Category: free trade & free markets

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Common Sense free trade & free markets insider corruption nannyism national politics & policies too much government

Welfare Kings

Bear Stearns. You gotta like an investment company with the word “bear” in it. If you are the kind of investor to go bullish over anything big, Bear, Stearns & Co., Inc., was BIG. For years its subprime mortgage biz made investors go all squirmy with bullishness.

They could pretend that the word “bear” was there for irony.

Call it prophecy, instead: The Bear Stearns bull lies on the ground, gored. Time to sell off the carcass.

The Federal Reserve has forced through a takeover deal, with J.P. Morgan buying out the dead bull. At a low, low price – though not nearly as low had the Federal Reserve stayed out. It’s another so-called capitalist bailout, an attempt to make a failure not seem so big.

This is not free-market capitalism, folks. This is big business welfare-statism.

In their normal run of operation, businesses negotiate the uncertainties of markets using tools like the profit-and-loss statement, aiming for profit. When they don’t manage this, they fail. Remember that term, loss?

Well, in today’s truly bipartisan political economy, the bigger you are the more scared our rulers get when you fail. So they prop up, as best they can, the biggest failures.

Forget welfare queens. The welfare kings are businessmen on the take from government. The losers are everybody else, as idiotic risks and bad business practices get propped up by government.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies

Ptolemaic Obama

I’m all for democracy, but I’m sure glad science isn’t put up for a vote. If geocentrism were up for political grabs, would governments be forced to go against Galileo again? After all, a plurality could say: See, the sun rises and sets — all the proof you need that the sun revolves around the Earth!

Just so with trade policy. There are few truths so firmly established as comparative advantage and the notion that with free trade we all gain.

But some see only the negatives, fearing competition. Who? Some businessmen, some workers.

Which is why Barack Obama has been making noises to renege on NAFTA.

Now, NAFTA is no free trade utopia. It’s a real-world political document that freed up a lot of trade, far from perfectly. Still, most of the complaints against it are nonsense.

Which is also why major Obama campaign consultants have whispered to Canadians that, no, Obama does not mean what he says. The candidate’s only saying nasty things about NAFTA to pick up extra votes.

I don’t know what Obama really believes. Right now he’s pandering to the protectionist Democrats. I am glad, however, not to feel such a need to lie.

And I am happy to affirm, once again, that the Earth revolves around the sun.

This is Common Sense. I’m Paul Jacob.

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

Nifty Doesn’t Cut It

Just because something can be done doesn’t make it economical to do. There is a big difference between physics and economics.

Take ethanol. It might seem nifty to grow the fuel for our cars and trucks like we do our food, in fields. But niftiness alone is not enough. Nifty notions, like un-nifty ones, must prove out in terms of all the costs involved.

A growing amount of research shows that ethanol doesn’t cut costs at all.

The most recent ethanol debunker I’ve come across is Robert Bryce, author of a forthcoming book with a provocative title, Gusher of Lies: The Dangerous Delusions of “Energy Independence.” Interviewed on ReasonOnline by Brian Doherty, Bryce offers some fascinating perspectives on energy economics and policies.

  • Did you know that for every gallon of ethanol, there’s at least 51 cents of subsidy?
  • Had you heard that corn-based ethanol produces more greenhouse gases than does our use of fossil fuels?
  • Have you stopped to think about all the water that raising more corn would require, and the increasing expense of getting gargantuan more amounts to farms in the midwest?

These and other considerations lead Robert Bryce to call current ethanol policy a “scam”and “the longest running robbery of taxpayers in American history.”

Some forms of bio-product may be more economically feasible than ethanol, like the biodiesel made from the unused parts of slaughtered animals. But we should wait to see how they cost out, too, without subsidy.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Stimulus, Response

Wall Street and the real estate markets have taken big hits, and so, to prevent a major recession, our president and representatives immediately began one-upping each other about a “stimulus package.”

And my thoughts go back to my classroom days. In biology.

There were these frogs, see. Dead frogs. On the table. Some of the kids would take a battery with some wires attached, and prod the dead frog, stimulating nerves to make the dead, half-dissected frogs jump.

Half the boys in the class thought it a hoot, half the girls thought it gross. Or maybe more than half.

Sometimes I think this is about as much as we ever were prepared for thinking about stimulus packages.

The economy is not a dead frog. it’s alive, and it’s received a shock. A better analogy might be to someone who’s received a blow to the head. You don’t necessarily immediately start applying shock therapy to get the person moving. Ask a nurse what to do. Most of the time, the body repairs itself. In due time. With care taken not to jar the person again.

But a blow to an ecosystem — like an economy — is more complicated than even some guy with a concussion. And, listening to the debate over the stimulus package, and then reading actual, astute economists consider the politicians’ proposals, and Iâ’m thinking . . .

Frog or no frog, the stimulus notions politicians prefer seem more directed towards influencing voters than getting the economy to jump back into action.

This is Common Sense. I’m Paul Jacob.

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Common Sense free trade & free markets

Guilt and Innocence in Oklahoma

Last October, two colleagues and I were indicted by Oklahoma Attorney General Drew Edmondson. Our crime? Helping a petition drive to limit the growth of government spending.

Supposedly, we three willfully violated an arbitrary residency requirement for signature gatherers.

As I’ve explained at the freepauljacob.com website, we acted in good faith to comply with Oklahoma’s unconstitutional regulation. If the prosecution succeeds – if we do get jailed for ten years – it would be a chilling precedent. And sadly, that’s the point: to intimidate citizens from making any future petitions of government that might inconvenience the political establishment.

That’s why a Steve Forbes editorial asked, “Has North Korea Annexed Oklahoma?” and termed Edmondson’s actions “thuggish.” A Wall Street Journal editorial called the AG’s prosecution “bizarre,” expressing fear it would make citizens “think twice before challenging political elites.”

Several Oklahoma legislators have called the prosecution wrong-headed and politically-motivated.

So, Edmondson has begun – you guessed it – a PR offensive. In an opinion piece for a local paper, he wrote, “The Oklahoma Supreme Court and the multicounty grand jury both independently found these defendants to be in substantial violation of Oklahoma law.”

But wait a second. Neither a court, nor the grand jury, have found us guilty of anything. As an attorney and the highest law enforcement officer in the state, Edmondson must know this.We get our day in court. See you there.

This is Common Sense. I’m Paul Jacob.

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

Powell Power

Should we be getting ulcers over the “digital divide” — the tragedy that not every single American already has a computer and Internet access?

Michael Powell, son of Colin Powell and the new chairman of the FCC, doesn’t think so. Shortly after he started his new job, the press asked him what he thought of the so-called digital divide. Powell said, “I think there’s a Mercedes divide. I’d like one, but I can’t afford it.”

Powell also said that he thought the very concept of a digital divide is a bit misleading. That’s because it “suggests that the minute a new and innovative technology is introduced in the market, there is a divide unless it is equitably distributed among every part of the society, and that is just an unreal understanding of the American capitalist system.” Powell noted that the end-of-the-line of that way of thinking is pure socialism.

Every time something new comes along you’d have to make sure everybody has it or nobody has it, which would kill innovation and economic improvement. Just so the politicians can have something to do. After all, every big new thing on the market is expensive at first and only the few can afford it. Then it gets cheaper and cheaper and more and more widely available.

That’s been the pattern with cars, plane travel and TV sets, and certainly with desktop computers and the Internet. It’s not a terrible thing; it’s a great thing. More power to Powell. Instead of pandering, he made it clear that in America you aren’t supposed to get everything you want, just what you earn.

This is Common Sense. I’m Paul Jacob.