From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: Ignorance - Was Re: VOTE, BABY, VOTE!
Date: Thu, 12 Nov 92 10:54:55 EST
Organization: IFS Project, University of Michigan
Reply-To: jwh@citi.umich.edu

In article <1992Nov12.082806.15389@RedBrick.COM>, jfr@RedBrick.COM () writes:
|> In article <1992Nov11.201147.12975@cbnewsh.cb.att.com> europa@cbnewsh.cb.att.com (r.j.capik) writes:
|> >From article <1992Nov11.165425.14512@ucsu.Colorado.EDU>, by fcrary@ucsu.Colorado.EDU (Frank Crary):
|> >> In article <1992Nov11.152245.2895@gvl.unisys.com> yavo@sdosrv1.gvl.unisys.com (Steve Yavorski) writes:
|> >> 
|> >>>>Fine: Why should they be made immune from the consequences of this
|> >>>>choice? If they want to have more kids than they can afford, that's
|> >>>>fine. But they should live with the result: Poverty. We are under
|> >>>>no obligation to save them from their own bad judgement.
|> >>>                                           ^^^^^^^^^^^^^
|> >>>Maybe they could afford it before they had the kids.
|> >> 
|> >> Ok, I should have, I suppose, said "bad judgement or bad luck." I
|> >> don't feel I (directly or theough the government) have an obligation
|> >> of insure everyone against all forms of misfortune.
|> >            ^^^^^^^^         ^^^
|> >>                                                  Frank Crary
|> >>                                                  CU Boulder
|> 
|>   Okay Frank, just to be consistent here, I want to make sure I have
|>   this correctly:
|> 

I don't know what Frank will have to say, but I'll offer my
opinions :-)

|>     1) You would not want to bail out any S&Ls (I might even agree
|>        with you on this one).  Let ALL of the people who were suckered
|>        or slickered by the curse of S&L deregulation go broke, right?

The Federal government guaranteed accounts up to $100,000.  This was
stupid, but a promise is a promise.  The government should pay depositors
according to its agreement.  Of course, after payoff, the insurance
system should be scrapped for some form of private insurance, or at
least public insurance with premiums based on risk.

|> 
|>     2) You would not want to give any business ANY kind of tax break
|>        or incentive or subsidy, right?  Get rid of the subsidies
|>        given to the tobacco farmers (hey, even I'd go along with
|>        that one!) and all the other farmers who have had "misfortune".
|> 

Corporate taxes should be abolished, therefore tax breaks would be
pointless.  At the same time, subsidies should also be abolished.
Farmers who wish to protect themselves agains 'misfortune' can buy
insurance.  Those who can't cut it as a business shouldn't be farming
as a business.

|>     3) What about deposit insurance?  Should that be banned also? 
|>        After all, if you can't choose a good S&L or Bank, to hell
|>        with you when it crashes, right?  (BTW, I also might be
|>        in partial argeement here, requiring banks and S&Ls to
|>        offer private insurance and letting depositers pick and
|>        choose between levels of insurance and their risk and return).
|> 

Deposit insurance should be handled by private insurance companies.
Banks and S&L's could determine the level of coverage they wished to
offer and the premiums they would pay to the insurance company would
be based on the riskiness of the portfolio.  If insurance is such a
good thing, banks should be able to advertise their level of 'protection'
and draw customers.  If it isn't important to depositors, banks
would lower or drop the insurance protection.  Most likely you would
see banks with varying levels of protection.  Insurance companies
would have a financial interest in making sure that banks complied
with the insurance companies 'regulations' regarding risk, unlike
the Federal government.  The biggest problem with Government is
that there are no real rewards for doing a good job, and no
real consequences for doing a bad job.  Since doing a bad job is
cheaper than doing a good job, the incentive is to do a bad job.
Businesses can't operate like that if they expect to survive.

|>     4) How about safety legislation?  Should companies be permitted
|>        to just forget safety (since it clearly impinges on profits)
|>        just to make a bigger buck, and let the workers be damned?
|>        Back to the sweatshops of the 1890s, huh?  
|> 

Health and safety legislation generally followed improvements made
by companies (see Hayek, et. al. in "Capitalism and Historians" and
T.S Ashton's "The Industrial Revolution" for more info).  Safety
is obviously a concern to employees, although safety can be overdone.
Companies that provide a safer work environment will be able to 
attract more workers than those who don't, assuming workers value
safety.  The biggest problem with government regulations is that
it often imposes large costs for little incremental gain.  The
increased costs simply cost jobs.  Ask an unemployed worker if
he would accept a decrease in safety for employment.  Also note
that a decrease in safety does not imply 'unsafe', although
even in that case, I don't believe the government should play
mommy and prevent someone from working in an environment which
mommy has deemed unsafe.  One final comment, the 'sweatshops'
you refer to only look bad from today's perspective.  At the
time, the conditions weren't worse than what many people were
already enduring and were often better.  I doubt seriously if
unions and most employees would agree to work in conditions that
existed in the last century.

|>   Frankly (sorry about the pun :-) this all makes me nauseous.  We
|>   are a society of people who are supposed to care about our fellow
|>   man, and yet you advocate returning to the dark ages when everyone
|>   was out only for himself.  No, check that, even in the dark ages,
|>   tribes took care of their own.  This is more like a pack of animals.
|>   No, check that too, even animals take care of their own.

'Society' is not a single entity.  It is composed of individuals who
have vastly different opinions about what is right and what isn't.
It is not the place of government to impose the will of a majority
on minority groups.  People have always been free to band together
to help other people out.  Charities existed *before* government
got involved.  The choices are not government charity or no
charity, the choices are government charity or private charities.
Each individual can contribute what he/she feels is appropriate, and
can donate the money to causes they he/she feels are important.
This is what freedom is all about.  We have been spoonfed the notion
that government can solve all problems, even though the evidence
is to the contrary.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         
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