Category: too much government

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national politics & policies too much government

Bakers’ Bailout

Bailouts aren’t just for big businesses any more.

Just a few years ago the “too big to fail” argument meant spending trillions on financial institutions and auto companies. Now it appears that rewarding failure — indeed, outright perverse dealing — has a new and eager beneficiary: the federal loot goes directly to unions.

Well, a union, at least. The Bakery, Confectionery, Tobacco Workers & Grain Millers International, whose brinksmanship shut down Hostess, Inc., has former Twinkie techs pulling in money earmarked in a specific way:

This week, the Labor Department decided to shower Hostess workers with Trade Adjustment Assistance, a multibillion-dollar pork barrel program that was beefed up as a bone to Democrats, who were blocking passage of three free-trade treaties in Congress in 2012.

TAA is a lavish program doled out by the Labor Department for laid-off workers who’ve lost their jobs due to “global trade.”

Of course, those 18,500 Hostess jobs were not lost to global trade. They were lost to union pig-headedness. The AFL-CIO-affiliated union was warned that without some cuts, the company would go under. The Teamsters entreated the bakers’ union to play ball. But no deal happened. And Hostess went under.

If the union’s negotiation tactic appeared as risky as a banker’s credit default swap portfolio on mortgage-backed securities, it’s now proved to be as un-risky as the same. The union may not be “too big to fail,” but it appears to be “too well-connected to fail.” The Obama administration is intent on throwing money at the group’s outrageous folly.

And so we continue to reward idiocy, well into the 21st century.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies Tenth Amendment federalism too much government

How to Surrender Freedom

When in the fight for liberty should one give up?

Never. Contrary to deterministic notions of social change, there’s nothing inevitable or permanent about any loss of our freedom.

What then should we make of the words of Daily Debate scrivener Robert Tracinski? Noting criticism of Florida Governor Rick Scott for reversing his stand against the Democrats’ health care reform package, Tracinski, also a foe of Obamacare, asserts that the battle to either repeal or block it “was effectively over with November’s election, when Democrats retained the presidency and control of the Senate.”

A bad blow is not a permanent conquest, however.

Scott’s opposition was central to his 2010 campaign for governor. As governor, he led a lawsuit against Obamacare. After the Supreme Court’s anti-constitutional decision upholding it, he said he would keep fighting by declining federal funds to expand Medicaid.

Alas, Scott has now thrown in the towel. (We don’t know yet whether state lawmakers, whose acquiescence is also required, will similarly discard their drenched terrycloth.) Proponents of greater government hegemony over the medical industry crow that all other hitherto recalcitrant governors will, in the words of David Firestone, “soon knuckle under and do exactly the same thing. . . . By investing a relatively small amount of their own money to cover the poor, states get a huge increase in federal Medicaid funds.”

You see how the bribe to the states is made. Cave in to a usurpation, and some of the apparent increased burdens will be borne not at the state level, but by the already insolvent, debt-ridden, deficit-addicted federal government.

It’s a sick system. And I’m not talking about just Obamacare.

This is Common Sense. I’m Paul Jacob.

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too much government

Meteorite, Meteorwrong

The most exciting atmospheric event of recent times had nothing to do with global warming.

The bus-sized meteor that burst into the atmosphere over Siberia on Thursday has deservedly garnered a lot of attention. It’s the biggest such atmospheric explosion since the Tunguska Event, in 1908, and took place many miles above the surface of the planet, its hundreds of kilotons of energy mostly absorbed by the atmosphere. And a million Chelyabinsk windows.

What remains is the clean-up. And the “lesson”:

Deputy Prime Minister Dmitry Rogozin said the incident showed the need for leading world powers to develop a system to intercept objects falling from space.

“At the moment, neither we nor the Americans have such technologies” to shoot down meteors or asteroids, he said, according to the Interfax news agency.

American astronomer and celebrity Neil deGrasse Tyson explained that, below a certain size, such asteroids approaching Earth are undetectable. (Nomenclature clarification: an asteroid is a rock in space; a meteor is one that hits the atmosphere; a meteorite is one that hits the ground.) And there’s nothing we can do about them. They almost literally come in “under the radar.”

But bigger objects could be tracked, are tracked. And potentially something could be done about those. Which is good, since they could be Earth killers.

Not surprisingly, deGrasse Tyson’s followers were blessed with a meme blast saying, “Asteroids… are nature’s way of asking: ‘How’s that space program coming along?’”

For my part, NASA’s current bowing out to industry is a step in the right direction. For it’s only when there’s a lot of space traffic that we can expect expert space traffic cops — who (whether public or private) would be better equipped to stop the next big wannabe-meteorite.

This is Common Sense. I’m Paul Jacob.

 

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

A Teachable Wage

The U.S. President wants to up the national minimum wage to $9 per hour.

Republicans tend to lose at such policy debates, sometimes by daring to tell the truth: That minimum wage laws tend to raise unemployment. But that doesn’t impress politicians, who can’t be bothered to look beyond the surface of such issues.

They present the minimum wage hike as a guarantee that higher wages get paid all around, that wages only go up, rather than what actually happens: some wages go up to meet the law, and others evaporate, as people are let go, jobs downsized, and new jobs go uncreated.

So why would congressional Republicans use the same old rhetoric to balk at the president’s plan?

Sometimes irony works. Republicans should take all the Democrats’ premises — we want higher wages, more wealth, etc., etc. — and up the ante:

“Yes, raising wages would be great! But why are you all such tightwads? Raise the minimum to $49 an hour! Or make the lowest rate comparable with congressional pay: $85 per hour!”

Then compromise and say they will only vote for the raise if the rate hike is a serious amount, not the president’s paltry $1.75 increase.

At that point, a more honest conversation will start up.

For the ugly truth is that the harmful effects of the current and rather low minimum wage laws rest mainly on folks who aren’t very likely to vote, or to notice why it is they are unemployed. But raise the rate to $49 per hour, or even $19, and the scam becomes obvious to all but the most dense.

Even Democrats would insist on a lower rate.

And then Republicans should demand that Democrats explain why. And reveal the perverse logic behind minimum wages for all to see.

This is Common Sense. I’m Paul Jacob.

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too much government

Oh, For a Smarter Obama

There are some things that can be endured only with irony, or a lot of drink (and I don’t drink).

Last night, as I listened to Barack Hussein Obama’s fifth “State of the Union” Address, I chose irony:

Obama just said he wants a smarter government, not a bigger one. So, surely, the new slogan will be: FREEZE GOVERNMENT SPENDING! Washington Will Simply Work Smarter for the Same Money! Now we’re united. Go Obama!

Live-blogging on Facebook in this manner allowed me to breeze through the rest of the tedium pretty well: my blood pressure didn’t rise one bit.

But this “smarter government” theme is actually a serious issue.

The problem with current government is not the IQs of the folks in our bureaucracies or running for office. The problem is the systemic effects of the incentives and disincentives that modern, barely limited government present to us all. We don’t need smarter government to improve conditions, we need wiser governance. And the wise person knows when to leave well enough alone.

Actually, there’s a lot of intelligence out there. And knowledge. But these are dispersed amongst “We, the People.” Government concentrates power, but it cannot concentrate knowledge or IQ in any multiplicative way. When people live under the right incentives — as provided by liberty and the rule of law — they become more responsible, they learn from their mistakes, and they even achieve some great things.

Government must learn to back off to allow this — or at least freeze spending!

I wonder if President Obama is smart enough, wise enough, to learn that.

Probably not as long as enough people laud him for saying inane things about “smart government.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Banning Consequences

When bad government policies create problems, government officials often pretend that the causes are unrelated to the effects. Instead they enact further bad policies. They may even seek to outlaw the effects, as if prohibiting puddles could stop the rain.

Suppose a government greatly expands the money supply, which leads to a general rise in prices obvious enough to cause people to complain about sticker shock. Governments may try to “solve” the problem with slogans and price controls.

In Argentina, which is lurching toward 30 percent inflation, they’re skipping the Whip Inflation Now buttons and going straight to the price controls. The government has temporarily frozen prices in the largest supermarkets. The two-month freeze is the result of an “agreement” between the trade group representing big stores and the Argentine government.

Now what happens?

Well, customers will race to the big stores, but small stores won’t lose business except in the short run. As the inflated demand outstrips a deflating stock of goods, the big stores and their suppliers won’t see much point in replacing goods that they can sell only unprofitably or at a loss. If they do replace the sold-off stock, they’ll likely do so with shoddier stuff in smaller packages.

Monetary inflation imposes hardship; price controls worsen the hardship. By the same logic, you help somebody whose leg you just broke by smashing his other leg too. You may think that this procedure would restore health, but actually—no.

This is Common Sense. I’m Paul Jacob.

Note on the illustration: The French assignat was an early instance of paper money inflation in Europe.

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national politics & policies too much government U.S. Constitution

Authorized, But in the Red

According to the late economist James Buchanan, there exist three basic categories of government functions: protective, productive, and redistributive.

The protective functions are most basic. As inscribed in the Declaration of Independence, we are to be protected by government not in a scattershot way, but by having our rights delineated and defended. Think courts and the military.

The redistributive functions make up the bulk of the federal government, today . . . according to a recent Heritage Foundation chart, “More than 70 Percent of Federal Programs Goes to Dependence Programs.” Most of these, like Social Security and Medicare, were not originally contemplated as tasks for the federal union, and are flagrant violations of the Constitution.

But some “productive” (business-like) functions were placed into the Constitution, the most famous being the authorization to create a postal service.

Though no longer an official wing of the U.S. Government, the Postal Service is still hamstrung by congressional micro-management, as the shrinking mail biz busies itself trying to erase red ink.

The current notion is to drop Saturday delivery of all but packages. The enterprise hopes to save billions on this reform, alone, and was able to initiate the service cut without Congress’s approval by gambling on what some are calling a legal loophole.

Perhaps as politically dangerous is the ongoing attempt to get rid of post offices in smaller communities, replacing them with “Village Post Offices” that private enterprise would run.

It’s worth noting that though the Constitution allows for mail delivery and a few other “productive” services, these aren’t very productive — at least, they tend to operate in the red.  Besides, what is authorized by the Constitution doesn’t mean required by the Constitution.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Laboring for Unemployment

When you make it harder to hire people—as Obamacare does by imposing penalties on companies that fail to provide specified health insurance—you make it more unlikely that persons will be hired.

Consider the case of Automation Systems Inc., reported at National Review Online. After the economy went into a nose dive a few years back, the only way owner Carl Schanstra could keep the company alive was by slashing staff.

Automation Systems has managed to bounce back, and business is improving. Currently, Schanstra employs 37 people. He would like to hire lots more. But as soon his company employs more than 50, he’ll be socked with $40,000 in penalties and $2,000 for each additional employee. Even firms that already provide health care to employees will have to pay such penalties if they have 50+ workers and their insurance plans don’t offer as much coverage as Obamacare deems necessary.

When you must shell out $40,000 to the government—$40,000 more than all hitherto expected payout of salary and benefits—to hire your very next employee, you have a strong incentive to keep your company smaller than you might have liked. And workarounds like contracting consultants, as discussed last week, are not options for every company.

This reality may seem obvious to anyone with even modest knowledge of what it takes to create wealth and make a living. But somehow the obvious escapes the central planners in Washington.

Or maybe they just don’t care about the hardships their policies impose upon us.

This is Common Sense. I’m Paul Jacob.

Categories
nannyism too much government

Rationing Pain Relief

If you doubt that ever-expanding government control over medicine hurts people, New York Mayor Michael Bloomberg is eager to disabuse you. How else to explain his new requirement that city-controlled emergency rooms restrict supplies of painkillers in the name of the war on drugs?

The idea is that if emergency rooms shrink supplies below what medical practitioners think reasonable, then it’s harder for addicts to get their fix.

Have personnel known that certain patients were addicted to painkillers and treated them with painkillers anyway? Or are painkiller addicts stealing the supplies? Whatever the rationalizations, it’s evident that substandard supplies will make it harder to help non-addicts in serious pain.

What about days when demand is especially high? Or when delivery of new supplies is disrupted?

Like any central planner confident in his own omniscience, Bloomberg is sure that limiting the supply of painkillers below the level judged adequate by hospitals could never make it harder to help persons in pain. He also says, if so, so what? “[So] you didn’t get enough painkillers and you did have to suffer a little bit. . . . There’s nothing that you can possibly do where somebody isn’t going to suffer. . . .”

His rationale, here, would “justify” making it harder to obtain anything whatever that enhances our lives if that thing might also be used destructively. A counsel to impair life in the name of saving it.

Bloomberg adds callousness to his hubris, topping it off with absurdity.

This is Common Sense. I’m Paul Jacob.

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too much government

The Budget Math Deficit

The White House once promised to answer any petition posted at its .gov site that garnered at least 25,000 signatures. (It has since increased the minimum.) Facetious persons urged it to build a Death Star like the planet-destroyer in Star Wars.

Well, the petition got the necessary signatures, and the Obama administration responded: No, we shan’t build a Death Star. One reason given? Paul Shawcross, a budget official, noted the prohibitive cost.

“We’re working hard to reduce the deficit, not expand it,” he says.

Really?

Now consider a widely reprinted lesson in accounting offered a little more than a year ago by Laurie Newsom of the Gainesville Tea Party. Newsom suggested that to better understand the government’s spending antics, drop eight zeros from the budget numbers. Newsom cited annual tax revenue of $2,170,000,000,000, a federal budget of $3,820,000,000,000, new debt of $1,650,000,000,000, national debt of $14,271,000,000,000. And “budget cuts” of $38,500,000,000.

Delete eight zeros and pretend that the national government is just one household. So instead of federal revenue of $2.17 trillion, we have one household bringing in $21,700. But in the same year, its residents are spending $38,200 and adding $16,500 to a credit card with an outstanding balance of $142,710. One the other hand, the family has “cut” $385 from its spending.

Sound like a very disciplined effort to get the fiscal house in order?

Things that can’t continue forever, don’t.

This is Common Sense. I’m Paul Jacob.