FEMA, in or out? (moved to top)

[Original post May 27th]

A White house "White Paper" [here] came out in February of this year (2009) discussing whether FEMA should remain under DHS or be brought back under the direct supervision of the president, where it used to reside. The discussion, though predictably derogatory towards the Bush administration, actually does fairly accurately represent the pros and cons of placing the department under each authority. At first I must admit that I was shocked the Obama administration didn't make the easy and obvious power grab, until it occurred to me that they don't want to be responsible for FEMA. It is an agency that nobody will ever be happy with. Even on the rare occasions that the agency does its job well, the media will always those most hurt or least helped, and that is press that no president wants.

Part and parcel with the discussion about where FEMA belongs is its role regarding terrorist attacks or "man made" disasters versus natural disasters. A good reason for the agency to exist at all is not discussed. A friend recently suggested that all federal agencies should be made to periodically justify themselves, and that good idea applies here. As the name states, this is a Federal Emergency Response Agency. As such, its role and operation should be limited not only by the laws of our land (it may not constrain constitutional rights, as with police confiscation of firearms after Katrina), but also by the principles on which our federal government was originally founded. In spirit of this principle, FEMA should only facilitate during an emergency, not direct it. The distinction is important for many reasons, but the first and most obvious is that FEMA cannot respond quickly enough to most emergencies, and we should not expect that to change. Just like a policeman may be a phone call and 3-minute drive away when you need him in 20 seconds, so even a well-run agency will not be able to respond effectively to unpredictable disasters.

In all cases - though it is truer for some than others - disaster preparedness is best handled locally. Folks in Florida know about wind and rain, Pennsylvanians know snow, Arizonans wildfires, and Californians earthquakes, fires, riots, mudslides.. well, you get it. All plans for such disasters are best handled locally with volunteer or contracted support when necessary.

For terrorism or even - as mentioned in the paper - nuclear attacks, the local knowledge is less complete or applicable, but it is still primary. Volunteers in personal watercraft moved far more people off Manhattan Island on September 11th than FEMA could ever have dreamed of, and those volunteers largely organized themselves. How about the Hudson rescue? Did the federal government save those lives in this half natural, half man-made disaster? Not a chance. The primary responders were civilians, the secondary were local, and the federal government has added grand insight by saying the disaster was "probably" caused by birds.

So does FEMA have a role at all? What should it do in a disaster? The most effective way it could help is by doing only things that cannot be handled locally. Like the federal government itself, FEMA should only provide a structure and environment in which state and small district planning can independently flourish. Give recommendations for standardization. Provide inter-state communications links for cross-border disasters. Most importantly, facilitate rather than hamper America's huge potential for volunteerism that we demonstrate after every single major disaster. Rather than hanging red tape like tinsel from a Christmas tree, the agency should look for ways around obstacles already in place. Clear the way for the transportation of people, goods, and information.

To some degree this can include equipment and personnel that a state may not have. I have no objections to providing things like radios, helicopters, rations, or medical supplies when and where they are truly needed. I do have an issue with trailers being lived in more than 3 years after a hurricane destroyed somebody's home.

Luckily the kind of supplies that I'm talking about don't even require spending much money. Doctors, military folks, and yes even rich people with helicopters are willing to help if you will only tell them how. Private donation shipments can be collected and delivered by private volunteers through all modes of private transportation that could, in turn, be effectively coordinated by an agency with half-competent leadership. Military medical supplies have expiration dates, so increase the turn-over speed for a handy supply. There are around 1.4 million healthy, trained, smart active duty military guys (under two hundred thousand of which are in Iraq and Afghanistan) sitting around just looking for something helpful and adventurous to do. Give them 2 weeks ad-hoc leave if they use that time in a FEMA assigned volunteer role. They'd be cleaning and re-building before the disaster was even over.

The key to all these things is that they are run from the bottom up. No emergency agency will ever get food and water to the "Littletown" of 300 people cut off in a disaster affecting a much larger city. But when Littletown has a plan and sends a representative to walk 40 miles through the woods to tell the FEMA coordinator about their plight, that agent can point two of the 3,000 volunteers with chain saws and pickup-trucks packed full of donated supplies to get moving that direction.

In the end, it makes little difference whether FEMA is run by the president or the DHS, because it will be ineffective and bureaucratic either way. The changes needed are not going to happen in either location - though they would be more likely under a strong executive than under any society of self-interested directors of lobbying money. We don't have the former and we're drowning under the latter, so I'd have to say that no matter which answer is arrived upon, the correct question was never asked. "FEMA in or out?" is moot. "FEMA: to be, or not to be?" That, my friends, is the question.

What's Next?

A brief discussion of the stock market is in order.

Before that gets underway, though, a discussion of my own economic credentials is warranted: There aren't any. I'm just a guy who watches things that happen and things that don't happen. All that is really necessary is an ability to see abject stupidity when it happens, and what we have seen recently is exactly that. (For details on the stupidity, please see "Depression Package" two posts ago.) Whether the purpose of that stupidity is, well, just purposeless incompetence, or if it is a more nefarious plan is not provable. I hesitate to accuse because that's one of the things that bothered me so much about the criticism of President Bush: people didn't just claim that he was wrong, they claimed that he was evil. They took clearly reasonable policy decisions, the wisdom of which could be honestly debated, and attributed the motivations to cabals, conspiracies, and just plain old dictatorial meanness. Which is stupid in and of itself. The one thing that was plain to most of us about GW is that right or wrong, he was and is a good man. I disagree with about 1/3 of his policies - marginally acceptable on average - but I don't think that where we disagree is due to his purely evil nature. So that is why I'm hesitant to attribute any of the current crisis to ill-intent by Obama. Not because I think it isn't possible, but because though I vehemently disagree with nearly every aspect of his public life, I still owe my own president the benefit of the doubt when it comes to harming his own country. And yet. And yet I cannot avoid my gut, and my gut is telling me that on the incompetent/nefarious axis, Obama falls right in the middle where there's just a bit of nefariousness (is that a word?) exasperated by incompetence.

Here's what I think: I think that before the election, Democrats saw a squishy economy and decided to exploit it in the polls. It worked, but having a weak to non-existent understanding of economics themselves, they didn't see where they has so severely undermined it with Freddy, Fannie, Chriss, and Barney. They thought that they could call a spade a spade without the rest of us noticing that it was in fact a back-hoe. They talked the economy into sliding faster and harder than it had too. Then they started talking about bail-outs: Bad ideas that held the economy in limbo during their discussion. While waiting for the government to get off its butt and give the markets something to react to, everything slipped further. Then incompetence took over entirely. Oh, trillions of dollars of pork and hand-outs represent more than their share of personal greed and corruption as well, but the vast majority of all this bail-out crap was incompetence. The bailouts passed, and the markets said "hell no!". And if you think I'm wrong, check out the dates each "stimulus" or "bailout" was signed and then look at the DOW for the next week. Markets don't lie. Markets can be inaccurate, but they cannot lie. If the did and got caught, I'd be rich, and they still would have worked. But I digress.

A little immorality and personal ambition drop-kicked a weak economy over the edge. Good policy could have softened the slide. If upon taking office the president had slashed top quintile personal income taxes, corporate income taxes, and capital gains while letting a few bad banks fail, the drop would have not been half as bad and recovery would be more complete. But they had to throw in that little bit of state-sponsored immorality where banks were actually pressured into taking bailout money. No big deal on the face of it (No, no, please don't give me billions of dollars!!), but then incompetence followed public outrage into restricting the behavior of companies trying to be competitive. And the markets lost even more confidence.

So here we are. The DOW dropped into the six thousands, and has now had a few day upswing. Economists debate whether this is a "sucker's surge" or if it's the real deal, but there is a lot of confusion. Mostly because so much of what markets are being drive by has nothing to do with what markets are supposed to be driven by. Irwin Stelzer discusses that here better than I can. So what what's next long term?

Here's my guess: Where good policy would have seen our 13000 pt DOW drop to about 10,000, it instead dropped to just below 7,000. The value of the stocks in our market are currently under-valued in relation to their own ability to produce real value. They will recover back to a somewhat tolerable level, but that will not be their "real" level. I guess that within a year we'll be back at 9,000, and within 2 years it'll be between 10,000 and 11,000. Five years later, it won't have moved significantly higher. Maybe 12,000.

That will be trumpeted as "the stimulus worked!" What it will really mean is that the stimulus is still undermining an otherwise healthy economy. Unemployment will still be relatively high, and the housing market still won't be sure what to with itself. The people who were bailed out will stop paying again, and the people who were not bailed out because they were too responsible will start saying "screw it" and hit the reset button themselves. Add this to the long term de-valuation of the dollar that everybody BUT a democrat understands is nothing but simple math, and the most dynamic economy on earth will not act that way again for nearly a decade.

We are not the cradle of world freedom because of our wealth. We are wealthy because of our persistent freedom. If we lose that free-market mentality, we will all lose in the long run.

Single Subject, Descriptive Title (SSDT) *updated 15 Mar 09 2005Z

[Updated text is Green]

A while back, I was perusing some blogs when I came across this question: If you could issue a decree adding a single amendment to the U.S. Constitution, what would it be? I was intrigued. Mostly because there are so very many that I would like to see. For some reason or other, I didn't read too many of the comments to see what others' ideas were - I was probably doing something silly like working - but it really got me thinking. Of all the ideas I had - re-issue the whole constitution with "we really mean it this time" after every section and amendment, eliminate agencies' ability to make rules with the effect of law, clarify just what counts as interstate commerce, or even just make myself king for life - I settled on one idea that I thought was pretty good. I think the most harmful general legal problem we have is that there are too many laws, and they are too complicated. Add to that things like 1,419 page stimulus bills that pass without being read, and what we have is an opportunity for severe abuse. Which is sadly obvious to anybody who has actually tried to read that stimulus bill. So what was my great idea? One topic only in each and every bill. Just one. If there is anything in a bill that doesn't clearly pertain to the subject at hand, it can't pass. If the jerks do it anyway, then the Supreme court is required to immediately overturn it.

Now, I couldn't remember where I read that original question, but since I check Instapundit constantly, I figured there was a good chance I'd find it there. Lo and behold, I found instead a link to a proposed amendment addressing exactly this point! As much as that guy blogs, I should have known that he'd have written about an idea I just had before I even had it. Anyway, the best part is that it met with approval from the Law-professing blogfather. I couldn't find any working links to the actual proposal, but I found a link to the text here. It reads: "Congress shall pass no bill, and no bill shall become law, which embraces more than one subject, that subject being clearly expressed in the title."

I like it a lot. I was originally worried about intentional misinterpretation of the "only one idea" concept, for example by claiming everything in the stimulus bill has to do with "stimulation" and therefore passes muster. But since at least forty states have a related law on the books, it must be well tested. I think that use of the word "subject" is the perfect selection, because different things all related to an economic stimulus would be related, but they would not all pertain to one subject.

Still, that's not quite enough. Even before I found that somebody already had this idea, I had gone further. I don't just want one subject, I want it to be short and simple. I want every bill to be only one page long. We now have so many laws that are over-written, confusing, and contradictory that people are frozen to inaction by fear of breaching the law. Rather than wade through the regulatory swamp that sits between here and entrepreneurial job creation, many a man will instead keep his current lousy job and skip the hassle. The number of times in a week that I hear "I don't know if we're allowed to do that" is frustrating beyond belief. The idea that free people are "not allowed" to do something that isn't clearly harmful to somebody else is one of the silliest and saddest things I've ever heard. If the concept of "not allowed" is not uncomfortable to free people, then they are not really free people at all.

So here is the text as I would write it:
"No bill shall become law unless it can be printed in English, single-spaced, on one side of an 8.5" x 11" sheet of paper in a font of 10 points or larger. Any existing law that cannot be printed to conform to this requirement shall be null and void. Each bill shall be read aloud in both the house and the senate chambers. In order to vote on a bill, each senator and representative shall have been present to hear it read aloud in its entirety. This amendment shall not limit the number of times a bill may be read aloud."

I have no doubt that this is not yet perfect. My later section is clearly not written as well as the first part. Brevity is one of the most redeeming features of our current constitution, and I struggle with how to balance that with the specificity that I think it is lacking. Our forefathers intended to leave room for later interpretation specifically because they could not know what time bring. It is a wise idea that they took a little too far, or perhaps our courts have wiggled too far around. After all "shall not be infringed" sounds pretty clear to me, but apparently not to the supreme court. I would prefer if any new amendments were not immediately undermined by a work-around. That's why I want bills read aloud and listened to in this one: So that congresscritters can't just mail in a thousand "yea's" or "nay's" and claim that one big document was really a thousand different bills when we all know it was not. But if you have suggestions for additions, subtractions, clarifications, or if you can just write this one better, please leave it all in the comments. And feel free to continue adding other ideas for later amendments!

Depression Package

The stimulus package that Congress is about to pass will not stimulate the economy. The past weeks have seen Liberals saying that it will work, conservatives believing it will not work, and most citizens just hoping blindly that it can. It cannot. What I haven't seen is a good explanation of exactly why it cannot work, so I'm going to take a crack at that myself. I apologize, but this will probably be a little long.

I read a comment recently on somebody else's blog that basically claimed an economy is a closed system; that whether you spend your own money, or the government spends it for you, the money is still being spent, so economically speaking the results are the same. You can't get rid of the money unless you burn it. I suddenly realized that this misconception, shared by millions of people, is the false concept behind the idea that spending makes an economy work. It is a self-falsifying argument, because in a closed system it shouldn't matter who does the spending, the effect would be the same. Therefore a government stimulus would be useless. About the only possible difference is when the spending would happen: You might have plans to spend your money during your retirement, but the government wants to spend it for you right now instead. Either way it's a moot point, since an economy is not a closed system. If it were, we would still be banging rocks together in a field and hunting with sticks. Instead, we have space ships and internet video. This change would be impossible in a closed system.

The value that is traded with money, represented by gold, sought after by politicians and measured by economists is called work. That's it. If the economy goes up, more work happened. Now, a narrow view of work would mean that more people were simply busy. That's almost right, but not quite. The real definition of work (here, not in physics) is not the busyness itself, but the results of people being busy. So if two companies produce the same thing with the same number of employees, but one company produces more of those things, then that company did more work.

Now, who's to say what's worth working for? Is a car worth more than a motorcycle? Which car? Which motorcycle? Is it better for the economy to produce lots and lots of cars, or is it better for the economy to produce one diamond bracelet? If you happen to work in congress, you'd probably say lots and lots of cars, because that keeps more people in jobs. You'd be wrong. The correct answer is that it's better for an economy to produce something that can be sold, whatever that is. If nobody wants it, it isn't worth making. If you think it's objectively useless, but someone else will pay you exorbitant amounts of money for it, then it's worth producing. Things have value only because people want them. Beyond the basic necessities of life like food and shelter, everything we have is luxury. We're not talking about perishing in this bad economy; we're talking about mediocrity. A recession won’t to kill you; it will prevent you from accomplishing, buying, or doing something that you want to do.

Now, this all sounds very basic and simple. You knew all this, right? But what does it have to do with the stimulus package? Waste. Busyness is made more efficient when it is applied intelligently. You could stay busy for a week building something in your garage and sell it for $100. Or, you could sit for the exact same amount of time on an assembly line and make $800. The difference between the two is that whoever is paying you has made you more efficient with his assembly line. You now do more work. He used his own intelligence and through invested money used the collected work of other intelligent people to increase your efficiency. You both win. The only reason he, or anybody, would do this is for profit. For his own good, not for yours. But he needs you to do the producing, so it's worth paying you that $800 which, by a happy coincidence, is exactly what is good for you!

These kinds of transactions, uncountable numbers of them per day, are not just A stimulus, but THE stimulus of our economy and every other economy possible. What the government plans to do now is to take some of your work and spread it around as they see fit. A lot of people seem to think that this is a fine plan, so long as when something is produced with that stolen money, they get it back.

The problem is, it never works out like that. It can't work out like that. From the very start, there is the overhead cost of the government itself. You have to pay somebody at the IRS to collect those taxes, the collection of which doesn't produce anything to sell. Then there are accountants and bureaucrats and others involved along the way that get their salaries paid. Somebody has to author bid requests, sort through responses, study environmental impacts, investigate banks' financial documents, pay for over-runs, and then have dinner with a congressman. In the end, not all of the money makes it out the other end. Sure, the people paid in between will spend it again, but what value did they create with it in the mean time? And in the end, how much of the money intended for… let's say infrastructure, is actually used for infrastructure? Eighty percent? If only we were so lucky. It's never even close (As you can see here with transportation spending as an example) How much does that missing 20% matter? It's more than a business’ average profit, that's for sure. So the government just lost more than a company would make with that same investment, and that is the harm. There are inefficiencies in everything, including the private sector, but two things control business inefficiencies: 1. The need for the value of what they create to compete with other products of value to see which one is the best. 2. The need to make a profit from that value. If they do this, they stay in business and their work is rewarded. If not, they don't and it isn't.

Government never submits to these controls. Never. They don't have to sell you their roads, and they have nobody under-bidding them.

These differences in spending through government and spending through the private sector may seem small. If the total outcome is a difference of 5% in production, what does that matter? Well, many companies hold on for many years without much more than a 5% profit. If that's lost through misappropriated funds and work with no value, then what has been created? How has this helped the economy? The answer is that it hasn't.

A simple real world example comes down to this: If GM isn't producing something that people want to buy, it is not helping the economy. If we give them billions of dollars to continue producing something people don't want to buy, that is not helping the economy. If the billions of dollars the government just gave GM are taxes that would have otherwise been used to buy or produce something of value, then taking that money away does not help the economy. So the rescue of GM damages the economy three times over. If GM goes under and everybody -- even the working age retirees who were consuming money but not making any -- gets jobs making something people actually want, that would improve the economy.

Beyond simply leaving the market alone, tax cuts are the only way to stimulate an economy. Tax cuts get money back into the hands of the people who produce. But not tax cuts in lower-income tax brackets. In fact, just ignore income taxes entirely. If you want money to be used to make even more money, and thus get the economy going, there are two taxes you should cut: capital gains and corporate Income. Capital gains taxes are on the money that you make on investments. People who are smart enough to make money by investing keep re-investing money when they make it. If you cut that tax, they'll invest more. Period. Corporate income taxes are taxes on the profit made by companies. The federal rate right now is 35% (link) http://www.taxfoundation.org/publications/show/22917.html If you’re barely making a profit, losing 35% of it is disastrous. This is the highest rate in the modern world and it is a really poor incentive to hiring more people or reinvesting in your own business. In effect, our tax rates are so high that even very efficient companies go out of business. In both situations, tax cuts here would get money, and therefore work, back into the hands of the people who use it most efficiently.

There are many, many reasons to oppose these bailouts, but only one that you need to know: They will not end the recession. They will prolong it, deepen it, and risk a true depression. The American economy is an amazing and powerful thing. It has pulled out of previous depressions even with poor policy and no leadership. While not likely, it could do the same thing again. Attitude does matter, and ours is indomitable. But no matter how short or long this recession would be, Congress will make it longer. No matter how deep or shallow, it will be deeper because of them. Throw the bums out.

Simplicity

Well, I was feeling pretty wordy the other day. But I guess all that last post can be said much more succinctly like this:

If Obama succeeds, the country fails.

The Clarity of Truth

I DO NOT hope that Barak Obama is successful. I know why that is, but I've had trouble figuring out how to say so without developing "Limbaugh Echo Syndrome". I've known for a while that I've got something more to add to it, and Ayn Rand has helped me figure out what that is. It's truth.

I am a newly minted Ayn Rand devotee. I finally started reading Atlas Shrugged about a month before the election and finished a little more than a week ago. The the world that she created more than 50 years ago is absolutely stunning, not just in its applicability today, but in its tonal accuracy. I can't believe the number of situations and statements in this book that I heard repeated in our world on the same day I read them in the novel.

I am not going to become a rabid follower. There are people who have pretty much formed a cult around this lady, and I won't be one of them. In the short term, however, I will have to work at not constantly referencing our real world back to her imagined one since it is so fresh in my mind. I'll let it happen a few times, and I may even do a "book review" on the pages that I've marked. It could make an interesting article as well as a handy "cliff's notes" for anybody who can't stomach her hyper-wordiness. The point of this prelude is that what I got from this book was clarity. Not strict adherence to her philosophy, but a functional way of looking at something. I think the power of a philosophy is exactly its ability to clarify the world. My personal maturity when reading this notwithstanding, every other philosophy I've read up to this point has muddled the truth rather than exposing it. They've asked questions that merely led to more questions and a distinct lack of utility. Objectivism, at least in its political applications, leads me down no blind alleys.

So how did Ms. Rand show me a clear way of explaining my wish for a mitigated disaster during the Obama administration? I think I'd better give my original logic first: Barack Obama, if he's not a socialist, sure ran as one. He's a pandering populist who wants to restrict freedom at every turn and redistribute wealth. His Tax policies will depress the economy. The bailouts he'll sign will devalue the dollar, which will devalue everything I have, everything I save, and everything I earn. His conciliatory foreign policy will weaken the United States' standing in the world, which "lowers the tide for all boats" and will result in even more economic pain. And finally, to hope for Obama success is to hope for the ascendence of moral bankruptcy along with all the actual bankruptcy of these times. This is what I would have said before reading this book and, in fact, earlier today before I had my little epiphany. But I can already hear the futile argument that would follow:

Them: "But if he's successful, then those things won't be true!"
Me: "But he won't be."
Them: "Because people like you hope that he won't! You'll make it come true!"
Me: "No, I just know that it can't. Socialism cannot work"
Them: "But you just don't want it to work, because then you'd be wrong!"
Me: "No, I don't want it to work, because it is wrong."

And so on. I was thinking along these lines today, looking for a way to clarify the fact that I think Socialism and income redistribution in all forms are wrong, and if they "worked" that would be worse, and the opposite of what I want. I could make that exact argument, but it falls on deaf ears over and over again. People want us to give Obama a chance, but I now say, a chance to do what? If we take him at his word, if we accept his campaign as being his plan, then they are asking us to give socialism a chance. I'm afraid that it's already been tried, and it's failed every time. But here is the clarity: Socialism and income redistribution are ineffective and immoral. That is a truth. They fail because they should fail. An immorality of that size can appear successful for a period of time by mortgaging the future, and they can hold on with moderate, "acceptable" levels of failure for quite a while, but they can never approach the success of freedom. If Obama's reign is billed as success, it will be a lie. And that is all we need to know.

The Block

It's been a while since I've posted here. At first it was because I'd hit my personal political saturation level. I had no more capacity to give a damn as the unimaginable happened. I know, It's not like I'm a particularly prolific poster. It wasn't the writing that I was swamped by, it was watching stupidity march forward in spite of readily available facts. I've since gone from that kind of frustration as the election happened, to now having the opposite of writer's block: There are so many things that I want to write about that I'm continuously unable to decide where to start. I also don't want to be repetitive, because so many of the connections and causal relationships in society and life in general seem so clear and direct that I can't imagine everybody doesn't know them. Which I guess is stupid of me, because the very proof of that fact is what frustrated me in the first place. Anyway here it comes, in no particular order!