The more of the blogs I read at HBR, the less I respect the institution.  A HBR blog post today by Tony Schwartz called “Are You a Role Model?” brought this to me again.  His overall post is about giving and personal sacrifice.   His underlying point is obfuscated by the two approaches he takes in the article.

The first part of the article is basically how he likes it when rich people agree with his tax policy preference.  He finds himself admiring them and impressed with them.  This is pretty shallow.  If we admire people because they agree with us, it is not because we truly find them worth of admiration, but we are admiring our own positions vicariously through them.  This isn’t admiration worth the name.  Instead it is mere intellectual narcissism.

The second part of the article is a list of people and professions he admires for their sacrifice.  There are several categories missing from his list (military, law enforcement, firefighters, etc.).  I do not believe Schwartz set out to make an exhaustive list of people he deems worthy of admiration.  But what is the common theme of who deserve admiration?  It is people who sacrifice to help the underprivileged, downtrodden, etc.  While that may be worth admiration, it is also too limiting.  Admiration belongs to all who do what it admirable (I won’t attempt an exhaustive list either).  People living their own lives the best they can is admirable.  To assert that sacrifice is required to be admired is abominable.  Schwartz does not explicitly limit admiration to this, however, his article seemed to me to strongly imply it.

“The idea that the service to God should have only to do with a church altar, singing, reading, sacrifice, and the like is without doubt but the worst trick of the devil. How could the devil have led us more effectively astray than by the narrow conception that service to God takes place only in a church and by the works done therein…The whole world could abound with the services to the Lord, Gottesdienste – not only in churches but also in the home, kitchen, workshop, field” -Martin Luther

Finally, Schwartz also makes an intellectual mistake common to left-wing politics.  He conflates giving and taxes.  Taxes are taken from people under pain of prison (for tax evasion) or confiscation of assets.  Giving the government your taxes is of no greater moral weight than paying your electric bill.  Demanding to be taxed more is the same morally as demanding to be charged more on your cell phone bill.  It is a way of avoiding making a harder decision to give more.  But a our debt crisis requires only the “rich” to sacrifice.  “What we need more of,” Schwartz asserts, is more people to give the government more money.  Not because it is objectively morally right, but because he believes it is what we need and is therefore moral for other people to do.

So the Standard and Poors (S&P) ratings agency downgraded the US Treasury bill from AAA to AA+.  Based on some comment in the media and on the web, you would think that they are engaging in an economic attack on the United States.  Their downgrade may have the effect of hurting the US economy in some way, but that is to confuse the effect with the intent.  Or put another way, it would be blaming the gun while ignoring the gunman.

The job of a ratings agency is to quantify the risk inherent in a security (like bonds).  Measuring risk is an inexact science that we do surprisingly well as a society.  Insurance companies do it every time they write a policy.  The risk of debt is generally the likelihood that you will get paid the agreed sum (principle plus interest) at the agreed time (maturation date).

“But the US government can print money.  There is no way they will be unable to pay debt in US dollars.”  True, but again, people who claim this are missing half the story.  By printing money (or otherwise increasing the amount in circulation) the government would inflate the currency and thus decrease its value.  While the face value of the debt would be honored, you wouldn’t be able to get the same buying power with it.  In real terms (when inflation is adjusted for) the debt/bond holder would have lost money.

The downgrade may ultimately increase the interest rate treasury bills pay, thus increasing interest rates elsewhere in the economy.  However, as our debt mounts, the temptation to inflate away the problem will increase for our politicians.  A less than AAA rating reflects this increased risk.  Blaming S&P for the downgrade blames the gun.

The policy of Congress (the vast majority of it in every party) has been to spend money and pretend debt doesn’t matter.  The bond market and ratings agencies think it does.  Continued deficit spending is the economic equivalent of slowly squeezing the trigger.  Nothing drastic will happen until it does.  Then there will be a big mess to clean up and no way to unfire the bullet.

I have stumbled across several articles and blog posts recently that have declared there is a right to Internet access.  Most of this is complete crap.  Everyone does have a right to Internet access as much as they have a right to a soft drink or otherwise engage in any legitimate commerce.  The government nor anyone else can morally tell you that you do not have the right to purchase Internet access.  To the extent a government (e.g. Syria, China) curtails your access to information via the Internet, they are infringing upon your rights.

This, however, is not what people are really talking about in the US context.  When people use the phrase, “a right to the Internet” in the United States.  What they really mean is that they should not have to pay for the strain they put on the network.  Americans have the right to legally purchase access to the Internet, but when they use more than what they purchased and are cut off, they complain.  Mobile telecommunications companies charge for data plans that are good for so much data a pay cycle (e.g. 500 MB per month).  The idea is that you will watch your data usage  and keep it low and thus minimize the strain you place on their network.  The hope is that everyone will not try to download their entire quota the same time as everyone else. Terrestrial telecommunications firms generally charge for a data rate (e.g. 15 Mbps) and care little for how much you download in a pay period.  However, most firms have a upper limit on the total downloaded data.

That upper limit is what causes the headaches.  This limit is usually ridiculously high.  The average user even with streaming movies does rarely comes close to this limit.  You would have to be using the full bandwidth constantly for a sad amount of time.  This limit prevents people from clogging up residential lines with high volumes of business traffic or illegally distributing software and other digital media.  In short the only people who get caught in this are people who have the wrong plan at worst (get a business account) or subverting the intellectual property laws at worst.  These people get no sympathy for their indignant rantings from me.

In the end what people who want the more Internet access than their current plan provides are lobbing for is for the rest of us to pay for their desire.  They are putting increased strain on the network, which will require either an upgrade to the network infrastructure or a lower quality of service overall.  Either way everyone else will pay for it in the form of higher rates or a lesser product than what they currently get.

(Those without any Internet access in their home should check out their local public library.  They are really neat institutions.)