Showing posts from January, 2011

Skills and Value Concentration

Many of my colleagues and peers complain about "wealth concentration" and the "superstar effect" without realizing these are natural trends in any group, regardless of size. As a community expands, the effect I am going to explain is magnified. The end result approximates a "natural monopoly." Seldom is there a nefarious plot to control products or knowledge -- it just happens to be more efficient to concentrate skills and products.

I'm going to use a large-scale, modern example to explain how skills concentration (specialization) leads to wealth concentration and the superstar effect. Afterwards, I'll offer other examples to help clarify the concept further.

For nearly 40 years, from the 1960s through the mid-1990s, when a company wanted to use computers to automate and improve a task's accuracy the firm would hire a team of programmers. As a result, companies of every size and type had customized software. This was great for programmers, but n…

Extreme Budget Illogic At the CBO

I've noted this issue repeatedly: health care reform will not and cannot reduce federal spending. Only in the absurd world of Congress can you pretend "The cuts are coming!" year after year, always delaying them, and yet count those "cuts" as savings. Do you really believe Congress is going to cut payments to doctors by 20% or more? Do you really believe Congress is going to increase taxes on union health plans 20-50% in four years?
But, as long as Congress claims it is going to cut, the CBO has to pretend the cuts will happen. Viola! Health care reform cuts the deficit! No, it does not. It will not, it cannot.
Read this at Real Clear Politics:
Extreme Budget Illogic At the CBO

It's simple: the CBO has to use the fake numbers provided by Congress. If the Congress claimed taxes will be 100% and no jobs will be lost, the CBO would have to use those assumptions. That's how the CBO functions — lots of garbage in, tons of garbage out. Sadly, the CBO knows this…

Study Downplays Outside Groups' Power

This story from indicates the real problem isn't money in politics.
Over the course of the campaign, the report found, Democratic committees and candidates outspent their GOP foes $159 million to $112 million – more than enough to compensate for the money outside GOP-leaning groups contributed toward airtime. Democrats spent more, and lost a lot more at local, state, and national levels. What happened to the huge affect we were told to expect from Citizens United? It didn't happen. The U.S. Supreme Court’s Citizens United decision didn't seem to change spending by more than two, yes two percent. Of course, we also had several multi-millionaires wasting their own fortunes running for offices that pay under $250,000 a year.

My personal theory is that problem of "revolving doors" — politicians go into lobbying, business executives go into politics, media consultants become reporters, and every now and then they rotate positions on the chess board.
Study do…

Tit-for-Tat: Extreme Rhetoric of Progressives

I'm not a fan of Michelle Malkin, but she has performed an important service.

The left and right have serious problems. They are busy vilifying each other, only able to see "the other" as wicked and guilty of heated, nonsensical rhetoric. Truth is, our history is littered with left-wing assassins, right-wing sociopaths, left-wing political terrorists, and so on. Even our founding was a series of violent acts. I'm not sure what this says about American politics.

I don't know what to make of this inventory list, but it is depressing…

There are pages and pages on the Web now listing the horrible statements, images, and so on from both political sides.

Will Repeal of Obamacare Increase the Deficit?

This response to various news stories on the repeal of healthcare reform is one of several interesting responses.
Will Repeal of Obamacare Increase the Deficit?

One of the problems with any estimates from the CBO is that such estimates can only use numbers and assumptions provided by Congress. Usually, the assumptions of Congress are incorrect, assuming cuts that are never enacted and revenues that never materialize.
The CBO states in its analysis of H.R. 2, the heath care repeal act: As with all of CBO’s cost estimates, these estimates—both for the first 10 years and beyond—reflect an assumption that the provisions of current law would otherwise remain unchanged throughout the projection period and that the legislation being considered would be enacted and implemented in its current form. CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation. However, current law now includes a number of policies that might be diff…

Founding Documents

I have added texts of the Founding Documents to this blog, as static pages. I have formatted these quickly, to post them with minimal delay. In coming months, I will add some commentary to these documents and important historical facts that clarify the intentions of the Founders and of the authors of various Constitutional Amendments.

The process of adding comments and historical clarifications will be ongoing. I will also tackle larger issues in regular blog posts.

Please, read these documents from time to time. It's good to refresh our collective memories.