Filed under: Capitalism, Economy, Education, Liberalism, Taxes | Tags: "Even Though", Supply and Demand, The Butterfield Fallacy
Have you heard of the Butterfield Fallacy? It is rooted in ideological prejudice, and well known to conservative commentators. Fox Butterfield was a reporter for the New York Times “whose crime stories served as the archetype for his eponymous fallacy.”
“It has become a comforting story for five straight years, crime has been falling, led by a drop in murder,” Butterfield wrote in 1997. “So why is the number of inmates in prisons and jails around the nation still going up?’ He repeated the trope in 2003: “The nation’s prison population grew 2.6 percent last year, the largest increase since 1999, according to a study by the Justice Department. The jump came despite a small decline in serious crime in 2002.” And in 2004: “The number of inmates in state and federal prisons rose 2.1 percent last year, even as violent crime and property crime fell, according to a study by the Justice Department released yesterday.”
The Butterfield Fallacy consists of misidentifying as a paradox, that which is a simple cause-and-effect relationship. You put more bad guys behind bars, and crime goes down. The typical New York Times reporter disapproves of sending people to prison because among other reasons they think it is racially discriminatory. “In 2004 almost 10 percent of American black men ages 25 to 29 were in prison” and it diverts tax money from what should be higher priorities. In 1997, “already California and Florida spend more to incarcerate people than to educate their college age populations.” Here, Reynolds Law comes into play:
The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.
New York Times business reporter Reed Abelson wrote yesterday with bewilderment that insurance premiums are rising sharply as ObamaCare’s insurance regulations begin to take effect:
Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.
Yuval Levin wrote of Ableson’s surprise that health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers. Ableson was bewildered at the Butterfield Fallacy. as Levin wrote under the perfect title “Even Though.” Some people think this might have something to do with ObamaCare’s basically outlawing actual insurance and replacing it with an economically incoherent substitute. The article also notes with surprise that businesses that now have to have their prices approved by regulators have adopted a peculiar practice by which they first propose higher prices than they expect to end up with and then work down toward their costs. Levin adds “sources say that supply and demand may be related in ways that influence prices, but this remain unconfirmed.”
When health care bureaucrats reduce the price that will be paid to providers for their services, oddly enough, the cost of insurance will go up.
James Taranto note another example from the Associated Press:
A bluefin tuna sold for a record $1.76 million at a Tokyo auction Saturday, nearly three times the previous high set last year–even as environmentalists warn that stocks of the majestic, speedy fish are being depleted worldwide amid strong demand for sushi.
The reporter, Malcolm Foster, was too caught up in environmental sentimentalism to notice that this is basic supply and demand at work. When the supply of something is low, prices go up. Imagine that.