Oh Jezebel, are you scared of the credit market because you don’t understand it?

Reading Jezebel’s Are Fertility Finance Companies as Shady as They Seem?, I started to get a familiar feeling I get while reading this kind of Jezebel article. I grow weary of Jezebel’s irrational, baseless, scare-mongering regarding certain kinds of commerce.

When describing the likelihood that fertility financing is a bubble, writer Katie Baker writes, “Hey, regulators, don’t you remember a tiny little incident called the subprime mortgage crisis?” Okay, first, increasing demand does not equal bubble.

Bubble:

So many people are invested

so heavily

in something with so little real value

that the investment way exceeds the possible net returns.

Unless you know that prices are way above value due to outside market manipulation, you don’t know whether something’s a bubble until it bursts.

A burst necessitates people en masse realizing the true value of their investments. This leads to a quick price reset and many people losing their shirts.

So are so many people invested so heavily into something, something I’ve literally just now heard of for the first time, that has so little actual value, that when the value resets, they’ll all lose their shirts?

This is silliness. So why would you want regulators to protect families from something that could do them so much good? With every kind of loan, there is risk for default, yes. But we don’t use that risk to ban car loans, or the loan you can take out to buy a TV. Why should you be able to borrow $24,000 to buy a car, from the same person who’s selling you the car, BTW, but not able to borrow $24,000 for the chance to get pregnant? Without outside influence, the credit market self regulates. If credit prices (interest rates) exceed demand, prices fall and money gets cheaper. When people start wanting to borrow more, prices (interest rates) go up. Demand for money rises when people feel confident that they’ll be able to make enough money on the borrowed money that they’ll realize a profit. Supply of money rises when people think their money (savings) will make more money by being available to others to invest. No one makes any money if money from savings is lent to people who can’t pay it back. In this way the right people get the right amount of money for the right price.

But let’s say for the sake of argument that fertility lending could be predatory without government assistance (even though in reality that would just lead to them defaulting). Well let’s look back to the aforementioned tiny little incident called the subprime mortgage crisis. Far from the result of a lack of regulation protecting people from predatory lending, federal policy actually encouraged lending to people who could never hope to pay the loans back. First, through the Community Reinvestment Act, which punished lenders for discriminating against poor and minority borrowers, the people the banks knew were the least likely to be able to pay back their loans. Then, through the creation of Fannie Mae and Freddie Mac, which created a secondary market for mortgages, assuring lenders they’d always be able to clear their books of the coming defaults they were creating by lending way more to people than they could hope to pay back. No risk, all reward for predatory lenders. Outside of regulation, the mortgage market would have self regulated. There would be no disincentive to not lend to people who can’t pay back their loans, so only worthy borrowers would receive loans. There would be no market for bad loans, so banks would have to decline to lend to overly risky borrowers or risk defaulting themselves.

So Katie wants to see those same regulators tweaking the fertility market? There isn’t a bubble now, but just get the government involved, and you’ll see the kind of poor investment choices that only outside coercive market manipulation can create.

Photo by booksin.

A Libertarian, Feminist take on the birth control mandate: pro access, not pro mandate

Improving access to birth control has been vital in helping women participate in the workforce how and when they choose to do so.

Yet today, many forms of birth control remain difficult and expensive to obtain, even for women with health insurance.  Currently, many insurance plans cover Viagra and not birth control. So it’s understandable that many women would be excited about a mandate requiring employers to offer health insurance that covers birth control.

But being pro access doesn’t necessarily mean being pro mandate. There are three important reasons this mandate actually causes more problems than it solves.

First, the mandate applies to organizations run by people who do not support birth control. It forces employers, for example, Catholic charities, to spend donation money from practicing Catholics to provide health insurance that covers birth control. This is a clear violation of religious liberty and one that if allowed to stand threatens religious freedom for everyone going forward.

As backwards as the Catholic stance may seem to you, it’s important to protect religious liberty, even, and especially, if it’s the liberty is to do things that don’t make sense to you. No one is forcing women to work at Catholic charities, and no one should force those charities to pay for products they find repugnant.

Second, these kinds of mandates just further strengthen the tie between full-time employment and health insurance. Women are less likely to work full-time than men, so they are less likely to benefit from employer-provided insurance. Keeping insurance tied to employment limits women’s access to it, and keeps many women dependent on their husbands for coverage. A much better solution would be one that helped untangle that government-created knot.

Third, when the government pays for something, or forces someone else to, meddling is seldom far behind. We barely have an insurance mandate in place and they’re already telling employers exactly what their insurance has to cover. Do you really want them telling you what birth control you have to take, and how often? Don’t think it could happen? It already has.

Currently, low-cost birth control, whether through insurance, Medicaid or NGOs like Planned Parenthood, is already available to the majority of women. But not every form is cheaply available to every woman yet. The solution to lowering prices and increasing access isn’t using the government to force people to buy it for other people. Untangling health insurance from employment would help the most. Ending the prescription requirement for birth control and encouraging people to donate to NGOs that provide low-cost birth control by making donations tax deductible would also help. Best of all, these initiatives will improve access without violating religious liberty or inviting the government into reproduction. Let’s oppose the mandate not because we oppose access to contraception, but because there’s a better way, with fewer tradeoffs, to get it done.

Update: Here’s a great source on how to increase access to birth control while encouraging freedom and lower prices for all: If We Want Better Health Insurance For All, Why Are We Making It Illegal?

Photo by Mike Licht, NotionsCapital.com

Dana Goldstein Homeschooling Piece Misses the Real Emergency

I just want to  remind everyone of one thing in the midst of the whole debate over homeschooling: Public schooling sucks the most for the families who are able to escape it least. Generally speaking, a low-income, public-school student will get a lower-quality education (if he or she graduates at all) than a high-income student (source).
In most places, homeschooling and private schooling are the only legal ways to avoid the public school to which you are zoned. Both routes cost money, above and beyond what you’re already paying in taxes.

It’s really important to keep homeschooling and private schooling options available for those who can afford it. Not least because competition from those two sources actually improves public schools, benefiting the kids left behind (source, source, source).

But it’s even more important to open up options for the kids whose families can’t afford or manage homeschooling or private schools. It just seems a little silly to hate on homeschooling when, for example in Florida, less than half of all African-American students graduate from high school (source).

Photo by Bruno Girin.

Why not investigate Bachus for killing the economy?

Rep. Spencer Bachus faces insider-trading investigation

So lemme get this straight. It’s okay for congresspeople to choose winners and losers in the private sector. It’s just not okay for them to trade stock related to the firms they picked to win and lose. And it’s not okay because it might tempt them to pick winners and losers based on stocks they already hold. So if we ban and prosecute “insider trading,” we can be sure a congressperson will never make a decision on which firm should win and lose that’s influenced by what benefits the congressperson.

When Congress subverts the process of creative destruction and blunts competition’s wealth-creating forces through corporatist favorite-picking the American economy suffers both immediately and in the future through economic uncertainty. What do insider trading rules do about that?

Insider trading rules are akin to telling an axe murderer he can still chop people up, but he just can’t eat them.

Photo by JacobEnos.

Human rights violations worsen in Libya

Now the government and the militias are torturing and killing people in Libya

Mr. Keeb’s government, formed Nov. 28, has found itself virtually paralyzed by rivalries that have forced it to divvy up power along lines of regions and personalities, by unfulfillable expectations that Colonel Qaddafi’s fall would bring prosperity, and by a powerlessness so marked that the national army is treated as if it were another militia.

The question underlines the issue of legitimacy, which remains the most pressing matter in revolutionary Libya. Officials hope that elections in May or June can do what they did in Egypt and Tunisia: convey authority to an elected body that can claim the mantle of popular will. But Iraq remains a counterpoint. There, elections after the American invasion widened divisions so dangerously that they helped unleash a civil war.

A poster of Libya's leader Gaddafi, one of several which were distributed among a crowd gathered to view a burning fuel truck, is held in front of the media in Tripoli

So Egypt and Tunisia are doing better than Iraq and Libya. What do Egypt and Tunisia have in common that Iraq and Libya don’t? Could it be the whole power-vacuum-caused-by-foreign-intervention thing?

How could we stand by and watch when we could violate our own law and another country’s sovereignty, and then be legitimately blamed for the resulting horrendous and long-lasting human rights violations?

But we had to do something!

Photo by BRQ