Category: moral hazard

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Accountability folly free trade & free markets moral hazard national politics & policies porkbarrel politics

Super-​Subsidize Me

welfare, taxes, charity, subsidy, subsidize, shrimp, stadium, Tesla

“In American political discourse, those on the side of the sick, poor, and underprivileged tend to favor more federal government intervention,” writes Heartland Institute policy advisor David D’Amato at The Hill. He explains that many “see government as … rather like a charity …”

Sure, government can act charitably, except that its money isn’t given voluntarily, and the recipients are often not so needy.

Earlier this month, the stock price of electric car company Tesla, Inc. rose high enough to overshadow General Motors. That’s great news for billionaire Elon Musk, Tesla’s CEO. But an Investor’s Business Daily editorial noted, “[T]he company is heavily reliant on taxpayer support.”

Who benefits (in addition to Musk)? “A study published by the National Bureau of Economic Research found that 90% of electric car subsidies go to the top 20% of households,” the editorial stated. IBD added that it was “a lot of welfare-​for-​the-​rich for very little environmental benefit.”

In addition to funding advanced technology, American taxpayers have spent $6.7 billion over the last few decades to subsidize stadiums for wealthy sports team owners. The latest? In Clark County, Nevada, taxpayers forked over $750 million ($354 for every resident) to bribe — er, bring — the Oakland Raiders to Las Vegas. 

The ridiculous Minnesota legislation to feed $5 million in state funds to start two shrimp farms almost seems reasonable in comparison. Almost.

“Maybe growing shrimp in Minnesota is a great idea,” admits John Hinderaker of the Center of the American Experiment. “If so, the owners should do what other small businessmen do: either find investors, or get a bank loan.”

Government’s crony capitalism taxes the poor to give to the rich.

This is Common Sense. I’m Paul Jacob.

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Accountability moral hazard nannyism national politics & policies responsibility term limits too much government

Ida-​Heave-​Ho

Gov. Butch Otter, Idaho, veto, asset forfeiture, term limits,

“Is there any chance the vetoes can be overridden?” asked a reader in response to yesterday’s commentary on Idaho Gov. Butch Otter’s veto of two pieces of common-​sense legislation. 

It’s a good question, because the bill reforming civil asset forfeiture and the bill easing regulations that block employment in cosmetology both passed by wide margins. Unfortunately, the answer is NO. 

According to the Gem State’s constitution, the governor has ten days after legislation reaches his desk or, at the session’s end, ten days after the legislature adjourns to decide whether to sign or veto a bill. If he vetoes after adjournment, it cannot be overridden — unless the legislature comes back into session.*

Only the governor can call legislators back into session, which is exceedingly unlikely if a new session would entail a veto override. 

It turns out that Idaho is one of only six states where legislators are unable after adjournment to override a veto. Still, the problem’s simple enough to solve: legislators could propose a constitutional amendment changing the process. 

Senator Steve Vick did just that, in 2014 and again in 2016. But though his amendment garnered the two-​thirds majority needed in the Senate, the House never took it up. He plans to reintroduce it next year.

There’s another constitutional change needed: term limits for the governor. A 2015 poll found a whopping 84 percent of Idahoans favor such limits. Yet, legislators may be squeamish, knowing that those same voters (by that same margin) also want legislators term-limited. 

“Sometimes it is amazing,” Idaho Politics Weekly’s Bob Bernick explained, “how elected officials can just ignore the will of voters.”

This is Common Sense. I’m Paul Jacob.

 

* Gov. Otter also vetoed the legislature’s repeal of the state sales tax on groceries, the timing of which legislators are challenging in court.

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Accountability general freedom local leaders moral hazard national politics & policies property rights responsibility too much government U.S. Constitution

A Bad Haircut

Gov. Butch Otter, Idaho, asset forfeiture, licensing, veto

Eric Boehm over at Reason excoriated Idaho Gov. Butch Otter for giving libertarians “the double bird salute.” Boehm wondered if the governor, in vetoing two bills earlier this month, had been merely “trying to make libertarians mad.”

That’s not exactly fair. 

The two blocked bills, one reforming unjust civil asset forfeiture and the other easing pernicious regulation of cosmetology, did certainly appeal to libertarians. But they also appealed to conservatives and liberals. And both passed with bipartisan support.

House Bill 139 would have reduced the number of training hours for a cosmetology license and allowed folks to fix hair at special events like weddings without a license, etc. “The fact that many lawmakers, Republicans and Democrats, liberals, moderates and conservatives, are working together to advance legislation in the interest of economic opportunity and prosperity,” argued Wayne Hoffman of the Idaho Freedom Foundation, “is a thing of beauty for a profession that’s all about beauty.”

But beauty is in the eye of the beholder. Those who run cosmetology schools probably like more mandated hours and folks in the profession might wish for less competition. Governor Otter said as much, complaining that HB 139 was written “without input from interested parties or due regard for the health, safety and welfare of the public.”

Just how dangerous is a bad haircut? 

Putting safety in context, Hoffman explained that the current mandated hours of training for a cosmetology license “is more than is required to become an EMT in Idaho.” 

Gov. Otter vetoed HB 202, the civil asset forfeiture reform, at the behest of “law enforcement” — the very interested parties who gain from taking people’s stuff without bothering to charge or convict them of a crime. 

That makes no sense … according to Common Sense. I’m Paul Jacob.

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Accountability general freedom moral hazard responsibility term limits

Trouble Over Term Limits

Paraguay, term limits, democracy, General Alfredo Stroessner, Cartes’s Colorado Party

Americans are hardly alone in strongly supporting term limits. All over the world, people who care about limited government also care about limited terms for officials wielding government power. 

Especially the people of Paraguay, who remember all too well the dictatorship of General Alfredo Stroessner. He seized power in 1954, securing it with fraudulent elections and the arrest, torture and murder of thousands of political opponents, until being removed by a 1989 military coup. 

After that ugly 35-​year episode, strict term limits were established in the Paraguayan Constitution: one five-​year term for the president — no re-​election possible. 

Fast-​forward to the last few weeks, when the country’s Senate violated its own rules by holding a secret session — of which even the head of the Senate was unaware — and approved a constitutional amendment allowing re-​election of the president. Under Paraguay’s constitution, amendments can be enacted by the House and Senate — without a vote of the people.

Before the House could vote, however, protests erupted against the deeply unpopular term limits change. (A recent poll showed 77 percent of Paraguayans opposed the amendment.) Angry crowds battled police on the streets of Asunción, the capital, after trashing and setting fires in the National Congress building. Meanwhile, police killed one demonstrator when they attacked the Liberal Party headquarters, prompting Pope Francis to urge dialogue in this 90 percent Roman Catholic country.

Yesterday, President Horacio Cartes announced he would not seek re-​election in 2018, whether the constitution is changed or not.

The head of Cartes’s Colorado Party, which was associated with Stroessner decades ago, told Reuters that any change is now “practically impossible.”

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies responsibility too much government

Escape from New York

New York, Cuomo, college, tuition, Bernie Sanders,

“New York City is a walled maximum security prison,” exclaimed posters for Escape from New York (1981, R). “Breaking out is impossible.” 

Now, as part of new legislation giving “free college” to New Yorkers, politicians take the same high concept from the film and extend it to the entire state. 

What, you ask, does Escape from New York have to do with free college? 

First, it’s not actually free college, but only free tuition for state and city colleges.* And note that tuition costs currently run less than half the price tag of room-​and-​board, books and fees. Moreover, the freebie is only for students whose parents earn less than $100,000 annually, beginning in Fall 2017. In 2018, the threshold jumps to $110,000 and to $125,000 in 2018.*

Gov. Andrew Cuomo, a likely 2020 Democratic Party presidential candidate, pushed the idea of bestowing free tuition in his State of the State address months ago. He also brought in Vermont Senator Bernie Sanders, who dangled free college during the 2016 campaign and has now introduced legislation in Congress.

But the Empire State Legislature amended the bill. Knowing full well the economic climate created by their previous policies, these venerable solons feared New Yorkers might take the free tuition, earn a degree and quickly move.

To someplace with jobs, perhaps. 

So, the legislation requires student recipients of the free money to remain in the state – not escape – for as many years as they received the free moolah. 

How will they keep graduates from leaving? Well, the movie trailer hyped that, “The bridges are mined. The rivers are patrolled.”

And those who leave also must pay back the tuition as a loan. 

If caught.

This is Common Sense. I’m Paul Jacob. 

 

* There’s also a subsidy program for those attending private institutions of higher learning, if those colleges match the $3,000 the State puts up.

** New York state ranks 16th in median household income, at $60,850 in 2014. Therefore, the cap will deny this benefit to quite a few upper middle class and wealthier families.

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Accountability crime and punishment moral hazard nannyism national politics & policies property rights too much government

What’s Being Forfeited

asset forfeiture, banks, banking, IRS,TIGTA, Bank Secrecy Act

What do you call those who prey upon the innocent, illegally snatching their money? 

Thieves? Muggers? The Mob? 

Government.

Last month, the Treasury Inspector General for Tax Administration (TIGTA) issued a report on the Internal Revenue Service’s use of civil asset forfeiture against Americans accused — well, not accused … more like suspected … well, not actually suspected of doing anything wrong, but willy-​nilly deemed guilty without charge, judge, jury or conviction — of “structuring.” That’s depositing less than $10,000 in cash into a bank to avoid all the paperwork demanded by the United States Congress at that amount.

Congress passed the Bank Secrecy Act, making structuring illegal, supposedly to trip up drug traffickers and money-​launderers. But that is obviously a ruse, as the TIGTA report makes abundantly clear. The IRS is simply snatching money — they won’t tell us how much — right out of individuals’ and businesses’ bank accounts. 

Pity the cash-​oriented business that doesn’t accumulate at least $10,000 to deposit.

The TIGTA report highlights that an incredible 91 percent of the time, the IRS acted “against individuals and businesses whose income was legally obtained,” and whom the IRS did not suspect of criminal activity. Also, through the IRS’s process of thievery “the rights of some individuals and businesses were compromised.”

Why is the IRS using the law to pilfer from the innocent, instead of the guilty? 

As I explained Sunday at Townhall​.com, it is easier and more profitable to make “quick hits” against innocent businesses rather than devious criminals.

When those responsible for protecting the innocent from criminals, instead, illegally twist the law to victimize the innocent, it’s called tyranny. And what is forfeited is much more valuable than mere money.

This is Common Sense. I’m Paul Jacob.

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