Category: free trade & free markets

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free trade & free markets general freedom too much government

How Not to Help Haiti

Haiti has suffered horrific devastation. It didn’t have to.

There was no way to prevent the 7.0 earthquake itself. But estimates of as many as 200,000 dead? That didn’t have to happen.

Economist Donald Boudreaux recalls that in 1989, an equally powerful quake hit the San Francisco Bay area. It caused lots of trouble but killed fewer than 70 people. But Haiti is a much poorer country than the U.S., with weaker buildings and roads, for starters.

Why so poor?

Haiti is not a free society. It’s had one corrupt tyrant after another, recently emerged from the terrorizing rule of Jean-Bertrand Aristide, who was sent packing in 2004.

Many pundits are saying that the way to strengthen Haitian society over the long haul is torrents of foreign aid. Economist Jeffrey Sachs wants Washington to spend billions on a five-year development plan, which he says it should fund by taxing Wall Street bonuses.

Charity and rescue efforts are wonderful. Government-to-government foreign aid, not so much. Haiti has remained desperately poor despite the massive flow of foreign aid, which, over the years, has mainly subsidized corruption. What Haiti needs is stability. The ability to attract investment. Less propping up of corrupt politicians. Less foreign aid, more freedom.

But a free society is something Haitians will have to build themselves.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom too much government U.S. Constitution

Know Your Rights

For years, politicians and activists have declared that we have a right to medical care. Not a right to freely contract for medical services, mind you, but a fundamental right to medical care.

This assertion serves as the moral force behind those pushing for nationalized, universal health care legislation. But can medical care really be a basic right?

Well, it’s nowhere to be found in the Constitution or the Bill of Rights.

Should it be?

Again, no.

Rights cannot involve requiring others to provide a product or service to us. We can’t simply demand, with talk of rights, the expertise and labor of doctors, nurses and other healthcare workers. Why? Because they possess the same rights we possess, in particular, the right not to be enslaved.

Watching the 2,000-page health care bill plod through the congressional sausage factory, the fraudulent nature of this “right to medical care” claim becomes painfully obvious. We’re not getting a new right from the deal. Instead, politicians are slapping us with a new mandate, forcing us to fork over our hard-earned money to health insurance companies.

If our right to freedom of speech worked this way, the First Amendment would mandate that we buy a local newspaper and sign up for cable TV or XM Radio. The Second Amendment would force us to own a gun and pay dues to the NRA.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Browsing for Trouble

Microsoft is in less trouble today than it was yesterday.

The software maker has been in hot water with the European Union because Microsoft integrates a browser with its operating system. To avoid costly litigation, the firm has “settled” with European regulators and agreed to “offer customers a choice” of browsers in addition to its own Internet Explorer.

In the annals of crime, coupling operating systems with web browsers ranks right up there with uxoricide, armed bank robbery, and using the wrong fork with your salad. But the prospect Microsoft faced if it didn’t cave to the EU was pretty serious. The firm has already shelled out more than two billion dollars in fines to the Europeans as a result of previous bogus antitrust litigation.

Neelie Kroes, who fills the post of “European competition commissioner,” says millions of European consumers “will benefit” now that they have a “free choice about which Web browser they use.” But every online computer user has always been free to compare browsers and pick a competing one. You surf. You click. You download. Not hard.

So what’s the deal here? Big target, deep pockets. Competitors without scruples willing to enlist government guns to force Microsoft to do their marketing for them. Nothing to do with justice or anyone’s legitimate rights.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets responsibility

Economist-in-Chief

I’m not an economist. So take my advice with a grain of salt. Or two.

But hold the pepper. I’m not the only non-economist. Our president isn’t one, either.

Sure, he has economists on his staff, but I’ve more than just begun to doubt their wisdom.

Take his latest advice to banks: “Go back and take a third and fourth look” at operations . . . and “explore every responsible way” to put their money in the hands of small and medium-sized businesses with current loan applications.

We can all agree it’d be nice to get rolling like we were before the bust.

But I bet bankers are trying to learn something from the bust, something about booms. They have every reason to be super-cautious. What if the current situation remains a house of cards, one that could come a-crashin’ at any moment? Lending money out now, in questionable cases, would be a horrid waste of capital.

I know that presidents are now cheerleaders for prosperity. One of their jobs, in the modern interventionist economy, is to pretend that prosperity is always right around the corner. Even if it isn’t.

But bankers have a different job. That job is to not lose money. And if they are now afraid tht in making a loan they might not get their money back, no amount of “advice” from our alleged economist-in-chief should change their minds. It’s called “fiduciary responsibility.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Head Over Heals for Stimulus

Which thinker is more relevant right now, Lord Keynes or Naomi Klein?

We’ve hit hard times. The Keynesian advice is to spend a lot of taxpayer money to make up for the lack of private spending, thereby jump-starting the injured market order.

Naomi Klein, on the other hand, is best known for her book “The Shock Doctrine,” in which she charged that free-marketers were conspiring to use social and economic crises as excuses to “take over” and remake the world in their favor.

Let’s look at the evidence, shall we? We’ve hit a crisis. The government has done the Keynesian thing. Unemployment went up, but . . . who has made the biggest gains?

USA Today reports that federal workers are enjoying a boom in both employment and salaries. “Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months” — and that’s not counting overtime and bonuses!

It’s not markets being stimulated, here, but government.

Not only is this Keynesianism on its head, but Naomi-Kleinism, too. Those who have taken advantage of the crisis are the ultimate insiders. As a Washington Examiner editorial puts it, “bad times for the rest of us are good times for the federal establishment.”

We could wish Naomi Klein were right.

But things aren’t getting better because she’s wrong.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Virgin Galactic’s Latest

It seems like only yesterday that Burt Rutan flew SpaceShip One into near-orbit and received the Ansari X-Prize for piloting the first manned private craft into space.

But it’s been five years.

Things have happened in the meantime. To be specific, SpaceShip Two, just unveiled.

It’s a much larger ship than the original, capable of carrying six passengers as well as two pilots. It has more windows. I like windows.

A year or so ago the company, Virgin Galactic, had shown off their White Knight Two, a twin-fuselage aircraft designed to ferry SpaceShip Two high into the atmosphere.

There’s still a lot of work to be done before rich people can actually trek up into space. Yes, space tourism is a few years away. But it’s coming, and it’s important.

As long as space is a government-subsidized and -organized industry, it will suffer from the usual problems associated with bureaucracies and politics.

But let’s give NASA its due: Those scientists and engineers took the risks, squelching the screechings of many folks who, these days, don’t approve of burning any kind of fuel, really, or risking anyone’s life. Think of the lawsuits that would have happened — the OSHA violations, for instance — had private industry been allowed to start this!

Now, it’s high time for private enterprise to take over. To make space flight rational. And fun, again.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

A Contorted Practice, Challenged

In his book Stuff White People Like: The Definitive Guide to the Unique Tastes of Millions, Christian Lander notes that “Yoga is essentially stretching with guidance. . . . . You might think that since yoga is such a minimalist activity, it can be done almost anywhere. But you would be wrong. Yoga must take place on hardwood floor at a studio. Exposed beams are generally believed to enhance yoga experiences by 40 percent.”

With this droll explanation in mind, you might think that much of the “specialness” of yoga depends on trivialities, like “$80 pairs of pants.”

But the state of Virginia harbors no such cynical thoughts. It understands the secret of yoga’s ancient allure: The great chain of instruction must be regulated by the state.

Virginians are free to do yoga, even in their own dingy homes, and to inappropriate music, say Bach or the Turtles.

Further, any Virginian may teach yoga. Hey, it’s a free state.

But under no circumstances may a Virginian teach another Virginian how to teach yoga — not without paying heavy administrative fees in the state’s vocational licensing system.

Silly, you say?

Yes.

Thankfully, the Institute for Justice teamed up with yoga-teacher trainers Julia Kalish, Suzanne Leitner-Wise, and Beverly Brown to challenge the law, on Constitutional grounds.

Now that’s soothing.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets responsibility too much government

Massive Failures

How many times, in the last year, have I heard praise for FDR’s banking reforms, even down to the specifics of federal deposit insurance?

The funny thing is, this factoid is false. Roosevelt opposed deposit insurance. Everyone did who at that time knew the history of the states that had experimented with this form of subsidy. Only logrolling pushed deposit insurance into law as a known special favor to small banks in rural areas — not to cure the nation’s ills.

The actual history and lessons of bank failures is explored by Charles Calomiris in a recent paper provocatively titled “Banking Crises Yesterday and Today.” According to this Columbia Business School professor, bank panics were not uncommon in the U.S., prior to the Federal Reserve in 1913. And the Fed pretty much stopped them. Massive bank failures, on the other hand, are different. Not unheard of elsewhere, massive failures had not been a problem in America leading up to that time. However, such failures became a problem a few decades later in the Great Depression.

Calomiris explains that such massive crises are brought on, chiefly, by institutional risk factors, like deposit insurance, government manipulation of the housing market to increase ownership through loosening of financial standards, and the “too big to fail” doctrine.

It turns out that honest standards, and not mammoth government subsidies and guarantees, prove the best way to prevent catastrophe.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom

A Deadly Law

Suppose I donated bone marrow to help save someone’s life . . . and you, to encourage people like me to step forward, offered college scholarships for such donations.

Most folks would applaud us. But not the federal government. It would charge us with a felony and send us to prison for up to five years.

The fear that people might sell their non-renewable organs — such as kidneys — for money, led Congress to pass The National Organ Transplant Act in 1984. The act also makes it illegal to compensate someone for donating bone marrow — which is renewable.

Thousands of Americans have rare and potentially fatal blood diseases requiring bone marrow transplants, often from a stranger. Every year thousands die because they can’t find donors.

The folks at MoreMarrowDonors.org want to recruit more donors through scholarships and financial incentives. Makes sense. But by law they can’t.

Doreen Flynn has three daughters with a blood disease. To fight their deadly disease, she is stepping forward to fight this deadly law that blocks their treatment.

Flynn and MoreMarrowDonors.org, represented by the Institute for Justice, have sued the U.S. Attorney General to overturn the ban on compensating bone marrow donors. The case is Flynn v. Holder.

Attorney Jeff Rowes put it plainly: “The bottom line is that throwing people in prison for trying to save lives isn’t just wrong; it’s unconstitutional.”

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Multiplication and Division

John Maynard Keynes’s most popular notion was his infamous “multiplier” effect. Spend some government (taxpayer) money, and the effects “multiply” in the economy, as if the Invisible Hand were on speed.

The truth is the reverse: “the divider” effect. Create government jobs and progress in the marketplace “divides” as a result of the increased taxes needed to support the jobs.

Our orator-in-chief also says he’s in the business of “saving jobs.” Like most politicians, he loves “multiplier” talk, because it gives him the green light to spend.

But, like the bank bailouts, what’s really happening with stimulus spending is that some people are getting raises and bonuses while the unemployment rate goes double-digit.

The actual multiplier effect regards talk. For every dollar government spends, politicians claim umpteen more jobs “saved.” It’s not reality. The multiplication effect occurs entirely in rhetoric and in PowerPoint presentations.

The New York Times tells us how “the federal government spent $1,047 in stimulus money to buy a rider mower” for a cemetery in Arkansas. Then, “a report on the government’s stimulus Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.”

The magic of this sort of job creation doesn’t rest upon the logic of markets. Here the magic lies simply in the lying. The “multiplier” multiplies because politicians tell multiple lies.

This is Common Sense. I’m Paul Jacob.