Category: free trade & free markets

Too Much of a Good Thing

Warren Buffett, Coca-Cola, consumer, regulations, consumer protection

Once upon a time, over-indulgence was considered a sin, a vice.

Not so much, nowadays.

Somewhere along the line, the idea that a little of a good thing was good, that general abundance is good, but that there can be too much of a good thing for any particular person . . . this latter common sense idea got lost.

I was reminded of this while reading the latest from the nation’s most famous investor: “Warren Buffett set himself on a potential collision course with public health campaigners when he said it was ‘quite spurious’ to lay the blame for obesity and diabetes at the door of fizzy drinks companies, such as his part-owned Coca-Cola.”

The octogenarian multi-billionaire Buffet, described as a “renowned Cherry Coke drinker,” defended not only his habit but the company that produced it. He emphasized choice, consumer choice. And he said, “I make a choice to get 700 calories from Coke, I like fudge a lot, too, and peanut brittle and I am a very happy guy.”

It came up because a university study had “linked fizzy drinks to 184,000 deaths annually worldwide.”

Well, name your poison. Some folks over-indulge in alcohol; others, food; others, fizzy drinks. But Buffet limits his Cherry Coke intake, as common sense would indicate.

Gluttony used to be a vice. It was preached against. The morality of common sense held sway in our culture.

At some point hedonism in the unrestrained sense took hold of many consumers, who can pay a heavy price — if not at the grocery, at the doctor’s office.

No new laws or regulations are needed. Let everyone, billionaire or not, add up their costs and choose.

This is Common Sense. I’m Paul Jacob.

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Tags Coca-Cola, consumer, consumer protection, regulations, Warren Buffett

folly free trade & free markets meme moral hazard national politics & policies

Trump’s Dangerous Idea

Donald Trump, trade, protectionism, Donald Trump, war, borders, Bastiat

A lot of people were impressed by the reasonableness of Donald Trump’s foreign policy speech yesterday . . . despite the usual hyperbolic promises of “best” and “great” and “beautifully.”

Its general tenor? Refreshing. Rejecting post-Cold War foreign policy for a return to “national interest” and “America first”? Long overdue. Like Trump, I think we should eschew nation building.

But still there is that one big problem: Trump is a mercantilist. He believes in protectionism. He thinks that trade has to be “fair” in order to benefit both participants. He thinks NAFTA and similar trade agreements (which generally promoted trade while still reserving a lot of room for government futzing about) are what hurt American industry. Trump is always blaming the “bad deals” made with Mexico and China, rather than placing the blame where it squarely belongs, on

America’s world-high corporate income tax, and
chaos of regulatory excess, and
impenetrable tax code.

But protectionism makes sense to a lot of people. They are incredulous when they hear the (well-established) idea that free trade — even unilateral free trade — is a benefit to the people who live under it.

Surely, they snort, when you target aid or protection to some industries, you are doing good, right?

Wrong. Oh, yeah, of course protectionism protects the chosen few, the advantaged. That’s what it obviously does. But it doesn’t protect the general interest – consumers pay more and producers allocate resources to less valued uses.

You have to look beyond the obvious (“the seen”) to get the full picture (“the unseen”).

Trump’s at his most dangerous right here — forget his loose talk — by continuing to pretend that protectionism helps America.

We cannot afford another Smoot-Hawley.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, Bastiat, borders, Donald Trump, Presidential campaign 2016, protectionism, trade, war

Accountability folly free trade & free markets general freedom moral hazard nannyism national politics & policies

Bailed — Before Bailout

health insurance, experts, obamacare, insurance, costs, illustration, meme

Last Wednesday, UnitedHealthcare Group Incorporated (UNH) announced that it will drop coverage of plans under Obamacare in all but a few states by 2017.

The market signaled a thumb’s up: UNH stock prices shot up over 2 percent.

The company, described in the news, somewhat vaguely, as the country’s largest insurer, is sending us a signal: the Affordable Health Care Act and its “Obamacare”?

Not affordable.

An insurance policy must make sense to both parties, the insured and the insurer. The insured gets peace of mind . . . and coverage when the rare events insured-for take place. The insurer has written enough insurance contracts out there, prices based on actuarial risk, to allow it to make a profit even with payouts.

The problem with the ACA is that it raised costs (in part by forcing insurers to take on patients with pre-existing conditions) while regulating terms of policies offered . . . and prices, too.

Plus, face it: the idea that one should insure for regular checkups is just one of the many absurdities built into the system.

It’s just too much meddling to work, in the long run. Bailouts and subsidies of those insurance companies that stick with the plan will then make the program unaffordable . . . for America’s taxpayers.

Over-regulated and over-subsidized, Obamacare suffers from the preposterous idea that a bird’s eye view of the economy from the politicians’ perch gives enough information to run complex systems servicing millions of people with diverse needs.

Expect more big stories with tags lines ballyhooing a “serious blow to Obamacare.”

This is Common Sense. I’m Paul Jacob.

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Tags Affordable Healthcare Act, experts, health insurance, ObamaCare

folly free trade & free markets ideological culture moral hazard national politics & policies

Cranks for President

Donald Trump, Bernie Sanders, cranks, nuts, populists, illustration

Some of us who think of ourselves as populists — or just ordinary people, hence “outsiders” — are having a hard time this political season. The two most talked-about outsider candidates, billionaire Donald Trump and socialist Bernie Sanders, make for strange populists.

A billionaire as a “man of the people”? Not very plausible. It is his lack of a self-censor, his free-wheeling, stream-of-conscious grade-school-level discourse, that impresses many folks. Definitely not scripted.

A socialist as populist? Socialism, long associated with elitists, would put the State into every area of everyday life. Most folks with horse sense resist that.

But Trump and Sanders do have something in common. They rely upon common misconceptions about everyday market life. They both fan the flames of conspiracy theories about prices.

When the price of fuel was spiking a few years ago, Bernie Sanders warned us: “Forget what you may have read about the laws of supply and demand. Oil and gas prices have almost nothing to do with economic fundamentals.” It’s all greed, you see: arbitrary power.

But, as Daniel Bier reminds us at The Freeman, believing that businesses are superpowers out to screw us with ever-rising prices, unhampered by supply and demand, is not just socialist silliness, it’s Billionaire Trump silliness, too — four years ago, the developer not only trumpeted the idea that we simply threaten OPEC for lower prices, but suggested we actually seize foreign oil fields.

This is not common sense. It’s crankism.

It’s the kind of thing folks say when they’re drunk.

Maybe on power.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, Bernie Sanders, cranks, Donald Trump, populism, Presidential campaign 2016

free trade & free markets general freedom ideological culture individual achievement media and media people national politics & policies

Parker and the Pope

Kathleen Parker, Pope Francis, Bernie Sanders, economic fairness

Kathleen Parker is far from my favorite columnist, but her Sunday column comparing Pope Francis and presidential aspirant Sen. Bernie Sanders regarding their shared message on economic fairness and equality of outcomes was well worth the effort.

She treats the men differently. She gives Pope Francis a pass because, as a religious leader, he “wants to raise consciousness about our obligation to the less fortunate,” while bashing Sanders, the politician, who “wants to restructure America’s economic institutions to ensure that money trickles down — mandatorily rather than charitably.”

“Let’s face it, most of us work hard . . . for a paycheck.” So Parker pointedly asks, “As the tax man chisels away at such monetary rewards, where goes the incentive to work hard?”

How persuasive — encouraging actual, real-world achievement — would a Sanders Four Year Plan be?

Addressing the Pope’s harsh words for individualism, Parker argues, “The ‘rampant individualism’ that Francis condemns is precisely what has driven American ingenuity, entrepreneurship and a level of prosperity unmatched in human history.”

Precisely.

In other words, maybe — just maybe — we did build it. Through our own sweat and toil. Individualism is decidedly not big government. And it is not public-private crony capitalism, either.

So, considering that it was America’s laissez–faire-ism that created such great wealth and prosperity, which presidential candidates are promising a return to more robust and vivacious individualism?

Not the ones promising everything. Nor the one promising the “best deal.”

The job of the next heroic leader will be to shovel whole layers of intrusive government out of our way.

Parker seems on board, boasting, “This is common sense.”

Hey, wait a second, Kathleen, that is my line. I’m Paul Jacob.

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Tags Bernie Sanders, equality, fairness, individualism, Kathleen Parker, Pope Francis

folly free trade & free markets moral hazard nannyism national politics & policies responsibility

Auto Destruct

car, automobile, auto, loan, bubble, illustration

Just when you thought it safe to go back into the loan market. . . .

Yes, you guessed it: a bubble may be about to pop.

There are actually several, but here’s one you might not expect: the automobile loan market.

Though less regulated and tampered with than the housing market, auto loans aren’t immune to “moral hazard” and other government-induced dangers. The Fed’s low interest rates are almost certainly stimulating the new car market. “Subprime” car loans are way up and so are delinquencies. Do the bankers making these decreasingly solvent loans expect a bailout?

As Eric Peters notes at his immensely fascinating automobile website, the average car loan is now $32,000, “a record high.” And then there’s the “ever-increasing duration of new cars loans. They are now on average six years long — and seven year loans are becoming pretty common.”

Why? “In order to spread out payments (now averaging almost $500 a month) that have become simply too much to manage for most people.”

But then of course car prices are rising. And not just because of simple inflation. It’s the result of government regulations, mandates, and . . . general craziness. Many buyers now finance used car purchases, too, as Mr. Peters explains. That used to be fairly uncommon. The used-car market has been unduly affected by government insanity as well. Remember Cash for Clunkers? Politicians boasted about their managed destruction of millions of used autos.

What they really achieved was a tighter-than-ever supply of usable older cars.

Cruising toward the auto-destruct of the auto-loan markets.

This is Common Sense. I’m Paul Jacob.

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Tags bubble, housing bubble, loans, moral hazard

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

Banking on Clinton

Hillary Clinton, Wall Street, Bernie Sanders, corruption, crony, presidential race, two-faced, 2 faced, illustration, Common Sense

I’ve been tough on Bernie Sanders, the socialist Vermont Senator and Democratic Party presidential candidate. Why? Because socialism is — to quote a current GOP candidate — “a disaster.”

But I appreciate his campaign for showing former Secretary of State Hillary Clinton for what she is, the ultimate establishment insider.

Even while, as SNL parodied, she seeks to co-opt Sanders’s progressivism.

Nowhere is Hillary’s have-it-both-ways mode of operation more obvious than in regard to Big Finance. She attacks the big banks, promoting her “very aggressive plan to rein in Wall Street.” Yet, she is supported politically and has been enriched personally by Wall Street firms. In 2014 and 2015 alone, Mrs. Clinton was paid $11 million dollars for speeches to various groups, including these financial interests.

On the campaign trail, Bernie has been calling on Mrs. Clinton to release transcripts of her speeches to Wall Street firms:

She gets paid $225,000 for a speech. Now you know that is a lot of money for an hour speech. . . . It must be mind-blowing speech, it must be a Shakespearean speech, it must be a speech that could educate and enlighten the entire world.

An anonymous attendee of Mrs. Clinton’s speeches to Goldman Sachs has characterized her remarks as “far from what she sounds like as a candidate now. She sounded more like a Goldman Sachs managing director.” Another said making the transcript public “would bury her against Sanders.”

Understandably, Hillary refuses . . . until every other living person who has ever spoken a word to anyone on Wall Street does so first.

At his rallies, Bernie now throws his empty hands up into the air to release his non-existent speech transcripts.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, banks, Bernie Sanders, Hillary Clinton, Presidential campaign 2016, Wall Street

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

Socialist Stasis, Disturbed

Post author By CS Admin
Post date March 21, 2016
3 Comments on Socialist Stasis, Disturbed

Cuba, stasis, Obama, visit, illustration

As the President of the United States treads ground previously trod by such a personage nearly ninety years ago — Calvin Coolidge was the last U. S. Commander in Chief to make the trip to Cuba — we are understandably inundated with coverage.

Obama’s Cuba trip is Big News.

We see that Cuba is backwards — it is socialist, after all, so no surprise there — but slowly opening up to American travel and trade. The nation’s voluntary sector squirms under the omnipresent, oppressive feet of its regulators.

What we see now is the result of socialist repression. Cuba shows, perhaps, socialism’s best-case-scenario result, stasis. The island dystopia is in many ways a time capsule. Some of its current charm is that stuck-in-timed-ness.

But there is also endemic hopelessness in the country. The people are held back. Infantilized. Ruled.

And there is no disputing the fact that this is all the result of an excess of socialism. As I have argued before, the old standby, the Blame the US Embargo ploy, is one that socialists wield with devastating results — to their own ideology. Socialism is the suppression of free trade; pure socialism abolishes all trade, along with all private property. Blaming an embargo shows how important private property and capitalism itself are to socialism’s few successes.

Barack Obama is, right now, demonstrating the best case against socialists in his own party, by opening up Cuba to the wonderfully corrosive processes of the market.

This is Common Sense. I’m Paul Jacob.

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Tags Cuba, freedom, Havana, Obama, socialism

Accountability crime and punishment free trade & free markets general freedom moral hazard nannyism national politics & policies

The Peace Dividend

legalization, pot, marijuana, crime, drug war, illustration

Has the War on Drugs actually, finally, made some progress?

Well, yes . . . but, really, no.

“Legal marijuana may be doing at least one thing that a decades-long drug war couldn’t,” explains Christopher Ingraham in The Washington Post’s Wonkblog, “taking a bite out of Mexican drug cartels’ profits.”

Certainly “legal marijuana” is not the drug war. It’s that war’s antithesis.

Let’s recall, too, that legalization didn’t come about after five decades of drug war failure because politicians came to their senses, admitted their mistakes and advocated a different approach.

Instead, frustrated citizen leaders teamed up with successful entrepreneurs to launch ballot initiatives, allowing voters to directly decide the issue.

Domestic production isn’t driven merely by Colorado, Oregon, Washington State and the other Washington, the nation’s capital, where voters fully legalized possession. Marijuana for medical use is legal in 23 states, including California, where most domestic marijuana is grown. In these states, pot is widely prescribed.

Thus, a quasi-legal domestic marijuana industry was created. Lo and behold, now pot produced in the good old USA is outperforming pot grown south of the border.

The Drug Enforcement Agency (DEA) acknowledges that U.S. marijuana is being illegally smuggled into Mexico. (Maybe the smugglers will pay for the wall.)

On the other hand, what does it matter that the Mexican drug cartels are losing market share to non-violent American businesses?

Well, those cartels have waged a war with the Mexican government killing more than 164,000 citizens between 2007 and 2014. Less profit to fuel the Mexican drug lords in that bloody war is more for our peace and security.

This is Common Sense. I’m Paul Jacob.

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Tags cartel, crime, Drug War, legalization, marijuana legalization, Mexico

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

Potluck Rites, and Rights

potluck, food, inspection, safety, regulations, government, folly, Common Sense, illustration

Progressives are becoming increasingly defensive about nearly all forms of Big Government, relentlessly telling us that we need government for everything from money and roads to food inspection and subsidies and . . . well, the list is endless.

Food safety is one of their favorite subjects, but I’m increasingly skeptical. Do we really need to be protected from our neighbors’ produce and cooked goods, as can be found in community bake sales and potlucks?

In Arizona, legislators had long carved out an exemption from commercial food safety regulations for potluck and similar “noncommercial social events.” Great. But there was an unfortunate limitation to the exemption: it applied only to such events that took place at a workplace.

Home or church? Potlucks there are still against the law.

So of course officials took the occasion of said “loophole” to crack down on some neighborly events in an Apache Junction mobile home park, in Pinal County.

I’m sure hundreds, perhaps thousands of these events are routinely ignored by Arizona’s police. Indeed, I bet half of the state’s better cops engage in such activities themselves — just because potlucks are part of everyday life all over the country.

But the idiotic regulation allowed public servants (loosely so called) discretionary powers to attack a few people for reasons tangential to community safety. Thankfully, Rep. Kelly Townsend has introduced HB 2341, which would extend potluck freedom beyond the office or warehouse workplace.

Let us be clear: this was not a problem waiting to be solved by Big Government. It is a Big Government problem to be solved by new legislation to de-regulate home and community potlucks.

This is Common Sense. I’m Paul Jacob.

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Tags big government, food, regulation, regulations