A Brief History of American Prosperity

An entrepreneurial culture and the rule of law have nourished the nation’s economic dynamism

By Guy Sorman

Worry over America’s recent economic stagnation, however justified, shouldn’t obscure the fact that the American economy remains Number One in the world. The United States holds 4.5 percent of the world’s population but produces a staggering 22 percent of the world’s output—a fraction that has remained fairly stable for two decades, despite growing competition from emerging countries. Not only is the American economy the biggest in absolute terms, with a GDP twice the size of China’s; it’s also near the top in per-capita income, currently a bit over $48,000 per year. Only a few small countries blessed with abundant natural resources or a concentration of financial services, such as Norway and Luxembourg, can claim higher averages.

America’s predominance isn’t new; indeed, it has existed since the early nineteenth century. But where did it come from? And is it in danger of disappearing?

By the 1830s, the late British economist Angus Maddison showed, American per-capita income was already the highest in the world. One might suppose that the nation could thank its geographical size and abundance of natural resources for its remarkable wealth. Yet other countries in the nineteenth century—Brazil is a good example—had profuse resources and vast territories but failed to turn them to comparable economic advantage.

A major reason that they failed to compete was their lack of strong intellectual property rights. The U.S. Constitution, by contrast, was the first in history to protect intellectual property rights: it empowered Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” As Thomas Jefferson, who became the first commissioner of the patent office, observed, the absence of accumulated wealth in the new nation meant that its most important economic resource was innovation—and America’s laws encouraged that innovation from the outset. Over two centuries later, the United States has more patents in force—1.8 million—than any other nation (Japan, with 1.2 million, holds second place). America is also the leader in “triadic patents” (that is, those filed in the United States, Europe, and Asia) registered every year—with 13,715 in 2009, the most recent year for which statistics are available, ahead of Japan’s 13,322 and Germany’s 5,764.

We Are Managing Uncertainty

Ubiquity, Complexity Theory and Sandpiles

By John Mauldin

We are going to start our explorations with excerpts from a very important book by Mark Buchanan, called Ubiquity: Why Catastrophes Happen. I HIGHLY recommend it to those of you who, like me, are trying to understand the complexity of the markets. Not directly about investing, although he touches on it, it is about chaos theory, complexity theory and critical states. It is written in a manner any layman can understand. There are no equations, just easy to grasp, well-written stories and analogies.

 As kids, we all had the fun of going to the beach and playing in the sand. Remember taking your plastic buckets and making sand piles? Slowly pouring the sand into an ever bigger pile, until one side of the pile started an avalanche?

Imagine, Buchanan says, dropping one grain of sand after another onto a table. A pile soon develops. Eventually, just one grain starts an avalanche. Most of the time it is a small one, but sometimes it builds on itself and it seems like one whole side of the pile slides down to the bottom.

Well, in 1987 three physicists, named Per Bak, Chao Tang, and Kurt Weisenfeld began to play the sandpile game in their lab at Brookhaven National Laboratory in New York. Now, actually piling up one grain of sand at a time is a slow process, so they wrote a computer program to do it. Not as much fun, but a whole lot faster. Not that they really cared about sandpiles. They were more interested in what are called nonequilibrium systems.

They learned some interesting things. What is the typical size of an avalanche? After a huge number of tests with millions of grains of sand, they found that there is no typical number. "Some involved a single grain; others, ten, a hundred or a thousand. Still others were pile-wide cataclysms involving millions that brought nearly the whole mountain down. At any time, literally anything, it seemed, might be just about to occur."

The piles were indeed completely chaotic in their unpredictability. Now, let's read this next paragraph from Buchanan slowly. It is important, as it creates a mental image that may help us understand the organization of the financial markets and the world economy. 

The Economic Ignorance of Central Planners

If we want better jobs numbers, we need to deregulate labor markets

by Richard A. Epstein

One story has dominated the economic news this past weekend. The story is that job creation has slowed to a “trickle,” in the words of a Wall Street Journal headline. Only 88,000 new jobs were created in the month of March. That feeble rate was accompanied by the “good” news that the jobless rate, which only counts those actively seeking work as unemployed, had dropped from 7.7 to 7.6 percent.

The real news was that the decline in the unemployment rate was explained by the separation of nearly half a million people from the workforce, so that labor-force participation shrunk from about 67.3 percent in early 2000 to about 63.3 percent today. A crude first approximation of the real unemployment rate would add back at least 4 lost percentage points. A more accurate estimation of the actual unemployment rate would account for those individuals who were out of the market by 2000 in part because of the impediments to market performance that were already in place. 

With these weak numbers, the political discussion has continued to focus on job creation and economic growth: How should these goals be accomplished? On “All Things Considered,” I heard E.J. Dionne advise that the Federal Reserve should keep its foot on the accelerator, by opening the cash spigot and keeping interest rates at their historic lows. At the same time, the rest of the government should put worries about the deficit aside—or so the argument goes—by increasing public expenditures funded in part through higher taxes on the top one percent. David Brooks rightly disparaged that prescription, but still was unable to identify that “big structural change” he hoped would turn the economy around.

Obama’s Misshapen Tax Policy

President Obama had, of course, no doubts on what should be done. In his view, we should double down on the same policies that he has championed since coming into office. His new proposed budget modestly chips away at the cost-of-living increases in Social Security spending, which has drawn fierce resistance from his party’s incorrigible left wing.

But his preferred long-term changes all cut in the opposite direction. The President has renewed his call for capping the charitable deduction at 28 percent—a dreadful idea—even as he tries to steepen the level of progressivity of the income tax. In addition, the President unveiled a proposal to slash the amount of money that individuals can keep in their tax-deferred retirement accounts to $3 million per person. Putting aside the transitional problems that dog this proposal, the simple point is that additional taxation is likely to further retard the creation of jobs and wealth, by shrinking the size of the largest pool of private investment funds in the United States.

The Fed, Lost In The Wilderness

The financial system has “gotten away from” the Fed’s ability to comprehend

by Paul Singer

The Fed is primarily responsible for that state of affairs, and it is out of its depth. Former Chairman Greenspan created – and reveled in – a cult of personality centered on himself, and in the process created a tremendous and growing moral hazard. By successive bailouts and purporting to understand (to a higher and higher level of expressed confidence) a quickly changing financial system of growing complexity and leverage, he cultivated an ever-increasing (but unjustified) faith in the Fed’s apparent ability to fine-tune the American (and, by extension, the world’s) economy. Ironically, this development was occurring at the very time that financial innovations and leverage were making the system more brittle and less safe. He extolled the virtues of derivatives and minimized the danger of leverage and risky securities and dot-com stocks, all while he should have been putting on the brakes. 

It was not just the disappearance of vast swaths of the American financial system into unregulated subsidiaries of financial institutions, nor was it just government policies that encouraged the creation and syndication of “no-documentation” mortgages to people who could not afford them. It was also the low interest rates from 2002 to 2005, the failure to see the expanding real estate bubble caused by an unprecedented increase in leverage and risk, and the general failure to understand the financial conditions of the world’s major institutions. 

Under Chairman Bernanke, the combination of ZIRP and QE completed the passage of the Fed from sober protector of a fiat currency to ineffective collection of frantically-flailing, over-educated, posturing bureaucrats engaged in ever more-astounding experiments in monetary extremism.

If you look at the history of Fed policy from Greenspan to Bernanke, you see two broad and destructive paths quite clearly. One path is the cult of central banking, in which the central bank gradually acquired the mantle of all-knowing guru and maestro, capable of  fine-tuning the global economy and financial system, despite their infinite complexity. On this path traveled arrogance, carelessness and a rigid and narrow orthodoxy substituting for an open-minded quest to understand exactly what the modern financial system actually is and how it really works. The second path is one of lower and lower discipline, less and less conservative stewardship of the precious confidence that is all that stands between fiat currency and monetary ruin. Monetary debasement in its chronic form erodes people’s savings. 

Will The 21st Century Be A Horror Show Of Epic Proportions?

Short Answer - NO

By Tim Reuter

In 2006, Mark Steyn reached two conclusions from his study of anemic Western demographics in his book America Alone. The post World War II global order led by the United States is literally dying, and the future belongs to Islam.

David Goldman, Spengler at Asia Times Online, dismisses those contentions as bogus. “The fastest demographic decline ever registered in recorded history is taking place today in Muslim countries.” World fertility fell from 4.5 to 2.5 children per woman over the past half-century, but “two or three times faster” in Islamic nations. Moreover, the severity of this drop is exacerbated by the “lapsed time” in which it is occurring. Europe spent two centuries descending to its present demographic nadir. Islamic societies are “attempting it [collapsed fertility] in twenty.”

But, this rush towards demographic oblivion is still cause for alarm. It “makes radical Islam more dangerous” because of “Spengler’s Universal Law #1 – A man or a nation at the brink of death does not have a rational self-interest.” As Islamic societies choose de-population, their rational calculus changes. The radicals’ boast that “you love life and we love death” is revealing in this regard. Radical Islamists have chosen to die fighting, rather than watch their societies self-terminate. As Goldman quips, “the flip side of suicide by infertility is jihad.” And, he marshals statistics, history, and philosophy to offer chilling predictions and disturbing recommendations.

Goldman draws on mounds of data to diagnose the Islamic world’s ills, and he dismisses Steyn’s thesis with the qualification of poverty. Old people are an existential threat to Islamic nations because they possess a fraction of Europe’s $30,000 GDP per capita circa 2009. The Middle East’s elderly “rely on their children to care for them.” But today’s bulge of young people will find that neither wealth nor descendants will exist to support them in their old age. The first signs of looming ruin are already apparent in states suffering drastic demographic drop-offs such as Iran (six children per woman), Turkey (five) and Egypt (four)

If you must rescue everything, then ultimately you will be able to rescue nothing.

If The Economy Is So Fragile That Government Can't Allow Failure Then We Are Indeed Close To Collapse

By Seth Klarman

Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?

Most people seem to viscerally recognize that the absence of an immediate crisis does not mean we will not eventually face one. They are wary of believing promises by those who failed to predict previous crises in housing and in highly leveraged financial institutions.

They regard with skepticism those who don't accept that we have a debt problem, or insist that inflation will remain under control. (Indeed, they know inflation is not well under control, for they know how far the purchasing power of a dollar has dropped when they go to the supermarket or service station.)

They are pretty sure they are not getting reasonable value from the taxes they pay.

When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute. They know the trajectory we are on.

When politicians claim that this tax increase or that spending cut will generate trillions over the next decade, they are properly skeptical over whether anyone can truly know what will happen next year, let alone a decade or more from now.

They are wary of grand bargains that kick in years down the road, knowing that the failure to make hard decisions is how we got into today's mess. They remember that one of the basic principles of economics is scarcity, which is a powerful force in their own lives.

They know that a society's wealth is not unlimited, and that if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse. For if you must rescue everything, then ultimately you will be able to rescue nothing.

The Economics Of Decline

There is always a price

by Mark J. Grant

I have long stated that one of the ways our current party might end is by an “Event.” The most likely suspect here has long been in Europe. An uprising, a change in the democratic political climate, a refusal to accept more funding with onerous terms, a refusal to fund as cash runs out. There are a host of possibilities here. 

It is more than likely that Portugal will be back at the trough soon and then there is Slovenia and more money for Greece and there is quite a list of upcoming traumas. It is also likely that Italy and Spain may be forced to the window and then the calls on capital will be enormous.

Leaving some “Event” aside however we are surely facing an economic decline both in Europe and in America. The reason is simple enough; it is the consequence of what the central banks are doing. The lowering of interest rates to miniscule levels has a cost and while the cost is not immediately paid or apparent; it is there and now, after some time has passed, right in front of our noses.

Consumers and investors and the people with money are what keep any economy growing. As each month passes and as months turn into years since the central banks began their actions; disposable income has been declining. If you got 5.00% on a ten year Treasury and now you are getting less than 2.00% then possible purchasing power has declined by 60%. This is true for all classes of fixed income assets. While bond compression has helped with portfolios; maturities and calls are causing havoc with available funds that can be spent. Those with money have significantly less to spend.

Civil Liberties After Boston

High stakes for law enforcement

by Richard A. Epstein

In the aftermath of the terrorist bombing—no lesser word will do—at the Boston Marathon, a major debate has broken out over the proper law enforcement procedures in two key areas: general surveillance and targeted searches. Many insist that a general right to privacy should limit the first, and that concern with racial and ethnic profiling should limit the second. Both of these overinflated concerns should be stoutly resisted.

The task of unearthing terrorist activities is like looking for a needle in the haystack. Even the best system of oversight and surveillance will turn up an extraordinarily high percentage of false positives, for the simple reason that the odds of any given lead providing useful information, although hard to estimate, may be very small. It takes, therefore, a very large payoff indeed to justify government action in those cases, which is why police surveillance and monitoring should receive high priority only in cases where the risk justifies the large public expenditures and the serious intrusions on privacy of those targeted individuals. At this point, the questions arise of what kind of surveillance should be used, and when and how law enforcement officials can target particular individuals. 

The Way Forward on Surveillance

The Tsarnaev brothers’ attack at the Boston Marathon has brought forth an insistent public call for an increase in surveillance to detect suspicious activities before it is too late. To be sure, there are always technical difficulties in using surveillance devices. But any objection on that ground should be treated solely as means-ends questions, which can in large measure be answered by improved software in such key areas as facial recognition detection. The moral, social, and constitutional objections are sadly misplaced.

Liberal Learning in the Marketplace

Thinking About Liberal Education With Adam Smith

 

by Joseph M. Knippenberg

I make no claims to a high level of expertise in the philosophy of Adam Smith.  This is the first time I have spoken about Smith outside of a classroom setting.  I assign selections from The Theory of Moral Sentiments and The Wealth of Nations in a sophomore-level core course, so the students and I discuss his work without any of us proposing to specialize in it.  The irony of approaching Smith in this way is certainly not lost on me.

Nonetheless, I think that it makes sense to think about liberal education with Smith because we live, work, educate, and are educated in a “market society.”  It is impossible not to think about the “job market,” the “higher education marketplace,” and so on.  The notion of liberal education certainly antedates the ascendancy of the capitalist market, and the question of how the two fit together, if at all, ought to be taken seriously by all those who profess to be devoted to liberal learning in the contemporary world.

Let me take as my point of departure Smith’s discussion of the division of labor in Book I of Wealth.  There he argues that this very division of labor is the principal cause of the wealth of nations, perhaps the most important consideration in an account of the human good.  The great collective wealth, from which we all benefit to one degree or another, follows from the division of any complex work into a multitude of smaller tasks.  In the course of explaining why this arrangement is so productive, Smith makes a number of arguments, the last of which has to do with the role of inventions and machinery in enabling us to accomplish these smaller and simpler tasks more efficiently and hence more productively.  Many labor-saving machines are themselves, he avers, products of the division of labor.

Men are much more likely to discover easier and readier methods of attaining any object, when the whole attention of their minds is directed towards that simple object, than when it is dissipated among a great variety of things.  (165)

There are a few of things about this statement that are noteworthy.  In the first place, Smith is stating what is arguably a general truth about the human mind: at least when it is seeking means toward an end, it gains power through a narrowed focus.  In any human endeavor, it would seem, specialization seems to produce greater results than synopsis and synthesis, than taking a sort of grand overview. The latter seems, as Smith says, to be kind of “dissipation,” hardly a compliment in any circumstance.  Second, this observation has no necessary bearing on theory for its own sake.  Means-end rationality, or (if you will) instrumental reason, profits from this narrow focus.  It is hard to believe that (grand) theorizing as an end in itself would similarly benefit.  It would not then be “grand,” would it?

The Art of the Impossible

Politics is the art of the impossible 

By Thomas Sowell

Someone called politics "the art of the possible." But, in the era of the modern welfare state, politics is largely the art of the impossible.

Those people morbid enough to keep track of politicians' promises may remember how Barack Obama said that ObamaCare would lower medical costs — and lots of people bought it.

But if you stop and think, however old-fashioned that may seem these days, do you seriously believe that millions more people can be given medical care and vast new bureaucracies created to administer payment for it, with no additional costs?

Just as there is no free lunch, there is no free red tape. Bureaucrats have to eat, just like everyone else, and they need a place to live and some other amenities. How do you suppose the price of medical care can go down when the costs of new government bureaucracies are added to the costs of the medical treatment itself?

By the way, where are the extra doctors going to come from, to treat the millions of additional patients? Training more people to become doctors is not free. Politicians may ignore costs but ignoring those costs will not make them go away.

With bureaucratically controlled medical care, you are going to need more doctors, just to treat a given number of patients, because time that is spent filling out government forms is time that is not spent treating patients. And doctors have the same 24 hours in the day as everybody else.

When you add more patients to more paperwork per patient, you are talking about still more costs. How can that lower medical costs? But although that may be impossible, politics is the art of the impossible. All it takes is rhetoric and a public that does not think beyond the rhetoric they hear.

The Ides of March

The American Republic and the Long Shadow of Rome

by Stephen M. Klugewicz

“Beware the Ides of March!” Thus the soothsayer warned Emperor Julius Caesar on the 15th of March, 44 B.C. On that day, Caesar, who had overturned the Roman republic and made himself a tyrant, was assassinated by a group of Senators, including his friend, Brutus. In the eponymous play by William Shakespeare, the Senators begin to stab Caesar, who tries to resist the assault until he sees Brutus also wielding a knife against him. “Et tu, Brute?” Caesar utters in disbelief before collapsing.

The figure of Brutus—the assassin of the tyrant— cast a long shadow over American history. “Brutus” became the pseudonym of one of the most famous Antifederalist authors (probably Robert Yates of New York), who wrote essays in opposition to the proposed Constitution of 1787, which he believed dangerously consolidated power in the central government. In setting up their own republic, the American Founders looked to the Roman Republic as a model for what they should be and to the Roman Empire embodied by Caesar as a portent of what they feared the republic could become. Americans feared that liberty was fragile and that the republic could be undone by the ambition of one man.

The Framers of the American Constitution were indeed wary of the rise of a Caesar —after all, King George III was in their minds—and designed the presidency with great care in an effort to prevent any abuse of executive power. Under the Articles of Confederation, there had been no executive, no judicial branch. The government consisted of a unicameral legislature, which lacked, among other powers, the authority to tax either the people directly or the states. All that the Congress could do was request money from the states. It was the perceived weakness of this government that sparked the call for the Philadelphia convention of 1787.

The debate about the structure of the executive branch was a source of much contention among the delegates at Philadelphia. At least twelve of the fifty-five wanted the executive power diffused among two or more men. Though a strong executive was considered dangerous by many, there was among other delegates a fear of making the executive too weak. As colonies and now young states, Americans had seen that legislatures could act just as tyrannically as executives. And this was true even of their experience with England. Many—perhaps most—of the American colonists’ complaints in the 1760s and 1770s were directed against Parliament, not the king.

Homage to Orwell

Revisiting George Orwell’s classic account of the Spanish Civil War, 75 years on

by Mick Hume 

George Orwell could have been killed twice in the Spanish Civil War. Once when he was shot in the throat by General Franco’s fascist forces; then when he was hunted by official Communist agents who, with the backing of Stalin’s Soviet Union, stabbed the revolution in the back and imprisoned, tortured and killed leading leftists and anarchists who were ostensibly on the same Republican side. Orwell learned the hardest way that the war against fascism in Spain was also a civil war against Stalinism.

Homage to Catalonia, Orwell’s famous account of his time in Spain from his arrival in Barcelona on Boxing Day 1936 to his escape in June 1937, has just reached its seventy-fifth anniversary. Like its author, the book almost didn’t make it either. The radical journalist and author’s usual publisher, Victor Gollancz, turned the book down without even seeing the manuscript, insisting that he would not publish anything ‘which could harm the fight against fascism’ by criticising the Communists.

Most of those from Britain and Europe who went to write about and fight in the Spanish Civil War took a similarly one-eyed view and followed the pro-Soviet line. What was unique about Orwell was that he hated fascism, but also stood apart from the official Stalinist-dominated left of his time. The radical maverick wrote about what he saw in Spain, rather than simply what he was told was true – although he also warned his readers to ‘beware my partisanship’ when seeking an objective account. He questioned the ‘official’ Stalinist-dictated account of events in Barcelona and elsewhere that was accepted around the world. This heresy made him the subject of a hate campaign when Homage to Catalonia was finally published in 1938, a campaign which continued well into the 1980s.

Is America Ensnared in an Endless War?

When the president does it, that means that it is not illegal

by Patrick J. Buchanan

So said Richard Nixon in his interviews with David Frost. Nixon was talking about wiretaps and surreptitious entries to protect lives and safeguard national security in a violent and anarchic war decade.

The Nixon haters pronounced themselves morally sickened.

Fast forward to our new century. For, since 9/11, we have heard rather more extravagant claims by American presidents.

Under George W. Bush, it was presidential authority to waterboard, torture, rendition and hold enemy aliens in indefinite detention at Guantanamo.

Under Barack Obama, we don’t have a Nixon “enemies list” of folks who are not to be invited to White House dinners. Rather, we have a “kill list” — a menu from which our constitutional law professor president selects individuals to be executed abroad.

Not only in Afghanistan, but Pakistan, Somalia, Yemen and who knows where else. And not just foreigners, but Americans, too.

When may Obama order an American killed?

According to a Justice Department “white paper,” any “informed high-level official” can decide a target is a ranking operative of al-Qaida who “poses an imminent threat of violent attack against the United States,” and if we cannot apprehend him, order him eradicated with a Hellfire missile.

As law professor Mary Ellen O’Connell argues: “For a threat to be deemed ‘imminent,’ it is not necessary for a specific attack to be underway. The paper denies Congress and the federal courts a role in authorizing the killings or even reviewing them afterwards.”

And they called Nixon the imperial president.

Tempi Cambi: Tradition and Modernity in The Godfather

Independence must be purchased with blood and sorrow

By Mark Malvasi

America, that bright, shining land of freedom, opportunity, and progress, is irredeemably corrupt.  It is in the hands of debased and hypocritical politicians, judges, businessmen, and their servants, such as the debauched Hollywood film maker Jack Woltz, the belligerent New York police captain Mark McCluskey, the rapacious Las Vegas gambler Moe Greene, and the contemptible Nevada senator Pat Geary, who are motivated by the desire for wealth and power.  None of these men exercises self-control.  All are driven by lust, anger, greed, vanity, and prejudice, easily losing their tempers and getting unnecessarily carried away.  Unless he has power, or has powerful friends, a man who finds himself in such a depraved and perilous world is alone, isolated and vulnerable.  In America, it’s every man for himself.  Conflicts are resolved according to the strict letter of the law, which is considered the ultimate arbiter of legitimacy and truth.  If one prevails at law, then nothing more is required.  One is innocent, or is at least legally blameless.  Yet, for the victims, this system does not yield probity or righteousness any more than it promotes responsibility and moderation among those clever enough to exploit the law to secure their own advantage.  All pretense to the contrary notwithstanding, America has only the letter of the law,  formal, cold, abstract, and still America has no objective legal standard that applies equally to everyone.  That is why for justice men must go on their knees to Don Corleone.

The undertaker Amerigo Bonasera is the first to make such an appeal. Bonasera “believes in America” and has desired nothing more than to be a good citizen.  He obeyed the law and raised his daughter in the “American fashion,” which means that he asked no questions when she began dating a young man, the son of a powerful United States senator, who was not an Italian.  Free from parental interference, his daughter can make her own choices.  When she resisted her date’s sexual advances, however, he and a friend beat her so cruelly that she was hospitalized with serious and disfiguring injuries.  “Now,” a grieving Bonasera laments, “she will never be beautiful again.” As an honest American, Bonasera reported the incident to the police and brought charges against his daughter’s assailants.  They were tried and convicted, but the judge, acceding to political influence, suspended the sentence.  “They went free that very day,” Bonasera complains, and they mocked him as they left the courtroom.

Listening with compassion to a father’s tale of anguish and heartbreak, Don Corleone nevertheless responds with a sarcasm and disdain that reveal his ethical code.  He wonders why Bonasera has come to him with this problem, since in the past he assiduously refused to do so.  “We have known each other many years. . . .,” the Don reminds him, “but until this day you never came to me for counsel or help.  I can’t remember the last time you invited me to your house for coffee though my wife is godmother to your only child.  Let us be frank.  You spurned my friendship.  You feared to be in my debt.” When Bonasrea protests that he sought to avoid trouble in his adopted land, the Don reproaches him further.  “You found America a paradise. You had a good trade, you made a good living, you thought the world a harmless place where you could take your pleasure as you willed. . . . After all, the police guarded you, there were courts of law, you and yours could come to no harm. You did not need Don Corleone.”[1]  In this moment of desperation, Bonasera has abandoned his previous scruples, only to enter the Don’s home on the day of his own daughter’s wedding and insult him by asking him to commit murder for hire.

Obamacare Will Be No More Successful Than Soviet Central Planning

Markets find ways to make things better and cheaper. Obamacare forbids that.

By John Stossel

Most Americans -- even those who are legislators -- know very little about the details of President Obama’s Affordable Care Act, so-called Obamacare. Next year, when it goes into effect, we will learn the hard way.

Many people lazily assume that the law will do roughly what it promises: give insurance to the uninsured and lower the cost of health care by limiting spending on dubious procedures.

Don’t count on it.

Consider just the complexity: The act itself is more than 906 pages long, and again and again in those 906 pages are the words, “the Secretary shall promulgate regulations ...”

“Secretary” refers to Secretary of Health and Human Services Kathleen Sebelius. Her minions have been busy. They’ve already added 20,000 pages of rules. They form a stack 7 feet high, and more are to come.

Our old health care system was already a bureaucratic and regulatory nightmare. It had 16,000 different codes for different ailments. Under our new, “improved” system, there will be more than a 100,000.

Government likes to think regulations can account for every possibility. Injured at a chicken coop? The code for that will be Y9272. Fall at an art gallery? That means you are a Y92250. There are three different codes for walking into a lamppost -- depending on how often you’ve walked into lampposts. This is supposed to give government a more precise way to reimburse doctors for treating people and alert us to surges in injuries that might inspire further regulation.

Why Read Old Books?

Reading Thucydides or Dante for the comfort that we are not alone

By Victor Davis Hanson

We all know the usual reasons why we are prodded to read the classics — moving characters, seminal ideas, blueprints of our culture, and paradigms of sterling prose and poetry. Then we nod and snooze.

But there are practical reasons as well that might better appeal to the iPhone generation that is minute-by-minute wired into a collective hive of celebrity titillation, the cool, cooler, and coolest recent rapper, or the grunting of “ya know,” “dah,” and “like.” After all, no one can quite be happy with all that.

Classics are more than books of virtues. Homer and Sophocles certainly remind us of the value of courage, without which Aristotle lectures us there can be no other great qualities. Instead, the Greeks and Romans might better remind this generation of the ironic truths, the paradoxes of human behavior and groupthink. Let me give but three examples of old and ironic wisdom.

The Race Goes Not to the Swift.

The problem with Homer’s Achilles ^[1] or Sophocles’ Ajax ^[2] was not that they were found wanting in heroic virtue. Rather they were too good at what they did, and so made the fatal mistake of assuming that there must be some correlation between great deeds and great rewards.

The Changing American Family

During the past 20 years, the American family has undergone a profound transformation

By Herbert S. Klein

For all the changes in fertility and mortality that Americans have experienced from the colonial period until today, there has been surprisingly little change in the structure of the family until the past quarter century. Until that point, the age of marriage changed from time to time, but only a minority of women never married and births outside marriage were traditionally less than 10 percent of all births.

But this fundamental social institution has changed profoundly since 1980. In fact, if one were to define the most original demographic feature in the post-1980 period in the United States, it would be the changes that were occurring in both families and households for all sections of the national population. The traditional American family has been undergoing profound transformations for all ages, all races, and all ethnic groups. Every aspect of the American family is experiencing change. These include the number of adults who marry, the number of households that are formed by married people, the number of children that are conceived, the economic role of mothers, the number of non-family households, and even the importance of marriage in accounting for total births.

The proportion of persons over 15 years of age who had never married reached historic levels in 2000 when a third of the men and a quarter of the women were listed as never having married. The decline in marriage among whites is occurring at a slower pace than among blacks, but both are experiencing rising trends in unmarried adults. By 2000, 22 percent of adult white women and 42 percent of adult black women had never married. This rise in the ratio of persons never married is also reflected in historical changes in the relation between families and households. Non-family households had always existed as a small share of the total households in the United States, usually made up of elderly persons with no families left. But now they are formed by young adults, many of whom never married, or by older persons who no longer reside with children. Also, the proportion of two-parent households, even in family households with children, is on the decline, as single-parent-plus-children households are on the rise. As late as 1960, at the height of the Baby Boom, married families made up almost three-quarters of all households; but by the census of 2000 they accounted for just 53 percent of them, a decline that seems to have continued in the past few years. Non-family households now account for 31 percent of households, and families headed by a single parent with children account for the rest, making up to 27 percent of all such families with children. Black families experienced the fastest decline of dual-parent households; by the end of the century married couples with children accounted for only 4 out of 10 of all black family households with children. But no group was immune to this rising trend of single-parent households.

Why France's gay marriage debate has started to look like a revolution

The bitter battle over gay marriage is a symptom of a broken political system

By John Laughland

Paris: Revolutions are often sparked by an unexpected shock to an already weakened regime. As commentators in France remark not only on the crisis engulfing François Hollande’s government but also on the apparent death-rattle of the country’s entire political system, it could be that his flagship policy of legalising gay marriage — or rather, the gigantic public reaction against it, unique in Europe — will be the last straw that breaks the Fifth -Republic’s back.

Opposition to the bill has electrified the middle classes, the young and much of provincial France. On Sunday 24 March, in the freezing cold, the 4km stretch from the Arche de la Défense to the Arc de Triomphe was full of people protesting against the bill. On 13 January, also chilly, the Champ de Mars was similarly crammed. When Johnny Hallyday or the World Cup got crowds like that, people talked of two million. But the police, evidently acting under political orders, have claimed that both demonstrations — which are without doubt the largest public movements in French history — garnered a few hundred thousand at most. Credible accusations surfaced in Le Figaro on Monday night that the film taken from police helicopters on 24 March and released by the Prefecture has been manipulated to reduce the apparent numbers of demonstrators.

Such lies are the sign of a rotten regime. Outbursts such as that of Elie Peillon, the son of the Minister of Education, who on 13 January tweeted that ‘those gits’ demonstrating should be publicly hanged, make Marie-Antoinette’s seem delicate by comparison. Had the mobilisation in Paris taken place in Tahrir Square, the world’s media would be unanimous that a ‘French spring’ was about to sweep away an outdated power structure, especially since the demonstrations (including the daily ones held throughout last week, which culminated in a massive impromptu rally of 270,000 people on Sunday afternoon) are attended by an overwhelming number of people in their late teens and early twenties.

By the same token, had the Moscow security forces tear-gassed children and mothers — as the CRS did on the Champs Elysées on 24 March — or had they dragged away by their necks youngsters who were peacefully sitting on the lawn after the demo — as the riot police did on the night of 18 April — then the worldwide moral policemen on CNN would be frantically firing their rhetorical revolvers. Such repression would be interpreted as a sign that the regime was desperate. Indeed, had the Ukrainian police removed the ‘tent village’ which formed in central Kiev at the time of the Orange Revolution in 2004 — as the Paris police bundled more than 60 anti-gay marriage campers into detention on the night of 14 April — then one suspects that Nato tanks would have rolled over the Dnieper to their rescue. A dozen people were even booked by the police for wearing anti-gay-marriage T-shirts in the Luxembourg gardens, where they were having a picnic, on the grounds that this constituted an unauthorised political assembly.

10 Lessons from Cyprus

Here are the likely lessons future historians will draw from Cyprus’s sorry experience in the euro

By Desmond Lachman

Lessons for Cyprus

1. Joining the euro was a tragic mistake.

Before joining the euro, Cyprus should have considered that its banking- and tourism-based economy had nothing in common with the rest of the European economy. It should also have recognized that if its economy got hit by a major negative external shock, Cyprus would not be supported by fiscal transfers from the European Union or by lower European Central Bank (ECB) interest rates. Cyprus is now paying a very high price for this mistake, as its economy is likely to contract by at least 25 percent over the next year.

2. Allowing unregulated banks to grow so large was a blunder.

It is bad enough that light regulation of the Cypriot banking system allowed that system to grow to more than seven times the size of the Cypriot economy, mainly due to large Russian deposit inflows. However, it is unconscionable that the bank regulators allowed Cypriot banks to buy Greek government bonds amounting to 150 percent of the size of Cyprus’s GDP. This combination was an accident waiting to happen — and it did happen when the Greek government defaulted on its bonds in 2012. The net result was bank losses close to €10 billion, or 60 percent of Cyprus’s GDP.

Searches and Seizures: Reasonable or Unreasonable?

The balance between liberty and security in criminal cases

by Richard A. Epstein

Matters of criminal procedure were not much in evidence in the aftermath of the bombings at the Boston Marathon. Nary a peep of protest was raised against the massive lock-down and manhunt that followed hard on the heels of that senseless tragedy.

But now that some degree of normalcy has returned, it is important to think about these procedural issues. To that end, two recent Supreme Court cases address law enforcement and the Fourth Amendment. Florida v. Jardines deals with searches in connection with illegal drug trafficking and Missouri v. NcNeely addresses compelled blood tests on suspected drunk drivers.

Both of these cases return to fundamental questions that have previously divided the Court. What is remarkable about the Supreme Court’s recent Fourth Amendment jurisprudence is that these divisions are not apparent. The opinions in both cases lack reference to the endless theoretical debates between the hard-nosed originalists and the equally insistent defenders of the “Living Constitution.” In consequence, these close decisions have generated strange alliances that have transcended the deep five-to-four conservative-liberal split.