Author: Redactor

Categories
free trade & free markets national politics & policies too much government

The End of an Era?

More than one person forecast the bursting of the Dot Com Bubble, twelve years ago. The Pets​.com sock puppet wasn’t the only clue — the general enthusiasm for companies that had never, ever shown a profit proved signal enough. And then there was all the talk about how the stock market “could only go up.”

Soon after, it went down.

Then stocks rose again, in a Fed-​induced bubble. And then collapsed again, along with the financial system.

Brace yourself for another rerun.

The Economist informs us that “European bankers have been saying things are fine for weeks now, even as their exposure to indebted euro-​zone countries strangles their access to funding.… Fears of contagion from Europe have now infected America.”

The gloom and doom just rises from there.

The article is depressing for another reason, though — the assumption that governments must not let banks fail, making The Economist read like council for never-​ending tax-​funded bailouts. Which was the kind of thing actual economists used to warn governments against. (A long time ago … perhaps back when the science was called “political economy.”)

Times sure have changed, as The Economist admits. The three years since 2008 have made a difference: Now it is the governments that prove insolvent.

It’s time for The Economist to rethink its policy advice, time to call for a general overhaul of the international monetary system.

We must end the age of inflation-​and-​bailouts, before it ends us.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall

Happy 100th, California

On this day a century ago — October 10, 1911 — California voters stormed to the polls and overwhelmingly enacted a measure establishing a statewide system of initiative and referendum. Through the years, Californians have used the initiative to enact for themselves many reforms their legislators refused to touch — from ending the poll tax in 1914 to term-​limiting their legislature in 1990.

Whether one agrees or disagrees with any specific measure passed via initiative in the last century, the enormous impact of California’s initiative process can hardly be disputed. Perhaps the best known and most consequential initiative has been Proposition 13.

This measure cut and capped the state’s property taxes in 1978, saving the homes of many citizens on fixed incomes. At Cato​.org, Steve Moore argues that “the anti-​big-​government tide in America began … with the passage of taxpayer advocate Howard Jarvis’s Proposition 13.” In the two years following Prop 13’s passage, 42 other states passed some form of tax relief.

At an event today in Sacramento — the “100th Anniversary Celebration of California’s Initiative & Referendum” — a politically diverse group of initiative practitioners, journalists, academics and political leaders will discuss the impact of the past century of citizen-​lawmaking and ways to improve the process.

Despite a century of change, two things remain the same:

  1. The politically powerful don’t like to be checked by citizens.
  2. Polls show that Californians today support initiative and referendum by the same three-​to-​one margin they passed it 100 years ago.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Obscene Green

I don’t know about you, but when I want to invest my money, I don’t go the Department of Energy for advice. 

There’s a reason for this. At their best, bureaucracies “lumber on,” to quote one sociologist’s analysis. They are, “by their nature … fitted only for average requirements.” Picking long shots? Not their strong suit.

And a long shot is what the government’s investment in Solyndra surely was. The more emails that are released, the more obvious this becomes. Even savvy folks within the administration knew was that Solyndra was a bad deal.

Yet President Obama says it seemed like a “good bet” at the time.

Why?

Politics. He needed to look good, and the easiest garb to grab was the garb of “green.”

That is, alternative energy — which is said to be our future. Undoubtedly some alternatives will dominate … that is, ones found on the market. The great gales of destructive creation that is the market process will eventually solve our “energy problem” … if only to create a new problem, requiring yet another solution. (In real life, there are rarely “solutions,” only trade-offs.)

There is something obscene in Obama’s “good bet,” for he was betting with other people’s money. Confiscated money.

At the very least, such funds must be treated carefully, not gambled.

To spend otherwise is to sully, for temporary gain, a sacred trust.

Of course, Americans are so used to such trust being desecrated that, sadly, the Solyndra scandal doesn’t quite seem like the enormity it truly is.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture individual achievement

A True Revolutionary

The key to success in business? Profitably serve as wide a customer base as possible. Mass production is the lynchpin. And it’s also at the heart of why many intellectuals hate capitalism: Serving the mass of mankind is “beneath” them. They have a higher calling. They serve Justice, or The Truth. Or, say, Beauty.

This curious by-​product of capitalism is what Austrian-​American economist Ludwig von Mises called “The Anti-​Capitalist Mentality”: The tendency of intellectuals to react against the very instrument that serves the common man even while they ballyhoo the “cause” of the common man.

Mises and others focused on intellectuals’ envy as the reason for their strange, seemingly inexplicable “turn.” Why bite the hand that feeds so many? Because that hand doesn’t reward intellectuals enough!

F.A. Hayek added another reason: Incomprehension. How markets work is beyond the designs of any single mind. Intellectuals tend to be prejudiced in favor of singular minds. Theirs, at least.

The great revelation at the end of the last century followed from that: Command-​and-​control societies must fail. Regardless, though, “planning” does happen in a free society. Piecemeal. You plan. I plan. And entrepreneurs plan to serve us both. 

And entrepreneurs of genius successfully serve millions, make a lot of money for all concerned, and find new ways to make life easier, more enjoyable.

Steve Jobs was such a man. He died yesterday, age 56. As head of Apple and Pixar, he changed society by serving the masses.

And even intellectuals approved.

A revolutionary, indeed.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies

Blame China

The Great Depression was made “great” by government mismanagement. 

Political action, first under Hoover and then under FDR, made things a whole lot worse. And it wasn’t just the Democrats’ misguided New Deal barrage of regulation, cartelization, and general anti-​business central planning. The Hoover Era Smoot-​Hawley Tariff, a huge Republican reassertion of high-​barrier protectionism, crippled international markets and devastated the one industry it was meant, especially, to help: agriculture. 

Protectionism is the idea that government should outrageously harm domestic consumers to “protect” domestic producers. And politicians, often thinking they must “do something” (i.e., “anything”) often feel the push to “save us all” by erecting barriers to trade. Since the crash of 2008, I’ve kept an eye on our Washington insiders, to see if they’d try to revive Thirties-​style self-​destructive nostrums.

Well, we’ve got a sighting. 

Congress is gearing up for some anti-​Chinese protectionism. An unfortunately bipartisan movement is festering there, saying China’s yuan is too valuable, making trade “unfair” for American producers. The Senate seems bent on passing the Currency Exchange Rate Oversight Reform Act.

But, according to Daniel Ikenson, what’s really going on is politics: Faced with “public approval ratings hovering in the low-​to-​mid teens, an embattled Congress is looking for plausible scapegoats for the dismal state of U.S. economic affairs.”

This is not sophisticated economic theory. It’s not conscientiously developed public policy.

It’s grasp-​at-​anything grandstanding.

And it could do a whole lot of harm.

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture initiative, referendum, and recall

The Wrong Track

Most Americans believe our country is headed in the wrong direction. But there remain folks who would like to take us all the way into downtown Wrongville.

Two Sundays ago, in my column at Townhall​.com, I expressed exasperation at the “prestigious” Think Long Committee’s recommendations to make it much tougher for California citizens to place issues on the ballot, to allow legislators to trump any citizen-​enacted measures, and to empower an unelected council chosen by the governor and legislative leaders to place any measure they desire on the ballot.

Then North Carolina Governor Bev Perdue (D) told a Raleigh Rotary Club, “I think we ought to suspend, perhaps, elections for Congress for two years and just tell them we won’t hold it against them, whatever decisions they make, to just let them help this country recover.”

After taking some hits, the Governor’s press secretary claimed she “was obviously using hyperbole.” But that’s not the way the audio sounds.

Finally, a New Republic article by Peter Orzsag, former Obama Administration Director of the Office of Management and Budget and now Vice Chairman of Global Banking at Citigroup, calls for more reliance upon “automatic policies and depoliticized commissions” because “we need to counter the gridlock of our political institutions by making them a bit less democratic.”

This just after our infamous 535 representatives handed away their power to a “super-​committee” of only twelve people.

A whole class of people see the road to Wrongville and hit the accelerator.

This is Common Sense. I’m Paul Jacob.