Category: free trade & free markets

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free trade & free markets general freedom international affairs

Market Rents Work in Argentina

Argentina, housing, flag, freedom

Markets work and markets for housing work.

This is what the new president of Argentina, Javier Milei, has sought to confirm by means of radically free-market economic policies. He is going as far as he can as fast as he can to make Argentina a freer and more prosperous country.

Can he succeed in the long run?

Many exploiters of the socialist status quo ante are bitterly opposed to his reforms and hope to undo them. We’ve seen before how quickly a relatively anticapitalist administration can kill the freedom-expanding reforms of a relatively procapitalist one.

But at least for now, Milei is proving his point, as witness the market for apartments in Buenos Aires.

The Buenos Aires newspaper El Cronista reports (with the help of Google Translate) that with the end of rent controls, the supply of rental units in Buenos Aires has doubled and prices for units have fallen by around 20%. The paper cites data by the Argentine Real Estate Chamber and the reports of brokers.

Under rent control, by 2023 the supply of rentals had shrunk to just 400 units. “Today we have a stock of more than 800 apartments, and it is growing day by day,” says Alejandro Bennazar, a director at the Chamber.

Eight hundred units is still low given the size of the capital city, but there’s light at the end of the tunnel. Getting rid of the controls caused supply to double instantly. An excellent start.

This is Common Sense. I’m Paul Jacob.

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Dollar Store Plague

dollar store, cheap food

Tucker Carlson said harsh things about “Dollar Stores” and “libertarian economics” on Glenn Greenwald’s System Update for December 16, as summarized in the show’s tweet:

“Libertarian economics was a scam perpetrated by the beneficiaries of the economic system that they were defending . . .

I think you need to ask: ‘Does this economic system produce a lot of Dollar Stores?’

And if it does, it’s not a system that you want, because it degrades people — and it makes their lives worse and it increases exponentially the amount of ugliness in your society.

And anything that increases ugliness is evil.

So if it’s such a good system, why do we have all these Dollar Stores?”

At Reason, Liz Wolfe fell for the same trap that has apparently ensnared Mr. Carlson. She defended progress in the U.S. since the time he was born. What? 

Contra Liz Wolfe, and in defense of Tucker, I’d say we are indeed living in tough times. Inflation’s way up, the birth rate is down, life-expectancy’s dropping, and a whole lot of Americans struggle to pay bills and keep even, financially, much less “get ahead.” The proliferation of dollar stores shows that the upscale stores are too expensive for too many.

They are a refuge for the poor.

But are they evilly uglifying, though? 

Perhaps not as pretty as Safeway or Target, but they’re clean and you can buy a can of soup for four bits, a dollar less than at an upscale market.

Are the rise of discount consumer goods stores, like Dollar Tree and Dollar General, especially hideous and indicative of a blow to . . . the American spirit? 

Seems more revelatory of a weird elitist streak in Tucker.

And what does libertarian — free-market — economics have to do with it? Libertarian economists have opposed all the major drivers of the current system: central banking, deficit spending, sovereign debt accumulation, taxation for redistribution, subsidy. The policies that have truly “hollowed out” the last semblance of progress.

But Tucker blames libertarian economists’ defense of equity markets for not only social decline but Dollar Stores.

He’s fallen for the progressives’ perennial scam: see a problem in our mixed economy and blame the freer part . . . not the role of elitist schemers with political power.

This is Common Sense. I’m Paul Jacob.

dollar store, decadence

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free trade & free markets regulation too much government

The Crime of Mowing the Lawn

gas powered lawn mower

As war rages in the Middle East, Ukraine, and elsewhere, some U.S. politicians struggle to devastate the American landscape. One of their targets is American landscaping equipment.

In Washington state, lawmakers hope to put an end to gas-powered landscaping. If they succeed, the ordinary activities of humble homeowners and businessmen — humble but determined to keep using Yardmax lawn mowers and Echo leaf blowers — would be criminalized.

Regulations instead of bombs will be the way. If you don’t follow the regulations, then you’ll be “bombed” with fines. Or jail time.

State Representative Amy Walen is pushing legislation, HB 1868, that would “prohibit engine exhaust and evaporative emissions from new outdoor power equipment,” a prohibition to take effect as early as January 1, 2026.

Persons using gas-powered equipment bought before the ban takes effect would presumably not be subject to fines or jail time. They might still be subject to investigation, though, if one of their grandfathered gas-powered tools looks too shiny.

And they might be at risk if they ignore the prohibition and buy post-January-2026-produced gas-powered mowers from out of state.

Exactly how the legislation would play out is hard to predict. But it does not look good for the average guy who just wants to keep his plot in shape.

Government agencies dealing with “natural or human-caused emergency events” would be exempt, at least initially. They wouldn’t have to worry about spending a year in jail for efficiently cutting the lawn. 

Just everybody else.

This is Common Sense. I’m Paul Jacob.

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The Not-Unintended Consequences

Gavin Newsom, California, fast food, regulation

When bad outcomes are obvious, we can no longer call them “unintended consequences,” can we?

Take the case of California’s double-barreled attack upon “fast food”: last year’s push through the legislature of Assembly Bill 102 and Assembly Bill 1228. These regulatory schemes would have introduced collective bargaining into fast food franchises and enforced much higher minimum wage rates.

The two laws sparked an industry backlash, in the form of ballot referendums to halt the regulatory onslaught, which Steven Greenhut writes about at Reason. “In September, Gov. Gavin Newsom announced a ‘truce,’” Greenhut explains. “The industry pulled its ballot measure and agreed to a $20 minimum wage. In return, Newsom and unions limited the power of the Fast Food Council and removed joint-liability provisions.”

The concession on hiking the legal wage minimum was agreed to, notice, by the fast food lobbyists. Not the workers. 

As those familiar with elementary economics understand, when the costs of an input (like labor) are increased, alternatives to those inputs will be sought. So we can expect more replacements of workers with automation — as we’ve seen all around the country in fast food, especially at McDonald’s — as well as higher prices.

Which, in a state sporting huge homelessness and unemployment problems, will only hobble the one industry that helps the poorest members of society both in terms of consumer products (inexpensive food) and entry-level jobs (at fast food joints).

Perhaps California’s Democrats know full well what they are doing. They push crazy policies not because the negative outcomes are “unintended” or unforeseeable.

You see, it’s not disastrous for them.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Why the Banks Are Failing Us

banking, surveillance, government, control

We depend on big businesses, especially upon banks. We pay for our food, clothing, medicines, and much else with little plastic cards from our banks. So when those cards stop working, all of a sudden — without warning — our hearts are going to do a bit more than beat just a little faster.

Why would there be big hiccups at all? 

As Brian Doherty remarks at Reason, it’s not just “frustrating when those businesses make seemingly arbitrary decisions that cripple your ability to function in a modern economy,” it’s hard to understand. After all, “the incentives of businesses are to, well, do business with customers.”

Why would banks, then, increasingly treat customers badly?

I’m not talking about the allegedly transient snag in the direct deposit system last week — apparently due to human error — but something more persistent, if scattershot.

Doherty found an answer in The New York Times, in an article “giving infuriating details of innocent Americans being cut off by their banks.” 

It should not shock the reader, Mr. Doherty explains, revealing: “the real cause of the banks’ seemingly arbitrary behavior is government rules designed to make sure it knows everything it can about citizens’ banking business, to discourage big cash transactions, and to ensure businesses the government disapproves of have as difficult a time as possible without being explicitly banned.”

Nearly ten years ago I wrote about it in a discussion of Operation Choke Point. Since then, in the words of the New York Times, “a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers.”

Who’ll be next?

This is Common Sense. I’m Paul Jacob.

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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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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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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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