Category: free trade & free markets

Categories
free trade & free markets tax policy

An Embarrassment of Riches

Have you heard the terrible, awful news?

Over roughly the last three decades, specifically from 1979 to 2007, Americans across all segments of the economy — from the poorest to the richest — have seen their incomes rise.

It just doesn’t get any worse, eh?

If you haven’t committed hara-kiri, here are the cold, hard facts from the Congressional Budget Office report:

  • The poorest fifth of the population, on average, saw their inflation-adjusted incomes increase 18 percent.
  • The 60 percent of Americans in the middle earned nearly 40 percent more, after taxes.
  • Those of us from the 80th percentile to the 99th had income gains of 65 percent.
  • Incomes for the top one percent of earners were up a whopping 275 percent.

One might think that universally higher incomes are a good thing, but that depends on how you look at it.

“If you think of America’s total income as one giant pie,” an ABC World News Tonight report explained, “the richest one percent have seen the size of their piece double over the last 30 years. And everyone else has seen their piece get smaller.”

Well, I’m really hoping that we won’t start thinking of all our incomes as “one giant pie.”

What about this 99 percent versus 1 percent warfare?

That’s media slant. Most Americans don’t begrudge someone good fortune, and affirmatively admire those who grow wealthy in return for smarts and hard work.

But they do oppose bailouts.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets insider corruption too much government video

Saving “Capitalism”

Excellent testimony by Prof. Russ Roberts of George Mason University about the government bailout of the financial sector. Naming Bush, Obama and Congress, Prof. Roberts charges: “You’ve helped risk-takers continue to expect that the rules that apply to the rest of us don’t apply to people with the right connections. You’ve saved the system, but it’s a system not worth saving. It’s not capitalism; it is crony capitalism.”

Let’s keep this common sense in mind.

Categories
free trade & free markets ideological culture

Occupy X Percent

By all accounts I’ve read, the 99 percenters in the “Occupy X” (fill in the “X” with your nearest protest city) movement seem obsessed with income inequality.

I, too, am concerned with the very rich — the bailouts of the very rich. I was against bailouts from the start. The moral hazard of a bailout mentality is extremely dangerous, inimical to a free society.

But that doesn’t make me a 99 percenter.

Why? Well, protestors on the streets believe — well, 49 percent of them believe — that the bailouts were necessary!

How odd. They distrust the rich. They want to tax the rich more. And yet, when the rich fail, they think it vital to “help the rich out.” Is this a result of simply believing in “helping people out in times of trouble”? Or do 49 percent of 99 percenters believe that the wealth of the well-to-do is so vital to the economy that their status as wealthy folks must be guaranteed?

I think it’s probably the latter. Leaning left, 99 percenters are committed to government “management” of the economy. And that includes bailing out unsuccessful rich folks as well as the unsuccessful poor and middle-class folks.

Were they really against inequality, wouldn’t they be happy now that the wealthy have taken a hit, and income inequality has been reduced? At least to a small, Schadenfreude extent?

Apparently, government being in control is the real bedrock issue. For X percent, anyway — X representing a shockingly high number of protestors.

This is Common Sense. I’m Paul Jacob.

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

Nails & Ball-Peen Hammers

When all you have is a hammer, every problem looks like a nail. When it comes to “jobs,” our politicians prove the truth of this adage over and over. They think that they have to “do something,” or at least “look busy” providing “leadership.”

Wrong — unless they take the lead to get out of the way.

Alas, few have the courage for that kind of leadership.

Republican politicians — fearing “looking bad” — are, even now, floating various “plans” to create “jobs.”

“I thought it was incumbent on me to at least say . . . ‘We’re working on a plan,’” says one incumbent.

Trouble is, whatever plan he or his colleagues put up to counter the president’s absurdities, odds are that it, too, will not work.

Why?

The trouble with markets right now is uncertainty. Several sectors went bust, and it’s not easy to get progress started again . . . especially when the government keeps cooking up game-changers. Solutions. “Fixes.” Political machinations — subsidies or regulations or any of the usual tools in the politicians’ tool belt — just increase uncertainty, muddying up the recovery.

The neat thing about markets is that none of us need to know how, exactly, to order the “economy” for order to be discovered. It works out. This is old wisdom, but even actual experimentation has shown that this is the case.

The economy is not a mess of boards half-nailed down. The last thing it needs is more hammering from politicians.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies

Depression Low Notes

Though President Obama has a reputation amongst conservatives for being “soft” on illegal immigration, he has, in fact, presided over an administration that has sent record numbers of folks back to their countries of origin.

And this has hit the agricultural sector. Hard. The one fifth of Americans who are unemployed have, apparently, little interest in picking crops. Perhaps Tom Lehrer’s 1965 song about Sen. George Murphy explains the popular rationale most memorably:

Should Americans pick crops?
George says, “No,
“’Cause no one but a Mexican
“Would stoop so low.
“After all, even in Egypt, the Pharaohs
“Had to import Hebrew braceros.”

Apparently, native workers aren’t exactly desperate. Credit this to extended unemployment benefits?

Doug French, of the Mises Institute, notes that as supplies of produce come up short, food prices have risen. Without recent immigrants to pick crops, some farms have had to contract with prisons.

Things sure have changed since the days of the Great Depression. Back then, those looking for work took all sorts of jobs: menial labor, farm work, you-name-it.

Today? Apparently not.

Trust me, I don’t blame folks for avoiding back-breaking labor. About 30 years ago, I chopped tobacco. Soaking my sore muscles in the tub after the first day, I decided that surely I could find other work — and I did.

Still, someone has to pick the crops. Food prices are soaring. American citizens might rather be deported than have to labor in the fields.

Where on Earth would we find laborers who would feel differently?

This is Common Sense. I’m Paul Jacob.

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

Renegade Regulatory Agencies

Americans often express astonishment when they learn that many of the nation’s laws — the bulk of its “regulations” — have not been written by Congress. Though the Constitution grants to Congress alone the power to legislate, Congress cedes most of that power to Executive Branch bureaucracies.

Last Wednesday, Sen. Rand Paul hosted a panel on government regulatory abuse. Covering this “round table” discussion, Lou Dobbs, the Fox anchorman, interviewed Sen. Paul, and the two highlighted a number of regulatory horror stories:

  • A man from Hungary was put in jail for three years for cleaning up an illegal dump that had been put onto land that he had purchased.
  • A family was harassed for raising rabbits without a license — fined $3,000,000 but given the out of a mere $90,000 fine if they paid within 30 days by credit card.
  • Members of another family found themselves face to face with EPA bureaucrats, who halted their housing project, demanded costly site restoration, and charged them with criminal liability for not immediately complying.

The law that’s directed against this latter family, by the way, “is about wetlands,” which, Rand Paul informs us, Congress has never enacted laws about: “‘Wetlands’ is something defined into existence by regulatory agencies.”

In The Road to Serfdom F. A. Hayek showed how undemocratic and abusive “central planning” becomes. Apparently, even without a grand, overarching plan, regulation of the micro-managing kind navigates the same path.

Demand more “regulation”? Expect arbitrary judgment and unreasonable requirements — tyranny — as the result.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture too much government

The Ism in Need of a Schism

The “Occupy Wall Street” protestors seem, mostly, to be against rich people.

But it’s not wealth as such that sparked the protests, is it? The ranks of the self-proclaimed 99-percenters may be filled with miseducated anti-capitalists, but the occasion of their ire seems fairly clear:

  • It’s the depression, stupid — or the stupid depression. The enduring character of it.
  • It’s the bailouts. A lot of borrowed money was thrown at “successful” people to make sure they remained “successful.”
  • It’s the frightening instability of our basic institutions, including government itself.

So of course folks protest.

Too bad they have barely two clues to rub together.

The general cluelessness does not end at the overflowing toilets and excrement-stained police vehicles. When the protests went global, the New York Times reported on the “thousands of people marching past ancient monuments and gathering in front of capitalist symbols like the European Central Bank in Frankfurt.”

Jeffrey Tucker of the Mises Institute expressed his incredulity:

A government-created institution that creates a government-issued paper currency that is a shabby piece of paper thanks to government intervention in order to bail out government-subsidized and government-sustained institutions. And they call this a capitalist symbol?

Obviously, “capitalism” today means “state capitalism” or “crony capitalism,” not laissez-faire. That some folks still think we live in a “free market” — and blame everything now not working on that system — demonstrates the need for careful distinctions from those of us who know better.

This is Common Sense. I’m Paul Jacob.

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

The End of an Era?

More than one person forecast the bursting of the Dot Com Bubble, twelve years ago. The Pets.com sock puppet wasn’t the only clue — the general enthusiasm for companies that had never, ever shown a profit proved signal enough. And then there was all the talk about how the stock market “could only go up.”

Soon after, it went down.

Then stocks rose again, in a Fed-induced bubble. And then collapsed again, along with the financial system.

Brace yourself for another rerun.

The Economist informs us that “European bankers have been saying things are fine for weeks now, even as their exposure to indebted euro-zone countries strangles their access to funding. . . . Fears of contagion from Europe have now infected America.”

The gloom and doom just rises from there.

The article is depressing for another reason, though — the assumption that governments must not let banks fail, making The Economist read like council for never-ending tax-funded bailouts. Which was the kind of thing actual economists used to warn governments against. (A long time ago . . . perhaps back when the science was called “political economy.”)

Times sure have changed, as The Economist admits. The three years since 2008 have made a difference: Now it is the governments that prove insolvent.

It’s time for The Economist to rethink its policy advice, time to call for a general overhaul of the international monetary system.

We must end the age of inflation-and-bailouts, before it ends us.

This is Common Sense. I’m Paul Jacob.

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

Obscene Green

I don’t know about you, but when I want to invest my money, I don’t go the Department of Energy for advice.

There’s a reason for this. At their best, bureaucracies “lumber on,” to quote one sociologist’s analysis. They are, “by their nature . . . fitted only for average requirements.” Picking long shots? Not their strong suit.

And a long shot is what the government’s investment in Solyndra surely was. The more emails that are released, the more obvious this becomes. Even savvy folks within the administration knew was that Solyndra was a bad deal.

Yet President Obama says it seemed like a “good bet” at the time.

Why?

Politics. He needed to look good, and the easiest garb to grab was the garb of “green.”

That is, alternative energy — which is said to be our future. Undoubtedly some alternatives will dominate . . . that is, ones found on the market. The great gales of destructive creation that is the market process will eventually solve our “energy problem” . . . if only to create a new problem, requiring yet another solution. (In real life, there are rarely “solutions,” only trade-offs.)

There is something obscene in Obama’s “good bet,” for he was betting with other people’s money. Confiscated money.

At the very least, such funds must be treated carefully, not gambled.

To spend otherwise is to sully, for temporary gain, a sacred trust.

Of course, Americans are so used to such trust being desecrated that, sadly, the Solyndra scandal doesn’t quite seem like the enormity it truly is.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture individual achievement

A True Revolutionary

The key to success in business? Profitably serve as wide a customer base as possible. Mass production is the lynchpin. And it’s also at the heart of why many intellectuals hate capitalism: Serving the mass of mankind is “beneath” them. They have a higher calling. They serve Justice, or The Truth. Or, say, Beauty.

This curious by-product of capitalism is what Austrian-American economist Ludwig von Mises called “The Anti-Capitalist Mentality”: The tendency of intellectuals to react against the very instrument that serves the common man even while they ballyhoo the “cause” of the common man.

Mises and others focused on intellectuals’ envy as the reason for their strange, seemingly inexplicable “turn.” Why bite the hand that feeds so many? Because that hand doesn’t reward intellectuals enough!

F.A. Hayek added another reason: Incomprehension. How markets work is beyond the designs of any single mind. Intellectuals tend to be prejudiced in favor of singular minds. Theirs, at least.

The great revelation at the end of the last century followed from that: Command-and-control societies must fail. Regardless, though, “planning” does happen in a free society. Piecemeal. You plan. I plan. And entrepreneurs plan to serve us both.

And entrepreneurs of genius successfully serve millions, make a lot of money for all concerned, and find new ways to make life easier, more enjoyable.

Steve Jobs was such a man. He died yesterday, age 56. As head of Apple and Pixar, he changed society by serving the masses.

And even intellectuals approved.

A revolutionary, indeed.

This is Common Sense. I’m Paul Jacob.