Category: free trade & free markets

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free trade & free markets general freedom too much government

Mass (Private) Transit

Washington D.C. metro, public transit, train

“Metro is dangling from a fiscal cliff,” hollers last Saturday’s Washington Post editorial headline. The “transit system faces a ‘death spiral’ starting next summer,” according to “the usually stolid pages of Metro’s financial projections.”

The Post informs that Metro’s “systemic budget problems have been compounded by pandemic-driven revenue shortfalls, inflation and the upcoming expiration of a federal bailout for transit systems.” 

Oh, what a cruel turn of events, Washington’s ill-mannered and unsafe transit system needs a bailout from local politicians . . . because the current financial bailout it receives from federal taxpayers is about to fizzle out. 

Life is tough. 

Metro has only about 70 percent of the funding it needs, so get ready for blood-curdling cries of “drastic service cuts”— until or “unless the region’s elected officials, along with Congress, devise a fix,” The Post tells us.

Hell of a way to run a railroad — not earning a profit. Constantly failing customers and just as regularly begging for more money from politicians who get that moolah from folks like me . . . who rarely if ever use the mass transit we are told is so essential to us. 

There’s a better way.

“Rail company Brightline began operating trains Friday from Miami to Orlando,” reports The Post, “using the fastest American trains outside the Northeast Corridor to become the first privately owned passenger operator to connect two major U.S. metropolitan areas in decades.

“The debut of the 235-mile, 3.5-hour ride completes a $6 billion private investment in Florida.”

With speeds “quicker than Amtrak’s” and fares “comparable to Amtrak’s and competitive with airfare,” Brightline chief executive Michael Reininger talks of “the beginning of a new industry and a blueprint for expanding rail in America.”

Two approaches. One uses my tax dollars and fails. The other uses private investment. 

And seems to be expanding.

Rather than complaining. And begging.

This is Common Sense. I’m Paul Jacob.

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

Slow Murder Is Still Murder

weather, climate change, government, power

Electricity providers must not beg the government to destroy them more slowly. 

“I’m not saying now’s the time to double down” on fossil fuels, pleads Lanny Nickel, chief operating officer of Southwest Power Pool, which helps provide electricity to 14 states. “I’m just saying now’s the time to slow down on the removal of [those] assets from our footprint.”

The assets Nickel means are oil, gas, coal.

Like others in the business of keeping the lights on, Nickel knows that if and when the percentage of fossil fuels in the utility industry “footprint” is coercively reduced to point oh one percent or whatever, wind and sunshine will not be taking up the slack. 

We’ll suffer, instead, from lots more brownouts and blackouts.

Nickel understands this. 

But begging regulators and politicians to go slower won’t discourage them. They’ll just gloat about how they’re making the utility executives sweat.

We should in fact be doubling down on fossil fuels, because these are the only always-reliable sources of electricity. 

Should solar and other sources of electricity become cheaper and more reliable, people won’t have to be compelled to increasingly turn to them. The transition would happen naturally, in the normal course of progress. 

And the notion that government will be able to fine-tune global weather if only we are forcibly deprived of our means of coping with the ups and downs of the weather is a willful delusion.

Electricity providers must not beg the government to destroy them more slowly, sure. But more importantly, the government should not be destroying them — and us — in the name of the religion of Climate Change at all.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets media and media people political economy too much government

Incredulity Doesn’t Cut It

dumpster fire, regulations, privatization

One of the objections people often make to the idea of private enterprise as a solution to government inefficiency is The Argument from Incredulity.

It’s not an argument at all, actually, just a harrumph and a guffaw: we cannot have free-market police, or fire suppression, or . . . garbage collection!

But of course all those things are successfully managed in the private sector.

No media outfit has a longer history of pointing this out than Reason magazine. So when the editors of Reason brought us Joe Lancaster’s “Government Waste Monopoly Pits Private Dumpster Business Against Garbage Bureaucrats,” yesterday, I hope they took a moment to revel in a little nostalgia. For this is the kind of story that made Reason what it is today, one of the best sources for retail political economy.

The tale tells of Steven Hedrick, an Arkansas man who put together a business renting out dumpsters — like you often see on construction sites, but smaller — which he would haul away after customers filled them. He built the business without ever going into debt, and then . . . came the government. 

“[I]n April 2022, the City Council in Holiday Island passed Ordinance 2022-004, which required all residents and businesses within the city to contract with the county sanitation authority, Carroll County Solid Waste (CCSW), for trash pickup and disposal services,” Reason informs us. “Anyone using private companies would have to switch, and anyone who did not have contracted trash service would have to sign up.”

And Hedrick’s little business must be . . . dumped.

What this is, at base? Sheer bigotry: preferring monopoly government to competitive private services.

For those of us who’ve been reading Reason for decades, it sports a familiar smell.

Just not a good odor, for the drive to monopolize everything stinks.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets too much government

Make Them Pay

California, Commiefornia, socialism, electricity

Thanks to renewable-energy mandates and other regulations, California muddles along with crippled power markets in which rolling blackouts are routine when demand for electricity is high and sun and wind are unavailable.

Apparently, this and other burdens on energy usage in the Brownout State are insufficient to fully immobilize everybody who relies on things that need to function. So the state’s utilities are preparing to also impose socialist billing on its customers.

Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison are proposing that the flat-rate component of power bills be based on income. Once regulators sign off, there is to be an ongoing transfer of wealth from richer to poorer.

The utilities aren’t acting independently. 

They’re obeying a legislative mandate.

In addition to a flat-rate component of utility bills that would be $15 for the poorest customers and $85 for the wealthiest customers, there would still be a component based on power consumption. So the impending looting of nonpoor customers could be worse.

The socialism isn’t full bore yet.

But I doubt that initial limits on this redistribution agenda would remain intact were the scheme implemented and to persist.

In addition to other objections, there is also the matter of how utilities will know their customers’ incomes. Will customers be required to report and prove these incomes? The central planners presumably regard this invasion of privacy as not worth fretting about. 

They’re too busy creating perfect equality . . . of brownouts.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture national politics & policies

Old Woke, Not New

SVB, Silicon Valley Bank, interest rates, collapse, FED

Last week’s collapse of the Silicon Valley Bank gets more interesting with each revelation. But one of them is probably not that it was “woke.”

Contrary to rumor, I see no real evidence that SVB gave millions to Black Lives Matter. The bank did pledge $50 million towards an internal program dubbed “Access to Innovation.” This, we are told, “sought to connect women, Black people, and Latinos with startup funding, networking, and leadership development in the venture capitalist ecosystem.” 

Sounds great in a press release, though what it has to do with making profits is a bit hard to determine. 

Very feel-good, not very bottom-line.

And that’s where the bank failed, on the bottom line. 

Its clientele was concentrated in one industry, which has been hit by rising interest rates. Thus stressed, it was exceptionally prone to “bank run” pressures. Its core asset class was long-term Treasury Bonds, whose value decreased with rising interest rates — and these were not hedged. 

As Forbes put it, “Whether it was fully or semi-deliberate, Silicon Valley Bank was betting heavily on interest rates not rising.”

An extremely bad bet.

But you can see why the bankers would make it, right? Why wouldn’t they expect the giveaway mentality of Zero Interest Rates Forever?

Their hopes dashed, they nevertheless turned to their friends . . . in power. The Biden Administration that failed to keep interest rates down then pledged to cover SVB’s clients — the super-rich corporations that true progressive Democrats pretend to hate for all their “profits” and “under-taxed” income — well above the FDIC-insured levels.* 

We may learn real data about the banks’ wokeness levels, rather than mere rumor, but the bedrock truth reveals itself as all-too-familiar: it’s all about monetary policy. 

That is, the “woke” ideas of a century ago, when the Progressives’ beloved Federal Reserve was created.

This is Common Sense. I’m Paul Jacob.

* Like Signature Bank, which was closed on Sunday, the overwhelming bulk of SVB’s deposits were uninsured by FDIC. 

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free trade & free markets moral hazard

Is It Still Capitalism?

capitalism, mixed economy, socialism, corporation, bank

Is it still capitalism if the capital is guaranteed?

“The U.S. government will guarantee all customer funds in Silicon Valley Bank (SVB) after a series of bad decisions and a run on deposits led to the bank’s collapse,” explains Elizabeth Nolan Brown in Reason. 

Technically, the bank isn’t being bailed out. Its customers are. And that’s a lot more popular than bailing out banks directly. There are more bank customers who vote than bankers who vote — though there is probably more political donations from banks directly seeking banking policy “correctives” than bank customers doing the same. That’s almost apodictically true.

The most bizarre element? While the FDIC, the federal agency that insures depositors of this and similar banks, is designed to guarantee depositors’ capital up to a certain limited amount ($250,000, more or less), the regulatory triumvirate of Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chair Martin Gruenberg declare that “all depositors of this institution will be made whole.” 

All.

Even the super-rich.

The key concept, here, is moral hazard — “The decision creates bad incentives for financial institutions and their customers” is how Ms. Brown puts it. We’ve been through all of this before. Is there really any question? The answers are in.

So, to the opening, Is it still capitalism if the capital is guaranteed? — if even Prince Harry’s fortune will be guaranteed — the answer is No.

Sorta. 

It’s a special kind of capitalism. State-dominated capitalism; Neo-mercantilism; f***-ism. Use whichever term.

As we contemplate a profit-and-loss system without loss, and how the losses will be made up within the financial system, just remember that the federal government playing the role of Savior is not itself costless, and . . . its debt keeps growing. And the Ultimate Result of all this still looms.

Immoral hazard.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets ideological culture national politics & policies

Can You Bank On It?

Old Glory, bank, money, savings

With major financial institutions going belly up lately, now may not seem the best time to start a new bank.

But economic conditions are always dicey. 

In any case, much depends on whether the partners in such a venture follow sensible policies or treat depositors’ funds as gambling chips to be flung about in accordance with wishes, prayers, and prejudices.

Singer John Rich, doctor and politician Ben Carson, and pundit Larry Elder are teaming up to run Old Glory Bank. They’ve got at least one thing right. They see a market for “digital-first banking solutions” that is expressly anti-cancel-culture.

The three purchased an existing bank, First State Bank of Elmore City, Oklahoma, and are giving it a new name and modified mission.

According to Elder, Old Glory Bank, currently accepting account reservations, will be guided by principles of “liberty, privacy, security, community, family, and faith.” It’ll eschew what Rich calls “the political weaponization of the financial system.”

This sentiment contrasts with the animus animating outfits like PayPal, which cancels customers for having PayPal-disapproved views or political goals. (A pro-democracy group in Hong Kong is one victim of this policy.)

Some standard banks, too, have begun spurning customers involved in certain legal but politically controversial industries, like the firearms industry.

According to a press release issued late last year, Old Glory Bank “will never cancel law-abiding customers for their beliefs or for exercising their lawful rights of free speech.”

We will hold you to that.

This is Common Sense. I’m Paul Jacob.

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First Amendment rights free trade & free markets general freedom

Sneaky Censorship

disinformation, disagreement, censorship

If our government tried to march all dissenters to jail — or hang them all — it probably couldn’t get away with it. Too many Americans still have enough sense of fair play and concern for individual rights to make such ugly expedients untenable.

Also, the First Amendment hasn’t been repealed yet. Oh, no! So the non-crime of uttering “misinformation,” “disinformation,” “hate speech” — that is, uttering disagreement — can only be thwarted indirectly.

One way is for government officials to get chummy with compliant social media companies and point them to utterances (posted comments, videos) to censor.

Another is to fund organizations with missions of defunding wrongthinkers.

The Washington Examiner’s Gabe Kaminsky reports on the taxpayer-bankrolled conspiracy.

Congress funds the State Department and “two State Department-backed entities,” including National Endowment for Democracy; which has in turn been funding a British organization called the Global Disinformation; which has a group called the AN Foundation that is also called Disinformation Index Foundation; which is sending blacklists of websites that supposedly purvey disinformation to American ad companies like Microsoft-owned Xandr.

The State Department, not constitutionally authorized to censor our speech, gave over $300 million (three tenths of a billion) to the Endowment in 2021.

Websites to be deprived — and that probably have already been deprived — of advertising dollars as ad distributors seek to avoid “risks that arise from funding disinformation” include the New York Post, Reason, Newsmax, The Federalist, American Spectator. 

No commie egalitarians; no woke websites.

All very roundabout and mostly under the radar. As intended.

This is Common Sense. I’m Paul Jacob.

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First Amendment rights free trade & free markets general freedom international affairs

Censorship Rerun

Disney, China, Fox, censorship

The Disney company, old chum of Chinese tyranny, is at it again.

In November 2021, Disney hid from Hong Kong viewers an episode of The Simpsons that mentions the Tiananmen Square massacre in a way not laudatory of the Chinese government. Disney had recently acquired 20th Century Fox, now called 20th Century Studios, which produces The Simpsons.

And now Disney has removed an episode from its Hong Kong platform because it refers to “forced labor camps” in China.

Let us not say that The Simpsons is just a cartoon.

Everything you could want to know about the evils perpetrated by the Chinese government, as established by eyewitness accounts and other documentation, is available in many videos and articles and books. But not everybody reads Steven Mosher or BBC backgrounders on the detention and murder of the Uyghurs.

When a cartoon character says “Behold the wonders of China. Bitcoin mines, forced labor camps where children make smartphones, and romance,” a viewer not yet acquainted with China’s policies has two options. He can let the words slide by unheeded, or he can make a mental note to find out what the cartoon is talking about.

I don’t want a world where such opportunities for enlightenment in our most popular cultural products are routinely squelched — in Hong Kong or anywhere else — by the likes of Disney, an entity whose controlling officers are much more concerned to rationalize, hide, and accommodate tyranny than to expose and counter it.

With the Chinese Communist Party pushing Disney to censor, why don’t we pummel Disney in the pocketbook from the freedom side?

This is Common Sense. I’m Paul Jacob.

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Detonators in Place

rent control, good intentions, government regulations

You must place explosives a certain way when demolishing a building to avoid damaging surrounding structures. But if you just want to destroy, you can forget about such precautions.

Could this be the perspective of those demanding national rent control?

They forget — or ignore — the destruction of living space inflicted by incentive-incinerating rent controls in places like New York City and Santa Monica.

Rick Moran perceives that President Biden is making a “first move toward a radical national rent control law,” telling agencies to find ways to stop rent increases. Biden is doing so at the behest of 50 congressional communists who have implored him to take executive action to save tenants from rising rents.

According to their letter, “rent is too high and millions of people across this country are struggling to stay stably housed as a result.” Meanwhile, landlords are “increasing the rent for their own profit . . .”

Profit? In a market economy? 

Rising rents! Caused by . . . ?

But if you just want to “solve the problem” and have been trained to be heedless of the destruction regulation can cause, you needn’t think about cause and effect — who did what and how and why. In the interventionist mentality, when oil or food or housing prices zoom upwards, only one cause is possible, and it has nothing to do with politics and policies already in place.

Even if the government’s central banks have been zanily pumping up the supply of money and credit while city and state bureaus have been going all-out to hamper and halt production.

That single cause, they contend, can only be the grasping, grabbing, profit-seeking capitalists. You know. The bums who make their riches (when they do) by supplying us with what we need.

This is Common Sense. I’m Paul Jacob.

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