Category: free trade & free markets

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free trade & free markets national politics & policies tax policy

State Violence in Vladivostok

While our president was finagling his way to support two out of three of the Big Three automakers, folk in Vladivostak were protesting Vladimir Putin’s new high tariffs on foreign-made used automobiles. As many as 6,000 protesters on Russia’s Pacific Coast took to the streets, some even calling for Putin’s ouster.

Used cars are a big deal on the eastern end of the Russian empire. Over 200,000 people in and around Vladivostok work on — or professionally trade — used cars. The used car business heavily undergirds the economy of the area . . . just across the East Sea from Japan. (I add this topographical note in case you forgot your grade school geography lessons.)

Not only did Putin insist on keeping the high tariffs, he sent in extra police to beat heads. The police attacked not only protesters, but journalists, too — without regard for nationality.

On the Sunday before Christmas, smaller protests were held around the vastness of Russia, including Moscow.

Don’t dismiss the tariff as “mere” economic policy — Putin sure doesn’t. One protester went on record, saying, “First, we have been deprived of our right to elect, now they are taking away our right to choose cars.”

An important lesson for America, too. Government policy skews our ability to choose. Favors to local business (whether by subsidy or tariff) decrease our ability to contract to get what we want. Which, often, includes imports.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets government transparency

Keep Bailing?

Not too happy about the $700 billion financial bailout or billions more for the Big Three automakers? Don’t worry, that’s just peanuts!

The overall government “bailout” is quite a bit larger — as in ten times larger. The federal government — in other words, you and me (and our rulers) — is ready to provide more than $7.7 trillion to bailout whoever might need to be bailed out.

This includes $3.2 trillion already taken from the Federal Reserve by financial institutions. And it also includes money from the Federal Deposit Insurance Corporation and Federal Housing Administration mortgage guarantees.

The total amount of $7.7 trillion is equivalent to half our yearly gross national product. So, should families, when they get in financial trouble, borrow and spend half their yearly income? No, I think this is one of those “don’t try this at home” type deals.

When Congress approved the legislation for $700 billion to establish the Troubled Asset Relief Program (TARP), there was talk of the need for transparency. But there has been precious little transparency for all this other money spewing forth from the Federal Reserve and various government entities.

Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. says, “given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency.”

Yes, how about a smidgen of transparency? Or better yet, an end to all these bailouts.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

Voter Intimidation You Can Believe In

Big labor is tired of the private balloting that workers currently enjoy when deciding whether to unionize. The unions want to get rid of such balloting. By law. There’s a bill floating around in Congress that would do this.

Is a President Obama going to sign it?

The unionized share of the work force has shrunk in recent decades. Many employees don’t see the benefit of joining a union. Because voting on whether to certify a union is done by private ballot, one can’t claim that they are scared of retaliation from the boss.

So what would unions gain from a law that bans private balloting?

Well, if union organizers know how people are voting, and people voting know that the organizers know how they are voting, there would be much more opportunity to pressure and even intimidate employees into voting the “right” way.

Unions hope this would help turbo-charge recruitment efforts. As columnist Donald Lambro puts it, passage of the bill would make it “easier to unionize workplaces without the bother of the private ballot to protect workers in a free and democratic election.”

This anti-democratic bill has been around for a while. But now the chances of passage have increased dramatically. Candidate Barack Obama, at least when addressing union crowds, often promised he would push to make it happen. Will he do so?

You can bet the unions are watching. So should we.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Wicked Trimmers of Cost

Robberies. Corruption. Furious government-enabled debt expansion in the name of curing the effects of prior furious government-enabled debt expansion. Murders. War.

And now, carpooling.

Yes, just when you think maybe it really is time to move to Canada to escape American insanity, you hear about how our neighbors to the north are harassing people for daring to save money on gas.

The alleged villain is an online startup called PickupPal.com. This is a website enabling people going places to hook up with other people going places. The site actively fosters collusive cooperation among travelers. My blood boils! Grr!

Two problems with this, if you live in Ontario.

First, Ontario strictly regulates ridesharing. Ontario riders can carpool only to and from work; must ride with the same person every day; may pay that person for their trouble only once a week; may not cross municipal boundaries during the ride; etcetera.

Second, Ontario bus companies are huge fans of these regulations. So the bus companies sued PickupPal. And the Ontario courts have just fined PickupPal over $11,000 Canadian dollars for making possible a $60 ride from Toronto to Montreal. PickupPal must also somehow enforce the Toronto regulations on their website.

Finally, the world is safe again for Ontario bus service.

This is Common Sense. I’m Paul Jacob.

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

Obaminableonomics

There’s a new school of economic thought: Obaminableonomics.

Come to think of it, though, maybe there’s nothing so very new about this Obaminable economic school — after all, it just combines typical big-government redistribution with a few nominal nods in the direction of fiscal self-discipline.

You can get a concise idea of the Obaminable approach to economics from a headline that floated into my In Box the other day. I quote: “Obama Promotes Fiscal Restraint, Big Spending.” According to the reporter, the president-elect “wants to project fiscal restraint even as his economic team assembles a massive recovery package that could cost several hundred billion dollars.”

Huh?

Well, President-Elect Barack Obama thinks he erases the contradiction by contrasting his short-term plans with his long-term plans. Short-term, government must spend like there’s no tomorrow, because this is what we allegedly need to see happening if we are to regain confidence in our future. Yes, we absolutely must see an endless parade of babbling bureaucrats going hog-wild with taxpayer dollars on a wide array of ludicrous, unworkable schemes. Absolutely.

After that, though, will come the line-by-line budget review, the ruthless cutting out of bloat.

Well, any alcoholic will tell you that he can stop whenever he likes. Just so, our rulers keep putting off the restraint of fiscal restraint.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

What About the Roads?

The classic political study Crisis and Leviathan, by Robert Higgs, argues that the state often exploits the sense of urgency that attends a crisis to enlarge itself as the way to “solve” the problem — even when government itself created the problem.

The federal government’s profligate credit policies, which fueled the now-busted housing bubble, come to mind. The government’s “solution” here is to lard some failed companies with subsidies and nationalize others. Why? Oh, no time to think, just hurry up and do it before investors get even more jittery.

Sometimes, though, officials scrambling for a solution consider solutions that might actually help. Crumbling infrastructure is on the minds of many city and state politicians. But the tough economy is also on their minds. Many are therefore more open these days to the idea of private financing of roads
and bridges. As Norman Mineta, former transportation secretary, puts it, ”Budget gaps are starting to increase the viability of public-private partnerships.”

I don’t know about the “partnership” part of it. Too often such ”partnerships” mean that a business is prevented from making good decisions, or is protected from the costs of bad decisions.

If we’re going to delegate a train or road to a private company, let them take full responsibility for it. Companies that succeed will get us from here to there just fine. And taxpayers won’t have to cough up money for the ones that fail.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets general freedom local leaders

Capitalism vs. Caste

An “Untouchable” in India’s caste system has changed his mind.

Chandra Bhan Prasad, an Indian writer and activist, was once the worst kind of socialist. According to a profile in the New York Times, he had been the kind of Maoist revolutionary who “carried a pistol and recruited his people to kill their upper-caste landlords.”

Now Prasad says the best way to lift low-caste members of society out of poverty is to increase economic freedom, let capitalism flourish. He accuses hardcore leftists of “hatred for those who are happy.”

Prasad is conducting a survey of India’s untouchables to learn about the impact of the economic liberalization that has been underway in India since the early ’90s. His survey finds that they are less likely to be confined to the traditional jobs of their caste, like skinning animals. And that they enjoy more social privileges than they once did.

The Times reporter advises that the results of greater economic freedom are uneven, that many untouchables are still mired in poverty while members of the upper caste still possess great advantage. Not very surprising, eh? You can’t expunge decades and centuries of bad policy and entrenched prejudice with a snap of the fingers.

On the other hand, if you want to bring millions out of grinding poverty, the abundant wealth created by capitalism sure comes in handy. Socialism will keep them poor just fine.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Unintended Consequences!!!

Here’s a revelation: A story headlined, “Bailout funds being spent in ways Congress never foresaw.”

What? Our omniscient congressmen failed to forecast the fate of their latest multifarious munificence?

You know, whenever I myself spend hundreds of billions on random questionable socialistic takeovers of the economy, I always demand an itemized account of exactly what I will get in return. Always.

It seems that the $700 billion just authorized by Congress is not only being spent on buying up troubled mortgages but is changing into a “broader bailout of all sorts of troubled businesses.” Some banks used the money to buy other banks instead of to “spur more lending.” And other recipients are paying dividends to stockholders.

Apparently, various central planners of our economy expected those receiving the money to use it in more publicly spirited fashion.

Such caviling ignores the real problem, which is more basic. You can’t cure the effects of gignormous debt creation and gignormous subsidizing of unwise enterprises with even more gignormous debt creation and gignormous subsidizing.

If massive intervention in markets caused the economy to curdle, roll back the massive intervention. Let investors take risks with their own money.

But don’t get drunk all over again, faster and harder, and expect that this time there won’t be any hangover.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets insider corruption nannyism too much government

The Boomers’ Bust

Remember when Bill Clinton ascended to the presidency? There were hurrahs. At last the Baby Boom generation had its own president!

We’ve gone through another Baby Boom president, and now we — and I’m talkin’ ’bout my generation, here — have our very own economic bust. Call it the Boomers’ Bust.

John Kass, writing in the Chicago Tribune, notes how different things look for Boomers, now. “In the ’70s,” Kass writes, “the slogan was ‘Do your own thing.” But today’s slogan might be ‘Washington, please save us.’”

Kass attributes some of the difference merely to age. When we were young, we took risks. Now that we’re older, we simply want to keep our houses and our cars and our TV sets, and our retirement plans.

The ominous marker in all this is the transfer of power. In our desires, demands, for security, we’ve given up a lot. Kass says we are giving up “liberty for all” and exchanging it with “power in the hands of a few.”

We can see it is who gains most: people and corporations on the inside track. But, as Kass points out, look who loses: “The casualty will be the entrepreneurs, those on the outside. . . . Such men and women will be on the outside for decades now.”

Since it was entrepreneurs who accomplished the most enduring good during the last 40 years, this will be tragic.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Socialism Fails . . . in Hawaii

We may have dismal years ahead of us. Democrats ruling Congress while Barack Obama, Mr. Redistributionist, will preside over an attempt to move in lurch step to massive new amounts of spending and taxes.

I write these words before the election, so maybe by the time you hear them, the electorate will have proved me wrong. But, hey: Under a McCain administration the federales would still not likely shy away from big government insanity.

There is, however, hope. When wishful thinking slams head-on into practical reality, sometimes we take stock. Sometimes we even say things like, “Know what? This is dumb and destructive. Let’s stop.”

We saw this in the 1980s and ’90s with the fall of the Berlin Wall, the collapse of the Soviet empire, and the turn toward freer markets in many former Soviet or other tyrannies (and near-tyrannies) around in the world.

And we’ve just seen an example here in the states, in Hawaii. There the state is ending its universal health care plan for children. Why? Because it was getting too expensive.

A government doctor in Hawaii named Kenny Fink reports, “People who were already able to afford health care began to stop paying for it so they could get it for free.” He adds that that this was not the purpose.

Of course not. Socialism is never supposed to kill economic incentives and self-responsibility. It just always does.

This is Common Sense. I’m Paul Jacob.