Category: free trade & free markets

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free trade & free markets national politics & policies

Blame China

The Great Depression was made “great” by government mismanagement.

Political action, first under Hoover and then under FDR, made things a whole lot worse. And it wasn’t just the Democrats’ misguided New Deal barrage of regulation, cartelization, and general anti-business central planning. The Hoover Era Smoot-Hawley Tariff, a huge Republican reassertion of high-barrier protectionism, crippled international markets and devastated the one industry it was meant, especially, to help: agriculture.

Protectionism is the idea that government should outrageously harm domestic consumers to “protect” domestic producers. And politicians, often thinking they must “do something” (i.e., “anything”) often feel the push to “save us all” by erecting barriers to trade. Since the crash of 2008, I’ve kept an eye on our Washington insiders, to see if they’d try to revive Thirties-style self-destructive nostrums.

Well, we’ve got a sighting.

Congress is gearing up for some anti-Chinese protectionism. An unfortunately bipartisan movement is festering there, saying China’s yuan is too valuable, making trade “unfair” for American producers. The Senate seems bent on passing the Currency Exchange Rate Oversight Reform Act.

But, according to Daniel Ikenson, what’s really going on is politics: Faced with “public approval ratings hovering in the low-to-mid teens, an embattled Congress is looking for plausible scapegoats for the dismal state of U.S. economic affairs.”

This is not sophisticated economic theory. It’s not conscientiously developed public policy.

It’s grasp-at-anything grandstanding.

And it could do a whole lot of harm.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability free trade & free markets too much government

Who Creates Jobs?

There’s way too much pressure on politicians to “do something.” Most of the things they can do are bad. “Do something” too easily translates to “do anything,” and odds are that “anything” will end up as catastrophe.

There’s a division of labor in doing things: Investors, capitalists, and entrepreneurs create businesses which employ people; legislators and government executives have the more humble task of setting up and refining the groundrules, allowing others to do the great works.

Politicians don’t create jobs as such.

Few politicians understands this. But Gary Johnson, former two-term governor of New Mexico, does — and he’s running for the Republican presidential nomination.

“The fact is,” he said in the recent debate, “I can unequivocally say that I did not create a single job while I was governor.” He went on to say how proud he was of this fact. New Mexico underwent an “11.6 percent job growth” rate during his two terms. All he did was get government out of the way of businesses.

Now, I understand: The “politician as jobs creator” talk is sometimes just a way to focus attention on getting policy right. National Review Online called Johnson “the best job creator” of all the candidates. The august journal didn’t mean much by it, other than note the statistic.

But too often politicians decide they can create jobs by taking money from all of us in taxes and investing it in private companies or new government programs. Those politicians aren’t creating jobs for us, but doing a job on us.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies Tenth Amendment federalism too much government

A Compact Solution

“We shouldn’t have to leave our country to have a reasonable health care system,” says Eric O’Keefe, chair of the Health Care Compact Alliance.

I agree, but what to do with Obamacare, at present secure from repeal?

O’Keefe points out that Article I, Section 10 of the Constitution permits states to enter into compacts with one another provided they get congressional approval. States have done so since colonial times; there are currently 200 state compacts in force dealing with issues from driver’s licensing to wildlife.

The Health Care Compact would allow states to “get rid of all of Obamacare,” and to tell the federal government, as O’Keefe puts it, “You keep your regulations; send us back our money.”

“It’s not just a way to block Obamacare,” O’Keefe explains. “It includes Medicare and Medicaid, creates a block grant of all the money and it goes into the compacting states for them to manage as they see fit. So the citizens and the legislature will work it out in their state.”

States that join the compact could set up their own health care system with the money they currently receive from the federal government, sans regulations and mandates. While some states might experiment with single-payer systems, others could expand medical savings accounts and other market-oriented reforms.

Georgia, Missouri, Oklahoma and Texas have already passed the Health Care Compact, and will likely apply for congressional approval once a dozen or more states join.

Who’s next?

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies porkbarrel politics

Hating Cathedrals

According to Adam Gopnik, at the New Yorker, many of my readers and I hate cathedrals.

Well, he alleges that we oppose “beautiful new airports and efficient bullet trains” (not cathedrals, exactly) for the same reason that “seventeenth-century Protestants hated the beautiful Baroque churches of Rome” — as “luxurious symbols of an earthly power they despised.”

Hmmm. Disagreeing with Gopnik is a hate crime?

Americans have more than enough cause to oppose big, intrusive government. We know how it works (often not very well), we know how unfair it is (often quite unjust), and we have a traditional alternative ready at hand (Constitutional liberty).

Cluelessly, Gopnik just sees a pig-headed hatred of government that leads to a hatred of some really nifty things.

He should reconsider. Perhaps what we have is a love of liberty and justice. And that precludes some nifty things from being conjured up in certain ways.

I bet Gopnik agrees. Go back to something like a cathedral. Take Teotihuacan. The Aztecs sure made some impressive buildings. Big public works projects. But for the purposes of blood sacrifice? At the cost of constant imperial warfare and imperial rule?

No.

Same with some dream projects. No doubt taking a billion-dollar train to a trillion-dollar airport would be cool. But I’d rather spend my money in other ways. And is it really right to tax somebody else for my luxuriant transports?

No more than robbing Peter to pay Paul . . . even to build a cathedral.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Saab Stories

Saab Automobile appears to be going down. The Swedish automaker was abandoned by its beleaguered parent company, General Motors, prompting the Swedish managers to petition the Swedish government for a bailout. In 2009, the Scandinavian government said “No.” GM then sold Saab to a Dutch manufacturer, which hit a cash crunch in this year’s first quarter.

Lots of people with fond memories of the pre-GM Saab thought that the Dutch outfit had a great idea: Revive Saab by reintroducing a 1940s look, the famous Saab 92.

But the financing fell through, sending Saab begging, again, to the Swedish government, with promises of radical restructuring.

A western Swedish district court again ruled, “No.”

This is not good for the people of Trollhattan, where Saab’s main plants reside. They will be hard hit, as in any disaster.

What is interesting is that, though many folks of Trollhattan have repeated the old social democrat line about how they are “people” who somehow deserve their incomes and such, the government refused to go along with the old bailout model.

One could argue that the oft-idolized Swedish nationalization/capitalization/marketing solution was the model for America’s 2008 and 2009 bailouts. The method looks less popular, these days, in its home country.

We’re living in tough times, getting tougher. Still, at some point we’ve got to bite the bullet and resist trying to “fix” failed businesses by government.

Governments fail often enough, themselves, without moonlighting this extra job.

This is Common Sense. I’m Paul Jacob.

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

A Million for Each Congressperson

A business filed for bankruptcy last week.

These have been tough times, so that’s not a shock. What makes the story juicy is that the FBI raided the company’s headquarters two days later.

The company? Solyndra, a solar panel manufacturer. A few months earlier, it had been boasting a profitable return on investment. And, as President Obama had proclaimed the previous year in a visit to the California outfit, Solyndra was precisely the kind of company that deserved federal government assistance. It was so cutting edge, so innovative, that it deserved a huge loan guarantee, to the tune of $535 million.

The raid occurred on the same day as the president’s “jobs” speech last week. Yet, Mr. Obama neglected to include an update on his administration’s previously self-praised policy of industrial subsidy pertaining to that very company.

Republicans are making much of this. They are themselves not immune to (indeed, during the Bush years they excelled at) just this sort of corruption.

And it is corruption. The Solyndra deal went down after major investors in the company gave millions in support of the Obama presidential campaign. It was fast-tracked as part of the federal government’s Keynesian “stimulus” spending.

This is how the politics of modern mercantilism — of systematic “business-government partnerships” — works. The moneymen support the politicians who support the moneymen.

It’s one way to get rich.

And gain (and maintain) power.

But it’s not good for the country.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

Facebook Plus

Don’t call me a Luddite, but I still prefer meeting people one-to-one over any other form of interaction. Yet I can proudly say I have almost mastered the telephone, even its cellular incarnation.

Alas, my computer is almost a constant vexation — and I almost never use Skype. I even let my personal domain-name blog vanish from the Web.

So I tread into the eddies of modern innovative turbulence with more than a little trepidation.

I feel up-to-date enough by just being on Facebook.

This hasn’t stopped me from commenting on services like Facebook in the past, but, like any person who strays from his core competencies (yes, I’m on LinkedIn, too — did you detect the business lingo?), I often look to more with-it folks to spark some thoughts and keep track of many trends. (Don’t we all?)

On Reason’s Hit and Run, Katherine Mangu-Ward keenly observes that last year all sorts of people got really worked up about Facebook’s weird privacy-diminishing policies. There was hysteria in some quarters, talk of monopolies and even natural monopolies, or (in other words), treating Facebook as a “public utility.” You know, regulating it “in the public interest.”

So what happened?

Google launched Google+, which has a number of cool privacy features.

The result?

“Starting tomorrow,” Mangu-Ward writes, “Facebook will debut new, easier to use privacy settings with ‘a googley aftertaste’”. . .

Competition. It still works its wonders.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture

Nab-N-Brag

Could America’s obsession with intellectual property be getting out of hand?

Congress has extended copyright protection for existing and old works as well as future works . . . which looks more like giveaways to major corporations than anything else. You know, like Disney, whose lawyers dread the day Mickey Mouse ever hits the public domain.

Now that patents have been taken out on “business procedures” and even strings of DNA, it seems that almost anything is up for grabs.

The easiest intellectual property to defend is the trademark, since unique identifiers are so important for both commerce and law. But even here there’s a lot of weirdness going on.

Take the recent lawsuit by In-N-Out Burgers against Grab-N-Go Burgers. The west coast outfit thinks the east coast outfit has, well, stolen its look. The Huffington Post calls it “copyright infringement,” but, in the first report I read, “the suit alleges that Grab-N-Go’s name and color schemes mirror In-N-Out’s signature style,” which sounds more like trademark. But the suit also mentions menu similarities.

Well, the names are similar, and the logos do resemble each other. But they seem quite distinct, and I would have thought common sense would judge Grab-N-Go as merely emulating In-N-Out, not infringing on rights. Businesses copy each other all the time. That’s capitalism.

It’s even Aristotelian. Keyword: mimesis.

Even innovation is never ex nihilo creation. It’s copying plus modification.

It’s why I call this commentary “Common Sense” and not “Xbligigroobi Blubqui.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture tax policy

Greed and Bigotry on the Campaign Trail

On the video page featuring Mitt Romney’s notorious “corporations are people” comment — the one I clicked to, anyway — every comment was negative, with jokes like “Did you hear that S&P downgraded the Tea Party credit grade to KK+?” and economically illiterate whoppers like “Corporations do not help anyone except those who own them or do what they say.” It’s saddening to see ignorance and bigotry so self-righteously maintained by everyday Americans.

Yes, bigotry.

For Romney was right: Corporations are made of people. Those who roil with hatred for corporations, singling them out for more regulation or greater taxation, are attacking actual living, breathing people, who, as Milton Friedman pointed out, are made up of three classes of just plain folks: the owners, the shareholders, who are people; the corporation’s hired workers and managers, who are people; and served customers, that is, people who have chosen, sans duress, to buy stuff from the corporations.

Economist Steven Horwitz, writing in the Buffalo News, cited one study that estimated that “45 percent to 75 percent of the burden of a corporate tax increase is borne by workers,” and noted that, if profits fall, fewer dividends would go to stockholders.

And “stockholders” are often nothing other than workers’ retirement funds.

Yeah, soak the older people. That should make corporation-haters feel good.

Setting aside “some other people” to hate is exactly what anti-corporatists are doing. It’s bigotry. And it’s ugly . . . and de-humanizing.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Millions for Chickens

The U.S. government doesn’t have all that much money. A few weeks ago, the big “funny” news story was that Apple, Inc., had more cash on hand than did the federal government. As August began, the big unfunny news story was the debt ceiling deal, wherein our leaders raised the debt ceiling in return for . . . increased spending.

So, in this environment you might think that boondoggle market-fixing programs would be anathema. But you would be wrong. Our beloved federal government announced on Monday its plan to buy $40 million of excess chicken products.

Prepare yourselves, kiddies. It’s not government cheese that will be pushed on you, soon.

You may remember similar buy-out programs from years gone by. I have this vague recollection of vast storehouses of frozen chickens, and the precarious value of same.

Why the buy-out? To prevent well-connected business folks at Tyson (or similar businesses) from having to brace themselves against lack of demand, pulling back on the number of chickens raised.

Our government: Protecting big business and assuring the needless slaughter of birds. What strange boasting rights.

Amusingly, in the article that prompted this commentary, the author uses the relative pronoun “who” to refer to the birds in question.

Birds aren’t people, and require a “that” . . . the “who” in the story are our ninnies in government, though “who” suggests owls, and our D.C. (“dumb cluck”) folks aren’t wise enough to merit such comparison.

This is Common Sense. I’m Paul Jacob.