If only we had a President who actually participated in private enterprise before being elected as President of the world’s largest economy.

By MAYA JACKSON RANDALL

WASHINGTON — President Barack Obama, in his weekly radio address, took time out to highlight the importance of small businesses, saying too many small companies are still finding it difficult to obtain the loans they need to keep their businesses running.

“While credit may be more available for large businesses, too many small-business owners are still struggling to get the credit they need,” the president said in his prepared remarks. “These are the very taxpayers who stood by America’s banks in a crisis–and now it’s time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs.”

Mr. Obama said it is time that large banks, who have already received substantial aid from the government, take the necessary steps to enable the recovery to take hold.

“Our economy as a whole can’t move ahead if small businesses and the middle class continue to fall behind,” he said, noting that small businesses have been hit hard by the recession. Many entrepreneurs can’t get the financing they need to start up their own companies and small firms have lost hundreds of thousands of jobs, he noted.

via Obama Seeks Support For Small Business – WSJ.com.

No amount of prodding by our socialist-in-chief is going to help small business as long as he continues his anti-free market policies. You cannot ask businesses to borrow money and banks to lend money when the environment for entrepreneurship is under attack. Costs will skyrocket on small businesses with Obama’s so called taxes on the rich, socialized medicine, cap and trade, card check, and…… We are only nine months in. If you are a small business or a bank, do you feel comfortable that you can accurately assess what the future economy will look like. Banks and companies make investment decisions based on risk and reward. If they cannot accurately assess risk, they will not invest.

While I haven’t read this book yet, it will be on my list as soon as I finish Robert’s book, “The Politically Incorrect Guide To Capitalism”, which helps provide a lot of the fire power behind this blog. Although, Robert is a highly regarded economist, he brings the dismal science down to a level that even an average Joe like myself can understand. In this interview, Robert discusses his book on the Great Depression. It highlights the fallacies you’ve been sold by the liberal establishment. Want to know why Obama’s policies are not working? All you have to do is see why FDR’s did not work.  You can also check out Robert’s blog, Free Advice out at http://consultingbyrpm.com/blog/

“The Politically Incorrect Guide™ to the Great Depression and the New Deal”

June 6, 2009

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Everything they say about the Great Depression and the New Deal is wrong.

No economic myth these days is more pernicious than the myth that the free market caused the Great Depression and the New Deal got us out of it. That, as economist Robert P. Murphy points out is flat-out false. In The Politically Incorrect Guide to the Great Depression and the New Deal he provides irrefutable evidence that not only did government interference with the market cause the Great Depression (and our current economic collapse), but Herbert Hoover’s and Franklin Delano Roosevelt’s big government policies afterwards made it much longer and much worse (just as President Barack Obama’s extraordinary expansion of government promises to do today). Perhaps even more compelling, Murphy exposes the untold story behind the New Deal—how it operated by force, and why what’s really at stake is not only our economy but our liberty. The real “lessons of the Great Depression” are not what you’ve been taught.

via Financial Sense Newshour Expert ~ Robert P. Murphy 06.06.2009.

Thursday, unelected bureaucrats will be making a major decision on behalf of the American people that can have far reaching implications to our freedoms. Here is an article from My Way News with my commentary.

Oct 18, 12:57 PM (ET)

By JOELLE TESSLER

WASHINGTON (AP) – With Democrats in charge in Washington, supporters of so-called “net neutrality” rules seem poised to finally push through requirements that high-speed Internet providers give equal treatment to all data flowing over their networks.

These rules – at the heart of a five-year policy debate – are intended to guarantee that Internet users can go to any Web site and access any online service they want. Phone and cable companies, for instance, wouldn’t be able to block subscribers from using cheaper Internet calling services or accessing online video sites that compete with their core businesses.

The Federal Communications Commission is set to vote Thursday on a proposal by the agency’s chairman, Julius Genachowski, to begin crafting regulations to prohibit broadband providers from favoring or discriminating against Internet traffic.

Broadband providers such as AT&T Inc., Verizon Communications Inc. and Comcast Corp. argue that after pouring billions of dollars into their networks, they should be able to operate those networks as they see fit. That includes offering premium services over their lines to differentiate themselves from competitors and earn a healthy return on their investments.

Genachowski’s proposal has also encountered misgivings among Republicans on the FCC and in Congress, who fear network neutrality rules could discourage broadband providers from continuing to expand and upgrade their systems.

“The risk of regulation really inhibits investment,” said Republican Commissioner Robert McDowell. Noting the agency’s estimated price tag of up to $350 billion to bring broadband connections to all Americans, he added: “How do we pay for all that?”

via My Way News – Hurdles remain as FCC ponders Internet data rules.

To start, what gives the government the right to tell private companies, who invest their own money in building these broadband networks, that they have to provide unfettered access to all internet users whether customers or not. This is rediculous enough, but let’s show how the free market would do this without the loss of liberty?

First, in most places there are multiple internet providers. For example, where I live in Pittsburgh, I can get internet from Comcast via cable, Verizon via DSL, Verizon via FiOS, and other providers of DSL and satellite services. If for example Comcast decides to limit monthly download to say 250GB, which they did, then customers will decide whether it is worth it for them to abide by their rules or switch to Verizon.

We make these decisions all the time. For instance, last year I switched from Comcast to Verizon for my internet. Why did I do this? Because Comcast thought they could hold me hostage to purchase all their services or rape me on the remaining ones. Surely enough the free market delivered. I dumped Comcast, went to Verizon for my internet, Dish Network for my TV, and Phone Power for my phone. I cut my costs and got more service. What government doesn’t seem to understand, probably because they only know force, is that the free market cannot coerce you into doing anything.

“Well, the internet is interconnected, and if Comcast decides to restrict access to a service that if offered by a competitor,  they can hurt the competitor even if the end user isn’t a Comcast customer. For example, if Verizon’s customer’s traffic has to travel over Comcast’s network to get to its destination, then that customer can be harmed even though they aren’t a Comcast customer.”

Hmmm, let’s think this through. If the internet is interconnect, which it is, would it make sense financially for Comcast to start a war with another carrier? Also, the internet is interconnected, but it is not one link. Most carriers have a plethora of routes to use to get to the destination they are seeking. They also have protocols that decide which route to take based on things such as available bandwidth. With this technology, they would bypass Comcast. (Warning: I’m using Comcast as an example. They aren’t the target of this legislation that supposedly is going to help consumers.)

Also, in a free market, companies are incentivized to innovate and offer new services because of profits. If profits are cut because of government force, then it is without a doubt going to cut into innovation, which ultimately hurts everyone.

Providers don’t only provide one solution. If they are providing phone services to businesses and end users, they must be able to meet that service obligation. If they are required to ignore those needs in order to provide “net neutral” access to their broadband, then those services become worthless. Those services cannot sustain, because they would be unreliable. This would decrease their profits (which we already explained hurts innovation), and hurt the consumers of those phone services. Now you have less competition in the phone service arena.

Government always seems to want to address problems that do not exist. Where has this been a long term problem? Where has the consumer, who has no right to these services, been harmed by the monstrous internet providers? I think one could argue that the most unregulated part of our lives these days, the internet, is without a doubt the most innovative and quickly advancing parts of our lives. This isn’t happenstance. This is because the government isn’t dampening the motive of companies to make a profit, not yet that is. It would appear that the government can’t stand to see a sector of our economy flourishing without it.

If you want the internet to continue it’s phenomenal advancement and betterment of our lives, I’d suggest you let your representatives know that “net neutrality” is disaster. Let them know your vote could be swayed by their stance on this legislation, and that internet service providers have delivered as promised in regard to our communications needs. We can decide what providers to use and punish ourselves. We do not need them taking our liberty in order to do it, which we already know they can’t.

Our government has been pushing alternative energy like they stand to make profits personally from the success of the green businesses. Hmm, could it be? How much has Gore made? Last I heard he’s made over $100 million. But profits are fine when they come from liberal causes, right?

Anyways, the reason I am writing this post is we’ve been told for generations now that we are going to run out of oil. Oil is a fossil fuel, and there is only so much of it. We are told we must not drill basically anywhere. This issue came to mind when I was out driving around looking at houses with my family. Although we have no intentions on buying any of the houses, this is just something we enjoy. While driving around, the following example became apparent. It applies to all limited commodities, and it highlights the fallacy that government must act so we don’t use all the world’s oil.

Have you ever noticed how older houses seem to have the best yards? At least where I live in Pittsburgh, the older houses seem to have the nice, flat yards. All the new houses are built with a cliff for a back yard. This is a constant complaint, but it is very simple to explain. It will highlight the fashion by which the market conserves resources. In a free market, home builders look to build houses for the lowest possible price. The lower the price the more purchasers. The more purchasers, the easier it will be to sell and make a profit. Developing a home on a flat lot is much cheaper than developing on a hill. Developing on a hill requires tons of expensive excavation. This is why the flat land is developed first.  Over time, more and more of the flat areas are developed. As the flat areas are used up, they become more expensive.  Supply shrinks while demand doesn’t. As they become more expensive, developing the hilly area starts to become more reasonable. Eventually, the flat land, because of low supply, costs more to develop than the hill.

The developers begin developing the hills because they can offer them cheaper than the remaining flat lots that as we already said have risen in price. Developers will continue this process moving to more and more difficult and expensive developments as the price of the low hanging fruit increases because of decreasing supply. Ultimately, the remaining supply becomes so expensive that more expensive substitutes are used, in this case hilly land. This will leave flat land that is untouched. As the supply of easier to develop hill begin to dwindle, developers will move on to harder and harder to develop areas. The cost of developing the harder areas would more than likely lead to some recycling of the old flat lots that have houses on them already.

This is no different with oil. The technologies that are now too expensive to develop, mass produce, and distribute will get more and more economical as supply of oil shrinks and prices increase to reflect the shrinking supply. Similar to land development, as energy supplies get more expensive we will always move on to the previous uneconomical sources that have now become economical.  Because of the skyrocketing price, it would not make economical sense to use the remaining supply.

How do you run out of oil? You could run out of oil if the government decides to nationalize the oil supply for say “the public good”. Government also could impose price controls, which would prevent the price signals from having their effect on demand. These are the circumstances that spell disaster for conservation. As with most things, the government isn’t the solution, and as we know in many cases can be the biggest problem. The free market requires no compulsion, no taking of liberties, and would preserve our resources without force. No bureaucratic idiocy is needed for the free market to prevent us from using all the world’s oil. Well, unless someone in government is in the business of making unearned profits, maybe by forcing the world to buy carbon credits from a former Vice President who shall remain nameless.

Over the past week, I’ve been writing about how the free market is the best solution to health care reform. I also argued that the best way to fix health care is to get rid of third party payer, typically employers, from the health insurance purchase. The second fix was to get rid of third party payer for day to day medical expenses. For some reason, despite the fact that the market delivers food to you to survive, Americans think the market without the government involvement would not provide the insurance and medical solutions needed.

Now I’ve already argued that they would. Examples like walk-in health clinics, $4 prescriptions, and HSAs abound. The biggest fear for most people though is the pre-existing conditions and finding health insurance. I’ve exclaimed and still do that the market will address this need, because that is what the market does. It addresses needs.

The change that would help propel the creation of new insurance products is the consumer of the insurance actually purchasing the insurance. When we purchase goods and services for ourselves, we seek out the goods and services that address our needs effectively at the best possible price. This shopping will create a educated consumers and will generate competition among the providers of insurance and medical services.

Today while doing my bills, my mortgage company sent me this offer: “You can now get $100,000 of accident hospitalization insurance coverage for one full year for free.” Wow, free. Let’s take a look at the fine print. First, let’s make it clear this coverage is for accidental hospitalization. It is not for going to get your flu shot, which as we said before should be paid our of pocket. If our real concern is making sure we do not go bankrupt in the event of an unplanned disaster, surely a plan that covers accidents would be on the top of our list. So, this plan covers hospital stays and emergeny treatments. It even has an option to add your family and include doctors visits. Doctors visits are limited to one per month with a lifetime limit of 60 visits. Wow, I can probably count on one hand how many times I’ve been to the doctors in the past 20 years.

This plan is not total coverage, but it does address a need, accidental coverage. There are exclusions to this plan. The accident cannot be the result of drinking, drugs, committing a felony, flying a plane, war, accidents outside the US, etc. By limiting their exposure, they are able to offer a reasonable amount of coverage for a very low price. How much is this plan? After the free period, it goes up to $9.95/month. To add doctors visits, its $13.95/month, and for a family it’s $19.95/month.

So what does it say about pre-existing conditions? “All eligible customers who complete and return the Activation Form will be accepted. There are no medical questions or physical examinations required for enrollment.” Sounds pretty good for pre-existing conditions to me.

Now, I am not saying this plan here is the answer. It does not cover all scenarios. It’s for accidents. It does not cover cancer, heart attacks, or diseases. I think we could all agree, how could it at $9.95/month? What this highlights though is companies including your home mortgage company will offer solutions. When you are shopping for your own insurance, you will make good decisions to address your own personal needs. You will not be pigeon holed into a plan that doesn’t apply to you because a co-worker has different needs. You also will not go without options. The market is where options are created, and the government is where options are few and usually all bad.

Earlier this week, I posted a two part series on how to fix the health care crisis. The solution was to get rid of third party payer in respect to the purchase of health care and insurance. Immediately, I got and was glad to have received the red herring question of the pre-existing condition.

Let me start off by saying, that I have a child with special needs. My 9 year old son has cerebral palsy and has gone through years of physical therapy and occupational therapy to be able to walk on his own. He still wears braces on his legs. In additions, my niece has a severe case of autism, so bad that she is fed through a feeding tube. I say this because I know personally what parents have to deal with when it comes to pre-existing conditions.

With that said, free markets and freedom in general are principles on which this country was founded. Principles are meant to be applied in all circumstances, because they prevent us for choosing the wrong path. Our founders knew this. It is by veering off these principles that we are in the mess we are in now. Just because there is a hard issue to be addressed, doesn’t mean we throw away our principles. We don’t teach our children principles to guide them through life, just to have them toss them aside at the first circumstance that challenges their principles. Principles are meant for the hard issues. The are not meant for the easy issues.

“OK buddy. Enough preaching already.”

Agreed! We must start off this topic discussing the morality of government health insurance. Then we will move on to the economics of the issue.

In Thomas Paine’s great work “Common Sense”, he lays out how and why governments come into existence. He describes a civilization with two people, and how with two people you do not need government. Those two people can discuss their problems and come to a solution directly. As more and more people come into this society, they can no longer work out their disagreements directly. There are just too many of them, and they have other duties that require their attention and time. This is when government comes into existence. They decide to appoint select members of the society that they believe will represent their best interests. Those representatives will then setup laws and rules that protect all members of the society. What are they protecting each member of society from? They are protecting them from each other. They are making sure that one member doesn’t use coercion on another member. This coercion can be in the form of theft, fraud or even murder. This is how government is supposed to function in a free society. I think we would all agree that the government that functions in this manner is a just and moral government.

If we all agree to that, then we must acknowledge that coercing someone against their will directly or through the government is an immoral act. This is why the free market is always moral, and all other systems are immoral. The free market allows people, in pursuit of their own interest, to peacefully without coercion come to an agreement on trading a product or service between themselves. Both parties in the transaction walk away from the transaction better than before.

As soon as the government becomes involved, with the exception of preventing coercion (contract law, prosecuting fraud and extortion, etc), they then become the coercive power. Just because they may be acting on something that the majority agrees with doesn’t mean that coercion is now moral. I’m sure the best case of this was slavery. The majority approval for the government coercion did not make slavery moral. Immoral acts are always immoral.

What I am leading up to here is having the government force any individual to pay for another individual’s health insurance is immoral. Also, forcing an individual to buy his own insurance is immoral. In a free society, people are free to pursue their self interest. They are free to be miserly, charitable or neither. They are free to be successful, and they are free to fail. This is a just and moral society. As discussed earlier, this is a principled society. As soon as you veer away from this principle, no matter what your intentions, you then cannot say that another act of coercion, say Wall Street millionaires taking our tax dollars, is immoral.

I know this may sound like great theory, but the truth is life would be much better if we stuck to the principles of our founding fathers. I think we all know and agree to that, but then for some reason we immediately find that this special circumstance is different. It isn’t different. Our founding fathers had many reasons and opportunities to take the path we are now taking. They decided to take the principled stand. They decided to take it for us. George Washington could have easily been a king. He could have setup a monarchy that would have passed from generation to generation. Read history, and you will find how easily he could have done this. People were begging him to be king. Instead, he stood on the principles they professed during the revolution, and he stepped down after two terms.

Now, enough of my moral argument. Morals are great, and we’d all be better off if we lived by them, but how will the free market address the question that prompted this blog?

The free market operates in this manner. Individuals need many things for survival and pleasure. Because they cannot meet all their needs by their own action and invention, they offer what they are best and most efficient at creating and delivering for something they need that someone else is best and most efficient at creating and delivering. This is what is known as the division of labor. For society to benefit the most from everyone’s production, this must be voluntary and with out compulsion. When voluntary, people will seek to offer what they can create better and in more supply than everyone else. They do this based on their self interest. The more value they can create the more they will be able to get from others through trade. When government bureaucrats decide who should do what, you end up with people producing things that they are less efficient at producing. This results in a lower quality of life for us all.

This is apparent even in the most obscure products and services that are offered today. Do you think in government controlled economies, people with a fetish for purple, prince garbed, frog figurines could ever find the product they seek? In the free market, even products and services that seem so obscure that they wouldn’t be worth producing are produced. They are produced because there is a need, there is someone who can produce it, and there is a price at which both agree the product is worth producing and purchasing.

In the market of pre-existing medical conditions, this type of innovation would undoubtedly take place as well. There would be entrepreneurs that see a need that needs met. Typically, these entrepreneurs have experience themselves with being on the needing side of the tracks. They found that they couldn’t meet their own need through the market, so they say “Hey, I see an opportunty here. Why don’t I offer this to society. There has got to be many more people out there with the same need.” As we know, this happens every day, and this is why we as Americans progress so quickly. This is why the internet in a very short time went from bulletin boards to what we have today, where you can make video conference calls across the globe for FREE!

That is not to say you would not have some progress under a government controlled economy. The problem is you would only have progress in the areas that some bureaucrat, special interest or the majority believe should be pursued. If your child suffers from a less common ailment, you are out of luck.

With the free market, you will see innovation so much faster, and you will see prices of those innovations quickly drop. How much did a little 20″ LCD screen cost just 10 years ago? Politicians love to blast the rich, but guess who will fund that new medical treatment your child or you need? When it is first developed in the free market, it will be expensive. That is because of all the research and development costs that went into innovating the product or service. The rich will be the only ones who can afford it. There are only so many rich people, and eventually the manufacturer will have to figure out how to make it cheaper to gain access to a larger market. In this process, all the other companies that participate in the creation of the product will also be pursuing reductions in production costs. This will create a butterfly effect, which will result in rapidly declining prices. I know people think it isn’t fair for the rich to be the only ones who can afford it at first, but under the government controlled market or a market with out the rich, the innovation wouldn’t have taken place.

As I said previously, when you remove the third party payer from the insurance purchase, you will quickly see incentives to live healthier. According to the CDC, chronic illnesses that are caused by life style choices account for 75% of all health care expenditures. It would be a far stretch of the imagination to believe that this number would not be drastically effected if those life style choices were punished via higher premiums. A large decrease in chronic diseases would undoubtedly reduce insurance rates, and it would reduce the cost of health care in general.

Also removing the third party payer from the day to day health care purchases would drastically increase competition and lower prices for normal health issues. This would help those who have pre-existing conditions by allowing them to get the regular medical care at a fair price. Personally, this was my major issue when searching for insurance. My son’s pre-existing condition prevented him from getting even catastrophic care. The reason being is they assumed there would be a large amount of day to day care. I wasn’t concerned with day to day care. My concern was catastrophe. I needed coverage for the care that you can’t plan for. With the decrease in the cost of day to day care that would result from paying out of pocket and increased competition, you would see insurers more inclined to cover those who have pre-existing conditions. One can easily imagine an insurance company running a new marketing campaign stating that is is the “Only insurance company to offer coverage for children with autism”. That is a market that needs served, and they would be the first to tap into that market. Quickly competitors would step up to the plate, and prices would be driven down. Doctors who specialize in a particular affliction would compete for the dollars of potential clients by offering the newest and best treatments. These are the circumstances in which the market shines best.

The last wonder of the free market that would help those who really struggle financially is charity. Historically, charity has always been the way the poor was able to receive the services that they need but could not afford. Americans are the most generous people on the planet, and it would be almost a guarantee that with the government out of the market you would see increased prosperity. With that increased prosperity, you would see more charitable donations. Insurance companies and doctors would donate time and dollars to take care of the less fortunate. One must ask what would happen with charity under a government run health care plan. If the government turns you down, it would almost certainly be illegal or at minimum be detrimental to the doctors relationship with the government if he performed a procedure out of charity.

As I write this, I get super excited as a parent of a special needs child thinking of the innovation that would be unleashed in a completely free market. Unfortunately, we have already let the barbarians in the gates, and they are not going to leave of their own accord. The likely hood that we will drive them out and take back our economy and country is slim. It involves the unknown. It’s easier to accept the mediocrity of the known than it is to trust in what we know is truth but seems so far from where we currently are. I beg you not to fear. Can you imagine what fear our founding fathers, who never knew what life was like without the protection of the Royal Crown, must have felt? The amount of courage that it must have taken just amazes me, even as I write this. I’m sure we can all agree, thank God that they did. Let’s remember life isn’t only about the here and now. It isn’t just about take care of me, and the future be damned. Now is our turn to take the principled stand. It’s our turn to make the tough decisions for posterity. If we do the right thing, one day, our children and grandchildren will say, “Thank God that they did.”

After reading the following editorial in the Wall Street Journal this morning, I had to send in a letter to the editor. While I doubt it will get published, it will here. That’s another lovely thing about the free market! Here’s the editorial followed by my response.

By VERNON L. SMITH

There is widespread agreement with the principle that our health-care system needs to be reformed. But our representatives and our neighbors have much trouble in reaching agreement on the particulars. There have been many legislative bills offered and hundreds of amendments with no clear path to a resolution.

Health-care systems everywhere encounter cost overruns and rationing devices, like queues, in their diverse attempts to deliver products for which demand has long grown faster than other economic sectors. Why is it so difficult to find the private and public means, the combination of markets and government assistance, that enables a preferred outcome to emerge?

This question has a simple answer that plagues health care everywhere.

The health-care provider, A, is in the position of recommending to the patient, B, what B should buy from A. A third party—the insurance company or the government—is paying A for it.

This structure defines an incentive nightmare. You do not have to be an economist to realize that, when phrased in this way, nobody knows how to solve this problem. Hence the many experiments, all of which have been deemed less than satisfactory.

I don’t know whether this problem has a solution. If it does, I think it requires us to find mechanisms whereby third-party payment is made to the patient, B, who in turn pays A, supplemented with any co-payment from B for services. Hence, from the moment B seeks services from A both know who is going to be paying A for what is delivered. A and B each has need for what the other brings to the table, and this structure carries the potential for nurturing the relationship between A and B. B is empowered to become better informed about the services recommended by various A’s that he might choose among, and the A’s might find it particularly important to build good reputations with B’s.

Mr. Smith, the 2002 Nobel Laureate in economics, is a professor at Chapman University.

via Vernon L. Smith: The ABC Dilemma of Health Reform – WSJ.com.

Subject:  In response to “The ABC Dilemma of Health Reform”

Leave it to the intellectual to turn the simple into the complex. Mr. Smith, a Nobel Laureate, says “I don’t know whether this problem has a solution.” Is he serious? Any economist knows the disaster that ensues when price signals are not available to the purchaser.

The entire system can be fixed by addressing third party payer in respects to the purchase of medical services and the purchases of the insurance. Instead of further incentivizing the distortion of the market via the tax code’s promotion of employer purchasing of insurance, we should incentivize the individual. When the individual purchases his own insurance, he’ll make better puchasing decisions, such as buying a catastrophic plan instead of a plan that covers everything down to teeth cleaning. The individual will also make better purchasing decisions when the doctor tries billing him $10 for a band-aid.

When the accumulative effect of millions of these first party payer transaction kick in, you will see prices come back in line with the rest of the market. You will see entrepreneurs battling it out for the consumers dollar.

Sincerely,

Jason Vanzin

I know I’m starting to post a lot of videos, but as I find great videos that advocate the free market I want to share them with my readers. The free market is so powerful. To demonstrate that power, Milton Friedman will use something so simple as the pencil.

Guys, here’s a great video on the free market. Pay particular attention to who the immoral actors were in the mortgage crisis.

By Donald J. Boudreaux Friday, October 16, 2009

Political discourse has more than its share of question-begging words.

For example, ponder the word “fair.”

“Fair” is perhaps the most misused word in all of politics. By definition, everyone this side of masochism and sociopathy favors “fairness.” No one believes that society would be a better place if only it were less fair.

The difficult question, though, is “What is ‘fair’?”

We have little difficulty distinguishing fair from unfair in small settings. If Mom bakes a pie and Junior scarfs down three-quarters of it before any other family members sit down for dessert, that’s unfair of Junior.

If I agree to mow your lawn in exchange for you washing my car and then renege on my part of the bargain after you wash my car, that’s unfair of me.

But distinguishing “fair” from “unfair” in large, complex settings is vastly more difficult than politicians make it seem.

Consider the distribution of income. Is it unfair that some people earn multiple times more dollars — often hundreds of times more dollars — than other people earn?

Seems unfair to many folks. Why should Sal the surgeon take home a salary 50 times larger than the salary taken home by Tony the teacher?

If Sal and Tony were assigned to their jobs by some authority and if that authority pays Sal more than it pays Tony simply because Sal has a more beautiful sister than does Tony, that would be unfair.

But in market economies persons aren’t assigned to jobs. Each of us chooses our career. If Tony chose to become a teacher, that means he chose not to become a physician.

Also in market economies, salaries are determined by impersonal market forces rather than by some authority.

So how can it be unfair that Tony doesn’t earn a salary as high as Sam’s? In a very real sense, he chose not to do so.

Tony’s reasons for choosing a teaching career (and avoiding a career in medicine) might be admirable or understandable. Perhaps Tony loves working with children. Perhaps he relishes having long holiday breaks and summers off. Perhaps he cannot stomach the sight of blood. Perhaps he was put off by the prospect of spending all the extra time in school required to become a physician.

Whatever his reason, he clearly gained — or expected to gain — by making the choice that he made. In Tony’s mind, when all the expected costs and benefits — monetary and nonmonetary — of practicing medicine were weighed against those of teaching, he obviously concluded that teaching offered him the better standard of living.

Of course, it’s true that Tony would have preferred to have all the benefits he gets from teaching — for example, long holiday breaks — and the higher salary paid to a surgeon.

But that option was never on the table — not for Tony, not for Sal, not for anyone.

It’s also true that Tony might come to regret having chosen to become a teacher rather than a surgeon. But so, too, might Sal come to regret his choice to become a surgeon.

Our imperfect capacity for making decisions, or for seeing the future more clearly, is unfortunate, but it’s no source of unfairness.

The bottom line is that looking merely at one aspect of people’s lives — the amount of money they earn — provides far too little information for determining if their lots in life are “fair” or “unfair.” All things considered (and it would be unfair not to consider all things!), Tony’s lower salary as a teacher does not seem unfair when compared to Sal’s higher salary as a surgeon.

Another possibility is that Tony wanted to become a surgeon, but he doesn’t have the brains to get into medical school.

Under these circumstances, we might feel sorry for Tony. But, once again, there’s no unfairness in the picture. No one broke the rules of the game. No one singled Tony out, or singled out the ethnic group to which Tony belongs, to prevent him from becoming a surgeon.

I wanted to play quarterback in the NFL, but I utterly lack the physical requirements for that job. All the desire in the world would never have enabled me to earn my living on the gridiron.

Feel free, if you wish, to pity me. But neither you nor I can find anyone or anything to accuse of being “unfair” toward me.

When politicians thunder about “fairness,” they too often focus on only a handful of facts, selectively chosen to portray eminently fair situations as being unfair. And that’s unfair!

via Fair’s fair — right? – Pittsburgh Tribune-Review.