Tuesday, February 23, 2010
Bipartisanship We Can Believe In
Unlike what we are seeing going on with the current healthcare debate, Judd Gregg (R-NH) and Ron Wyden (D-OR) prove that bipartisanship can be alive and well and can lead to the development of good solutions to some of our most pressing problems.
Tuesday, January 5, 2010
Norms, Rules, and Morality
Megan McArdle has a very interesting blog post (http://meganmcardle.theatlantic.com/archives/2009/12/personal_finance_1.php) where she discusses the importance of norms for the functioning of the economy.
She correctly points out that the health of the economy, particularly as it pertains to credit, borrowing, and financial markets, relies at least as heavily on societal norms as it does on actual laws. For instance, many individuals currently own houses that are worth less than the mortgages that they took out. For a good portion of these individuals, they probably could benefit financially from simply walking away from their mortgage. Indeed, some people act on this very fact, and yet most of people in this situation still attempt to make their payments as long as they can afford to do so. This is because it is a societal norm in America that when you take out a mortgage, you are expected to try your best to make the payments. If this norm were to disappear, then no matter what laws we might pass, we could expect credit to dry up for many people and mortgages to become much more difficult to obtain.
There are many other norms that help the economy function, and many of them have no real absolute moral underpinning (though there are definite exceptions, in my opinion). Instead, they have simply become accepted by our culture due to various reasons, and as such we become outraged when they are violated. It will be interesting to see how these norms evolve over time, particularly as a result of the economic upheaval that we are currently going through.
For a much more thorough and engaging discussion, you should check out Megan's post.
She correctly points out that the health of the economy, particularly as it pertains to credit, borrowing, and financial markets, relies at least as heavily on societal norms as it does on actual laws. For instance, many individuals currently own houses that are worth less than the mortgages that they took out. For a good portion of these individuals, they probably could benefit financially from simply walking away from their mortgage. Indeed, some people act on this very fact, and yet most of people in this situation still attempt to make their payments as long as they can afford to do so. This is because it is a societal norm in America that when you take out a mortgage, you are expected to try your best to make the payments. If this norm were to disappear, then no matter what laws we might pass, we could expect credit to dry up for many people and mortgages to become much more difficult to obtain.
There are many other norms that help the economy function, and many of them have no real absolute moral underpinning (though there are definite exceptions, in my opinion). Instead, they have simply become accepted by our culture due to various reasons, and as such we become outraged when they are violated. It will be interesting to see how these norms evolve over time, particularly as a result of the economic upheaval that we are currently going through.
For a much more thorough and engaging discussion, you should check out Megan's post.
The Virtuous and the Greedy
This is a paradigm that has polarized our country and led to bad thinking. It’s holding the nation’s progress back. It’s as if there were a wall. And on one side of the wall is this belief that not-for-profits and government exist for public service, and that they’re fundamentally altruistic, that they have a deeper purpose, and they’re doing good in the world, and they have pure motives. On the other side of the wall are corporations. And they’re just selfish and greedy. They have no purpose other than to make money. They’re a bunch of psychopaths. And I’d like to tear that wall down. Human beings are obviously self-interested. We do look after ourselves, but we’re capable of love, empathy, and compassion, and I don’t see that business is any different.”
- John Mackey, CEO of Whole Foods
Read more: http://www.newyorker.com/reporting/2010/01/04/100104fa_fact_paumgarten?currentPage=7#ixzz0bkYL3TkJ
I have no problems with not-for-profit organizations, but I can guarantee you that if we were to replace all of our grocery stores, health care providers, educational institutions, home developers, etc. with not-for-profits, we would live in a far less prosperous country.
- John Mackey, CEO of Whole Foods
Read more: http://www.newyorker.com/reporting/2010/01/04/100104fa_fact_paumgarten?currentPage=7#ixzz0bkYL3TkJ
I have no problems with not-for-profit organizations, but I can guarantee you that if we were to replace all of our grocery stores, health care providers, educational institutions, home developers, etc. with not-for-profits, we would live in a far less prosperous country.
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