The Visible Hand Strikes Again.

Once again, The Economist hits the nail on the head with a write-up of the now infamous "cash for clunkers" program:

Rebate schemes like this tend to encourage buyers to advance purchases that they would have made anyway, thus cannibalising future sales. The termination of a car-scrappage scheme in France in the 1990s led to sales plunging by 20%. Nor is it certain that the scheme provides a more general boost to the economy, as buyers may have been put off other purchases in order to afford a new vehicle.
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The green benefits are also hotly contested. The scheme should help to make America’s car fleet slightly less fuel inefficient, but there are significant environmental costs in scrapping perfectly good cars and building new ones.

The American economy is an incredibly complicated machine. When the government decides to stick its greasy hands inside and fiddle around with the parts, bad things tend to happen. This isn't to say that government policy can't have positive effects -- but in almost every case, it comes at a price. Short-sighted policies that promise too-good-to-be-true benefits lose their shine when the consequences come a-knockin' on the public's door.

Right now, members of congress are considering a piece of legislation that would transform America's massive healthcare industry. The benefits are obvious: everyone gets healthcare coverage. But before trigger-happy reformers vote aye, they might want to dwell on the unintended consequences of their pet project. Yes, just about every modern country provides universal healthcare coverage. But a lot of those countries have to deal with huge doses of taxation, high levels of sustained unemployment, and a stagnant work force.

After considering the pros and cons, a lot of people may still support the legislation. The good of universal coverage may outweigh the associated evils.

But there are some things that no one can foresee. Our economy is based on billions of unpredictable transactions between individuals. If seemingly harmless programs like "cash for clunkers" can create unintended ripples in this economic ocean, what could happen when the government gives one of our largest industries an extreme makeover?

I'm really not sure. But you can bet it won't be all unicorns and rainbows.

Watering The Tree Of Liberty With The Blood Of Sub-Par Cable Pundits.

So, some guy brought a gun to a protest outside of Obama's healthcare town hall in New Hampshire. That guy went on Hardball with Chris Matthews. And this is what happened:

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Is it just me, or does Mr. Radical Gun Nut seem a lot more collected and rational than Matthews? This was clearly meant to turn into a shouting match, but Kostric never took the bait. And shouldn't television personalities be held to a slightly higher standard when it comes to hair? The dead ferret perched atop Chris Matthews' noggin is kind of distracting.

Workers Of The World Unite! ... Please?

Leftists around the world were thrilled when the world economy came a-tumblin' down last year. Capitalism had failed! It was time for the people to arise, and create a new, better order, full of rainbows and the equitable distribution of income!

But when it came time for elections in Europe -- a stronghold of center-left politics -- things didn't work out quite as planned. In short, the socialists got pwned.

A new article from The Economist does a good job of examining this phenomenon:

With the exception of Greece, the European elections in June were a disaster for social democratic parties. From France to Austria, centre-leftists failed to harness dislike of conservative incumbents. There was a swing against ruling socialists from Bulgaria (where they were ousted from national power in July) to Britain (whose prime minister, Gordon Brown, looks irredeemably unpopular). In Spain supporters of the ruling socialists tried hard to convince people that they were as upset as anybody about unemployment of nearly 20%, but voters still nudged to the right.

Elsewhere in the world, the picture is more mixed. But in almost every democracy, politicians who style themselves progressive face a common set of problems, to do with shrinking treasuries, looming environmental challenges, general pessimism and the resurgence of nationalism.

But the situation is more complex than it seems. As the article notes, "conservative" politicians, including France's beloved Sarko, haven't hesitated to bash capitalism and institute massive government bailout programs.

American conservatives looking for a ray of hope would do well to remember that the left/right distinction has always been relative; the Democratic Party would be considered center-right by European standards.

Even so, Europe's shift to the right is a good reminder that triumphalists are lousy at predicting the future. Karl Rove's "permanent Republican majority" was an illusion, and the shine is already wearing off Obama's magical presidency. Politically speaking, shift happens. In America, conservatives were in power when the economy took a dive, so they received a drubbing at the polls. But in countries where socialism held sway, leftists suffered a similar fate.

Some people vote according to unbending ideological principles. But the rest seem content to settle for voting the bums out, whoever the bums may be.