Category: folly

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

Wide-Eyed Wackiness

Where to begin? How about the very first sentence of the New York Times article hailing passage of the Dodd-Frank financial bill? According to the illustrious fishwrap, “sweeping expansion of federal financial regulation” reflects “a renewed mistrust of financial markets after decades in which Washington stood back from Wall Street with wide-eyed admiration.”

We’ve seen some liberalization of financial dealings over the years. It was once illegal to own gold. Travelers can be glad of the rise of interstate banking after governments began to permit it in the 1980s.

But have politicians really offered nothing but “wide-eyed admiration” for “Wall Street” for “decades”? Has the federal government really been hands-off till now?

Take Senators Dodd and Frank. They were out front pushing home ownership on people who could not afford homes, with multiple programs and legislative packages. This bubble-making process was further inflated (quite literally) by the Federal Reserve’s cheap credit policies. Many lenders, encouraged by government-provided (but perverse) incentives, jumped onto the Irresponsibility Bandwagon in the run-up to collapse.

So how can the “solution” be additional bailout authority . . . which will further encourage bankers and others to invest unwisely?

And the new regulations — these, too, are supposed to help? We don’t even know what they are yet, because bureaucrats have yet to write them, as specified (vaguely) by Congress. In addition to their burden, they will allow pols to shake down Wall Street for years to come.

This is Common Sense. I’m Paul Jacob.

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folly national politics & policies

Save the Unions’ Ponzi Schemes?

Senator Bob Casey from Pennsylvania is legislating something big, the “Create Jobs and Save Benefits Act.”

Innocuous? Everyone wants more jobs. Government may have a lousy track record creating jobs that actually produce things demanded by people, but still — the bill is hardly unexpected in times like these.

It’s the second half of the title that indicates the powder keg within. The bill would bail out horrendously mismanaged union pension plans.

Unions, in the current legal context, are legal creatures of the state, with special privileges. And, surprise surprise, their own pensions — the ones that they manage — appear to be in as bad shape as the public-employee pensions I’ve talked about before, the ones that are building into a tsunami of insolvency.

A public bailout would transfer money from people without any special pension plan to people with pensions that are going bust. This is horribly unjust. That’s why Americans for Limited Government — a past sponsor of this program — is calling out Republican politicians who’ve signed onto Casey’s audacious scheme.

“At issue are multi-employer pension plans, in which companies across an industry pay into a single pension pool,” explains the Wall Street Journal. “[E]ven before 2006 only about 6% of multi-employer plans were fully funded, compared to about 31% of single-employer plans. The real problem is that multi-employer plans have become a sort of pension Ponzi scheme.”

Hmmm. Where have we heard that before?

This is Common Sense. I’m Paul Jacob.

Categories
folly general freedom ideological culture

Facebook’s Secret Shame

Facebook has had some bad press lately.

The popular social networking site got in trouble in recent months for the ever-more-cavalier way it treats users’ privacy. People complain that their data has been unilaterally exposed in ways they never expected when they first signed up for the service, and that privacy settings have devolved into a confusing, hard-to-tweak labyrinth.

Facebook seems to be adjusting its privacy practices in response to the bad publicity. But there’s another lamentable Facebook practice that has, unfortunately, received less sustained attention: Its willingness to shut down a user’s Facebook page solely because somebody else is offended by the viewpoint expressed on that page.

The “somebody else,” in the case I’m referring to, is the government of Pakistan, which banned Facebook because of a page encouraging people to display images of the prophet Muhammad in protest of threats of violence against the show South Park, which had made fun of making threats against people who display images of Muhammad.

“In response to our protest, Facebook has tendered their apology and informed us that all the sacrilegious material has been removed from the URL,” gloated Najibullah Malik, who represents Pakistan’s Orwellian “information technology ministry.”

It’s dangerous to cave in to demands for censorship. The folks at Facebook were faced with the loss of a large market, but they should have let the anti-censorship page remain published and let Facebook users in Pakistan pressure their government to lift the ban.

This is Common Sense. I’m Paul Jacob.

Categories
folly free trade & free markets

Finding Common Sense in China?

Las Vegas gambling entrepreneur Steve Wynn says that “common sense” has “disappeared in Washington, DC.” In a recent interview on CNBC, he complained about the federal government’s “wild, uncontrolled spending” and “unbelievable, unsustainable debt.”

Good point, of course, but nothing new. Still, Wynn’s rant went further.

Wynn is opening a new headquarters for his casino empire in Macau, China, and was asked if he expected to find “common sense in Macau.” He didn’t mince words, arguing that the “opportunities” were “far superior abroad than in America.”

But what about the regulation and government oversight in Macau, China, versus the U.S.?

“Macau has been steady,” he replied. “The shocking, unexpected government is the one in Washington. That’s where we get surprises everyday. That’s where taxes are changed every five minutes. That’s where you don’t know what to expect tomorrow. To compare political stability and predictability in China to Washington is like comparing Mount Everest to an ant hill.

“Macau and China is stable. Washington is not. Is there a businessman or a media person in America . . . that isn’t frightened about what the next crazy idea is coming from Washington? . . . Everything is cuckoo and God knows what’s next.”

Wynn closed by saying, “The uncertainty of the business climate in America is frightening, frightening to everybody. . . . there’s a sense of fear that the politicians are ruining us . . .  It’s got to stop.”

Amen.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability folly general freedom too much government

How Dare You Say We Waste Our Time?

Businessmen tend to be extremely concerned about efficiency, even to the point of talking incessantly about things like “performance metrics.”

Bureaucrats? Not so much.

Indeed, the merest suggestion that a program isn’t cutting the mustard can bring on protests of outrage. John Payne, writing on The Lesson Applied, caught my attention to one such instance. Quoting from the Associated Press, he reveals the passion and “logic” of former “drug czar” John Walters:

“To say that all the things that have been done in the war on drugs haven’t made any difference is ridiculous,” Walters said. “It destroys everything we’ve done. It’s saying all the people involved in law enforcement, treatment and prevention have been wasting their time.”

Payne’s no-nonsense response? “Yes, that is exactly what critics of the drug war are saying.”

Why did Walters take such umbrage? Could it be to intimidate us into not thinking about the evidence that drug-war critics present? Or questioning the logic of the whole program?

And the logic is a tad shaky: Allegedly to prevent some people from ruining their lives, we ruin those lives and many, many others.

Hundreds of thousands of people in prison. Billions in property confiscated without due process. Innocents shot in no-knock raids — including dogs, little girls . . . and the police themselves from innocent Americans defending themselves from seemingly anonymous attackers in the night.

Drug abuse can be very bad. I know. But Constitution-abuse can be worse.

This is Common Sense. I’m Paul Jacob.

Categories
folly free trade & free markets

Hedging Our Bets

Do congressmen know anything about anything?

Perhaps that’s an unfair question. These guys demonstrate a whole heckuva lot of savvy when it comes to logrolling, porkbarrelling, taxing, spending. Oh, and sniping, grandstanding and griping, and of failing to read bills they pass. I apologize if I implied any deficiency of proficiency in such areas.

I just wonder whether they know anything about real life outside the ways and byways of Capitol Hill.

For example, on the question of whether altering investment strategy in response to changing economic news constitutes “fraud.” If risk management equals fraud, lots of firms should close down tomorrow to protect themselves from congressional subcommittees eager to pretend that government policies have played no major part in screwing up the economy.

Power Line blogger John Hinderaker, after wading through transcripts of the senatorial interrogation of officers from Goldman Sachs, concludes that the senators, “seemingly without exception, are embarrassingly ignorant of modern risk management techniques. . . . [of] how and why firms like Goldman Sachs hedge their exposure to various economic trends . . . [They seem] to think that there was something ‘evil’ about taking a short position — that all investors were somehow required to try to keep the housing bubble going.”

Hinderaker’s observations are more detailed than I can recapitulate here. But the bottom line — that those who would run our lives don’t understand the bottom lines of those who actually work and trade for a living — is nothing new.

This is Common Sense. I’m Paul Jacob.