Category: free trade & free markets

Categories
free trade & free markets

Do the Business, People!

What can we do to help commerce? the French finance minister asked a group of businessmen in the late 17th century. The reply became famous — was, indeed, the snappy comeback heard ’round the world: “Laissez-nous faire!”

Let us be; leave us alone.

Or: Get out of the way! No onerous taxes, no playing favorites with subsidies or regulations or “protection.”

It’s unlikely that President Obama keeps the works of the French Physiocrats, or later “political economy” writers, by his bedside. Speaking before the Chamber of Commerce recently, he enjoined businessmen to “hire and invest,” “get in the game,” etc.

“Ultimately,” he explained, “winning the future is not just about what the government can do to help you succeed. It’s about what you can do to help America succeed.”

Stop dithering! Hire!

But what competent capitalist, enjoying a huge and lasting increase in demand, and having the means to hire new employees to help meet it, would refuse to do so? Obama speaks as if “helping the economy” were the point of getting staff. No. One hires to produce, sell and make money. This does “help the economy”; it is the economy. But companies only hurt themselves and the economy if they hire persons not yet needed just to “win the future.”

Responding to Obama’s remarks, Harold Jackson, CEO of Buffalo Supply, says it’s “a little outside the bounds to suggest that if we hire people we don’t need, there will be more demand.”

A little? Understatement.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government U.S. Constitution

Not His Job

President Obama will address the State of the Union, today, speaking before Congress. These annual efforts are almost uniformly unbearable, with too much applause and too much rah-rah-boy politicking. And far too little thought.

Scuttlebutt has it that the president will concentrate on the economy, on “jobs.”

After the sea change of the last election, one might hope that he’d stay on topic and address constitutionally-mandated issues of his office.

“Jobs” are none of his business. “Jobs” — by which I mean the number of people employed this way or that out there in the non-governmental sector, and by which he means the number of jobs total, including those paid for out of taxpayer expense — should not be his chief worry.

No president in recent memory has excelled by fiddling with policy to micromanage “the economy.” No one knows this stuff. Not even college professors specializing in macroeconomics.

What government operatives know is how to get elected, stay in office. How to preen for television cameras, read a prompter.

You know, the essentials.

But they cannot possibly know enough to “run the economy.”

And yet, Obama talks about making the country “more competitive.” Oh, come on. Just open up trade — which promotes widespread co-operation as well as competition — stop micromanaging the money supply through the Fed, make regulations fit a rule of law and not a vast bureaucratic command system, and let it go. Let individuals and businesses worry about “competiveness.”

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture media and media people national politics & policies too much government

What Gets Lost in Washington

The current battle over “health care reform” is a great example of why representative government frustrates.

It’s not just that the vast majority of Americans who oppose the Democrats’ bill didn’t get their way. It’s that the proponents of socialized medicine (and that’s the real goal, here: The eventual complete government takeover of medicine) are playing a sort of obstacle-course race . . . as I argued yesterday.

Meanwhile, how the anti-Obamacare message hits Washington vexes, too.

Some partisan pundits and pollsters go so far as to say that the Democrats’ reform legislation suffers because it lacks a good name. “The Patient Protection and Affordable Care Act” is not a catchy moniker. “Obamacare,” used primarily by its opponents, is super-catchy. And the Republicans repeal effort is pretty clever: “Repealing the Job-Killing Health Care Law Act.”

Though “job-killing” may reference a hot, current topic, it is far from the most salient thing one might say against the Democrats’ rushed-through plan.

Standard politics: Even when politicians do the right thing, they push it for the wrong reason.

Media folk are now beginning to spin the popular opposition to Obamacare. Carefully worded polls “prove” that Americans aren’t overwhelmingly against the plan.

Which misses the real point: Incredulity. Democrats ballyhooed the notion that further government intervention into medicine would reduce costs. Nonsense, of course. And Americans know it.

That common-sense skepticism is precisely what gets lost in all the politics.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

A Light Bulb of an Idea

Suppose you knew that a heavily-demanded, glow-giving product, cherished for more than a century, was about to become illegal. And suppose you wished to continue being a USER (gulp) of this product and maybe even a DEALER of it (double-gulp) after the ban takes effect.

What would you do?

Stock up.

Cato Institute analyst Doug Bandow recently and publicly stated, quite bluntly, that he will “become an entrepreneur — as a black market operator.”

So why is a dignified fellow like Bandow descending to such a desperate measure?

He likes light bulbs, and, 100-watt incandescent light bulbs will be illegal in this land of the free come January 2012, with lower-wattage incandescent bulbs prohibited a year later.

Bandow prefers incandescent bulbs to fluorescent bulbs because of the softer light they offer, among other reasons. And he dislikes the market-mangling already happening because of the impending prohibition.

Never mind which form of artificial light is better for which purposes by the lights of mere consumers. Those calculations are all individual and freedom-dependent. Meanwhile, “politicians in Washington believe they know best and are determined to inconvenience the public in the name of saving energy.”

At Townhall, back in 2007, I wrote about the government-mandated switch to fluorescents. I didn’t bring up the idea of a black market in light bulbs, but I did insist that some of us would “rather fight than . . . have them tell us how to switch.”

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets initiative, referendum, and recall too much government

Pay the Boatman

Attack the outsider — the first resort of the unarmed arguer.

My Townhall column praising Washington State anti-tax activist Tim Eyman raised the ire of Seattle Times columnist Danny Westneat. He insinuates that it’s easy for me to like Eyman, for I never need to “catch the late boat after a Mariners game,” since I live in Virginia and Eyman’s initiatives affect the Evergreen State’s ferries.

Westneat complains that a voter-approved Eyman measure reducing car taxes took away the main source of subsidy (he doesn’t use that word) for Puget Sound’s ferry system. Turning common-sense responsibility on its head, he writes, “instead of levying a tax across a broad group (all car owners), as we did pre-Eyman to help pay for ferries, the costs now are increasingly heaped on a narrow group — the ferry riders themselves.”

Horrors! People paying for what they use!

Westneat seems to be into financial irresponsibility. “Yes, [the system] wastes money sometimes. What big organization doesn’t?” Nice dismissal of the incompetence and corruption in a state-run biz that cannot even account for its cash.

When the ferries were taken over from private business by the state, it was, he says, because of the previous owners’ “usurious 30-percent fare hikes.” Not mentioned? This followed the cessation of Seattle’s wartime shipworks, and a huge decrease in demand.

Some folks sure apply basic economic insights selectively. Dispersing costs, concentrating benefits? That they idolize. Economies of scale? Their arguments run aground.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture national politics & policies

Study War Some More?

Some people love spending so much they’d kill to do it.

A while back, Paul Krugman, today’s leading Keynesian shill, trotted out the old chestnut that World War II brought America out of the Great Depression. In The Freeman: Ideas on Liberty, Steve Horwitz provides a concise, reasoned response:

Wealth increases when people are able to engage in exchanges they believe will be mutually beneficial. The production of new goods that consumers wish to purchase is the beginning of this process.

And borrowing from future generations to spend on goods not connected “to the desires of consumers, but rather to the desire of the politically powerful” doesn’t work.

Krugman talks war not because he wants one, but because he thinks government spending is so important that he’ll take what he can get, “even if the spending isn’t particularly wise.”

He misses the point.

The malaise that holds back recovery after a shock like the Implosion of 2008 isn’t lack of spending as such — it’s lack of confidence. Capitalism depends on trillions of separate plans and desires working together. When investors are wary of investing and consumers — fearing the future — don’t know what they can really afford to buy, no amount of “jump start” splurging will repair the engine.

At the end of World War II conscripts were freed, wage and price controls were abandoned, and a sense of victory permeated everything — and the Great Depression ended. Finally.

The lesson? End wars. Curtail regulations. Free up the system.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Housing Boom’s Inflated “Wisdom”

Watch how the received wisdom gets worded: “A sustained rebound in home prices is considered critical to getting the economy back on track.”

That’s from a Washington Post business report on falling home prices. Its passive voice construction covers up who holds the opinion.

The sentence could have been written differently: “Many politicians, policy wonks, and industry shills believe that only a sustained rebound in housing prices can put the economy get back on track.” But that would have helped the reader see the special interests behind the statement.

We need housing prices high and rising again . . . to fulfill the plans of the very people who set up the house of cards that just came down.

Harvard economist Jeffrey Miron’s reaction is worth quoting in full: “No, no, a thousand times no!

Housing prices are falling because they soared to ridiculous levels during the bubble. Any policy that attempts to keep prices high — or, equivalently, that attempts to prevent foreclosures or juice housing construction — is fighting a crucial market adjustment to past distortions.

The housing boom mania — fed by multiple government subsidies and massive financial intervention coupled with cheap money from the Federal Reserve — served some people at the expense of the public at large. Progress doesn’t depend on it. Real progress depends on rejecting such nonsense.

By the way, other things equal, inexpensive housing is good for us. The whole “rising prices” mania defeats the alleged rationale for mortgage subsidies in the first place.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Latest Mixed-Economy Mix

Mix special interests, politicians-on-the-make, and expanding bureaucracies and what do you get? E15 gasohol.

Matthew Wald of the New York Times’s “green” blog reports that government ethanol mandates and subsidies make it harder to sell gas efficiently. Converting gas tanks to accommodate the new 15 percent ethyl alcohol/gas blend, E15, could mean shortages of gas for customers with cars that can’t use it. Moreover, ethanol can damage some engines and gas pumps.

A slew of engine manufacturer associations have sued the EPA to block approval of E15. On the other side of the special-interest coin, it’s worth noting that it was the ethanol industry that pushed for E15 approval in the first place.

The approval by itself wouldn’t mean much if buyers and sellers weren’t being forced to use ethanol. New fuel products have been introduced by market participants in the past; with E15, producers and resellers could offer — and consumers buy — the fuel that makes the most economic and technological sense. Instead, the current innovation is an artifact of government policy. You can be sure that the problems caused by imposing ethanol will trigger other political “solutions” that worsen market disruptions, triggering even worse “solutions,” and so forth.

Our “mixed economy” isn’t generally efficient, like free markets tend to be. In a mixed economy, the political winners win big; the rest of us lose.

It’s a mixed bag. The headier mix resulting from freedom? Far better.

This is Common Sense. I’m Paul Jacob.

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

Madison’s Angels to the Rescue?

Something called “behavioral economics” has arisen in recent decades, testing and probing many of the assumptions-cum-postulates of basic microeconomics. Researchers have discovered that human beings are prone to biases, cognitive errors, and a whole bevy of choice glitches. We are not perfectly rational.

Shocking, I know.

Some people draw an odd moral from this: Since people are such fools, they require the help of government to regulate them from utter folly and ruin.

Economist David Henderson quotes one of his Facebook friends, TV creative director John Papola, as supplying the “most succinct criticism” of this tack: “Why in the world do behavioral economists who study our flaws and irrational quirks advocate centralized power in the hands of a small group of flawed overlords? If people are irrational, so are government regulators, only they have corrupting monopoly power.”

You’ve seen this kind of argument before, in political theory. James Madison famously noted that

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

Just so: Were we entirely rational, no regulation would be necessary — no laws would. But, given universal human limitations, the regulators themselves require regulation, and a (non-existent) supply of non-biased, error-resistant rationality, to boot.

Forget vast reams of regulations and huge teams of bureaucrats. Instead, perfect the basic rule of law, regulating markets by a well-conceived basic set of rules.

And expect some imperfection.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

Big Box, Big Apple

Whether to let a business open up should not hinge on opinion polls. But a recent survey of New Yorkers does underscore the absurdity of banning Wal-Mart from the Big Apple.

If you’re used to seeing a Wal-Mart every 30 miles, you may be surprised to learn that there’s not a single Wal-Mart in New York’s five boroughs. Unions have marshaled political clout to keep the company out. Now, with the store again trying to gain a foothold in the area, “community” activist Pat Boone complains that “We need good paying jobs, not minimum wage jobs.” Wal-Mart pays more than minimum wage. But ask yourself: Is no pay for no work really better than a reasonable entry-level wage that sustains some folks’ homes and hearths?

And who is the “we” that this “community” activist speaks of? The unemployed workers who would flock to the job-application lines if Wal-Mart came to town? The 71 percent of New Yorkers who, according to Douglas Schoen’s survey of 1000 New Yorkers, would cram the store’s aisles?

Too often, political power caters to interest groups eager to force others to conform to their own way of thinking. Markets, by contrast, are all about offering a value and then letting people decide for themselves whether they want to pay for it.

So let Wal-Mart open up, New York. Let honest, hard-working people get the best deals for food and supplies.

This is Common Sense. I’m Paul Jacob.