Category: too much government

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free trade & free markets government transparency media and media people national politics & policies too much government

Most Outrageous Negotiation Strategy Yet

Trump cards, Donald Trump, The Madman Theory, strategy, negotiation, deal, trade, tariffs, trade war

The best defense of Donald Trump’s presidency, so far? He is smarter than the rest of us, and knows how to negotiate with bad guys and insider players. We have to discount what he is saying, the theory goes, because he is not telling truths . . . obviously. 

He is negotiating.

Take nothing at face value, including Trump’s professed beliefs.

Protectionism, for example. Trump has long been against NAFTA and the modern version of “free trade.”* But, as I noted in late July, Trump does not seem to be demanding managed trade, or high tariffs as a means to protect American producers, or even tariffs as a means to increase government revenue. He appears — at least some of the time — to be using tariffs as a way to bargain other countries to reduce their tariffs.

This method has not worked in the past.

But is Trump different enough a politician to pull off a “madman” strategy to get leaders in other countries to do the right thing and reduce their tariff and regulatory burdens on their own countries?

A long shot — and several sectors of American business are being hurt right now in this “negotiating” (threat) phase of Trump’s outrageous gambit.

Another area where one might express such hope for a master-negotiator president is in reining back the Pentagon. In the run-up to November 2016, Trump sure seemed defiant of the neo-conservative/neo-“liberal”/center-left establishment on foreign policy.

But now he just signed a huge increase in the Pentagon budget: an $82 billion increase.

Is Trump’s plan to bring big-spending military-industrial complex lobbyists to heal by first giving them what they want?

That. Won’t. Work. 

This is Common Sense. I’m Paul Jacob.

 

* Post-WWII trade policy has consistently defended treaty-based global trade, but with heavy elements of protective tariffs, regulations and subsidies, making the whole thing look less like Free Trade and more like Mis-Managed Trade.

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Accountability free trade & free markets general freedom responsibility too much government

No Other Options?

Washington D.C., metro, repairs, closed, government, waste, efficiency, accountability

Long I have criticized the Washington, DC, Metro — the transit authority in our nation’s imperial capital — most recently in March. But I am foursquare in support of the government body’s recent hazard warning: “Only take Metro if you have no other option.”

Good general principle.

But what’s the particular occasion? There will be “Major 24/7 Construction Activity” for 15 days in mid-August. The service is advising usage of buses and even freely-provided shuttle services to compensate for commuters stuck in the repairs.

Christian Britschgi, writing at Reason, actually dared ride one embattled line. He found what you might expect: a long history of lazy, perverse incompetence at Metro, bordering on corruption. When concrete started falling from the ceiling at one station in 2016, “an internal investigation . . . uncovered Metro safety inspectors at the station had taken to just cutting and pasting positive evaluations from prior year reports instead of actually checking for damage in some hard-to-reach areas of the station,” Britschgi explains

This is the kind of thing you expect to find in government. Why? Because we don’t allow government projects to go under, even after repeated and massive failures. Ignominy.

Should we be shocked, though? No. Spectacular non-success is close enough for government work. Markets work better because of important communication via profit and loss. Without that stick of loss, governments just take our taxes as their carrot. 

Not a whole lot rides on actually serving riders.

This is Common Sense. I’m Paul Jacob.

 

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folly government transparency national politics & policies too much government

It’s Only Money

Lunacy, money, Congress, health care, magic, ACA, budget, spending

“If we can put a man on the moon,” went the old 1970s saw, we can do . . . well, fill in the blank.

Anything!

Man, can that “anything” get really expensive. And when promoters of big government drive the program, anything quickly serves as a first-stage rocket to everything.

During the 2016 campaign, a Democratic Party activist knocked on my door to express confidence that Democrats would provide greater healthcare benefits. “Can we afford that?” I asked.

The question caught her off-guard, but after reflecting on the affordability for a brief moment on my step, she decided, what the heck, surely the great “we” can swing it.

Vermont Senator Bernie Sanders, the conscience of the Democratic Party (that he refuses to join), likewise ponders healthcare. Sans cost, again, focusing exclusively on bestowing benefits. 

Sanders has introduced legislation mandating that the federal government provide Medicare for All.

Fortunately, the folks at the Mercatus Center at George Mason University are not so arithmetic-averse, calculating the price tag for the socialist senator’s bill to be a whopping $32.6 trillion (with a “t”) over ten years. 

In fiscal 2019, the U.S. Government plans to spend $4.4 trillion, borrowing a trillion dollars of that to keep the federal spigots spewing cash. So, Bernie suggests nearly doubling annual spending, placing a giant $3.3 trillion cherry on top of the current fiscal pig-out. 

And who in Washington has any credibility left to argue against the socialist urging evermore deficit spending on top of massive debt and gargantuan liabilities? 

President Trump? Republicans in Congress? The very architects of annual trillion-dollar deficits for the foreseeable future?

 That “lunacy” refers to the moon? Mere coincidence.

This is Common Sense. I’m Paul Jacob.

 

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crime and punishment First Amendment rights general freedom Second Amendment rights too much government U.S. Constitution

Progressive Designs

Progressive, magazine, H-Bomb, plans, free speech, First Amendment

In February 1979, Professor George Rathjens called the editors of The Progressive, urging them not to publish a story in the works, which included a journalistic best guess as to the design of a hydrogen bomb. The Progressive refused to squelch the story, and the professor of poli-sci (not nuclear physics) contacted the Department of Energy, which sued to suppress the article.

The Progressive defended itself on free speech grounds.

Fast forward to today, with progressives screaming to squelch the freedom of speech and press of Defense Distributed, an Austin, Texas, organization, which expressed its intention to publish easily downloadable plans* to print plastic guns using 3D printing technology.

This hit the news first as the result of a court decision early in the month,** but now Senator Edward Markey (D-Mass.) blames the Trump administration, not the court. “Donald Trump will be totally responsible for every downloadable, plastic AR-15 (gun) that will be roaming the streets of our country.”

Why blame the administration? Because the administration settled its lawsuit holding up the publication.

Amusingly, back in 1979, the government dropped its suit against The Progressive.

Progressives were definitely not for nuclear bombs 40 years ago, and The Progressive had its own agenda in publishing a version of the article that saw print in the magazine’s November 1979 issue. Now progressives express more alarm about private individuals having weapons, not about the government’s weaponry. 

But the biggest change? It has something to do with free speech.

This is Common Sense. I’m Paul Jacob.

 

* I say “easily downloadable” because plans like this have been available on the not-exactly-easy-to-access Dark Web for some time.

** The decision is clear: “Arguments for tighter restrictions on firearms are, in this case, directly opposed to arguments for the unfettered exchange of information on the internet.”

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Accountability First Amendment rights general freedom ideological culture media and media people moral hazard nannyism national politics & policies Regulating Protest too much government

Dbl Standard Destruction Co.

Trump, border, wall, build, t-shirt, Donald J. Trump Border Wall Construction Co., Addison Barnes, Oregon

Addison Barnes has just won a court case against Liberty High School of Hillsboro, Oregon. The court ruled that the school acted wrongfully when, early this year, it suspended him for wearing a “disruptive” T-shirt heralding a “Donald J. Trump Border Wall Construction Co.” 

Addison was awarded $25,000 for legal expenses, and the school has apologized to him, sort of, for the suspension.

“I brought this case to stand up for myself and other students who might be afraid to express their right-of-center views,” Addison says. “Everyone knows that if a student wears an anti-Trump shirt to school, the teachers won’t think twice about it. But when I wore a pro-Trump shirt, I got suspended. That’s not right.”

No, it’s not.

The outcome is imperfect. The apology offered by Liberty High does not acknowledge the glaring injustice of the suspension. It simply asserts that the school got the “balancing act” wrong between making students feel welcome and making them feel safe. (Because it is “unsafe” per se for kids to peacefully express political disagreements?) Nor was the teacher who imposed the suspension obliged to apologize personally.

Ideally, all schools would be privately owned, privately run. Then they could openly promulgate whatever silly policies they wished about what students may display on T-shirts, if anything. Market pressures would tend to discourage indefensible rules. 

But today’s schooling system is not ideal.

Have you noticed?

Meantime, let’s hope that the court’s decision will discourage other schools from imposing similar double standards.

This is Common Sense. I’m Paul Jacob.

 

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Accountability free trade & free markets general freedom national politics & policies property rights responsibility too much government U.S. Constitution

The Trump Trade Enigma

Trump, worship, trade, trade war, tariff, free trade, trade deficit

President Donald J. Trump, former “reality TV” star, often seems merely to skirt reality.

“Our trade deficit ballooned to $817 billion,” President Trump exaggerated to the “men and women of U.S. Steel” last week. 

“Think of that. We lost $817 billion a year over the last number of years in trade,” he went on. 

“In other words, if we didn’t trade, we’d save a hell of a lot of money.”

This is the sort of dopey bunk a drunk at a bar might say, after the fourth shot had obliterated any remnant of economic understanding from his synapses.

But the president said this in Granite City, Illinois, in front of cameras, a live mic, and a cheering crowd.

And yet, as I wrote yesterday at Townhall, Donald Trump is now explicitly aiming at a worldwide free trade policy, negotiating to break down trade barriers and get rid of subsidies on . . . well, “non-automobile industrial goods.”

I’m almost afraid to ask him why not all industrial (and, for that matter, agricultural) products. Could one expect a coherent answer from someone who does not understand that an $817 billion “trade deficit” means that we, the consumers of the United States of America, got stuff from each billion spent? Each dollar?

And yet, if he pulls off worldwide free trade agreements — for whatever reason — he may almost be worth the attention that Bussa Krishna, of the southern state of Telangana, India, gives him.

The man set up a shrine to worship Donald Trump.

I will never do the same. But I’d tip my hat to almost anyone who fosters trade, and the peace and progress trade brings to the world.

This is Common Sense. I’m Paul Jacob.

 

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Accountability general freedom ideological culture porkbarrel politics responsibility too much government

Ask the Next Question

next question, socialism, Republicans, Democrats, regimentation, Democracy, Democratic, lies, politicians

Republicans are very reliable. When given our system’s “Mandate of Heaven” — majorities in both houses of Congress and the Presidency — they can be relied upon to do one thing: add debt by piling up huge deficits.

It happened under George W. Bush, and it is happening under Donald J. Trump: “The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years,” the Wall Street Journal tells us, “pushing the federal deficit above $1 trillion starting next year.”

Republicans should ask themselves why. And while they ask themselves that, everyone else should ask the next question: why do politicians who say they want one thing so often deliver its opposite?

This is not a mere “right-wing” phenomenon. Leftists say they want “democratic socialism,” but, as Irving Kristol noted, at some point not far down their road to Utopia, “democratic socialists” must choose between democracy and socialism.* By promising everybody everything, too quickly everybody gets shanghaied into service to produce that “everything,” finding themselves conscripts in socialism’s army.

The equation of socialism with regimentation and general un-freedom has been clear for over a century, explained carefully by sociologists, economists and even politicians.* And yet, increasingly, today’s Democrats are embracing a philosophy with proven anti-democratic features.

Could some deep principle be at play?

Probably. It is built into the very nature of state governance, of politics itself. It may be why republics metamorphose into empires, conservatives go radical and liberals become serviles.

Which is why effective democracy requires limited government. To minimize that boomerang effect.

We might start by limiting spending.

This is Common Sense. I’m Paul Jacob.

 

* Herbert Spencer’s writings on socialism include The Man versus the State (1884) and Industrial Institutions (1896, Principles of Sociology, Vol. III, Part VIII); German politician Eugene Richter’s satire Pictures of the Socialist Future (1896) is well worth reading; and economist Yves Guyot preceded Ludwig von Mises’ classic Die Gemeinwirtschaft (1922, translated as Socialism: An Economic and Sociological Analysis, 1950) with several books, including The Tyranny of Socialism (1893) and Socialistic Fallacies (1910).

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

Trump’s Biggest Secret?

golden crutches, farm subsidies, tariff, trade, free, Trump, EU

“This trade war is cutting the legs out from under farmers,” says Senator Ben Sasse (R-Neb.), “and White House’s ‘plan’ is to spend $12 billion on gold crutches.”

Referring to Donald Trump’s tariff brinksmanship with China, Sasse is decrying Trump’s request to Congress for compensatory farm subsidies. Sasse insists that “America’s farmers don’t want to be paid to lose” — but regardless of what farmers want, we should want free trade.

Tariffs are taxes. Consumers ultimately pay for them all.

Trump’s requested “crutches” is just another example of a bad government program leading to another, “compensatory” bad government program.

Old story. Too familiar.

The senator is right to be alarmed by the Trump “administration’s tariffs and bailouts,” for the president is playing a most dangerous game. Trade wars are not mutually beneficial. Trade is.  

Of course, if the ultimate result is an end to all trade barriers — as Trump himself demanded regarding the EU — then . . . could it be worth it?

One thing’s for certain: the history of protectionist brinksmanship is not pretty. Sasse himself predicts that Trump’s tariff hikes “aren’t going to make America great again, they’re just going to make it 1929 again.”

Sasse is referring to the passing of the Smoot-Hawley Tariff Act of 1929, which led not only to a spooked Wall Street, but to bank failures and retaliatory protectionism from other countries. 

And a worldwide depression. And world war.

But is Trump really a secret free trader,* using tariffs in a game of chicken with trading partners?

This just in, from The Guardian: “Trump and EU officials agree to work toward ‘zero tariff’ deal.”

Stay tuned.

This is Common Sense. I’m Paul Jacob.

 

* We could be forgiven for thinking him an old-fashioned protectionist, considering his repeated insistence that “Tariffs are the greatest!” But with Trump, maybe we should never take him literally.

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Photo by Carlos Martinez

 

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Accountability folly free trade & free markets general freedom moral hazard property rights responsibility too much government

Poison Is Poisonous

poison, inflation, Venezuela, socialism, free markets, capitalism

Venezuela’s socialist economy has been collapsing.

No big mystery. If, out of hostility to capitalism, a society keeps destroying everything that production, trade, and prosperity depend upon, the economy suffers. The benefits of markets don’t flow no matter what.

One assault has taken the form of hyperinflation — runaway printing of currency, done in part to dissolve government debt. Many Venezuelans are resorting to barter. It’s easy to understand why.

Or is it? A Reuters reporter says that economists say that “the central bank [of Venezuela] has not printed bills fast enough to keep up with inflation, which . . . reached an annual rate of almost 25,000 percent in May.”

So go faster!?

Dude. Dude. The massive expansion of Venezuela’s money supply is what’s causing massive jumps in prices. Just like any other economic good, the medium of exchange is subject to the laws of supply and demand.

Other things being equal, enormously increasing a supply of a good will enormously lower its market value or price. Money, too, has a price — in terms of the non-monetary goods being bought. If the pre-hyperinflation price of a dollar in terms of bread is one loaf and the post-hyperinflation price is one bread crumb, you won’t reverse the decline by printing even more dollars or bolívars even faster.

If you’re ingesting poison, you can’t fight the effects by being poisoned more and harder. The very first thing to do is stop ingesting the poison.

This is Common Sense. I’m Paul Jacob.

 

 

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Accountability crime and punishment folly free trade & free markets general freedom local leaders nannyism national politics & policies responsibility too much government

Kick the Addiction, Save Money

marijuana, tax revenue, taxes, spending, war on drugs, opioid epidemic

The political case for the War on Drugs has always been intuitive. “Drugs are bad” has trumped practical concerns. But the actual, responsible case for the political crusade has depended upon some concept of “social cost.”

Now that marijuana is being legalized state by state, the case against the greater War on Drugs is being taken seriously — enough to rethink all varieties of costs. Indeed, many now see the opioid epidemic as being driven, in part, by the War on Drugs, and not just as an excuse for a stronger crackdown.

Nevertheless, coming to some accounting — especially “social cost” accounting — remains difficult. This is especially true so long as its effects on freedom and the rule of law do not get figured in.

Somewhat surprisingly, even the budgetary effects of legalization have proven a bit tricky.

So it is welcome to read Harvard economist Jeffrey Miron’s study of marijuana legalization as it has occurred in the states of Washington, Oregon, and Colorado. He compares results of legalization with the predictions he had made eight years ago, in a previous Cato Institute study. It turns out that while tax revenues are far greater than expected, law enforcement costs have not gone down.

“Early experience suggests that governments will reallocate rather than reduce those expenditures,” Miron writes. “That reallocation may be beneficial, but it does not have a direct effect on the budget deficit.”

On a federal level, though, we might expect greater savings. How? We could shut down whole bureaus.

Yet, achieving such savings would require progress on Washington’s biggest addiction:  spending.

This is Common Sense. I’m Paul Jacob.

 

Studies cited:

Jeffrey Miron, “The Budgetary Effects of Ending Drug Prohibition,” Cato Tax & Budget Bulletin, Number 83, July 23, 2018.

Jeffrey A. Miron and Katherine Waldock, “The Budgetary Impact of Ending Drug Prohibition,” Cato Institute white paper, September 27, 2010.

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