Category: free trade & free markets

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crime and punishment folly free trade & free markets ideological culture national politics & policies too much government

Subsidizing Illegal Aliens

Rand Paul, subsidy, aliens, illegals

In The Mouse That Roared, a 1955 comic novel by Leonard Wibberley, a tiny English-speaking country in Europe loses market share for its only export, a wine label, to a cheap American knock-off. Seeking compensation for the loss, the duchy decides to do the only rational thing: declare war on America, and then, after the inevitable defeat, reap the rewards of reconstruction financing.

I was reminded of the book when reading about another of the Obama Administration’s subsidy programs, uncovered by Sen. Rand Paul. The program gives money to illegal aliens deported to their country of origin, El Salvador, to start small businesses.

Sort of a Small Business Administration program for deportees.

But Congress’s involvement is nil, and the SBA has nothing to do with it, either. The program, according to the Rand Paul press release, “is administered by the non-profit Instituto Salvadorno Del Migrante (INSMI — translated to Institute of Salvadorian Migrants) and funded through a $50,000 grant from the taxpayer-backed Inter-American Foundation.”

It is not big money, certainly not by profligate Washington standards. Nor is the premise of the program likely to win it praise from anyone looking for a solution to illegal immigration. Indeed, the best way to describe the program is how Rand Paul’s team did describe it: “absurd.”

In The Mouse That Roared, the Duchy of Grand Fenwick makes a crucial mistake in its plan to profit from American largesse: it wins the war.

But some things haven’t changed since then. The American government throws around money absurdly.

And little countries make fools of Big America.

This is Common Sense. I’m Paul Jacob.

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Accountability Common Sense First Amendment rights free trade & free markets general freedom ideological culture nannyism national politics & policies responsibility too much government U.S. Constitution

re: Solutions

New Year, 2016, resolutions, Common Sense, illustration

Today’s the traditional day for New Year’s “Resolutions,” but instead of resolutions, how about some solutions?

Sure, Thomas Sowell has sagely reminded: there are no solutions in social life, only trade-offs.

But, utopian perfection aside, let’s agree that some changes would be better than others, and, let us resolve to solve some nagging problems — or at least trade up. And since the really nagging problems are political . . .

For Republicans: this could be the year to give up on government as society’s chief moral agent, empowered to regulate everybody’s medicine cabinets and bloodstreams. End the failed War on Drugs, with legalizing marijuana the simplest first step. Vice will continue, as it always has. But it’s another kind of vice to think that force, policing and imprisoning folks, will “solve” the problem. Much less even reduce the availability of drugs.

For Democrats: this could be the year to give up on government as micromanager of markets — and people’s marketplace choices. Face it: folks will make decisions that liberals don’t like. They’ll eat at McDonalds and buy large sodas — and the wrong stocks. And guns! But adding to the mass of regulations doesn’t make consumers choose better, it makes stuff more expensive and business less open to competition. Indeed, almost all the regulations designed to help “the little guy” backfire, helping big business by hobbling their upstart competitors.

Our leaders, at present, cannot even balance budgets. They are addicted to debt. To pretend we must have more and more government to prevent our addictions or save us from personal debt is ludicrous.

Can we resolve to stop pretending that bigger government is always the solution?

This is Common Sense. I’m Paul Jacob.

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

Collateral Damage Defines Socialist B.S.

Bernie Sanders, consequences, socialism, economics, illustration, Common Sense

Senator Bernie Sanders gave us a big present last week. In one simple “tweet” he warbled out the essence of his socialism: “You have families out there paying 6, 8, 10 percent on student debt but you can refinance your homes at 3 percent. What sense is that?”

That’s what he broadcast. That’s what this self-proclaimed socialist wrote — or allowed his staff to write — on his official Twitter account, @SenSanders.

And it is not as if he had the excuse of haste. He was repeating a thought from his presidential campaign account in September: “It makes no sense that students and their parents pay higher interest rates for college than they pay for car loans or housing mortgages.”

To the earlier post, Twitter erupted in criticism. The gist? Have you never heard of collateral, sir?

Lenders can charge less on secured loans because, in case of default, the recourse is to take the collateral, the car or house, thereby recouping the loss.

But an unsecured loan? Well, by law one cannot easily slough off student loans — but one can simply not pay, or pay late. Hence the higher rates.

From its beginnings, socialism — and progressivism and Fabianism and fascism and social democracy, following — has been fueled by complaints about markets.

Without showing any understanding of the logic of markets.

Which is why, when put into practice, socialistic and interventionist programs produce such great amounts of negative collateral effects. Socialism is the philosophy of good intentions that yields collateral damage worse than the problems meant to be solved.

Oh, Bernie Sanders! Your initials say so much.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom individual achievement

Falcon 9 Delivers Eleven

SpaceX, Falcon 9, Jeff Bezos, Elon Musk, Space, NASA, Common Sense, illustration

Earlier this week, SpaceX made history. Again.

Back in 2008, the company had launched the Falcon 1 into orbit —a big deal in the Space Age, previously dominated by governments.

Blue Origin, which is the baby of Amazon’s Jeff Bezos, has been providing Elon Musk’s SpaceX some stiff competition. A few weeks ago, Blue Origin sent up the New Shepard rocket — and returned it to earth vertically.

This week, SpaceX pulled ahead, sending its Falcon 9 up beyond New Shepard’s suborbital heights, putting eleven (count ’em: 11) satellites into orbit . . . and returning to touch down safely onto dry land — on the launch pad — vertically.

Just like we imagined when we (well, some of us oldsters) were young, before we witnessed Mercury and Apollo splashdowns.

Back in 2012, when I wrote about SpaceX — and NASA’s outsourcing of launches — I called it progress. One reader worried about the whole thing, though: “A spy satellite is still a spy satellite even if some telecom conglomerate puts it in space.” He was afraid of privatizing tyranny. That would be bad, but it doesn’t seem to apply to this week’s new satellites . . . unless M2M (machine-to-machine) Internet devices mean something different than what I understand them to be.

In any case, costs have been contained: while NASA’s Space Shuttle was also reusable, it cost about half a billion bucks per launch, which, we’re told, is “about eight times the current cost of a Falcon 9.”

Free enterprise: delivering the goods at a fraction of the cost.

This is Common Sense. I’m Paul Jacob.

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education and schooling folly free trade & free markets national politics & policies too much government

The Truth About Tuition

tuition, supply and demand, subsidy, government

Subsidize something, and you tend to get more of it.

But wait, what if you subsidize demand for something, but don’t really allow (or continue to disallow) increased supply?

Then prices for that something go way up.

This is elementary economics — nothing controversial about it.

Except that politicians and bureaucrats who make public policy tend not to acknowledge this aspect of reality when they propose subsidies. Instead, they expect praise for their “heroic” and “caring” program of destruction.

They need to be educated. But, alas, all this applies best to college education. How does one educate the educators?

A new study, which reliable economists tell me is “sophisticated,” finds that the bulk of recent college tuition price inflation can, indeed, be directly linked to the federal government’s loan subsidies.

This study makes for some opaque reading, alas: “Essentially, demand shocks lead to higher college costs and more debt, and in the absence of higher labor market returns, more loan default inevitably occurs.” Yikes.

The college education bubble has been much talked-about for years, at least amongst skeptics of government policy. But in hushed tones — the big fear, here, is that a bursting of the bubble will lead to — who knows what? I mean, who-knows-what policy reaction.

Probably just more government subsidy and control. And even higher tuition still. Double yikes.

Thankfully, while the brick-and-mortar higher education institutions suck up more and more government-backed money, the Internet is enabling some great alternatives. The future, I think, does not belong to the university system as we have known it.

This is Common Sense. I’m Paul Jacob.

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

Historic Paris Pact?

climate change, global warming, Paris, accord, Common Sense

The climate change pact just completed at the United Nations conference in Paris is, the Washington Post informs us, “historic.”

The New York Times, LA Times, Chicago Tribune, and just about every other paper uses that very word in their headlines, too.

“The 12th of December, 2015, will remain a great date for the planet,” declared French President Francois Hollande, dubbing it “the most beautiful and the most peaceful revolution that has just been accomplished.”

“History will remember this day,” U.N. Secretary-General Ban Ki-moon predicted. President Obama called it a “turning point for the world.”

Chris Mooney, in a deeper analysis for the Washington Post, agreed that all the hoopla was “more than warranted.”

But Mooney also acknowledged that, “this document, by its very nature, depends on . . . Countries, companies and individuals all across the planet [doing] the right things — and very hard things, at that.”

How hard?

Essentially ending any emission of greenhouse gases in the next half-century.

“Achieving such a reduction in emissions would involve a complete transformation of how people get energy,” the New York Times reported, “and many activists worry that despite the pledges, countries are not ready to make such profound, costly changes.”

As the negotiator for the Federated States of Micronesia put it: “We’ve agreed to what we ought to be doing, but no one yet has agreed to go do it. It’s a whole lot of pomp, given the circumstances.”

“What’s more,” adds Mooney, “even if everyone plays by the rules, the standards and goals set out by the Paris agreement may not be enough to prevent the catastrophic effects of climate change.”

Historic? History will determine that.

This is Common Sense. I’m Paul Jacob.

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

Climate Changelings

Paris, climate change, global warming, natural gas, fracking, Common Sense, illustration

Worried that the world is going to sacrifice progress for the mess of pottage that is “global climate change”?

Don’t. Years ago, economists specializing in game theory recognized that the governments of the world would be extremely unlikely to agree to reduce carbon dioxide emissions. The incentives are all wrong for that.

Last month, the great debunker of junk climate science, Patrick Michaels, reporting on the recent Paris talks, concurred. The international agreement going forward is so worded as to be “free to be meaningless.” Countries can claim to be “doing something,” but effectively accomplish nothing. Which allows “the world’s largest emitter (China) and the third-largest one (India)” to balk.

But the ole USA? It is doing something . . .

and it’s going to cost. Here’s one reason: Under Obama’s Clean Power Plan, substitution of natural gas for coal in electrical generation isn’t going to increase, even though it produces only half the carbon dioxide per kilowatt of electricity as coal. Instead, his EPA says power companies have to substitute unreliable, expensive “renewables,” mainly solar energy and wind. These are mighty expensive compared with new natural-gas power. And even the Clean Power Plan won’t meet our Paris target.

Obviously, what we have to worry about are our martyrdom-prone environmental zealots and their power-hungry (political power-hungry) friends ensconced in government.

They just can’t leave well enough alone, for, as Michaels notes, even CO2 emissions improve with industrial progress — when markets are free and property rights established.

But anti-capitalists in and out of government don’t want improvements to come naturally. Apparently, they would rather make things worse even by their own standards than let markets work.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom individual achievement property rights responsibility too much government

Roman Rockets?

Blue Origin, Jeff Bezos, rocket, private, privatize, Common Sense, illustration

Is Big Government necessary to accomplish Big Things?

Big government built the pyramids. Big government erected the Great Wall of China. Big government put Man on the Moon.

But humanity could have reached Luna over a thousand years ago, had Roman civilization not gone into a death spiral.

Bill Whittle made this point in some recent talks on Afterburner and guesting on Stefan Molyneux’s philosophy show. He blames the fall of past civilizations on “sexual strategies”: the sociobiology of r/K. (The “r” strategy organisms make lots of babies, invest little in them, accept widespread predation; the “K” strategy makes fewer babies, invests heavily in each, and suppresses predators and parasites.) Civilizations start K-style and decline with r.

It’s a theory.

Whatever the biology, Big Government was integral to Rome’s decline, with its exploitative systems and corruption, monetary inflation and “handouts.”

Rome wasn’t destroyed in a day. There were delays and cost-overruns, like any government job.

But Whittle’s right about progress. Humanity would be a lot further along if it didn’t get caught in government/conflict/exploitation traps. Private companies might be on the Moon today were it not for Big governments that destroyed promising civilization in the past.

But hey: private enterprise is catching up.

“In an historic first,” Popular Science informs us, “the private company founded by Amazon co-founder Jeff Bezos has become the first to land a re-useable rocket that’s traveled to and from space.” The rocket lands as envisioned in old science fiction flicks, vertically — though with the aid of “drag brakes” (parachutes).

Let’s hope our civilization doesn’t once again collapse before we witness (and contribute to) further progress.

This is Common Sense. I’m Paul Jacob.

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Common Sense free trade & free markets general freedom initiative, referendum, and recall U.S. Constitution

Compatriots, We — For Liberty!

thanksgiving, Common Sense

Thank you. It’s Thanksgiving, a good day to say so.

What a great idea for a holiday — a thoroughly American one, unpretentious and unspoiled. Centered on family and friends, the day may be the most important of the year, something we all share, in no small part because it is when we count (and publicly acknowledge) our blessings.

First on the list?

The blessing of liberty, of course. The freedom to work and produce and to keep the fruits of your labor. In order to put food on the table (a LOT of GOOD food.)

And, because man does not live by bread alone, to do it your way, independently, by the sweat of your own brow and the work of your wits — not as any man’s slave, nor riding anyone’s back . . . including the taxpayer.

Thanksgiving thus serves to celebrate that quintessential American Dream: standing on one’s own two feet . . . with friends, family, and freedom.

I have a further reason to thank you, though, other than this date on the calendar.

And no, it’s not simply for reading Common Sense and allowing me to bring you heaping helpings of honest outrage, and resolve, stories of perseverance, commitment to principle, tales of “doing something about it,” offering a bit of humor, hopefully providing some good information and argumentative ammunition, a perspective on smart grassroots politics in this state or that, a lens on corrupt politicians and their latest schemes in a city or town all the way across the country.

I’m thanking you for something even more important.

Don’t get me wrong. Common Sense is important. I love riffing on the latest insanity, or success — especially presenting stories that can spur copy-cat campaigns, initiatives, legal actions and, in a word, ACTION.

Imitation is the sincerest form of flattery, after all.

You and I: we’re the folks taking responsibility for the future of freedom. We’re committed to doing the hard work of political reform.

Right?

It ain’t easy. We need to support each other, learn from one another, and work together — even when we are many miles apart. We have to build a smarter, more united pro-liberty community.

That’s why I write Common Sense.

To communicate with you . . . and other important individuals. All of us hanging together — and not “hanging separately,” as old Ben Franklin once quipped — because our efforts are absolutely essential to protecting the values of freedom, responsibility and independence.

Friend, we pay our dues (and more) — for otherwise your children and grandchildren, and mine, will face a world without what we hold so dear.

I started Liberty Initiative Fund to help citizen activists place tax limits, term limits, criminal justice reforms, and other pro-liberty and anti-crony measures on state and local ballots. I also serve as president of Citizens in Charge Foundation, which protects our crucial ability to use the citizen initiative and referendum process to hold government accountable.

Thankfully, Citizens in Charge Foundation financially supports Common Sense, allowing my compatriots to make tax-deductible contributions to keep this communication network alive and kicking.

Of course, it all comes down to you. This program, this Common Sense network doesn’t exist without your caring and support.

You know, I adore the Constitution and the Bill of Rights. As I know you do, too. But words on paper don’t keep us free unless there are people, like you and me, standing up for those words.

Stand with me again today and support Common Sense by joining Team 1776.

What’s “Team 1776”? It’s a group of folks like you who believe in the values of liberty and in building a network around those values through this communication vehicle. Members of Team 1776 care enough to provide our financial foundation by making a one-time gift of $1,776. Or they donate more. Or less. Whatever they can afford to give.

Many join Team 1776 with a monthly pledge of $17.76, which doesn’t hit the checkbook so hard (less than 60-cents a day), but adds up big-time for Common Sense — especially with more people stepping up to make that commitment.

Between today and the end of the year, I need to raise $30,000 to keep the Common Sense coming. I hope you have a great Thanksgiving Day and that you’ll claim this Common Sense program as one of your blessings.

Thanks for all you do and for your consideration now.

This is Common Sense. You make it possible. I’m Paul Jacob . . . and mighty grateful.

P.S. Your gift to Citizens in Charge Foundation for Common Sense is fully tax-deductible and 100 percent will go to the support and expansion of this program. Be part of Team 1776 by making a contribution or a monthly pledge today. Click here to make a donation by credit card. If you prefer to mail a check, please write “Team 1776” in the memo line.

P.P.S. My rough draft of this letter was titled, “Hey Comrades — Send Money!” I chuckled. My Web guy chuckled. But “comrades” is a commie word. We’re not even socialists, right? Sociable individualists, I like to think of us. Patriotic Americans. Compatriots. The word “compatriot” means both fellow countryman and colleague. And most of my readers (though certainly not all) are Americans like me, and almost all of you are colleagues (“comrades” without the bad connotations) in an important cause, a cause that must triumph. So this may be a better way to think of us: Compatriots for Freedom! Let’s make an impact . . . by saving civilization.

P.P.P.S. Thanks again. Happy Turkey Day!

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folly free trade & free markets general freedom ideological culture too much government

Bitter Pill

Martin Shkreli, Turing Pharmaceuticals, Daraprim, greed, FDA, ilustration, Common Sense

When Martin Shkreli, CEO of Turing Pharmaceuticals, announced his August acquisition of Daraprim, the only available version of the anti-parasitic pyrimethamine, and his plan to raise its price from under $14.00 to $750 per dose, I did not comment. Everybody else seemed to know exactly how evil the man was, and how awful the system that allowed his machinations.

I knew only that I didn’t know enough.

After reading Mary J. Ruwart’s “The $750 Pill: Corporate Greed, Excessive Regulation—or Both?,” I’m glad I waited. According to Dr. Ruwart, who has worked in the pharmaceutical industry, even the barest facts in the case incite suspicion:

Daraprim was patented in the 1950s, and is used for treating parasitic infections in fewer than 13,000 people a year in the U.S.  Turing bought exclusive rights to distribute the drug in the U.S. from Impax for $55 million; drug sales are less than $10 million/year. Impax itself bought daraprim several years earlier. It upped the price from $1 to $13.50/pill, causing the number of prescriptions to drop about 30%.

As Ruwart explains, the drug is no longer patent-protected, and “any generic company could make daraprim. . . .” So, what gives?

A company cannot just jump into the market. It has to prove — to the Food and Drug Administration — that its new generic would enter the bloodstream exactly as the old one. With the FDA’s red tape, this costs millions.

Which allows companies like Turing to effectively reclaim a monopoly for a little-used generic. Blame the FDA.

Still, there is some competition, from a company with a similar drug, priced at $1 per tablet.

This is Common Sense. I’m Paul Jacob.

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