Category: too much government

Categories
national politics & policies responsibility too much government

Death by a Thousand Non-Cuts

As I write this, the United States of America is $16,275,179,205,442 in debt. By the time you read this, we’ll have piled up millions more.

Much debt is of recent vintage. When George W. Bush became president in 2000, the national red ink totaled $5.7 trillion. In eight years, Dubya nearly doubled it to $10.6 trillion. Since his 2008 election, President Obama has far outpaced Bush, sinking us another $5.3 trillion in debt in just half Bush’s time.

And, by continuing to run yearly deficits of over $1 trillion, we’re digging the hole deeper at top speed.

For all the hysteria over draconian cuts, forced at the so-called fiscal cliff, those somewhat slippery savings would at best amount to about 10 percent of our yearly deficit, leaving us spending 9/10ths of a trillion dollars we don’t have.

In the “other cuts” department, the Obama Administration had been supporting paltry reductions to federal Medicaid spending of $17.6 billion over ten years (that’s less than $2 billion a year), but just flipped its position. Why? State governors are deciding if they can afford to take part in Obamacare’s massive Medicaid expansion to cover those earning up to 133 percent of the poverty line.

Not content to spend recklessly alone, the Feds picks up the entire tab of new Medicare recipients’ first three years. After that, Washington pays 90 percent and the states pay 10.

States are wondering how they’ll come up with that additional 10 percent — seven governors have already declined to join in the spending program. No one in Washington has given a second thought to paying the 90 percent.

They figure they can always raise taxes.

This is Common Sense. I’m Paul Jacob.

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

Paying for Agreement

How do you get a body of professionals to go along with your program?

Pay them.

It’s an old idea: He who pays the piper calls the tune.

The pipers are economists. The paymaster is not you, but the Federal Reserve. There’s a suprising amount of agreement amongst even disagreeing economists that the Federal Reserve is, on the whole, “a good thing,” a necessary thing, even an institution whose existence and rationale must not be questioned.

Shocking, but less so when you apply what is called “Public Choice” analysis to economists themselves. Assume that economists are self-interested. Assume that they like to get paid. Opinions turn out to be somewhat elastic, even given some very hard facts. The results?

Don’t bite the hand that feeds you.

Nicely, a few economists bring this up, every now and then. Garett Jones on EconTalk did, reviving a letter monetary economist Milton Friedman wrote to researcher David M. Levy in the early 1990s. Friedman summarized the situation concisely, saying that the Fed

hires directly roughly half of all economists specializing in the field of money, and indirectly provides funds for a large fraction of the remainder. I have no doubt that is a major reason why the Federal Reserve, despite such a poor record of performance, has such a high public standing.

This also helps explain why there was a major shift away from laissez faire amongst economists. In the 20th century, the “worldly philosophers” developed a new labor market; they found that they could make a great deal of money working for government. And they don’t get paid for telling the government not to do what it wants to do, or to fire most economists.

This is Common Sense. I’m Paul Jacob.

Categories
First Amendment rights free trade & free markets too much government

Unfree Financial Speech

Can you get in trouble with the law — or at least a government agency’s unlimited regulatory power — for peacefully telling the truth?

You can, despite the protections articulated in the First Amendment and the greater respect sometimes accorded to freedom of speech than to other constitutionally protected rights.

It is possible because when they assault speech, government officials claim to be opposed not to the right to speak freely but to something else. They say they’re combating lung cancer, the influence of money on politics, or the unequal distribution of information to investors.

This summer, Reed Hastings of Netflix committed the sin of boasting on Facebook that monthly viewing of Nexvids “exceeded one billion hours for the first time ever in June.” Sounds innocent enough.

Come December, though, and the Securities and Exchange Commission has threatened to bring civil charges against Netflix for allegedly violating “public disclosure rules.” SEC Regulation FD requires public companies to make “full and fair disclosure” of “material” information that is not already public.

The SEC still thinks that 244,000 Facebook subscribers don’t fully and fairly constitute the public, but the communication cannot by any reasonable, modern construal be a case of offering “insider information.” How much more “outside” from the back rooms of a corporation can you get than Facebook?

The absurdity, here, lies in the SEC’s rules and its interpretations of those rules — and in the blind, confused, bankrupt way bureaucracies, which don’t go bust as the companies they oversee can, enforce their rules.

That is why Bernie Madoff slipped through the SEC’s fingers for years, while Netflix finds itself in hot water for a Facebook posting.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability folly too much government

A Dog-Wagging Tale

In California and Rhode Island (to name just two states) cities are going bankrupt . . . or closing libraries and parks and cutting police and firemen to forestall going belly up. Meanwhile, they continue paying huge sums in employment benefits for folks who used to work at city hall, but have since retired into the politicians’ promised land.

Bankrupt cities don’t do so well at paying out those promises, though.

That’s why even many union members in San Jose and San Diego, California, supported the victorious citizen initiatives earlier this year that created a reasonable and workable pension program, and why serious pension reform passed through the legislature and was signed into law in deep-blue, heavily unionized Rhode Island.

In Los Angeles, former Mayor Richard Riordan’s Save Los Angeles campaign has worked mightily to prevent the city’s three pension systems from hitting the outrageous and piggy-bank breaking annual cost of $2 billion by 2017. Unfortunately, Riordan’s group abandoned a petition drive to place a reform measure similar to San Diego’s and San Jose’s on the Los Angeles ballot next Spring. The Service Employees International Union (SEIU) Local 721 claimed credit for blocking the initiative, claiming they convinced thousands of petition signers to withdraw their signatures.

Now, the Los Angeles Daily News reports that, “With no pension ballot initiative to fight, the unions can re-focus their energy and their money on the races for mayor, controller, city attorney and the City Council.”

“We are more freed up now,” said an anonymous union official.

And likely to have even more influence on how the city will be run and financed and managed.

Or should I say, “mis-managed”?

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture too much government

A Streetcar Named Veblen

Around the country, cities are going ahead with trolley and streetcar projects, as well as light rail. I just returned from Seattle. Capitol Hill was torn apart at huge expense — all to add a streetcar line to cover a stretch where no buses now run.

Trains are cool; trolleys are neat; streetcars have cachet. But as transportation economist and city-planning critic Randal O’Toole puts it, these are all more costly than buses. Far more costly. They rack up huge costs in infrastructure, and the ridership for them rarely increases enough to pay off even maintenance costs much less the capital outlays.

But for real transportation insanity, California’s your place. There, the bullet-train project has spiraled out of control, “forcing” the state’s pixillated pols to court the state’s employee pension funds to “invest” in their beloved boondoggle.

Why this madness? What’s going on here?

I think Thorstein Veblen explained it. Inadvertently.

Veblen was the economist of our great-grandfathers’ generation who characterized capitalism’s failures as the wastefulness of the rich, in terms of “conspicuous consumption.” He thought that there should be more government, and that this would be . . . less wasteful.

Well, we got that “more government.” It’s far more wasteful than the billionaires of old. At least they got rich providing benefits for the masses. Today, governments tax the masses to pay for vast, inefficient schemes to . . . move the masses. And the masses stay away. In droves.

The “conspicuous consumption” is in the public realm.

It turns out that spending other people’s money makes folks in government less responsible and more enticed by technological gewgaws and the strange tides of high-cost fashion.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Spelling Stagnation

The just-re-elected president had promised to slash the deficit in his first term. That didn’t happen, but there’s talk of back room deals being made right now, saith Politico:

Taxes will go up just shy of $1.2 trillion. . . . Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.” And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner. . . .

However, the cuts all come in the far, Star Trekkie future. Nick Gillespie of Reason not unreasonably asks if Boehner is really “Dumb enough to take $400 billion in cuts a decade from now in exchange for $1.2 trillion in tax hikes that start ASAP?” Gillespie defines “dumb” in the context of history:

[T]here’s a clear pattern: Republican presidents ratchet up spending and Democratic presidents consolidate the increases. This reality is at almost complete odds with political rhetoric. . . . Perhaps the near-total disconnect between rhetoric and reality is the reason why we can’t get anywhere — taxpayers are constantly being misdirected by the powers that be.

Still, Republicans have stood for lower tax rates. Are Republicans alone in “standing by principle”? No.

There’s another: the 77-member Progressive Caucus “will not support any deal that cuts benefits for families and seniors who rely on Medicare, Medicaid and Social Security to put food on the table or cover their health costs.”

So, realistically, there is no insider constituency for reducing spending. If enough congressional Republicans vote to increase taxes, they’ll be bilked. Meanwhile, debt overhang strangles the economy, and increased taxes will also cut into the investments that make jobs.

Thus stalemate spells stagnation.

This is Common Sense. I’m Paul Jacob.

Categories
responsibility too much government

Is Pregnancy a Lifestyle Disease?

Two stories courtesy of Reason’s Hit and Run startled me into thinking about the strange issues that come up when you put government in charge.

Peter Suderman covered another Supreme Court review of Obamacare, featuring Liberty University’s claim that Congress overstepped its authority in mandating employer coverage of specific insurance features, and that the contraception/abortion mandate violates religious freedom.

Then I scrolled down to read Rachel Moran on one conservative British MP’s daring call for “patients suffering from so-called ‘lifestyle diseases,’ such as type II diabetes, [to] pay for their own prescriptions rather than claim free or subsidized drugs.” The Tory MP has a point:

[W]e have got to have an affordable system that rewards individual responsibility. If you want to have doughnuts for breakfast, lunch and dinner, fine, but there’s a cost.

Trouble is, as we learned last Saturday, the whole point of the modern welfare state is to take away folks’ responsibility by removing negative consequences, the costs, from risky behavior.

Here in America, we’re headed that direction. The responsibility for one’s own contraceptive purchases is being shifted (by the Democrats’ healthcare reform law) from individuals and couples to employers, via government — putting the monetary burden onto all citizens, via higher insurance payments.

The religious freedom aspect of the constitutional challenge is a red herring. More basic? Individual freedom and personal responsibility. But those aren’t exactly guaranteed in the Constitution, and politicians haven’t found a way to get elected in enough numbers on the issue of returning responsibility back into the system.

So we’re left in a world where it makes perverted sense to call pregnancy a “lifestyle disease.” And subsidize its prevention.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies tax policy too much government

Let’s Jump!

When I was a kid, my mother would rhetorically ask, “If your friends jumped off a cliff, Paul, would you?”

Moot question now. My friends don’t dare jump, nor do my political enemies. Face it, Ma, nobody wants to do a swan dive off the fiscal cliff.

Except for me.

It now appears that enough House Republicans will join Democrats in voting to raise taxes on the so-called “wealthy,” thus hiking up taxes on some of my countrymen. It will do little to raise revenue, and nothing to control spending.

We taxpayers should stand together. I oppose being divided and conquered. And when they ask us to turn over Spartacus — er, the wealthy — we should each declare, “I am wealthy!”

Debt-delivering, big-spending politicians relentlessly provide us with pious pronouncements to the effect that, though we simply must stop piling up such debt and cut wasteful and out-of-control spending, because such fiscal responsibility remains unthinkable, at present, we must postpone responsibility till later.

They see the fiscal cliff and insist we climb higher.

Let’s face this fiscal cliff honestly, let’s not pretend that the acme of responsibility is funding government on the backs of the few. Besides, if there is no political will to make spending cuts today or tomorrow, why would anyone expect such backbone to miraculous appear . . . later?

I see the cliff and say, “Let’s jump!” While we can still land safely.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Kindness of Bureaucrats

When the local government of Washington, D.C., says, “Don’t worry” — people worry.

Matthew Marcou, deputy associate director of the District of Columbia’s Department of Transportation’s Public Space Regulation Administration, told those ruled by his long-worded administrative agency — the people working the city’s many food trucks, which feed lunch to a great number of Washingtonians and tourists on sidewalks every day — not to worry.

Just because the wording of a new sidewalk regulation would shut down eight of the city’s ten most popular food trucks doesn’t mean the good folks at the Public Space Regulation Administration couldn’t simply — almost magically — grant a waiver.

Be happy.

Still, there are the malcontents, the businesspeople who want some sort of certainty about the rules controlling their enterprise. The Washington Post reports that “Owners of food trucks . . . are put off by a still-unknown process that relies on the kindness of bureaucrats to keep their businesses alive.”

Che Ruddell-Tabisola is the D.C. Food Truck Association’s executive director and also a co-owner of the BBQ Bus. “[W]hy would you put forward regulations that are only successful when you make an exception to the rule?” asked Che.

The word “regulate” comes from the word “regular”; the goal of regulation being to make things regular. Therefore, regulations that require significant use of waivers fail. They aren’t rules at all. They constitute, instead, a labyrinth of economically suffocating and graft-inducing red tape.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Demands and Supply

A storm hits the east coast. Some homes are washed away. Others burn down. Millions lose power. Gasoline supplies are massively disrupted, even as mass transit is unusable for days.

Obviously, post-Hurricane Sandy, emergency measures are called for. It’s crucial, for instance, that the disrupted and reduced supplies of gasoline be gotten into the tanks of vehicles as inefficiently as possible, and by causing motorists to waste as much of their precious time as possible. Who but rational and well-informed persons could disagree?

To achieve this goal, rationing and laws against “price gouging” — in New Jersey, defined as adding more than ten percent to prices under normal conditions of supply and demand — come to the rescue! So Governor Chris Christie assures gas station owners that his government will “impose the strictest penalties on profiteers who . . . seek to capitalize on the misfortune of others in the midst of a crisis. . . .”

After all, what’s the alternative?

Well, it’s this: Let fuel prices rise to the height required to induce motorists who least urgently demand gas to give way to those who most urgently demand it. This would

  • shrink or prevent round-the-block gas lines;
  • encourage shipment of gas to those areas where prices have risen the highest, i.e., where gasoline is scarcest;
  • allow people to get back on their feet as quickly as possible by following their own best judgment in the face of local circumstances best known to themselves.

What do you call this strategy? Getting out of the way. Or laissez faire — but there’s nothing foreign about it. It used to be the American way.

This is Common Sense. I’m Paul Jacob.