Category: free trade & free markets

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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.

Categories
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.

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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.

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free trade & free markets general freedom

Tough Medicine, Tough Luck

Don’t get sick in Union, Missouri. Not if you need Sudafed in a hurry.

Union is the second city in the nation to require a prescription for sales of medicine containing pseudoephedrine. This is an active ingredient in Sudafed, a drug that good-hearted and responsible people might take to relieve nasal congestion.

However, pseudoephedrine can also be used to make methamphetamine, a very popular and very strong (and very illegal) psychoactive drug.

The reasoning seems to be that if something used in a good thing can also be used in a bad thing, you can’t trust people to use the good thing without erecting blocks to said usage.

If applied consistently, such a regulatory principle would mean you’d have to get a prescription for 80 percent of the stuff in your home. Did you know that if you gargle with detergent, it can be injurious to your health? No wonder you need a doctor’s prescription.

Over at the Show-Me Institute’s blog, Sarah Brodsky notes that when sufferers have no good alternative to Sudafed, they must call in sick, “find time to go to the doctor’s office . . . or go to work unmedicated.” She adds that unmedicated allergy sufferers aren’t exactly at their best.

But hey. The important thing is politicians pretending to do good by making it harder for us to do good for ourselves. Right?

This is Common Sense. I’m Paul Jacob.

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

Gross Jobs

The president says he’s creating jobs. I’m skeptical. I guess there are some things government can do to ensure that jobs get created, out there in the bill-paying, profit-making world. But these do not include spending trillions of borrowed money.

And neither do they include simply giving more money to state and local governments.

The truth about Obama’s much-ballyhooed job creation is that more than half of his alleged new jobs turn out to be government jobs.

Government jobs don’t count, Mr. President.

Remember, many things governments do actually drain us. Jobs in the marketplace, on the other hand, serve real consumer demand, make us all better off. They also help pay the taxes for those government jobs. Employing more people in government means needing more real jobs to pay for the government ones.

And how much work do politicians cause us to engage in just to unbury ourselves from their silly, wealth-extracting regulations? I know, I know: Every time they add on some new complication to the tax code, jobs emerge in the accounting and tax-consulting industry. But this doesn’t exactly make us better off, does it? Not on net.

This lesson applies generally. Here’s the bottom line. Government can borrow and tax to spend to create “gross jobs.” Sure. But on net, after balancing the collective books, we’re not better off.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Derailed

You gotta love trains. You gotta, you might say, since we all pay for them.

In taxes, subsidies.

The federal government’s Amtrak system loses $32 for every passenger — averaging all the routes. According to a recent Pew study, most lines of the system ran at a loss last year, many at a huge loss.

The Acela line, in the Washington, DC/Boston corridor, makes a profit of $40.50 per passenger, when depreciation costs are figured in. But most lines aren’t so solvent.

On the other end of the country, the Cascades line loses over $32 per passenger and the Coast Starlight squanders $100 more.

But these losses pale besides the Sunset Limited, from L.A. to New Orleans, which loses a whopping $462.11 per passenger.

Many of these routes should just be closed. People pay the full costs of car rides and plane rides, in droves, right now. There’s no reason to throw more money on “the problem” of routes that already suck up big bucks.

Were all routes sold off, line by line, private enterprise would abandon some — and make the rest profitable. Or go broke trying. But it wouldn’t be your dime going for the losses, unless you choose to invest in a post-Amtrak rail line.

Instead of this, the Obama administration threw a dozen billion bucks at high-speed rail.

That way we can go faster — go broke faster.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Bernanke’s Pseudo-Semi-Solution

I’m not convinced. I’m not persuaded by Federal Reserve Chairman Ben Bernanke’s recent comments about how we must start trimming the nose hairs of the federal government’s runaway deficit spending.

Bernanke has been a great enabler of economic disaster. By pumping so much easy credit into the economy after the Great Internet Bubble popped early in the decade, Bernanke and his predecessor made it easy as pie to pile up all the bad housing loans that produced the Great Housing Bubble late in the decade.

His new solution? Massive new multi-billion bailouts of bad economic actors. More and faster pumping of the money supply. More and faster enabling of bad investments and bad debt by working to keep federal-fund interest rates vanishingly low.

Now Bernanke wants America to reduce its sky-high deficits — $1.42 trillion for fiscal year 2009. He says we need a “clear commitment to reduce federal deficits over time.” Sure Ben, sure. I don’t disagree. But talk is cheap. Especially vague, general talk that your own actions persistently belie.

Bernanke seems to have some inkling that the fantasy economy can’t persist forever. He has, alas, no real idea of how to return to reality. He’s the guy who blows up a dam and then wants to lay down some twigs to stop the flood.

Stop blowing up the economy, Ben.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

A Regulatory Assault Taxis Into Law

When the politicians in our nation’s capital aren’t the butt of jokes for, say, not paying their taxes or behaving scandalously, well, they’re causing even more trouble.

One of their favorite areas of official mischief-making is assaulting — er, regulating — the city’s taxicabs. Last week a number of cabbies went on strike, protesting a proposed system, not dissimilar to New York’s taxi regime. The new scheme would require cab owners to buy a very expensive medallion to operate each cab.

Larry Frankel, one of the strikers quoted in the Washington Post, said, “We are here to protect our rights as owners and operators.”

The protesting cabbies object that this is not just another expensive regulation. This one threatens their very livelihoods. It’s almost designed to favor large companies over driver-owned cabs.

Which seems almost universally the case with regulations: They protect big interests from competition.

District Council member Jim Graham, who introduced the bill to “medallionize” taxicabs, said he feared the city would be “overrun” with taxis. There are 8,000 already, with 300 adding on every month.

Why, some day there could be more cabs than politicians and lobbyists combined! Imagine the disaster: Folks getting across town too easily or, worse yet, too inexpensively.

Just another bit of ill-thought-out regulation. It is par for the course in our nation’s capital. It makes you proud to . . . live somewhere else.

This is Common Sense. I’m Paul Jacob.

News Flash: After this commentary was recorded, the FBI arrested a top aide to DC City Councilman Jim Graham on charges of accepting cash bribes and free trips in exchange for pushing the taxicab legislation discussed here. (See this news coverage and this article in the Washington Post.)

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

Over 50 and for Freedom

Say you’re a senior citizen. You’re concerned about the rising costs of medical services, but are not ready to surrender your care to well-meaning but naive advocates of ever-greater government. What to do?

Many seniors belong to AARP, a kind of combination consumer group and political lobbyist association for people age 50 and over. Fifty seems kind of youngish to me to be a senior citi — ow! crick in my back! — but okay.

Members get discounts and also get AARP spokesmen pretending to represent them on political questions. AARP supports a big-government overhaul of medical services. However, they’ve discovered that the issue is touchy. So they have taken pains to dispute President Obama’s recent claim that AARP endorses any particular bill.

Some AARP members fear that Medicare benefits are at risk. Other AARP members and former members just like their freedom.

Thank goodness AARP has competition. There’s a group called 60 Plus, and now a new outfit, the American Seniors Association, is offering a special deal to all seniors who submits a torn-up AARP card with their application.

ASA’s president, Stuart Barton, is blunt: “President Obama must think the American people are idiots. . . .” if he thinks they’ll buy “the idea that health care rationing, restrictions and regulations being debated in Congress will save money and result in better preventative medicine.”

You know what? I’m not even going to wait until I turn fifty. Sign me up.

This is Common Sense. I’m Paul Jacob.