Category: free trade & free markets

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free trade & free markets too much government

Doctoring, Priced

Any number of economists will tell you that medicine just has to be different from other goods and services provided on the market. They will offer elaborate theories to explain, for instance, why competitive markets won’t work for health care, and why more government is necessary, and why, in fact, today’s hospitals don’t publish their prices.

I see this mainstream “explanation” as mere apologetics, designed to justify evermore government. The truth is that medicine is “different” because legislation — at local, state, and federal levels — has made the industry different. It’s an accident of history, not something “natural” to this particular market.

But, as Obamacare further consolidates medicine under the government rubric, there appear some daring examples of non-compliance. The latest is from Dr. Michael Ciampi, of South Portland, Maine, whose family practice group has stopped accepting insurance payments of any kind, public or private.

Posting its prices on the Web, Ciampi Family Practice claims to offer substantial savings over other providers. And other benefits, too, including house calls:

Because we no longer contract with insurance companies, Medicare or Medicaid, we can be more flexible and innovative. We use technology when it helps us take better care of patients, but we refuse to use it for technology’s sake. We will not spend our visit staring at a computer screen instead of looking at you. We can also spend more time with patients than the typical provider in a “big box” medical practice. . . . We do not have physician assistants or nurse practitioners.

Ciampi is not the only (or biggest) provider to do this.

Could competition just erupt without a government-provided “solution”? Could “the market” provide the leadership medicine needs now?

This is Common Sense. I’m Paul Jacob.

Categories
First Amendment rights free trade & free markets government transparency national politics & policies

Your Taxes, in Small Type

The business of business is to profit by helping others. The business of government is to make sure that businesses don’t profit by cheating others.

Unfortunately, sometimes it’s the governments that cheat.

Take the airline industry. Though substantially deregulated by the early 1980s, government has not treated it in an exactly laissez faire manner since. First there are the taxes, quite heavy. And recently the Department of Transportation decided that it must regulate the way in which airlines may advertise their prices . . . and the taxes. That is, the DOT insists that the “total price” — by which it means the price-plus-tax — must be shown prominently, with the tax portion “presented in significantly smaller type than the listing of the total price.”

Talk about regulatory micromanagement!

Now, this rule isn’t something Congress cooked up. It’s the result of a bureaucracy gone wild.

And the rule has one obvious effect: It shields government from consumer criticism, showing bureaucrats at their most self-serving. About one fifth of every airline ticket goes to the government, and folks in government don’t want you to know that.

This being the case, you might think — as George Will does — that the First Amendment would apply, especially since the First Amendment is now routinely held as protecting political speech more strictly than commercial speech. But, so far, courts have ruled for the taxing and regulating bureaucrats, not the competitive airlines. Or consumers.

Frequent fliers (I’m one) should hope the Supreme Court justices take up the case, which shows why economic and political freedom go best together.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets tax policy

Denmark to Citizens: Drop Dead!

That might as well have been the headline of the Spiegel Online article. What else could Der Spiegel mean by the words “Health Be Damned: Denmark Hopes Cheaper Soda Will Boost Economy” except that Denmark’s government is endangering the lives of citizens merely to promote their prosperity and to respect their rights to life, liberty and the pursuit of happiness?

Letting individuals again govern their own beverage intake, unimpeded! How is that not tantamount to shoving them over a cliff?

On the other hand, if you live in Denmark, enjoy soda, and dislike being harassed for doing so — thank goodness for tax competition.

Steep new taxes on drinks like beer and soda have been sending Danes across the border for these items. They have long shopped in Germany anyway, but the “sinful drink” taxes have inspired an increase in the international jaunts. Research by a Danish grocers’ association suggests that over the past year, members of some 57 percent of Danish households have zipped over to Germany to buy beverages onerously taxed at home. Denmark officials therefore plan to phase out the new taxes.

The government has already abandoned a notorious “fat tax” on foods with saturated fats. It seemed that Danes disliked the higher prices and unemployment caused by the tubby tax.

At least for now, then, Denmark officials have declared defeat on key fronts in the paternalistic war on soda, fats and liberty.

So, take heart, victims of America’s nanny state! The incursions are reversible.

This is Common Sense. I’m Paul Jacob.

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

Slow Times for a Fast Car

How economical are electric cars? It’s hard to know. We don’t have a free market setting in which to judge the question.

Their obvious advantage? They don’t pollute.

But, skeptics remind us, their electricity does have to be first produced, and the most likely additional source? Coal. Dirty coal.

In any case, electric tech’s progress (or lack thereof) remains fascinating. When I wrote about the Tesla Motors electric sports car back in 2006, I was enthusiastic. But since then the car has not exactly “taken off,” and the company has received a huge, huge hunk of money in the form of loans from the Department of Energy in 2009, so it looks like just another Solyndra-like boondoggle.

But wait: It turns out that the company has faced an uphill battle: government.

The states heavily regulate auto dealerships. You know, “for the consumer” (read: for a few privileged dealers). Indeed, this regulation at the state level has plagued America’s auto industry for years. And dealers, privileged by these protectionist laws, really, really hate Tesla Motors’ marketing model: direct-to-customer.

In Colorado, car dealers got the law changed to prohibit direct-to-customer auto sales.

I hope Tesla sues to overturn the state dealership laws as illegal under the Constitution — after all, they do precisely what the interstate commerce clause was designed to prevent.

More likely, though, Tesla will seek and get an exemption from the Energy Department. And American mercantilism will continue.

This is Common Sense. I’m Paul Jacob.

Note: Image is anachronistic, and later appeared no this site to illustrate a very different Tesla story.

Categories
free trade & free markets

Good Pogue, Bad Pogue

Reviewer David Pogue knows technology but often botches business ethics. Writing about T-Mobile’s decision to liberalize its cellular contact, he asserts that “the two-year contract” to which T-Mobile is offering an alternative “is an anti-competitive, anti-innovation greed machine.” He gets his dander up:

The Great Cellphone Subsidy Con is indefensible no matter how you slice it — why should you keep paying the carrier for the price of a phone you’ve fully repaid? . . . Those practices should stomp right across your outrage threshold.

Maybe outrage is called for . . . by Pogue’s demand for outrage. It’s outrageous.

Companies need not compete on every level, to every aspect of a service, in order to offer customers a real alternative. And no particular voluntary market arrangement is inherently “anticompetitive,” for it cannot in itself prevent anybody from offering costumers something different. (Only government force, a major factor not discussed by Pogue, can block competitors from competing in particular ways.) Nothing about multi-year cell contracts prevented Tracfone and others from offering prepaid plans. Or prevented T-Mobile from offering its new plan.

Or a different alternate.

Pogue’s accusations of greedy “anti-competitiveness” can be and are made with equal injustice against any successful business. But there is no set amount of revenue greater than a company’s costs beyond which profits suddenly change colors, from moral to immoral.

And nothing is wrong with pursuit of profit per se, just as there is nothing wrong with pursuing an expected benefit by purchasing products and services, popular or un-.

People expect gains when they trade. If they see no benefit, they can just say no.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets tax policy

The “Fair” Tax That Wasn’t

Talk of tax “fairness” may be all the rage today, but it takes me back to 1980 and Jimmy Carter’s “windfall profits tax.”

In the previous year, then-President Carter had delivered his infamous “Malaise Speech,” in which he had addressed concerns about the energy crisis, going on and on about this program and that, and the need for “energy independence,” but not mentioning the one good thing done during his administration regarding energy: the beginning of energy market deregulation.

Carter’s Democratic Party was, like today’s Democrats, concerned about “fairness.” Because of the deregulation, they expected energy companies to reap “windfall profits.” Which those businesses somehow didn’t “deserve.”

Arguable, that.

But skip morality for a moment, and look at it from an economic point of view. The new, extra profits from a deregulated market would have enticed more investment into the areas where the “windfalls” were being made, thus increasing production, reducing prices. To the benefit of all.

Instead, Congress enacted the tax, and Carter signed it 33 years ago yesterday. And for six years, domestic production of oil produced “negative” profits. All Congress really did was delay and diminish the economic recovery to be expected from deregulation.

Congress also got much less revenue from the tax than projected.

The Crude Oil Windfall Profits Tax was repealed in 1988, and we experienced great growth in the 1990s.

A word of caution, I think, to those who bandy about “fairness” to the exclusion of sense, or worry overmuch about energy company profits, today.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets media and media people

Apple Abjectly Apologizes for Arrogance

Apple is a huge company, selling gadgets around the world. One of its biggest markets turns out to be China, which is also a supplier of many components. And working within a quasi-capitalist/quasi-post-communist dictatorship does have its problems.

Yesterday we learned that Apple’s head honcho, Tim Cook, has openly apologized to Chinese consumers.

He did it under pressure . . . from China’s state-run media.

The non-paranoid way of looking at this is that Apple has fallen down on the job of Chinese consumer support. The company’s 17,000 outlets, including eleven Apple-branded stores, just do not service consumer complaints well enough.

This may be true.

But the pile-on by the media looks a little different than, say, the piling-on by America’s media against successful companies here. It has the odor of concerted plan, “commandment from on high.”

And it is well known that China — which tries to plan its economy as much as humanly possible, with the iron fist of totalitarian law — when it gets really serious, gets serious indeed.

So, Tim Cook’s abject apology echoes not so much Apple’s rare apologies in America, but the apologies made by targets of China’s Cultural Revolution, a generation or two ago, at least if the BBC has it right:

State broadcaster CCTV and the state’s flagship newspaper, People’s Daily, had portrayed Apple as the latest Western company to exploit Chinese citizens.

Last week the paper ran an editorial headlined: “Strike down Apple’s incomparable arrogance.”

Even Apple’s (or Microsoft’s) critics in the West don’t sound that strident.

For the record, I have complaints with all gadgets, all systems, all suppliers. I can truly be nonpartisan on this.

And this is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

Kentucky Grass

While the Supreme Court’s hearings on gay marriage stole the headlines, Senator Rand Paul was doing something interesting in the Senate. Teaming up with his fellow Kentucky Senator Mitch McConnell along with Oregon’s Democratic delegation, the increasingly influential senator pushed S.359, the Industrial Hemp Farming Act of 2013.

Together with its twin in the House, sponsored by Kentucky Congressman Thomas Massie, the bills seek to amend the Controlled Substances Act, which has outright prohibited the domestic raising of industrial hemp since 1970.

Hemp is marijuana, but grown for its fiber. And not potent in THC, so its recreational and medicinal value is nil. It was raised in colonial days, and by several of the Founding Fathers. I learned about it in Third Grade History. You probably did, too.

I wasn’t told that, if carefully cultivated, the same plant served other uses. There’s scant evidence that Thomas Jefferson and George Washington — two enthusiastic if not completely successful hemp growers — exhibited any interest other than curiosity and acquisitiveness in their hemp growing.

The legalization move in Congress is about, pardon the expression, high time. Hemp is a great product, and the idea that, for the convenience of suppressing its cultivation as a psychoactive substance, not only a whole species but a whole industry would be suppressed is typical federal overreach.

Why the concentrated Kentucky interest? Well, it was the Bluegrass State where hemp was historically grown after the Civil War.

The Oregon angle? You’d have to ask Senators Wyden and Merkley. But I’ve known a number of Oregonian cannabis activists who’ve talked as much about the virtues of industrial hemp as the delights of their “grass.” Perhaps the idea is blowing in Oregon winds.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Inventing Objections

The Times published a wispy report on how Samsung has announced not that they are about to release a “smart watch” — a watch with computer functions — but only that they are working on one. Presumably, Samsung hopes to preclude the notion that the company is simply copying Apple, which is rumored to be developing a smart watch.

One reader — call him Mr. X — claims to be “saddened” by this evidence of market rivalry. He feels it’s “sad to witness” both Samsung’s alleged copying of Apple (or of other companies already making smart watches) and Apple’s forthcoming attempt to “force” smart watches on us.

Perhaps unbeknownst to himself, X’s lament implies that the whole market process is a continuous tragedy, only occasionally interrupted when sweeping novelty comes along.

Not so.

How often is a major new product category invented, after all? Farmers sell wheat—must they offer a new strain of wheat for their efforts to be valuable? What about napkin manufacturers? Car makers? Computer makers? Should we shed tears when anybody competes with anybody else in the same decades-old or centuries-old product category?

Inventions are great. But not everything on the shelf must be a brand-new kind of product to be well made and worth getting. Incremental improvements matter too. If companies took X’s complaint seriously, their ability to provide goods and services would be thwarted.

What we want from the “competition” is usually not “the new” but the slightly better, or the substantially less expensive.

Capitalism owes its essence to copycats as well as innovators.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

A Coffin for Special-Interest Regulation

This is a story about monks and coffins, not vampires and coffins. But, since it takes place in Louisiana, you might be thinking “vampires.” And not just because Interview With a Vampire, Fevre Dream, Dracula 2000 and True Blood have all focused on the Pelican State as a hotbed of undead activity.

You see, it also deals with government. And — of course! — a particular kind of bloodsucking.

The brothers of Saint Joseph Abbey, a Benedictine monastery in Covington, Louisiana, began to make hand-make caskets in 2007. The enterprise was designed as a fund-raising effort to help cover educational and health-care expenses. But the state’s Board of Embalmers and Funeral Directors swooped in and shut down the operation before one wooden “final resting place” had been sold.

And so the monks sued, arguing that the restriction was arbitrary and “served no legitimate public purpose and existed only to funnel money to the funeral-director cartel.”

Exactly. That’s how these sort of things work. The government allows special interests to regulate markets, and suck as much wealth up as possible. It’s the most common form of vampirism today.

Yesterday, the Fifth U.S. Circuit Court of Appeals found in favor of the monks, ruling unanimously. This is historic. And inspiring.

And, yes, it’s the result of good work done by the Institute for Justice, a free-market legal outfit that represented the monks.

Still, I wonder: Do we owe this eminently just ruling at least in part to the easy-to-empathize-with plaintiffs? Would the ruling have been so favorable had the suit been initiated by ordinary Joes? Or an irascible old vampire hunter? (I say this knowing that the folks at IJ are polite, professional, and, uh, youthful, if not eternally so.)

This is Common Sense. I’m Paul Jacob.

Clipart from Clipartheaven.com