Commenter Archive

You don't have to sell your home to get value from it; you can also take out a loan to extract equity.

Think of it this way: If you have $100,000 in home equity, you can sell your home and become a renter with $100,000 in the bank. Which means that you're $100,000 better off than a renter with no assets.

Renters don't necessarily have lower net worth than homeowners. Especially nowadays, when many homeowners have negative equity in their homes.

For example, a right triangle with two sides that are equal has a long side (hypotenuse) of a length that cannot be expressed as the ratio of two integers.

If the equal sides are rational, yes. But if the equal sides are of length sqrt(2), for example, then the hypotenuse will be 2.

I think that there's an implied "because the doctor knew, or should have known, that it was the wrong thing to do" in there.

"I’m expected to be able to parse a 60-page document" strikes me as a gross exaggeration for rhetorical effect. I simply don't believe that the key facts about the mortgages were buried deep in the loan papers. If I'm wrong about this, I'd be interested in seeing actual loan papers, but I strongly suspect that the important terms were prominently featured on the front page. In fact, I believe that there are regulations requiring this. I think that borrowers were very much complicit in these loans in ways that the victims of medical malpractice are not.

Also, another relevant difference is that when someone gives you a loan you can't pay, he gets punished by not getting the money back. No one who's preaching personal responsibility is saying that people who issued bad loans should be bailed out by taxpayers (well, maybe for macroeconomic reasons, but rewarding irresponsible lending is seen as an undesirable side effect rather than the purpose of the bailouts). And your damages are mitigated by defaulting. We have medical malpractice law because there's no analogous automatic mechanism to punish bad doctors or mitigate the damages to patients.

If you do the financial equivalent of exercising regularly, not smoking, not drinking alcohol, and not overeating, you probably won't have extreme debt. Extreme debt is usually the financial equivalent of type II diabetes.

Hands are made of particles, aren't they?

"But recent physics theories suggest..."

Every time someone says this with respect to a subject other than physics, a physicist punches a hole in a nearby wall.

Do you often argue with ad copy?

I don't see how fighting welfare reform every step of the way and railing against it even fifteen years later counts as acknowledging that there was a problem. Perhaps you have a different left in mind.

Only those who live paycheck-to-paycheck at subsistence level. Anyone with an above-subsistence income is living paycheck-to-paycheck by choice.

I'll grant that someone with no dependents living on a subsistence income has a valid excuse for having no savings. This is a very small minority of the population. And a smaller minority still has a good reason (e.g. a disability) not to have a greater income.

I'd be open to the idea of a forced-saving scheme. While not strictly libertarian, it at least eliminates much of the moral hazard and perverse incentives inherent in tax-based alternatives, and would also have salutary economic effects.

I see government distortions being more relevant at the top than at the bottom. That is, it may explain why doctors and lawyers make more than engineers, and how the CEO of some corporation that got a huge government subsidy is a billionaire. But there are many very obvious reasons why the poor are poor that would almost certainly remain in the absence of government micromanagement of the economy.

If you don't show up for work consistently, or slack off while you're there, or get addicted to drugs, or have children that you can't afford while still maintaining a safety buffer, or if you haven't saved enough to weather a spell of unemployment (including COBRA), then you're probably not going to do any better in a truly free market. There's really nothing we can do for you other than pity-charity.

And I really don't see an acknowledgment from the left of the role that personal responsibility plays in these situations. They're constantly making lame excuses when the reality is that a lot of people just kind of suck (granted, the left acknowledges this, but only with respect to productive members of society who vote Republican).

It's worth noting, also, that corruption need not take the form of outright bribery. Even if it were made such that corporations could not possibly give any sort of material resources to politicians, they'd still have a great deal of influence due to the fact that they create jobs, which constituents love.

If a lobbyist from Acme Corporation, a firm which employs 50,000 workers in a particular representative's district, that representative is going to listen to what he has to say. And if the lobbyist says that Acme could hire another 10,000 workers if the government could just help them out a bit with expanding the plant, then that representative's going to listen, because those 10,000 jobs are going to help him get reelected.

This is corruption in the sense that it's a corruption of the legislative process. And it leads to bad policy, because politicians aren't qualified to be picking winners and losers. But there's no bribery. It's all on the up-and-up. The representative isn't even going to keep quiet about it---he's going to brag about it in his campaign speeches. And so populism becomes the handmaiden of corruption.

I suspect that corruption works this way fairly frequently. And even where money changes hands, I wonder if maybe it's less quid pro quo than, "Aren't they those nice people who helped me get reelected? I guess I should hear what they have to say...Oh, I think the voters are going to like this."

It's not obvious to me that there's much of a connection between cronyism and personal wealth or income inequality. That is, I'm not sure that it's very common for people to bribe Congressmen with their own personal money, as opposed to doing it with corporate funds.

If this isn't happening, then taxing the personal incomes of the rich isn't going to do much to prevent cronyism. And preventing corporations from holding enough cash to bribe legislators isn't an option, because legislators cost a lot less than the legitimate things that corporations need to be doing, like building factories and such.

Just so you know who to blame.

I followed this guy over.

Right. Because there's nothing sociopathically narcissistic about "Make people give me stuff for free!" There are people at the OWS rallies demanding that their personal debts be cancelled, and we're the self-centered ones.

Best not to use words you don't understand.

Specifically, that's government consumption, not government spending generally. Government transfer payments, like Social Security, aren't counted.

Ideally you should not follow "The underlying problem is ignorant dolts like you" with an ignorant, doltish assertion.

trizzlor:
I'm told that egg, once it dries, damages the car's paint in a way that can be expensive to repair. But this is trivially generalizable to other examples. Pay me $100 or I'll smash the windows on your car, or in your house, or slash your tires, or whatever. The point is simply that coercion is bad regardless of the victim's BATNA.

If leftists don't hold employers causally responsible for the poverty of their workers, then why do they want to hold them financially responsible? That is, why is the proposed solution to force employers to give their workers charity in the form of above-market wages, rather than levying a tax on the whole population and using it to fund a welfare scheme for the world's poorest in general?

For people who claim not to be pointing fingers, what the left is doing looks an awful lot like scapegoating.

I just figured out how to articulate why this strikes me as such a non-sequitur: Low BATNA simply isn't what makes involuntary transactions suspect.

What makes involuntary transactions suspect is the fact that one person is forcing the other person into a transaction that harms him. If you want to get utilitarian about it, this means that the transaction can result in a net social loss---the sum of two positives is always positive, but the sum of a positive and a negative can be a negative.

In an involuntary transaction, the coercer lowers the victims BATNA by, e.g., threatening to kill him if he doesn't comply, whereas in a voluntary transaction one party has a low BATNA coming in. It's the forcible manipulation of the BATNA that makes the transaction suspect, not the low BATNA itself.

You can have involuntary transactions with a high BATNA, and they're still illegitimate for the reasons stated above. For example, say that I threaten to egg a well-to-do doctor's car if he doesn't pay me $100. His BATNA, being a well-to-do doctor with an egged car, is still pretty damned good. But the transaction is still illegitimate.

So when you say that one participants BATNA is low, and therefore the transaction is suspect, that's a complete non sequitur.

But they're not similar as indicators. An involuntary transaction is an indication that one person is trying to benefit himself at the expense of the other person. A voluntary transaction is an indication that two people are cooperating for their mutual benefit.

This is huge. Any analysis that ignores this distinction is utterly worthless.

To elaborate, less that be mistaken for content-free snark, the main problem with involuntary transactions is that they usually result in harm to one of the participants. A person will not generally enter into a transaction which he believes is not in his best interests, but he can be coerced into one. Involuntary transactions, then, are very rarely Pareto-efficient, and usually not even Kaldor-Hicks efficient (i.e., the benefit to the perpetrator is less than the harm to the victim).

This isn't the case with voluntary transactions. Voluntary, nonfraudulent transactions, even when not euvoluntary, are generally mutually beneficial, and to be encouraged.

A leftist sees a rich person transacting with a desperately poor person, and concludes that the rich person is somehow responsible for the poor person's state. In reality, the transaction is mutually beneficial, and the rich person is making the poor person better off, not worse off. To claim that this is effectively the same as an involuntary transaction is to demonstrate a very tenuous grasp on the fundamentals of causality.

Now, there's a game-theoretic argument that we could perhaps improve the lot of poor workers by forbidding people to hire them under conditions below a certain level. Depending on elasticities of demand for labor, this may backfire or have mixed results (e.g., fewer people hired at higher wages). In any case, it has jack-all to do with whether these transactions are really voluntary (hint: they are).

Progressives argue that “allowing” you to choose between taking an offer and starving to death is effectively the same as involuntary exchange and should be addressed differently than plain old leverage.

Progressives [sic] don't seem to grasp the fundamentals of causality.