Thursday, November 29, 2012

The government spends how much?!?!

In this video Dr. Antony Davies breaks down federal government spending. Using 2011 budget numbers he shows that the federal government could do nothing but pay interest on the debt and run medicare, medicaid, and social security and still they would not have balanced their 2011 budget.

Seeing how much the government would need to have cut just to balance the budget in 2011 shows that we have a serious problem in this country. Our spending cannot continue at current rates. Like Dr. Davies says in the video, we need to seriously rethink what we want our government to do. If we want it to continue to do the things it does now we are looking at 100% tax increases across all income brackets. Soaking the rich will not work, there just are not enough of them.

So whenever you hear politicians tell you we can solve our debt problems by raising taxes on the 1% remember this video. That claim is just not mathematically possible.

Sunday, November 25, 2012

Is Price Gouging Wrong?

In the aftermath of Hurricane Sandy there was a lot of talk about price gouging. Governor Christie of New Jersey warned businesses not to engage in price gouging and promised to prosecute any business that did. But is price gouging wrong? Is it immoral? Take a look at this video before jumping to any conclusions.

Price Gouging Video

Also, since gas stations were not allowed to "price gouge" in New Jersey, how was gas allocated? After all, if the price is not allowed to rise to meet demand some other mechanism of allocation must be used. So what happened? Time travel back to the 1970's.

Tuesday, November 13, 2012

Should we quit building on the coasts?

In an article on cnn.com, Carl Safina argues that it is foolish for people to rebuild in the wake of hurricane Sandy. The article is a good read and brings up a lot good points. The main argument is:

"The government should at this time help victims get their lives back on track. But no federal dollars should magically appear for rebuilding in flood-prone areas. The spots that flood will take repeated hits. Everyone knows this. To help people rebuild in those places is to help put lives and investment in harm's way. It's foolish."

I agree with him that rebuilding should not be subsidized with federal dollars. I also agree with him about ending federal flood insurance, insurance that is priced artificially low and distorts the true cost of living on the coasts. Mr. Safina himself has federal flood insurance and asks to be cut off. From the article:

"Insurance for new building in flood-prone areas should be ended. People who really want to take their chances should do just that, or pay real commercial insurance premiums if they can find a willing insurer. Eventually even Lloyd's of London will likely decide it's had enough. Insurers must be realistic about risk in ways politicians don't have to be."

Some people might say that this is unfair, but what is really unfair is coastal living being subsidized by inland taxpayers. Sure we would all like to live on the beach, but with accurately priced insurance premiums it is prohibitively expensive for most of us. It is time that we recognize this and quit rebuilding only to watch all of those resources be destroyed by the next storm.

Monday, November 12, 2012

What mandate?

I keep hearing people like Michael Moore and Peter Colavito of the SEIU refer to Obama's win as a mandate. According to Merriam-Webster the definition of mandate is "an authoritative command". I guess what those guys are saying is that the people of America gave Obama an authoritative command, to do what I have no idea. But did they even do that?

According to Center for the Study of the American Electorate only 57.5% of the eligible voters voted in this election. So 126 million people voted and 93 million people didn't. Obama won 51% of the people who voted, Romney 48%. So out of all of the eligible voters in the U.S., Obama got 62 million out of 219 million people to actively support him. Since when is 28% approval enough to be called a mandate?

Look, I get it, Obama won. And politicians from both sides like to act as if their victories are "mandates". But this is ridiculous. 72% of voters wanted someone other than Obama. And even if some of the voters who didn't vote are happy that Obama is president they are certainly not so overjoyed that we should consider their tacit approval a mandate.

I wish politicians from both sides of the aisle would realize that most voters usually choose the lesser of two evils and that given the choice between Obama, Romney, and a Bert and Ernie ticket, Bert and Ernie would have easily gotten a plurality. Especially if they tapped Big Bird as their campaign manager. Sesame Street vs. K Street. That would have been an interesting 4 years.

Sunday, November 11, 2012

NFL/NCAA wrong to lock high school players out

Here is an op-ed I wrote for Clemson's student newspaper, The Tiger.

On Saturday October 27th, South Carolina running back Marcus Lattimore suffered a dislocated knee in a game against the Tennessee Volunteers. This is the second significant knee injury for Lattimore in as many years. While team officials and doctors are optimistic about Lattimore’s chances to play football again, this injury forces us to reexamine the NFL’s “3 year rule”.
For those not familiar with the rule, the collective bargaining agreement between the NFL and the NFL Players Association (NFLPA) states that athletes who want to enter the NFL draft must be out of high school for at least three years. Supporters claim that this rule is in place to keep college athletes in school longer and to ensure that those drafted are physically ready for the NFL. I say what a bunch of garbage. What it really does is protect current players from competition, save the NFL team owners money, and line the pockets of college athletic departments.
It should come as no surprise that the NFLPA, NFL, and NCAA agreed to the rule. Look at the incentives involved. Current players do not have to worry about younger, cheaper athletes taking their jobs. The owners get a free developmental league which they do not have to pay a dime to support. Major college athletic departments get to field an elite product using extremely cheap labor. In the 2010 – 11 season, the University of Texas football team led the nation with a profit of just over $71 million. Twelve other schools earned over $30 million in profit[1]. I doubt that these large profits would be possible if the best players were allowed to skip college football, leaving colleges with a shallower talent pool.
But all of this misses the moral issue. Why are college football players denied the right to earn a living? The best players, players like Marcus Lattimore, would be millionaires right out of high school. Who are we as a society to say that it is OK for Mark Zuckerberg to drop out of school at 19 to take a risk starting a business but it is not OK for Marcus Lattimore at the same age to take his chances in the NFL? Like Mr. Lattimore, Mark Zuckerberg likely would have benefited from the increased maturity that comes with age before starting his business. But that does not mean that we have the right to deny him the opportunity. It is not obvious that college football players are systematically less mature than aspiring entrepreneurs yet we treat each group as if that were true. And I do not buy the argument that college players are physically unable to handle the NFL. According to the recruiting website rivals.com, Marcus Lattimore was 6 feet tall, 210 pounds and could bench press 270 pounds coming out of high school, numbers that are well within the range of NFL running backs. The four and five star recruits that would likely choose the NFL over college are physically gifted.
Supporters of the rule often point to the fact that the average NFL career is only 3.5 years long. Well according to a recent study, up to 75% of startups fail[2]. Yet society encourages Mark Zuckerberg to take a risk while discouraging Marcus Lattimore. Perhaps society values intellectual pursuits over physical. Or maybe the Zuckerbergs of the world are better able to gauge risk than the Lattimores. Whether the first statement is true or not, it ignores the injustice done to the individual and I think the second is false.
Allowing the best players the opportunity to skip college for the pros would also help the integrity of college football. We never hear about improper payments to college baseball or hockey players because the great players that the coaches and boosters want to pay go pro. In football, however, society has decided that it is better to force young athletes to go to college, regardless of their circumstances. What if a player is from a poor family and needs money to help a loved one? Too bad. The NFL and NCAA officials sleep better at night knowing that they forced him to go to college, regardless of his needs.
            What the NFL and the NCAA are doing to the young men that play college football is terrible. They are depriving them of their right to earn a living under the guise of “protecting them”, when really they are only protecting themselves financially. I hope that the players begin to understand their situation and that they put pressure on the NFL to change their rules, either by new challenges in court or by choosing to play in other professional leagues such as the Arena League or the CFL, perhaps even in lieu of playing in college.


[1] http://businessofcollegesports.com/2011/12/28/top-50-most-profitable-fbs-football-and-mens-basketball-programs/
[2] http://www.bizjournals.com/sanjose/blog/2012/09/most-startups-fail-says-harvard.html?page=all