Category: free trade & free markets

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

Pardon Him, Mr. President

Samuel Girod, Kentucky, crime, Amish, FDA, drug,

Presidents tend to issue pardons as their tenures draw to a close. But many victims of our government should be pardoned right now. Until the culpable agencies can be dismantled and/or sundry bad laws repealed, a steady flow of presidential pardons would provide the swiftest justice.

An Amish man in Kentucky, Samuel Girod, has been convicted of selling herbal remedies and such crimes as “failing to appear.” It doesn’t add up to one day in prison, let alone the six years of his sentence.

Girod created a salve from natural ingredients for treating skin disorders. After the state health department demanded that he stopped making certain claims for the product, he changed its name to Healing Chickweed. Told that the word “healing” was prohibited, he changed the name to Original Chickweed. The Food and Drug Administration also hounded him for selling various herbal remedies, which they called “drugs” because of his medical claims.

The man’s worst sin in all this seems to be failure to cooperate with the harassment. When FDA agents tried to examine his “manufacturing process,” he refused entry to his home. When Girod missed a hearing about his case, the government dubbed him a “fugitive.” The local sheriff can’t understand why the government is “victimizing such peaceful and law-abiding citizens.”

Yes, it’s a puzzle. Many historical, political, institutional, ideological and psychological factors would help explain it. More than answers, though, Samuel Girod needs his freedom.

How about it, Mr. President?

This is Common Sense. I’m Paul Jacob.

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education and schooling free trade & free markets general freedom ideological culture media and media people national politics & policies privacy property rights responsibility too much government U.S. Constitution

According to Economics

Tom Woods, Contra Krugman, podcast, healthcare, welfare,

“Everywhere you look, economics is despised,” writes Tom Woods in his Tuesday email letter.

You know what isn’t despised? A daily email letter.*

But I digress; back to economics.

“The gimme-free-stuff people hate it because they don’t like being told that there might be undesirable side effects from seizing other people’s things.”

Well, true enough. But turn it around: many people demand free stuff at least in part because they do not understand the bigger picture . . . which Mr. Woods ably provides in his daily podcast and on his weekly Contra Krugman podcast with economist Bob Murphy.

“Politicians hate it, because it imposes logical constraints on what political activity can accomplish.”

True, but, like many in the general public (from whence they come), politicians’ prior lack of economic knowledge also leads, in part, to their hubris.

“Even some folks in the business world hate it, because (1) they’d rather agitate for special privileges than hear the case for free markets, and (2) they’d rather have low interest rates than be warned about the causes of the business cycle.”

Yes, too true. But, again, business people are generally just people, most of whom haven’t even been exposed to something beyond boring and misleading textbook econ, if that. Mr. Woods knows that, since that’s what his mission is, exposing more folks to ideas beyond what he calls “the index card of allowable opinion.”

Well, I’m all about allowing the unallowable — if it’s right!

This is Common Sense. I’m Paul Jacob.

 

* Historian Woods is now doing what I’ve been doing since 1999, providing a daily common-sense thought that is short and easy-to-read and dropped into your email box every weekday. Mine goes up online at ThisIsCommonSense.com; I don’t see his on his website . . . but I do see a lot of books and podcasts!

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

According to Logic

healthcare, Obamacare, Trumpcare, Affordable Care Act, pre-existing condition

“Polling on every possible option confounds all logic,” or so writes Tiana Lowe about ObamaCare and its repeal, at National Review.

“Americans overwhelmingly dislike the individual mandate and prioritize lowering the cost of health care over all other health problems in the country,” Ms. Lowe elaborates, “but a majority of Americans do not want to roll back Obamacare’s guaranteed coverage of pre-existing conditions. Just a quarter of Americans are happy with Obamacare as-is, but a mere 12 percent favor the now-dead Senate health-care bill.”

Perceptively, she notes that the situation is as bad or worse for politicians, who want to “have their cake and eat it too.” The problem with politicians is pretty obvious: they lie because they are afraid of confronting the truth.

But it seems to me, on the evidence Lowe herself provides, Americans mostly have it right.

We want to lower costs of health care. Well, that should be the first priority. It should’ve been government’s highest priority, since government caused our predicament.

A huge supermajority is unhappy with ObamaCare, which makes sense. The Affordable Care Act is not affordable. But the Senate health-care bill was worse than ObamaCare, so folks were right to oppose it.

The only real issue? Many Americans don’t seem to understand that the “pre-existing coverage” mandate necessarily raises costs. Forcing insurance companies to pay for non-eventualities* requires them to pass those extras onto customers in general. Here is where leadership would be of help.

And where it has failed, our President most of all.

Lowe criticizes Trump for not pushing the Senate’s bill more effectively. I’m thankful for that.

This is Common Sense. I’m Paul Jacob.

 

* Insurers wager against unpredictable future illness or accident, not the sucker’s bet of paying for an existing predicament.

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Accountability crime and punishment folly free trade & free markets local leaders nannyism national politics & policies too much government

Messed Up State

Marijuana, sand, Nevada, crisis, emergency

After lamenting Illinois’s fiscal decline into America’s “most messed up” state yesterday, lo and behold, today we find the State of Nevada messed up, too.

On marijuana.*

Question 2, passed by voters last November, legalized recreational use of what we used to call “weed” by those 21 years of age and older. The measure also stipulated that — for the first 18 months only — alcohol distributers are solely permitted to carry marijuana from wholesalers to the new retail dispensaries.

Why provide a monopoly to alcohol distributors?

“[T]he state’s powerful alcohol lobby worried that legalized weed would cut into liquor store sales,” explained the Los Angeles Times. Proponents added that provision as “a concession.”

But still not a single alcohol distributor has been approved to distribute marijuana.

So, with pot now flying off the shelves of Nevada’s 47 marijuana dispensaries, there is no lawful way to replenish those shelves. Nevada’s DOT (which requested from the governor an official declaration of a state of emergency) warns: “this nascent industry could grind to a halt.”

That’s not just a bummer for pot smokers; it has the governor and the DOT in a state, too. “A 10% tax on sales of recreational pot — along with a 15% tax on growers — is expected to generate tens of millions of dollars a year for schools and the state’s general fund reserves,” notes the Times.

Legalize marijuana, sure. And realize that the politics of it can be more toxic than the drug itself.

This is Common Sense. I’m Paul Jacob.

 

*Is that why the slogan “A World Within, A State Apart” is now featured on the state’s website?

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free trade & free markets general freedom nannyism national politics & policies property rights responsibility

Mr. Jetson, Call Your Office

robot, machinery, Ludd, Luddites, anti-technology, socialism, efficiency, government

Increasingly, people are worrying about robots.

They’re taking our jobs, we’re told. Soon, all we’ll have left are robots. Massive unemployment!

While some find this scenario utopia and bliss,* it sounds dreadful to me.

Silver-plated lining is, I doubt it. This kind of worry about technology making laborers obsolete has been around at least since Ned Ludd, who broke factory machinery to save jobs back in 1779.

How is this next wave of technology any different? If technology destroyed jobs on net, we’d all be unemployed now.

Economist Deirdre McCloskey takes this historical view. Writing in Reason, she says today’s high-tech “innovations have actually raised real wages, correctly measured, because a human supplied with a better tool can produce more outputs. And the point of an economy is production for consumption, not protection of existing jobs.”

We’ve always been losing jobs. And new ones are created. Our worry shouldn’t be the jobs lost to new tech, but the lack of new ones coming into existence because of the oldest tech of all: government.

But you know what industry is least resistant to jobs vanishing to robots? Government itself. Sure, some reductions in public sector jobs have occurred, mainly as a result of decreased revenues in the recent “recession.” The job losses there have not been filled by robots, though. Permanent employee positions have been destroyed . . . too frequently replaced by outsourced consultants.

Could robots replace large swaths of public employees? Maybe that wouldn’t be good, actually. The worst-case scenario might be this: government becoming efficient.

We don’t want bad and efficient government.

Kludge may be better.

This is Common Sense. I’m Paul Jacob.

 

* Some even see in this development a sort-of science-fiction rationale for making socialism at long last plausible — robots as the new slave class; all the humans in the leisure class! Yeah, right.

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Accountability folly free trade & free markets ideological culture media and media people national politics & policies

Next Bubble to Pop?

bubble, Paul Krugman, recession, student loans, debt, folly, David Stockman

There was a great and wondrous moment, a decade and a half ago, when economist Paul Krugman, Nobel Laureate and New York Times’s unregistered shill for the Democratic Party, suggested that what the economy really needed was another housing bubble.

What he wrote, specifically, was this: “To fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

Krugman later reinterpreted that statement in a clever (if not convincingly honest) way. After the subprime loan industry collapsed in 2008, he attributed that bust to financial market malfeasance, not the Fed-inflated bubble we got . . . and that he had previously called for.

Now we are looking at several ready-to-burst bubbles:

  • The student loan debt problem seems scary.
  • The sovereign debt problem is undoubtedly more dangerous and far larger, but is perhaps still able to take on more fake money — all the world’s 1s and 0s have to go somewhere!
  • So the current bets seem to be on a huge auto loan industry bubble, about to pop.

Loan terms have increased in duration, and the average amount new car buyers are financing has jumped over 17 percent in five years. The idea has been “to continually lower monthly payments,” says David Stockman, “so people can get behind the wheels of vehicles they can’t really afford.”*

Which bubble does Krugman favor? I don’t have the stomach to check.

But, be certain, as we play pop goes the bubble, he’ll play pop goes the weasel.

This is Common Sense. I’m Paul Jacob.

 

* Stockman seems to be echoing warnings made by Eric Peters, of Eric Peters Autos.

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Accountability folly free trade & free markets general freedom local leaders moral hazard nannyism national politics & policies property rights responsibility too much government

Against Flexibility?

Seattle, Oregon, unintended consequences, work hours, scheduling, Fair Work Week, labor

Do politicians have any idea what they are doing?

In Oregon, Senate Bill 828 just passed the Senate and is now being favorably reviewed in the House. The law would require “large employers in specified industries to provide new employee[s] with estimated work schedule and to provide current employee with seven days’ notice of employee[’s] work schedule.”

But will the measure help employees? Really?

The notion is called the “Fair Work Week.” Pushed by Democrats, it has gained bipartisan support. The basic idea: allow time (under full force of law) for workers to manage their own schedules and personal economies.

Trouble is, in the name of making work easier to manage, it attacks flexibility.

Which is something many workers want. More than notification.

Indeed, the study commissioned by the City of Seattle for their similar regulatory scheme acknowledged that reducing flexibility is not necessarily a godsend for workers.

“A more predictable schedule,” the report noted, “is not always one that an employee would prefer. A schedule known with certainty is a cold comfort if it yields too little income to survive.”

The report went on to explain that many of the labor market’s scheduling inconveniences are themselves the result of other government regulations, such as ObamaCare.

Christian Britschgi, writing at Reason, predicts that passing the Oregon law would mean “a fairer worker week” for some, but for others, “no work week at all.”*

Meanwhile, the Seattle study noted that it was workers in small businesses who are most likely to be discomfited by last-minute scheduling changes. The Oregon law applies only to big businesses.

This is Common Sense. I’m Paul Jacob.

 

* A standard, negative consequence of most “well-intended” legislation.

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folly free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies property rights responsibility too much government

Minimally Mugged By Reality

minimum wage, business, pay, workers, fallacy, profit, Bernie Sanders

It should shock no one: forcing businesses to pay steep minimum wages ends up pushing some businesses out . . . of business. Yesterday I looked at what minimum wage laws can do to low-skilled workers. Today, consider the employers. When we make it harder to turn a profit, it becomes harder to profit. Businesses that can’t at least break even close their doors.

Many business owners are inclined to promote, politically, politicians who in turn support minimum wage hikes. Do they change their minds when mugged by reality? Alas, the trauma alone won’t convert a person to principled allegiance to free markets.

I was reminded of this fact by a story about business owners in Minneapolis who stress their Sandernista credentials.  

“I’m a bleeding-heart liberal and I’m a big Bernie Sanders supporter,” says businesswoman Jane Elias, an art store owner. “But this whole flat-out, $15, one-size-fits all is just wrong.” Another victim, restaurant owner Heather Bray, says she’s a “proud, proud progressive.” But: “The arithmetic doesn’t work. People will not continue to go to budget-conscious restaurants when they’re no longer budget-conscious.”

So . . . arbitrary minimum-wage demands don’t add up in light of the demands of running their businesses under their particular circumstances. Well, no disagreement here. But take it further, please. Keep doing the math. The bottom line is that everybody, not just you — and always, not just sometimes — has the right to make his own decisions about his own life and property.

And profit by it.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom local leaders national politics & policies political challengers property rights responsibility too much government

The Real ObamaCare Opposition

Mitch McConnell, Rand Paul, ObamaCare, healthcare bill, opposition

Senate Majority Leader Mitch McConnell (R-Ky) has introduced a bill to compromise between the House’s recent Affordable Health Care Act and the current “ObamaCare” Affordable Care Act. Though there seems to be some “what the heck, go with it” enthusiasm for it on Capitol Hill, it’s not coming from Senators Rand Paul of Kentucky, Ted Cruz of Texas, Ron Johnson of Wisconsin and Mike Lee of Utah.

‘‘Currently, for a variety of reasons, we are not ready to vote for this bill,” their joint statement from yesterday reads.

Their objections? Well, they agree that there are “provisions in this draft that represent an improvement to our current healthcare system but. . .”

— and this is a big but —

“it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their healthcare costs.’’ Their opposition, the Boston Globe tells us, puts the TrumpCare wannabe in jeopardy.

Dr. Rand Paul is the key figure in the opposition. One of Capitol Hill’s ongoing amusements has been to watch the junior Kentucky senator repeatedly pit himself against his state’s senior member — who, the Globe tells us, now threatens “to bring the bill to a vote next week even if he doesn’t have the necessary votes.”

Pressure tactics.

Which you need to put an obviously bad bill through Congress.

Too many mainstream Republican congressmen lack the courage of their constituents’ convictions. They apparently do not really believe that a freed-up health care system and insurance market can work to the general good.

At least, not in time for the next election.

This is Common Sense. I’m Paul Jacob.

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crime and punishment folly free trade & free markets general freedom nannyism national politics & policies responsibility too much government

Serving Consumers? Punish!

Amazon, monopoly, trusts, antitrust, trade, free trade, big business, economic myths

New media ballyhooer Douglas Rushkoff made waves this week. Citing an un-named friend who went hysterical about Amazon.com’s purchase of Whole Foods, he asserted that such “unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force.”*

The company has “surely,” he claimed, “reached too far.”

Apparently, serving customers exceptionally well is bad for business.

Yes, he almost totally ignored the pro-consumer benefits of Amazon. Had to — his case makes no sense when you factor in us consumers. He focused, instead, on Amazon’s success in terms of its recent “online and offline retail sales growth” and its control of 40 percent of cloud storage and streaming services.

He went on to spin a bizarre fantasy about how disruptive bigness is in business. His economically illiterate farrago reminds me of the sad case made against pre-antitrust Standard Oil, a company which, during the whole time of its growth prior to break-up, kept on producing more fuel at ever-decreasing prices.** Broken up because of . . . fears about how businesses change. And of bigness itself.

As long as consumers are being served, this reaction strikes me as paranoid. When businesses get big (and even near-monopolistic) and then cease to serve customers, they fail. While serving customers, there is no call for fretting over businesses that move from one success to another  — which is what Rushkoff has the gall to worry about.

The call for Amazon’s break-up over-sells government and necessarily under-serves consumers.

This is Common Sense. I’m Paul Jacob.

 

* Rushkoff’s piece in Fast Company was the first I heard of such a “call.” Rushkoff is the coiner of the term “media virus” and a sort of populist pusher of market skepticism.

** For the bizarre story of the Standard Oil case, and how it made no economic sense whatsoever, see Dominick T. Armentano, Antitrust: The Case for Repeal (Ludwig von Mises Institute, 1999), p. 41-43, and Antitrust and Monopoly (Independent Institute, 1990), pp. 57-60.

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