Monday, April 21, 2008

Compassion and government

You hear a lot about "compassionate conservatism", which is really itself a reaction to the phenomenon I noted earlier where people who don't want to take money from one group to help out another are seen as uncharitable. I would submit, though, that it is simply not possible for government to be positively act based on compassion.

I am not claiming that "compassionate conservatives" aren't really compassionate; compassion is simply a desire to help in others' times of distress. I'm sure both they and progressives really do want to help. One of my reasons for writing this is hearing E. J. Dionne speak on his book Souled Out, and he certainly seems to believe we should support government helping out the poor to be consistent with a Christian faith. I'm sure he genuinely feels compassion for the poor. My problem is that I first off don't think government solutions to reduce poverty actually do so. Even if I did, though, when Christ calls us to care for the poor I'm pretty sure he didn't mean to take extort money from our next door neighbor and use that to do it.

My first problem with a "compassionate" government is that a government doesn't have any money. I have heard people recently argue that the government owns everything produced in its borders, either through some hyper-socialist ideal or because it prints the currency.

In the former case they are going further than even Marx himself would have ventured. Marx agreed with Locke that a worker is entitled to his wages; he just rejected the idea that capital assets can add value to the product and thus thought that all value in excess of wages paid (surplus value) should be forfeit to society rather than held as profit to the capitalist. The Bible is quite clear that God owns everything, but it naturally follows from the fact that God owns you that He would also own the produce of your labor. For this to be true of the government we must accept that the government does not exist to serve the people but that it in fact owns the people. This argument has certainly been made throughout history by various tyrants, but I would submit that virtually no one actually believes it. To accept this you have to throw out our Constitution because limits on government are ridiculous if we believe we are wholly owned by the government. The only thing that makes sense at that point is absolute tyranny, whether by an individual, a group, or the majority.

The second case is even less substantial. This argument rests on the fact that the government printed Reserve Notes and thus owns them all. If this is true then it would seem reasonable that Dell could at any moment require me to give up the computer on which I write this, since their building it confers permanent ownership to them.

The government has two main ways of procuring money to support its various programs, it can tax or it can loan money. The latter is really a delayed way of taxing, so I'll ignore it. In the former what we're doing when we "give" money to the unfortunate we're "giving" what doesn't belong to us. If you are called to help the poor (and you are) then you should do so, but you should do so with the money you produced or that God entrusted to you, not by taking from someone else.

The second, and bigger, problem is that these "solutions" rarely work. When compassion guides our governance we like to think of the government as a parent who, caring for her children, sees them fall on hard times and helps them get back on their feet to get started again. The problem is that said parent is deeply involved and can make independent decisions on a case by case basis. To successfully administer compassion in our personal relationships we depend on being able to selectively enforce our own boundaries. We have to know the difference between a friend who recently lost their job, is trying hard to get a new one and has cut nearly all their expenses and a friend who has taken up drinking, has lost their job but is keeping up their destructive habit and wasting all of their money. To the former giving some money to help them make it through is a great blessing, to the latter this would only reinforce their destructive habits. The government is guided by policy and so it's almost impossible for it to distinguish these cases. As a result government policies intended to help people out more often than not exacerbate major problems.

An easy example of this is college tuition. We have a problem often harped on in the media that the cost of college tuition rises faster than the rate of inflation. Additionally a huge number of jobs require a college degree to get in, even if they don't use specific knowledge gained from any college program. The standard government solution to this is to provide more aid for people to go to college, but that's what caused the problem in the first place. Every college in this country except two (Grove City and Hillsdale) accept government money in the form of tuition assistance, often a substantial portion of their total tuition costs. Because of this they can charge more for tuition than they would be able to if they had to depend on people actually paying what college was worth and they can put people through college who are going to get a job when they get out that doesn't really require knowledge gained in college. Because there are so many college graduates out there, anybody who didn't got to college is looked on as basically lazy, so employers want somebody with a college degree, even if they don't need something covered by a specific degree program. Make people pay their own way and tuition would naturally come down as would attendance numbers and thus the number of employers requiring a degree.

We see similar problems all over the place whenever government tries to be compassionate. We go easy on illegal aliens and thus reduce the number of hard working people who have waited in line for years to get into this country who can get in. We provide aid to poor mothers and split up families while encouraging out of wedlock birth. I actually just read that the recent FLDS compound broken up was sustained mainly through taxpayer funding of the various wives in the form of welfare checks since they are legally single.

Thursday, April 17, 2008

Mortgage Bailout, part 2

I had previously posted in defense of Bush's negotiated interest rate freeze. I still think that was a good idea, but the mortgage bailout in Congress really, really bothers me. I'm aware that I frequently come off as uncompassionate so let me start by stating that I feel for people who got themselves into mortgages they can't afford. I hear them all the time on the Dave Ramsey show and I wish they didn't get themselves in this situation.

Having said that here is what I see as the pros and cons of the bailout:


  • Real Estate values don't drop now. They're artificially high because of bad loans so they probably still drop later, but it might not be as precipitous a decline.
  • Some people don't lose their home.
  • Some people who bought mortgage backed securities (which probably includes a bunch of pension funds) don't lose value
  • Some mortgage banks don't go bankrupt (though most of them probably sold the securities already)

  • Anti-bailout

  • You're charging a bunch of people, the overwhelming majority of whom either don't own a home or are in a responsible mortgage, to shield a much smaller number of people from the results of their actions. This is made worse by the fact that many of the people paying are currently in a smaller house, have held off on buying a house when they could have done so irresponsibly, or have a higher interest rate than they would if they were in an ARM. This means people aren't just paying for somebody else to keep their home. They're probably at some level paying for somebody else to keep a more expensive home than they own for the same rates they're paying on theirs.
  • You're stabilizing house prices at an artificially high level, which means that those people who don't own a home now because they have been responsibly saving their money instead of getting a loan they couldn't afford will have to wait longer and pay more because they can't buy one sold at a discount by someone who got a loan they couldn't afford. Again this is aggravated by the fact that these people are also paying the bad loan holder to hold onto the house they would like to buy.
  • You're setting a precedent that the next time you hear a deal that's too good to be true on the radio and you know that a significant minority of the population is buying it, you can go ahead and take the risk because if things work out you'll get a better deal than being responsible and if they go south then you can probably get the government to bail you out if you can hold out long enough that it hits everybody else, too.
  • You're setting a precedent that if there are a bunch of very risky, but lucrative securities and you need to factor in the chances that the government will bail you out on the risky side to see if they're worth it.

  • Monday, April 14, 2008


    Unless you live under a political rock, you have probably seen Obama's comments that most of America is bitter about not having the government give them jobs and that's why they turn out gun-toting, bible thumping bigots who join the KKK and hate immigrants (not exactly his words, but that's the feeling I get from his speech, and yes I have read it in context).

    Though I find the content of the speech itself and the political fallout from it, which will probably be long lasting, interesting, that's not what interests me the most this morning. There are two parts to his slander of middle America. The first is that social conservatives cling to religion, gun rights, controlled immigration policies, and limits on trade (I won't deal with his comments about "antipathy to people who aren't like them" because I think it is a misplaced stereotype) not because they are rational but because they are bitter about being jobless. I think Obama quickly realized how deep this cuts and has run away from those comments, instead characterizing the debate as being about whether or not people are bitter (or more precisely whether or not they deserve to be bitter).

    What really catches my attention is the comments on various conservative blogs (one of the most exemplary can be seen on Volokh) stating that Barack is right, we should be bitter. All of them that I've seen list a litany of charges against Republicans always including involvement in Iraq. What I find interesting about these posts is that every one I've seen is very clearly written by a liberal. I can't claim to know where they stand on gun rights, religion in schools, or the border fence, and I certainly don't know where they live. I've also never really spent any time in PA, but I have spent time in small towns in GA. I have a difficult time imagining that the biggest problem of the average citizen of Altoona, PA is supply contracts being awarded to Halliburton.

    What I seem to be seeing is what Psychologists call projection; big city liberals (including Barack himself) think people should be bitter, so they're quick to jump to defend comments that they are. If you go read reports actually coming out of the Alleghenies, though, the closest thing I see to bitterness is indignation that the hardworking people of small town America were so slandered. This brings me to the second problem with his statement. You will note the above linked press coverage is of people who take pride in caring for themselves through their own hard work. To insinuate that they are bitter because the government hasn't come in and taken care of them like little children is deeply insulting. Zell Miller got this, but then he thought the Democrats were "a National Party No More."