Category: too much government

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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.

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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.

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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.

Categories
too much government

The Greek Misprize

Sometimes a great misunderestimation.

George W. Bush’s “misunderestimate” still has a jolly ring to it, in my ear, just as does the common barbarism “irregardless.” Yet I realize that, in both cases, the prefix adds no new meaning to the word it would seem to modify.

Regardless, underestimation is today’s theme.

Matthew Feeney, at Reason.com, notes the shock-without-awe of the Greek government’s 2013 budget, just released. “The budget is worse than the 2010 projections,” he notes. And that simple statement almost qualifies as understatement:

The IMF had been hoping that the Greeks would manage to get their debt to GDP down to 120 percent by 2020. Considering that the newest budget projects a debt to GDP rate of 184.9 percent in 2016 it is unlikely that this goal will be reached.

That 184.9 percent figure was revised up from previous estimates of 179.3 percent.

The amount of debt is now way beyond the country’s annual income, as measured by GDP. I’m not one to rely heavily on GDP figures, but we need some comparison, and a market/private sector income figure would not make the 2013 ratio look any better.

And this is not a new thing. The Greeks have been underestimating their debt-to-GDP ratio for years now, as a nifty graphic from Zerohedge shows.

When a country is as overladen with government workers and other tax consumers as Greece is, this is to be expected. Zerohedge was right in 2010, to note that “Greece just got bailed out so it can get into even more debt!” At some point, hope morphs into fantasy and misunderestimation of future insolvency becomes a way of life.

This is Common Sense. I’m Paul Jacob.

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

Panel Decides “Death”

The practice of medicine historically straddled between being a business profession and a charitable endeavor. When government took it over — nearly in one big gulp, in Great Britain— that uneasy mix mutated, leaving us with the occasional bout of stark horror.

A British woman suffering from cystic fibrosis has been denied a new wonder drug that the manufacturer has agreed to provide for free, while the National Health Service gets around to approving it. But NHS says no.

Her family say she will die soon without it, yet managers at Heartlands Hospital in Birmingham say it would be unethical to provide the drug under the deal, only for it to be withdrawn later.

The drug, Kalydeco also known as ivacaftor, costs £182,000 per patient per year, and works for five per cent of people with CF who have a certain defective gene, around 270 people in England.

It corrects a malfunctioning protein which causes the characteristic build-up of fluid and mucus in the lungs that causes devastating damage.

A long shot, apparently. But is that any reason to deny a charitable offer?

These kinds of deals get offered and accepted in America all the time.

But then, when a private insurance company here decides not to cover some drug or treatment, that’s an excuse to excoriate American capitalism — while forgetting about all the characteristically American workarounds. But in “single-payer” Britain we see the state acting as a proverbial “death panel.” The outcry against socialism should be just as loud, if not louder.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Cliff Dwellers

When you hear talk about “the fiscal cliff,” ask, “Which one?”

This coming January, if Congress and the president fail to take action, every American who pays income taxes will pay more. Also set to increase? Payroll taxes, which every worker pays.

But even if we can avoid falling off those cliffs, another threatens.

It has been identified by finance professors Robert Novy-Marx at the University of Rochester and Joshua Rauh at the Stanford Graduate School of Business, who summarized their recent research paper, “The Revenue Demands of Public Employee Pension Promises.”

The bottom-line? Looking at the pension commitments state and local governments have already made to public employees, the professors “found that, on average, a tax increase of $1,385 per U.S. household per year would be required, starting immediately and growing with the size of the public sector.”

That’s only the average. “New York taxpayers would need to contribute more than $2,250 per household per year over the next 30 years,” according to their analysis. “In Oregon, the amount is $2,140; in Ohio, it is $2,051; in New Jersey, $2,000.”

Politicians have promised lavish pension benefits. And then not funded them. Plus, employees often outrageously game the system, spiking their benefits to the tune of millions over decades of retirement — like the Illinois teacher’s union lobbyist did by teaching a single day in the classroom.

If we don’t get the problem under control, this cliff keeps getting higher, making, as the professors put it, “the $1,385 per-household increase required today seem cheap.”

This is Common Sense. I’m Paul Jacob.