3 posts tagged “change”

Finally, a campaign to cut back the consumption of cigarettes that does not involve the half baked, wrong headed, ham handed approach of government. Here we have an approach that does not involve usurious taxes and unending smoking bans that come from a punitive, paternalistic "We know better than you" style of behavior modification.

Virtually no one believes that smoking is neutral relative to the health of the smoker. Everyone and their dog fully understands the multiple counter productive health impacts of smoking. Further, most everyone is aware of the addictive nature of nicotine. None of this is really a matter of debate or any meaningful disagreement.

Yet smoking persists and the ever increasing government efforts to ban smoking virtually everywhere while taxing the cost per pack out of the price range of most people simply is not working. And it will not work no matter how much the punishment increases. When people feel pushed, we push back. Raise the taxes beyond belief and smokers will buy from the black market. Continue to ban smoking in public places, including even in the great outdoors, and smokers will simply migrate to those areas where they can smoke. Government solutions, as is most often the case, do not work and are counterproductive.

The article below briefly outlines a private sector push by two highly successful, super rich individuals to effectively influence the public about the negative outcomes of smoking. It is an effort to positively attract people to either give up their bad habit or do not take it up in the first place. We all know it is very difficult to separate people from their vices but an entrepreneurial campaign has a better chance to make a difference than does punitive government measures.

Wrong headed government bureaucrats and simple minded politicians with big hearts continue to fail using punishments to correct behavior. Keep your eye on this move to incent people to do the right thing. Appealing to the better angels of our nature trumps smacking us across our backsides in order to change behavior.

The free market will work better in the end.


Stub out that weed for ever
From The Economist print edition
A powerful duo against a doughty foe

WHEN two of the world’s richest and mightiest men pledge to destroy an enemy, it is time to pay attention. Bill Gates, the former boss of Microsoft who now devotes all his time to his charitable foundation, travelled this week to New York, the city run by Michael Bloomberg, to join his fellow billionaire’s campaign to stamp out smoking.

Have the two potentates met their match? Despite decades of work by health campaigners, more than one billion people still smoke today. Smoking kills up to half of those who fail to quit puffing, reducing their lives by an average of 10 to 15 years. The World Health Organisation (WHO) says more than 5m people a year die early from the effects (direct or indirect) of tobacco. That exceeds the combined toll of HIV/AIDS, tuberculosis and malaria.

Despite that dismal situation, there are three reasons to give the latest pair of campaigners a slim chance of success: money, methods and motivation. Messrs Gates and Bloomberg vowed to spend a combined total of $500m on discouraging the weed. Since Mr Bloomberg’s charity had already announced an award of $125m earlier, the new money pledged this week totalled a “mere” $375m: $250m from the mayor, and a fresh $125m from the software magnate’s philanthropic outfit.

How will this cash be spent? In quite innovative ways, and that is a second reason for optimism. Hitherto, most anti-smoking funds have been channelled through a few large bureaucracies. But Mr Bloomberg’s charity wants to let a thousand flowers bloom: in other words, to lend a hand to many initiatives, both public and private, to see what works. There will be a competitive grant scheme for poor countries where the tobacco habit is spreading.

The very fact that two giants are teaming up is a landmark in American philanthropy—comparable to Warren Buffett’s decision, two years ago, to put his fortune at the disposal of Mr Gates’s foundation. As part of their joint commitment, Mr Gates is giving some of his $125m directly to Mr Bloomberg’s charity; the rest will go to carefully monitored projects in India, China and other places where the number of smokers is rising relentlessly.

Then there is motivation. There are other big players in this cause, and that should induce every new entrant to try bringing something fresh to the party.
Earlier this year the WHO started a campaign against tobacco known as MPower. One of its selling points was that in contrast with many other projects, it had a fairly clear idea about what was needed. WHO experts have listed a series of tactics, ranging from aggressive public education to a rise in tobacco taxes, that deliver results. (Even if high taxes lead to some smuggling and diversion, studies done in Brazil, for example, show that fiscal measures do curb consumption.) The World Bank, which funded that research, is also thought to be ready to join the anti-smoking scrum after years of paying little attention.

A crowded field, indeed. But having an extra $500m from two hard-driven billionaires surely won’t hurt.

Copyright © 2008 The Economist Newspaper and The Economist Group. All rights reserved.

Change is all around us and, as is often stated, the only constant about change is that it is ever increasing. But the dirty little secret that neither McCain or Obama will admit is one of the great lessons of history: to wit, government cannot control change. What government can do and has done on innumerable occasions, is really screw up change in a foolish attempt to "fix" it.

Given that the main thrust of the Obama campaign is change, we can basically discount if not dismiss most of what it stands for and advocates. Politicians in general and Senators in particular like to believe that they can control change via government fiat. It is one of the primary reasons why electing a Senator as President of the United States is by and large a bad idea. It is why voting for a candidate who has executive experience is important. Unfortunately, in this Presidential cycle we, the people, are going to be stuck with a Senator. We can only hope whomever is elected can somehow figure out how wrong they are in their view of the role and power of government. Not likely to happen.

The article below addresses some of the history of the relationship between government and change. It paints a sordid picture that cannot be denied.

Change will continue to occur. Get used to it. The only remaining question is how much we will allow government to screw up the process along with our lives as well.


Change We Can Believe In Is All Around Us
By BRIAN WESBURY

Rarely do senators become president, but in less than five months either John McCain or Barack Obama will become the 44th president of the United States. That's change, and that's interesting.

It's also what everyone seems to want – change. Sen. Obama promises to provide "Change We Can Believe In." Sen. McCain suggests that "the choice is between the right change and the wrong change." If it's the war that is the focus of all this talk about change, well, that's understandable, and maybe people really do want change. But if it's the economy, it's hard to imagine that change could happen any faster.

In fact, the U.S. economy (really, the global economy) is transforming at an absolutely astounding rate. We're living in Internet Time, where policies and their consequences travel the world at the speed of light. The normal human reaction to such a rapid pace of change is to be overwhelmed, stressed out, anxious and fearful. As a result, it is probably true that when voters listen to talk about change, what they really hear are promises of "no change," which would be a huge difference from the status quo. They just want things "the way they were."

Look at the chart nearby. America's manufacturing output, as measured by the Federal Reserve, is up seven-fold since 1950, but manufacturing jobs as a share of all jobs have fallen to 10% from 30%. Your grandfather and father may have worked for General Motors (and joined the UAW), but it's likely that you don't and won't.

The problem, if it really is one, is not foreign competition or evil financiers. It is technology and productivity. In the 10 years ending in 2007, durable goods manufacturing productivity averaged an annual growth rate of 4.8%. In other words, if real growth is less than 4.8%, the sector needs fewer workers year after year.

For the economy as a whole, overall U.S. business productivity rose 2.7% at an average annual rate during the decade ending in 2007, 1.7% in the decade ending in 1997 and 1.4% in the 10 years through 1987. Change is everywhere, and it's accelerating.

This has happened before – in the Industrial Revolution – where the political environment bred America's first real populists, people like William Jennings Bryan and Theodore Roosevelt. Bryan was perhaps the best orator of American political history, and like Mr. Obama, he could affect people emotionally.
Roosevelt, like Mr. McCain today, was a true American hero and one tough guy. History may not be exactly repetitive, but it sure seems to move to similar rhythms.

Unfortunately for the American economy, the populist movement of the late 19th and early 20th centuries led to a rapid growth in government intrusion into business activity. The populists didn't like the gold standard and demanded more government regulation.

In 1913, the Federal Reserve System was created and the income tax was introduced to pay for a growing government. And then, during the Great Depression – which was caused by the new Fed, trade protectionism and tax rate increases – a massive expansion in government took place. Forty years later, in the malaise of the late 1970s and early 1980s, the U.S. finally figured out what it was doing wrong. By returning to hard money under Paul Volcker, and lower taxes and less regulation under Ronald Reagan, the high-tech leg of the Industrial Revolution began.

The fruits of this are plain to see. Rather than watching the sun set on the U.S., as many believed would happen in the early 1980s, the U.S. has experienced one of the greatest booms in wealth creation in world history. And the impact of our technological innovation has helped lift untold numbers out of poverty.

This technology has created massive amounts of change. Like the Industrial Revolution before it, the current transformation is anything but pain-free. It's what Joseph Schumpeter called creative destruction. Google, Craigslist and Microsoft have been prospering. General Motors, United Airlines and the New York Times have not. In the midst of layoffs in the newsroom, it's hard to see anything good happening in the rest of the economy.

Yes, there are serious problems in the housing market, and yes, oil prices are at all-time highs, even after adjusting for inflation. As a result, it feels like things are getting worse rapidly. But the subprime mess will end up costing much less in real terms than the savings-and-loan crisis. Americans are spending about 7% of their total budget on energy, roughly the same as in 1970 and well below the peak of 9% in 1981. Once the Fed starts to lift rates again, oil prices should drop.

Americans have had it so good, for so long, that they seem to have forgotten what government's heavy hand does to living standards and economic growth.
But the same technological innovation that is causing all this dislocation and anxiety has also created an information network that is as near to real-time as the world has ever experienced.

For example, President Bush put steel tariffs in place in March 2002. Less than two years later, in December 2003, he rescinded them. This is something most politicians don't do. But because the tariffs caused such a sharp rise in the price of steel, small and mid-size businesses complained loudly. The unintended consequences became visible to most Americans very quickly.

Decades ago the feedback mechanism was slow. The unintended consequences of the New Deal took too long to show up in the economy. As a result, by the time the pain was publicized, the connection to misguided government policy could not be made. Today, in the midst of Internet Time, this is no longer a problem. So, despite protestations from staff at the White House, most people understand that food riots in foreign lands and higher prices at U.S. grocery stores are linked to ethanol subsidies in the U.S., which have sent shock waves through the global system.

This is the good news. Policy mistakes will be ferreted out very quickly. As a result, any politician who attempts to change things will be blamed for the unintended consequences right away.

Both Mr. McCain and Mr. Obama view the world from a legislative perspective. Like the populists before them, they seem to believe that government can fix problems in the economy. They seem to believe that what the world needs is a change in the way government attacks problems and fixes the anxiety of voters. This command-and-control approach, however, forces a misallocation of resources. And in Internet Time this will become visible in almost real-time, creating real political pain for the new president.

In contrast to what some people seem to believe, having the government take over the health-care system is not change. It's just a culmination of previous moves by government. And the areas with the worst problems today are areas that have the most government interference – education, health care and energy.

The best course of action is to allow a free-market economy to reallocate resources to the place of highest returns. In the midst of all the natural change, the last thing the U.S. economy needs is more government involvement, whether it's called change or not.

Mr. Wesbury is chief economist for First Trust Portfolios, L.P.
URL for this article:http://online.wsj.com/article/SB121314078329762429.html
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

During this Presidential election cycle we have heard the word change tossed around as if simply saying it will resolve all the problems of the world. One candidate calls for hope. Hope for what? Change. Change what? Whatever you want as long as you vote for me. If you haven't noticed, that is politics as usual.

That same candidate raised the subject of bitterness on the part of middle America where decades of economic degradation fostered by an uncaring, do nothing government has caused people to cling to guns and god. Most notably that is the candidate promising to change it all and make it better.

What a crock!

As the piece below notes, the cause of the bitterness in the parts of America that have been abandoned by progress of late is, as is the case more often than not, local. It is the result of misguided policies that have been locked in place by misinformed politicians which continue to block any chance for change. Ultimately, when you get down to the root cause of the decline it can most often be attributed to high taxes, unions and over regulation. In the end the fix will have to come locally. It will not be possible to impose the necessary change from Washington DC.

Yet the most fascinating aspect of all of this is that much of the advocacy of the Presidential candidate of Hope and Change is increased taxes, more regulation, and greater power to unions.

It seems the more things CHANGE, the more they stay the same.


The Rust Belt Should Be Bitter
By JEFF DURSTEWITZ

In the firestorm touched off by Barack Obama's comments about those who "cling to" guns and religion out of economic resentment, most analysis missed a crucial point: The "bitterness" felt in the so-called Rust Belt is mainly a product of high-tax, highly unionized states.

While there are pockets of prosperity in Pennsylvania, upstate New York, Ohio and Michigan, a good deal of this area is economically depressed. That's not because of Washington's policies (or lack thereof). These policies aren't killing Texas, North Carolina, Georgia, Arizona, Nevada and Florida.

While southern states do have problems, their governments generally don't smother economic growth by layering on ever-rising taxation, regulation and expenses. They don't permit workers to be forced to join closed-shop unions. No one in D.C. – Obama, Clinton, McCain or Superman – can fix the Rust Belt's self-inflicted wounds.

Western New York offers a prime example. Despite proximity to major markets, a long international border with a major trading partner, a well-developed transport system, untold natural splendors and a well-educated workforce, the Buffalo area's population shrinks every year. Why? High taxes, high government costs and forced unionization are major factors.

New York state is run by and for its public-employee unions, particularly teachers, but several others as well. The unions collect dues and then recycle a significant amount of what they collect into politicians' campaign funds. These contributions (plus state electoral law, which seems designed to protect incumbents and hobble challengers) produce tax-and-expense structures that drive employers away. To varying degrees, the same is true for much of the Rust Belt.

Mr. Obama referred to the ire of poor folks who've been given false promises in the past by national politicians. The real falsehood is the notion that federal programs or subsidies can overcome a state's own ruinous policies.

Mr. Durstewitz, co-author of "Younger Than That Now – A Shared Passage From the Sixties" (Bantam, 2001), lives in Saratoga Springs, NY.

URL for this article:http://online.wsj.com/article/SB121097955205299961.html
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved