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Budget Driven Strategy

from Peggy Noonan at the Wall Street Journal, America’s Strategy Deficit:


On Thursday came the testimony of three former secretaries of state, Henry Kissinger(1973-77), George Shultz (1982-89) and Madeleine Albright (1997-2001). Senators asked them to think aloud about what America’s national-security strategy should be, what approaches are appropriate to the moment. It was good to hear serious, not-green, not-merely-political people give a sense of the big picture. Their comments formed a kind of bookend to the generals’ criticisms.

The seemed to be in agreement on these points:

We are living through a moment of monumental world change.

Old orders are collapsing while any new stability has yet to emerge.

When you’re in uncharted waters your boat must be strong.

If America attempts to disengage from this dangerous world it will only make all the turmoil worse.

Mr. Kissinger: “We haven’t faced such diverse crises since the end of the Second World War.” The U.S. is in “a paradoxical situation” in that “by any standard of national capacity . . . we can shape international relations,” but the complexity of the present moment is daunting. The Cold War was more dangerous, but the world we face now is more complicated.

Mr. Kissinger: “In our national experience . . . we have trouble doing a national strategy” because we have been secure behind two big oceans. We see ourselves as a people who respond to immediate, specific challenges and then go home. But foreign policy today is not a series of discrete events, it is a question of continuous strategy in the world.

All agreed the cost-cutting burdens and demands on defense spending forced by the sequester must be stopped. National defense “should have a strategy-driven budget, not a budget-driven strategy,” said Mr. Kissinger.

He added that in the five wars since World War II, the U.S. began with “great enthusiasm” and had “great national difficulty” in ending them. In the last two, “withdrawal became the principal definition of strategy.” We must avoid that in the future. “We have to know the objective at the start and develop a strategy to achieve it.”

Does the U.S. military have enough to do what we must do?

“It’s not adequate to deal with all the challenges I see,” said Mr. Kissinger, “or the commitments into which we may be moving.”


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Uber and DUIs

In LA Weekly Dennis Romero writes IS UBER REDUCING DUIS IN L.A?

In a vast, 4,000-square-mile county, it’s hard for many folks to get around without a car. And that has meant that DUIs have become a much-feared epidemic.

But ride-sharing apps like Uber, Lyft and Sidecar have become a go-to Godsend for party people in L.A. And it’s conceivable that they’re starting have their impact on DUI statistics, possibly making streets safer for everyone.

How many friends do you know who now “Uber it” rather than get behind the wheel for a night out?

Brewer told us that she’s not sure why there’s such a serious drop in DUIs for Labor Day weekend….


This data is still being greeted with some skepticism, but I believe it will prove significant. This same report is being repeated in several cities.  There are just too many anecdotes and stories from passengers and drivers and the incredible growth in the use of Uber make the conclusion one that would be logically expected.

Further the elimination of cash payments reduces theft, and there may be some social (crime reducing) benefits from the increase of the sense of community these service engender.  That last benefit may be a stretch, but the DUI reduction should be expected.

In New York there are stories of people getting rid of their cars in light of the ease and availability of Uber type services.  This may be unique to New York given the high costs of car ownership there.

Government efforts to limit Uber in an effort to protect the taxi franchise may be coming at a high cost.

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Crony Inequality

from Don Boudreaux at Cafe Hayek A Quick Note On Inequality and Cronyism:

Cronyism of the sort that Sam rightly and consistently decries does indeed unjustly enrich some people by making other people poorer.  So such income transfers (which, as Sam suggests, government pulls off with far greater success than it has when it tries to transfer wealth from the rich to the poor) are not only rooted in force (and, hence, are presumptively unjust) but are also zero- or negative-sum ‘moves.’  In both of these ways such transfers differ from the voluntary and peaceful processes that create income and wealth differences in private markets.

But even with such rent-seeking, cronyist transfers, I’d not say that the concern is, or should be, with any resulting increase in income inequality.  The concern is, or ought to be, with the unjust policies and activities that give rise to these transfers.  If a millionaire embarks upon a life of successful house burglarizing, the problem with this activity isn’t that it further increases income inequality; the problem is that the activity itself is immoral and destructive.  So just as we wouldn’t look with less disfavor upon a burglar whose success decreases income inequality than we look upon this hypothetical millionaire burglar whose success increases income inequality, our assessment of crony capitalism isn’t made any more harsh because it increases income inequality.

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Cheaper Does not Mean more efficient

Doctor Leo Spaceman

from The New Yorker, a review on the book America’s Bitter Pill by Steven Brill.  The review is by Malcolm Gladwell.


It is useful to read “America’s Bitter Pill” alongside David Goldhill’s “Catastrophic Care.” Goldhill covers much of the same ground. But for him the philosophical question—is health care different, or is it ultimately like any other resource?—is central. The Medicare program, for example, has a spectacularly high loss ratio: it pays out something like ninety-seven cents in benefits for every dollar it takes in. For Brill, that’s evidence of how well it works. He thinks Medicare is the most functional part of the health-care system. Goldhill is more skeptical. Perhaps the reason Medicare’s loss ratio is so high, he says, is that Medicare never says no to anything. The program’s annual spending has risen, in the past forty years, from eight billion to five hundred and eighty-five billion dollars. Maybe it ought to spend more money on administration so that it can promote competition among its suppliers and make disciplined decisions about what is and isn’t worth covering. Goldhill writes:

Medicare is cheaper to run than private insurance. So what? Cheaper doesn’t mean more efficient. It may be cheaper to run banks without security guards, hotels without housekeepers, and manufacturers without accountants, but that wouldn’t make those businesses more efficient.

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Self Interest vs Selfishness

from Selfishness, Greed, and Capitalism by Christopher Snowden

Like Chang, many critics of capitalism use ‘self- interest’ and ‘selfishness’ (or ‘greed’) interchangeably, but they are quite different. Selfishness implies indulging oneself at another’s expense, but free- market transactions only take place when two self- interested parties see a mutual benefit.

Self- interest should not be conflated with avarice. If I decide to have apple juice instead of orange juice with my breakfast I am acting in my self- interest, but unless I snatch it from a thirsty child I can hardly be accused of selfishness.

Many argue that self- interest should not be seen in purely economic terms, but, instead, as a broader term to describe our goals and aspirations. Milton and Rose Friedman, for example, wrote (Friedman and Friedman 1980: 27):

Narrow preoccupation with the economic market has led to a narrow interpretation of self- interest as myopic selfishness, as exclusive concern with immediate material rewards. Economics has been berated for allegedly drawing far- reaching conclusions from a wholly unrealistic ‘economic man’ who is little more than a calculating machine, responding only to monetary stimuli. That is a great mistake. Self- interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue. The scientist seeking to advance the frontiers of his discipline, the missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy – all are pursuing their interests, as they see them, as they judge them by their own values.