Wednesday, May 31, 2006

Wrap Up

Got into a heavy-duty discussion over at Amba's place the other day. I had to let things drop, but I wanted to go back and respond to a few things.

Tom Strong wrote in the comments:

But here's the thing: with every stupid bill that gets passed, no matter which party sponsors it, there's a beneficiary. With the pension bills it's your actuarial friends; with Sarbanes-Oxley it was consulting firms (who got all kinds of new business thanks to that legislation); with last year's bankruptcy bill it was the credit card companies. Every new law is for sale, and it doesn't seem to matter a damn which party is sponsoring it.

My guess is, if you asked him, Jack would probably agree that what disturbs him most is the way our laws get written with certain beneficiaries in mind. He refers to them as corporations and aristocrats; more right-leaning observers may instead complain about "special-interest groups." Maybe, just maybe, there's some intersection of agreement there?
But the people who benefit aren't always pushing for the bills. Most of the retirement actuaries I know are also scared that the next piece of legislation that gets passed will be the one to kill the Golden Goose. Most would prefer some sort of reasonable simplification to ERISA law. (On the purely accounting side, Warren Buffet has made some excellent points.)

And SOX was passed mostly because of the media swarm and public alarm following ENRON, WorldCom, etc. That is usually NOT an environment in which to craft good legislation.

But someone benefited in those cases mostly because someone always benefits, not simply because of lobbiests.

One problem of having a large and intrusive government is that anything that government does will have serious consequences for someone. It's only natural that the affected parties will try to do something to influence the outcome. They would be stupid NOT to try and influence the legislative and regulatory processes. And after several decades of this one should expect that a specialized industry will arise to help with those needs. This is a natural outgrowth of large government intervention in the economy.

In another comment, Amba wrote:
I agree with you that progressive policies (of the welfare variety) haven't done poor people any good. Obviously unions did working people good, but became profoundly corrupt and a burden on competition.
This isn't just a union problem, however. Any large entrenched institution will become bloated and rigid. The same thing is true of businesses and government agencies. Markets ultimately 'correct' such problems in the business community, one way or another. Governments are another thing entirely, since they can always raise taxes, issue bonds, or print more money. This provides one motivation for the beliefs of small-government conservatives like myself. Smaller organizations respond more quickly and flexibly than large organizations. This doesn't matter so much when times are good, but those traits are crucial in a crisis. It's also why small-government conservatives such as myself will likely stay home this fall. The idea that the Dems may be worse than the Reps on this issue is no longer enough reason to support the Reps.

Later that same comment....
I guess what I'm getting at is, how Darwinian do we want to be? Is there a group of people in between who aren't bad people, or self-destructive, who are just never going to be competitive enough in this tough climate? How much would society be well-advised to do to protect and equip those people, assuming it's in everyone's long-term interest? (And that we need Indians as well as chiefs?) Education comes to mind (I saw your post about the complete failure to meet the requirement for qualified teachers). Beyond that, I tend to agree with conservatives that culture has a large role to play.
How tough is this climate? There are certainly problems, but on the whole even the poor people here are at least as well off as most of living humanity. (And I dare say quite a bit better off than most of humanity throughout history.)

That said, I do believe we should be equipping our citizens as best we can. There are minimal cultural and educational standards that everyone should attain, except those who are truly incapable. But our educational system has failed in its most basic duties. (I've written about some of my personal experiences here, here, here, here, and here. Warning, that's a hell of a lot of boring personal stuff. In short, the public schools I attended stunk. Those posts do answer a bit more about where I'm coming from and what makes me so angry at times.) But the institutional inertia of the educational system in this country is HUGE, and we'll not likely see any substantial improvement anytime soon. We're locked into a failed system for the duration.


Pooh said...

I'm sorry I missed this whole thing from the beggining - just catching the end of it has been the most stimulating stuff I've read all week.

(And it's good to see it's not just me who you burst in with guns blazing)

Icepick said...

(And it's good to see it's not just me who you burst in with guns blazing)

Dude! I'm Corporate Guy now, so I have to get those frustrations out somewhere....

cakreiz said...

Pick: you'll be pleased to know that a couple of Jack Whelan's loyal followers at AtF have elevated you to troll status:

Forestwalker writes: "the two dominant commenters sound like trolls (or at least reliably contrarian). I'd check with Amba as to whether they're actually representative of her readership before responding to them."

Followed by this:

"Forestwalker is spot on about the two dominant commenters and how they are capable of poisoning the well.

This dynamic regularly stymies dialogue on the web. Amba has *many* thoughtful readers who, I fear, will abstain from commenting once the dye has been cast.

Disappointing, but it is helpful to recall that the number of people who read and are influenced far exceeds the number that comment under any circumstances."

I'm new to Whelan; I was unaware of him until I read Pooh's post yesterday, which linked to Amba, who linked to Donklephant. Your stature at AtF is legendary, presumably because of your take-downs at Amba. (Cf- Jackson Browne's "Here come those tears again...") Nicely done.