to-day operation of the Fund, the stated goal is relatively straightforward:
"The Fund shall strive to maximize its medium long-term growth rate while spending no more on public relations than is necessary for basic financial transparency."

So how does the existence of the Fund improve the lives of the worlds poor? We should first explain the term "civil monetary policy."

Economists study national macro economies in terms of two branches of federal policy: fiscal policy and monetary policy. Fiscal policy is how the government spends tax dollars. Monetary policy is how the central bank tinkers with the financial markets and interest rates to promote economic growth and prevent inflation.

Monetary policy to promote rapid short-run economic growth is based on lowering interest rates. The main way this is usually done is by increasing the supply of money in the economy through "open market operations" in which the central bank buys bonds supplied by the free markets.

Civilians who donate to the Fund are therefore conducting monetary policy on a small scale by increasing the publicly available supply of liquidity. This in turn lowers interest rates, promotes economic growth and job opportunities, which in turn increases tax revenue for government social programs.

An obvious criticism of the Fund is that the central bank would already be doing the work of the fund if it were truly feasible. However, people donating to the Fund to lower interest rates is different from the central bank lowering interest rates in several ways.

The most important difference is as follows. When the central bank lowers interest rates by bidding up bond prices, the corresponding bond purchases constitute an increase in the net supply of money in the economy, resulting in destabilizing inflation. That is, the central bank's ability to reduce interest rates is limited. On the other hand, when an individual in the economy donates to the fund, this does not increase the net supply of money, since the donor gives up money and reduces personal consumption in the process, which has a deflationary effect.