Moral Hazard: Bail outs, Debt relief, and Immigration

Our last conversation brought up the subject of moral hazard.

This is a term largely used in economics. There, it is typically used to refer to policies that remove the costs of failure - thus giving people an incentive to take risks they would not otherwise take. These risks end up costing society a great deal, because they have to cover the cost of failure.

As an illustrative example, imagine a game of poker. One of the players receives a promise from an observer, "If you win, you keep all of your winnings. But if you lose, I will cover all of your losses."

This creates a situation where the player now a huge and perverse incentive to take all sorts of risks he would not otherwise take. He has an incentive to try for "long shots" - plays that pay off big if they succeed, but almost never succeed.

How many lottery tickets would you buy if somebody said, "You can buy as many as you want. I will cover the cost of every ticket that does not win?"

Now, the person making the promise is the government. The people they make this promise to are investors - your standard "Wall Street Bankers". Propagandists tell us that the government spends too much money helping the poor and middle class. Yet, huge amounts of government money go to helping the wealthy avoid major losses - helping the very people who refuse to any taxes to cover these guarantees.

"Moral Hazard" is tightly linked to "To Big To Fail". The reason the government covers the losses of these risk takers is because of the costs of failure to the economy as a whole. By knowing that the government cannot possibly allow these costs to stand, the government does not even need to explicity cover these costs. Thus those companies take huge risks, they fail, and the bailout begins (bailouts that those who are bailed out are refusing to pay for).

I have described this with respect to multi-billion dollar government bailouts. It applies to regular borrowers as well.

Imagine two households. Household 1 purchases a $100,000 house, refrains from buying expensive gadgets or vacations, saves for retirement, and keeps their debt manageable. The value of their house goes up over the next several years, but they allow the equity to build and maintain their current life style. After 10 years, the value of their house collapses back down to $100,000. However, they now owe $50,000, which they can easily continue to cover.

Household 2 buys a $200,000 house. As housing prices rise they refinance and spend the equity on cruises or other forms of entertainment and gadgets. At the end of 10 years, the value of their house collapses back down to $200,000. However, they have $300,000 worth of mortgages from refinancing. At this point, the government steps in to give them assistance with their loan. This household ends up after 10 years with a $200,000 house, a house full of gadgets, and memories of the places they have seen and the things they have done.

Now, to add injury to insult, the government needs money to cover these costs. It can only get the money from those who managed their finances responsibility and, consequently, have money to spare. The person who gave up all sorts of luxuries and who kept his finances in order finds himself with an additional tax burden precisely because he has to give some of his money to the household that spent wildly.

The moral hazard comes from the fact that such a policy rewards (in the biological sense) those who are financially irresponsible and punishes those who are financially responsible. It teaches a lesson that those who spend wildly and accumulate massive debts enjoy a greater quality of life over the long run than those who manage their finances responsibly. This, in turn, sets the stage for yet another round of fiscal irresponsibility - one in which people have been taught to sense the rewards of being one of those who act irresponsibility and sense the costs of being responsible.

I should add that it is not the case that all people who end up in financial distress have mismanaged their money. They might end up in this situation due to a severe illness (though illnesses brought about by poor life-style choices such as drinking, smoking, and obesity will not count in this regard). Criminals might take a person's ability to pay their debts, or some (unforeseeable) natural disaster (against which proper precautious could not have been taken) might have caused them great harm. However, there are people who end up in financial distress due to their own actions.

In that previous discussion I mentioned at the start of this article, moral hazard came into play regarding immigration reform.

Let us again take a situation that involves two people in another country in identical circumstances. The one difference between these two people is that one has a disregard for the law or the rules. He does as he pleases and tries to get away with what he can. He crosses into the country illegally and gets a job. The other person has a respect for the rules. He learns and tries to follow all of the proper procedures. However, this involves a lot of red tape and waiting with no guarantee of acceptance, so he remains out of the country legally.

Now, an amnesty is declared. In doing so, the person with low respect for the law and regard for the rules ends up getting a significant advantage - he ends up being accepted into this country. On the other hand, the one who respected and followed the rules is kept out. In fact, his chances of getting into the country may be reduced because the "quotas" are taken up by those who came into the country illegally.

Here, we have created a situation where we have rewarded (in the biological sense) disregard for the law and a willingness to do what one wishes, and punished (in the biological sense) those who are inclined to follow the rules and accomplish their ends legitimately. This, in turn, sets the stage for yet another round of illegal immigration - one in which more people see the advantages of breaking the law and hoping for the next amnesty, and fewer people see any reason to respect the rules and procedures that have been put into place regarding immigration.

All of these elements of moral hazard are legitimate.

In practice, we tend to see Republicans who ignore the moral hazard of "too big to fail" government bailouts - or even benefit from the government's implicit promise of future bailouts - by paying any additional taxes and fees to the government. Those practitioners are permitted to keep everything that they get when they win, while having others cover their debts when they lose. While debates go on about funding the massive deficit that, to a substantial degree, was created to bail out these people, we hear them demanding that they should pay nothing. They should only obtain government benefits - and never pay the costs.

At the same time we see Democrats that ignore the moral hazard of rewarding fiscal irresponsibility and a disregard for the rules on the part of the middle class and poor.

In fact, moral hazard is a legitimate concern - a legitimate reason for action - at all levels. What we should be doing is creating institutions that reward responsibility and respect for the rules, while at least forcing people to accept the costs of their own failures and preventing them from obtaining benefits through criminal activity.

Immigration and the Human Rights of Non-Americans

There are issues where I wish Republicans would be Republicans and not abandon their principles - particularly where they abandon those principles to bigotry.

I am not talking about little principles either - but principles that are presented as core and foundational beliefs - cast aside where tribal hatred takes control of the heart and mind.

These are the principles that all [people] are created equal and are endowed . . . with certain inalienable rights - and that governments are instituted to secure these rights. Rights are not a gift from government that those in power may give or take away as suits their interests. In fact, to conceive a right in this way is entirely incoherent. Rights in this sense impose limits to government.

Granted, I have an updated conception of rights that rejects the claim that only men have rights (and only white men at that). It also rejects the claim that rights come from a creator - they emerge when matter organizes itself in particular ways. Finally, it is not an intrinsic property, but a relational property identifying desires that people generally have many and strong reasons to promote. As such, the rights we have can be proved or disproved - they exist as a matter of fact, not a matter of opinion.

For example, the right to freedom of speech is found in the fact that people generally have many and strong reasons to promote (through punishments such as condemnation) an aversion to responding to mere words with violence. It is a fact that people have many and strong reasons to promote this aversion, and that they can do so by praising those who respect this limitation and condemning those who violate it. It does not come from God. Instead, it is found in the relationship between this aversion to responding to words with violence and the reasons for action that exist. It is very real, and when people ignore these facts they will suffer for it.

Governments are human inventions best put to use promoting that which people generally have reason to promote, such as rights to freedom of speech, a fair trial, and a liberty to live as one chooses when it does no harm to others.

However, when it comes to "foreigners" - the despised and contemptible "them" who is "not us", many Republicans (and not too few Democrats and Independents) adopt the attitude that "them" are - well, for all practical purposes - "them" are not human. Saying that "them" are human would imply that they have these rights. We can't possibly embrace that conclusion. To deny that they have these rights requires the assumption that they are something less than "human". Any "rights" they might be thought to have are a gift of government - to be granted or taken away at the convenience of those in power - "us".

Why is Guantanamo Bay detention center in Cuba - besides the fact that it would be odd at best to name a detention center in Illinois the "Guananamo Bay" detention center?

Because we have adopted a rule of thumb that the government is going to treat people within its borders as humans. We are going to assume they have rights. However, creatures outside of our national borders - those "things" that walk on their hind legs like humans but are distinctly sub-human - have no rights. As long as we can keep them outside of our national borders, they remain sub-human "things" that can be treated however it pleases us to treat them. We must keep them out, so that we can continue to treat them as mere things.

On subjects such as global warming, where Americans put the lives and well-being of others at risk - if those others are Americans we recognize certain moral limits. Well . . . some of us do. However, if the victims are those creatures living outside of the national boundary, whole cities and nations can be destroyed without the sense that it might be morally objectionable to do so.

One of the worst things that can happen is for those bipedal external creatures to sneak into our house, our nation, where they might actually fool us into thinking of them as real people. Against this, we authorize people to trap them (fortunately preferring live capture) and expel them.

America is a country that covers a huge amount of territory. If the economy is booming in my state, and crashing elsewhere, I can expect people to move from that state to mine, "taking our jobs" as it were. However, at the sane time, they add to our state's economy as consumers, investors, and tax-payers. The result is to level out the economies in this vast region. However, it levels the economy at a very high level.

China has experienced the same benefit. Europe has learned by these examples and substantially opened up movement among the member nations of the European Union.

The reasons for this are reasons a morally consistent and principled Republican would not only recognize, but embrace. If people have freedom, they create prosperity. If you take away their freedom, you create poverty.

However, when it comes the bipedal creatures external to the United States (and even certain bipedal creatures in the United States that look more like "them" then "us") the principles that a morally consistent Republican would embrace are cast aside.

"After all, they look different. They don't speak the right language. And you want to call them 'human'?"

Well, yes. Actually I do.

We should, in fact, be treating them as we would have them treat us if our positions were reversed.

Which is yet another principle that a morally consistent Republican should recognize and embraced - that gets thrown away whenever the subject turns to the sub-human bipedal "them" that live outside or have somehow wormed their way inside our national borders.

Some Alternative Conceptions of Fairness

There was a careful bit of word choice in my last post that could have easily been missed, so I want to shine a spotlight on it.

It wrote that fairness is an outcome or procedure that people generally have many and strong reasons to cause others to like.

I did not write that fairness is an outcome or procedure that everybody (or everybody in a particular culture) likes. Nor did I write that it is an outcome or procedure that the agent likes or that it maximizes utility (provides the most happiness, preference satisfaction, desire fulfillment, endorphin production, etc.).

I did not identify fairness with what everybody likes for a couple of reasons.

First, there is almost certainly no outcome or procedure that everybody likes. Nor is it the case that finding one person that dislikes an outcome outcome or procedure proves that it is unfair. Never do we here the argument, "Jimmy did not like the outcome; therefore, by this fact alone, we have proof that it is unfair." This is simply not what we are talking about when we talk about fairness.

Second, what people actually like or dislike (or think they like or dislike) may be substantially different from what they have reason to like or dislike. Their likes might be grounded on a false premise - an environment in which they were taught to dislike X "because God disapproves of X". Or perhaps a cultural approval or disapproval fit a particular time and a particular set of circumstances that no longer apply. For example, a community facing frequent famines might hold that it is "fair" to give women of child-bearing age an extra share. This reason to promote a particular distribution would disappear when the famines disappeared.

The objection to equating fairness with what the speaker likes springs from the fact that language is a public and interpersonal phenomenon. We invent terms for those things it is worthwhile to talk about. "I do not like X" is a useful piece of information - a piece of data that may be added to the data pool. However, when people get together to talk about what is fair or unfair it is foolish to think that the thing that concerns them and that is worth all this time and attendion is what a particular person - the speaker - does or does not like.

On the other hand, it is quite useful to talk about what people generally have many and strong reasons to cause people to like. Indeed, do not like fairness we are not dedicating our conversation to, "What you like." for a public conversation, the useful thing to talk about is what people generally have reason to cause others to like.

It simply does not follow from, "I don't like X" that you and everybody else - or, more accurately - that people generally have reason to jump up and do something about X that calling it "unfair" would imply. Useful or not, it does not carry those implications and is not what we are talking about when we talk about fairness.

On the other hand, it follows by definition that a form of distribution or a procedure that people generally have many and strong reasons to promote a disapproval of is something that people generally ought to promote a disapproval of. Flagging something as "unfair" in this sense tells people, "Here is a distribution or a procedure that you people out there - people other than me (or in addition to me) have many and strong reasons to respond to with condemnation." Of course, when this is not true, then the claim that the act was "unfair" can be challenged and, potentially, proved false.

Technically, and more accurately, calling something "unfair" means that there are reasons to condemn it. However, as a matter of fact, the only reasons that exist are reasons that people have. Consequently, only claims about reasons that people have are actually relevant to the fairness or unfairness that exists. Reasons that do not exist are not relevant.

Finally, I did not say that fairness is found in the rules or procedures that maximize utility, in part, because nobody is actually or even potentially concerned solely with maximizing utility. The motives that people have for promoting desires for or disapprovals of certain types of distributions or procedures are the various interests that people have. It is found in their aversion to pain, their concern for their children, their food preferences, their enjoyment of various types of activites, their love for their spouse, their hatred of the next door neighbor with a barking dog. There may be a desire to maximize utility somewhere in this soup, but it is only one ingredient among many constantly being pressured by all of these other concerns.

When is the last time you looked at a menu at a restaurant and made your selection based solely on which choice will maximize utility? Or went to the movie that would maximize overall utility? Did you choose your spouse based solely on the principle of utility maximization? And when you have sex, is it solely because having sex with that person at that time maximizes overall social utility and for no other reason? Do you buy Christmas gifts based solely on maximizing overall social utility?

To demand that people act only this one interest - the interest in maximizing utility - is folly. It cannot happen. And if it is the case that X cannot be done, then it cannot be the case that X should be done.

The second objection to this claim is that there is no reason - no physical manifestation in the world - that gives the desire to maximize utility priority over all others. It is one desire among many. It has no intrinsic merit that gives it a special claim for consideration that other interests lack.

The value of a desire to maximize utility is not determined by its intrinsic merit. It is determined by the degree to which such a desire tends to fulfill other desires. This gives others reason to promote such an interest. On this measure, a desire to maximize utility certainly has a lot to recommend it.

Using the same measure, we can look at other reasons people may have for promoting or inhibiting certain outcomes or procedures and discover that they are not very good reasons. Unlike the desire to maximize utility, some of these reasons are themselves reasons we have reason to condemn or inhibit. Using this standard, we can identify some potential reasons for promoting a particular outcome or procedure as poor reasons and discount them appropriately. Again, this discounting does not depend on their intrinsic merit, but by their tendency to thwart other desires. Intrinsic merit or demerit does not exist.

So, I did not write that fairness was a system of distribution or a procedure that everybody likes, or that the speaker likes, or that maximizes utility. The formulation I used was that fairness identifies forms of distribution or procedures that people generally have many and strong reasons to cause others to like.

To call a procedure "fair" - as in a "fair trial" - is to call attention to those features that give people generally reason to promote approval. A fair trial means that a person is spared punishment if they did nothing wrong, and that we punish only those for whom there are many and strong reasons to punish. It is a procedure that reveals relevant facts - and keeps irrelevant facts that might prejudice a jury and produce an unjust outcome hidden.

This, then, is how to go about determining whether a distribution or a procedure is fair. Determine whether people generally have many and strong reasons to promote a liking of that outcome or distribution. It is not enough to like it. It is not relevant that everybody likes it if their liking is grounded on false beliefs or cultural traditions meant for different circumstances. We are not looking for an outcome or procedure that maximizes utility. We are, instead, for an outcome or procedure that people generally have many and strong reasons to get others to like.

Fairness

We are commonly tricked by a mythology of intrinsic fairness into adopting and promoting outcomes and procedures that there are few real-world reasons to promote.

[I]f I had $100, and another person had $5, and then an collective tax of $35 was invoked, it would not be fair for me to pay $30, and expect the other person to pay the remaining $5 just because I had already payed for 86% of the tax.

Why not?

I agree with the sentiment. However, it does raise the question: What makes something "fair" or "unfair"?

For context, the comment above was written in response to a post on taxing those who make more than $250,000 per year. I argued that we have put two wars on the national credit card, and that refusing to tax the top 2% as a way of paying for part of these costs means that we are having wars funded almost entirely by those making less than $250,000. Many of those have already paid with life and limb - they are being told to pay the rest of it in the form of reduced government services as well while those making more than $250,000 contribute nothing.

This, I asserted, was unfair.

But what does it take for something to be fair? How do we prove fairness?

Before analyzing fairness, it is useful to note that there are two distinct types of fairness - fairness in results, and fairness in procedure.

Fairness in results means that we are looking at the outcome and judging it as good or bad. For example, we each contribute $5.00 to a pool where we buy 100 lottery tickets. If any ticket wins, we split the money evenly. Perhaps one of us can double our stake in the outcome by doubling our contribution. If I donate $10, then I get "two shares" of the jackpot.

Procedural fairness says that the final result does not matter as much as the procedure for getting that result. A game is an example of procedural fairness. If everybody followed the rules, then it does not matter what the final score was, it was a fair game. A fair trial does not look to produce good results for the accused. It aims to establish a procedure whereby the accused is not handicapped in proving that he does not deserve punishment. A fair punishment, on the other hand, is an example of outcome fairness - disproportionate punishment is unfair.

Now, let's look at the question of what it takes for an outcome or procedure to be fair.

A lot of times it is argued that a particular outcome or a particular procedure is simply, intrinsically fair or unfair. In many cases, a person will simply assert that a procedure or outcome is fair or unfair without offering any type of evidence or support for that conclusion. She expects the listener to grasp this quality of unfairness.

This does not guarantee that the person is making a claim that an outcome or procedure has intrinsic value - but it is a moderately reliable sign.

However, intrinsic value does not exist. All claims about an outcome or procedure being intrinsically fair are false.

All real value exists as relationships between states of affairs and desires. Moral value exists as relationships between malleable desires (desires that can be molded through rewards such as praise and punishments such as condemnation) and other desires. A virtue is a malleable desire people generally have reasons to promote, while a vice is a desire they have reason to inhibit.

Fairness, then, is an outcome or a procedure that people generally have many and strong reasons to cause others to like - whereas unfairness is an outcome or procedure people generally have reason to cause others to dislike. This liking or disliking then motivates people to act in ways that "realize" a fair outcome or procedure while avoiding unfair outcomes or procedures.

Let us take this view of fairness and apply it to the principle that, when it comes to taxes, everybody should pay the same percentage of their income. Let us say . . . 20%. A person who makes $110 will pay $22, while a person who makes $11000 pays $2200.

When it comes to taxes, is there a reason to get everybody to like a result where everybody pays the same percentage?

Recall, that the only reasons that exist are desires themselves.

In a sense, it depends in what you are measuring.

Let us imagine a community with 100 people. They make different amounts of money. It is agreed that everybody pays 20% of their income in taxes. However, it is a community where $100 is needed to survive. Those who end up with less than $100 will die.

In one sense, the person with $110 who pays $22 in taxes is paying the same percentage as the person with pays $11000 who pays $2200.

However, it is not the case that $2200 to the person who has $11000 has the same value as one's life to the person who makes $110. Consequently, the claim that the flat tax is "fair" in the sense that "everybody pays the same percentage" is an argument that contains a seriously flawed assumption. It assumes that $1.00 to the person who has $100 is worth exactly the same as $100 to the person who has $10000.

Because there are certain necessitities to living - food, health care, energy - this is almost certainly false. The first few dollars a person makes are significantly more valuable than anything that counts as disposable income. Furthermore, this basic amount is not the same for all people. Some people need more health care than others. For example, some need medications that others do not need.

Fairness in this case is not grounded on intrinsic values. It is an argument grounded on relationships between states of affairs and desires - where desires provide reasons to promote the liking of various outcomes or procedures. There are many and strong reasons to promote disapproval of a procedure in which a person is deprived of the basics for a minimum quality of life. The term "unfair" is a prudent and effective way of promoting an aversion to that type of outcome.

A common argument that we hear in economic debates is that economic justice or fairness is not an output-type of fairness, but is a procedural fairness. As long as everybody plays by the rules of the free market, it does not matter what the results are. They are fair. This is true in the same way that if everybody obeys the rules of a game, it does not matter what the final score is - it was a fair game.

However, there is no intrinsic merit to procedural fairness either. There are only relationships between certain procedures and desires that give people reason to promote a fondness for some procedures and to acquire an aversion to others. The reasons for promoting a particular set of rules have nothing at all to do with their intrinsic moral quality - it has none. It has everything to do with the fact that the procedure is one that people generally have reason to cause others to like.

In a game, if the rules do not produce an entertaining (desire-fulfilling) outcome, it is a simple matter to change the rules. The same is true of the procedural rules for economic justice. If the rules as exist prevent the fulfillment of desires that could otherwise be fulfilled, the desires being thwarted are reasons to act to promote a different set of rules and to call it "fair" (or "just").

The claim that a procedure has an intrinsic value that can disregard outcomes - that can disregard the preventable suffering they cause or fail to prevent - is simply false.

The Foundation of Moral Value

A member of the studio audience has, in effect, asked me to present the fundamental theory of value on which my writings and moral judgments are built.

So, do you think that we "ought to do" anything?

I want to start by saying that I went to college for 12 years studying fundamental theories of value (moral philosophy). Consequently, a great deal of work has gone into this answer. Though hard work is no guarantee of good results.

The answer is: It depends on exactly what you mean by "ought to do".

Do I believe that certain actions contain an intrinsic "ought-to-do-ness" (or "ought-not-to-do-ness") built into them by a god or nature?

The answeris: No.

There is nothing that we ought to do in this sense. No action has such a property.

However, there is another type of "ought" entity that is very real - the hypothetical ought ot "hypothetical imperative".

It works like this:

If you want to avoid the agony of severe pain, then you ought to keep your body out of hot fires.

For most of us, we want to avoid the pain of being burned, so we have reason to act (we ought to act) in ways that will avoid a state in which our bodies are exposed to hot flames. Avoiding hot flames is something each of us ought to do.

This ought only applies to those who have an aversion to the pains (or who have reason to avoid damage to body structions - prevent infections, maintain the use of limbs and sense organs, prevent disfigurement) that would be caused by burns. Certainly, it does not follow that a person with none of these interests has a reason to avoid hot flames.

For the rest of it, it further follows that we have reason to install smoke detectors in their homes and test them regularly. We ought to make sure that our houses are wired in such a way that the wiring will not spark a fire. We ought not to smoke when we might fall asleep. (We ought not to smoke for other reasons as well.)

It is quite possible (and, in fact, very common) that an agent might have a reason to avoid hot flames and, at the same time, a stronger reason to act that requires exposure to hot flames. A parent may have a child caught in a burning house. The aversion to having the child suffer harm may be stronger than the aversion to the pain of burns. These aversions would motivate the parent to find a way to save the child without getting burned. However, where there is no option, the "ought to avoid hot fires" gets overridden by "ought to run into the burning house and rescue the child".

These aversions to the pain of severe burns and desires to protect children from harm are very real. They are as real as plants and planets. We see them working all around us every time we see other people in action - or other intentional agents. Consequently, the "oughts" that spring from them are very real.

It is also the case that, while biology gives us a some strong interests, our interests are not fixed by nature. Some of them are learned by our interactions with the external world. We learn to like or dislike certain things.

I mentioned that the interest in avoiding the pain of burns implies an interest in making sure that the house is wired correctly. This, in turn, implies a set of standards for evaluating electricians. A good electrician is one that has those qualities that would tend to fulfill the desires people seek to have fulfilled when they call an electrician. For example, a good electrician will wire a house in such a way that would tend to avoid sparking a fire. This would combine with other qualities such as working efficiently, inexpensively, and and communicating well with the employer. These standards are not arbitrary - they are standards whereby a good electrician tends to do a better job fulfilling the desires of traditional electrician-seekers than a poor electrician.

This makes it possible for a community to speak intelligibly and intelligently about the qualities of different electricians (or smoke detectors). These are very real standards - and they are substantially independent of what any particular person may want or believe. It allows people to make statements about the quality of electricians and smoke detectors that are substantially true (or false).

In the same way that there are standards for good electricians and good smoke detectors, there are standards for good neighbors. Following the same formula, a good neighbor has those qualities that people generally have reason to want to find in a neighbor. A poor neighbor lacks those qualities.

A good neighbor is averse to wantonly doing harm or to disturbing others with noises that would thwart the interests others have in sleep or a restful time in the back yard. She is honest and kind. She watches over our property when we are away and watches over our children as they play. She will take action to secure our rescue if she looks out her window and discovers that you have gotten ourselves pinned underneath your car. To the degree that we are good neighbors we do the same for them.

From here we get standards such as "Neighbors ought not to lie, or to take without consent, or to commit murder." Good neighbors have aversions to these kinds of things.

The qualities that people generally have reason to seek in a neighbor is not up to personal whim. There is a fact of the matter as to which qualities tend to be pleasing or useful to others.

As I said above, some of these qualities are fixed by nature. Thus, it makes no sense to praise or condemn neighbors based on these qualities. On the other hand, some qualities are acquired based on experience. By controlling the experiences our neighbors have (particularly young neighbors or family members) we can influence the qualities that they acquire.

The tools that we have for this include praise and condemnation. We have reason to praise those qualities we have reason to promote - honesty, kindness, helpfulness. We have reason to condemn those qualities that we have reason to inhibit in our neighbors - such as an interest in wanton violence or a level of greed that makes one a threat to others.

In other words, we create an institution called "morality."

The standards of morality are not a matter of personal opinion. There is a fact of the matter regarding the qualities that people generally have reason to promote or inhibit. There is a matter of fact as to what it makes sense for people generally to praise or condemn.

This answers the second question:

I do not understand how one could choose a logical desire under those conditions.

There are logical desires in terms of desires that people generally have reason to promote or inhibit. There are no logical desires in terms of desires that have an intrinsic "ought-to-have-ness" or "ought-not-to-haveness". The first type of desire fully accounts for our moral institutions.

Morality and Expiring Tax Cuts on the Top 2%

A member of the studio audience has tried to explain to me how Republicans feel about asking those who make more than $250,000 pay a higher tax in order to deal with the debt.

I look at it as a moral issue. It is unlikely a household making $300,000.00/year got to that point overnight. It was probably a result of years of hard work and sacrifice. whether it was 8 years of college for a doctor or someone who worked for years for little or no pay to start a business. Now at the same time the government went for decades overspending on pet projects and is now facing a budget crises. The crises is not because the government is not getting enough money it’s because it cannot control its own spending.

Item 1: Actually, many of them did get there overnight. Their wealth was inherited.

Item 2: Why is it that it is moral to put a burden on somebody going to college to become a doctor, and not somebody who went to college and became a doctor? What gives a person who sacrificed to get ahead given immunities from burdens that must then be piled on those who are currently sacrificing to get ahead?

This is a lot like saying it is wrong to give a heavy backpack to somebody who has already climbed a hill and is standing on top. That, instead, to be fair, we must give the backpack to somebody who is currently climbing the hill and is trying to reach the top.

In fact, what this type of policy does is help those at the top of the hill stay their aline, by giving additional burdens to those trying to climb.

Item 3: Many of those who struggled to get to $300,000 did so with the government's help. They took out student loans or small business loans, used government roads, were protected by the military and police from domestic and foreign threats, obtained the benefits of government-funded research - much like Mitt Romney's father did. Government-funded safety regulations may well have kept them alive and healthy.

Item 4: We really need to take a look at these "pet projects" that are substantially responsible for our current situation.

In 2000, when Bush took office, the government was running a surplus - it was paying back its debt.

Pet Project #1: Bush’s 2001 tax cuts. These tax cuts substantially provided benefits to the wealthy. With these tax cuts, the surplus vanished and the government entered a period of deficit spending.
Part of the idea was that the government would soon be producing a surplus again. The "job creators" who got these tax cuts were supposed to invest their wealth, creating new jobs and initiating a new round of prosperity. This prosperity was then supposed to provide the additional government revenue that would pay off the deficit.

This was Bush's first pet project.

It failed.

Pet Project #2: Bush's 2003 tax cuts - which also provided substantial benefits to the wealthy. This was meant as a stimulus package to prevent (or to get us out of) a recession. It created even larger deficits.

Pet Project #3: An unfunded war in Afghanistan to fight Al-Qaida.

When you put the pieces of the argument together, in part, it boils down to this: "Morality demands that the top 2% not be charged for government pet projects - such as fighting Al-Qaida." Fighting Al-Qaida was a very expensive project - and it was paid for on credit.

When the country goes to war, it is customary to ask everybody to sacrifice something. The Bush Administration had no qualms about ordering members of the middle and lower classes (substantially, people making less than $250,000 per year) who volunteered to serve in the military to risk life and limb in the defense of this country. However, when it came to funding this war, they did not ask those making more than $250,000 to contribute even one dollar to the costs. Instead, they put all of the costs on credit, running up the national debt.

So far, nearly 100% of the cost of fighting Al-Qaida has fallen on the shoulders of those making less than $250,000 per year. Not all of it - but a huge portion of it. Many paid with life or limb. So far, those making more than $250,000 have been asked to contribute nothing towards those costs. It would seem fair – and substantially in keeping with the idea of shared sacrifice in the defense of this country – that those making more than $250,000 cover some of that debt. It is not as this war was merely a gift to the middle and lower class.

Pet Project #4: An unfunded war in Iraq.

It is true that this was a pet project of Vice President Cheney, Secretary of Defense Donald Rumsfeld, and several other members of the Bush cabinet. It is money that should not have been spent. It would be great if we could wave a magic wand and say that the government never launched this project and make this part of the debt vanish from the debt.

However, reality prohibits this type of solution. This war, like the Afghanistan war, was fought on credit, and now we have a bill that has to be paid. It has to come out of somebody’s pocket.

Whose pocket?

As with the war in Afghanistan, those making less than $250,000 per year have already paid quite a bit. They have given life and limb. They have given up careers and left their families. They have sacrificed opportunities to make $300,000 per year so that they can earn a soldier's pay defending this country.

Yet, the call from conservatives it is immoral to have those making more than $250,000 to make a contribution.

Pet Project #5: Recapitalizing the banks after the 2008 financial collapse.

People making more than $250,000 per year decided to make loans on low-quality mortgages, bundle them in with other loans, and sell them to each other to produce tens of billions of dollars in profits, which mostly went into the pockets of people making more than $250,000 per year. When housing prices fell, and these bundles lost their value and the banking system locked up.

To save the economy, the Bush Administration (and, yes, it was the Bush Administration, not Obama) gave huge amounts of money to recapitalize the banks. It basically gave money to millionaires to save them from their own folly and save the nation from another great depression. The government took over their bad debts and put money in their pockets to the tune of hundreds of billions of dollars.

Yet, we are told that morality demands paying for this pet project by cutting services to those making less than $250,000 per year.

Conclusion

So, these are the five pet projects that brought us from surplus to our current state.

(1) Make the rich richer.
(2) Make the rich even richer
(3) War no. 1
(4) War No. 2
(5) Bail out the rich

And morality requires paying for this by cutting services to those making less than $250,000.

The projects have been carried out. They are done. We cannot go back and undo them. The only thing we can do is pay the bill.

So, is it the case that morality requires that 100% of this bill be paid by reducing services to those making less than $250,000 per year? Or is it the case that those who make more than $250,000 per year may be morally obligated to cover some of the cost.

the $1.6 trillion in revenue that Obama is asking for will not even cover the cost of the two wars. So, in effect, the question is, "Should the cost of those two wars be paid for entirely by reducing government services to those making less than $250,000 per year, or should those making more than $250,000 be required to pay something towards the costs of those wars?"

Morality does not permit the government to go to war where those making less than $250,000 pay nearly 100% of the cost.

Secession, Debt, and Responsibility

As tempting as it is to scoff, there is a valid point to be made behind these petitions to secede from the union.

As a response to the 2012 elections and Obama’s victory, people in several states have created petitions asking the government to allow their state to secede from the union. Several have quickly gotten the 25000 signatures in 30 days required for an actual review of their request.

The first response – my first response – was to see this as a childishly immature “cry-baby” response to losing an election. However, when I read some of the comments behind these petitions, I found a valid moral point – a legitimate reason for anger and frustration where “leaving” is a perfectly legitimate response.

Let us imagine a situation with two people.

Person A, we may assume, has put some effort into remaining fiscally responsible. His debt (as a percentage of income) is relatively low, and he works to keep it that way. To do this, he gives up a lot of things – things that it would be nice to have.

However, in this example, Person A has been made responsible for the debts of Person B. If Person B spends more than he can pay back, creditors are being told they can collect from Person A.

Of course, the very reason Person A has money that the creditors can collect is precisely because he has been financially responsible – giving up some of the things he would like to have in order to live within his means.

In this type of situation, it follows that Person B has a moral obligation not to become a financial burden to Person A. If he runs up a huge debt on his own, than his actions are imprudent but not immoral. (Well, breaking a promise to pay back the money would still be immoral.) However, when he runs up a debt under conditions that bring real harm to Person A, in this example, his actions harm another person. In this case, what was imprudent becomes immoral. It is something that a virtuous person would seek to avoid.

However, we have created a situation where immorality is heavily rewarded, while virtue is punished. Person B, in this case, can run up huge bills buying everything in sight – obtaining personal benefit from all of the things that he acquires on credit. Of course, people are great rationalizers, so we can expect Person B to convince himself that he absolutely needs these things and cannot possibly get by without them. Still, he cannot afford them.

As Person A observes Person B’s financial recklessness, he sees his own financial well-being under threat. What good does it do to give up the things that one wants in order to remain financially responsible if somebody else’s reckless behavior ruins one’s efforts anyway?

Person A has two options.

He could decide to become just as financially irresponsible himself. If he runs up his own debt, at least he gets the value of the things the buys on credit – rather than having Person B have all the fun.

The other option – the only option for Person A if he actually values living a finically responsible lifestyle and not ruin his own life with excessive debt – would be to sever his ties with Person B. “Let Person B cover their own debts – or suffer the consequences.”

The most financially irresponsible state governments are blue states. They include California, New York, Connecticut, Oregon, Washington, New Jersey, and Massachusetts. Whereas the financially most responsible states are red states. They include Montana, Wyoming, Nebraska, Oklahoma, Alabama, Tennessee, and Indiana.

Yet, no matter how well these financially responsible state governments do at maintaining their own budgets, they are tied to states who do not seem to be able to act responsibly – blue states. Currently, this blue-state mentality is also in control of the federal government, which already has a severe debt problem.

It is perfectly rational to respond to this by saying, “You may drown in debt, but we will not allow you to drag us down with you.”

Unfortunately, this story has a twist.

As a point of fact, the “red states” are substantially responsible for much of the federal debt. They are the ones who put into office the incompetent George Bush and crew. Through a system of tax cuts for the rich, two unfunded wars, a unfunded prescription drug program, and engineering a financial collapse requiring trillions of dollars to recapitalize the banks, they created a substantial part of the federal debt.

It may be tempting to blame this on Obama. However, they threw the country down this financial well. Obama has only had the opportunity to try to climb out again after the nation hit bottom.

So, in effect, this is still a case in which the “red states” created a huge financial mess and, instead of accepting responsibility for their mistakes and offering to help clean it up, they seek to blame somebody else and run away, leaving others suffer through the financial disaster they voted for.

Consequently, there is still a legitimate objection to be raised against these cry-baby conservatives who (seek to) go running away in a tantrum because they did not get their way. It is still legitimate to say to them, “You created this mess by putting that incompetent in office for 8 years, you will stay around and help clean it up.”

However, this does not change the fact that “blue states” also have a moral obligation – an obligation grounded on a principle not to cause harm to others – to get their own financial houses in order.

Rationality and Self-Regarding Interests

A member of the studio audience as asked me to address the question

Why would it ever be rational to put someone else's (overall/net) well-being ahead of your own?

This is not an easy question to answer, in part because some of the terms are not clearly defied. Specifically, what is meant by "rational" or "well-being".

We could simply define "rational" as that which promotes the well-being of the agent. In this case, it would never be rational for an agent to sacrifice his well-being for another. On the other hand, we could simply define "rational" as "that which maximizes the total number of paperclips". In this case, it would never be rational to do anything that does not maximize the total number of paperclips.

However, these types of maneuvers would invite a new question: "Why should I actually do that which is rational?" Questions about rationality ultimately seem to be questions about what to do. If we preserve this connection, then we have to limit our discussion about what is rational to things that people have a reason to do. If there is no reason to maximize the total number of paperclips, then there is no definition of rationality that makes it rational.

So, we link rationality to what there are reasons to do.

The other term to look at is "well-being".

The trick here is that the term itself is a value-laden term. "well-being" means, "a state of being that is good" or, more relevantly, "a state of being that an agent has reason to realize".

We cannot even answer the question, "Is an agent better off?" without first determining what states the agent has the most reason to bring about. A state of being is not "well-being" without being a state that the agent has a reason to bring about.

Now, we could define rationality in terms of that which promotes a state of being that the agent has the most and strongest reasons to support. In this case, it would still be true that what is rational is that which promotes an agent's well-being.

However, this still invites the question, "Why give one's own state of being a priority over all other states one might have reason to promote - such as the state of somebody else's being?" Can one identify, in the real world, an "ought-to-be-consideredness" that resides solely in the state of one's own being, and in nothing else that exists? In other words, is it the case that concern with other states cannot exist, or can exist but should not?

There is good reasons to hold that other concerns can exist and do exist - and without them the human race would not exist.

The main thesis of Richard Dawkins' The Selfish Gene is the idea that we are disposed to acquire those interests that tend to replicate our genes. These are sometimes incompatible with our own state of being.

Take the desire for sex, as an example - an interest in realizing a state of being in which "I am having sex". This is an interest that tends to promote genetic replication. However, it is often incompatible with the well-being of the agent. Sex consumes time, energy, and other resources (not only in the act of sex but in getting into a state where sex is even a possibility). It makes one vulnerable to otherwise avoidable diseases and other forms of harm. For females, it could result in pregnancy which puts a massive strain on the body - often leading to death. If it results in a live-birth, the self-interested thing to do would be to abandon the infant. However, mothers are disposed to have an interest in the child's well-being.

All of these are explainable in terms of interests molded by evolution - including other-regarding interests. However, they are not explainable in terms of interests only in one's own state of being.

So, other interests - other reasons for action - can exist, and do exist.

Perhaps they ought not to exist.

Here, I am going to offer a negative hypothesis - what reason is there for including some reasons for action and excluding others? What evidence is there for the existence of such an entity? Where, in the material world, do we find the "ought to be considered" within reasons relevant to one's own state of being but "ought not to be considered" within reasons relevant to the well-being of others?

I would hold that there is no reason to postulate such an entity - no evidence for this existence. While this does not imply that such an entity does not exist, the fact that there is no reason to postulate such an entity is as good as we can get - and good enough.

The member of the studio audience asking the original question postulated:

The only thing that I know exists is my own consciousness. I would argue that because of that, the only philosophical axiom that I can stand by is: What is 'good' for my consciousness is 'good'.

Without going into the question of whether one can know of the existence of other things, it does not follow from, "I know of the existence of X" to "What is 'good' for X is good".

If, for example, it were the case that the only thing that I know exists is torture, it would not follow that what is 'good' for torture is 'good'. There is nothing within the state of "I know of the existence of X" that implies "what is good for X is good".

Nor does it follow from "I do not know of the existence of X" that "There is no such thing as good for X". I might not know about the man who was inside a large tank cleaning it when I opened the valve to fill the tank with water. My lack of knowledge does not change the fact that opening the valve is not good for the man in the tank.

The questions of what we know and what is good are as different as the question about what we know and what is true.

Ultimately, I define rationality in terms of means and ends. Given a desire that P, it is rational to do X where X helps to realize P and not to X where X tends to prevent the realiziation of P. Given a set of desires, it is most rational to do that which realizes the most and strongest of those desires. Rationality, in this sense, comes in degrees. This applies to both self-regarding and other-regarding desires. There is no reason in the real world to assign "ought to be consideredness" only to self-regarding desires.

Partisanship and Objectivity

I dislike being partisan.

I tried to join the Democratic Party once. I found too many elements as distasteful as the religious right and the Tea Party. So, I clearly do not think that the Democratic Tribe is a den of perfect wisdom and moral virtue. I walked out of the county convention eight years ago and changed my party affiliation to Independent. (Well, it took me a few years to actually get the paperwork filed.)

One difference is that the Democrats seem to be holding these fringe elements in check. However, I fear that these fringe elements are held in check by the need to do so to win elections. The weaker the opposition to the Democratic Party, the stronger the voice that these fringe elements have.

I am not at all inclined to support Democrats merely because they are Democrats.

Yet, at a time when Republicans deny even the hard sciences of physics, chemistry, and biology - in a system that only has room for two parties - there is not a lot of choice.

Ultimately, Romney's presidential campaign suffered from the same sickness that plagues the whole of the Republican Party generally - confirmation bas. First, they decide what to believe (the Earth is not warming, Iraq has weapons of mass destruction, evolution is impossible, marriage requires one man and one woman. Romney will win the election). Then they go about sorting the evidence. "This supports my belief - it stays. That does not support my belief - it is to be tossed out."

Religion treats confirmation bias as a virtue. It calls this "faith". It is about picking a conclusion that you like and holding onto it, ignoring all evidence to the contrary and twisting the evidence you do have to support your conclusion. I suspect that, with so much praise going into this way of (non)thinking among Republicans, it has infected their policies even on matters where there is scientific (or military intelligence) information to be weighed and elections to be won or lost.

Do you want to believe that Romney will win the election? The polls do not support that conclusion. Well, since the conclusion cannot be questioned, this implies that there is something wrong with the polls. They over-estimate Democratic turnout. They underestimate Republican enthusiasm. How do we know this? Because the polls say that Romney will lose the election and that is the wrong answer. This means we have to find the cause if the error."

This is no different from the view that Scripture is the answer book - that everything in it is true. Does science give us a different answer? Well, then science must be doing it wrong. Either the scientists have made a mistake, or scientists are involved in an evil conspiracy where they are hiding the truth so as to serve a hidden but malevolent agenda.

However, this is not a Republican problem. It is a human problem.

Science is aware of these dispositions and attempts to negate their influence. Scientists do not say, "We are objective and you are not." Scientists say, "None of us can be objective. However, we can set up our experiments so that we can minimize the harm done by our inherent lack of objectivity."

For example, where possible, we must make our research double-blind. Everybody is biased. They see what they want to see and interpret events to fit the model. This means that the person taking the measurements cannot know what numbers she is "supposed" to get. "Is this a member of the study group? Or the control group?" They isolate variables and look for measurable results. They look to see if others can replicate the research.

(Note: Science needs "Journals of Negative Findings" in all fields. There is currently a publication bas where those that report positive results get published, but failure to replicate those results do not get published. Given that science has this bias and admits to it, the next thing is to create tools to correct for it.)

Political parties will be well served to set up institutions to fight group-think as well. It would be useful to have institutions where a person can question the "de dicta" unquestionable truths of the group without being shot - even anonymously.

It would be useful to make this a personal goal as well. "There are intelligent people whom, I have no reason to doubt, are just as good as I am who think I am wrong on this matter. Seriously, why do they think that? Can I get my head wrapped around how a person can fail to see things as I do without imagining him being bent on the destruction of humanity?"

Right now, Republicans might be asking, "How do we make sure our beliefs are true and that we removed bias?"

The answer: Learn science.

The Benefits of a Working Two-Party System

It should be noted that the only place where the Republican Party retained power on the federal level was where they could manipulate the vote by redrawing legislative districts - the House of Representatives.

In votes for the President, for Senators, for statewide ballot initiatives - everywhere they had no authority following the 2010 census to redraw the boundaries in their favor, they lost.

Republican House Majority Leader John Boehner has said that the fact that the voters returned Republicans to the House means there is no mandate in support of the President's budget policies. Yet, the reason people returned Republicans to the house is that the Republicans redrew the legislative districts in 2010 for that purpose. Even here, the Republicans lost seats.

Boehner, I believe, is well aware of this. He stands on an island of Republican construction - and even that island is sinking.

There are any members of the Democratic Tribe who are seeking the coup-de-gras for the Republican Tribe. They are plotting their moves in the next elections to take over enough seats to control the House.

This may not be the best option.

Another option would be a revised and reformed Republican Party that is actually capable of earning their seats rather than holding them through political manipulations. It would be one in which the Republican Party puts up quality candidates who can do a good job in the legislature - candidates who can toss aside the garbage that now contaminates the party and can come to the table with good ideas addressing real-world problems.

This clip offers the best message for the Republicans that can come out of the election.



In this clip, Rachel Maddow is not calling for the demise of the Republican Party - or even its removal from power. She argues that America is served best when different people bring their best ideas to the table to work out a product that has the best of everything.

Bill Clinton delivered the same message at the Democratic Convention. None of us are right all the time. We - each of us - benefit from inviting other people to bring their different knowledge and understanding with them so that, together, we can build something better than that which any one of us - or any group of us locked in a mutual admiration society - can build separately.

Maddow was able to provide a long list of things where the Republican echo chamber had become disconnected from reality - from the birther movement to the denial of global warming and evolution to the belief that if a woman got pregnant than she was not really raped.

These are not matters of policy - they are matters of fact.

There's real problems in the world. There are real knowable facts in the world. Let's accept those and talk about how we might approach our problems differently. Let's move on from there. If the Republican party, and the conservative movement, and conservative media are forced to do that by the humiliation they were dealt last night, we will all be better off as a nation.

Democrat tribalists are engineering more power for themselves.

However, this is not necessarily the best outcome. It invites the Democrats to build their own bubble which, itself, will become disconnected from reality. They will tend to consider only those options mentioned in their own echo chamber, and find themselves incapable of thinking outside the bubble - to the detriment of all of us.

We do not need a take-over by the Democratic Party. We need the Republicans to start coming to the table with real-world solutions to real-world problems that they have approached from a different perspective - because sometimes they are going to have the better solution.

The real change - the positive change - that can come out of this will not emerge in the next election. It will emerge in the next Republican primaries. This is where we will see if the Republicans can put forward candidates who are capable of grasping reality.

Compromise, Arrogance, and the Fiscal Cliff

The Fiscal Cliff looms.

The term refers to a set of automatic spending cuts and tax increases that go into effect or expire at the end of the year - combined with the fact that the debt ceiling will soon need to be raised again.

The government seriously blew it the last time this subject came up. They nearly threw the economy into a second recession with their refusal to govern responsibly, and earned the ire of voters in American and embarrassed themselves (and America) before the world.

In fact, they created this fiscal cliff as a way of forcing themselves to do something constructive on this issue after the elections - because they could not do anything constructive at the moment.

The time to do something constructive is here.

It seems that the Tea Party - the architect of the previous train wreck - has been humbled a bit in the elections. However, it is unwise to assume that they are politically impotent or that they have any moral qualms with driving the country off of such a cliff. They believe that the fearlessness with which they will destroy the country gives them power and will force others to yield to their demands.

This time, I wish to encourage the supporters of a rational compromise to help to ward off this outcome by pre-empting those moves with vocal and active opposition to the attitudes behind it.

The target of this call for rational compromise is the uncompromising position of "no revenue increase." It is a call to declare that position morally unconscionable.

It is one thing to go to a bargaining table with the view, "This is what I think is best. Let us hear what you think is best. Perhaps one of us can change the mind of the other. Failing that, perhaps we can patch together something that contains those elements we each think is most important and in which we each give up those elements we think can best be given up. We will both leave the table supporting a package containing elements we believe will fail - but that is how compromise works."

Going to the table with a promise not to raise revenue replaces this morally mature attitude with utter arrogance. Such a person is saying, "I promise not to listen to any arguments against my position. I will consider no fact or line of reasoning that might suggest that my position is in error. I will keep my position to the end of time and will not allow any argument that you present - to change my mind. "

The arrogance actually goes further than this.

A person can believe that she is right and still accept that a compromise position must contain elements that she disagrees with simply because of the possibility (however unlikely) that one is wrong. You do not need to always convince me that you are right to get me to compromise. It will be enough for you to convince me that you have considered the complexities of the case and have sensible arguments supporting your position. In this type of case, while I still hold that you have made a mistake you cannot see, I allow for the possibility that I have made a mistake that I cannot see and allow your view to determine some of the final result on those grounds - even though you have not convinced me that I am wrong.

The person who refuses to compromise - who promises not to compromise - shuns even this. The attitude is quite like saying, "The great and all-knowing me cannot possibly be mistaken. Not only do I refuse to listen to any arguments or evidence suggesting that I am in error, I refuse even to conceive of the possibility of error."

This leads to the question, " What is the weight of an immoral promise?"

Let's say that a person promises a friend to kill his ex spouse's favorite pet, or to vandalize her car, or to support a malicious slander against her. After a moment of reflection, this person realizes that what she had promised to do something no decent person would do.

The immorality of the act renders the promise null and void. It us time to go back to the person to whom one made the promise and say, "First, I regret to inform you that I must break my promise. Second, what type of creature are you that you would have me make or carry out such a promise anyway?"

Besides, there is no promise that cannot be broken if a greater concern arises. If I promise to meet you for lunch, and I am the first to arrive at an accident where a hit-and-run driver hit a young boy on a bicycle, my obligation is to the young boy - not to keep such a promise.

Certainly, in the heart of a decent and respectable individual, governing the nation would be considered an issue of extreme importance.

We have very little time to work on this issue.

It is time to take names of those who refuse to compromise and to raise the public ire against any who would display that level of arrogance. In fact, the time that the government approaches this fiscal cliff is a good time to promote the social attitude that a promise not to compromise is a promise not to govern. It displays the utomost arrogance and those who would do such a thing should feel shame.

Promoting such a social attitude involves publicly and frequently condemning those who display this arrogance. "So, what you are saying is that you are so perfectly wise that there is no conceivable way that anybody who disagrees with Your Greatness might contribute something of value to these negotiations." That accusation should be leveled at anybody who absolutely refuses to accept any form of revenue increase as a part of a budget compromise.

Because, on this issue, that is exactly what they are saying.

Republican Moral Reforms

I am hoping that the election will prompt the Republican Party to do some soul searching and make some badly needed changes. I am not a political strategist. However, I would like to think that the Republicans could benefit from a greater appreciation and respect for the difference between right and wrong.

First, Romney was as blatant of a liar that has ever run for public office. He did not even try to hide it. Strategists will credit Obama's victory in Ohio to the auto bailout. However, hand-in-hand with that was Romney's lie that the car companies Obama saved were moving jobs overseas. This angered the leadership of those companies. When Romney refused to repudiate the lie, this seemed to anger them to take steps to oppose Romney. Chrystler gave its employees the day off so they could go vote.

Adopting a moral position against lying and other forms of deception should include the types of deceptive claims put forward on substantive issues such as climate change. Republicans need to get into the habit of responding to claims like, "One volcano produces more greenhouse gas than humans put out in a decade," with "Actually, that is not true. Each year humans release more greenhouse gasses than all of the volcanoes for the past forty years. It is as if we create 40 man-made volcanoes for every natural volcano."

That's a scientific fact. People can debate its implications for climate change, but it is still a fact. If the Republican Party were to adopt a moral appreciation for truth, it would include a respect for statements such as this and a rejection of claims that are false.

Second, Romney displayed arrogance towards the voters by refusing to tell them the details of his plans when he got into office. Effectively, Romney us as children. "Don't fret the details, little ones. Papa Romney knows what he is doing. Trust me. Now, let me have the controls." It would do the Republicans some good to repudiate this type of condescending arrogance towards the voters.

Third, besides learning honesty and respect for voters, I suspect that this election will actually see Republicans repudiation the remnants of racism and other forms of bigotry that still reside in the Republican Party. In particular, I expect that Latino Republicans are going to see a huge boost in power and influence starting immediately. Many will see them as the savior for the party - the only way they can win the next Presidential election. This, in turn, will require suppressing the racist voices that still speak within the party.

Many Republicans have seen the necessity of this move for a long time. The Bush Administration pushed for immigration reform, but the racist faction of the Republican Party objected. Those who objected have now cost the Republicans a presidential election many think they should have won. Those racists elements will now be further marginalized, as they should be.

Fourth, I would also suggest that the Republican Party soften its hostility towards gays. It can drop the biblical arguments against homosexuality just as they dropped the biblical arguments against integration and the subjugation of women (the latter two also needing some work but have at least moved in the right direction). It does not violate its limited government principles to say that the government has no business regulating the relationships of consenting adults. I expect that those who will rise to leadership in the Republican Party will have openly gay advisors and defend them against the rabid bigots in the party, as they defend black Republicans.

The fact is, the Republucan attitudes concerning lying, arrogance, and bigotry all represent moral failings. Without these moral failings, the Republican Party would be stronger than it is.

An Economic Failure on the Liberal Side

I spent some time last week discussing where Romney's economic plans will fail - how he ignores the problems of positive and negative externalities, imperfectly informed and rational agents, and the effect of wealth differences on the "invisible hand" of the market.

Today, I will explain a failure on the other side.

It is a failure to recognize that big-budget government agencies will be hijacked to provide massive benefits for those who have the resources to manipulate the system. Well-intentioned bureaucrats cannot prevent this. The economics make it far too easy for those with resources to loot the public trough.

One manifestation of this is the way that regulated industries take over the agencies that regulate them. It then becomes a tool for stifling competition by increasing the cost of forming a new company and entering the market. It also becomes a tool for regulations that add to everybody's costs and funneling that money into the pockets of a few.

Simply imagine a hypothetical program that will take $1 out of each of our pockets and give it to Company C. We each are $1 poorer. Company C is $300 million wealthier. For $1, it is not even worthwhile for you or me to even know that this program exists. The 15 minutes it takes us to read the basic description already represents a net loss. Investing the time and paying the money to campaign against it is foolish.

Yet, Company C can invest $50 million in campaign contributions, lobbying, paid advertisements, phony studies, talking points handed out to sympathetic media personalities, getting "findings"posted on sympathetic web sites, hiring people to cruise the web looking for discussions to "contribute" to - all of this, and still make a $250 million.

In fact, using these hypothetical numbers, the company can invest in 5 projects of this type, fail 5 out of 6 times, and still make a substantial $50 million profit. It can afford to set up departments geared specifically toward this type of profit-seeking.

Most of the bills that legislators present are not written by the legislators or the staff. They are written by lobbyists who present the text to the legislator saying, "I want you to support this bill."

We do not need to imagine a corrupt legislator. The lobbyist as done her job and can bombard the legislator with arguments as to why the bill is a good idea. "It helps the economy." "Our company will produce more jobs." All of this ignoring that the money taken out of the pockets of others and funneled into the corporate bank accounts is money they will not be spending and jobs that will not be lost as a result.

Where is the legislator going to find the counter-arguments? It does not pay for anybody else to go through and do independent research. The companies that make these proposals get wealthier and "invest" some of that wealth in more proposals. Anybody doing opposition research gets poorer with every proposal they investigate. Even a person who takes up this task out of a sense of civic responsibility will find themselves unable to afford to continue.

The effectiveness of the corporate lobbying is augmented by the revolving door between the regulatory agency and the business. The business uses some of its profits to hire those who leave the agency. These people then have connections with those in the agency. They understand its inner workings. They know the people they leave behind - know how they think and what motivates them. They know the regulations and the weaknesses in enforcement. They know how to bring about a success rate of better than 1 in 6 - and that makes them worth a great deal of money to the companies they regulate.

Even those who remain in the agency understand these rules. "If I anger these companies I am supposed to be regulating, I can kiss goodbye any hopes of a high 6-figure salary with stock options when I leave."

We do not need to postulate "corrupt" regulators in the classical sense to get these results. People judge their conclusions at least as much on emotion as they do on evidence. They believe what they want to believe - and the potential for huge salaries and other benefits provide a lot of weight for what one wants to believe. The arguments that will ultimately allow a person to profit simply "feel" better than those that do not. They "make sense" and "seem true".

An examination of climate change denial shows this phenomena. The mere fact that these truths cut into some people's profits causes them to see climate change as a hoax and to see problems that reason alone would never accept. They are not seeking to cause harm. They are simply refusing to accept the fact that their behavior (what profits them) produces harm.

A lot of the work is not even done on the legislative level. Rules have to be interpreted. It is worthwhile for the company to hire the lawyers and "experts" to argue for one interpretation, while the harms are so spread out that it is not worth it to anybody to argue against it.

We can well bet that since Obamacare was passed, the medical industry has been hard at work fighting for interpretations that will cost each of us $1 here and $5 there - but which will funnel hundreds of millions of those dollars into the pockets of the companies making the investments. Yet, neither you nor I have the resources to even keep track of what us happening in the lower reaches of the agencies managing this program.

The industries being regulated are sure watching, and certainly investing money to get the results they want.

The rest of us - we lose $1 here, $5 there . . . a couple of thousand of these programs getting through a government bureaucracy and we have a lot of money being transferred from the poor and middle class to the rich.

The 2014 Elections

A pool player will tell you, with each shot you take, to think about the shot that follows. Where the cue ball stops is nearly as important as getting the ball in the pocket.

So it is with elections. The 2014 elections have already started. If you care about how they turn out, it is past time to get started.

Though I have a particular interest in the American elections, these points are applicable to any democratic society.

One mistake I see a lot of people make is to assume that politicians have nearly unlimited power to change things.

One place I see this in complaints about what Obama has or has not accomplished. Obama may well lose this election. Still, irrational people with a weak grasp of reality condemn him for not taking actions that, in the real world, would have added nails to what is already a nearly shut political coffin.

Examples here range from failure to address climate change to a failure to close the Guantanamo Bay detention center and the use of drones against suspected terrorists (some of whom are American citizens).

The political reality of the situation can be illustrated by looking at the underwear bomber - Umar Farouk Abdulmutallab - who attempted to detonate a bomb he wore in his underwear while on a plane landing in Detroit on December 25, 2009.

Imagine the political implications if he had been successful.

Republicans would have immediately demanded investigations looking to find fault. They would have certainly found things that they could have spun into reason to condemn President Obama. They would interpreted events with an eye to getting Democrats removed from office and broadcast those interpretations on media that they control. They would have, in fact, succeeded in removing several Democrats from office and politically weakening those that remained. The very fact of 289 bodies at a cash site in Detroit would have guaranteed that.

In this investigation, any evidence that the Obama administration failed to pursue certain options out of respect for "rights" or morality or even respect for the Constitution would have been presented as a reason to remove Democrats from office. The argument would be that terrorists have no rights, and nothing in the Constitution should ever be interpreted as preventing the President from keeping Americans safe. The idea that the President, as commander in chief, is limitless in power would have seen a whole new life.

When the Republicans regained control of the government, they would have done so with a mandate to take new and bold steps in the war against terror."

The political reality is that, given the current attitudes of the American people and the structure of the media, the Office of President can only be held by a person willing to do whatever it takes - without respect to rights or morality or Constitutional limits - to prevent another terrorist attack on American soil. He will not be condemned for it - or criticized or removed from office for doing so. He will only be praised. The only question a rational voter can ask is, "What are the other qualities we want in a President that will ignore rights, morality, and the Constitution in preventing another terrorist attack?"

In all of this, rationality-deficient liberals insist on ignoring reality and, as usually happens when reality is ignored, make things worse.

In 2011, after political gridlock over raising the debt ceiling that significantly weakened the economy (itself a threat to the President), the National Defense Authorization Act was passed. It contained an amendment "affirming" that the President has the power to use the military to detain citizens suspected of involvement in terror. The President has no authority to veto individual amendments. Obama's only choice would have been to veto the entire Defense Authorization bill - which would have fed a growing political and economic chaos.

Obama did the responsible thing and signed the bill.

However, ultra liberals were quite vocal in condemning Obama for this, without even mentioning the names of those who supported and insistent on "affirming" these powers. In doing so, they politically weakened Obama and politically strengthened those who think that the ability to detain Americans indefinitely on the mere suspicion of a crime is a good thing.

Another case in point:

These rationality-deficient liberals also condemn Obama for not closing Quantanamo Bay.

On December 15, 2009, Obama issued a Presidential Memorandum closing the detention center and moving the prisoners to the United States. Congress then attached amendments to bills that would have been exceptionally costly for Obama to veto that restricted the use of federal funds for this plans - making it illegal for the President to close Guantanamo Bay. However, these liberals responded - not by condemning those who fought for this legislation, but by weaking the political status of those who would have opposed the legislation if they had the political standing to do so.

What thinking, rational people would be trying to do in the time between elections is to create a political environment in which politicians could then do the right thing and get credit for it. This means working to politically strengthen the politicians who are seeking to do the right thing, and weaken those who do the wrong thing. This is quite the opposite of the apparent liberal agenda of weakening those who would do the right thing if they could, and strengthening those who oppose what they claim to want to defend.

This requires taking the argument to the people themselves. It requires explaining to them effectively (and by "effectively" I mean seeking the expertise of professional communicators) about why these unlimited powers are not such a good idea. "Without safeguards, these powers that can be used to keep you safe from terrorists can also be used to keep powerful people with lots of money safe as they engage in all sorts of abuses against you and those you care about - effectively making you serfs within a corporate fiefdom, even to the point of being required to defend the lord's or lady's corporate castle if it should ever come under attack."

When the people condemn unlimited government power as a threat to their real-world security . . . when the people demand that steps be taken to avoid burdening our children and grandchildren under a mountain of debt in a planet suffering the ravages of human-induced climate change . . . when the people oppose torture and demand a fair trial for the accused . . . then politicians will do so as well. However, unless and until one changes the minds of the people, demanding that politicians in office ignore these political realities is just plain foolish.

The next elections have already started. Those elections will measure the political environment that determine who politicians who wish to stay in office must behave in order to keep their job. Molding that political environment means talking to friends, family, neighbors, participating in advertisements, and making contributions of time and effort that aim to influence the opinions, not of politicians, but of voters.

You have to go to the people - and not just the echo chamber of those who already agree with you. You have to reach those who are undecided, or who can be made undecided. This is how one will influence what happens in the next election.