Category: free trade & free markets

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free trade & free markets general freedom

Central Banks Losing Control

The rapid rise of interest in and use of “virtual currencies” like Bitcoin has been astounding. It probably won’t surprise you to learn what the established masters of the worlds’ monies say: Bitcoin is disruptive!

Heavens.

Bogdan Ulm, writing on Bitcoin Trader, noticed the concern in Ireland:

“Virtual and digital currencies can challenge the sovereignty of states,” says Gareth Murphy, senior Central Bank of Ireland official. At a recent digital money conference in Dublin, he mentioned that rivals are interfering with a bank’s ability to sway the price of credit for the entire economy. Murphy warned that there might be considerable threat to the finances of a country if increasingly more transactions for services and goods fade away from the tax system due to the use of crypto currencies such as Bitcoin.

Now, it’s worth mentioning that there are many economists — from a long tradition — who have denied the necessity of anyone acquiring the ability to “sway the price of credit for the entire economy.”

Separate bids and offers for credit (loaning money with interest) can be seen as signals of competing evaluations in the economy. There are tremendous forces pushing interest rates to align, and when they do (or don’t), their alignment (or lack thereof) sends important additional information to market participants about both the present and the future.

But when anyone (say, a central bank) presumes to corral all interest rates into a “coherent plan,” much of the useful meaning of signals gets lost, or jumbled, and the economy gets (inadvertently?) programmed for boom and bust.

So, when I hear that modern digital currencies could prevent central banks from “doing their business,” I wonder if, perhaps, this is not a good thing.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

Now Okay to Walk and Talk in DC

Tourist guides in our nation’s capital now get to talk through what they’re walking through.

DC circuit Judge Janice Brown rules that Washington, DC, wrongly burdens First Amendment rights when it prohibits talking “about points of interest or the history of the city while escorting or guiding a person who paid you to do so — that is, unless you pay the government $200 and pass a 100-question multiple-choice exam.” Until her ruling, the city could jail guides for 90 days and/or fine you up to $300 for daring to walk and talk professionally without going through the hoops of regulation and licensing.

Chastising slovenly argumentation in other courts, Brown observes that the record is “wholly devoid of evidence” supporting bans on the speech of tour guides Tonia Edwards and Bill Main, the stand-up persons who challenged the requirements.

The suit’s prospects may have been enhanced by the freedom-of-speech angle. But although the importance of the First Amendment cannot be overstated, violating it is only one of many ways that governments infringe on our right to engage in peaceful productive activity. The assaults seem endless. Too many people are too unwilling to mind their own business, too eager to interfere with yours. So we must be eternally vigilant.

By “we” I largely mean — with respect to this case and thousands like it — the folks at Institute for Justice, who came to the aid of Edwards and Main, and who incessantly champion the rights of people seeking only to peaceably earn their bread.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture

Big Business vs. Big Liberty

“Incumbents Fear Cantor’s Loss Will Fill Tea Party’s Sails” is the headline.

Before a few days ago, GOP establishmentarians felt that they had finally quelled the Tea Party notion that Republicans should be more than 2 to 4 percent different from Democrats on whether the country should suffer a socialist health care industry, endless tsunamis of red ink, etc.

Coca-ColaCertain big businesses also hate Tea-Party-style boat-rocking. In his article “Big Business Vs. Libertarians in the GOP,” David Boaz observes that candidates who plausibly oppose crony capitalism are drawing opposition from firms like Coca Cola, Delta, Georgia Power, and AT&T. These and the Georgia Chamber of Commerce created a “Georgia Coalition for Job Growth” to defeat Republican Charles Gregory and other candidates who are “just too libertarian” for them.

What do these anti-liberty businesses — in Georgia, Kentucky, California and elsewhere — fear? The lower taxes that real-deal Tea Party candidates support?

No.

And it isn’t “gay marriage or foreign policy that seems to annoy big and politically connected businesses,” writes Boaz. Who they oppose are representatives who refuse to “bring home the bacon,” who “actually take seriously the limited government ideas that most Republicans only pay lip service to.”

Don’t be shocked to witness big businesses working against limited government, welcoming regulation and subsidy as a way of life.

Why? Because the “mixed economy” approach (whether mercantilist, “progressive,” fascist, what-have-you) allows them to rig the system in their favor, usually by discouraging competition.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

The New Space Race

We’re on the verge of being virtually connected to every person in the whole world who has a $200 laptop or a $50 smartphone or better.

Private companies Google and Facebook are funneling capital into satellite networks to bring the Internet to millions now utterly without it. Reporters call their competition a “space race.” Google will spend between one and three billion dollars on 180 small low-earth-orbit satellites. Facebook’s game plan entails higher, geosynchronous orbits.satellites in orbit

Google estimates that “two thirds of the world have no [Internet] access at all. It’s why we’re so focused on new technologies … that [can] bring hundreds of millions more people online….”

Instapundit’s Glenn Reynolds thinks that Google’s satellites will also make governmental spying and censorship harder, a suggestion readers hotly dispute. In any case, major cyber-companies have been paying much more attention to plugging security holes in their systems in the wake of the Snowden revelations.

What’s indisputable is that dramatically more widespread Internet access will enable a great many people who currently lack that access to enjoy radical new means of knowledge and trade.

The Internet abets everything from communication to scholarship to publishing to broadcasting to stock trading to finding new customers and even new loves. This cyber wealth will be enriched by the contributions of the new surfers of the web. We can also expect the satellite technology backed by Google and Facebook to give us both higher Internet speeds and lower Internet costs.

Globalization is good.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

P2P Jitneys

Virginia state government has banned Web-based/app-based car-ride services Uber and Lyft from operating in the state. After applying heavy fines. After demanding the services follow rules originally devised for taxis and limo and bus services.

It seems tantamount to banning the automobile a century ago because the horse-and-buggy regulations on the books didn’t fit.

Uber and Lyft call what they provide “ride-sharing” services, allowing people with smart-phone and tablet apps to “hail” rides they need, from almost anywhere to almost anywhere. The folks providing the rides have signed up and even taken classes, and both parties rate each other after the transaction. Riders can “steer clear” of low-rated drivers if they want. And drivers can not offer rides to low-rated riders, as well.

It’s quite a service.

I first heard about this idea from economist David Friedman, a generation ago. He called it a “jitney” system, and offered it as an alternative to mass transit systems that are just too capital intensive to make a profit while still servicing diverse needs.

Now, the idea is off to a good start with two excellent services. Technology has allowed for safe, low-transaction-cost contracting between strangers. This sort of person-to-person (P2P) revolution could change everything.

Including government patronage. Or the need for much government regulation. Taxicab services are heavily regulated in most places. The excuse is usually safety and traffic considerations, but let’s be frank: it’s mostly a government power grab. Horning in on territory. Collecting a fee.

Uber and Lyft leverage the capital car-owners invest, and such P2P services are probably the most efficient contracting systems possible. If free market principles should apply to anything, it is jitney services.

So, Virginia, lay off. Free the P2P.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

Bypassing McDonald’s to Fly

When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?

But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.

No. They won’t.

But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.

And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic  — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.

Increasing poverty, not decreasing it: stultifying progress, both personal and in general.

Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)

One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

Great. We’ll have fewer low-income workers working full time.

This is Common Sense. I’m Paul Jacob.

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

Senator for the VA

Sen. Bernie Sanders, the Vermont socialist, has been all over the media discussing the VA scandal.

However, I can’t find Mr. Sanders reflecting on his own role in the fiasco.

Last September, Sanders argued, “The VA is making progress in reducing the disability claims backlog. I meet very often with General Shinseki, (and) with (VA Under Secretary) Allison Hickey to see the progress that they are making.”

Apparently Sanders, chairman of the Senate Committee on Veterans’ Affairs, needs new glasses.

As the public and the president were discovering the depth and breadth of the scandal, the Vermont senator moved quickly to defend the VA: “The Veterans Administration provides very high-quality healthcare, period. It’s not perfect.”

“Not perfect” indeed.

Sanders also warned of “a rush to judgment,” noting emphatically, “We don’t know how many veterans died.”

As the scandal spread nationwide, the good senator . . . freaked out. “There is right now as we speak a concerted effort to undermine the VA,” he told MSNBC’s Chris Hayes.

“What are the problems?” Sanders asked himself. “The problems is . . . you have folks out there now — Koch brothers and others — who want to radically change the nature of society, and either make major cuts in all of these institutions, or maybe do away with them entirely.”

How possible future cuts might prevent the VA from getting the job done at present remains unclear.

On Thursday, Sanders blocked Senate consideration of HR 4031, which had passed the House by a whopping bi-partisan 390–33 vote. The bill would have given the VA Secretary the power to replace managers who weren’t producing for patients.

Senator, let our vets go . . . let them escape the bureaucracy to seek the care they deserve.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets individual achievement

Modern Tech Gives a Hand

This is a story about how technology is making things better. About 840 times better.

What’s represented by that multiple is price — the far lower price of a machine that 53-year-old Jose Delgado Jr. uses instead of the left hand he was born without.

For three years he had used a prosthesis costing $42,000. Its myoelectric technology detects electrical signals in muscle tissue in order to operate prosthetic fingers.Cyborg Beast

But the gadget’s capacity to grip? Rudimentary.

Now Delgado has a more capable prosthesis, the result of the latest technological breakthrough.

And it costs just 50 bucks.

3D printing has been advancing rapidly, sometimes controversially. It is now possible to produce a working metal gun with the technology.

It’s hard to see what can be controversial about Delgado’s new 3D-printed prosthesis, though.

Is the price for real? Perhaps the $50 incorporates only immediate production costs, and that other factors involved in developing and marketing the Cyborg Beast could make it pricier. But given what’s been demonstrated, even its most expensive incarnations would have to be orders of magnitude cheaper than earlier prosthetic tech.

It also does the job better.

The Beast’s mechanical plastic fingers are much better articulated than those of its predecessor. It grips objects more firmly and precisely, manipulates them more dexterously. Delgado dramatically demonstrates the superiority in a YouTube video produced by 3D Universe.

Such products of human ingenuity are stunning. Yet soon we’ll take for granted what they now make possible for the first time. And there’s a lot more to come. We live in interesting times.

This is Common Sense. I’m Paul Jacob.

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

Preparing for a Bailout

In his 2012 State of the Union speech, President Obama declared, “It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs.”

Yes. He said that. But in reality, the handouts and cop-outs have kept on coming, like the solar wind.bucket for bailout

A Washington Examiner editorial notes that while “Obama blasted the influence of insurance lobbyists and vowed to take on the industry … as president, he passed a health care law that funnels more than $1 trillion in subsidies to insurers, and fines Americans who do not purchase their products.”

Go ahead: call that a handout.

But what about bailouts?

While newspapers like The Washington Post insist that Obamacare is exempt from such an eventuality, there remains the part of the Affordable Care Act known as the risk corridor programs. These reimburse “insurance plans for claims that cost significantly more than premiums that new subscribers paid in,” according to The Post’s Wonkblog. The goal is to protect health insurance companies from the risks they face in the new Obamacare exchange.

Companies that make money will pay into a fund that will be used to bail out companies that lose money. But, after obvious complaints about limits, the Centers for Medicare and Medicaid Services (CMS) pushed a mandate that the program be revenue neutral, that the money paid out not exceed that paid in.

Last Friday, in 435 pages of regulations, CMS abandoned this call for budget neutrality. Instead, the regulation states, “In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers.”

A taxpayer bailout: fully in place.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets initiative, referendum, and recall national politics & policies

The 22 Franc Minimum Wage

Fox News’s Bill O’Reilly and 2012 Republican presidential candidate Mitt Romney agree with America’s progressives: raising the minimum wage is common sense.

The Swiss had a chance to prove their solidarity with that notion yesterday, when they voted on whether to establish a minimum wage in the country, a rather high one of 4000 francs per month (something close to 22 francs per hour). They voted the proposal down.

Overwhelmingly. By over 76 percent.Frederic Bastiat's classic essay, What Is Seen and What Is Unseen

Unlike in America, this minimum wage would have affected a huge hunk of the population. One out of ten Swiss workers earns less than the proposed minimum. In America, only about a single percentage of workers earns close to the national minimum.

This matters, as Frédéric Bastiat clearly explained, because price regulations can have two effects: a loss of production, or none at all — “either hurtful or superfluous.” No effect, when the price floor (as in a minimum wage) is set lower than the level most prices are already at (or, for which workers already work). But when the price floor gets set higher, goods go off the market — with too-high wage minimums, workers with low productivity cease to get hired.

Swiss voters could scarcely afford to risk the jobs of ten percent of the workforce.

In America, raising the minimum wage is usually a matter of sacrificing a few people (whom voters mostly don’t know — Bastiat’s “unseen”) while rejoicing in the higher wages of those workers retained (the “seen”).

In Switzerland, the government declared the down vote a victory for common sense.

Which it was.

This is Common Sense. I’m Paul Jacob.