The ‘Unseen’ Deserve Empathy, Too by John Hasnas

Today’s article of the day comes from the Wall Street Journal:

While announcing Sonia Sotomayor as his nominee to the Supreme Court, President Barack Obama praised her as a judge who combined a mastery of the law with “a common touch, a sense of compassion, and an understanding of how the world works and how ordinary people live.” This is in keeping with his earlier statement that he wanted to appoint a justice who possessed the “quality of empathy, of understanding and identifying with people’s hopes and struggles.”

Without casting aspersions on Judge Sotomayor, we may ask whether these are really the characteristics we want in a judge.

Clearly, a good judge must have “an understanding of how the world works and how ordinary people live.” Judicial decision-making involves the application of abstract rules to concrete facts; it is impossible to render a proper judicial decision without understanding its practical effect on both the litigants and the wider community.

But what about compassion and empathy? Compassion is defined as a feeling of deep sympathy for those stricken by misfortune, accompanied by a strong desire to alleviate the suffering; empathy is the ability to share in another’s emotions, thoughts and feelings. Hence, a compassionate judge would tend to base his or her decisions on sympathy for the unfortunate; an empathetic judge on how the people directly affected by the decision would think and feel. What could be wrong with that?

Frederic Bastiat answered that question in his famous 1850 essay,What is Seen and What is Not Seen.” There the economist and member of the French parliament pointed out that law “produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.” Bastiat further noted that “[t]here is only one difference between a bad economist and a good one: The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”

This observation is just as true for judges as it is for economists. As important as compassion and empathy are, one can have these feelings only for people that exist and that one knows about — that is, for those who are “seen.”

One can have compassion for workers who lose their jobs when a plant closes. They can be seen. One cannot have compassion for unknown persons in other industries who do not receive job offers when a compassionate government subsidizes an unprofitable plant. The potential employees not hired are unseen.

One can empathize with innocent children born with birth defects. Such children and the adversity they face can be seen. One cannot empathize with as-yet-unborn children in rural communities who may not have access to pediatricians if a judicial decision based on compassion raises the cost of medical malpractice insurance. These children are unseen.

One can feel for unfortunate homeowners about to lose their homes through foreclosure. One cannot feel for unknown individuals who may not be able to afford a home in the future if the compassionate and empathetic protection of current homeowners increases the cost of a mortgage.

In general, one can feel compassion for and empathize with individual plaintiffs in a lawsuit who are facing hardship. They are visible. One cannot feel compassion for or empathize with impersonal corporate defendants, who, should they incur liability, will pass the costs on to consumers, reduce their output, or cut employment. Those who must pay more for products, or are unable to obtain needed goods or services, or cannot find a job are invisible.

The law consists of abstract rules because we know that, as human beings, judges are unable to foresee all of the long-term consequences of their decisions and may be unduly influenced by the immediate, visible effects of these decisions. The rules of law are designed in part to strike the proper balance between the interests of those who are seen and those who are not seen. The purpose of the rules is to enable judges to resist the emotionally engaging temptation to relieve the plight of those they can see and empathize with, even when doing so would be unfair to those they cannot see.

Calling on judges to be compassionate or empathetic is in effect to ask them to undo this balance and favor the seen over the unseen. Paraphrasing Bastiat, if the difference between the bad judge and the good judge is that the bad judge focuses on the visible effects of his or her decisions while the good judge takes into account both the effects that can be seen and those that are unseen, then the compassionate, empathetic judge is very likely to be a bad judge. For this reason, let us hope that Judge Sotomayor proves to be a disappointment to her sponsor.

Published in: on May 29, 2009 at 6:38 pm  Leave a Comment  
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Why me and you are unemployed…

The old joke goes what is the difference between an graduate in Economics and a graduate in another degree and the answer is the Economist knows why he is in the unemployment line. With the current recession most new college graduate are having a hard time finding a job. I am one of those so here I am living the old joke and tell you why you do not have a job.

First, Education is the only thing in which you can spend your money on and not be taxed. At the same time, it is provided with a lot of federal funds. This is called a subsidy. In Economics, a subsidy always causes an overproduction. Think of it in this way, if the government pays the corn farmers more money than they are bringing in from the market then the corn farmers will create more corn then the market needs. So the important thing to note is that the subsidy causes an overproduction driving the price down.Next, the government usually buys up much of this excess in order to keep the farm prices high.

Since education is heavily subsidized and not taxed at all then that means there are more people earning college degrees then the market is asking for. As in their are less high skilled jobs than high skilled workers. This is also why the demand for graduate level degrees is going up as well. So during a recession it is much worse than just a surplus of students. The government solution in the farming industry solution is to buy up the excess. The government tries to do the same with the Americorp, Peacecorp, and the Military. Obama has realized that this is more of a serious issue and since he knows stopping the subsidies is political suscide his plan is to create more government jobs.

Many do not see this as a problem but there is one major one. First, as there becomes more workers in the public sector, which derives its income from taxpayers we have lesser and lesser people paying for more and more. This causes more and more debt. The next problem is that when the economy does pick up, now the government and the private sector will bid for employees. This is a major distortion in the market.

Everybody in America has noticed the growth in immigration both legal and illegal. Many of the arguments for immigration is that they do the jobs that Americans do not want to do. Some of this is true. The government has encouraged people to go to college more and more, thus they cannot take a job doing lesser skilled work or they will constantly be in debt. The more we subsidize education the more we will have to bring immigrants to fill in the lower skilled jobs.

The correct policy in this situation would be to only allow private subsidization of college students. This would allow the market to match up exactly how many skilled workers would be demanded. This would allow college students to make more when they came out. What about those who were on the margin? They would spend time working their way up in a corporation instead of wasting their money on education. My father was one of those. He could have went to school and gotten a business degree and then went into McDonald’s corp. or he could have started as a crew person and worked his way up. He choose the latter and there is nothing wrong with that.

~PCCapitalist

Published in: on May 29, 2009 at 2:35 pm  Leave a Comment  
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Is the Abortion Debate Changing? by David Harsanyi

Today’s article of the day comes from Reason:

As an atheist and a secular kinda guy, I practice moral relativism regularly. Still, I always have struggled mightily with the ethics and politics of abortion. Apparently, I’m not alone.

A new Gallup Poll claims that for the first time since 1995—when the question was first asked by the organization—most Americans consider themselves to be “pro-life” rather than “pro-choice.”

The straightforward question asked of participants was this: “With respect to the abortion issue, would you consider yourself to be pro-choice or pro-life?” Fifty-one percent responded that they were pro-life, and 42 percent said they were pro-choice. These percentages are the reverse of what was found in the same poll in 2006.

What happened? Is it possible that the nation has undergone a gigantic attitudinal shift on the fundamental issue of abortion in only three years’ time? Logically, it seems that the entire framing of the debate has become antiquated and far too simplistic for the questions we face. Anecdotally, I would say it’s possible. I know I’ve changed my views.

After a life of being pro-choice, I began to seriously ponder the question. I oppose the death penalty because of the slim chance innocent people will be executed and because I don’t believe the state should have the authority to take a citizen’s life. So don’t I owe a nascent human life at least the same deference? Just in case?

Now, you may not consider a fetus a “human life” in early pregnancy, though it has its own DNA and medical science continues to find ways to keep the fetus viable outside the womb earlier and earlier. It’s difficult to understand how those who harp on the importance of “science” in public policy can draw an arbitrary timeline in the pregnancy, defining when human life is worth saving and when it can be terminated.

The more I thought about it the creepier the issue got. Newsweek, for instance, recently reported that 90 percent of women whose fetuses test positive for Down syndrome choose to abort. Another survey showed that only a small percentage of mothers even use the test. So what happens when 90 percent of parents test their fetuses? Does it mean the end of the disorder, or are we stepping perilously close to eugenics?

What about future DNA tests that can detect any defects in a fetus? What happens when we can use abortion to weed out the blind, the mentally ill, the ugly, or any other “undesirable” human beings?

Recently, Sweden’s National Board of Health and Welfare ruled that women are permitted to abort their children based on the sex of the fetuses. In the United States, a woman can have an abortion for nearly any reason she chooses. In fact, a health exemption for the mother allows abortions to be performed virtually on demand.

If you oppose selective abortions but not abortion overall, I wonder why? How is terminating the fetus because it’s the wrong sex any worse than terminating the fetus for convenience’s sake? The fate of the fetus does not change; only the reasoning for its extinction does.

Now, I happen to believe (as civil libertarian and pro-life activist Nat Hentoff once noted) that the right to life and liberty is the foundation of a moral society. Then again, I also believe a government ban on abortion would only criminalize the procedure and do little to mitigate the number of abortions.

Obviously, these are a few of the complex and uncomfortable issues to ponder. Maybe this poll tells us that the dynamics of the abortion debate are about to change, that Americans are getting past the politics and into the morality of the issue.

Then again, it’s entirely possible that I’m just projecting.

David Harsanyi is a columnist at The Denver Post and the author of Nanny State. Visit his Web site at www.DavidHarsanyi.com.

Published in: on May 28, 2009 at 6:23 pm  Leave a Comment  
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Home Values Fight Back

This from the Wall Street Journal:

“Officials at a Citigroup Inc. office in St. Louis placed a call to this desert town recently. The bank had caught word that Indio was coming after the lending giant with fines and threats of criminal charges. The offense: an algae-infested swimming pool at 79760 Eagle Bend Court.

Citigroup wound up in charge of the foreclosed home, one of thousands of such properties it was managing across the country. But last year, Indio passed a law that allowed it to charge banks with a criminal misdemeanor if they allowed a home to fall into disrepair.

“If I need to do it, I’ll say, ‘Mr. Bank President, if you don’t come and take care of your property, we’re going to come arrest you and take you to court in California,'” says Brad Ramos, Indio’s long-serving police chief.

The hard-line approach is part of this town’s attempt to gain leverage over some of the nation’s largest lenders. A couple of years ago, Indio was a real-estate bonanza. Old date farms were closing down, sprouting subdivisions in their places. Today it’s a different scene with one in 10 houses either in default or foreclosure.”

At first glance, this seems like a good way for homeowners who have done everything right and made their payments on time to prevent their home values from going down. As the neighbors upkeep can have negative externalities. The next question is the property rights one. Should other homeowners be allowed to sue other homeowners for upkeep.

The solution may be that if they all entered a social contract like the ones James Buchanan lays out, then it is an unianimous decision that the homeowners would be held against. Obviously, if your neighbor who you never entered a contract with decides that you do not keep your home nice enough for him, then he cannot do anything to you. This is why there are homeowner’s associations.

The rest is here.

~PCCapitalist

Published in: on May 28, 2009 at 1:17 pm  Leave a Comment  
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The Jealousy Paradox

On this blog, I have randomly put up ideas about relationships and applying my economic knowledge to it. In economics, there are many paradoxes. These paradoxes describe something that happens but when using economic calculation they should be doing the opposite. One of those is the “voting paradox.” This states that people do not have an individual incentive to actually go in vote as there is a better chance of you dying on the way to the polls then actually changing the election. Regardless of this, people still vote. So what is the jealousy paradox?

The Jelousy Paradox happens to most people at one time in their life. The story usually goes that Joey loves Susie and Susie loves Joey. This causes them to get into a relationship. Next thing you know, Susie goes off to college in a different town than Joey. Susie makes a new friend named Bob and Bob flirts with Susie. Susie tells Joey because she thinks it is funny. Joey deep down goes nuts and begins to worry. He begins to think about Bob and Susie running off together.

The paradox here is that she wouldn’t tell Joey if she truly thought that she would leave Joey for Bob. In fact, she is being completely honest and trustworthy by telling Joey, but at the same time Joey is losing trust in her. So this begs the question why do we assume that our significant other will run off with someone else when they are telling us about it? The real worry is the person that you never hear about until the day arrives when they run away with them.

I know this is quite a different theme than normal for this blog but its something to think about.

~PCCapitalist

Book Review: Meltdown by Thomas E. Woods, Jr.

Meltdown: A Free Market Look at Why the Stock Market Collapsed, the Economy Tanked, and the Government Bailouts Will Make Things Worse by Thomas E. Woods, Jr. may have one of the longest subtitles of any book around but it is a very important book. I encourage all of my readers to stop what they are doing and order this book. It is a relatively quick read that will bring you up-to-date not only on the current financial crisis but also the Austrian Economic theories behind it.

This book is the sole voice that is not following the masses in blaming the recession upon Capitalism. Instead, Thomas Woods uses many economic theories and evidence to show that the government has had more to do with this problem then we think. He starts the book with a view of how the government created the current bubble. It becomes clear that this is very much in line with the Austrian Business Cycle. He then shows the more broad picture of how this also has happened in both the Great Depression and the dotcom bubble.

The major part of the book is its eloquent attack upon the Federal Reserve system. Woods shows that the Federal Reserve has done more to hurt the economy than any other intervention. He also warns us of the impending problems that we have no had yet but could have with possible runaway inflation also know as hyperinflation. At the end of the book, Woods challenges those who believe that they are a free market conservative or libertarian that they should realize that the Federal Reserve cannot have your support. The Federal Reserve, he says, is one of the biggest interventions in the economy we have seen. They have a monopoly on money.

Everybody should pick up this book, if they want to learn about the real reason why the economy is in a downspin. People often try to blame crisises upon things they do not understand, like Capitalism. Instead, what they do not realize is that people try to control the economy and that person would have to be god in order to get it all right.

Rating overall 5/5

~PCCapitalist

How Washington Rations

Today’s article of the day is from the Wall Street Journal:

Try to follow this logic: Last week the Medicare trustees reported that the program has an “unfunded liability” of nearly $38 trillion — which is the amount of benefits promised but not covered by taxes over the next 75 years. So Democrats have decided that the way to close this gap is to create a new “universal” health insurance entitlement for the middle class.

Such thinking may be a non sequitur, but it will have drastic effects on the health care of all Americans — and as it happens, this future is playing out in miniature in Medicare right now. Desperate to prevent medical costs from engulfing the federal budget, the program’s central planners decided last week to deny payment for a new version of one of life’s most unpleasant routine procedures, the colonoscopy. This is a preview of how health care will be rationed when Democrats get their way.

At issue are “virtual colonoscopies,” or CT scans of the abdomen. Colon cancer is the second leading cause of U.S. cancer death but one of the most preventable. Found early, the cure rate is 93%, but only 8% at later stages. Virtual colonoscopies are likely to boost screenings because they are quicker, more comfortable and significantly cheaper than the standard “optical” procedure, which involves anesthesia and threading an endoscope through the lower intestine.

[How Washington Rations]

Virtual colonoscopies are endorsed by the American Cancer Society and covered by a growing number of private insurers including Cigna and UnitedHealthcare. The problem for Medicare is that if cancerous lesions are found using a scan, then patients must follow up with a traditional colonoscopy anyway. Costs would be lower if everyone simply took the invasive route, where doctors can remove polyps on the spot. As Medicare noted in its ruling, “If there is a relatively high referral rate [for traditional colonoscopy], the utility of an intermediate test such as CT colonography is limited.” In other words, duplication would be too pricey.

This is precisely the sort of complexity that the Democrats would prefer to ignore as they try to restructure health care. Led by budget chief Peter Orszag, the White House believes that comparative effectiveness research, which examines clinical evidence to determine what “works best,” will let them cut wasteful or ineffective treatments and thus contain health spending.

The problem is that what “works best” isn’t the same for everyone. While not painless or risk free, virtual colonoscopy might be better for some patients — especially among seniors who are infirm or because the presence of other diseases puts them at risk for complications. Ideally doctors would decide with their patients. But Medicare instead made the hard-and-fast choice that it was cheaper to cut it off for all beneficiaries. If some patients are worse off, well, too bad.

Medicare is already the country’s largest purchaser of health care. Private carriers generally adopt its rates and policies, and the virtual colonoscopy decision may run this technology out of the marketplace. Now multiply that by the new “public option” that Democrats favor, which would transfer millions of patients to a new insurance program managed by the federal government. Washington’s utilitarian judgments about costs would reshape the practice of medicine.

Initially, the open-ended style of American care will barely be touched, if only for political self-preservation. Health planners will adjust at the margins, as with virtual colonoscopy. But scarcity forces choices. As the Medicare trustees note in their report, the tax increases necessary to fund merely the current benefit schedule for the elderly would cripple the economy. The far more expensive public option will not turn into a pumpkin when cost savings do not materialize. At that point, government will clamp down with price controls in the form of lines and rock-bottom reimbursement rates.

Mr. Orszag says that a federal health board will make these Solomonic decisions, which is only true until the lobbies get to Congress and the White House. With virtual colonoscopy, radiologists and gastroenterologists are feuding over which group should get paid for colon cancer screening. Companies like General Electric and Seimens that make CT technology are pressuring Medicare administrators too. More than 50 Congressmen are demanding that the decision be overturned.

All this is merely a preview of the life-and-death decisions that will be determined by politics once government finances substantially more health care than the 46% it already does. Anyone who buys Democratic claims about “choice” and “affordability” will be in for a very rude awakening.

Published in: on May 19, 2009 at 6:40 pm  Leave a Comment  
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Millionaires leave Maryland: Does Federalism still work?

The founding fathers set up a system of federalism, which was to create a system of competition between states. With the growth of the central government, federalism has become near obsolete. The central government can use funding in order to water-down the effectiveness of federalism. One example of this is that the federal government required states to put the drinking age at 21 and if they did not they would not recieve their transportation money. Right now federalism is working in Maryland this from The Baltimore Sun:

“Let’s break this down: In 2008, in an effort to repeal the hugely unpopular computer services tax, the General Assembly and Gov. Martin O’Malley approved a new, temporary millionaires’ tax bracket. Marginal income over $1 million would, for a three-year period, be taxed at 6.25 percent instead of 5.5 percent. We’re talking net taxable income over $1 million here, so that’s money you’re making IN EXCESS OF $1 million after all tax deductions, etc.

Let’s assume you’re making $2 million a year in net taxable income. That means you’re paying at the new tax rate on a whopping $1 million. Your increased income tax burden because of the millionaires tax is $7,500.

So, after crunching the numbers, our $2 million earner now pays $22,675 more than he or she would have if we’d kept the old, flat tax brackets. Translating back to our typical Maryland family, that’s the equivalent of $645.02 a year, or about $12.40 a week. Is that enough to make you move?”

Federalism allows those millionaires who think that they can get a better deal on their income, to move their. Obviously the costs will have to be pretty high as many will have to sell their houses and so on.

The rest is here.

~PCCapitalist

Published in: on May 19, 2009 at 1:44 pm  Comments (1)  
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Should the GOP Run Toward the “Middle”? By Jack Hunter

Today’s article of the day comes from Campaign for Liberty:

When Republican Sen. Arlen Specter defected to the Democratic Party recently, politicians and pundits everywhere heralded the move as another sign that the GOP was “too conservative.” Said liberal Republican Sen. Olympia Snowe, “If the Republican Party fully intends to become a majority party in the future, it must move from the far right back toward the middle.”

Presumably “the middle,” a pasture that so many Democrats, liberal Republicans, and others believe the GOP should now graze, is a place free of “reckless” government-slashing rhetoric. These critics believe Obama is president, the Democrats are in power, and Republicans who refuse to “change” with the rest of the country will face inevitable defeat for the foreseeable future. The Republican Party is simply “too conservative,” they say. Nothing could be more untrue.

What exactly did voters reject in 2008 that makes for such a dark future for conservatives? A government-slashing Congress? A president that cracked down on illegal immigration? A Christian right, gun zealot? No, they rejected George W. Bush, a big government, amnesty-proposing president, who was occasionally socially conservative in his rhetoric, but rarely in practice. Between the war and spending, America soured on Bush for reasons that had nothing to do with conservatism.

Does anyone really believe voters are now enamored with Barack Obama because they despise conservatism and love liberalism? Americans aren’t that ideological. After 100 days in office, Obama’s popularity remains high, with a significant majority in a recent Gallup poll saying he is doing a good job. But when the same poll asks “what is the worst thing Barack Obama has done since he became president?,” the number one answer is “stimulus spending,” the president’s most ambitious and most defining piece of legislation to date.

If the GOP must move to the middle to win elections, exactly what do Republicans gain by backing massive spending increases which even those who support Obama are uncomfortable with? Why is becoming more like the Democrats considered the path to GOP success? What’s the point of even having a Republican Party?

The GOP would do well to flee from the consensus middle and take a hard right on the top issues that continue to concern Americans across the political spectrum — out-of-control spending, outrageous debt, and our ever-expanding federal government. In other words, the Republican Party should actually become the party of small government it has always pretended to be.

But not everyone agrees, most notably Sen. Lindsey Graham. According to The New York Times, “Graham scoffed at the notion that the party was suffering because it was not conservative enough. ‘Do you really believe that we lost 18-to-34-year-olds by 19 percent, or we lost Hispanic voters, because we are not conservative enough? This is a ridiculous line of thought. The truth is we lost young people because our Republican brand is tainted.”

Graham is right. The Republican brand is tainted — by Bush Republicans like Graham.

While the 18-to-34-year-olds came out in force for Obama, the most conservative Republican presidential candidate in the last election ran a campaign defined in large part by its youth support. As usual, the old, white, Christian Republican base dutifully gravitated to conventional, Bush Republicans like McCain, but the government-slashing radical Ron Paul drew support from young and old; Republicans, Democrats, and independents; whites, blacks and Hispanics; Christians and non-believers. The much discussed, increasingly shrinking GOP is the party of lukewarm, establishment men like Graham, McCain, and Bush — not fiery conservatives like Ron Paul.

But those who believe the GOP must move to the middle are right about one thing: Thundering on and on about abortion, gay marriage, and family values at the national level is political suicide, precisely because too many Americans who might be attracted to a limited government message would be repulsed by any politician they perceive as wanting to dictate their personal lives.

Once again, Paul’s example is the best solution. This pro-life, conservative Christian believes states should decide social issues free of federal interference. Gay newlyweds in Vermont would have nothing to fear from a staunchly libertarian GOP. And neither would conservative Christians in South Carolina, who would gain more from a smaller, less intrusive government than the type of pro-Christian, big government the religious right typically supports. In any move to the middle, Republicans are more likely to find a graveyard instead of salvation. The GOP will never out-Obama, Obama.

However, it is not clear that voters are prepared to accept big government as the long-term American way. If a majority ever decides to reject it, they will require a GOP far removed from the current, middle-of-the-road consensus of both parties. And only a Republican Party that eventually opposes big government — and is not a part of it — will stand fit to put it out of its misery.

Published in: on May 18, 2009 at 6:51 pm  Leave a Comment  
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Book Review: The Revolution by Ron Paul

Since Congressman Ron Paul’s Presidential Campaign, he has recieved a large amount of support from the public. Not enough support to boost him as a party nominee but enough to get on to major news channels. Ron Paul is a good political entrepreneur. He has seized upon this and written a book that every American should read, whether you agree with him or not.

Much like Conscience of a Conservative by Barry Goldwater it is a small book that spans many issues. This gives a person enough information to allow them to run with it and do their own research. Unlike Goldwater’s book Paul cites many great figures throughout the book and at the end he includes a recommended reading list with these people in it. Some of them include Ludwig von Mises, Thomas Jefferson, Fredreic Bastiat, F.A. Hayek, and Murray Rothbard.

In the media Ron Paul often comes off as rash or harsh. Arguing for Capitalism can be harsh. Some people are turned off from him because he does not have the speaking skills or the good looks that most Americans care about in politicians. Politicians should be picked upon policy and not personality, but that is neither here nor there. This book is a very rational well thought out logical book. This digs deeper into some of the rhetoric that he speaks and would help with those who find him to be harsh.

One particular argument I found interesting was his one of healthcare and linking it to inflation. Paul argues that “The health costs tend to rise faster than other costs because of the distribution effects of inflation: wherever government spends its new money, that is where higher prices will be most immediate and evident.” The second part of this argument is correct, but if we use debt and such that would not be inflation. It would still bid up the cost all the same but it may be interesting to look into whether or not programs are funded by debt or inflation. Of course, if the result is the same this may not matter.

Overall rating 4/5

~PCCapitalist