Category: too much government

Categories
too much government

Paying the Right Wage

Local government is hard. In rural areas, it can be like organizing an ongoing bake-sale. In metropolitan areas, it’s more like running a small country.

Today’s big metropolitan governments tend to be run by un-term-limited oligarchs, so of course corruption is endemic. When there’s little competition for power and scant oversight, then the “above-board deals” become, de facto, insider deals.

And we wind up paying more in salaries and benefits for government workers than anything else. Recently, George Will off-handedly noted that in California “80 cents of every government dollar goes for government employees’ pay and benefits.”

Is that “too much”? Had we limited government, we would still expect salaries to make up a huge chunk of government. But since transfer payments are part and parcel of so much of modern governance, the fact that employee compensation packages are actually crowding out other line items should give us more than pause.

Truth is, though, it needn’t be hard to tell who is over- or under-paid, according to economist Arnold Kling:

If you do not have enough sanitation workers because you cannot fill job openings at the current level of pay, then those government workers are underpaid.

On the other hand, if you do not have enough sanitation workers because your budget is busted by the ones you have, then those government workers are overpaid.

Take that notion to your next local government board meeting. Big or small.

This is Common Sense. I’m Paul Jacob.

Categories
general freedom too much government

Life, Liberty, and the Pursuit of Bureaucracy

Ted Williams — not the late baseball great, but a formerly homeless, recovering drug and alcohol addict of the same name — received a second chance at life thanks to his announcer-quality voice.

A video displaying his talent — first posted at the Columbus Dispatch site — won him that chance. Soon he was headed to New York to appear on television and visit his mom, whom he had not seen in many years.

But, not so fast. Williams wasn’t allowed to fly.

The hold-up? Government control of airport security protocols.

You see, those who cannot “prove” their identity by displaying a government-issued ID are treated as terrorism suspects.

Sure, sure: It would’ve been easy to confirm that Williams lacked both the intention and the weapons to take over a plane. But that’s not the bureaucratic way.

Jim Harper, an expert on the burgeoning national surveillance state, pointed out on Cato@Liberty that one likely result of a national ID requirement will be to “exclude the indigent from rungs on the ladder [of advancement in life]. . . . A land of freedom doesn’t put paperwork requirements between a man on the rebound and a long-awaited reunion with his mother.”

Homeland Security’s obstreperousness resulted in what turned out to be a minor delay. Thanks to The Today Show and The Early Show, Williams was able to fly the next day.

Great for Williams. For others? Most rungs up from homelessness don’t garner major network support.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets initiative, referendum, and recall too much government

Pay the Boatman

Attack the outsider — the first resort of the unarmed arguer.

My Townhall column praising Washington State anti-tax activist Tim Eyman raised the ire of Seattle Times columnist Danny Westneat. He insinuates that it’s easy for me to like Eyman, for I never need to “catch the late boat after a Mariners game,” since I live in Virginia and Eyman’s initiatives affect the Evergreen State’s ferries.

Westneat complains that a voter-approved Eyman measure reducing car taxes took away the main source of subsidy (he doesn’t use that word) for Puget Sound’s ferry system. Turning common-sense responsibility on its head, he writes, “instead of levying a tax across a broad group (all car owners), as we did pre-Eyman to help pay for ferries, the costs now are increasingly heaped on a narrow group — the ferry riders themselves.”

Horrors! People paying for what they use!

Westneat seems to be into financial irresponsibility. “Yes, [the system] wastes money sometimes. What big organization doesn’t?” Nice dismissal of the incompetence and corruption in a state-run biz that cannot even account for its cash.

When the ferries were taken over from private business by the state, it was, he says, because of the previous owners’ “usurious 30-percent fare hikes.” Not mentioned? This followed the cessation of Seattle’s wartime shipworks, and a huge decrease in demand.

Some folks sure apply basic economic insights selectively. Dispersing costs, concentrating benefits? That they idolize. Economies of scale? Their arguments run aground.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Housing Boom’s Inflated “Wisdom”

Watch how the received wisdom gets worded: “A sustained rebound in home prices is considered critical to getting the economy back on track.”

That’s from a Washington Post business report on falling home prices. Its passive voice construction covers up who holds the opinion.

The sentence could have been written differently: “Many politicians, policy wonks, and industry shills believe that only a sustained rebound in housing prices can put the economy get back on track.” But that would have helped the reader see the special interests behind the statement.

We need housing prices high and rising again . . . to fulfill the plans of the very people who set up the house of cards that just came down.

Harvard economist Jeffrey Miron’s reaction is worth quoting in full: “No, no, a thousand times no!

Housing prices are falling because they soared to ridiculous levels during the bubble. Any policy that attempts to keep prices high — or, equivalently, that attempts to prevent foreclosures or juice housing construction — is fighting a crucial market adjustment to past distortions.

The housing boom mania — fed by multiple government subsidies and massive financial intervention coupled with cheap money from the Federal Reserve — served some people at the expense of the public at large. Progress doesn’t depend on it. Real progress depends on rejecting such nonsense.

By the way, other things equal, inexpensive housing is good for us. The whole “rising prices” mania defeats the alleged rationale for mortgage subsidies in the first place.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Latest Mixed-Economy Mix

Mix special interests, politicians-on-the-make, and expanding bureaucracies and what do you get? E15 gasohol.

Matthew Wald of the New York Times’s “green” blog reports that government ethanol mandates and subsidies make it harder to sell gas efficiently. Converting gas tanks to accommodate the new 15 percent ethyl alcohol/gas blend, E15, could mean shortages of gas for customers with cars that can’t use it. Moreover, ethanol can damage some engines and gas pumps.

A slew of engine manufacturer associations have sued the EPA to block approval of E15. On the other side of the special-interest coin, it’s worth noting that it was the ethanol industry that pushed for E15 approval in the first place.

The approval by itself wouldn’t mean much if buyers and sellers weren’t being forced to use ethanol. New fuel products have been introduced by market participants in the past; with E15, producers and resellers could offer — and consumers buy — the fuel that makes the most economic and technological sense. Instead, the current innovation is an artifact of government policy. You can be sure that the problems caused by imposing ethanol will trigger other political “solutions” that worsen market disruptions, triggering even worse “solutions,” and so forth.

Our “mixed economy” isn’t generally efficient, like free markets tend to be. In a mixed economy, the political winners win big; the rest of us lose.

It’s a mixed bag. The headier mix resulting from freedom? Far better.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability folly too much government

Our Limited Abilities Require Other Limits

Last week I asked, in effect, Who regulates the regulators?

It does no good to say “the people,” because — as much as I want government to be ultimately controlled by the people — if you’re like me, you don’t know enough to micro-regulate high finance.

But there’s something I didn’t mention last Wednesday: The regulators don’t have that knowledge, either.

Even keeping eyeballs on simple fraud turns out to be difficult. Trying to micromanage high finance? Much harder.

But the congenital inability of regulators properly to regulate doesn’t mean that we must consign ourselves to a never-ending, Sisyphean cycle of boom and bust.

Many of the instruments of the modern federal government try to do too much. These very institutions, because they hubristically attempt to regulate away boom bust deliver just the opposite. They make sure booms go bust in messy ways.

Here’s a fresh example: “Lack of regulation” wasn’t the main reason for this latest bust. More important? The “too big to fail” subsidy. By giving Wall Street, big bankers, and financial intermediaries the impression that they would be bailed out in case of implosion, those very same folks behaved in such a way to risk said implosion, and thus needing the bailouts.

Which happened.

Which started the cycle all over.

Only by going back to basics can we improve our long-term economic outlook — not by government micromanaging the economy.

Nicely, citizens like you and me can understand these “basics.”

And defend them.

This is Common Sense. I’m Paul Jacob.

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

Madison’s Angels to the Rescue?

Something called “behavioral economics” has arisen in recent decades, testing and probing many of the assumptions-cum-postulates of basic microeconomics. Researchers have discovered that human beings are prone to biases, cognitive errors, and a whole bevy of choice glitches. We are not perfectly rational.

Shocking, I know.

Some people draw an odd moral from this: Since people are such fools, they require the help of government to regulate them from utter folly and ruin.

Economist David Henderson quotes one of his Facebook friends, TV creative director John Papola, as supplying the “most succinct criticism” of this tack: “Why in the world do behavioral economists who study our flaws and irrational quirks advocate centralized power in the hands of a small group of flawed overlords? If people are irrational, so are government regulators, only they have corrupting monopoly power.”

You’ve seen this kind of argument before, in political theory. James Madison famously noted that

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

Just so: Were we entirely rational, no regulation would be necessary — no laws would. But, given universal human limitations, the regulators themselves require regulation, and a (non-existent) supply of non-biased, error-resistant rationality, to boot.

Forget vast reams of regulations and huge teams of bureaucrats. Instead, perfect the basic rule of law, regulating markets by a well-conceived basic set of rules.

And expect some imperfection.

This is Common Sense. I’m Paul Jacob.

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

Commerce, Compulsion and the Constitution

Every once in a while a judge attends to the Constitution, and freedom lovers cheer wildly as if this were very strange, even wondrous. I guess it is, considered in light of the sweep of human history.

Should the Democrats’ “health care reform” package kick in fully, it would compel people to purchase medical insurance by punishing abstainers with a steep, extra tax. So hurray for Judge Henry Hudson of the federal district court in Richmond, according to whose recent decision the Commerce Clause of the Constitution does not empower Congress to point a gun to our heads and force us to buy health insurance.

If the Constitution could be honestly read that way, it would mean that the Founding Fathers had fought to replace British tyranny with an even worse home-grown one. But no, no Founder thought that giving the federal government power to smooth trade relations among the states equaled authorization for universal, compulsory purchase of books, booze, bobby pins — or whatever Congress-Approved “health care” delivery system some future central planners might concoct. Nor does it.

We’re not out of danger yet, obviously. There are many more battles to come, many other provisions of “Obamacare” that have yet to be challenged and quashed in courts or in Congress. But in any tough job, you need to accomplish the first step.

Judge Hudson’s common-sense conclusion sounds like a great first step to me.

This is Common Sense. I’m Paul Jacob.

Categories
folly too much government video

Video of the Week: California PERS Aristocracy

In vignette after vignette, this mash-up provides a helpful (and amusing) take on California’s pension fiasco:

It’s not easy thinking about government-enacted pensions, I guess. Everyone wants to retire young and well-off, and no one wants to appear stingy. But there has to be responsibility in how these things are set up.

I touched upon the subject earlier this week, in “Pension Declension.” Two of my commenters — Charles Sainte Claire and SkipppingDog — strike me as perhaps not quite getting why pension reform is necessary.

What Charles and Skipping aren’t saying is that a defined benefit plan guarantees a certain return whether or not the money has been invested to produce such a return. So, where does the money to pay the defined benefit come from?

Yep, you guessed it: The taxpayers. Future taxpayers who can’t even be blamed for having elected the dishonest pols who cut these fraudulent deals with the politically active and powerful public employee unions.

In the public sector, the pressure will then be off the workers and politicians to actually fund today what will be spent tomorrow. Which means embracing the sort of chaos now destroying states and municipalities in California and across these United States.

What about in the private sector? Did someone say “private” sector? Well, even in the private sector, it will be the taxpayers who get stuck with the bill.

To suggest that defined benefit plans are the way to go is to suggest that workers can have whatever they desire and some magic person named The Taxpayer will always be there to pay for it. It is to embrace fleecing future generations.

Of course, we’ll be told that it “worked well in the past.” In a manner of speaking. After all, Bernie Madoff’s fraudulent scam worked well “in the past.” Most rip-offs “work well” . . . that is, until the very moment when honest, hard-working people realize they’ve been had.

Categories
ideological culture too much government

Where Democrats Go Wrong

When we find ourselves in a pickle, it’s a good idea to ask: Where did we go wrong?

I’ve often probed how America got itself into the present mess. I’ve noted how easy it is for politicians to lose touch with the common sense of the American people — so much so that they cannot even imagine balancing a budget while they are in office.

Further, I’ve often castigated Republicans for betraying their promises to cut spending.

But what of Democrats? Where’s the common sense?

When President Obama proposed a non-military pay freeze on federal workers, the Democratic National Committee’s “Organizing for America” (OFA) QUANGO asked its supporters for help. Fine. But what happened? The Democratic base went ape. Bananas. Noodles-out nuts.

Example? David Dayen of the FDL News Desk. “We’ve officially gone around the bend,” he wrote, thereby going ’round the bend. He characterized the carefully worded letter sent out by OFA with a “this is what we’ve been reduced to” snipe.

Dayen and too many other Democrats think their ideology means always increasing government worker pay. Even if government workers prove almost impossible to fire, have great benefits, and comparatively high pay, they must not be asked to make a tiny sacrifice. Not even while others suffer.

If these partisans’ core concern were really helping Americans, including the poor, they wouldn’t be so fixed on keeping federal pay as high as it is.

But, priorities, you know.

This is Common Sense. I’m Paul Jacob.