Category: free trade & free markets

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Accountability free trade & free markets local leaders porkbarrel politics tax policy too much government

Selling Us Out

Maryland legislature, pork, Amazon, tax break, Jeff Bezos, Senator Roger Manno

Last week, Maryland’s Legislature enacted an $8.5 billion package of tax breaks and infrastructure improvements to lure Amazon into building its second corporate headquarters in Montgomery County, Maryland, bordering Washington, D.C.

State Senator Roger Manno, the only legislator from the county to vote against the subsidy, dubbed it “a $5 billion tax break for the richest man in the world. . . .”*

Today, the Montgomery County Council will consider a further proposal to streamline its zoning process, cutting in half the time the county takes to review a proposed development.

“We are trying to make sure our processes are consistent with everybody else,” County Executive Ike Leggett explained, adding that the county now “sometimes takes 100 to 120 days, while many other jurisdictions are much less than that.”

Did Leggett say “consistent with everybody else”? Well, the new zoning rules won’t apply to every business, just those planning to hire 25,000 workers. Or more.

“It’s neutral to the employer,” County Council President Hans Riemer slyly suggested. “It’s a proposal that would allow any really large employer to come in and build under certain terms.”

But only Amazon would be large enough.

“Really what it does is it creates predictability, reliability,” offered Riemer. But wouldn’t every other business also benefit from “predictability” and “reliability”?

“I think the Amazon proposal made the county realize . . . that it needed to look at some of its practices and where it has been criticized,” noted Bob Buchanan, chairman of the Montgomery County Economic Development Corporation. “We were more process versus results.”

And the county intends to remain that way . . . for “every” current business.

This is Common Sense. I’m Paul Jacob.

 

* He was referring, of course, to Amazon founder and owner of the Washington Post, Jeff Bezos.

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Accountability free trade & free markets general freedom national politics & policies privacy subsidy too much government

The Post Office Scam

USPS, Post Office, monopoly, competition, Amazon, discounts

The President of the United States says that the U.S. Postal Service is scamming us by offering shipping discounts to Amazon, the mail-order giant. “Post Office scam must stop.”

President Trump is hovering in the vicinity of the right idea. But what about government-required discounts for shippers? Are these scams too?

Congress has long required lower postal rates “for religious, educational, charitable, political and other non-profit organizations. . . .”  Robert Shapiro estimates that such mandates cost the agency over a billion dollars a year. The government forces USPS to do a great many things that lose money — things that companies functioning in a free market cannot profitably do.

And American taxpayers must perennially fork over billions to sustain its lumbering operations.

It is true that, in markets, buyers of large quantities of a good or service routinely pay less per unit than buyers of small quantities; such discounts can enhance the seller’s bottom line. The fact that USPS offers discounts to a mega-shipper like Amazon does not in itself show that charging more per parcel would generate more revenue.

The question is, then, which transactions would flourish if the agency were just another market player instead of a government-protected, government-hobbled, government-subsidized bureaucracy?

Like any government-run “business,” the Post Office is itself a “scam.” This scam must stop. Phase out USPS as a government agency and let any company deliver first-class mail to our mailboxes on any honest terms that might attract customers.

This is Common Sense. I’m Paul Jacob.

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crime and punishment free trade & free markets general freedom moral hazard national politics & policies too much government U.S. Constitution

High on Hemp?

hemp, marijuana, legalization, prohibition, THC, CBD, Mitch McConnell

Hemp is not marijuana.

And yet it is.

Earlier this week, Senate Majority Leader Mitch McConnell announced he will introduce legislation to legalize industrial hemp.

He is not concerning himself with marijuana, which is what we call the plant Cannabis sativa when cultivated for its Tetrahydrocannabinol (THC) content, the principal chemical in the plant that makes it ideal for “recreational” uses. Industrial hemp is Cannabis sativa, too, just with minuscule THC.

Hemp products are actually legal to buy and sell in the United States.

Sort of.

But growing it is murky, considering that ingestible hemp is a Schedule 1 drug no matter how little THC it has — despite the fact that Congress has allowed states to regulate the growth of low-THC hemp for “industrial” purposes.  

A complicating factor is that industrial hemp contains an oil, Cannabidiol (CBD), which is neither an ecstatic nor a hallucinogenic drug, but is widely believed to have many therapeutic powers. And is widely sold all over the country, wherever states have allowed for medical marijuana.

Nevertheless the DEA objects to it as much as to THC, saying that all ingestible forms of hemp are illegal.

Because of all this murkiness, McConnell’s bill might seem to be welcome step towards clarity.

Trouble is, since industrial hemp is indistinguishable from cannabis with THC — to look at; to smell; to touch — officials hoping to crack down on marijuana-as-a-psychoactive-drug would be much hampered were industrial hemp commonly and legally grown.

What a mess. The only real solution is to de-list all forms of Cannabis sativa from the War on Drug’s Schedule of Drugs It Unconstitutionally Proscribes.

This is Common Sense. I’m Paul Jacob.

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Accountability folly free trade & free markets general freedom government transparency local leaders moral hazard nannyism porkbarrel politics responsibility too much government

Bailing on Mass Transit

mass transit, metro, cars. low income, recession

Around the country, our major metropolitan transit systems have hit the skids. “Between 2016 and 2017, ridership fell in each of the seven largest transit markets,” the Washington Post informs.

You might guess that the reason for declines in ridership might have something to do with bad planning and poor service. Washington, D.C.’s Metro system, with which I am all-too familiar, is a horror . . . run by people I wouldn’t trust to sweep your driveway much less mine, and certainly not to manage how I get between those (or any other) two locations.

But the Post quotes an urban planning scholar who attributes the decline (in part) “to increased car ownership, particularly among low-income and immigrant populations, who were in a better position to afford cars following the Great Recession.”

This puts planners in a pickle since, he explains, if “low-income people are doing better, getting the ability to move around like everyone else, it’s hard to say that what we should do is get them to remove themselves from their cars and back on trains and buses.”

Shockingly sensible — especially coming from a planning specialist. “Transit systems should deliver quality service to low-income people,” he insists. “But low-income people do not owe us a transit system.”

Well, maybe that’s the problem, this notion that governments “owe” this service to “low-income people.”

After all, web-based services like Uber and Lyft have shown how market innovations provide the best ways to move millions.

This is Common Sense. I’m Paul Jacob.

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Accountability free trade & free markets general freedom government transparency moral hazard national politics & policies porkbarrel politics too much government

Georgia on My Dime

pig, pigliets, crony capitalism, Delta, NRA

After the recent school shooting in Parkland, Florida, followed by pressure from gun control advocates, Delta Airlines announced it would end its corporate relationship with the National Rifle Association, whereby NRA members were given discounts on travel.*

Meanwhile, Georgia legislators were in the process of passing legislation to give Delta a state sales tax break on their fuel purchases. That special legislative deal was worth a whopping $40 million to the Atlanta-based company.

Yet, when Lt. Gov. Casey Cagle heard about Delta dissing the NRA, he tweeted, “I will kill any tax legislation that benefits @Delta unless the company changes its position and fully reinstates its relationship with @NRA.”

The Lt. Gov. added, “Corporations cannot attack conservatives and expect us not to fight back.”

Everyone is familiar with the story. Those who favor gun rights were angry with Delta Airlines and ecstatic with the pushback from Georgia legislators. Those favoring new legislation to restrict gun ownership were thrilled by Delta’s break with the NRA and livid with those legislators.

But while cheering and jeering one side or the other, too many folks missed the 800-lb problem in the room. A letter writer to the Washington Post illuminated it: “The government can’t punish people or businesses for their political views. They can be punished only by the free market, in the form of lost business.”

True enough in the free market.

But when crony capitalism replaces free markets, the government certainly will punish or reward people and businesses — with millions and billions of our tax dollars — on purely political grounds.

Georgia government just did it to Delta Airlines.

This is Common Sense. I’m Paul Jacob.

 

* To be precise, reports claim a grand total of 13 NRA members availed themselves to the special rates once offered by Delta.

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Accountability folly free trade & free markets general freedom moral hazard national politics & policies responsibility tax policy too much government

Billionaire Theater

Bill Gates, taxes, tax, government, entrepreneurs, responsibility

“I need to pay higher taxes,” Bill Gates told CNN’s Fareed Zakaria on Sunday.

He was making a case against Republican tax cuts, but his actual argument? Insignificant. It’s just another unlearned, narrow-perspective “growing inequality” farrago. But his conclusion intrigues . . . as a man-bites-dog story, because people have this goofy idea that rich people are somehow against government and for reduced taxes.

They aren’t. Not even most of the richest.

“I’ve paid more taxes, over $10 billion, than anyone else,” says the man worth $90 billion, “but the government should require the people in my position to pay significantly higher taxes.”

Why? To spend his money better than he could?

Were all the wealth of America’s billionaires confiscated whole and that sum would actually pay off the federal debt (which I doubt), what do you think Washington politicians would do? Go on the straight and narrow and never over-spend again?

No. Politicians would take the new influx of funds as a signal to go on an even bigger spending binge.

But what about his mere income tax increase notion? What then? As sure as the Blue Screen of Death it would be applied down to millionaires, too. And then rates for less-than-millionaires would likely go up. We have a history with this. And what would that do?

It would hit up-and-coming entrepreneurs the hardest. It would nip Bill Gates’s company’s competition in the bud.

But surely Gates wouldn’t be mercenary in his theatrical play for media adoration, would he? 

Not Saint Bill!

This is Common Sense. I’m Paul Jacob.

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First Amendment rights free trade & free markets general freedom initiative, referendum, and recall nannyism national politics & policies privacy property rights Second Amendment rights Tenth Amendment federalism too much government U.S. Constitution

Winning Too Much?

The Human Freedom Index for 2017, CATO, Fraser Institute, and the Liberales Institut at the Friedrich Naumann Foundation for Freedom Switzerland, US, United States

“We’re Number 17!!!”

This lacks a certain triumphant note.

It is nothing like the “We’re Number 1!” the Swiss are now hollering as they pump their arms into the air, waving giant #1 foam fingers against the backdrop of snow-covered Alps.

Actually, knowing the Swiss, they are probably a bit more restrained. Still, you get the point.

Number 1 in what, you ask? Creamy, delicious chocolate, perhaps? Banking? Skiing?

Freedom.

The Human Freedom Index 2017, jointly published by the institutes Cato, Fraser, and Liberales, is hot off the presses. The report ranks the countries of the world on “personal, civil, and economic freedom.”

This year, Switzerland switched places with Hong Kong, which had come in first the year before. The U.S. moved up from 23rd place in 2016, but down from 2008, when we were challenging Top 10 status at Number 11.

“Weak areas [for the U.S.] include rule of law, size of government, the legal system and property rights,” according to a Cato video.

Let’s compare Switzerland to the United States. The 1848 Swiss Constitution creates 26 sovereign cantons (states), greatly influenced by our system of federalism. In the 20th century, Americans in 26 states and most localities borrowed from the Swiss, establishing a system of direct democratic checks on government — what we call ballot initiatives and referendums.

Both countries have constitutional limits on government, protecting individual rights — even from fully democratic tyranny. But in the freest nation in the world, Switzerland, citizens possess a powerful direct democratic check on their government at all levels . . . while we do not.

After all, we’re Number 17.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom too much government

Bank on It?

marijuana, bank, California, California State Treasurer John Chiang, Federal Reserve

It took me a moment. And I assure you, I wasn’t high.

When I read that California State Treasurer John Chiang was considering a “marijuana bank,” my first thought was that he was talking about warehousing bud and leaf.

Well, no. That would be stupid.

So, maybe reporters and bloggers shouldn’t call it a “marijuana bank.” What these government officials are doing is trying to determine “the potential of a public bank to service the cannabis industry in California.”

A state bank, in other words. Not unheard of.

But would it be stupid?

Not according to Treasurer Chiang.* But his notion is not just about serving an industry that the federal government still tries to suppress — and continues to use its regulatory powers over banks to monkey-wrench.

Chiang defends his move in part on anti-capitalist grounds: “We see deepening public dissatisfaction and cynicism over the private banking system — a dissatisfaction that can be traced to the financial excesses of Wall Street, which triggered the worst recession since the Great Depression.”

Was the financial crisis the result of “bad actors” in the industry alone? No. The American banking industry is heavily regulated, the government-created Federal Reserve is very hands-on in its control of money and banking, and federal regulatory and financial bodies have exerted similar influence over housing industry financing for scores of years.

So of course a Californian politician wants to solve a government-induced problem by creating more government.

That’s what’s stupid, if you ask me.

This is Common Sense. I’m Paul Jacob.

 

* He’s going forward with a big study to “answer questions about costs, benefits, risks, and legal and regulatory issues, including the needs for capitalization, deposit insurance, and access to interbank transfers of funds.”

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Accountability crime and punishment folly free trade & free markets general freedom moral hazard nannyism national politics & policies too much government U.S. Constitution

The Ninth and the Tenth of It

marijuana, constitution, intrastate, rights, legalization, decriminalization

When Attorney General Jeff Sessions rescinded the Obama Administration enforcement guidelines regarding the states that have legalized (in their 29 different ways) marijuana, last week, supporters of freedom expressed some worry.

But we had to admit, one excuse for Sessions’s nixing of the mostly hands-off policy seemed to make sense on purely legal grounds. If we want to liberalize drug laws, then our Cowardly Congress should do it.

Definitely not the Executive Branch.

And yet, over at the Volokh Conspiracy, Will Baude argues that “the rule of law” does not require “renewed enforcement of the Controlled Substances Act.”

If anything, he argues, it “requires the opposite.”

Baude mostly rests his case on the Constitution’s Commerce Clause, which does not authorize regulation of intra-state trade. An issue on which the AG does possess a duty to weigh in.*

This rubs against FDR-Era constitutional theory, of course, which treats all commerce as regulate-able interstate trade. But this makes no sense. The Tenth Amendment declares that states possess powers not given to the federal government. An interpretation of the Constitution cannot be justified if it effectively nullifies other parts of the Constitution. (If all trade is “inter” state, what’s left for the states? Powers to do what? And how could there be any constraints on federal power?)

And then there is the Ninth Amendment, which states that the people retain rights not listed in the Constitution.

When citizens assert rights — such as the option to cultivate, sell, buy or ingest a common and quite hardy plant — in their states (largely through ballot initiatives), the federal government should butt out.

This is Common Sense. I’m Paul Jacob.

 

* “Members of the executive branch have their own obligation to interpret the Constitution,” Baude writes, “and if a federal law is unconstitutional in part then the executive branch, no less than the courts, should say so. It is the Constitution, not the Court, that is the ultimate rule of law in our system.”

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crime and punishment folly free trade & free markets general freedom nannyism too much government

Beaver State Bliss

gas, Oregon, freedom, invisible hand, law, pump, control

The Great State of Oregon is not at DEFCON 1. Nor are Beaver State residents gnashing their teeth over a new law that went into effect earlier this week.

News reports proclaimed: “People in Oregon are freaking out about the thought of pumping their own gas under a new law.” But don’t believe everything you read.

For starters, Oregon’s new law doesn’t actually force anyone to do anything. It merely allows “retailers in counties with a population of less than 40,000 . . . to have self-service gas pumps.”

But a Facebook post by KTVL CBS 10 News in Medford took it an apparently frightening step further, asking, “Do you think Oregon should allow self-serve gas stations statewide?” The post went viral nationwide because of responses such as this:

I’ve lived in this state all my life and I REFUSE to pump my own gas . . .

This [is] a service only qualified people should perform. I will literally park at the pump and wait until someone pumps my gas.

Oregon is one of only two states — New Jersey, the other — where gas stations are banned from permitting customers to put gas in their own cars. Folks in the other 48 states have managed, as one Facebooker explained, “to pump gas without spilling the whole tank and triggering a Star Wars-style explosion.”

Still, if Oregonians so revere their regulatory regime, protecting them from the indignity of pumping gas, why change the law even partially?

Well, for economic reasons. As you might expect, gas stations across rural Oregon were closing at night, stranding many motorists.

Freer markets offer greater protection for real people . . . those not too perplexed by the prospect of pumping their own petrol.

This is Common Sense. I’m Paul Jacob.

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