Category: free trade & free markets

Categories
free trade & free markets

Hardship

Regulation. It’s a tough job.

Just as regulators think they’ve got it figured out — i.e., this is what folks must do in such-and-such circumstance, and this is what they mustn’t do in such-and-such other circumstance — somebody invents something that makes things way too easy for buyer and seller alike . . . despite all the alternative-strangling regulations.

It’s so frustrating!

This can get out of hand pretty quickly when one industry (say, computer hardware and software and networking) is by historical quirk much freer than another industry (say, New York City taxicabs). You guessed it, this isn’t a hypothetical: A company called Uber has created a smartphone app that lets cabbies and customers find each other more easily. Now Uber is testing its service in New York City.

But — uh oh! — rotten Big Apple taxi regulations prohibit yellow cabs from pre-arranging rides, that is, by methods other than hailing a cab on the street. Cabbies may not use electronic devices, for example. And cabbies usually aren’t allowed to refuse a fare unless another passenger is already sitting pretty and watching the running meter.

Officials say they are “looking at” Uber’s app, and the New York Times reports that both sides are working to “resolve regulatory concerns.” Well, there are only three ways to resolve them:

  1. Prohibit Uber.
  2. Pretend that the regulations don’t mean what they say. Or
  3. get rid of the stupid regulations.

Solving regulatory problems is so hard!

This is Common Sense. I’m Paul Jacob.

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

Banker Away

Republican candidate for the U.S. Presidency Mitt Romney has received some flak for keeping some of his vast hoard of wealth in foreign accounts. Though I have a few problems with Mr. Romney, this isn’t one of them. Folks with savings and investments should diversify. Anyone with large amounts of money should consider diversifying beyond our borderlines.

And not just for “tax avoidance” reasons, either.

For one thing, as nice and generous as our politicians are, the U.S. isn’t exactly stable and business-friendly. That used to be the U.S. It may not be, any longer.

Take Peter Schiff’s new endeavor. The redoubtable Schiff, an investment expert perhaps best known for having predicted the 2008 mortgage crisis and the severity of the current recession, has started a gold bank, Euro Pacific Bank Ltd., which will back deposits with gold. The actual yellow stuff.

Its most interesting innovation will be its offer of a “gold debit card,” for use worldwide. Peter Wenzel calls this idea “awesome,” but then notes the downside:

U.S. security laws have become so intrusive, burdensome, and expensive to comply with, that it made it difficult for Schiff to offer the services in the U.S. So, Schiff opened his bank offshore, in St. Vincent and the Grenadines. It operates outside the jurisdiction of U.S. security regulations, and does not accept accounts from American citizens or residents.

America’s place in the world is changing. And not for the better.

This is Common Sense. I’m Paul Jacob.

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

A Fraudulent Pill to Swallow

If you’re like me, you often rub up against common opinion and find little sense in it — or, as I like to put it, popular opinion with the common sense bled out of it.

On Monday I reported on an anti-Obamacare lawsuit against the federal government for mandating the purchase of medical insurance that included “free” contraceptive drugs (including “morning after pills”). I took on the obvious problems, but neglected to mention that it’s not insurance.

I guess you can call turnips “rainbows” and politicians “angels,” but, based on accepted meanings of terms, it is not “insurance” when benefits include regular maintenance or common preventive (“prophylactic”) products.

One doesn’t insure against dandruff by buying a policy that provides you with “free” shampoo or against sunburn by purchasing a policy that offers free SPF50 sunscreen. One doesn’t insure against obesity with insurance that provides “free” healthy foods according to This Diet or That Diet.

For instance, it would be absurd to have an insurance policy to pay for one’s vitamins.

In a sense, the vitamins are the insurance. Think of them as a separate, medicinal form of insurance, which you pay for at purchase.

Same for contraception.

One buys insurance for unexpected and irregular needs. Calling Obamacare’s “contraception benefit” mandate “insurance” is a fib.

Much of what we think of as insurance actually amounts to confused (and confusing) methods of savings (at best) or a confidence game to get some people to pay for the regular goods and services other folks use (at worst). By force and fraud.

The force is the government mandate. The fraud is calling this whole program “insurance.”

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

An Olympian Budget Fiasco

The original conception of the modern Olympics was flawed. Its bedrock notion of an “international” contest unduly accented the “national.” This directed attention away from individual achievement and towards “national” competition, especially to the “national teams” and how many medals countries win.

The Olympics became a venue for Big Government in action. And so of course, that means: waste of money. The current events in London are way over-budget. CBS takes a look at this:

It seems there’s a trick to putting together a winning Olympic bid: You have to have a flexible relationship with reality.

The London bid that beat out New York and Paris won, at least in part, because it promised value for money.

And after the extravagance of the Beijing Games, London promised, in 2005, to deliver a more measured approach, games that would cost under $4 billion — a bargain.

But that figure turned out to be an underestimate. A whopping underestimate, if $15 billion meets your definition of a whopper.

No surprise, of course, as Katherine Mangu-Ward explains at Reason.com: “Hosting the Olympics is virtually always a big fat money suck, despite what you may have heard.” Nick Gillespie, at the same site, opines, “Mega-activities such as staging the Olympics are often sold as economic development programs for dreary local economies, but they almost never deliver anything other than big bills and useless infrastructure.”

This applies to sports stadiums and league franchises, too. It’s time to separate sports and state.

This is Common Sense. I’m Paul Jacob.

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

Listicle!

In education circles, “lifelong learning” is a mantra, a piety, a cliché. For the rest of us, it’s how we maintain sanity.

Take words. It’s worth learning a few new ones now and then. After all, with new words can come new insights. Mostly, it’s just fun.Listicle

Yesterday, I learned a new word: Listicle.

This gem courtesy of Jesse Walker with Reason. He blogged about a Cracked “listicle” entitled “The 6 Most Popular Crime Fighting Tactics (That Don’t Work).” If you are on the Internet (and, since you are reading this, you almost certainly are) you’ve seen plenty of “listicles.” These are articles constructed in the form of a list. They are very popular, often linked on Facebook, tweeted on Twitter. Walker defends his recommendation: “Don’t sneer. Many listicles are excellent. I’ll take the average listicle over the average op-ed any day.”

I’d never heard the word before, but I am certainly aware of the art form. The listicle in question was concocted by Robert Evans, and he makes some great points:

  • Drug Dogs Are Inaccurate . . . and Racist
  • Car Chases Are More Dangerous Than Criminals
  • Drug-Free Zones Keep Dealers Close to Schools
  • Red Light Cameras Are Killing People
  • “Dry County” Laws Increase Drunk Driving
  • Capital Punishment Does Nothing to Reduce Violent Crime

Walker excerpts the “dry county” prohibition story, which is well-reasoned. I’m against capital punishment, but not moved by Evans’s take on it. Still, a tip of the hat to his red-light intersection revelation . . . which I won’t quote, because, like the most popular listicles, this one contains a plethora of words that, were I quoting, would contain a superabundance of aster**ks.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture too much government

Estonia’s Success

When I was coming of age, the economic ideology of Keynesianism was going bust. Keynesians couldn’t explain the stagflation of the 1970s. Monetarists triumphed and the Austrian School experienced a resurgence.

Now, monetarist disputes are hard to follow, and the Austrian Theory of the Business Cycle is not exactly a piece of cake. But Austrian economists’ preferred policies possess a kind of common sense: The thing to do is prevent false booms. Once you hit bust, it’s too late: we are going to experience the pain of readjustment, “recalculation,” as we find new prices and levels. I riffed on this theme last weekend, in my column “Dead Hobo in Trunk.”

Keynesians, now back in the limelight, have it easier, promising “less pain.” They offer drugs to make us feel better: Borrow, go further into debt, and spend, spend, spend!

So you can see why today’s Keynesians would hate Austrian wisdom. Not inflating the money supply, not engaging in deficit spending? Risible! And “austerity”? Keynesian shill Paul Krugman never tires of pillorying that program.

Which brings us to Estonia.

The little post-Soviet Baltic state was one of the few countries to actually restrain spending after the 2008 bust, freezing pensions and cutting public employee salaries by 10 percent. Krugman infamously blogged about it, noting that the country’s current recovery hasn’t yet reached the height of the pre-bust boom. He thinks this tells against “austerity.”

But to Estonian economists, the height of the boom was a false prosperity that couldn’t last. They’re glad their country’s rid of it, and note that their current recovery is above the pre-2005 levels.

In other words, Estonians not only understand their country and their situation better than does Paul Krugman, they understand economics better.

This is Common Sense. I’m Paul Jacob.

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

Bipartisan Blame for Auto Wreckage

President Obama often takes credit for President Bush’s worst policies while also averring that the economy hasn’t resurged yet because of his predecessor’s bad policies. I’m happy to blame both of them for the bad policies and bad results.

While campaigning in Ohio recently, Obama said we should pick him in November because he didn’t “let Detroit go bankrupt.”Auto Wreck

Financial writer Steve Conover points out that the car-czar idea started with Bush in the frantic last months of his administration. Also that the choice for dealing with troubled auto firms “in 2008-2009 was not bankruptcy versus no bankruptcy [but] between precedent-driven bankruptcy and White House-driven bankruptcy — rule-of-law versus rule-of-czar.”

Not every car company was going bankrupt back then and being “rescued” by the elephantine intercession of the federal government. GM and Chrysler were the special beneficiaries of that galumphing guidance. As were the auto unions at whose behest the usual bankruptcy procedures were bypassed.

Better-managed firms like Ford and Honda had circumvented the abyss. The reward for their hard work and foresight? Government-subsidized competition. Conover’s most basic point is that the only resource that can (and should) “save” any company from failing in the marketplace is “a sufficient number of buying customers.” The auto industry would have continued minus GM and Chrysler. People who wanted to buy cars would simply have bought cars elsewhere — from companies better able to supply their demand. And auto jobs would have moved accordingly.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets general freedom ideological culture individual achievement

Two Legacies

Two great economists died this month.

Anna Schwartz, co-author with Milton Friedman of the classic A Monetary History of the United States, 1867-1960, passed away last Thursday, at age 96. For reasons known only to a few Swedes, she did not receive the Nobel along with her more famous research partner.Anna Schwartz and Elinor Ostrom

Elinor Ostrom, on the other hand, who died about two weeks earlier, at age 78, did manage to nab a Nobel.

While Mrs. Schwartz may not have received the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, she had received the more popular honor of being dubbed “the high priestess of monetarism.” She knew more about the history of banking and finance than just about anyone. Tellingly, her intellectual odyssey didn’t stop when she reached retirement age.

In recent years, she attacked the politically popular notion that bailouts are a good idea during economic downturns. She also came out against the reappointment of Ben Bernanke as Fed chairman, and argued that government was the main instigator of the 2008 financial bust.

She knew how to make waves.

Elinor Ostrom focused her work not on finance but on the problems associated with managing common-use resources. She found that government regulations tended to mismanage resources, while individuals and communities better negotiated creative and effective solutions to problems that previous economists deemed insoluble without government.

Like Anna Schwartz, she was much more than an armchair theorist. She didn’t merely draw equations on a blackboard and pontificate on how necessary it is for “government” to “fix it.” The evidence — which they collected — is in, government most often is the problem that must itself be fixed.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Walmart to the Rescue!

Walmart is still taking kicks, especially in New York City. But as local politicians, union activists, and business bigots (people who develop hatreds for other people’s wage and consumer choices) continue to harass the company, it’s worth taking a step back and appreciating what it does right.

Indeed, it is so successful that it’s worth exporting. Or so suggests economist Tyler Cowen in an interesting interview on the Arabic Knowledge@Wharton website, where he says that companies like Walmart are exactly what the “poor people of Africa” need. Why? These big corporations make food

more accessible and more reliable. It’s not just the pricing at any one point and time. It’s what happens in the very worst periods. Companies like Walmart are very, very good at keeping up supply and being regular.


Anti-Walmarters in first-world countries tend to forget how bad everyday life is in poor countries, except when they are trying to find ways to increase foreign aid or pitch a Live Aid concert. They take for granted not only our vast markets, but the Industrial Revolution and our several agricultural revolutions.

And there’s the rub, for the Third World. The “Green Revolution” that staved off mass starvation in the 1970s, ’80s, and ’90s, has “somewhat slowed down,” says Cowen.

This is an unreported story. Crop yields are stagnant. It isn’t a problem we can solve overnight but it’s really one of the biggest problems in the world. It hardly gets any publicity. But for poor people in India, the Middle East and parts of Africa, it really matters.

So Walmart could really help.

But then, so would an end to Third World kleptocracy and its replacement by a rule of law.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets responsibility too much government

Legislating Only Profits

J.P. Morgan Chase CEO Jamie Dimon testified before the Senate Banking Committee yesterday about the $2 billion in trading losses suffered by his company’s London office last month.

Congress is shocked that money can be lost trading derivatives. And our legislative leaders seem to seriously think they can write rules for banks and other financial institutions that protect everyone from such losses, making certain any trading in financial securities is guaranteed to earn a profit.Jamie Dimon

“We will lose some of our shareholders’ money,” Dimon acknowledged, “and for that, we feel terrible. But no client, customer or taxpayer money was impacted by this incident.” In fact, J.P. Morgan Chase is nonetheless expected to turn a profit this quarter — as it has consistently done since the financial crisis.

Still, some politicians and policy makers fear the nation’s largest bank is “too big to fail,” that a collapse could again threaten the stability of the entire economy.

I liked what Rob Cox of Reuters TV’s Fast Forward urged Dimon to tell the senators: “We are not going to fail, but if we do, the failure will be our own. We will bear it on our bond holders, our investors and it will not be a public problem.”

Cox went on to endorse “this idea that banks can go out and they can lose money and they can make money,” adding that “at the end of the day it’s their money, not our money, that’s at risk.”

In other words, no bailouts.

This is Common Sense. I’m Paul Jacob.