Jeff  Carter

Charles Murray penned a good article on the new America this weekend. It brings together a lot of statistics, but the solution to those statistics probably make most people uncomfortable.

My gut tells me that a lot of Rick Santorum supporters are supporting him because quite frankly they are upset at what has happened to the traditional American family and don’t know what to do about it. Instead of figuring out ways for the market to re-establish traditional core values, they put their faith in government to do it for them. They aren’t that much different than left wing Democrats that put their hopes and dreams into government programs to solve societal problems. Government is never the answer.

We see symptoms of government solutions everywhere. They create nothing. Government remedies create economic distortions. For example, in Chicago we have what’s known as Section 8 housing. It’s a Housing and Urban Development program that is designed to help people. However, what happens is that when a new development in the city is planned, in many cases some of it has to be designated Section 8. Hence, we have new buildings on Lake Shore Drive over looking the lake that include a small percentage of Section 8 housing. The actual buyers of apartments pay more to subsidize the housing, and the developer makes less money. The economics ignore the fact that you are rewarding people with a sweet apartment in one of the best neighborhoods in the nation without them earning it but that is another story. Government causes distortion.

One problem the article cites is out of wedlock birthrates. 50 years ago, the rate was far less than it is today. One difference of course is the availability of birth control, and the availability of abortion to take care of an unwanted pregnancy. However, it doesn’t matter how many government programs we throw at the problem both from the right and left. The problem remains. If we want to correct that problem two things have to happen. First, set the economic incentives up from a government perspective to favor not having kids out of wedlock. That can be done through tax and support policy. Second, society as a whole has to put its foot down and say that out of wedlock birth is wrong. It can’t be an accepted practice. It doesn’t mean we don’t have empathy. Peer pressure will do a lot more to cure the problem than any government program. Plenty of educational resources exist to instruct people on what to do.

Jeff Carter

Jeffrey Carter is an independent speculator. He has been trading since 1988. His blog site, Points and Figures was named by Minyanville as one of The 20 Most Influential Blogs in Financial Media.