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Suppose President Obama asked citizens to exercise more, smoke less, and eat healthier foods to reduce healthcare costs. And let's say he was frank about telling us we have no choice because there isn't enough money to keep going the way things are going. Would citizens respond?

I think so. One of the frustrations people have with the current economic downturn is feeling they are helpless to do anything about it. We are told by the media that only the government is big enough to fix our problems. I think people would feel happier knowing that exercising and eating broccoli was part of something larger than their own health.

Or suppose the president asked the citizens who still have money to spend a bit more freely to stimulate the economy. Suppose Obama explained that our only two choices are that the government taxes us and spends the money inefficiently or citizens spend more of their own money than they would normally spend, buying things they actually want, and it adds up to the same thing. Would the citizens who still have extra money respond?

I think they would. Again, it would feel like you were doing something patriotic to help the country, and as a bonus you would get some new stuff.

Suppose President Obama ordered the power companies to make one change in policy. Not only would they credit the bills of customers who have solar panels on the roof when they generate more power than they use, as is the current situation, but they would actually pay customers cash for any energy created beyond the limit of their own monthly bill. That would make any home with a Southern exposure a potential generator of electricity. The President could ask citizens to invest in solar panels, as an act of patriotism, knowing the payoff would take years, but the collective benefit to the country would be great. It would stimulate the economy, create jobs, and drive down the cost of solar panels. And your neighbors could see your new solar panels and know you were doing your part.

What would stop Obama from asking the citizens to contribute in these ways?
 
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Feb 11, 2009
It's time we eliminated the public judicial system. Ours is plagued with overspending and inefficiency, problems that can be corrected by allowing private business to sort it all out. In 2001 the US spent 167 billion (!) on "justice":

http://www.ojp.usdoj.gov/bjs/pub/pdf/jeeus01.pdf

Why should hardworking Americans have to pay for the protection of people who are too lazy to protect themselves? We've already got the Second Amendment. If you want to be secure in your person and belongings, get a job and prove it! Enough of this I-can't-protect-myself mooching.
 
 
+1 Rank Up Rank Down
Feb 11, 2009
I think you should re-evaluate, Scott.

To think that people in our culture will instantly make the kind of sacrifice necessary to live a healthy life merely upon being requested to do so is ludicrous. Living a healthy life is hard, especially for people accustomed, as many people have pointed out, to living a life of indolence and self-gratification. I have friends that are constantly encouraging me to exercise so I can keep up with them hiking, and do you think I do so? I'd love to, but I don't have time. If I had the time, I wouldn't remember to do it. I try to eat healthy, but I don't really succeed that well at it. In short, people who already have ample motivation to live healthy aren't doing so. Asking them nicely is unlikely to produce any results (and let's not talk about the use of force to ensure healthy lifestyles). Plus, I'd venture to say that the contribution that not exercising and not eating right makes to health care costs is probably not that significant. Malpractice insurance and unnecessary tests comprise a lot of it.

As for asking people to spend, others have made some excellent points: Mostly we'd be funding other countries, and other presidents have been laughed at for this idea. Also will it really benefit our country if people buy selfish things that do not profit society, or will we be better if we invest (via government spending) in roads and bridges and buildings and other things for the common good? Why is it all about me, me, me? I always thought the Works Project Administration and Civilian Conservation Corps were excellent ideas.
 
 
Feb 11, 2009
>What would stop Obama from asking the citizens to contribute in these ways?

The fact that Jimmy Carter is still being ridiculed 30 years later for asking people to raise their thermostats?
 
 
Feb 11, 2009
Is this going to run afoul of game-theory/capitalism problems? Seems like it will.

If I'm not the only one doing hard work for the "common good" I am (of course) going to be better off than the rest of you guys who foolishly put their efforts into making /all/ of our lives better,

So, of course, the greed of the individual will prevent your idea making any headway until such a time as working for society is rewarded in some way (and rewarded more than capitalism rewards greed at that),

Not sure how you'll fix that little obstacle,
 
 
+1 Rank Up Rank Down
Feb 11, 2009
Aardwizz,

I didn't see your post when I wrote mine, but obviously we're on the same wavelength!

Or, as cmj sez, "nicely put"!

Rocky
 
 
+1 Rank Up Rank Down
Feb 11, 2009
Aardwizz: Nicely put. :^)
 
 
Feb 11, 2009
scott, you are right about everything you blogged.

what annoys me is the glazing over of obama's contribution.

it is not the power of substance. we didn't go that route, we elected a president who is a media rockstar. his power is to mold the pysche of the weak willed.

he make millions think he was presidential by offering them the plan to inflate their tires. these are things that they do. yet they gave him credit.

obama's utility is the power of cool persuasion, not efficient and wise use of govt power.

who can tell you how to live your life with common knowledge stuff(inflate tires to increase mileage) and not only get credit for some sort of practical genius but sway the minds of the public?

these kinds of benefit are conditional on being cool like angelina jolie, not wielding the power of taxation and police force.
 
 
+1 Rank Up Rank Down
Feb 11, 2009
I just wrote this to a friend in England who asked about the economic situation here. It fits in with the thrust that these comments are taking, so I thought I'd post it. Make of it what you will.

"To be blunt, I'm reasonably confident that the real cause of the financial crisis is the greed and stupidity of the American people, fed by 50 years of corresponding corporate greed and stupidity, and compounded by 50 years of poor government. I have no idea what a real cure might be, or whether it is even possible. A Depression followed by World War sort of worked once, but the Earth cannot afford that again. The only positive thing I can say is that if the world were to recognize that 1, we're all in this together, and 2, it will require us all to work hard and sacrifice to make things better, there might be a chance. I do not feel that that is impossible, only a very long shot.

To be a little less negative, a financial package something like the one they have been working on stands a fair chance of "working" in the short run and staving off a real depression. I am a "Keynesian" economist, and I reject the idea that monetary policy alone can 'fix' the problem. I also reject the supposed value of tax cuts as being a fix, or even in any way a good thing, and very much blame Reagan for starting us down that road. Tax rates in the US are too low by far. I have no problem with "pork" in the stimulus bill if it has a valid stimulus effect, but I would have preferred that the bill be kept simple, and a separate bill be worked out later to provide for smaller projects.

Obama is not the problem with Congress, Politics is the problem with Congress. He is doing fairly well in a very bad situation."

Rocky, who is constantly amused by Scott's apparent naivete
 
 
Feb 11, 2009
Sadly, this is not the 1930s - 40s.

Back then, people DID do things for the common good, because they knew that it was for the common good. Victory gardens. Buying war bonds. Comminities with strong service organizations (Elks, Moose, Shriners, etc,) - they sitill exist, but as a shadow of their past.

Times have changed; we get so much instant gratification in so many aspects of our life:
- 100 channels, plus On-demand, plus being able to own our favorite movie/shows;
- the internet plus Google and Wikipedia - is there any question that you can't get a quick (surface) answer to in less than 2 minutes?
- sex - who needs to wait for marriage anymore? Maybe not on the first date (than again....), but by the third...? Or shack up with someone until you tire of them, then move on.
- food - my Supermarket carries regularly foodstuff that I've never even heard of, and I've travelled around the world;
- 24 hour banking; convenience stores, gas.
We've gotten so used to having our wants satisfied NOW!!!, that we've lost some of the old virtues, like patience, persistence, willness to sacrifce.

I'm not advocating rolling back the clock. That would be impossilbe, and unwelcome. We just need to recognize that the culture HAS changed, and alter the message accordingly.

Could President Obama ask us to sacrifice in a way that we would respond appropriately? No, I don't think so. Not today, at least. In 2010, or 2011, if the current conditions continue, and we are deep in the Great Recession (or The Greater Depression), and the culture has changed to recognize truisms like "There but for the grace of God go I", and "We're all in this together", then maybe.

We need to abandon that feeling of "entitlement". That "I'm getting mine and screw you" mentality that both conservatives and liberals today are guilty of. Yes, both sides are guilty. You can see it in today's comments so far. "No one can tell me what to do!" "Make 'em do it!" "Sue the bastards!"."Tax the rich!" "Cut my taxes!" These are the sentiments of entitlement. As long as they persist as the DOMINENT philosphy, we'll destroy each other.
 
 
Feb 11, 2009
Remember how FDR worked to stimulate the economy during the G. Depression by giving people jobs building roads, bridges, etc. Now review Denmark's complete overhaul of their country's attitude toward and use of energy: they were hard-hit during the oil embargo of the early 70's and have since vowed to never be 'at the mercy' of any oil producing nation ever again. They went from being 99% oil dependent to now producing enough energy not only for themselves, but with excess energy to sell to other countries. All the while, they have maintained one of the highest standards of living in the world.
http://www.neatorama.com/2008/01/01/energy-independence-how-denmark-kicked-the-foreign-oil-habit/
I believe President Obama should combine these ideas and create government jobs for our citizens where they would work to produce windfarms, solar power companies, etc. In the process, he would create an America that is energy self-sufficient, never again to be dependent upon foreign oil. What a beautiful world that could be!
 
 
-3 Rank Up Rank Down
Feb 11, 2009
Here's an idea that I actually had the temerity to send to the White House. It's radical. Any self-respecting capitalist (or even just any citizen of a democracy) would consider it heresy, but....

Suppose, just for a time, the United States made it an actual Federal crime for a U.S. company to outsource any labor or operations outside U.S. borders? This would not necessarily mean the recall of anything that's already been shipped off. It would simply be intended to prevent any further draining of jobs "offsite."

Like I said, positively draconian. But on the other hand...who here remembers (or at least learned in school of) a little practice from back during WWII called....*rationing!*?

...

Now in the immortal words of our esteemed host, "Dance, monkeys! Dance!!" (Seriously, though, I don't think this would be a bad idea, and I'm often as Libertarian as you can get.)
 
 
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Feb 11, 2009
@ RavenBlack: with an increased demand for solar panels, more suppliers would enter the game to get a piece of the pie. More suppliers eventually means more competition, driving down prices.

@ Tigerh8r: great idea - that could actually help people. So why didn't the government think of it? (OK, silly question - sometimes I actually believe that's what they're for). But maybe a slight adjustment, so more people feel the benefit (= democratic). How about paying off 90% (or whatever the best number works out to be) of all mortgages, and using the rest to also give tenants (ie, people who rent their homes) something extra?
 
 
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Feb 11, 2009
I'm sure he could do those things but the health part is backwards.See this article that confirms my longtime suspicion that we have it wrong: http://www.msnbc.msn.com/id/22995659/ . If you want to be patriotic, we should go back to smoking four packs a day and being generally unhealthy. Social security would be in the black in no time. There are lots of good reasons for being healthy but saving the country money on health care is not one of them.
 
 
Feb 11, 2009
How soon we forget. Not long after 9/11, President Bush did just that - he asked people to go about their lives, and to go to the mall and spend money. He was flayed in the press - they said, in effect, "Listen to that country bumpkin! A complex thing like a recession compounded by a terrorist attack, and that brain-dead idiot says 'go to a mall and spend money?' Give me an effing break!"

Now, of course, if Obama said it, it would be heralded as the most intelligent, insightful utterance to ever have left the mouth of mortal man. He would be held up as a model of selflessness and clarity, and all the press would be saying, "<slap sound of palm on forehead> Why didn't WE think of that! What a genius the president is!" Thank God for a 'free press.' NOT!

As to the rest of your post: there is a huge difference between incentives and mandates. In practice, incentives lead to mandates. In your solar panel proposal, you need to go back to your early economic training. In your example, you first have the government mandate to the power companies that they would have to pay people for power generated above and beyond that which they used due to their solar arrays. Then, you provide an incentive to people to install solar panels.

Here are some of the problems with that mandate to the power companies: first, for the power companies to do that, they'd have to install new meters. That would cost them money. Then they'd have to set up new accounting procedures, hire more people and print new checks, as well as all the associated costs of preparing, auditing and sending out the checks. That would cost more money, all of which would be passed along to the consumer as higher rates on power. In addition, the number of people who had solar panels would likely be a very small percentage of power customers, so all that bureaucracy would have to be set up to service a very few consumers. Remember, you've provided an incentive (tax relief, money from the power companies, etc.) for the consumer. Moreover, solar panels only work when the sun is shining (duh!). Think of how big a solar array you'd have to have to actually consistently generate more power than you're using. It would cost gigabucks.

So now what you have is those who can afford solar panels being subsidized by those who can't. All based upon central planning by the government, all with good intentions. This, in a nutshell, is the fatal flaw of central planning. As with a mechanical system, it adds drag without adding any commensurate boost. It saps money out of the system to pay for something that sounds good, but isn't justified economically.

In your example, this is how it would progress: it would go from an incentive to install solar panels to a mandate to do so. And since not everyone could afford them, the taxpayers would have to subsidize those who couldn't afford them. This would remove money from the economy and put it into something that couldn't stand on its own, economically speaking. And therein lies the fatal flaw of any centrally-planned economy. Its why the Soviet Union collapsed. Simply stated, it just doesn't work.

This is the beauty of the capitalist system. It's self-controlling and self-correcting. It doesn't need some "genius" of a lawyer who can't even spell economics to plan it. It doesn't require us becoming a fascist nation (private ownership but centrally planned) in order to meet some idiot's idea of 'fairness'.

So think carefully about the Pandora's box you're opening with this kind of proposal. The law of unintended consequences will bite you on the butt if you try to shoehorn yet another bad fascist economic idea into a pretty successful capitalist economy.
 
 
Feb 11, 2009
Obama is popular. This alone will not be enough to motivate most ordinary people to obey requests, however well intentioned, that would require extra effort. Yes, some will, but the majority will ignore it.

Question: Is the economy broken really? Or has the illusion of prosperity created by the sub-prime mortgage market and the artificially inflated real estate market been dispelled, showing the underlying state of the US economy? What does the US really produce? Most of its manufacturing happens in the far east. US workers certainly are not willing to work for the wages that chinese workers are, therefore nothing produced in the US can compete. If you import everything, and export very little, then how can your economy be robust? This is what's confusing me.
 
 
-1 Rank Up Rank Down
Feb 11, 2009
Nobody has a right to tell me what to eat, no matter who it saves. I actually suffer from a rare type of allergic reaction to many 'healthy' things (some of which I liked!) and it's quite tricky for me to navigate. The link that charlesfunnish posted scares the pants off of me, because it will mean some bureaucrat effectively ruining the quality of my life (and millions of others) just to save some money and then give it to people who don't work, don't take care of themselves or their children, and generally don't do anything useful for society.

I posted a theoretical solution of my own on Slate a while back. To fix our ailing economy, we need three things: (1) creation of value, (2) demand, and (3) appropriate pricing of risk.

The DemObama plan does not create much value (spending != value), is at best a toss-up as to generating demand (everyone's too scared to spend any money - and even the good parts read like a free gift to organized labor), and certainly does not heed the recent lessons in risk pricing (leading to malinvestment).

It's going to be a sharp, painful, prolonged slide. Nobody's creating value (fear of taxation or government usurpation), nobody's spending (fear of bankruptcy), and the few people who are lending are lending at too high a rate for low-risk borrowers. Prices are still too high for essentials like food and energy (yes, too high), which eats into discretionary income.

Or, as my father said about NAFTA and the WTO -- "if you export all your wealth, pretty soon, you won't have any!" (We can't even put a "Buy American" clause into the stimulus because it violates some WTO clause and other countries could sue us for billions of dollars - how do you like your "international" courts now, lefties? And meanwhile, Obama wants to dedicate a portion of GDP to African aid... despite our being trillions of dollars in debt already and unable to provide for our own citizenry).

A better solution than the stimulus? No income tax for _labor_ for one year. You could even cap it at $250K (Obama's "rich" number) if you like. That would be about $12,000 in my pocket, which would wipe out all but my ancient zombie grad-school student loan debt, and leave plenty left over to go towards a house or a car. Think about it: if the lefty government is for the little guy so much, why is the little guy - who is struggling - paying even $1 of income taxes? Let alone thousands, or tens of thousands.
 
 
-2 Rank Up Rank Down
Feb 11, 2009
Scott, you are so silly. People don't want to be responsible for their own actions, they want everyone else to change.

I really think if we abolished health insurance (public and private) and demanded people pay the full medical costs of their lifestyles, people would take much better care of themselves.
 
 
Feb 11, 2009
Agreed. Individuals will need to help. National efforts like the Picken's Plan are great, but we need focus from Obama. He could just read energy facts like: Millions of gallons of gas are wasted each year from under inflated tires. Only WE can check our tire pressure regularly.

Good article.
 
 
Feb 11, 2009
The Simpsons did it! Oh, wait, no, New Jersey and Colorado did it - net metering for excess electricity generation with reverse payments that is.

And Scott, with respect to yesterday's blog on the rise of the online virtual world: have you seen the movie "Virtual Nightmare"? It's very hard to find, but trust me, you would absolutely love it!

Rocky, who thinks Scott badly needs to reread his copy of "Opera philosophica et theologica"
 
 
Feb 11, 2009
You've already mentioned in previous posts that people like having at least a little control over things. Also most people want to feel like they are part of something bigger than themselves.

I would also add that, in my experience, the best solution is one that benefits the individual AND the group. So it makes it easier to convince people that this really is the BEST solution.
 
 
 
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