© Barry Belmont for UNR Students for Liberty, 2011.
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The rebuttal to the invisible hand in population control is to be found in a scenario first sketched in a little-known pamphlet (6) in 1833 by a mathematical amateur named William Forster Lloyd (1794-1852). We may well call it “the tragedy of the commons,” using the word “tragedy” as the philosopher Whitehead used it (7): “The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things.” He then goes on to say, “This inevitableness of destiny can only be illustrated in terms of human life by incidents which in factinvolve unhappiness. For it is only by them that the futility of escape can be made evident in the drama.”

The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component.

1) The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.

2) The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of 1.

Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another. . . . But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit–in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.

© Barry Belmont for UNR Students for Liberty, 2010.
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<facepalm>

</facepalm>

© Barry Belmont for UNR Students for Liberty, 2010.
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If a country’s public debt reaches 77 percent of its gross domestic product (GDP), bad things start to happen

At least according to the researchers of the study. The US currently stands (from 1980-2008) at 61 percent and can go one of two ways depending on who you ask:

In other words, the next few years are probably going to be fun to watch. That is, if you manage to avoid being swallowed by your country’s collapsing economy.

© Barry Belmont for UNR Students for Liberty, 2010.
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On Jan. 8, 1964, President Lyndon Johnson delivered a State of the Union address to Congress in which he declared an “unconditional war on poverty in America.” Then, the poverty rate in America was around 19% and falling rapidly. Last week, it was reported that the poverty rate this year is expected to be roughly 14.3%, and is climbing.

Between then and now, the federal government spent more than $13 trillion fighting poverty, and state and local governments added another couple of trillion. Yet the poverty rate never fell below 10.5%.

The federal government now has 122 separate anti-poverty programs (defined as either means-tested programs or programs whose legislative language specifically refers to their purpose as combating poverty).

These range from Medicaid, the largest and most expensive anti-poverty program, to the tiny Even Start Program for Indian Tribes and Tribal Organizations. Combined, these 122 programs spent more than $591 billion in 2009, and are projected to cost even more this year.

That amounts to $14,849 for every poor man, woman and child in America. Given that the poverty line is $10,830, it would have been cheaper just to mail every poor person a check for $11,000.

Welfare spending increased significantly under the Bush administration, but President Obama has thrown money at anti-poverty programs at an unprecedented rate. Just during his first year in office, Obama’s administration increased spending on welfare programs by more than $120 billion.

(By way of comparison, President Bush increased welfare spending by roughly $80 billion over his entire second term).

Some of the increase, of course, is due to the recession. But the administration has also made conscious policy choices to ease eligibility and expand caseloads. For example, the stimulus bill included a provision that created a new “emergency fund” to help states pay for added welfare recipients, with the federal government footing 80% of the cost for the new “clients.”

This was an important change because it undid many of the incentives contained in the 1996 Clinton welfare reform for states to reduce welfare rolls.

Under the new rules, states that succeed in getting people off welfare would lose the opportunity for increased federal funding. And states that make it easier to stay on welfare (by, say, raising the time limit from two years to five) were rewarded with more taxpayer cash. The bill even let states with rising welfare rolls still collect their “case-load reduction” bonuses.

The end result is that one out of every six Americans is now receiving some form of government assistance.

Of course all this welfare spending could arguably be justified, if we were actually reducing poverty. But, as the most recent numbers make clear, we’re not. Clearly we are doing something wrong. Throwing money at the problem has neither reduced poverty nor made the poor self-sufficient.

Instead, government welfare programs have torn at the social fabric of the country and been a significant factor in increasing out-of-wedlock births with all of their attendant problems. They have weakened the work ethic and contributed to rising crime rates.

Most tragically of all, the pathologies they engender have been passed on from parent to child, from generation to generation.

In fact, the whole theory underlying our welfare programs is wrong-headed. We focus far too much on making poverty more comfortable, and not enough on creating the prosperity that will get people out of poverty.

Observers have known for a long time that the surest ways to stay out of poverty are to finish school, not get pregnant outside marriage and get a job, any job, and stick with it. That means that if we wish to fight poverty, we must end those government policies — high taxes and regulatory excess — that inhibit growth and job creation.

We must protect capital investment and give people the opportunity to start new businesses. We must reform our failed government school system to encourage competition and choice. We must encourage the poor to save and invest.

More importantly, the real work of fighting poverty must come not from the government, but from the engines of civil society. An enormous amount of evidence and experience shows that private charities are far more effective than government welfare programs.

While welfare provides incentives for counterproductive behavior, private charities can use their aid to encourage self-sufficiency, self-improvement, and independence. Private charities can individualize their approaches and target specific problems that are holding people in poverty.

One definition of insanity is doing the same thing over and over and expecting different results. Perhaps that’s something to keep in mind the next time we hear a call for more welfare spending.

© Barry Belmont for UNR Students for Liberty, 2010.
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And so ”The Lesson” bears repeating:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

Unfortunately, most everyone who dibbles and dabbles in political power (like the ASUN) forgets either the long term effects or the fact that what applies for one group affects the status of all others. However, through each of these little tiffs and mini-antagonisms, we will reveal the warped logic of those who fail to learn The Lesson and how they can leave nothing but liberties destroyed in their wake.

© Barry Belmont for UNR Students for Liberty, 2010.
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© Barry Belmont for UNR Students for Liberty, 2010.
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© Barry Belmont for UNR Students for Liberty, 2010.
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If you haven’t already heard, the president of the ASUN,* Eli Reilly, has proposed a “stimulus package” for UNR. The idea is for $200,000 to be spent over two years that “will create 50 new student jobs on campus.” If this isn’t the definition of blindingly moronic, then I don’t know what is.

In fact, if this is considered a “good idea” or is actually thought, by anybody, at any time, for any reason to be an effective way to “stimulate” UNR in a positive way, then I am afraid that everything I’ve ever known, loved, or cared for in humanity is circling the drain.

In the face of “budget cuts” and a “recession” someone’s fearless leader (not mine), Eli Reilly, has seen fit to inflate the budget 10% what it was last year. When START said that cutting the budget of certain programs was going to be necessary and that if elected they would be scrupulous about it, they were screamed out of whatever room they were in. Laughed at, picked on, and called ridiculous, for proposing such a ridiculous idea. And yet with Reilly’s cuts of $12,500 from Flipside, $3,000 from homecoming, $4,000 from Insight, and $50,000 from club support, this course of action is applauded and indeed deemed responsible.

Wait, what? you might ask. Didn’t I just say the budget is 10% greater, and yet there are all these cuts? What’s up? Well you’ll be glad to know that among the increases were: senate wages (go figure…), executive wages (go figure…), professional salaries (seeing a trend?), professional and classified salaries (seriously?), ASUN advertising, Campus Escort, the Leadership Program, and Diversity inititives.

That’s right. Stuff that doesn’t actually help the majority of students in any conceivable way. No money for tutoring, no help centers, no counseling, nothing.

Complaints of slash and burn cutting (with a heavy dose of favoritism) aside, what about this “stimulus package.” Well, 50 lucky students are going to get jobs working for the ASUN or some other department on campus. Fifty make work jobs paid for by people with actual jobs, actually working their way through college. These jobs that Reilly hopes to create don’t exist now because it doesn’t pay for them to exist now. Put another way, the reason there aren’t the 50 jobs he hopes to create out of thin air already existing now is because it is not worth it by the people who would employ them to allow them to work for them. As an example, say there are 20 of you working at the Panda Express (mmm…) on campus. Why aren’t there 25? Because the people paying you will lose money.

The solution, at least in the eyes of someone’s economically ignorant leader? Have student fees pay for those 5 extra workers! According to the “package” the department will only pay for 25% of the student’s salary while the University picks up the 75% slack. Now, Panda Express only needs to value those 5 new employees at 1/4 of what they value their other employees. But, the 1/4 valuable workers will still be paid the same amount! (or close to it) Who exactly is this fair to?

Not the workers who get paid what they’re effectively worth (and not 4 times as much).
Not the majority of students whom this money is being taken away from (~$16.50 per person).
Not the people excluded from the jobs (since there is no way to effectively measure marginal costs for employment in this case).
Not even to the students who get these jobs! Preferential treatment is still unfair even if we like it.

Why do it then? Why not just give every student $16.50 in Advantage Cash or only for the Bookstore and stimulate the University that way? Who gets the jobs? Which jobs are they? Why those jobs? Why not other jobs? Why? Why?

Why?

Because we have a student government. Like all governments it does not, cannot, know the best way to achieve ends. The person in charge* ($8,800) is a History major, the speaker of the Senate ($7,000) is an “International Affairs” major, and of the two newly elected College of Business senators ($870 each) only one is an actual Economics major, though (so far as I know), he had nothing to do with the budget or this “package”: these people do not know what they are doing with money. Even if they were all Ecomonics geniuses, they still wouldn’t know how to properly spend other people’s money better than they do. You can’t know how to do that. And this is one of the major failings of government (next to it being illegitimate and ever-more-tyrannical).

So give it back. Give us back our money. It’s not yours and it’s not yours to give to 50 other people in some misguided attempt to “stimulate” the University. Isn’t it enough that the four people mentioned above have already taken $17,540 from us by themselves? Must they take even more in the name of others? There is nothing worse than a benevolent thief, he knows of no crime greater than that of honest ownership.

And let us, as a final note, never forget that lesson near and dear to us all:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

© Barry Belmont for UNR Students for Liberty, 2009.
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