Joplin: If All Else Fails, Try the Market

To anyone around here, when you mention the name, "Joplin," they think of that day of wrath when tornadoes ripped through the midwest and one, seemingly released from hell, devastated Joplin, Missouri.   One doesn't have to reach far among one's neighbors and friends to learn of someone who was touched by the disaster.  I heard of one mother who, lacking a tornado shelter, hid with her two children in a clothes closet.  When the Angel of Death had past over, she opened the door to find the closet the only thing left standing.

Many in Kansas, no stranger to tornadoes, helped as the community worked to rebuild itself. They "did and maybe asked permission later!" with typical midwestern get-it-doneness. The speed with which churches and religious organizations mobilized would put the Pentagon to shame! To rephrase Archbishop Dolan, they did not help because those in need were Christian, they helped because they were Christian.

An economics professor at Troy University, Daniel J. Smith, studied how this spontaneous action accomplished wonders. The story is the more poignant as we watch the Japanese bureaucracies in government and "private" utilities obscure reality and stand in the way of recovering from Fukushima Daichi.  Fortunately for Joplin, it was blessed with lax regulation and not plagued with crony capitalism.

Here is what professor Smith found:

If the Goliath Has the Distributors In His Pocket, It's Time For David's Sling

Craft brewers are small brewers who brew beer much more like homebrewers do and eschew the tricks of the mass marketed beers such as those of Anheuser-Busch, Miller, and Coors. Craft brewers have about 5% of the U.S. beer market; imported beers have about 11%. Anheuser-Busch, Miller, and Coors have over 80%. Read David Kesmodel’s article, "Small Brews Show They're Not Weak Beer: As Popularity Rises, Specialty Brewers Challenge Distributors" (Wall Street Journal, December 10, 2007; Page B1.) State beer distribution laws sound like one more "consumer protection" law that harms competition, consumer choice and consumer welfare.

"Booms, Technological Bubbles and Busts."

Milton Friedman died yesterday.

When I was in graduate school in the late 1960s, many of my peers were disciples of Mao and romanticized that thug Che Guevara. They carried around with them The Thoughts of Chairman Mao ("The Little Red Book") as if it were a badge of honor. I vividly remember the ugliness at the American Economic Association meetings when Friedman gave his Nobel Laureate lecture amid angry prrotests and demonstrations.

The "Little Green Book" (his Capitalism and Freedom) was the first book that made me think critically and creatively in economics. From today's vantage point, it appears to have won the long war with "The Little Red Book." His ideas have seized the commanding heights. It is a great irony that the best words to put on his tomestone would be those of John Maynard Keynes, the dominant intellectual force in economics from 1936 to the 1970s and the king whom Friedman deposed:

"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood . . . Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."

- J.M. Keynes, General Theory, ch. 24.

Today's Wall Street Journal is a must read. Not only is there a lead editorial on Uncle Milton (no surprise) and a front page article, but they published a new article by Friedman himself ("Why Money Matters") on the editorial page that is a gem. It could as easily have been titled "Booms, Technological Bubbles and Busts." Personally, I can't imaging still writing so lucidly and perceptively at 94. In fact, still breathing would be an accomplishment.

Fellow economist Michael Boskin leaves us with the image of Milton and Rose dancing at her birthday. The perfect signature on a full and fruitful life!

Pray for his soul and the wife who has lost a soulmate. May he be smiling down at us from the true commanding heights.