Archive for May, 2010

Rand Paul has come under serious fire lately for his staunch libertarian stance on the Civil Rights Act.  The basic gist is:  Government doesn’t need to interfere in a business’s right to be racist if it wants.  The market can decide; if people don’t like racism, they won’t shop at or buy from racist businesses.

One site likened his somewhat naive comments to something college students might discuss in a coffee shop…not something politicians would discuss with any seriousness.

So…I’m a kid in a coffee shop…what would I say?

Let’s play the thought experiment:  pretend we let the market decide…and it decides that it wants to be racist.  This is probably the reality anyway, since why would you need to sign an anti-discrimination law if there weren’t any to begin with?

So is it ok for the market to be racist?

If I don’t like the businesses where I live that are discriminatory; I can just move somewhere else, participate in a different market, right?

Hmm…but you forced me to move. Someone else’s discrimination is affecting where I live, where I shop. And that is just me…what about the people that are being discriminated against?

The Libertarian argument that businesses (or anything else they are referring to) should be “free” to do what they like is bunk.  Your freedom is not always yours alone.  It affects other people; it doesn’t exist in a vacuum.

The extreme example is smoking.  You should not be free to smoke….because your smoke affects other people too.  If you want to smoke at your house or something…ok.  But a ban on smoking in planes, or in buildings, or restaurants is completely appropriate.  If your freedom to smoke means I get cancer, then you should not be free to do it.

Many things are like this.  A more subtle example is the time honored American “freedom” to be rich…really rich.  In America it is ok to be rich (not all countries are so positive about the rich).

But being rich comes at least somewhat at the expense of those who worked to make you rich.  The rest have to watch the rich move to the front of every line, drive nicer cars, live in better, safer houses.  People worry about their plight in life compared to the rich.  The rich simply existing is a source of anxiety which causes ill health.

I’m not saying it is bad to be rich…only that it isn’t in a vacuum.  The rich existing does affect the poor.  The larger the income disparity between the rich and poor, the more the effect.  Most countries have progressive tax schemes at least somewhat due to this.  It is a tax on the rich simply because they are rich (which affects everyone else).

So no.  Racism is not ok.

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My grandfather is dying.  That stinks and I love him and its really hard on my family and my mom today asked me if I wanted to speak at the funeral.

Of course I said.  Its my place I think to say something as I was one of those that knew him best…at least as a grandfather.

Now I’m thinking, “What exactly do you say at your grandfather’s funeral”?

I could google it….and for anyone that knows me or reads the website….I google everything.  You can almost always get good information.  I googled songs for my wedding.  I google recipes, places to eat, etc.

But I won’t.  In this case, I don’t think it matters what makes a good speech at a funeral.  I’m not trying to make a good speech….i’m trying to make MY speech about MY grandfather.

I remember when Marc Whitfield was killed; they talked about the honor of serving as a policeman, but to me that was about police….not about Marc.

And I don’t think the speech is to the other people at the funeral…some lesson learned about death, or the importance of those still alive that we love.  I’m not moralizing to the attendees.  That doesn’t matter much and I’m not the person to do that.

In the end, I’m not sure there is much to be learned from death?  It happens.  It may point out some things about life, but death itself is pretty mundane, final, and self-explanatory.

I think I will speak to him directly; it is for him and my family.   Say something nice about how much I loved him; tell a funny story I remember growing up with him.

I’m not religious, but if he can hear…he knew how much I loved him….and it never hurts to hear it again.

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I wrote last time about the concept that Goldman is employing:  “all that is not illegal is permissible”.

When they say they did nothing wrong, they mean they did nothing illegal.

If some judge finds that what they did IS illegal, they will find another judge.  If all judges find what they did was illegal, they will make new laws.  If that doesn’t work, they will simply re-organize under some other legal structure and continue to do what they wanted in the first place.

So……how do you win a game?

I assure you it is not by being the best at something.  Hard work is a VERY difficult way to win.  It is a high effort strategy that, in real life, doesn’t often work.

Why can’t you win by being the best and working hard?

Because the rules change (and there is always some fool out there willing to work harder).

In sports, the rules stay mostly the same; the game is defined.  We enjoy the fairness; we scream when the rules (which are limited since the game is well-defined) are broken.

In life, the rules can change; the game can change.  There is no “score”, no tidy buzzer at the end that tells you when its done.  Those who win are those who make the rules.

Goldman can use its influence, its special knowledge, and its money….to make the rules or change them if needed.  They don’t break the law because they make the law.

When I was in business school I was taught attractive industries are those with high barriers to entry.

Here is how you make your industry attractive:   bend the rules in your favor.

Capitalism in the United States is not about competition and free markets.  It is about manipulating the rules of the game in your favor.  That is the easiest way to win any game.  It doesn’t require nearly as much hard work and is a much better guarantee of success.

Think about it:  How can you win long term if there is a level playing field?  The best strategy is to un-level the playing field….not to work harder.  If your long term strategy is working harder, you won’t be on top long…there is always some idiot out there willing to work harder.  If your long term strategy is hard work, you will kill yourself doing it.

I think Goldman’s strategy is simply how capitalism in the US works:  its a plutocracy.  The rich are bending the rules to make sure they stay rich.  The rich are largely smart, and we are busy working hard, so we don’t realize the bait and switch.

I remember the story of Mickey Mouse from business school.  Whenever the early Mickey Mouse movies get close to lapsing their copyright and entering the public domain, Disney simply gets the law changed to extend the copyright.

The pharmaceutical industry peddles treatments that work better than placebos….the treatments don’t have to work better than sunshine, getting friends, eating healthy, taking vitamins, exercising, etc….and often they don’t, but they can’t sell or patent exercise.

They even invent new diseases to match “cures” they have found (had you heard of erectile dysfunction before Viagra?).   You rig the game.  If you can “cure” erectile dysfunction, then you need to make it a disease.  Shyness is a disease now too (social anxiety disorder).

In short, the patent system CREATES the current pharma industry.  The industry manipulates those rules to protect their profits; they don’t want free markets.  Its much more profitable to define diseases or massage the drug approval process regulations.

Also, no business wants free markets……they want free markets when it suits them…and then closed markets when it doesn’t. The patent system creates a closed market; that’s good for copyright holders.

Multi-national corporations (who are also quite well-connected and resourced) want free trade…because it allows them to move goods and labor unfettered.  The only group you can bet for sure will benefit from that arrangement…is the multi-nationals themselves.

Who do you think writes these laws?  The industry almost HAS to write them; because they are the only ones with enough expertise to do so.  Would you want some blowhard politician writing laws about an industry they have never even worked in?  The industry groups draft the laws and try to get the politicians to sponsor them.

Banking is the ultimate special privilege industry:  It gets to create money…and he who creates the money, makes the rules.

If you’re looking for a lesson in my rambling here it is this:   The winners make rules.  Everyone else whines about working hard.

If you beat me 100 to 2 in basketball and I re-define winning as having the lowest score….then I win.  It doesn’t matter how good you are.


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