Arnold Kling  


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I think I got to these either from Mark Thoma or Yves Smith.

1. Wolfgang Munchau writes,

I have heard credible reports suggesting that the underlying situation of the German Landesbanken is even worse than those estimates suggest. Last year, a story made the rounds in Germany, according to which a worst-case estimate would require write-offs in the region of €800bn - about a third of Germany's annual GDP. If you were to add this to Germany's public debt, you might jump to the conclusion that Greece should bail out Germany, not the other way round. While that is probably a little exaggerated, there are serious questions about whether the eurozone is still in a position to issue such massive guarantees.

In Europe, big banks tend to be larger relative to their economies than those in the U.S. To pundits inclined to admire Europe, this suggests that the way to go is a few banks operating in a highly regulated economy. To those of us inclined to be skeptical of concentrated power, it instead suggests a highly fragile system.

2. Dean Baker writes,

The final [Obamacare] bill included a provision that subjected employers of more than 50 workers to penalties if employees' health care costs exceeded a certain percent of family income.

The problem with this sort of penalty structure is that employers do not have control over workers family income and in general should not even know it. This sets up an absurd penalty structure where employers do not have the knowledge they need to act to avoid the penalty

3. Rand Paul's opposition research dug up the following quote:

if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children's prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households.

Actually, Rand Paul did not say that. Nicholas Kristof recently wrote it in his New York Times column. Kristof is on the Left. Hence, it is not racist.

Snarkiness aside, what should "we" do about irresponsible parents? The libertarian answer is that "we" should not do anything as a state. Perhaps "we" can help using noncoercive elements of civil society, including charities. However, from the standpoint of the Church of Unlimited Government, that is not enough. From that standpoint, the failure to advocate the use of the state to alter other people's objectionable behavior amounts to condoning such behavior.

Comments and Sharing

COMMENTS (11 to date)
Philo writes:

“[W]hat should ‘we’ do about irresponsible parents? The libertarian answer is that ‘we’ should not do anything as a state.” Why is that supposed to be the libertarian answer? Children have rights, too (don’t they?), and surely some forms of irresponsible parenting violate some of those rights. (Admittedly, the details are murky.)

Rebecca Buringame writes:

We work to provide environments that children can both access and aspire to. Governments can't do that because they spend more time creating environments that children can only pass through; environments that may or may not have anything to do with them.

Peter writes:

@Philo: "Children have rights, too" is a strong point of contention even in the libertarian world. A good extreme example here is are you violating your three year old's right to use his personal property as he wishes, etc when you take away his toy (coercion by the family which is the closest a three year old has to a outside government entity) so he will go to bed. How about a three month old fetus? etc etc

michael writes:

"What should we do about irresponsible parents?"

we should at least give the children a good education and expose them to good role models. We do live in an interconnected society and we either pay upfront to help them lead productive lives or we will be paying much more later in terms of crime and punishment. It good in a humanitarian sense and good for selfish reasons too.

Pandaemoni writes:

Umm...Kristof's column (or at least the excerpt of it) does not mention race. So how can it be racist? Is the assumption that "poor" = minority? If so, did Kristof imply that in his writing, or is it something that is only being read into it now? If the latter, why isn't that racist?

I assume there are more white people who are poor than minorities, even if minorities are disproportionately represented in the lower classes.

Lorenzo from Oz writes:

Pandaemoni: Arnold was being ironic.

Seth writes:

Certainly, giving positive feedback to irresponsible parenting by rewarding it through government hasn't helped those unfortunate children.

Neither does the feedback dampener/blocker known as political correctness that Mr. Kling pokes fun at. It lets people continue to live in their fantasy world without accountability to their choices.

Unfortunately, the people who perpetuate these reinforcements of irresponsible parenting don't have to directly pay the price for their contribution to the children's predicament. In fact, they get positive reinforcement for their part by getting to feel good for believing they've helped out and by the mainstream that tends to reward them for caring.

Tracy W writes:

Michael: We do live in an interconnected society and we either pay upfront to help them lead productive lives or we will be paying much more later in terms of crime and punishment. It good in a humanitarian sense and good for selfish reasons too.

I would like to see the data behind this. What evidence is there that "paying upfront" reduces the costs in terms of crime and punishment more than the upfront costs? Even if we assume a discount rate of zero?

StatsGuy writes:

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JohnGalt writes:

Pandaemoni: The quote from Kristof was an excerpt from an article about a trip to Africa.

Re Obamacare: Is the company so fined supposed to reduce the value of the benefits so that the cost charged to the worker (inverse of cost to company) conforms to the proper per centage?

azmyth writes:

1: Has no one in the entire world ever heard of the concept of default or bankruptcy? Governments defaulting on debt destroys no real assets, only claims on assets. Sure, you might trigger debt deflation, but a central bank should be able to make a sovereign default inflation neutral by offsetting the deflationary effects with expansionary policy. Certainly that's better than a Weimar style hyperinflation across the entire Eurozone.

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