Author: Redactor

Categories
free trade & free markets national politics & policies

Our Fairy-Tale Economy

Everybody seems to hanker to get something for nothing. Because of that universal desire, and our inability to satisfy it, we have all these fairy tales about the tragic costs of magic.

Yes, the cost of something-for-nothing can be shockingly high. In some savvy tales, audacious hopefuls wind up giving away first-born children to pay for their something-for-nothing.

For half a year, our leaders have gone on a something-for-nothing binge, throwing money at a downturned economy. Lots of money. Trillions.

Where does it come from?

Magic?

Not exactly. Politicians and financiers use complicated tricky maneuvers to gain money they don’t have.

With the help of the Federal Reserve, they can sorta create money. But that creation has costs. It makes the money less valuable. We don’t always see this right away. Right now people are switching away from spending, so a lot of new money goes into savings. When people start spending again, though, prices will rise and money’s value will plunge. Gold into lead.

Politicians also get money by borrowing. But that also comes at a cost: It must be paid back. Here, politicians play an old fairy tale game, not exactly giving up their first-born, but saddling our children and grandchildren with debt. It’s a mean, wicked stepmother kind of policy.

Maybe we should be reading more fairy tales these days. For the realism.

This is Common Sense. I’m Paul Jacob.

Categories
government transparency

Sanders versus Bernanke

I don’t side with Bernie Sanders very often, but Vermont’s favorite socialist son occasionally brightens our capitol with something surprising.

Early in March, the senator challenged Federal Reserve Chairman Ben Bernanke with an interesting question: “Will you tell the American people to whom you lent 2.2 trillion of their dollars?”

Bernanke then said that the Fed explains its policies online. Terms and collateral requirements, and so on.

But that didn’t answer the question, so the senator pushed on. And Bernanke, not being the Master of Obfuscation that former Fed chairman Alan Greenspan was, replied with an honest and unmistakable “No.”

He then went on to explain why he wouldn’t: It might “stigmatize” receiving banks, don’t you see.

Sanders mocked the answer. You see, he believes that the Fed should be transparent, especially regarding the current round of crisis loans.

I’m with him on this. I believe governments can only be truly republican — run by the public — when their operations are open for all to see. But there’s another reason: A transparent Fed would be a talked-about Fed. And the more people learn about the Fed, the more likely they will be to dissolve it.

America didn’t always have a national bank. And, like Tom Jefferson and Andy Jackson, I think we can do better without one at all.

We just need a good rule of law regarding money.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall term limits

Quinn Is In

Blagojevich is out! Quinn is in! There is gubernatorial hope for corruption-riddled Illinois.

Now, admittedly, I don’t agree with Governor Pat Quinn on every issue. But few governors can boast Quinn’s long record as an anti-establishmentarian reformer.

In April of last year, Pat Quinn, then Illinois’s lieutenant governor, was pushing hard for a ballot measure to give voters the power to recall elected officials. This was after the sitting governor, Blago, got in hot water for various corruption, but long before he was caught scheming to sell president-elect Obama’s vacated Senate seat to the highest bidder.

Certainly, the first target of a new recall power would have been Blagojevich. The bill passed the Illinois house but unfortunately failed in the senate.

Of course, Quinn’s track record goes way beyond the political battles of 2008. In addition to being pro-recall, he is also pro-initiative rights and pro-term limits. In 1994, Quinn did the heavy lifting to put a term limits measure on the ballot. It would have capped state legislative tenure at eight years had not the Illinois Supreme Court outrageously removed the ballot measure, blocking the vote.

Quinn is in. Illinois reformers should beat a path to his door and urge him to push for these necessary changes harder than ever.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability general freedom responsibility

Good Guys and Bad Guys

There are two types of people, those who divide people into wicked capitalists and saintly victims, and those who don’t.

The folks at ACORN, a lefty activist group, see only evil capitalists and downtrodden everybody-else.

Columnist Michelle Malkin reports how ACORN champions the cause of homeowners crushed by the credit crunch and housing collapse. Except that some of their poster-child victims are hardly innocent.

A few weeks ago, as a mob cheered and cameras recorded, an ACORN gang broke into a padlocked home in Baltimore. It had been owned by Donna Hanks, expelled when the bank foreclosed. “This is our house now,” ACORN activist Louis Beverly declared, with Donna by his side.

Man of the people, right?

Except that Hanks was not merely hammered by circumstances. She bought the house in 2001 for $87,000, but later refinanced for $270,000 — money she presumably spent. In 2008 the house was sold for less than the new loan but more than twice the 2001 price. In 2006, Hanks declared bankruptcy, but did not comply with the terms of the court. Malkin gives further details of her irresponsibility, but you get the idea.

There are innocent victims hurting, now, in the current financial collapse. But being a borrower rather than a lender tells us nothing by itself. As the antics of ACORN show, either can be the victim.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Doctoring on the Installment Plan

How does a successful doctor deal with patients lacking insurance? Dr. John Muney decided to offer a deal. For $79 each month he would service patients with unlimited office visits, some tests, and even in-office surgeries — at all his AMG Medical Group centers.

Now, the deal’s not for me. I have insurance through work, and I also have a family, so that $79 would have to be multiplied by four. Real money. But for some people, I bet, this makes perfect sense.

Yet, if government gets its way, no patient of New York’s five boroughs — where Muney’s clinics are located — need ever consider the good doctor’s innovation. Why? Because the state Insurance Department has declared his service a form of insurance and says it requires a license from the state.

What were you thinking, Dr. Muney? This is a free country, and . . . you can’t just do what you want, you know.

Dr. Muney is fighting back. The application form for this contract has THIS IS NOT INSURANCE emblazoned on every page. He is challenging the bureaucracy’s ruling.

Once upon a time, doctors regularly engaged in this kind of pricing. Many doctors — perhaps most — engaged in pro bono work for the poor. Other had special rates, etc. But the American Medical Association pressured politicians to put an end to such competitive practices.

Thanks, AMA.

As for Dr. Muney, my thanks to you is not sarcastic. Hang in there.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Bailing Out of the Bailout

Freedom lovers would like to bail out of Washington’s endless bailout . . . that is, the government takeover of the economy.

The big spenders often won’t even debate the matter. Radio talker Rush Limbaugh is catching flak for saying he doesn’t want President Obama’s scheme to “work,” which sounds goofy until you realize that many of Limbaugh’s critics, including the White House, carefully ignore Limbaugh’s point. Economic upturn, great. Permanent loss of our freedom and permanent expansion of government, not great.

GOP congressmen aren’t exactly the most credible messengers when it comes to opposing massive new spending and intervention in the economy. But I’d rather see them repent and fight than repent and slink away in embarrassment.

Some Republican congressman are indeed fighting the good fight. And some of the nation’s GOP governors are too. Louisiana’s Bobby Jindal just turned down $100 million in bailout funds that he argues would result in permanently higher taxes for Louisiana businesses.

In a message distributed by Townhall, South Carolina Governor Mark Sanford notes that the trillion or more dollars “in so-called ‘stimulus’ money . . . is really little more than a social policy wish  list of the Left.”

We live in dangerous and interesting times. The only wish list worth pushing, now, is establishing the economic ground rules — and Constitutional principles — that should have been guiding us all along.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

The Next Market To Melt

“During melting markets, all pension funds come under siege.”

I’m quoting from a February article by John Entine. This Reason magazine cover story is entitled “The Next Catastrophe,” and, like so many things these days, it’s scary. Entine explains how fragile pension funds can become when markets collapse.

Regular listeners know that I’ve been worried about what we might call the Ultimate Catastrophe. Increasing demands on Social Security and other entitlement programs, like Medicare, added to never-ending deficit spending, threaten to bankrupt the nation.

But Entine looks at a different economic crisis. He points out that all pension funds can become unhinged in chaotic markets. Old news. What’s new? Well, many government and union pension funds began taking riskier stances regarding stock investing a few decades ago. And with greater risk comes You Know What.

Worse yet, many funds have been hijacked by well-meaning do-gooders, investing in “socially responsible” causes rather than reasonably run profitable companies. These funds are worth over $2 trillion. That is, they are until their fundamentals prove weak or worse, and they go down, down, down.

As with the mortgage markets, it seems that pension management has undergone a huge paradigm shift, away from security and savvy, towards . . . nonsense.

Things are not looking up, up, up.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability free trade & free markets too much government

Able to Raise Keynes

Recently on This American Life, economists told NPR listeners how the then-upcoming stimulus bill would amount to the very first legitimate and full test ever of Keynesian ideas.

Sure, politicians have been using John Maynard Keynes’s notions as an excuse to deficit spend ever since the Great Depression. But then, Lord Keynes had wanted politicians to spend even more, more than they dared.

Now, President Obama and our Democratic Congress have decided to spend enough billions, or trillions, to really do the trick.

Switch to Larry King’s latest interview with Bill Clinton. Our former prez assured us that the stimulus bill “would do what it is supposed to,” and he mentioned three things, only one of them vaguely about stimulus. He said the bill was better seen as a “bridge over troubled waters.”

Clinton said the real issue was declining asset values, which Congress would address later.

At Mises.org, Stephan Kinsella asked how this could amount to Keynesianism. Clinton used a different lingo entirely.

Here’s how: It’s not that the bill will give us Keynesian stimulus. It’s that it has stimulated politicians in the old, old Keynesian way.

Congressional Democrats know that the stimulus won’t work. So they are preparing the spin now. From them we heard the official excuse for the bill. From Clinton, the future excuse.

Politicians know zip about the economy. They just know how to spend our money. And our great, great, great grandchildren’s.

This is Common Sense. I’m Paul Jacob.

Categories
government transparency

Yes, Virginia, There Is a Nebraska

Government transparency is understandably popular. Voters want to know what their governments are doing.

So smart politicians promise us more transparency, more sunshine, more info. But, being politicians, sometimes they don’t deliver. And, when they do, they often spend a whole lot more than necessary.

That’s what is happening in Virginia. Bills to put the state budget online have passed both chambers of the legislature — unanimously.

But politicians estimate that the cost to get the job done will run over $3 million. Wow. That’s a lot. How does that compare with other states?

At the Tertium Quids blog, there’s a letter posted from Ed Martin, chief of staff to former Missouri Governor Matt Blunt. Martin points out that two years ago Blunt created the Missouri Accountability Portal by executive order.

The website is a national model with a searchable database of state expenditures. It’s garnered over 17 million hits from interested citizens. And it cost less than $200,000.

Then there’s Nebraska State Treasurer Shane Osborn. As the Washington Examiner recently reported, he put Nebraska spending online without the legislature passing a law. He just did it.

“I used my staff to compile the data,” Osborn said. “I just viewed it as my job.”

The grand cost of Osborn’s excellent transparency website? Only $38,000.

Sounds like there are millions of reasons for Virginia to learn from others.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies

A Dollar for Your Stimulus

Remember Robocop? The clobbering of the bad guys by the cyberonic cop was a tad too bloodthirsty for my taste. And the satire wasn’t exactly as subtle as Huxley’s or Orwell’s. Still, today’s economic news makes me remember that weird game-show line, horsily bellowed throughout the 1987 flick: “I’d buy that for a dollar!”

Fast forward to 2009 and dire economic times, and the question hangs there. What can you buy for a dollar?

Answer? Subsidy.

Washington state politicians have just sent hundreds of thousands of checks for . . . one dollar each — yes, just a buck — to the state’s poorest residents.

Lots of those residents have no bank account, and thus it will cost the recipients more to cash the check than the amount of the check. So what on earth are the Evergreen state politicians thinking?

Well, there’s method to their madness.

Remember the nearly trillion-dollar so-called stimulus package Congress just passed? Apparently, there’s some rule that says if you’re a food-stamp recipient and you get at least one dollar in energy bill assistance, this qualifies you for even more federal assistance.

So, Washington legislators mail out completely ridiculous, wasteful, dollar-each checks to “prime the pump” of the federal money machine — proving that the bailouts are not only lunatic themselves, but the cause of lunacy in others.

This is Common Sense. I’m Paul Jacob.