; charset=UTF-8" Is that what people should be doing?

A Plumbline in the Wind

The world is going to the dogs, but I refuse to learn to bark

Psalm 119:19 I am a sojourner on earth; hide not thy commandments from me!

A Plumbline in the Wind Near Lauder, Scotland: Sheep on a hillside

Is that what people should be doing?

27 July 2008 · No Comments

Why will I never go into politics? Because the whole process appears impervious to logic. It’s not just the proposals that the politicians are making; it’s the so-called problems to which the electorate–taught by its masters in the media–expects solutions. Here is a great example from National Public Radio (a wholly-owned subsidiary of the Democratic Party). The have a program about business, whose Sunday version this afternoon ran a feature they call “The Straight Story.” This means, as far as I can tell, the ex cathedra statement from their economics editor, a Mr. Farrell, on what the lumpenintelligentsia who are their audience are expected to think. This afternoon’s sermon concerned the consequences of recent disruptions in the economy.

Permit me to add a disclaimer. I am not happy about disruptions in the economy that cause people to be laid off. There have been layoffs at my company, and I am very sorry for the people who have lost their jobs. Nor am I impervious to the plight of many people who deal with the kinds of difficulties that Mr. Farrell discussed. I would, however, contend that the better application of logical thinking to the situation might improve the consequences for both individuals and society. I have no answers to give, but I think the questions can be better asked.

Mr. Farrell began by giving credit to the Federal Reserve System and the Treasury Department for preventing “a financial collapse.” Some might say they also helped bring it about, but that is another story. He finds this development “worrisome” because

I think what we’re seeing is the consequence of actions that have been taken over the past three decades: the shredding of the social safety net. Now let me just tick off a few highlights: Fewer people have health insurance; Health care plans: They’re a lot less generous than they used to be; Pensions: They’re full of holes, so here’s the straight story: Workers and their families, they’re now absorbing most of the cost when money goes bad and the economy spirals down and that means we’re more dependent than ever on the monetary authorities to bail us out….

You know, we can say, “Don’t take on debt and you need to save more.” Well, you know what? The way our economy has evolved, you are on your own. You need to be more risk adverse. You need to be more conservative. It’s not just the function of the downturn in the economy and this is disturbing that I’m fairly convinced that the risk of losing your job, the financial consequences of losing your job are greater today than they were three decades ago.

I don’t think he means “conservative” in the political sense here. But why is being risk averse a bad thing? I have always been risk averse, and I would suggest that when one is saving for retirement, it’s often a good idea. At this point, his interlocutor and the host of the program, a Miss Vigeland, asked him:

Chris, where we all have seemingly accepted less health insurance, health insurance that costs more, pensions that are full of holes, I mean, all that stuff that you said you know there’s no big hue and cry within the American population to fix all of this?

One can excuse her failure to be the probing and inquiring journalist at this point if one remembers that they work for the same outfit. And Mr. Farrell answers:

I think we’re at a turning point, but you’re absolutely right and the reason why there hasn’t been a hue and cry is we’ve become a wealthier society and we took on a lot of debt, but what’s happening now is a lot of that debt is going bad and we’re not getting wage increases. We haven’t been getting them for a long time but now we’re not getting them and we can’t borrow. And so my sense is that people are increasingly upset about the way their pension plans are being managed and the risks that we’re taking. I mean, is it really good public policy that we’re making decisions about how much should I be in equities? You know, how much international stock should I own? And I’m making decisions and you’re making decisions that will have implications for your living standard 30 years down the road. Is that what people should be doing? And it’s this downturn in the economy that’s sort of ripping apart and showing how vulnerable we all are.

Mr. Farrell’s sermon is not deathless rhetoric, but that is not my purpose in discussing it. I am rather concerned with its overall meaning.

First of all, the healthcare question. It seems that every discussion about the economy ends up in that issue, just as everything in the water ends up around the drain. What everyone seems to forget is that the reason for the high cost of health care, whether that cost is paid by sick people, insurance companies, or the taxpayer, is that there is more of it. People spend more on drugs because there are more drugs to spend money on. Hospitals charge more because they have more tests and procedures available to administer and then charge for. Old people pay more for medical care of all kinds because they live longer. The reason for the increasing cost of healthcare is what many would call the progress of medical science. Whatever we want to do about the distribution of this care, no proposal that ignores this fact will amount to anything. But I don’t think that the cost of heathcare is Mr. Farrell’s main point. (I’m sure that when he does get around to it, he will explain why the Democratic Party platform has the right answer.)

It appears that his main point is that people should not be “making decisions that will have implications for your living standard 30 years down the road.” He asks, “is it really good public policy” that the “workers and their families” should make decisions about saving for the future, in particular for their retirement? Clearly he thinks it is not, that is, that individuals should not be responsible for their own lives. A commenter from the left on the web page for this interview takes issue with Mr. Farrell’s displeasure at the intervention of the federal government. She argues that the federal government as “the ultimate expression of our responsibility for each other” should actually take care of everything. That is, of course, the logical implication of his rejection of individual responsibility. That Mr. Farrell’s argument tends in that direction is also suggested by his reference to “public policy.” This is a euphemism for the use of the state monopoly of force to compel people to adopt, either individually or in groups, some course of action. So instead of “counting on the Federal Reserve and the U.S. Treasury Department to bail us out” we should be counting on some other organ of the government to tell us how to invest our money–or better yet, to invest it for us.

Who else does he think can take care of us ignorant children? Who else can shield us from the consequences of our actions by being the indulgent Daddy (a bit like me, but that’s another story too)? Barack Obama loves you and has a wonderful plan for your life.

Tags: Politics and society

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