Category: free trade & free markets

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free trade & free markets national politics & policies

Pro Bono

U2 singer Paul David Hewson, best known by his stage name Bono, has come to recognize that capitalism is crucial in lifting people out of poverty in any permanent way.

He now calls institutionalized charity like foreign aid only a “stopgap,” not a basic cure for poverty — an understanding perhaps still too generous, since such aid can prevent needed economic and other reforms and thus help entrench poverty.

In any case, for decades Bono has both raised money from individuals for international charity and chastised government officials whose policies seemed too stingy (in spending other people’s money). Now he is surprised to be touting the pivotal virtues of money-making and entrepreneurship.

“Rock star preaches capitalism. Wow. Sometimes I hear myself and I just can’t believe it. But commerce is real. That’s what you’re about here. It’s real. Aid is just a stopgap. Commerce — entrepreneurial capitalism — takes more people out of poverty than aid. Of course we know that.” (See a clip of these words.)

The rock star’s epiphany came after a TED talk a few years ago by George Ayittey, in which the speaker “made a special effort to rip into the foreign aid establishment,” knowing that Bono was in the audience. When the star came up after the talk to express his disagreement, Ayittey gave him a copy of his ideology-changing book Africa Unchained: The Blueprint for Development.

Perspectives unchained by myth and politics are a good idea too.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets insider corruption

Copper Tubes in Alabama

You’ve gotta be somewhere, so you might as well choose where that somewhere is in a non-random fashion.

That seems to be the rule.

One consequences of this is that we now have local government officials and functionaries jet-setting the world promoting their towns, counties, cities . . . their hills and their dales.

A fascinating report from The Economist tells how the mayor of Thomasville, Alabama, came to sit in a north China pipe-factory canteen talking up his town. “Sheldon Day was there to drum up investment,” the report explains. “Two years ago he convinced another Chinese company, which makes copper tubes, to build its first American factory in the county next door. The plant will create around 300 jobs when it opens next year. Mr Day wants more.”

It’s a charming tale, even if “the battle for Chinese attention” be “fierce.” And risky:

The mayor of Farmer City, Illinois, cancelled his plans after residents expressed anger at the idea of using city money to woo foreign businesses. Chad Auer, a mayor in a right-wing bit of Colorado, had to take to YouTube to explain that when Richard Nixon went to China in 1972, it turned out to be worth his while.

Nixonian prudence aside, there’s an even darker aspect to this practice: Bending over backwards to entice businesses to an area . . . at the expense of existing businesses, residents, and any concept of equality before the law.

I refer, of course, to “tax incentives,” loopholes, tax credits, regulatory workarounds, and the like.

Fine, you pillars of society, going off promoting your town — so long as no special deals are made.

But make special enticements, and you morph from “seller” of community to “sell-out.”

This is Common Sense. I’m Paul Jacob.

 

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free trade & free markets general freedom too much government

You Ignorant Fool

About the title  —  that’s the FDA talking, not me. It’s their apparent attitude toward people who dare learn about their genes.

For $99, 23andMe analyzes your saliva and tells you about your DNA. Their site includes plenty of caveats about the possible emotional impact of the information, the possibility of errors, the limits of what one can infer about health tendencies, the advisability of taking no remedial action without further testing and consultation.

Nevertheless, the FDA has sent a WARNING LETTER to 23andMe co-founder and CEO Ann Wojcicki expressing concern that customers may, for example, rush to have dangerous prophylactic surgery like breast removal if they learn about some genetic risk factor. The company must stop marketing its product until it satisfies FDA regarding false positives, recipients with no common sense, etc. Otherwise, the agency just may have to seize 23andMe and impose penalties.

Yet, as Harry Binswanger notes, “A false positive does not force you to obey it.”

Wojcicki has now spoken up about the FDA’s letter, allowing that 23andMe is “behind schedule” in providing FDA with information, calling the bullying agency a “very important partner,” and in general speaking very carefully while stressing that new technology is not per se a bad thing.

What she doesn’t say is that any FDA interference with our ability to buy and evaluate information about our DNA, and Wojcicki’s right to discover and sell it to us, would be a very bad thing.

This is Common Sense. I’m Paul Jacob.

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

The Woman Who

The good news? Federal Reserve Chair Ben Bernanke is getting the boot. The bad news? His replacement looks no better.

Last Thursday, the Senate Banking committee voted to place Janet Yellen as head of the Federal Reserve. The full body of august solons is expected to confirm this nomination, electing her as head honcho and chief cook (kook?) at the nation’s quasi-private/quasi-public central bank.

I am sure there are folks who look on this passing of the baton with a sort of patriotic piety. I know there are Democrats who rejoice in a banker referred to by Reuters as “a monetary policy dove who puts more weight on driving down high unemployment than the risk this will ignite future inflation. . . .”

Of course, the Fed has already pumped trillions into the system. A burgeoning employment boom has not resulted. To say the least.

Reviewing the current situation, and the likely appointment, economist Gerarld P. O’Driscoll, Jr., reminds us of the big truth about those who push at the Veil of Money: “the Fed is not capable of stimulating job creation, at least not in a sustained way over time.” What the Fed has succeeded in doing, in recent years, is prop up our benighted federal government’s continuing crisis of over-spending: “Congress and the president have been spared a fiscal crisis, and thus repeatedly punted on fiscal reform.”

Problem is, no one really believes debt accumulation or monetary back-up make for a sustainable policy: at some point, O’Driscoll tells us, rising interest rates will “precipitate a crisis.”

I wouldn’t want to be in charge at the Fed when that happens.

So, some sympathy for Ms. Yellen.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

The Freedom Cure

To solve our problems, we need the freedom — to plan, to create, to market and profit. We need the freedom to use the capital we gain by solving problems — whether the capital comes in the form of money, knowledge, or reputation — to solve other problems.

That’s as true in medical industry as in any other productive endeavor. But medical freedom is shrinking thanks to taxes and regulations imposed by Obamacare and numerous previous interventions.

Consider the many life-saving gadgets and drugs that we now take for granted. Medical doctor Paul Hsieh observes that creating these does not happen automatically. Even slightly higher taxes or tighter regulations “can mean the difference between a product coming to market— or being abandoned as not worth the effort.” We know how existing devices save lives. What we don’t know is what lives will by lost for lack of inventions that never maker it to market but, in a freer political environment, would have. It is the difference between what Bastiat called “That Which Is Seen, and That Which Is Not Seen.”

How can we ensure the largest possible field for the invention and propagation of life-saving technology, like genetically cased medicine or 3D-printed body parts? For starters, get rid of new taxes on medical devices and eliminate FDA regulations. Chuck the whole apparatus of Obamacare. Then enact ever-more fundamental market reforms until patients, doctors, drug and device companies use their judgment completely unimpeded.

The debate about freedom in medicine shouldn’t be just about whether you will be allowed (!) to “keep your doctor.”

This is Common Sense. I’m Paul Jacob.

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

Corn Subsidies Fail Big

America has a problem: obstinate politicians, the Obstinacy in Chief, especially.

Almost any policy high-lighted at some point in the last few years could serve as an illustration of this point, but let’s choose the once-popular “green” pro-ethanol policies.

George W. Bush pushed ethanol, and Barack Obama doubled-down on the subsidy, making it a centerpiece for his low carbon-footprint notion.

It has not worked.

What it has done is create what environmentalists are now calling “an ecological disaster.”

How?

It created a land rush that swallowed vast tracts of land sporting alternate uses, including millions of acres of conservation land, including wetlands. And the huge amounts of insecticide and fertilizer used in the effort have poisoned wells and water supplies as well as rivers and the Gulf of Mexico.

All to plant more corn than the market demands.

But is it doing what the government wants, and Obama demanded — the whole reason for this goofy program after all?

“The government’s predictions of the benefits have proven so inaccurate,” write Dina Cappiello and Matt Apuzzo for the Associated Press, “that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases. That makes the hidden costs even more significant.”

Over-production, higher costs, externalized burdens — typical for a government subsidy. But what can we do about it?

In early 19th century Britain, Richard Cobden and John Bright started the Anti-Corn Law League, which successfully opposed the biggest protectionist program of the age. We could use another such vital force, this time to oppose the idiotic subsidies that raise food prices internationally as well as wreak havoc on land in the Mid-West.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom ideological culture

Taboos Against Toke Talk

Not all taboos are alike. Some are backed by the full force of law. Other taboos are enforced merely by polite opinion and the snubs of the cold shoulder.

Have you noticed how the latter kind feeds the former?

John Payne, executive director of Missouri’s Show Me Cannabis Regulation, was recently asked on Mike Ferguson’s Missouri Viewpoints why the politics of marijuana has changed in recent years. His answer is worth contemplating:

[O]ne thing that’s finally changing is that the taboo around talking about this has finally started to drop away. Pretty much, people have thought that any discussion of the issue . . . has been labeled almost criminal in and of itself. Just talking about legalizing it means that not only do you support the use but you yourself are a user.

He calls the old view a “stereotype,” and says that its repulsive — shaming? — effects seem to be dwindling — the town meetings he has been conducting around Missouri have certainly been drawing huge crowds.

Interestingly, later on in the show, the pro-drug war gentleman shot back exactly in the old-school manner. He demanded to know “why [marijuana legalizers] don’t frankly come out and say ‘because we want to get high!’” He was dismissive of Mr. Payne’s reasoning. He’ll only accept the confession: “I want to get high.”

Apparently, individual freedom coupled with personal responsibility — principle — is not something the drug warrior finds very convincing. Unlike growing numbers of Americans who now seem, at the very least, more than willing to engage in what Payne calls a “rational debate.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture national politics & policies

Greenspan’s Tarnished Standard

Long ago, before becoming Federal Reserve Inflater-in-Chief, Alan Greenspan advocated a gold standard.

The idea is that everybody pays for things in gold, a natural medium of exchange. Receipts for gold used for convenience in trade are “backed” and can be easily redeemed. With appropriate protections in place, politicians can’t dilute the value of money by printing more receipts or by shuffling phosphor dots on a computer screen.

But our world is very different.

At the Fed, Greenspan oversaw a lot of credit expansion, encouraging a horde of folks who couldn’t afford homes to take out mortgages. Any discussion of the financial crisis of 2007-2008, or why “we” “failed to predict” it, must discuss Fed policies and other government interventions.

Not, though, if you’re a former Federal Reserve chairman intimately aware of those policies and fully capable of grasping their baleful effects. Then you blather about “irrational exuberance,” or, in a new article for Foreign Affairs magazine, Keynes’s “animal spirits.”

Not a word about how monetary inflation spawns malinvestments that must eventually be washed away. Indeed, the best interpretation of Greenspan’s new book, or his appearance on The Daily Show with Jon Stewart, is that Greenspan is doing his utmost to deflect attention from his own disastrous record.

He’d rather have us believe that “free markets” failed in 2008, not — oh, no! — the policies he himself had pushed since obtaining his seat as head honcho at America’s inflationary central bank.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Obamacare as Bad as Windows 8?

The spectacular failure of Healthcare.gov to sign people up for the much-promised easy-to-access “healthcare” plans, has now gone mainstream.

So, how bad is it?

Worse than Windows 8?

Just as I know of no one, personally, who has bought a medical coverage package through the new Obamacare system, I also know of no one, personally, who likes Windows 8 . . . at least, on a non-touchscreen computer.

So, are the disasters comparable?

Healthcare.gov fails to hook customers with insurers; Windows 8 fails to do basic o.s.-type tasks, like allow you to do your work.

Still, people are buying Windows 8 computers. Voluntarily. But sales are down, far enough that a number of manufacturers have been selling computers without operating systems installed. And Microsoft is offering discounts to manufacturers for including Windows 8.

Surely Microsoft will speed up the delivery of Windows 9, or at least some fix that makes Windows 8 more usable.

But what will the Obama Administration do?

There are a lot of expert Web technicians out there. For hire. Big companies — Amazon, Travelocity, Priceline — find them and manage to put together successful online trading services. So, surely if the government spends two or three times what businesses spend, it will get a workable system about half as good.

It’s what we expect from government.

Of course, Microsoft could fail, and isn’t too big to fail. But I expect it will survive, simply because of the possibility. The fear. The disincentive.

Those who believe in government über alles, however, forswear such incentives. Bad programs are expected to continue forever and ever.

This is Common Sense. I’m Paul Jacob.

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

Affordable [sic] Healthcare [sick]

The Pelosi-Obama Affordable Care Act was passed as a pig-in-a-poke. Now with that poke open, with the pig fully emergent as of next year, what do we know about “Obamacare”?

  1. It’s not socialized medicine, but it is heavily regulated- and subsidized-medicine, almost designed not to work. Its inevitable failures will be said to require more government as “fixes,” eventually (some Democrats hope) going all the way to, yes, socialized medicine.

  2. It’s chockfull of new subsidies, which raise medical costs by making demand for services even more inelastic . . . and thus can only increase taxpayer burdens and more strain on budgets. The original reason so many Americans opposed the reform was that promoting a new “entitlement” even as the old entitlements of Social Security and Medicaid teetered further into insolvency was the very opposite of common sense.
  3. It’s filled with new “mandates” at every level, for businesses as well as individuals. A few have been postponed, but the bulk of the increased regulations are indeed going into effect next year. That will generally raise prices.

But by how much? Well, a new all-state study predicts that

insurance premiums will increase under the first year of Obamacare in 45 of 50 states. This finding flies in the face of President Obama’s promise that his health care overhaul would cause premiums “for the typical family” to fall by $2500.

Why the decrease in five states?

Those had already embraced the goofy over-regulations that Democrats just seem to love.

This is Common Sense. I’m Paul Jacob.