Judge Andrew Napolitano has a few questions:
Categories
Category: too much government
It’s a dam shame.
There are plenty of private sector dams in the U.S., but the biggest are federal government projects, like those on the Columbia and Colorado rivers. These government-run outfits aren’t “free,” though. Indeed, they often prove to be good examples of typical government operations, providing special favors to some people at the expense of others.
Take the Hoover Dam, cherished as the nation’s highest symbol by MSNBC’s Rachel Maddow. The dam supplies water and electricity to Las Vegas, Nevada — at cut rate prices. A typical family in Las Vegas pays half for water what the same family would pay in Atlanta, Georgia, despite the fact that Atlanta gets 13 times more precipitation. These cheap rates have predictable consequences — overuse, for one. Which then leads local water authorities to foist on consumers some heavily intrusive conservation rules.
Andrew Wilson, in a report for the Property & Environment Research Center, writes that “A market-ready solution for Las Vegas water,” though not often talked about, would have far fewer negative consequences. And it’s not a difficult idea as such: “discard the historic cost-based pricing model and move instead to a pricing system that recognizes the scarcity value of water.”
Raising the prices for water and electricity to Las Vegas (and, for that matter, electricity to favored Bonneville Power Administration customers in the Pacific Northwest — along with many other federal government “business” products) would not only help forestall shortages and draconian lawmaking, it would be equitable. There’s no reason for the rest of the country to be, in effect, subsidizing Sin City.
Or any other city.
This is Common Sense. I’m Paul Jacob.
Categories
Killing Them Softly
You probably associate methadone with heroin recovery clinics. Now it’s associated with state-run medicine. And iatrogenic fatalities.
Washington State’s “Washington Rx” is a medical assistance program that’s been in operation less than a decade, providing a drug discount card to those with low incomes and regulating prescriptions for Medicaid patients. The biggest challenge? Rising prescription drug prices — which places many drugs out of reach of poor and non-insured folks, and jeopardizes state finances with a financial hole to suck up ever-increasing amounts of money.
How to economize?
The board responsible for Washington Rx policy has pushed cheaper drugs. For pain medication, effective but expensive drugs like Oxycodone were swapped out for that old synthetic opioid, methadone, which is ultra-cheap. This saved the state millions.
Reasonable, eh?
Well, the problem with methadone is that it’s hard to control dose. The drug lingers in the body, builds up. It turns out to be rather easy to pass away during sleep of an accidental overdose. “Doctors,” a fascinating Seattle Times report informs us, “call it the silent death.”
Methadone overdose rates have radically increased in the Evergreen State, especially in poorer communities. Since Washington Rx set up shop, 2,173 Washingtonians have died of methadone overdose; an overwhelming majority of all overdose cases are from this one drug.
Programs in other states also list methadone as a preferred drug, and methadone overdoses are on the rise nationwide.
We are often told of the horrors of private insurers and their dastardly cost-cutting practices. But here’s a bureaucracy cutting costs. And effectively, too.
With a side-effect: killing people.
That’s hardly Common Sense. I’m Paul Jacob.
In Suffolk County, Massachusetts, a new wrinkle on the old Producers-like scam hit the spotlight as a grand jury indicted Daniel Adams, a film impresario with several films under his belt, on ten counts larceny and false claims to the state in the financing of two movies set in the Cape Cod area, The Golden Boys (2008) and The Lightkeepers (2009).
According to Boston.com, Adams is charged with taking “advantage of a state incentive that allows film makers to apply for a tax credit equal to 25 percent of eligible production expenses. But prosecutors said he deceived the state about his expenses, claiming, for instance, that he paid [actor Richard] Dreyfuss $2.5 million, when in fact he paid him only $400,000.”
Adams has pleaded not guilty, and his legal standing is for a jury to decide.
More important is the general policy — funding movies is just not a legitimate use of tax money.
The only possibly legitimate argument for taxation is that the forcibly extracted money serves all the people it’s extracted from, by fulfilling very general, truly public interests. Making movies is not that.
One wag notes that “[t]he real crime is that a movie starring Richard Dreyfuss ever qualified for taxpayer funds in the first place.” That sounds almost like a criticism of Dreyfuss. Hey, I like the actor.
The point is that no film, either starring the greatest of greats or the least of unknowns, should be financed with conscripted money.
This is Common Sense. I’m Paul Jacob.
Some “unintended consequences” aren’t.
The order of the market is an unintended consequence of market participation. By buying and selling, we’re just trying to get what we want. But we also send signals that help other folks accommodate our values and plans, which then allows markets to form some semblance of orderliness.
In government, on the other hand, laws get advanced to help this person or that, or whole groups of people. But economists often note that the actual consequences of many policies are at great variance with their advertised benefits. These often negative outcomes we term (following F.A. Hayek) the “unintended consequences.”
It’s worth noting that sometimes politicians do intend those hidden, bad consequences.
Economist David Henderson brings up an instance of this:
One insurance agent I spoke to speculated that politicians and other government officials who support these regulations not only understand these effects, but also like them. Why? Because they cause more people to go without insurance and thus create a demand for government-provided insurance.
Henderson then cites a provision of Obamacare, now kicking in: Regulations mandating medical insurance companies to spend a prescribed percentage of premiums “on actual medical care.” The result will be, almost certainly, the demise of whole hunks of the health insurance industry.
Thereby increasing political demands for government-provided insurance.
Some of the folks who concocted this regulation, and some who voted for it, certainly knew the likely result. And welcomed it.
Politicians are not equally clueless.
This is Common Sense. I’m Paul Jacob.
The seeds of disaster can often be found in good intentions — a simple regulatory requirement designed to avoid disaster — as explained by economist Lawrence White:
It has been alleged that Brazil’s Labor Minister, Carlos Lupi, had demanded kickbacks from “charities and non-governmental organizations in exchange for funding from the ministry.” He has also been accused of receiving both a state and a federal government salary. Such talk has undermined his ability to work for the already-beleaguered government of President Dilma Rousseff. So he resigned.
We’ll see what happens to Lupi. But the charges reveal a problem we will always have as long as governments are big. The very ability to “make or break” a project, business or career is itself an opportunity to charge a premium for such service.
The bigger and more arbitrary government is by design, the more opportunity there is for corruption.
So why isn’t all government corrupt?
Well, separation of powers allows one government sector to watch over the others, perhaps jealously. And, as Brazil’s case shows, a free press helps.
But there’s also the cultural element.
A generally honest culture where people follow higher principles as a matter of habit can offset the dangers of governmental arbitrariness. This explains, perhaps, why Scandinavian countries managed under big government as successfully as they did, for so long. Going into the modern welfare state, Scandinavians were generally honest and morally upright.
Over time, though, this element recedes, as opportunities for corruption work their way into every level of society. As has happened in northern Europe generally.
Small, limited, citizen-controlled government is less corruptible. It also encourages a culture of honest dealing.
This is Common Sense. I’m Paul Jacob.
Politics is often the art of lying about the effects of policy, and Hugo Chavez, Venezuela’s Prevaricator-in-Chief, is a master politician. As consumer-price inflation hits a 27 percent per annum rate, he blames capitalism.
One report summarizes his position: “Mr. Chavez said the market had become a perverse mechanism where the big monopolies, the big trans-nationals, and the bourgeoisie, dominate and ransack the people.”
So he’s extended price controls from staples to all sorts of goods, with some prices being immediately subjected to a rate freeze. Big firms will have to report costs to the government, so bureaucrats can determine a “fair price.”
Were it not a ratcheting up of oppression and hardship, I’d say this is all getting rather funny. Price controls notoriously fail to achieve what they aim. In the United States, Nixon-era wage and price controls set stagflation into overdrive. Long lines at the gas pumps, shortages in supermarkets, and rising prices. What a mess.
There’s good theory to explain why price floors and price ceilings cause major problems. But according to the head of the country’s price control board, “The law of supply and demand is a lie.”
Hugo and his cronies deny the relevance of the central bank’s doubling the volume of money in circulation since late 2007. Supply of money increases? No possible effect on skyrocketing prices, supply and demand being a lie, you see.
Meanwhile, people have begun to hoard products. It’s now almost impossible to even find coffee in Venezuelan stores.
This is Common Sense. I’m Paul Jacob.
America’s agricultural policies are notoriously crazy. The federal government subsidizes one crop while discouraging its use at the consumer end. The old New Deal program of paying farmers not to grow crops is still in place. The high tariff on sugar artificially increases prices far above the world price.
To compensate, the federal government helped develop a refined sugar substitute, high fructose corn syrup — an even more “sugary” sugar — and then infected nearly the whole food supply with it.
So, some sympathy for the “locavore” movement, the folks who believe we should eat foods grown in the areas we live. It seems more natural. Less goofy.
But it’s also a lot more costly, considering that buying locally tends to forsake gains from trade.
So a law to prop up locavore production and consumption, like the legislation introduced early in November by Sen. Sherrod Brown (D-OH) and Rep. Chellie Pingree (D-ME), cannot help but shuffle two steps back for every misstep forward. Basically, it’s about more subsidy, including $30 million for “Value-Added Producer Grants,” $15 million for “farmer food safety training,” $90 million for something called a “Specialty Crop Block Program.” The least obviously bad part would direct the “USDA Research, Education, and Extension Office to coordinate classical plant and animal breeding research activities,” though I don’t see why farmers can’t manage this on their own. This is the Age of the Internet, after all, of Information.
Congress: Forget it; repeal current agribusiness subsidy and protectionism, instead.
This is Common Sense. I’m Paul Jacob.
Nobel Laureate economist explaining why drug prohibition makes no sense: