Parental Guidance Not Necessary

Charles Payne
Posted: Jul 18, 2014 12:01 AM
Parental Guidance Not Necessary

A just machine to make big decisions
Programmed by fellows with compassion and vision
We'll be clean when their work is done
We'll be eternally free yes and eternally young
What a beautiful world this will be
What a glorious time to be free


-D. Fagen

Paternalism: Behavior by a person, organization or state, which limits some person or group's liberty or autonomy for their own good. Paternalism can also imply that the behavior is against or regardless of the will of the person [being restricted], or also that the behavior expresses an attitude of superiority.


The core of the enlightenment movement behind the urge to remake America into a better, fairer, more equal society comes from a feeling of superiority of would-be taskmasters that also doubled as tastemakers. These men and women saw themselves as the last best hope for a nation absorbed with individual achievement and wealth creation. For them, a world closer to perfection was for everyone to own a tiny plot of land and be rewarded with kinship and a stress-free life.

A key component of their feelings was of sorrow or disdain for the masses and the notion that we are simply not smart. Even when it comes to the most obvious observations that rank right up there with the red facet pumping out hot water and the blue facet pouring out cold water, the enlightened crowd took on a condescending approach to helping everyone else understand. And so for them, it is logical that fast food makes people fat, guns fire themselves, and lazy people are just misunderstood, while lawbreakers are the real victims.

Moreover, it is with this mentality that the U.S. Department of Agriculture (USDA) is ready to nudge food stamp recipients to make smarter decisions.

“Intended to change the choice architecture of the food retail environment to make healthier choices more prominent”- USDA

Those fellows with compassion and wisdom have recommendations on how to get people to buy more fruits and vegetables and less junk. Their 80-page report outlines strategies that border on absurd to insulting. At first blush, I am reminded of Woody Allen’s early movie material, but these folks take themselves seriously and apparently think food stamp recipients will take them seriously, too. Why? Because food stamp recipients are too dumb to know the difference between healthy and unhealthy choices.

The good news is that Michelle Obama has made eating “healthy” her mission and while it’s admirable, the new architecture of choice is only a house of cards.


  • Discount coupons
  • Rebates
  • Buy one get one free deals
  • Loyalty cards
  • Special shopping carts

The “My Cart Grocery Cart” would be color coded and physically divided. It would be designed to modify behavior, using algorithms that reward smart choices. And once a fresh food threshold has been reached, the cart would congratulate the shopper. (Stop laughing!) Other innovations would include better store lighting for healthier food items, movie ticket rewards for doing the right thing, and supermarket classrooms complete with weekly circulars.

Of course, in our collectivist utopia, supermarkets would have to chip in beyond special lighting arrangements. Each store would be urged to assign an “Ambassador” to help people make the right choices. Then there is the $30,000 per store price tag for those talking shopping carts. This thing is a nightmare on wheels, yet taxpayers are already out $999,891 on the study that spawned these suggestions.

The panel based this approach on a $999,891 government-funded study entitled “Nudging Nutrition,” arguing the research “suggests an intervention of this sort might be successful in modifying consumer shopping behavior.” This is how the “just machine” of paternal leadership operates. Food stamp recipients that are not buying the right foods for themselves and their families need to be called out, not mollycoddled or rewarded for eating vegetables.

What a beautiful world, indeed…

The Rally

Two things stand out from Wednesday's session.

  • Yellen finally gives us a timeline:
  • During her testimony yesterday, Yellen fielded a question/statement from Rep. Carolyn Maloney D-NY, where it was suggested the Fed would raise rates in the third quarter of next year. Yellen’s reply was that the first rate hike "is in some sense roughly consistent with what you said."
  • Blue chip names take the lead:
  • Dow +0.45%
  • S&P +0.42%
  • NASDAQ +0.22%
  • RUS -0.20%

As the Dow pulls away from 17,000, I think we’ll get serious momentum that is driven more by quality names than by the high flyers. Although, that should change later when the excitement normally associated with this kind of rally begins to materialize.

Housing Data

Once again, another headline from housing points to the massive struggles for residential construction to recover from its post-bubble meltdown.

  • Starts pace 893,000 estimate 1,020,000
  • Permits 933,000 estimate 1,037,000

Fortunately, there is a sliver of good news that probably won’t get any press. While starts for Single family units plummeted to the lowest level this year, permits reversed to the highest level of 2014 and high year over year. I’m seeing hints of an inflection in housing, but must admit, much of the onus is on easier lending standards and continued job growth.

The market will open under pressure in part to increased economic sanctions against the Russian industry and banks that President Obama announced last night.