The Four Boneheaded Biases of Stupid Voters (And We're All Stupid Voters)

Reason magazine is fast becoming one of my favorite news/opinion sources. They have a nice RSS feed and excellent articles.

I was especially taken by this article on the biases we all have about voting, and hopefully this explains how we end up with free-spending, policy-deficient politicians like George W. Bush.

Anti-Market Bias

I first learned about farm price supports in the produce section of the grocery store. I was in kindergarten. My mother explained that price supports seemed to make fruits and vegetables more expensive but assured me that this conclusion was simplistic. If the supports went away, so many farms would go out of business that prices would soon be higher than ever. I accepted what she told me and felt a lingering sense that price competition is bad for buyer and seller alike.

This was one of my first memorable encounters with anti-market bias, a tendency to underestimate the economic benefits of the market mechanism. The public has severe doubts about how much it can count on profit-seeking business to produce socially beneficial outcomes. People focus on the motives of business and neglect the discipline imposed by competition. While economists admit that profit maximization plus market imperfections can yield bad results, noneconomists tend to view successful greed as socially harmful per se.

A Speech on the So-Called Evil of Money from "Atlas Shrugged"

"So you think that money is the root of all evil?" said Francisco d'Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor--your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?

"Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions--and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth."

For the rest of the speech (it is very long, philosophical and extremely well-put) go to Capitalist Magazine online. Wikipedia has a good article on the book "Atlas Shrugged" and a list of the characters in the book for background to this quote.

Should I Be Buying Railroad Stock?

I've been hearing a lot lately about the resurgence of rail. With gasoline prices rising now and almost certainly skyrocketing in the near future, railroads look like a fantastically efficient way to move goods around the country again. They can haul triple the amount of freight for the same amount of fuel as a truck.

St. Petersburg Times writes about it here.

Warren Buffet and Carl Icahn are investing in railroad stocks according to the Daily Reckoning Website.

Forbes talks about railroad companies reinvesting here.

All this while I'm re-listening to book mp3 of Atlas Shrugged, a 1950s era novel which centers on the railroad industry of the time. I love to listen to it everytime I need a shove in my level of productivity. This book makes me want to work harder.