Category: free trade & free markets

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free trade & free markets ideological culture individual achievement too much government

None of Us Are Angels

An old thought: Were we all angels, we wouldn’t need government. Indeed, were we angels, it wouldn’t matter what kind of government we had.

But we’re not angels. We have limitations. Each one of us judges according to our own context-ridden conception of advantage and value, bound by our differing perspectives and situations. Despite our love for others, that love isn’t infinite and it doesn’t often trump our perceived self-interests, and it certainly isn’t angelically unlimited.

So we need something very much like government, and that government needs limits.

We need protection from criminals, but we also need protection from those who would protect us, who can — with “government power” — usurp their roles and become criminal themselves.

This is, I repeat, a very old thought.

Yet it seemed new when James Buchanan and Gordon Tullock advanced something very much like it with their book The Calculus of Consent, and in the many great contributions of their separate careers.

James M. Buchanan died this Wednesday. Before his contributions, economists typically assumed that public servants would swoop in like saving angels, setting the world aright according to the latest mathematical models, disinterestedly, without partisan passion or individual error.

Naive in the extreme.

Thanks to Buchanan, economists today occasionally go so far to confess that though markets often “fail,” merely appointing government to “fix” markets can put us in a bigger fix, since government failure is rampant. Government isn’t magic. It doesn’t change our natures for the better merely by being instituted, or by being called “government.” Power still corrupts, and economists now have to deal with that ugly but unavoidable fact.

By showing us that we’re no angels, Buchanan put himself on the side of the angels.

This is Common Sense. I’m Paul Jacob.

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

The Great Evasion

From the earliest moments of the current, ongoing economic depression, our leaders signaled their fear by hastily concocting programs that postponed the reckoning that had to come.

Douglas French, writing about housing finance today, says a lot simply with his title: “Markets Stagnate Until They Clear.” Government policy has kept mortgages in a weird limbo, and market prices at unnatural highs. Our geniuses in power have even moved heaven and earth to reinflate the old housing boom.

Better to have let it crash and recover rather than keep it unworkably hobbling along.

But the clearing of markets scares politicians silly.

Right after the 2008 implosion, our leaders increased unemployment insurance and offered many new cushions for workers. Humanitarian? Or just another way to avoid new, lower wage rates to match the monetary collapse? I’m not sure about the latter, since the “wages” of not working proved so effective that many workers stayed unemployed voluntarily.

The cost? An extended, lengthy depression.

But that’s not all, of course. By putting more people onto the rolls of the federal government’s dependents list, the burden on taxpayers and on the debt system increases.

Meanwhile, politicians still cannot imagine a way to do what a few other countries, including Canada, have done: cut back on spending and balance budgets.

Our politicians will do anything to avoid that!

Some folks are calling the current period “The Great Recession.” I suggest a better term: “The Great Evasion.” And what’s being evaded is responsibility.

This is Common Sense. I’m Paul Jacob.

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crime and punishment free trade & free markets

The Union Label

Uniting together to form mutual aid groups is a very old idea. Workers do it; professionals, too — even consumers. It’s usually a great idea, contributing a lot to human welfare.

But what we call “labor unions” have a problem: They tend to be, well . . . violent.

Why?

One of the main practices of unions has been (though it need not be) the monopolization of labor into a union-run pool, disallowing non-union workers from taking jobs in targeted plants, businesses, industries, what-have-you. Labor legislation in America and elsewhere generally shores up and regulates that power — which, by definition, is thuggish.

So we’ve come to expect thuggishness from existing unions. Members of unions feel they have the right to exclude non-union workers, and they will intimidate, threaten, and attack both “scabs” (competing workers) and “evil businesses.”

Which now includes a Quaker meeting place expansion project.

In one of the best-titled stories of recent times, “Union Workers *Probably* Torched a Quaker Meetinghouse Over Christmas,” we learn that an under-construction building was torched this holiday season, and that the culprits were “almost certainly” union members.

To call them “disgruntled” would be to euphemize. To attack a Quaker meetinghouse takes quite a bit of . . . well, you fill in the blank.

In one sense, unions are doing nothing different than hundreds of other organizations do, seeking special privileges from government. But unions continue to use the basic tactics of force when the “rule of law” fails them.

That they would do so even against another group known for the heritage of peace and non-aggression and even non-retaliation is breathtaking in its . . . honesty?

I’ll let you pick your own word.

This is Common Sense. I’m Paul Jacob.

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

Paying for Agreement

How do you get a body of professionals to go along with your program?

Pay them.

It’s an old idea: He who pays the piper calls the tune.

The pipers are economists. The paymaster is not you, but the Federal Reserve. There’s a suprising amount of agreement amongst even disagreeing economists that the Federal Reserve is, on the whole, “a good thing,” a necessary thing, even an institution whose existence and rationale must not be questioned.

Shocking, but less so when you apply what is called “Public Choice” analysis to economists themselves. Assume that economists are self-interested. Assume that they like to get paid. Opinions turn out to be somewhat elastic, even given some very hard facts. The results?

Don’t bite the hand that feeds you.

Nicely, a few economists bring this up, every now and then. Garett Jones on EconTalk did, reviving a letter monetary economist Milton Friedman wrote to researcher David M. Levy in the early 1990s. Friedman summarized the situation concisely, saying that the Fed

hires directly roughly half of all economists specializing in the field of money, and indirectly provides funds for a large fraction of the remainder. I have no doubt that is a major reason why the Federal Reserve, despite such a poor record of performance, has such a high public standing.

This also helps explain why there was a major shift away from laissez faire amongst economists. In the 20th century, the “worldly philosophers” developed a new labor market; they found that they could make a great deal of money working for government. And they don’t get paid for telling the government not to do what it wants to do, or to fire most economists.

This is Common Sense. I’m Paul Jacob.

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First Amendment rights free trade & free markets too much government

Unfree Financial Speech

Can you get in trouble with the law — or at least a government agency’s unlimited regulatory power — for peacefully telling the truth?

You can, despite the protections articulated in the First Amendment and the greater respect sometimes accorded to freedom of speech than to other constitutionally protected rights.

It is possible because when they assault speech, government officials claim to be opposed not to the right to speak freely but to something else. They say they’re combating lung cancer, the influence of money on politics, or the unequal distribution of information to investors.

This summer, Reed Hastings of Netflix committed the sin of boasting on Facebook that monthly viewing of Nexvids “exceeded one billion hours for the first time ever in June.” Sounds innocent enough.

Come December, though, and the Securities and Exchange Commission has threatened to bring civil charges against Netflix for allegedly violating “public disclosure rules.” SEC Regulation FD requires public companies to make “full and fair disclosure” of “material” information that is not already public.

The SEC still thinks that 244,000 Facebook subscribers don’t fully and fairly constitute the public, but the communication cannot by any reasonable, modern construal be a case of offering “insider information.” How much more “outside” from the back rooms of a corporation can you get than Facebook?

The absurdity, here, lies in the SEC’s rules and its interpretations of those rules — and in the blind, confused, bankrupt way bureaucracies, which don’t go bust as the companies they oversee can, enforce their rules.

That is why Bernie Madoff slipped through the SEC’s fingers for years, while Netflix finds itself in hot water for a Facebook posting.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

The Right Not to Be Ripped Off

Michigan’s state House and Senate passed Right-to-Work bills last week, because, as Governor Rick Snyder said, workers “should be able to decide whether to join a union or not.”

Which exact bill will wind up on the governor’s desk is anybody’s guess, but one could be signed into law by Snyder as early as tomorrow. Both would prevent unions from requiring workers to join as a condition of employment.

Predictably, Michigan Education Association President Steve Cook argues that legislators “want to force unions to . . . provide se+rvices, benefits and the protections to non-members who will not pay a penny for them. It defunds unions.”

That’s a rather one-sided way of looking at the issue. The cases of Michigan day care workers and home health care workers, both railroaded into union, tell a different tale.

Two years ago, the Mackinac Center for Public Policy challenged the bizarre unionization of 40,000 self-employed day care providers by the American Federation of State, County and Municipal Employees and the United Auto Workers, with dues skimmed “from the Michigan Department of Human Services subsidy payments made to some providers on behalf of qualifying low income parents.”

Then, there’s the $33 million SEIU has nabbed “from the elderly and disabled in Michigan . . . through a unionization scheme it orchestrated when Jennifer Granholm was governor.” Jarrett Skorup writes in Michigan Capitol Confidential that “tens of thousands of people are being forced to send money to the Service Employees International Union simply because they care for a friend or family member who receives a Medicaid stipend.”

After reviewing these two cases, the right-to-work is clearly part of an even bigger right: the right not to be ripped off.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets video

Video: The U.S. is a HUGE subsidizer

Free markets may be an American ideal, but they aren’t an American reality:

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free trade & free markets ideological culture

Fifty Out 1.4 Million

Black Friday’s mass anti-WalMart protests focused on how poorly WalMart treats its employees. Or so run the allegations. A typical sign said “Living Wage NOW.”

But it was a funny sort of labor-relations protest. There were marchers. And there was media coverage. Lots.

What there wasn’t a lot of, though? Walk-out WalMart employees. A few hundred showed up, nationwide, says OUR WalMart, the protesting organization; WalMart itself puts the walkout number at about 50.

That’s out of 1.4 million workers overall.

The whole spectacle seems so strange. It’s not the workers protesting wage and conditions, really, but those who don’t work there. The protestors demand higher wages for WalMart employees. But from what I can tell, actual employees feel rather lucky to have their jobs.

Could we be witnessing a new form of unionizing? Outside agitators working to get in? That is, could the protestors be trying to force up wages so that they could replace current WalMart workers?

For many of the most vocal WalMart critics, that seems unlikely. They hate WalMart. One gets the idea, from following their typical spiels, that what they are really up to is hurting the company.

And, if the folks at Reason magazine are right, raising prices. What many object to is the fact that WalMart has succeeded precisely because it has decreased prices to consumers.

In olden days, the common presumption was that cheaper prices were what we wanted from business: more goods for less, thus providing betterment to vastly increasing numbers of people.

On the professional left, such eternal verities no longer seem to apply.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom U.S. Constitution

Equally Unequal

Two court cases come to our attention, courtesy of Cato’s Ilya Shapiro. Both involve the favoring of members of one group over another.

The Sixth Circuit ruled that a voter-approved amendment to the Michigan state constitution outlawing racial preferences in college admissions would violate the U.S. Constitution’s equal protection clause. The amendment states in part that Michigan public colleges and universities shall “not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin. . . .”

In his dissent, Judge Richard Griffin writes: “The post-Civil War amendment that guarantees equal protection to persons of all races has now been construed as barring a state from prohibiting discrimination on the basis of race.” Shapiro calls the decision Orwellian.

The other case involves California law banning sellers of eyewear who are not state-licensed optometrists and ophthalmologists from conducting eye exams and selling glasses at the same place of business. The law prevents national eyewear chains from competing effectively in California (since customers prefer to get their glasses and eye exams in one shop).

Cato joins an amicus brief urging the Supreme Court to take up the California case. Shapiro also says that because there are two conflicting lower-court decisions on the Michigan question, the Supreme Court is likely to add that case to its docket.

Let’s hope all further rulings are based on a clear-sighted respect for equal rights under the law.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Kindness of Bureaucrats

When the local government of Washington, D.C., says, “Don’t worry” — people worry.

Matthew Marcou, deputy associate director of the District of Columbia’s Department of Transportation’s Public Space Regulation Administration, told those ruled by his long-worded administrative agency — the people working the city’s many food trucks, which feed lunch to a great number of Washingtonians and tourists on sidewalks every day — not to worry.

Just because the wording of a new sidewalk regulation would shut down eight of the city’s ten most popular food trucks doesn’t mean the good folks at the Public Space Regulation Administration couldn’t simply — almost magically — grant a waiver.

Be happy.

Still, there are the malcontents, the businesspeople who want some sort of certainty about the rules controlling their enterprise. The Washington Post reports that “Owners of food trucks . . . are put off by a still-unknown process that relies on the kindness of bureaucrats to keep their businesses alive.”

Che Ruddell-Tabisola is the D.C. Food Truck Association’s executive director and also a co-owner of the BBQ Bus. “[W]hy would you put forward regulations that are only successful when you make an exception to the rule?” asked Che.

The word “regulate” comes from the word “regular”; the goal of regulation being to make things regular. Therefore, regulations that require significant use of waivers fail. They aren’t rules at all. They constitute, instead, a labyrinth of economically suffocating and graft-inducing red tape.

This is Common Sense. I’m Paul Jacob.