Where Lies the Value?

I find myself struggling to take seriously the near-instant and seemingly effortless undergraduate and graduate degrees available to people these days.

Attend class one night a week. Or work online and don't attend class at all.

Enjoy nine-week semesters.

Attend class the same night each week.

Just register once and have your whole program laid out for you.

Finish two years of undergraduate work in six to nine months.

Get a graduate degree in 18, 14, or even 12 months.

And these aren't just degrees from the University of Flagstaff (or whatever). Respectable (and often nationally renowned) universities offer these types of degree programs.

Putting pedagogy aside for a moment, I can't help but wonder how edifying such educational programs are for the students themselves.

Call me a traditionalist, but I'd argue that the value of a degree is (or rather should be) a function of how much sacrifice and work was involved in its attainment. The easier the degree is to get, the less valuable it is (or should be). After all, if a BA could be gotten by putting a quarter in a vending machine, then everyone would have one and it would have no value. It is the scarcity of the resource that makes it valuable. And it is the difficulty of attaining the resource that drives its scarcity.

So is a jiffy pop degree really worth anything? I mean, have you really earned a degree if you haven't had to:

• commit to rearranging your work schedule to attend class, worrying how business travel may screw you to the wall or how a change in a class’ exam schedule might conflict with a big meeting at work
• navigate the campus bookstore and registrar's office every semester, struggling to pick up books and identify in which room your class will meet
• deal with a sixteen-week semester stretching out before you with only three credits waiting at the end
• deal with 20 year old kids schlumping their way through a semester that you’re killing yourself to navigate
• sacrifice big, bloody chunks of your time away from your family. . . away from your life. . . to the gods of education
• work at it all for years (three, four, five or more) before hopefully graduating?

I hold no grudge against those who get their education from accelerated, on-line or non-traditional degree programs. I myself participate in evening school, which is a kind of non-traditional program in and of itself. I wish everyone a degree and a promotion. Two degrees, if it'll help.

I myself am not footing the bill for the lion’s share of my educational expenses, so I am perhaps missing out on the sacrificial benefit to be had from the financial struggle.

But I know that if I ever finish the degree I'm pursuing (which is continually in question), I'll enjoy a tremendous sense of accomplishment, looking back at the countless days, weeks, months and years spent in pursuit. And I'll look back over the likely seven or eight years of toil and struggle as being well worth it. I wonder about the jiffy-pop graduates.

I Don’t Think That Means What You Think It Means

Here in December of 2007, it is difficult not to hear and read about the burgeoning subprime crisis. This perfect fiscal subprime storm has led to startlingly high default rates on home mortgages. Subprime loans were issued back when the real estate market was fat, dumb and happy, and those subprime loans are now bearing rotten fruit.

Subprime, subprime, subprime!

It's semantics, I know, but it still bugs me. I’d guess that most folks believe that “subprime” refers to the interest rates of these loans. “Sub” means below, obviously. And “prime” clearly must refer to the mythical prime rate. So it must be that really low (subprime) loans were issued to people, getting them into loans they couldn’t afford once those rates adjusted, right?

Wrong. Within the mortgage industry, it is the borrower that the term “subprime” modifies. . . borrowers whose credit scores (generally below 620 or so) are so low, or whose debt-to-income ratios are so high as to make them unqualified to receive traditional loans at decent rates.

“Subprime” does not speak to the rates involved in the loans themselves. In a quirk of language, subprime loans are typically loans issued significantly above standard rates because the borrowers are unqualified for traditional, more favorable loans. Adjustable rates, balloon payments and other monkey business are common secondary characteristics of such loans.

Over time, media reports will continue to screw this up. Reports written by very knowledgeable financial experts and published in respectable outlets will be less than clear in the language they use. And fewer and fewer people will realize that “subprime” refers to the condition of the borrower and not to the loan rates themselves.

How To Help, or To Help at All?

I was parked in a McDonald's drive-thru in downtown St. Louis on November 20. A man walks up to my car window wearing worn clothing and broken down shoes. He motioned to his ear, mouthed something and handed me a crumpled note.

Without even reading the note, I already know what it will say: It'll say "I’m deaf and unable to speak, I’m homeless and without money, and I need just a few dollars to get [somewhere] where I can get help."

I know all of the cynical arguments for not giving this guy any money. "Any money you give him will just be used to buy drugs or alcohol," the cynics say. "He’s probably just faking being deaf as part of his scam anyway. He looks able-bodied enough to earn his own money. People shouldn’t have to endure being shaken down for money and made to feel guilty in a drive-thru lane."

I also know the caring, well-reasoned and well-meaning arguments for not giving this guy any money. Many experts argue that giving food or money to homeless individuals discourages them from going to shelters and charity centers where life-saving services are available. And getting the poor and homeless into contact with these vital sevices and selfless servants is the one proven way to affect positive outcomes for these individuals who almost universally have mental health issues, substance abuse issues or both.

So I know what the experts and the cynics say I shouldn't do. But I also know what some other pretty respectable folks say I (and we all) should do:

There are those who say to the poor that they seem to look to be in such good health: "You are so lazy! You could work. You are young. You have strong arms."

You don't know that it is God's pleasure for this poor person to go to you and ask for a handout. You show yourself as speaking against the will of God.

There are some who say: "Oh, how badly he uses it!"

May he do whatever he wants with it! The poor will be judged on the use they have made of their alms, and you will be judged on the very alms that you could have given but haven't.
St. John Vianney

I can safely dismiss the cynics who say the homeless aren't worthy of help; that's just not me. But how do I (or any of us) balance the discrepancy between what the intellectual and spiritual experts say we should do to help?

Downhill Travel

Recent events have allowed me the opportunity to solidify my thoughts on a subject I have been noodling with for years. I have a hypothesis (an hypothesis?) about something that I think could be tested, if such testing hasn't already occurred. Simply put, that hypothesis is:

People are willing to drive greater distances in a north-south orientation than they are willing to drive in an east-west orientation.

Every time the possibility of a trip arises in someone’s life, some mental gymnastics are done to determine whether to drive or fly. Time availability is obviously a deciding factor; if you have to be somewhere in a few hours or overnight, flying is really the only option. Cost is also definitely part of the equation; if you don’t have the means to fly, or if you can’t afford a rental car once you get there, then driving is really the only option. Lots of other factors also come in to play, but that’s not what I’m really talking about here.

If you control for the influence of time, cost, and the host of other variables that go into such a decision, I contend that people are more willing to accept long driving trips if those trips are generally oriented in a north/south direction.

You live in Chicago and want to go to Orlando? It’s only 1100 miles. Let’s drive it.

You live in Chicago and want to go to New York? Man, that’s almost 800 miles! Who in their right mind would drive that?

• Some folks are natural-born drivers and will drive anywhere, no matter what the distance.
• Some folks hate driving and fly everywhere
• As a group, young people are generally more willing to drive long distances than are older people.
• Some people are deathly afraid of flying and will never get on a plane.
• Some older folks retire early and drive non stop for years at a time.
• Folks with many children tend to lean toward driving both to mitigate travel cost and to avoid hassles.

You could of course go on and on with such a list of weighted trends and demographic variances. But I really do think that, for those on the fence, when all other influencing factors are removed from the equation, driving north/south is seen as more desirable than driving east/west.

I once had a grown man look me straight in the eye and swear that north “is always up.” And he meant “up,” folks. As in uphill. North to him was always up, and traveling south was always traveling downhill. Maybe that’s what’s going on here. Maybe people are okay with driving downhill for a vacation, accepting the fact that they’ll have to drive uphill on the way home. And maybe people are okay with driving uphill to start a trip, knowing that the return will be an easy downhill jog.

Or maybe people are subconsciously (or consciously) more willing to drive on trips that won't cross time zones and screw up their internal clocks.

Could this phenomenon be studied? Sure. I can think of several measurement instruments that could be used to reliably measure this phenomenon and control for the aforementioned variables. I think a researcher could reasonably arrive at a conclusion as to what influence direction of travel has on an individual’s tendency to choose driving over flying (or vice versa).

But who would pay for such a study? Hmmm. . .

I might have to look into that.

Men Can Be Led. . .

George Will continues to say well and concisely what others cannot or will not. As he pointed out in a recent article about the current state of intellectual capital and capacity in our United States military:

"Officers studying at the Army War College walk the ground at nearby Gettysburg where Pickett's men walked across an open field under fire. They wonder: How did Confederate officers get men to do that? The lesson: men can be led to places they cannot be sent."

I do not doubt that Will was inspired by or informed directly by military doctrinal writing as he turned this particular phrase. Irrespective of the source of the notion, though, I credit Will for bringing such a verbal gem to me.

Men can be led to places they cannot be sent.

Tremendous.

Plexus

As I was reading Lewis Mumford’s 1937 essay entitled “What is a City?” I stumbled onto a gem of a “new” word that I’d love to be able to incorporate into my working vocabulary.

Plexus
1 : a network of anastomosing or interlacing blood vessels or nerves
2 : an interwoven combination of parts or elements in a structure or system

In this essay, Mumford explores (as the editors state) what he saw back then as the "fundamental propositions about city planning and the human potential, both individual and social, of urban life."

Mumford posits that city’s primary purpose might really be best defined as “a geographical plexus, an economic organization, an institutional process, a theater of social action, and an aesthetic symbol of collective unity.”

Outstanding! I don't agree with Mumford's theories about the need to place limits on the geographical size, density and overall population of cities to maximize the benefits derived from social intercourse while minimizing the negative externalities that higher-than-desirable densities and a sprawling geography bring. But I do know that I dig his use of the word "plexus."

From this point on I will always know what the word "plexus" means, but I hope I can take that a step further and firmly place the word into my verbal toolbox for use whenever I need it.

I like it.

Plexus.

Mortgage Crisis - Why Now?

We hear about the mortgage crisis going on and see reports of families losing their homes, home prices plummeting, and huge lending institutions going belly up.

But what. has. truly. caused. this. problem?

It is a complicated situation, but the root cause is fundamentally simple, in my opinion. Between about 2000 and 2007, a once-conservative lending industry stepped over the line and turned predatory because it was easy and profitable to do so. Fiscal restraint was eroded by historically low interest rates, a reasonably sound economy and little oversight. Ravenous lenders lost their fear of bad loans the way bears lose their fear of humans when garbage is plentiful.

The tools that facilitated this travesty are not new to the lending industry; what is new is how irresponsibly these tools were used.

Adjustable Rate Mortgages
Traditionally, ARMswere used to give qualified home buyers an initial respite from a fully-loaded mortgage payment for the first three to five years that they owned a home. Buyers were made to understand that the loan’s rate was adjustable and that it would eventually reset to a higher rate, at which time they’d be paying what everyone else was paying, or a little more. Such loans were used sparingly because they offered borrowers less security than a fixed-rate loan.

In the cash-induced haze of 2000 – 2006, though, lenders began to push ARM loans not as a way to save a little money early on with a mortgage, but as a way to squeeze buyers into homes they could not afford with a fixed-rate loan. Reasonable people with good credit were being put into loans they could barely afford at the outset, with little consideration being given to what the rate might adjust to three our five years later. Hope springing eternal as it always does, these otherwise reasonable, realistic borrowers allowed their desire for a new home to blind them to the likelihood that their barely affordable house payment in 2002 would become utterly unaffordable in 2007 when the adjustable nature of their mortgage kicked in.

Sub Prime Lending
Traditionally, when considering who should be qualified for a loan, lenders took very seriously such key variables as income, employment history and credit score. As lending morays became more liberal over time, people with poor credit and little or no employment history ceased being seen by lenders as customers to avoid and became instead a desirable new customer base. Desperate borrowers with no justifiable reason to believe they should be allowed to borrow $200,000 with little or no cash in-hand and a disastrous credit history were suddenly being bombarded with promises that they too would be approved for a home loan. . . guaranteed! Lenders saw the opportunity to use their customers’ poor credit histories as a means to push them into loans that were more profitable up front for the lenders. These loans to sub prime cost the already disadvantaged borrowers a fortune in higher interest rates, shorter fixed periods (for ARMs), murderously high reset rates and embedded balloon payments that virtually guaranteed that the loans would be defaulted on in the long run. Yet some estimates are that more than 20% of all loans made in the early part of the 21st century were loans to sub prime borrowers.

Interest-Only and Negative or Reverse Amortization Loans
At the height of this lending inebriation, lending tools that had long been considered too risky for use by the general public had somehow come to be seen as additional tools that lenders could use to attract and sign new borrowers. Lenders had become skilled at convincing borrowers that an interest-only loan-- a loan that requires the borrower to only pay the interest on the loan each month-- would somehow save them money. They pushed these loan vehicles while underplaying the fact that the principle of a loan structured in this way remained undiminished month after month and would require payment in full eventually.

For others, an interest-only loan didn't go far enough to bring the monthly payment for the house of their dreams into range. For those seeking even lower monthly payments or more expensive homes, lenders began pushing negative or reverse amortization loans. . . loans structured so that the borrower pays no principle and only a portion of the interest each month, with the principle owed continuing to increase over time. These loans of course can only allow such a free ride for a short period of time (typically five years) and reset or "recast" to a regular schedule if the principle amount exceeds a preset limit. Such pesky details held little interest for the folks selling and buying such loans when money was cheap and easy.

Again, the fact that the principle owed remains constant or continues to grow with such unconventionalloans was seen as an incidental nuisance. With home values rising by tens of thousands of dollars each year, no one had the time or inclination to worry about something as trivial as ever expanding debt loads.

Housing Prices
With the influx of this cheap money into the real estate market during the boom around 2000, real estate prices inevitably began to inflate. It soon came to be expected that a new home buyer of a $150,000 home could sell his home two or three years later for $30,000 more than he had paid. Across the country, home values increased on average somewhere near $800 per month. . . month after month, year after year. This, coupled with extremely low interest rates, made the temptation for homeowners to buy, sell, and upgrade nearly irresistible.

Home Equity Lending
Another byproduct of inflated home values and low interest rates was the explosion of home equity lending. At its height, seemingly every other radio commercial showed lenders telling listeners how easily they could get the equity out of their homes for vacations, college tuition, home improvements, or credit card debt consolidation. And Americans ate it up, trading equity in their homes for vacations, luxury spending and the consolidation of credit card debt. This conversion of unsecured credit card debt to secured loans against their homes is perhaps more responsible than any other single dynamic for the spiraling debt load that Americans carry today.

Summary
When things were good, they were very good for home buyers. The rules of the game were simple; get into as much house as you can finagleand tread water for a few years. After just a few years, you'll have a ton of found equity that you wouldn't otherwise have. And instead of throwing money away on rent, you'll pay the same money in interest on mortgage and get 30 percent of it back on your taxes at year-end via the Mortgage Interest Deduction.

So what has happened now to bring all of this to a head? These loans and practices have been going on for years now. Why is this blowing up now? While there are many dynamics at play here, these are what I believe to be the most important and influential contributing factors to the current state of the industry.

Cause 1: Interest rates are trending upward. While still relatively low, rates are considerably higher than they were in 2003 at the height (or depth) of the bacchanalia, when a reasonably-qualified applicant could secure a 30 year fixed rate mortgage for 5.25% with no points. The adjustable rate mortgages made throughout the first half of this decade are now adjusting upward and driving some owners to default.


Cause 2: Sub prime borrowers, who were known by all to be poor credit risks from the outset, are now defaulting on loans of all types (not just ARMs) as everyone knew—our should have known—that they would. Bad loans go bad, to no one’s surprise.

Cause 3: Lenders are becoming more cautious with their lending. Higher lending standards necessarily increase the scarcity of money available for home purchases, which subsequently drives down home prices nation-wide and (eventually) crashes new home sales and construction starts as sellers and builders compete for fewer buyers.

Cause 4: Corrections in home pricing, combined with the trend in home equity spending are resulting in people becoming equity-poor in their homes. Owners who spent most or all of their home’s equity on consumer debt and vacations are now finding that their houses aren’t nearly as much as they once were. Even as their payments rise to a point where borrowers find it difficult or impossible to make the payments each month, these same borrowers are finding that their lack of equity makes it that much more difficult to refinance or sell their home. And this in turn drives up defaults and reduces the turnover rate of existing homes, depleting the buyer base and driving home costs down even further.

Okay. It's well and good to point the finger at lenders and blame them for this crisis. But isn’t the borrower responsible for this mess too? After all, they’re the ones who can’t pay their bills, right?

Absolutely. A significant portion of the blame rests squarely in the laps of the borrowers. The American dream has evolved in the twenty first century to demand a level of luxury that is effectively unattainable for most. Americans, by and large, save nothing and spend more than they earn. We are inherently unwilling to settle for less than our peers, and the abstract nature of monetary dynamics are such that a little denial goes a long way in enabling people to get into trouble. After all, next month will always be better than this month, right? And the credit card bill won’t be that high, really.

So the borrowers are at fault. But I argue that lenders and investors bear the lion’s share of the blame for this current debacle. Highly sophisticated lending and investment firms with all of the marketing power that money can buy have targeted an industry that is challenging for even the most sophisticated customers to navigate. These lenders have directed much of their influence toward selling harmful and destructive loans to the members of our communities who are least well equipped to see the danger inherent in those loans or understand the long-term implications of the agreements they were signing. Hard-working people of limited means were misled to believe that the loans they were agreeing to would better secure their future.

Instead, the bubble burst and those who were most at risk are now being destroyed. And the irresponsible lenders are already seeking a bail out by the government that could make the Savings and Loan debacle of the 1980s look trivial by comparison.

Manpower Limited

My family and I took a weekend vacation over the Labor Day holiday to a somewhat unusual destination that set my mind wondering about labor availability and manpower issues. The resort will remain unnamed here, since some of my comments could be construed as less than flattering to the town and to the region. I truly mean no disrespect to any of the people who were kind enough to serve us this weekend and would not want to cause any pain with my comments.

The area to which we traveled was rural. I mean really rural. As in 25 or 30 miles between gas stations on the interstate, rural. The resort was part of a nearly one hundred million dollar restoration of a historic landmark, and it represents a recent influx of that much cash into what was until just a few years ago a small local economy with no tourism or industry to speak of.

The facilities were lavish, and the amenities were top notch. Travertine tile, marble, stone, rich woods and fine brass shone everywhere.

But everything was a little bit off. The dining room couldn’t manage its waiting guests well. The front desk’s processes made it awkward for folks with lots of luggage to check out without having to haul their bags to three different locations. The valet drivers didn’t know where to park your car or how to gracefully accept a tip as they ushered you into your vehicle. The pool attendant was overly concerned about counting the resort’s towels. And everyone was slow, slow, slow.

My wife noticed this same sense of “off-ness” independent of my own observations. When I asked her why she thought the service available at this resort seemed incongruously bad compared to the lavishness of the surroundings themselves, she posited the reasonable theory that the resort's management likely has difficulty laying in a sufficient supply of high-performing employees because they must necessarily draw from the limited labor pool of the area.

Perhaps exposing my tendency to believe that there’s always one person somewhere who is at fault for every failure, I blame the management more than I blame the labor base in the area. The services we’re talking about here are skills that can be taught. They are not esoteric skills that require employees to come to the hotel already highly skilled. Service received equals service demanded by management, I say.

So in my book, it is management’s fault, and they’ll either work out the kinks in their service provision or they won’t. But this raises an issue worth further consideration in my mind. If my wife’s theory is even partially true (which I think it is) and the owners of this resort really can’t find enough good workers, then they may have made a multi-million dollar blunder by not considering whether or not they could adequately staff this luxury-laden behemoth they’ve built. Patrons of such a costly resort simply will not tolerate the level of service currently being proffered there.

Is it possible they were so myopic in their planning as to believe that they could just cram anyone into those positions and everything would work out for the best?

Don’t they know how picky I am?

Vulnerability

I got to thinking about physical vulnerability recently. None of us is comfortable with the idea of being vulnerable, and we like to think that our lives are structured in such a way that we have wisely limited or eliminated any real vulnerabilities from our comfortable lives.

Sleep is a problem, though. Having to sleep about eight hours a day makes us amazingly vulnerable. It’s startling in its significance, really. For eight hours a day (give or take), we willingly (and often blissfully) fall unconscious and lay prone and motionless, vulnerable to any bad thing that might befall us.

Sleep is a biological imperative and it is inescapable. In the wild, animals compensate for their need to sleep in very dangerous circumstances in a variety of ways. They sleep lightly, ready to react quickly. They sleep in dens, caves and holes to better conceal themselves and to limit the avenues from which they could be attacked. Some sleep in groups, using their peers as a means for widening their sensory nets, thereby increasing their odds of survival.

Humans do it differently. We don’t hide. It’s really no mystery to anyone where we will be when we are sleeping. And we don’t sleep in proximity to large groups of people as a means of safety; many humans sleep alone, and those who sleep in close proximity to many others likely wish that were not the case.

Every night, as predictably as clockwork, we go to the same rooms in our houses, turn off the lights, and go unconscious. To compensate for the conspicuous and isolated way in which most of us sleep, we put in place other protections.

• We build walls and doors with locks to make a surprise attack by predators a difficult and noisy proposition.


• We install lights and bars and alarm system stickers on our windows to discourage predators from picking us as their prey, hoping that they’ll attack someone who is less protected.


• We buy guns and strategically place baseball bats and golf clubs near our beds, convincing ourselves that those tools will be helpful if a predator decides to disregard our perimeter defenses.


• We pass laws that empower us to protect ourselves in our homes, and others that make attacking us in our sleep punishable by (hopefully) lengthy incarceration.

But fundamentally, despite our preparations, we still choose to collapse into unconsciousness every night, with no one standing guard. Our children are asleep in another room, equally vulnerable if not more so.

It is a tribute to the safety of our society that we as rational human beings feel justified in simply turning off like that, reasonably sure that we’ll be just fine. But this willingness to sleep relatively unprotected also represents a huge gamble and assumption on our part.

We simply assume that no one will make his way through our neighborhood slaughtering families in their sleep. We believe this because such a thing has not happened to us or our relatives. But we have no real guarantees.

We accept the risk. Or perhaps we choose to believe the risk does not exist.

Maybe Not So Sarkozy

To hear many in the US media tell it, France’s newly elected President Nicolas Sarkozy is the anti-Chirac— fiscally conservative, more America-friendly, and not one to hold truck with much of the socialist nanny-state mentality of his predecessors. Conservatives are often giddy at the idea of a French president they don't have to hate, and liberals are openly cautious about a new French president who can't be assumed to hate his US counterpart.

In his latest article, George Will raises some intriguing points about how Sarkozy came to be elected and how (if at all) he is likely to differ from Chirac and other previous presidents with regard to his social and fiscal policies. Will has written about Sarkozy’s less-than-conservative realities in the past, and usual, Will says eloquently in this new article what I would butcher, were I try to attempt to convey something similar.

As Will states:

“Sarkozy has. . . said ‘I don't wake up every morning asking what Hayek or Adam Smith would have done.’ That is, unfortunately, obvious. A fountain of suspiciously opaque formulations (he advocates ‘regulated liberalism’ and ‘humane globalization), he is pleased that "the word 'protection' is no longer taboo.’ (When was it ever taboo in France?) He is committed to continuing protections of the most cosseted French faction, the farmers. When calling for a ‘genuine European industrial policy, he asks: ‘Competition as an ideology, as a dogma, what has it done for Europe?’ Worse, he wants to curtail the independence of — that is, politicize — the one institution that can save France from itself, the European Central Bank, which can restrain France's ruinous preferences for a loose monetary policy and inflation as slow-motion repudiation of debt.”

Given these, Sarkozy’s own words about what he believes and proposes, are we still to believe his billing as a regular neo-conservative capitalist who actually understands Western market economics and is willing to let his people know that he believes in what he knows.

Perhaps the best of Will’s observations about Sarkozy and his ascension to the French presidency is this: “Sarkozy's socialist opponent, Segolene Royal, a princess of vagueness, won 47 percent of the vote for, essentially, "resistance." Remarkably, she defeated Sarkozy among voters ages 18 to 59 — the working population. It does not bode well for reform that he won by winning huge majorities among those most dependent on the welfare state — 61 percent among those 60 to 69, and 68 percent among those over 70.”

Elected by his overwhelming popularity among those dependent upon France’s welfare policies, a proponent of “regulated liberalism,” and one clearly disdains the uncertainties of competition, Sarkozy is certainly less easily labeled “conservative” and “America-friendly” as the press might have us believe.

Unintended Consequences

The best argument a libertarian can ever make for abolishing the institutions that inflict policies on the citizenry at the local, state and federal level is this: policy makers are routinely surprised by the unforeseen consequences of their bright ideas, and if they don’t know for sure what the result of their policy decisions will be, then they should just lay off.

I can’t really refute that argument. History is replete with examples of such unforeseen outcomes to seemingly straight-forward policy interventions. The New Deal. Relief, Recovery and Reform. Create jobs and change US economic policies to help and protect folks. It’s a slam dunk, right? Wrong.

There are certainly many who are quite fond of the programs that came out of that deal (Social Security, Public Works Programs, Fair Labor Standards Act, etc.). But depending on whom you choose to believe, the New Deal may very well have also deepened the very depression it was trying to resolve and postponed the recovery it was designed to bring about.

Ideas about policy changes are thrown around with abandon, with few experts willing to acknowledge the possibility that the effects of their proposed policies might not be limited to the ones they’ve enumerated.

Some examples. Mandatory life in prison without parole for thrice-convicted drug dealers or child molesters. Outstanding, one might think. Who could argue against such a thing? We all want to protect the kids, right? Lock up the bad guys forever.

But maybe it’s not so clear cut. Maybe. . . just maybe. . . if a third conviction for selling drugs or molesting a child brings with it a mandatory life sentence, the following might be the result:

• A sister who sees her brother molesting their little cousin might decide not to report the crime because, while she wants to stop the abuse, she can’t bring herself to be the one responsible for putting her brother away for life.

• A district attorney might be reluctant to indict a twice-convicted individual on new drug charges if the individual is found in possession of a relatively small amount of contraband; the DA might be unwilling to send a guy away for life for what seems to be a relatively minor offense.

• A jury might be more likely to become deadlocked on a seemingly clear-cut molestation or drug possession case not because the defendant’s guilt is in question, but because some jury members might be unwilling to put a man away forever for molestation or drug possession.

And perhaps the most frightening unintended consequence of mandatory life sentences for child molesters (or anyone but murderers).

• A child molester sits back and considers what he has done, trying to decide how or even if he should release his victim. If he knows that what he has just done will guarantee him life in prison without parole if he’s caught, and if he knows that the punishment would be the same even if he’s convicted of murder. . . he may decide it best not to leave any witnesses alive at all.

So mandatory sentencing might just result in fewer crimes being reported, fewer indictments, fewer convictions and (God forbid) the murder of some victims that might otherwise have been left alive.

As for mandatory sentencing. . . we have to maintain a reasonable sentencing continuum ranging from traffic tickets to life in prison without parole or capital punishment (depending on your preference). Taking a life must bring with it the maximum penalty, and lesser crimes, no matter how heinous, must bring with them lesser punishments. To break this continuum means. . . well I'm not sure what it means.

And as for unintended consequences. . . they’re here to stay. Policy makers must tread carefully and drop their unjustified certainty in the outcome of their proposed policies.