Category: free trade & free markets

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First Amendment rights free trade & free markets

Elon Musk Is Serious

Elon Musk, Twitter

Billionaire Tesla and SpaceX entrepreneur Elon Musk is showing the world how capitalism reforms wayward companies — like Twitter. 

It is done from within the system.

By stock ownership.

Becoming Twitter’s top stockholder — right after Musk told the Babylon Bee he just might have to buy Twitter to reform it — surely demonstrates serious intent.

But Twitter honchos have stressed that the mere advent of Elon Musk portends no major changes, a hint of things not to come. 

Moreover, a restriction on how many shares board members may purchase meant that had Musk joined Twitter’s board, he’d have been unable to ramp up the pressure for reform by becoming an even bigger stockholder.

So Musk chucked his original plan to join the board and decided, what the heck: If I do need to buy Twitter to fix its anti-speech policies, I better outright buy it. He has reportedly offered $43 billion.

He says: “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe.” But he now realizes that the company in its current form will never be that platform. 

“Twitter needs to be transformed as a private company.”

A week ago we asked, “Will Elon Liberate Tweeting?”

We’re still asking. Maybe the current owners love banning disagreement with themselves too much to give it up. 

Someone should tell them that are worse things to sell out for than open discourse and freedom of speech.

This is Common Sense. I’m Paul Jacob.

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Production, It’s a Gas

Elon Musk

Is this a news story?

“Electric-car baron Elon Musk calls for increasing U.S. oil and gas [production] to combat Russia.”

It’s news because of Russia’s invasion of Ukraine (and because gas has gotten awfully expensive) and because Musk is a major industrial figure. But a businessman calling for deregulation of an industry — is that also headline-worthy stuff?

Unfortunately, yes, given how businessmen so often want liberty for themselves along with ever-expanding restrictions for competitors (or the same restrictions for everyone as long as competitors end up getting hurt more).

I want a world in which we can make no sense of the word “but” in this opening paragraph:

“Tesla may be the world’s leading seller of plug-in electric vehicles, but CEO Elon Musk wants the U.S. oil-and-gas industry to ramp up production.” 

“But”?

Musk’s statement-by-tweet doesn’t help: “Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures.”

These words are not super-clear about what Elon Musk believes the government’s attitude should be toward markets during non-extraordinary times. War or no war, government policies safeguarding markets should not be resorted to only as emergency measures. No matter how much some may welcome sustained efforts to hobble an industry.

It’s rare that our businessmen clearly enunciate the principles of free enterprise that they are thought themselves to practice. We’re lucky if we get a tendency in that direction. 

I guess that’s better, at least, than a fervent statism that seeks to wipe out all economic freedom all the time.

This is Common Sense. I’m Paul Jacob.

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deficits and debt free trade & free markets national politics & policies too much government

Inflation Evasion…Depression

consumer price index, inflation

Going into the lockdowns and bailouts, a consensus of politicians and their court wizards, the economists, had belittled the specter of inflation.

Nowadays, when folks use the term “inflation,” they really mean upward movement on the consumer price index (CPI). Some economists, who have a sense of history,* reserve the word not for price level increases, but for increases in the supply of money. And the two concepts are tightly linked. 

But a whole lot of people seek to blame CPI rate increases on anything but monetary policy, as Veronique de Rugy notes in an article at The American Spectator.

“Theories for why we shouldn’t worry abounded,” de Rugy writes. “It was caused by a base-effect price increase, supply-chain restraints, a drought in Taiwan — everything but the Fed’s expansionary policies and Congress’ overspending, in part because some of these experts had cheered for these actions all along.”

And then inflation came back.

Big time.

While expressing some humility and an unwillingness to make predictions, de Rugy insists that “the amount of money printed, borrowed, and spent during the last few years led to a one-time price level rise, and we may have a way to go until we are done.” 

She also insists that the Pollyanna phrase “transitory inflation” is no comfort: “inflation was always going to be transitory. Even the inflation of the 1970s ended in the ’80s. What mattered is whether transitory inflation meant a few weeks, months, or years.”

And, I cautiously add, how de-stabilizing it is. Consumers rightly worry about rising prices, but inflation doesn’t hit all sectors the same. Credit expansion leads to imbalances that are hard to correct. 

And the correction is “depression.”

This is Common Sense. I’m Paul Jacob.

* Including the history of their own discipline. Readers of Austrian economists such asF.A. Hayek get a better sense of past debates than from other economists.

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Common Sense free trade & free markets general freedom property rights responsibility

Farming Is Fundamental

garden, food, freedom

If you live in Maine, you may now grow your own food. The right to do so has been safeguarded in the state constitution.

If you have the right to life and to sustain your life, surely you have a right to farm. As we all know, though, governments regularly find excuses to interfere with all kinds of peaceful activities.

So this past November, Maine voters passed a constitutional amendment authored by Rep. Billy Bob Faulkingham (whose energetic campaigns for freedom have previously caught Common Sense notice) and proposed by the legislature. 

Maine’s Right to Food Amendment makes clear that “All individuals have a natural, inherent and unalienable . . . right to save and exchange seeds and the right to grow, raise, harvest, produce and consume . . . as long as an individual does not commit trespassing, theft, poaching or other abuses of private property rights public lands or natural resources in the harvesting, production or acquisition of food.” (So there’s no California-style de facto “right” to loot.)

Foes of the amendment worry that it will enable people to bypass regulations.

Let’s hope so. 

Don’t we want the new law to ban governments in Maine from banning agriculture for the sake of “esthetics,” protecting Big Milk, or any other rationalization for foiling farming on a person’s own property?

And for the idea to spread to the other states, where far too often the scales of justice don’t properly consider the citizen’s right to produce food against the bureaucrat’s regulations frustrating same. 

This is Common Sense. I’m Paul Jacob.

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Unions Must Stop

labor union, California

Golden State labor organizers want to be able to trespass on the property of companies to recruit new workers. But companies don’t want their operations periodically disrupted by trespassers.

Typical kind of political disagreement. One party wants its rights to be respected; the other wants to violate those rights.

That was pretty much where things stood in the Golden State until the California Supreme Court’s 6-3 decision last summer, which invalidated the relevant provision of the California law that had empowered unions to disrupt business for hours a day for up to a third of the year.

Let me repeat that: for hours a day for up to a third of the year.

The petitioners in the case were Cedar Point Nursery, which produces strawberries, and Fowler Packing Company, which produces grapes and oranges. Pacific Legal Foundation pursued the litigation on their behalf.

On September 1, a California district court followed up. In light of the high court’s decision, the district court ruled that the state can’t enforce union access without “just compensation” to property owners for temporarily taking their property.

This seems like an unnecessary and contradictory hedge, a misunderstanding of the context in which just compensation for government-authorized taking of a property for public use properly applies (if ever).

But, practically speaking, the rulings mean that California businesses have now escaped at least one of the many hassles that are encouraging so many to flee the state.

PLF attorney Wen Fa says that agricultural businesses in California can now function “without the threat of unions trespassing on their property and disrupting their workplaces.”

This is Common Sense. I’m Paul Jacob.

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Subminimal Morality

Matt Thibodeau

He’s been at the job fourteen years. Congress may kill it.

Matt Thibodeau has disabilities that severely limit how productive he can be and thus how much he can contribute to the bottom line of his employer, Associated Production Services.

Under a longstanding exception to the federal minimum wage, Matt is paid $3.40 an hour for tasks like shrink-wrapping and assembling packages. The rate makes his employment feasible. (The current federal minimum is $7.25.)

Some congressmen want to scrap this exception to the mandatory minimum, calling it unfair and “out of date.”

“I felt like they were being targeted because they couldn’t speak for themselves,” says Matt’s mom, “and so that made us parents even more determined to speak for them.”

What’s out of date, or was never justified to begin with, is Congress’s federal minimum wage regulation.

Any mandatory minimum wage discourages employers from hiring persons not yet productive enough to justify the cost of being employed at the dictated minimum. It prevents low-skilled workers — on the outs of the economy — from getting a foot in the door.

Some employees initially paid only a few dollars an hour will soon improve their productivity and earn a higher wage. Others, like Matt, simply cannot advance further but can provide steady, conscientious labor within the compass of their abilities.

That’s fine. Each party to such an arrangement benefits. And his work enables Matt to be productive and valued, which is tremendously important to him. 

As it is important to all of us.

This is Common Sense. I’m Paul Jacob.

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First, Fire All the Freelancers

freelance, law, Congress

Congress is about to make the lives of an awful lot of people an awful lot harder.

So what else is new?

But the legislation in play does seem new — in suddenness and scope. 

It would impose massive newfangled regimentation on how we make a living. And it would kill the livelihoods of millions of people.

I refer to people who do gigs and freelance assignments for a living. One might ask why Democrats have it in for this kind of worker. Is it to appease unions? Is it the result of the same ideological forces that drove Karl Marx to despise the professional classes, needing to turn everyone into a prole? 

After all, this anti-freelancer agenda is not new. Similar legislation, called AB5, was tried a few years ago in California, instituted at the behest of activists eager to reduce competition with union work and remove chances for non-9-to-5 ways of making a living.

The premier target was ride-share companies Uber and Lyft. But many were caught in the net. AB5 created havoc throughout the state. Even socialist freelancers hated its mass murder of options and opportunity.

AB5-style congressional legislation to outlaw gig or freelance work except under very restricted circumstances is now being discussed in the U.S. Senate after having passed the U.S. House. It would also give unions many ugly new weapons to use to impose themselves on employees and employers.

In California, AB5 was mostly repealed by a citizen initiative.

Will there be a national citizen initiative to also promptly repeal the Protecting the Right to Organize Act? Unlikely, since Americans currently lack the right to enact national citizen initiatives.

This is Common Sense. I’m Paul Jacob.

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Embargo Socialism?

Cuba, communism, socialism, freedom, slavery

As the people of Cuba have revolted, this month, taking to the streets in huge marches, complete with waving of American flags, leftists in America — who love socialism and hate the Stars and Stripes — have been put in an awkward position. 

The Biden administration, in its continual prostration before progressives, initially attributed Cuban unrest to lack of COVID vaccine access. But then leftists began blaming the United States’ embargo for that and for Cuba’s sorry economic mess, blaming the U.S. as the cause of Cuban misery. 

Not Cuba’s Castro communist government! 

The problem is U.S. foreign policy, or so the memes assert. Some claim that the embargo amounts to a blockade of all international trade with Cuba.

Is this true?

“Embargo is the official term used by the U.S. government to describe the sanctions on Cuba,” Politifact explains. “While the nuances in the U.S. embargo can make it difficult for foreign companies to trade with the country, there is no evidence that they can’t,” concluding with “We rate this claim False.”

Indeed, other popular memes show that the U.S. is the only country on the planet not trading with the communist-run tyranny due south of Florida.

More interesting is the clarification of the embargo by Senator Marco Rubio. “There’s only two embargoes, here: the embargo against government-owned companies and the embargo that the Cuban regime imposes on its own people.”

It is entirely legal for Cubans and Americans to trade, says Florida’s senior U.S. senator. But the Cuban tyranny won’t let them.

All my life the U.S. has been engaged in an embargo against Cuban socialism. Against slavery. Against a government at war with its people. 

It has not yet “worked,” but I know why Cubans wave American flags.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies subsidy

Unemployed or Misemployed?

couch potato, Covid, stimulus, welfare

“Now Hiring” signs are up everywhere, especially on the windows of restaurants and other retail businesses.

But those signs aren’t disappearing.

Lots of jobs are left open.

No takers.

Week after week.

The job recovery that President Joseph Robinette Biden Jr. says he has placed his fabled “laser-like focus” upon, has been disappointing, to use the words of Washington Post columnist Catherine Rampell.

Oops, make that “extremely disappointing.”

“Economists and analysts had been expecting around a million jobs to be added on net in April,” Rampell wrote last week, “given the rising share of vaccinated Americans and relaxation of restrictions on business. Instead, employers created a measly 266,000 positions, the Bureau of Labor Statistics reported Friday. Job growth for March was revised downward, too.”

This didn’t come out of nowhere, as another Washington Post columnist made clear a few weeks ago. “Many employers, especially restaurants and small retail businesses, are having a hard time finding workers,” explained Henry Olsen. “This is likely the result of trends in covid-19 vaccinations and the generous unemployment benefits that were expanded due to the pandemic.”

Normally when talking about employment and unemployment, we are tempted to put on our economist caps and talk about supply and demand, marginal productivity, monetary policy, etc. But most commentators seem to be honing in on the ultra-obvious: pay people to stay home, they tend to stay home.

Indeed, thinking of the generous unemployment benefits which the U.S. Congress has bestowed upon the country as “stimulus,” we should realize that paying people to stay at home is like hiring them for the cushiest job imaginable. No worker shortage, as many suggest, but malinvestment in the wrong “jobs.”

And thus the opposite of “stimulus.”

This is Common Sense. I’m Paul Jacob.

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From Socialism to Fascism

Venezuela, socialism, fascism

Democratic socialism might seem all fun and games . . . right up until one is forced to choose between democracy and socialism. Those countries that choose the latter, like Venezuela, lose both prosperity and democracy, and then things get really bad.

But what happens when such a society’s dictator wises up?

“Bankrupted by Socialism, Venezuela Cedes Control of Companies,” Fabiola Zerba reports for Bloomberg. “Saddled with hundreds of failed state companies in an economy barreling over a cliff, the Venezuelan government is abandoning socialist doctrine by offloading key enterprises to private investors, offering profit in exchange for a share of revenue or products.” 

If that last sounds like less than full privatization, and unnecessarily cumbersome, it is. “Dozens of chemical plants, coffee processors, grain silos and hotels confiscated over the past two decades have been transferred — but not sold — to private operators in so-called strategic alliances. . . .”

“Strategic alliances” sounds ominously . . . fascistic.

This is not gratuitous, for, as Peter Drucker explained, “Fascism is the stage reached after communism has proved an illusion.” And it is definitely not directly towards “free markets” that Venezuela now moves. Dictators and ruling juntas don’t like free markets. It makes them less integral to the wealth extraction process. 

And wealth, in their view, needs to be extracted!

It gives meaning to their lives.

Jon Miltimore, in an article at FEE, also uses the f-word, and quotes my friend Sheldon Richman’s definition: fascism, noun : “socialism with a capitalist veneer.”

Really moving beyond 20th century mistakes would entail reviving actual free markets. Not “so-called strategic alliances.”

This is Common Sense. I’m Paul Jacob.

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