Category: too much government

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free trade & free markets too much government

CreepOut-o-Meter Hits Red

If you are like me, you are not a monetary economist. I’m familiar with the main positions, I guess, and — if I dug information buried deep in memory — might be able to sound coherent on monetary policy when asked. And if given enough time to collect my thoughts. But you wouldn’t come to me to gain specific advice on specific issues relating to the Federal Reserve and money management at the rarefied level of the central bank.

Perhaps, like me, you’ve accepted or rejected positions based on analogous realms where you know much more.

And sometimes it all depends on The CreepOut-o-Meter.

My CreepOut-o-Meter just hit red.

Britain’s Business Secretary Vince Cable was recently quoted as saying, “If a monetary deal’s going to work, the central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse.”

Did he really say, “unlimited powers”?

That’s a long way from Milton Friedman’s reserved talk about a “monetary rule.” One of the biggest of Britain’s bigwigs isn’t talking about tinkering or refining. He’s pushing for an unlimited bailiwick to bail out Europe’s banks, credit, and the euro itself.

So you can see why I tend to promote old-fashioned money, money that wasn’t intimately controlled and bolstered-by-bailouts. Money like gold. Or silver. Or a set of commodities.

With that kind of money, it’s governments that are bound, limited.

It fits better with my idea of a free society.

This is Common Sense. I’m Paul Jacob.

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

Clunker Flunked

When the Obama Administration hit the ground running in 2009, one of its first “hopeful” and “audacious” programs was “Cash for Clunkers,” a sort of triple-action economic stimulus, carbon-emission reduction, and automaker bailout bill. Congress got on board, a lot of trades were made, billions spent. There was much brouhaha.

Skepticism should have been the order of the day, of course. So many things could have gone wrong.

And did.

Now, with the clarity of 20-20 hindsight, a consensus emerges: Cash for Clunkers was a clunker itself. An economic analysis from Resources for the Future is just the latest (mostly negative) judgment: “[T]he program increased new vehicle sales by about 0.36 million during July and August of 2009, implying that approximately 45 percent of the spending went to consumers who would have purchased a new vehicle anyway. Our results suggest no gain in sales beyond 2009 and hence no meaningful stimulus to the economy.”

Further, fuel economy gains and pollution reductions were minuscule.

The study is far from exhaustive. A lot of old cars were scrapped, recycled. Guess what this does to the used car and parts market? It’s been devastating.

Who’s hurt by supply reductions and consequent price rises? Cash-strapped folks, the kind of people who usually buy used cars, or keep old cars running — which is a lot of people during a depression.

I bet that Cash for Clunkers served, on net, to transfer wealth from the working poor to far wealthier individuals.

This is Common Sense. I’m Paul Jacob.

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ideological culture too much government

Better Late Than Never?

“Too little, too late.” I am not alone to suspect that the Occupy movement — the 99 percenters — started its protest against corporate greed and government cronyism several years too late.

Where were the Occupiers when the Tea Party protests started?

Dancing in the streets over the Obama presidency? Many Occupiers may have lagged because they thought that “their man” could and would clean up corruption and make Washington work for the everyone — or at least the “middle class.”

The “too late” charge can be directed against the Tea Party, though — and has been, repeatedly. The Tea Partyers waited to organize until a liberal Democrat was in the White House, one who saw Bush’s big government and, well, raised it.

Many would admit, later, how not “theirs” Bush was. Still, few protested Bush’s big government push.

To the Tea Party’s credit, it was first — kicked off by Rick Santelli’s CNBC “tea party rant” in early 2009, against the upsurge of bailouts for banks, car companies, home-buyers, you name it, as well as the very idea of government stimulus. (Though I ranted earlier.)

The time to protest cronyism and corruption in American government? The moment one opens one’s eyes to political reality.

Maybe the great age of protest has finally come.

I hope it’s not too late.

It always seems like citizens should have stood up to abuse of power sooner, but being late to the action is no excuse not to stand up now.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets porkbarrel politics too much government

Strings of the Puppets

It’s hard to push string. That’s something the marionette masters in Washington are finding out. They’re used to dangling money in front of people. Watch the puppets leap!

But dangling money in front of folks in turn for votes and donations, that’s one thing. Investing in business? Quite another.

You see, businesses serve customers. While government can, indeed, invest in business, that investment doesn’t ensure success.

Developing and offering products on the market that people want to buy — that makes for success.

No matter how nifty something may seem to the investor, if it’s too costly for the targeted consumer — or simply fails to spark consumer fire — the company will not make a go of it, no matter how progressive the government doing the investing.

Sunday’s bankruptcy filing by Beacon Energy, a maker of an innovative flywheel electric energy storage system — energy storage being awfully important for that dubious future where we must rely more on unreliable and uncontrollable sources of energy, like wind and solar — is just another in a long history of failed government investments. In this case, other investors failed to come through.

On the bright side, this time the $43 million in loan guarantees, similar to those pushed to now bankrupt Solyndra, came with better collateral. Thus, this failure didn’t leave quite as big a hole for taxpayers.

Politicians like investing other people’s money (ours) . . . with their own political strings attached. But they hate that those strings lead right back to them when their corporate puppets wind up dead.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Got Jobs?

New jobs come from entrepreneurial insight into new ways of profitably producing goods; they are paid for with investments. After a bust, old ratios of prices and wages cease to work, requiring time for entrepreneurs to refigure. But capitalism’s basic scenario — savings, investment, productivity gains, trades — still applies.

Some folks prefer to short-circuit all this, simply robbing Peter to create a job for Paul.

They’re known as politicians.

President Obama proposes spending an additional $447 billion to create jobs, even though our economy is already gummed up with debilitating debt. The Cato Institute’s Dan Mitchell argues that taking money from the economy’s right pocket (taxes) and putting it in the left pocket (spending) doesn’t create economic growth or long-term employment, but, for those who happen “to be sitting in the left pocket . . . [i.e.], a state or local politician that’s getting money from the so-called stimulus,” they think “it’s a good thing.”

Congressman Jesse Jackson, Jr. (D-Illinois) says that the “only way out” of our current mess is to offer every one of the 15 million unemployed Americans a $40,000-a-year job . . . with the federal government.

Most Republican presidential candidates pitch their (quite mythical) job-creating skills, too.

The Republican presidential candidate banned by the national news media — no, not Ron Paul, the other one, former New Mexico Governor Gary Johnson — put it best. “The fact is,” he said at the only debate he was allowed to appear in, “I can unequivocally say that I did not create a single job while I was governor.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets insider corruption too much government video

Saving “Capitalism”

Excellent testimony by Prof. Russ Roberts of George Mason University about the government bailout of the financial sector. Naming Bush, Obama and Congress, Prof. Roberts charges: “You’ve helped risk-takers continue to expect that the rules that apply to the rest of us don’t apply to people with the right connections. You’ve saved the system, but it’s a system not worth saving. It’s not capitalism; it is crony capitalism.”

Let’s keep this common sense in mind.

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

Nails & Ball-Peen Hammers

When all you have is a hammer, every problem looks like a nail. When it comes to “jobs,” our politicians prove the truth of this adage over and over. They think that they have to “do something,” or at least “look busy” providing “leadership.”

Wrong — unless they take the lead to get out of the way.

Alas, few have the courage for that kind of leadership.

Republican politicians — fearing “looking bad” — are, even now, floating various “plans” to create “jobs.”

“I thought it was incumbent on me to at least say . . . ‘We’re working on a plan,’” says one incumbent.

Trouble is, whatever plan he or his colleagues put up to counter the president’s absurdities, odds are that it, too, will not work.

Why?

The trouble with markets right now is uncertainty. Several sectors went bust, and it’s not easy to get progress started again . . . especially when the government keeps cooking up game-changers. Solutions. “Fixes.” Political machinations — subsidies or regulations or any of the usual tools in the politicians’ tool belt — just increase uncertainty, muddying up the recovery.

The neat thing about markets is that none of us need to know how, exactly, to order the “economy” for order to be discovered. It works out. This is old wisdom, but even actual experimentation has shown that this is the case.

The economy is not a mess of boards half-nailed down. The last thing it needs is more hammering from politicians.

This is Common Sense. I’m Paul Jacob.

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too much government

Creepy Louisiana Law

Sometimes, the proper response to legislation is just “Huh?”

Too often, though, our incredulity reaches the shivering heights of repulsion. In those cases, we should challenge the legislators who proposed, promoted, and voted for the law. The challenge might as well be in the form of a question: “Don’t you feel creepy for sponsoring that kind of thing?”

I would have felt creepy even contemplating a vote on Louisiana’s HB 125, which, in the cause of preventing transfer of stolen property, prohibits people from buying stuff at Goodwill and similar secondhand stores with cash.

Yes, you read that right: CASH. Greenbacks. Federal Reserve Notes. “Legal tender.”

I’ve always associated such kinds of prohibitions — not allowing cash to leave the country, for example — with poor and/or socialist countries. Real backwaters. The Second or Third World.

But here it is, in Louisiana. A fully recognized state of the union (at least by everyone but FEMA).

The law passed — indeed, in the words of one report, “flew . . . under the radar” — so quickly that “most businesses don’t even know about it.”

Besides non-profit resellers like Goodwill, and garage sales, the language of the bill encompasses stores like the Pioneer Trading Post and flea markets.

Lawyer Thad Ackel Jr. feels the passage of this bill begins a slippery slope for economic freedom in the state.

“The government is placing a significant restriction on individuals transacting in their own private property,” says Ackel.

Somewhat inexplicably, pawn shops are exempted from the prohibition.

What a sorry state.

This is Common Sense. I’m Paul Jacob.

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too much government video

High Finance Q & A

This comedy routine from Australian television — sort of a take-off on the famous Abbott & Costello sketch “Who’s on First?” — may be more spot-on about the continuing financial crisis than it is ha-ha funny. Brew a strong cup of coffee, sit down in a very stable chair and watch:

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free trade & free markets national politics & policies property rights too much government

Renegade Regulatory Agencies

Americans often express astonishment when they learn that many of the nation’s laws — the bulk of its “regulations” — have not been written by Congress. Though the Constitution grants to Congress alone the power to legislate, Congress cedes most of that power to Executive Branch bureaucracies.

Last Wednesday, Sen. Rand Paul hosted a panel on government regulatory abuse. Covering this “round table” discussion, Lou Dobbs, the Fox anchorman, interviewed Sen. Paul, and the two highlighted a number of regulatory horror stories:

  • A man from Hungary was put in jail for three years for cleaning up an illegal dump that had been put onto land that he had purchased.
  • A family was harassed for raising rabbits without a license — fined $3,000,000 but given the out of a mere $90,000 fine if they paid within 30 days by credit card.
  • Members of another family found themselves face to face with EPA bureaucrats, who halted their housing project, demanded costly site restoration, and charged them with criminal liability for not immediately complying.

The law that’s directed against this latter family, by the way, “is about wetlands,” which, Rand Paul informs us, Congress has never enacted laws about: “‘Wetlands’ is something defined into existence by regulatory agencies.”

In The Road to Serfdom F. A. Hayek showed how undemocratic and abusive “central planning” becomes. Apparently, even without a grand, overarching plan, regulation of the micro-managing kind navigates the same path.

Demand more “regulation”? Expect arbitrary judgment and unreasonable requirements — tyranny — as the result.

This is Common Sense. I’m Paul Jacob.