The Miracle of Capitalism

Five or six years ago, I remember reading an article mourning the death of letter writing. The gist of the article was that cell phones had made communication via the written word obsolete. Not only were we losing the skill of communicating through the written word, we were in danger of losing a precious historical record since most historians compile information through digging through archives of letters. This important method of connecting with the past was in danger of being lost as the spoken word replaced the written word.

The other significant change in our modern society over the past century has been our mobility. A Couple of generations ago, we would have stayed in the same town as our parents and grandparents. Today, families scatter quickly. While our willingness and ability to move enhanced our ability to make a living, it also had a serious drawback. We became disconnected from family and friends. We became more urbanized and more alienated. The fictitious town of Mayberry still pulls at our emotions because most of us feel at least somewhat nostalgic for a time and place where we lived in a community in which people were close and knew each other for a long time. In our urban, fast-paced lives, we lack the comfort, stability and support that predictable relationships bring. Moreover, many of us are disconnected from our families that are often spread out over the country and sometimes over the globe. There is a basic human need to share old stories, and follow the progression of the people that have known us our entire lives. Many a Phd thesis has been written on this trend.

Enter social media (along with email, text messaging and Skype). In less than a decade, the information age has transformed our society and helped to assuage this longing in us. Facebook in particular has become a primary vehicle for meeting this basic human need. While Facebook has had its controvercies and its detractors, I believe that on balance, it has been a very positive force. Started as a social networking site at Harvard and then the entire Ivy League, Facebook has exploded from a site used primarily by high school and college kids to the population at large. I can attest that Facebook has enriched my life immeasurably.

I warily signed on about a year and a half ago, and pretty soon I was "friended" by family members (that has its own set of issues), old college friends, high school friends and, more recently, even grammar school friends. Some people post quite voluminously. Others are more sparing, but I enjoy quick little updates from these people. It has been fun to catch up on how my old friends have progressed in their careers, raised their kids and muddle through life. It's fun to get updates on the athletic careers of my niece and nephews, and hear about the latest setback from my friend that operates a small farm in the South.

One of the true joys of using Facebook in middle age is reconnecting with people that you hadn't thought about in years. One thing that became apparent quickly is that I really didn't appreciate some of these people as much as I do now. I don't know if it's because in my early contact their personalities were not fully formed or whether I was just not paying close enough attention. But it has become clear to me that I have come across some pretty remarkable people along the way. Facebook gives you a second shot to get to know them a little better.

About a year ago, I and several of my teammates organized a reunion of our college football team. In the 30 years since we played together, this formerly close-knit bunch had scattered into the wind. By using Facebook in addition to our own networking, we were able to track down all but a few people and organized a once in a lifetime event. We had people come in from all over the country (one even flew in from Indonesia) to eat, drink and tell old war stories with old teammates. It was pretty astonishing to see people pick up right where they left off 30 years ago. As a result, we are all in touch with each other more frequently now, get updates periodically and little groups of us occassionally get together for a lunch, a beer, or a ballgame. This all was facilitated in part by the advent of Facebook.

Recently, I reconnected with some classmates from my old Catholic grammar school, and they provided me with a stark reminder of why I remain highly ambivalent about Catholicism. Yes, all those stories about the harsh nuns with their rulers, paddles and wagging fingers were true and not exaggerated. Still, it was great fun to trade memories with people I had not seen in nearly 40 years, and hear about how they ended up. I was suprised by the number of people that connected with me that knew me when I was young and did stupid things, yet wanted to correspond with me anyway. Human beings have a great capacity for forgiveness and acceptance.

Of course membership in Facebook needs to be managed. It does have its annoyances. Some can't help but vomit their political views on a regular basis (I save that for my blog). I sometimes get requests to be "friended" by people I don't remember (or who I do not care to remember). Others use it solely as a worship wall for their children (o.k., I've been guilty of some of that, too). One woman even reminded me that I proposed to her when we were in 1st grade (she has no clue how luckey she got by turning me down). But on the whole, the influence of Facebook has been a hugely positive.

These connections have also nudged me to correspond with more people. I have several friends now that I exchange emails with on a regular basis. I have spoken with many people that do the same thing. So it seems that the art of letter writing has been reborn, albeit electronically in lieu of pen, ink, and the U.S. Postal Service. Query whether historians will be able to access these messages centuries from now so they can tell the story of what our society was like.

Mark Zuckerberg, the founder of Facebook, is said to be worth $13.5 billion (at age 27) and is in the top 100 billionaires in the world. He deserves to be. He is emblematic of the miracle of capitalism. He found a powerful human need.....the need to connect and be part of a community, and found a way to fill that need for millions of people at a reasonable price (essentially free). No government program brought this to us. No cabinet czar came up with the idea. No blue ribbon panel was involved in it. Just a kid in his dorm room. It's what capitalism is all about. It's certainly made my life richer.

He Really Did Say That

In a stunning statement in front of the House Small Business Committee, Treasury Secretary Tim Geithner said that taxes must be raised on small business so that "government would not have to shrink," and that ultimately such taxes would be good for growth. He held fast to this assertion even when confronted with the fact that small business creates most of the jobs in this country.


Any wonder why unemployment is still above 9% after two years of stimulus and Obamanomics.


I work with small businesses. I see their struggles up close and personal. In Illinois, they have been punished enough already. Over the past 4 years, small businesses have been savaged by recession, tough credit markets, and an explosion in the regulatory environment. Illinois, unlike New Jersey, chose not to ask for any sacrifice from its public sector unions that have a stranglehold on Illinois politicians, and, instead raised business and individual income taxes instead. Obamacare imposed new costs on businesses and promises even more costs and regulations. One CFO I spoke to told me, "We need a new plant, which I would expect would employ 250 people. But I'm just not going to do it yet. Not until the landscape changes."


And yet Geithner wants even more. After a 25% increase in government spending under the guise of stimulus (read "permanent growth"), he proposes to transfer yet more wealth from the private sector to the public sector, or else GOVERNMENT PROGRAMS WILL HAVE TO SHRINK.


Imagine that. Imagine a world with a smaller Department of Education, Department of Energy, or, even worse, a smaller EPA. All of these departments were granted whopping increases which set their baseline budgets even higher. Can anyone tell me succinctly what any of those departments will accomplish with any of those increases?


I can tell you what some of the businesses I work with will be able to do with those dollars if government doesn't confiscate them...... hire people, invest in new projects and new technologies, make promising acquisitions. In short, engage in those activities that create real wealth. Or simply retain an additional capital cushion so they won't have to go hat in hand to the bank.

The small businesses owners that have survived this tsunami have done so by making hard and sometimes painful decisions. And Mr. Geithner has determined that big government has better plans for those resources than they do.

Explain to me how that will be good for growth again, Mr. Geithner.

Bag Police

Evanston ("the city that cares too much") is in the middle of a burning controversy. The Eco-fascists are all in a tizzy over whether to tax or ban disposable grocery bags.

Now, you may remember that Evanston's unofficial motto came from a Chicago Tribune article about Evanston's treatment of the homeless. It appears that no other city in America was so welcoming to the homeless. The town of Evanston had more shelters and soup kitchens per capita and offered more generous benefits to the homeless than any other city in America. Pretty soon, word filtered out nationwide and within a fairly short period of time, indigents from all over the country were flocking to Evanston in defiance of Milton Friedman's admonition that there was no such thing as a free lunch. It seems that Evanston had created its own demand for goods and services for the homelessness, and it has become quite a little cottage industry in that town.

Well, the good, responsible folks in Evanston are at it again. I assumed that if we dutifully put our plastic and paper bags, glass bottles and used newspapers in the recycling bin, and wheeled it out to the curbside and paid the special fee for the recycling guy to pick it up, we would satisfied our responsible green duty. Apparently, this is not good enough for Evanstonians. Evanstonians want to ban disposable bag entirely or, at minimum, punish users by taxing them.

No one has really put forward an estimate of the magnitude of the problem. No data has been put forward to demonstrate that we are gagging on disposable bags. Nor has anyone quantified how many people are actually likely to comply and stuff dozens of little canvas bag in their trunks in the event of a spontaneous grocery trip. I suspect that there are a vast quantity of males in Evanston that are just like me, and, rather than displacing their golf bags in their trunks with eco-friendly canvas shopping bags, they will trundle up the road to Wilmette to do their shopping, thus increasing their carbon emissions, negating all the eco-benefits of this measure. In addition, if even 10% of Evanstonians pick up and shop elsewhere, this will represent a material decline in sales for most merchants, and that doesn't even take into account folks like me that don't live there but stop to pick up groceries when I pass through. And this says nothing about the job loss to the companies that supply paper and plastic bags, and the companies that supply things to the companies that supply things to companies that make paper and plastic bags.

But none of this matters to the liberal mind. They know what is good for all of us. Inconvenience, cost, job loss, and unintended consequences matter not to them (see, e.g. our policy on Ethanol). If disposable bags are banned, we don't even know what the real benefit will be, other than the liberals in Evanston will have satisfied themselves that they are being ecologically responsible, at least in their own minds.

None of this is to suggest that all environmental regulation is nonsense. But it needs to be sensible, and be supported by real cost/benefit analysis, with a real eye on unitended consequences. Moreover, regulations need to be reviewed periodically to determine whether the premises underlying the original analysis still holds. The eco-facsists conveniently overlook all of this and simply want to impose their will and take lifestyle choices away from us. Lightbulbs, toilet tanks, microwaves, grocery bags... no product choice is too small for them to demand a say over, and no measure of impracticality can dissuade them.

And, by the way, what in the world will liberal Cub fans be placing over their heads at Wrigley Field by the end of the season?

Lunch Police

Coming on the heels of the friendly folks at the EPA abolishing the old Thomas Edison invented lighbulb and foisting the retrofitting costs on small business, we now face the lunch police. It turns out that many Chicago Public Schools have banned the old brown bag lunch from their schools. Parents no longer can be trusted to plan meals for their kids. Worse, we are told, some kids even use some of their allowance to surreptitiously purchase junk food like chips and candy bars and slip them in their lunches. Government has determined that parents are just too dumb or uninformed to make decisions for their children, and are largely ineffective at policing the nutrition of their kids, so parents now have no choice in the matter. At many public schools, children are required to eat meals provided by the school cafeteria. No matter that the children often complain that those meals are tasteless (and provided by a major contributor to the Democratic Party). Nope. Big brother has taken yet another decision away from the family. Lightbulbs, toilet tanks, microwaves, cars, and now school lunches. Day by day, bit by bit, decisions are taken out of our hands and placed in the hands of some administrator at the EPA, school board or Department of Energy.

I often eat at my desk, and sometimes I brown bag. Tomorrow, I plan to tuck two Twinkies in my lunch as my own quiet act of defiance.

Lightbulb Police

The lightbulb police came to visit my wife's office last week. She was informed that the EPA had banned the manufacture of certain lightbulbs and that she would be required not only to purchase new "Al Gore" approved lightbulbs, but that all the fixtures in her office would have to be retrofitted to accommodate the new bulbs. Total cost to her business of several thousand dollars. In addition to the city and state grabbing for more, the Obama administration pushing for more, now the lightbulb police get into the act. Light bulbs, microwaves, toilet tanks used to be designed by industrial designers. Not any more. Today, the specifications for those and other items are written by some "green" bureaucrat in Washington, who then turns around and hands the bill to us. We used to have choices in many products, weighing price, functionality, and design. Today, the bureaucrats have decided that those features must take a back seat to "green" conformity. You see, she had other ideas about how to spend that money--raises for her loyal, hardworking employees, a new computer, maybe stash some more away for retirement. But no, some pointy headed bureaucrat had other ideas. This is exactly the kind of thing that continues to weigh on our economy. At a time when small businesses continue to strain and struggle, the bureaucracy continues to pile more bricks on the load, without any thought whatsover as to the costs they are imposing. Germany's unemployment rate is 7.1%. Did you ever think you'd see the day when we would envy Germany's unemployment rate? Are you beginning to see how that happened?

Just a Couple Questions, Mr. President

Now that the Nobel Peace Prize winning president has started his first pre-emptive strike or "kinetic military action," I'd like to pose a few questions. What is the goal in this rush to war? Is it regime change? But regime change is not within the scope of the UN resolution. If it is humanitarian, then why here and not Sudan or Yemen? Will you do the same if unrest erupts in Saudi Arabia and the royal family cracks down? Why was congress not consulted or congressional authorization sought? Is that not necessary because the French OK'd the operation? If Gadaffi is taken down, is there a post-Gadaffi plan or have we not learned anything from Iraq? Don't we risk creating chaos and a vacuum that will be a magnet for Al Qaeda? If Gadaffi stays, aren't we risking more retributive terrorist attacks? So aren't we making America less safe no matter what- if he stays (attacks from Gadaffi who has done it before) or if he goes (safe stays (safe haven for Al Qaeda). When Saddam brutalized his own people, Mr. Obama said that wasn't sufficient cause to use military power because there was no imminent threat. Where is the imminent threat from Libya? Aren't you diverting precious and stretched military resources from two fronts that are already tired? Are you worried that your Muslim outreach program will be upset now that you have pre-emptively attacked another Muslim country that posed no imminent threat to the U.S.? Inquiring minds would like to know.

Finally, did you get around to sending a thank you note to cowboy President Bush for inducing Libya to give up its nuclear program? Bet you're glad that happened.

Teen Rage

Sometimes your kids say things that astonish you. Last week, when my 17 year old daughter came downstairs raging, "I don't need a nanny," I automatically assumed that my wife was trying to put some order to her room. But it was none of the sort. It turns out that there someone had introduced legislation to ban anyone under 18 from tanning salons, even with parental consent. My daughter was just furious. She has mild acne on her shoulders that is helped a great deal by a 10 minute visit once or twice a week to the local tanning salon. "This is a decision that should be made by me and my parents," she asserted.

Without any coaching from me whatsoever, she looked up our state senator and representative and sent them both emails. In her correspondence, she explained her condition and explained how helpful tanning was to her and how it helped her feel good about herself. She further explained that Obamacare had leveled a 10% tax on salons already and that 15-20% of tanning salon patrons are under 18. Banning them from salons on top of the tax would put many of these small business out of business and kill jobs. Further, she said that there would be a ripple effect because other companies sell them lotions, towels, tanning beds and other supplies.

She argued that in Illinois, with parental consent, is legally entitled to get a tattoo, a piercing, and, under current law, she can even have an abortion. Why should she be denied the ability to get a tan. Finally, she said she had looked on line and for $300 or $400, she could buy a tanning bed, so she could put herself out of reach of the regulation. She finished by stating that she felt that legislators had more important work to do than insert themselves in a decision that rightfully belonged to her and her parents.

She did this all without any prodding or coaching for me. I was pleased that she advocated for herself, and that she was able to understand and explain (without a single course in economics) the harmful effects of wrongheaded regulation. She understood that the consequences of overreaching regulation include job losses and unnecessary destruction to entire industries.

The bill never made it to the floor.

There is hope for the future.