Federal Income Tax - ???!!!jflakdjfloiuw!lakdjk!!!!!???

Liberty - Why Don't People Get It?

For a really really long time, I have been baffled as to why people don't believe in freedom - whether it is economic or social. It often seems like I'm speaking in a different language and people give me looks like I'm talking about a "utopia" that is not practical.

Since his op-ed in the WSJ on health care (thanks Rug!) I've been reading up on John Mackey. (This guy ROCKS! He is really the Ayn Rand Hero of today.) For the first time, I'm starting to see why more people don't believe in freedom or the type of freedom advocated by libertarians. In this transcript of a speech he gave in 2004, he identifies why the Freedom Movement is struggling. In hindsight, I really should have realized this on my own.

Here are a couple of excerpts from the article that got me thinking:

"Let's start with the critique. How many of you have read Ayn Rand? How many of you have been influenced by her? "Atlas Shrugged" remains one of the five greatest novels I have ever read. Who can ever forget characters like Dagny Taggart, Hank Rearden, Francisco d'Anconia, from "Atlas Shrugged," as well as Howard Roark in "The Fountainhead"? These characters all demonstrated tremendous passions and drive, backed by high self-esteem. Each one inspired this young entrepreneur. I wanted to be just like those heroic characters in "Atlas Shrugged."

However, despite her literary greatness and many positive contributions to the freedom movement, I believe that Rand has also harmed the movement. How? She was overly provocative. The "virtue of selfishness" is an oxymoron. Selfishness is not a virtue. Now, I understand all the arguments — I've read all the books. I know that self-interest channeled to the social good, as expressed through Adam Smith's "invisible hand," is the single most brilliant insight about social organization ever made in history. That being said, selfishness (as opposed to self-interest) is still not a virtue. It is something to be discouraged, and not something to be supported."

"When I was a naive (some people in the audience by this time probably think I'm still naive) and idealistic young man, I migrated to the Left for my value system. Why did I do that? Because the Left provided an idealistic vision of the way the world could be. However, the reality of the Left's vision proved to be terribly flawed. Its socialist economic system not only didn't work very well, but in its communist manifestation it justified monstrous governments directly responsible for the murders of over 100 million people in the 20th century. Despite the horrible track record of leftist ideology, millions of young Americans continue to migrate to an intellectually bankrupt Left because the Left still seems to be idealistic, and idealism is magnetic to the young. Idealism will always be magnetic to the intelligent and sensitive young people of the world.

How sad that the freedom movement often refuses to be idealistic. We usually don't even attempt to compete. We simply forfeit the field to the Left because we pride ourselves on our "realism" and "tough-mindedness." We talk about freedom and prosperity — and that is about it. We have no real theory of either the good life or the good society except the fundamental belief that if people have sufficient personal and economic liberties (as in Friedrich Hayek's spontaneous order) we will create a prosperous society.

Freedom and prosperity are important goals, but they must be only the beginning goals for us. If we are to win the allegiance of the young people of America then we must dare to be more idealistic. We must create a vision of the good life and the good society that is irresistible to the young."

Health Care - Where Can I Get A Life Boat?

One of my favorite quotes of Ayn Rand comes from We The Living:

"Do you believe in God, Andrei? No. Neither do I. But that's a favorite question of mine. An upside-down question, you know. What do you mean? Well, if I asked people whether they believed in life, they'd never understand what I meant. It's a bad question. It can mean so much that it really means nothing. So I ask them if they believe in God. And if they say they do—then, I know they don't believe in life. Why? Because, you see, God—whatever anyone chooses to call God—is one's highest conception of the highest possible. And whoever places his highest conception above his own possibility thinks very little of himself and his life. It's a rare gift, you know, to feel reverence for your own life and to want the best, the greatest, the highest possible, here, now, for your very own."

My new favorite question is "Do you believe that the government should provide health care?" I think the answer to this question tells me more about a person's view on individual liberty than anything else I could ask.

Anyway, if the health care public option bill passes after the debate in the Senate floor... I think I'll be ready to admit that we are all on a sinking titanic and start looking for a life boat.

What Is Property?

When it comes to property rights, it is easy for me to follow the logic that when you CREATE something, like a sword or a painting or a piece of furniture, that it belongs to you*. I can also follow the logic that when you trade what someone has created at some agreed price, that it now belongs to you. However, I have a difficult time following the logic of land rights, or rights to anything that none of us created. Anyone have an opinion about this? I would love to be able to understand this better!

*you can be an individual or an organization

What Do You Deserve?

We live in a world where everyone talks about how the weak deserve food, deserve money, deserve happiness.. that it is our moral obligation to make sure that they get these things. But what about those people who create their own wealth, who create their own means to food and who create their own means to happiness.... why do we think that these people don't deserve to keep what they have created?

The Business Of Getting Married

First of all let me say that I am a romantic at heart and the idea of a forever after with your true love sounds wonderful, and I might even go "awwww". But then reality dawns on me of the dirty business of getting married. I say "dirty" because of the involvement of the state in terms of issuing marriage licenses. Um, can I ask WHY in the world is this the business of the state?? It seems ridiculous to me that the government has monopolized this industry of marriages. Not to mention their tax breaks and other benefits of marriage, which certainty create incentives for us to get married. And why exactly should I pay less in taxes if I am married? Or more in taxes if I am not married? I also say "dirty" because I ask myself "what is the point of marriage?" and it is nothing but setting a contract with another person that you will be there for them in x, y and z situations, and establishing a power-of-attorney-type-exchange. In which case, WHY WHY WHY is this something that the state needs to be involved in?

Perhaps at one time in the distant past, people believed that marriages, in this type of contract form, would ensure that they creates a stable family.. but really does this even exist anymore? With the insanely high divorce rates and prenuptial agreements to get ready for divorce before getting married.. it is difficult to argue that marriages create a stable family.

Please enlighten me with your positive views towards marriage so that I can be less cynical about it. :)

Moral Hazard: The Gift That Keeps On Giving

I love the concept of karma - the idea that you do an action and the consequence depends on your action. It is just so clean. Systems that employ karma as the guiding principle for how they operate work so well! We do use this idea in various aspects of our society: We create laws such that people who harm others are punished. People who make productive contributions in their job can look forward to better earnings. People who drive carefully get better auto insurance rates.

However, when it comes to the karmic balance of our economy... well I’m not sure it exits anymore. The recent bailouts have tossed out this relationship of action and its consequences. The bailouts repulse me in many ways: first of all the govt is taking ownership in private enterprises, secondly the companies that are being bailed out have very little probability of producing any returns greater than or equal to zero, thirdly the govt doesn’t have the money!

As much as these reasons upset me, the one thing that scares me is the amount of moral hazard* now prevalent in our economy. The idea that if you make bad decisions you will suffer for it, is no longer true! Because of the bailouts, especially of the auto industry, we have removed karma as our guiding principle. What incentives do people or companies have now to manage their risk and to make good decisions? We have created a system that allows for companies to make terrible decisions without them worrying about the consequences. Rather, we have created a system where the consequences of actions have changed, and incentives are altered.

Suppose you have a situation where two events are possible. You can make a lot of money say $X with 60% probability and you can loose a lot of money say –$X with a 40% probability. Suppose, now, the situation has changed (as in the case of the bailouts). The probabilities and the amounts are the same, but what you will experience is changed. Instead of experiencing –$X profit you will end up with $0 and the government as your new owner. How will this influence your decisions?

I am not claiming that in all situations and all companies will make more risky decisions because they might feel like the government will bail them out. In depends on how –$X relates to ‘$0 and the government as the new owner’. Maybe having the government as your new owner is worse. If all other companies in your industry are functioning well and don’t need to be bailed out, but you do, then maybe it is far worse to have the government as your owner. But if all other companies in your industry are being bailout out... what kind of decisions are you going to make?

Since I am an Actuary, I love making predictions based on trends. So, here is my prediction: Many more companies will make bad decisions based on their new found security of the bailouts (at least in the short term future). Of course these companies will probably make rational decisions based on their risk analysis, but people will see them as being greedy and unreliable. And greed is bad right? So maybe we will venture off again on our quest to find the magic pill to get rid of it. And reliable? I wonder why companies don’t like to make decisions that will be similar to suicide, even though they would be doing it for the good of society. Oh well, atleast it will give us some ammunition in our fight against "Corporate America". And THIS can most definitely help the Democrats to usher in a new era of socialism.


*Moral hazard is the change in the behavior of people and organizations when their share of loss is reduced.