Private Choices and the Public Good: The Case of Portion Sizes in Restaurants

Is the Public Good the Same as the Sum of Private Goods?

Many conservatives like to say that we don't need government policies to promote the public good because the public good is nothing but the sum of the private good of the individual members of our society. If everyone gets what he/she wants through the free market, the welfare of the whole society is maximized, and anything that the government does can only subtract from the welfare of society.

That sounds persuasive, but is it true? If everyone gets what he/she wants, does that really mean that the welfare of the whole society is maximized? Is welfare of the whole society merely the sum welfare of its members, or does the public good of the society include things that the individual members do not include in their sense of their own wellbeing?  The answer is complex because it depends on the way that the costs of individual choices are apportioned. To see why this is so, consider the case of portion sizes of meals in American restaurants.

Why Have Portion Sizes Increased So Much?

Portion sizes in restaurants in the United States have increased greatly over my lifetime. For example, when I was in college in the 1950s, most restaurants served hamburgers that were less than one quarter pound in size. A restaurant that served a quarter-pound hamburger advertised that fact. Today, in contrast, a quarter-pound hamburger is considered small. We see half-pound hamburgers in restaurants, and the portion sizes of other dishes have increased similarly. Today, portions in American restaurants are so large that most people cannot consume them at a single meal. Consequently, restaurants provide boxes for their customers to use to take home the food that they have not eaten, and we often see people leaving restaurants with such boxes.

Why have portion sizes increased so dramatically? They have increased because restaurant owners have discovered that people will pay more for large portions. People feel that they are getting a good deal if they get a lot of food for their money. At the same time, the large portions cost the restaurant owner very little more than smaller portions.

Cooking and Serving a Meal Costs Much More Than the Meal Itself

The biggest part of the cost of a restaurant meal is the cost of cooking and serving it. The cook and the server cost much more than the food itself. The cost of cooking and serving a half-pound hamburger is the same as the cost of cooking and serving a quarter-pound hamburger. The additional quarter pound of meat adds very little to the cost, but customers are willing to pay substantially more for the larger portion because they feel that they are getting a good deal. So, people buy meals that are too large to eat and take home the leftovers. Everyone is happy. The customers get what they see as good deals, and the restaurant owner makes more profit. What could be better?

The Big Portions Create Costs

The fly in the ointment is that the larger portions create costs that are not born by either the customers or the restaurant owner. They are shared by all of the members of our society. The first such cost is environmental. The millions of plastic foam boxes that the customers use every day to take home the leftover food add a huge amount of non-biodegradable trash to our landfills, and the environmental and financial cost of dealing with that trash is not born by the restaurant owner or by the customers. It falls on the whole society. For example, residents of my community pay a monthly fee for trash collection, and the size of that fee depends in part on the amount of trash that has to be collected.

The second cost is the cost of excessive obesity. The large portions drive customers to eat too much, and as a result, too many people in our society are obese. Obesity is a cause of many chronic diseases including heart disease, diabetes and some cancers. The cost of caring for patients with such chronic diseases adds substantially to the cost of healthcare in our country, and that additional cost is born by all of us in the form of higher health insurance premiums.

The Restaurant Owner and the Customers Do Not See the Social Costs

The environmental cost and the healthcare cost are in a sense invisible to the restaurant owner and the customers. They bear only a tiny fraction of those costs, and in any case, there is no way for them to know the environmental cost of a single half-pound hamburger or one plastic foam box.

What is Important and How Do We Decide?

What should we do about the social cost of the large portions? I do not wish to say that restaurant owners should not serve half-pound hamburgers or that customers should not order them. Individual freedom is important. On the other hand, we have to see that the choices made here impose costs on us all, and we would be better off if we did not have to bear those costs. Clearly, maximizing the welfare of our society as a whole involves more than maximizing the benefits to the restaurant owner or to the customers. We would all be better off if we did not have to pay the fees or the health insurance costs imposed by the larger portion sizes. 

Are the social costs more important than the individual benefits, or is it the other way round?

There is no simple answer to the question of the relative importance of the social costs and the individual benefits. The answer to that question is inherently political. We could, for example, forbid the use of nonbiodegradable boxes by restaurants, or we could start a campaign to shame people who take home food from restaurants. Should we do such things? There is no easy answer, but one way or another, we will decide what costs we wish to bear as a society, and we will decide what costs we will impose on the people who impose extra costs on us.

The Government of the United States Will Print Money to Pay Its Debts

Our Government Will Devalue Our Money

In last week’s post, I talked about the decline in the value of the dollar due to the loss of its central place in the international oil market. I pointed out that you will become poorer because your dollars will lose purchasing power. However, that is not the whole story. It gets worse. Much worse. We should expect that our government will deliberately devalue our money in order to be able to pay the interest that it owes on our national debt.

We Have Lived on Borrowed Money For Decades

As long as the value of the dollar was underpinned by the fact that everyone needed dollars buy oil, and as long as Saudi Arabia was committed to investing its oil profits in U.S. treasury bonds, the U.S. government was able to borrow money at extremely low interest rates to finance its operations. That in turn made it possible for our government to lower the taxes we paid over and over again while maintaining at least a semblance of domestic services and supporting a worldwide network of military bases along with a navy that patrolled all of the world’s seas. In short, we have lived on borrowed money for decades.

Now Our National Debt Has Become Unmanageable

Now, the debt has become unmanageable just at a time when the government’s borrowing cost has risen due to the declining demand for dollars. The government is now borrowing money just to pay the interest on the national debt – not to reduce the principal – just to pay the interest.  In addition, a recent article reported that the United States’ government is now formally insolvent:

The U.S. government is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, released last week to near-total media silence. The numbers: $6.06 trillion in total assets against $47.78 trillion in total liabilities as of September 30, 2025. Importantly, the $47.78 trillion in reported liabilities does not include the unfunded obligations of social insurance programs like Social Security and Medicare — those are disclosed separately in the off-balance-sheet Statement of Social Insurance (SOSI).

Our Government Will Print Money to Avoid Defaulting 

A private business in this situation would have to default on its debts. It would declare bankruptcy, and its creditors would receive only a small fraction of what they were owed. In contrast, a national government does not need to default because it can print as much money as its needs to pay its debts. Our government has debts of just under $40 trillion. The interest payments now come to about $980 billion per year, and they are rising. We are now spending more on interest payments than on our military forces. We recently started a costly war, and last year, Congress passed a big tax reduction, but don’t you worry. When the interest payments are due, the Federal Reserve will be able to print as much money as the government needs to pay the interest.

Printing Money Causes Inflation

However, printing money to cover the debt has the side effect of creating inflation. When new money goes into circulation, but no new goods or services are produced, prices rise and the value of the dollar goes down. Nevertheless, printing money to cover debts is the solution that has been used for more than a century by all governments that have faced unmanageable debts, and we should expect that our government will do it this time, too. It will have to print money because the current path of borrowing to pay the interest is unsustainable, and the alternative of defaulting is unthinkable. U.S. treasury bonds are the foundation of both the American and the world’s financial systems, and defaulting would be a disastrous shock. Printing dollars will avoid the shock, and the decline in the value of the dollar will be a gradual process that the world can adjust to.

Act to Preserve the Value of Your Retirement Account

You can adjust to it, too but only if you understand what is happening. If you have retirement accounts, savings accounts in dollars or other wealth that needs to be preserved, I strongly suggest that you use the internet to inform yourself of the alternatives that are available to you,  and I also recommend that you talk to a financial advisor about what you can do to preserve the value of what you have. The devaluation of the dollar will not happen all at once. It will be a gradual process. So, you have time to act, but you do not have time to waste.

Trump's Bullying and His War in Iran Will Make You Poorer

Oil Purchased with Chinese Yuan

Trump's war in Iran is speeding up the decline of the American dollar, and that will make you poorer. Iran recently offered to allow oil tankers to pass through the Strait of Hormuz, but only if the oil in the tanker was priced and purchased using Chinese yuan instead of dollars. Why should you care about that? You should care about it because it will affect your life very directly.

In order to understand why this is so, you first need to know that for decades, most international trade in oil has been conducted in U.S. dollars. In 1973, Pres. Nixon made an agreement with Saudi Arabia that the United States would protect the Saudi oil fields militarily, and in return the Saudis would price and sell their oil only in U.S. dollars. Since then, oil from OPEC countries has been priced and sold in dollars. The effect of this agreement has been that countries that buy oil need to have dollars to pay for it. That has created a high worldwide demand for dollars and that demand has kept the dollar strong and the prices of imported goods low in the United States. 

In addition, the Saudis agreed that the dollars they received for their oil would be recycled into investments in United States treasury bonds. That has allowed our government to borrow at artificially low interest rates, and that in turn has kept interest rates low for everyone in the United States. The interest rate that banks charge for mortgages, for example, is tied to the interest rate on treasury bonds. In effect, you were able to buy a house with an affordable monthly mortgage payment because Saudi Arabia was buying treasury bonds. If they stop doing that, interest rates in the United States will rise, and that means that mortgages and other loans will become more expensive. The rise in interest rates along with the rise in the prices of imported goods will affect you directly because it will become more costly to borrow money to buy a house or any other consumer goods.

Imported Goods Are Cheap Because the Dollar is Strong

Many of the things that you buy are imported or contain imported parts. For example, every automobile factory in the United States has a supply chain that includes at least some parts made in other countries, and those parts are cheap because the dollar is strong.  If a car has parts made in – say – Mexico, those parts must be purchased with Mexican pesos. So, the American company buying the parts uses its American dollars to buy pesos to pay for the parts, and their prices in dollars depend on the number of pesos that a dollar will buy. A strong dollar buys more pesos than a weak dollar. Therefore, the cost in dollars of making the car depends on the strength of the dollar. The stronger the dollar is, the cheaper will be he cost in dollars of making the car and the lower will be the price that you will have to pay to buy it.

The requirement that oil must be paid for in dollars has kept the dollar strong, and the dollar’s strength has kept the prices of imported goods low. That has meant that the cars, clothes, furniture and imported fruit that you buy have been affordable for you. In addition, low interest rates have made it affordable for you to buy such things on credit.

Trump's Bullying of Other Nations is Weakening the Dollar and Increasing Interest Rates

That situation is now changing. Countries all over the world are looking for ways to reduce their need for dollars. Some countries started doing that before Trump was elected, but his bullying has lent urgency to their search.  Countries are looking for ways to reduce their dependence on the United States, and they want to do it quickly. Countries that were our allies now see us as dangerous and unpredictable. They are working to reduce their dependence on the United States and on the American dollar, and specifically, they are moving to other currencies to pay for their oil. China already pays for its oil with Chinese yuan. The BRICS countries are paying for oil with their own currencies. The EU is talking about paying for its oil with euros. All of that means that the dollar will weaken further and that interest rates in the United States will rise.

A Weak Dollar Together with Higher Interest Rates Will Make You Poorer

The effect of this will be that your purchasing power will continue to decline. Because of Trump’s bullying of other countries, many of the things you buy will become more expensive very soon. In addition, the value of your life’s savings (which you hold in dollars) will decline. Because of Trump's bullying and his war, you will need to adjust quickly to the new economic reality, and you can thank our president for that.

This War is Grounds for Impeachment

 Opposition to the War on Policy Grounds

People are angry about our attack on Iran. I have seen a lot of criticisms of this war. Some say that Trump is somehow a puppet of Netanyahu or of Israel. In this view, the war is just another example of how we have been tricked into supporting Israel, which is - as those who espouse this view see it - an anachronistic, colonialist project, which we should not support.

Another critique of the war says that it is all about oil. In this view, our attack on Iran is just another expression of our attempt to control, and to profit from the Middle East’s oil. A third critique says that this war is yet another expression of the power of what Pres. Eisenhower called “the military-industrial complex.” Those who espouse this view say in effect that we entered the war to provide an opportunity for the defense companies to make profits.

Those who hold these views criticize the war as policy. They say that it is a bad policy. They say that the majority of the American people oppose the war. They say that the United States should not have attacked Iran., but none of these critiques contest the president’s right to attack Iran. The people who hold these views say that the attack on Iran is bad but not that it is illegal.

Opposition to the War on Constitutional Grounds

I think that we should oppose the war on Iran because it is illegal. Our Constitution gives to Congress – and only to Congress - the right to declare war. While the president as commander in chief of the armed forces may engage them in military action without the approval of Congress, he may do so only in an emergency. The War Powers Act of 1973 states:

The constitutional powers of the President as Commander-in-Chief to introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to (1) a declaration of war, (2) specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.

There has been no declaration of war or specific statutory authorization, and no one, including Mr. Trump, has alleged that Iran attacked “the United States, its territories or possessions, or its armed forces." So, this war has no legal basis at all, and Mr. Trump’s ordering our forces to attack Iran should be seen as an impeachable offence. He is a rogue president who is trampling on our Constitution and our democracy.

Some members of Congress recognize the situation for what it is, and they introduced a resolution to block the president from engaging in any further military action in Iran without congressional approval. The resolution failed because the president’s Republican supporters control both houses of Congress. Speaker Mike Johnson in a truly Orwellian moment even said that we are not at war.  He also said that the restrictions contained in the War Powers Act of 1973 are unconstitutional because they interfere with the powers granted to the president in Article II of the Constitution. He apparently believes that a president should be able to take this country into war whenever he feels like it, which is what Mr. Trump apparently believes as well.

This war is illegal, and that is why we should oppose it. Opposing it on policy grounds is a weak approach because there can always be disagreements about policies. The Vietnam War was bad policy, but it took ten years to bring it to a close. The Afghanistan War was bad policy, but it took twenty years to end it. This war is not just bad policy. It is illegal. It should be ended now, and the rogue how started it illegally should be impeached.

The Midterm Elections Are an Opportunity

Unfortunately, we won't be able to end the war or impeach the president now, but we can terminate the Republicans' control of Congress in this year's elections and thus open the possibility of ending the war next year.  If Trump's opponents take control of Congress, they will be able to put the brakes on his adventurism, and there have been many political and economic signs that his opponents may win this year's election. However, that will happen only if they work hard to make it happen. So, this is not a year to sit on the sidelines. Do whatever you can to help to take our country back from the madman now leading it. Let's end this illegal war!

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Was Venezuela Trump’s Sudetenland?

 The Sudetenland, Munich and the Policy of Appeasement

The Sudetenland was an area at the western edge of Czechoslovakia (now the Czech Republic). In 1938, Adolf Hitler demanded the right to annex the Sudetenland and make it part of Germany on the grounds that its inhabitants were mostly German speakers. The Munich Conference was convened to settle Hitler’s claim, and the British and French famously gave in to his demand for the sake of what Prime Minister Neville Chamberlain called “peace in our time.” Nevertheless, a year later, Hitler invaded Poland and World War II broke out. As a result, “Munich” has become a shorthand for the futility of appeasing aggressive political leaders. Appeasement doesn't work because it emboldens the aggressors to make further demands. If we appease an aggressor today, we will only have to fight him tomorrow. Today, we see references to “Munich” used to explain why we need to resist Putin’s invasion of Ukraine.

Another Lesson

However, “Munich” has another lesson to offer. It is that appeasement may also be a trap for the leader who is appeased. He may later start a war believing that no one will resist him only to learn that his belief is wrong. The war that Hitler started was a disaster for Germany. More than 6 million Germans died in the war. The country’s cities were flattened by the allied bombing. Almost 80% of the buildings in Berlin were destroyed and something like 70% of those in Cologne. 20% of Germany’s housing stock and almost half of its infrastructure – railroads, bridges and roads – were destroyed. By 1945, the German people were starving. The results of the Munich Conference were even worse in some ways for Germany than they were for the rest of Europe.

From Hitler's point of view, the takeover of the Sudetenland and the Munich Conference were a test of the allies' willingness to resist his aggression. Trump’s overthrow of the government of Venezuela may be seen as a similar test to see whether anyone would resist.  Trump encountered no serious resistance either from other countries or from political factions within the United States, and like Hitler, Trump has been emboldened to undertake bigger adventures. We can see the result now in Iran. If Trump continues down the path of expanding aggression, he will eventually encounter resistance from other major powers just as Hitler did. So far, no major power has dared to challenge our attack on Iran, although the Russians and the Chinese are giving intelligence and logistical support to Iran. So far, Trump has been able to do what he wants without serious consequences to us, but do we believe that will contine indefinitely? No doubt, Hitler believed that in the fall of 1939.

Stop the Madness

Engaging in ever-widening aggression is madness. We can stop it because, fortunately for us, we do not live in Nazi Germany. We still have freedom to criticize and to resist our government’s policies. If we value our country or the future of our children and grandchildren, we must resist with all our power. If we do not wish to see them searching for food in the ruins of New York or Chicago, we must stop the madness of expanding war now.

This year's election gives us an opportunity to stop the madness. If Trump's opponents take control of Congress, they can put the brakes on his adventurism, and there have been many political and economic signs indicating that his opponents may be able to do so. However, that will happen only if they work hard to make it happen. So, this is not a year to sit on the sidelines. Do whatever you can to help to take our country back from the madman now leading it. 

A Campaign to Unite Working Americans

 A Radical Idea

I have a really radical idea. Let’s fight this year’s electoral campaign on issues that matter to most working Americans, and let’s not focus on issues that cause working Americans fight among ourselves instead of focusing on our common enemy: the oligarchy. Let’s campaign on issues like affordable healthcare, affordable childcare and affordable housing, and let’s offer real proposals to alleviate those problems.

Let’s not argue over theoretical issues like the definition of capitalism or the definition of socialism. Let's not spend our time on questions like whether black people deserve reparations, whether transgender women should compete in women’s sports events or whether Israel is committing genocide in Gaza. All of these are valid moral questions that deserve answers, but this year, we are fighting for the life of our democracy and for a country in which ordinary, working people can afford to live. If we are to have any chance of winning this fight, we must bring working people together to vote in their own interest. We cannot spend time fighting among ourselves.

We Can Rise Together

But what about racism and sexism? Shouldn’t we also fight against them? Yes, we should, but we should do so in a way that does not present these fights as zero-sum contests within the working class. We should focus on showing that a gain for black people does not have to be a loss for white people, and a gain for women does not have to be a loss for men.

For example, if we had affordable childcare, families would gain, not just women. In a society with two-income families, affordable childcare would give all working families bigger disposable incomes. Affordable childcare would allow families to buy homes or to save more for retirement. The men in those families would be better off and not just the women.

Affordable childcare would also help to close the wealth gapbetween black households and white households. The reason is that on average, black families are disproportionately represented among families with no savings. So, any program that helped working Americans to save money would help to narrow the wealth gap between black families and white families. Similarly, affordable childcare would especially benefit women because they are disproportionately represented among single-parent families. So, affordable childcare would help to narrow the wealth gap between men and women.

We can make the same kind of an argument about affordable healthcare. A program like Medicare for All would benefit all working Americans. We would all be better off if healthcare were affordable, but affordability would especially benefit members of the groups like women and minorities that are most burdened by our present caricature of a system. They would be the ones who benefit the most even though all of us would benefit to some degree. Affordable healthcare would make it possible for people who live today from paycheck to paycheck to save money and would thus help to close the wealth gaps between black people and white people and between women and men. 

At the same time, white men would also be better off. They would not have to deal with crushing medical bills or suffer bankruptcy from unexpected medical emergencies. Their salaries could rise if companies did not have to spend so much money on health insurance for their employees.

These examples show that improving the lot of women and of black people does not require us to take anything away from white men. In fact, policies that make women and black people better off may help white men at the same time. We can rise together, and that is what we should emphasize in our campaign.

Let's Do It!

We could put together a campaign to appeal to all working Americans. Such a campaign would give us a real chance to take back our country. So, let's get busy. Let's focus on ideas that bring working Americans together so that we can take our country back!

What Do Tariffs and Deportations Have in Common and Why Do the Rich Support Them?

 Tariffs and Deportations Share a Common Basis

What do tariffs have in common with the deportation of immigrants? Our president’s signature tariff policy suffered a setback last week, and it was on the heels of the setback that his other signature policy – the arresting and deporting of immigrants – had suffered the previous week in Minneapolis. This combination set me to thinking.  Why has he adopted these particular policies? What do they have in common? Where does their political appeal come from? And why have they been so strongly supported by his MAGA base and by our ruling oligarchy?

What both policies have in common is that they are rooted in the idea that our society, our culture and our economy are endangered by people who are not like us. The tariffs are justified by a claim that our economy is being destroyed by foreigners who compete with us unfairly and dishonestly. As a result, our manufacturing industries are being destroyed and our people thrown out of work. We cannot allow the foreigners to continue to take advantage of our openness in this way, but we can save ourselves by erecting tariff barriers to keep out the foreign products that are weakening us. Furthermore, the most egregious offenders – the Chinese – are non-white and (mostly) non-Christian. So, the tariffs may be portrayed as a part of the defense of White Christian Civilization against “the barbarians at the gates.”

The policy of deporting immigrants is justified in the same way. Non-white foreigners are invading our country. They take jobs away from White Christian Americans; they are criminals who endanger our people; and their languages and customs pollute our culture. Many, it is said, are terrorists. However, we can defend ourselves against them if we close our borders and deport those who are already here.

The Policies Are Rooted in the Xenophobia Which is Common Everywhere

Both of these policies draw on deeply held feelings of xenophobia that may be found in people everywhere. The United States is not unique. Britain withdrew from the European Union in part because of resentment of immigrants. India has its Hindu nationalism. Burma slaughters its Rohingya. Religious and tribal wars are endemic in many parts of Africa. Muslims in Egypt discriminate against the Christian Copts. 

Moreover, the MAGA movement is not the first xenophobic movement in American history. The "Know Nothing" movement of the 1840s was a nativist political movement. The immigration of the early twentieth century gave rise to the anti-immigrant laws of the 1920s. Chinese immigrants were excluded from American citizenship for decades.

The Policies Serve the Interests of the Rich

However, the fact that xenophobia is so common does not explain why the policies are supported by our American oligarchs or why Trump's policies have become the basis of a organized MAGA movement at this time. An organized political movement like Trump's MAGA movement does not spring automatically from cultural fears even when they are widely held. The MAGA movement could not have been created without the oligarchs because turning a set of vague, cultural fears into an organized movement takes lots of cash, and it must be provided by people who have it. People like Jeff Bezos or Alex Karp do not support a political movement out of a vague, cultural fear of foreigners. Such people support a political movement because they expect it to advance their financial interests. They support Trump's MAGA movement because he cuts their taxes and increases their profits by reducing regulation of business. 

We can see the results in the policies of the Trump administration. His tax cuts mainly benefit rich people. His deregulation of business helps corporations to make money. His tariffs shift the tax burden from the rich to working Americans. On the other hand, his policy of deportation of immigrants is bad for business. The policy deprives business of both workers and customers, but the rich know that they cannot get their tax cuts and deregulation for free and that something must be done to fulfill the promises made to the MAGA voters. So, the oligarchs support the MAGA movement and its xenophobic policies because they cannot get the tax cuts they want without the support of the MAGA voters.