Category: moral hazard

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Accountability crime and punishment folly moral hazard nannyism national politics & policies Popular responsibility too much government U.S. Constitution

Where the Beef Is

cheese, law suit, justice, McDonald's, hamburger, Florida, class action

In South Florida, two McDonald’s customers are suing the fast food behemoth for charging them for cheese they say they do not want.

“According to a class-​action lawsuit filed in Fort Lauderdale federal court on May 8,” informs the Miami Herald, “Cynthia Kissner, of Broward County, and Leonard Werner, of Miami-​Dade, say they have had to pay for cheese they don’t want on their Quarter Pounder sandwiches.”

Before you upchuck every last greasy, chemical-infused/​extra-​beef morsel of this story, let’s look at the facts:

The Quarter Pounder went national in 1973.

The fast-​food franchise used to charge extra for the cheese.

But “at some point” the junk food purveyor stopped “separately displaying these products for purchase on menus.” These days, only the Quarter Pounder with Cheese and the Double Quarter Pounder with Cheese are listed.

McDonald’s joints in Florida, at least, provide no discount for removing the cheese.

Rip-​off, say these two customers. How big? A $5 million injury! 

That’s what they are suing for.

It’s mad. The lawsuit, that is. You are not entitled to set the pricing and menu policies of stores you do not own. 

In a celebrated analysis of loyalty in markets, an economist revealed that consumers have a continuum of options, including “voice” and “exit.”

“Voice” is what you express when you argue your case in a family or a democracy — and fast food provisioners. Decent people will, if disgruntled, choose “exit,” driving down the street to a Wendy’s.

McDonald’s could rightly charge extra for withholding the cheese. 

That it doesn’t do so? Chalk it up to savvy. 

This is Common Sense. I’m Paul Jacob.

 

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Accountability crime and punishment folly free trade & free markets insider corruption media and media people moral hazard national politics & policies porkbarrel politics property rights responsibility too much government

Déjà vu All Over Again

housing, bust, financial, meltdown, Government-Backed Mortgages, jail, punishment, cause

One of the stand-​bys of the post-​2008 mortgage finance bust, at least from left-​of-​center policy mavens, has been to ask: why has no banker gone to prison? They played a game of fraud and got rich. What a protected class — Cronyism! Plutocracy! Capitalism!

The why is much easier to understand if you read up on Round Two of the aughts’ boom-​bust scenario, as in Prashant Gopal’s coverage in Bloomberg, “Getting Rich on Government-​Backed Mortgages.” Gopal spotlights a non-​bank mortgage broker, Angelo Christian, who is making a killing selling houses to people with horrible credit, just as happened before 2008.

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program,” Gopal writes. “It’s a sweet deal: He gets his nearly risk-​free commission. [His client] puts no money down. If things go south, the government ultimately bears the risk.”

So, should he go to jail?

Not really. He’s merely doing Congress’s bidding. 

Gopal notes that it is not banks that dominate this round. They are under too much scrutiny. But non-​banking loan intermediaries like Mr. Christian are swarming like flies on a cow’s behind.

There’s a problem in Gopal’s account though. “No one is saying the system is close to another collapse.” 

Well, plenty of people are saying that.

The Cassandras are just not being heeded.

Of course, they don’t know when the bust will happen.

They just know it will.

This is Common Sense. I’m Paul Jacob.

 

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Photo by Images Money on Flickr.

 

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Accountability crime and punishment folly general freedom ideological culture media and media people moral hazard nannyism privacy property rights responsibility tax policy too much government U.S. Constitution

Brave New Paternalism

Michael Bloomberg, tax, policy, nanny state, vice, social engineering, statist, technocrat

Michael Bloomberg is rich. He’s also in politics — a public health crusader.

And, for years, he “has personally funded and promoted all sorts of regressive taxes and regulations in an attempt to push people around,” the folks at Americans for Tax Reform tell us. “He uses the coercive power of the government to force people to live their lives as he sees fit.”

Onstage at a globalist event, One-​on-​One with Christine Lagarde — who is managing director of the International Monetary Fund — Bloomberg blurts out his approach to government policy regarding what he calls “those people.”

“If you raise taxes on full sugary drinks,” he says, “they will drink less and there’s just no question that full sugar drinks are one of the major contributors to obesity and obesity is one of the major contributors to heart disease and cancer and a variety of other things.”

Against the charge often made that such taxes fall heaviest upon the poor, he is forthright. Regressive? “That’s the good thing about them because the problem is in people that don’t have a lot of money.”

Notice that he is not talking about a public service campaign to help people learn how to drink (and eat) better. And he is not talking about removing all the government policies that have encouraged bad eating and drinking habits (as well as lethargy) — the government programs to encourage the overuse of high fructose corn syrup; the welfare state’s poverty trap that stifles life at the lower incomes; the subsidized consumption of food and drink — he wants to add another government program.

He can only see betterment by increased governmental bullying. 

This is Common Sense. I’m Paul Jacob.

 

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Michael Bloomberg, tax, policy, nanny state, vice, social engineering, statist, technocrat

Photo by Center for American Progress

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Accountability folly general freedom ideological culture moral hazard responsibility U.S. Constitution

China Marks Marx Anniversary

Karl Marx, communism, socialism, death, failure, China, Chinese, German city of Trier

The Chinese government has sought to honor the birth of Karl Marx (1818 – 1883) by giving a giant bronze statue of the social philosopher and pseudo-​economist to the German city of Trier, his birthplace. 

Agreeing that Trier and Marx should be thus honored, local officials shamefully accepted the donation.

Marx was a bad guy. His willfully destructive anti-​capitalist theorizing and polemics have been enlisted to enslave and murder many millions of people in the Soviet Union, China, Cambodia, Cuba and elsewhere. The story is told in works like Modern Times and The Black Book of Communism. One effective critique of Marxian ideas may be found in the second volume of Murray Rothbard’s History of Economic Thought.

We often hear that Communist implementation of Marxian theory poorly translates “real” communism/​socialism/​collectivism. No government unswervingly enacts all the ideas and prescriptions of a single intellectual founding father. But there is much in Marx’s volumes that openly demands the razing of the division of labor, profit-​seeking, and other requirements of civilization.

In one article, Marx scribbled that “there is only one way in which the murderous death agonies of the old society and the bloody birth throes of the new society can be shortened, simplified and concentrated, and that way is revolutionary terror.” There’s plenty more where this came from.

When a major nation-​state gives a town a statue, it’s hard to say no. But one needn’t accept it at face value. Install it on a base that lists the separate bouts of Marx-​inspired mass murder. Or use it as a target in paintball tournaments.

Or just place it in the local cemetery. Where deadly ideologies should go. 

This is Common Sense. I’m Paul Jacob.

 

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Accountability crime and punishment general freedom ideological culture moral hazard nannyism national politics & policies privacy too much government U.S. Constitution

Hooray for Congress!

right to try, treatment, healthcare, Rights, FDA, democrats, Congress, medicine, experimental,

When Congress behaves badly, I criticize. When it works well, I applaud. 

I’ve waited a long, long, long time to put my hands together in polite applause.

It happened yesterday. 

The U.S. House of Representatives passed a Senate bill, largely along party lines, to give those facing a terminal illness the “right to try.” That is, the right to try experimental drugs and treatments that haven’t yet been approved by the federal Food & Drug Administration (FDA). 

Of course, Congress doesn’t actually give us rights. We have always had the common law right — indeed, the human right — to freely seek a path to wellness when we are ill. 

From time immemorial. Even before the FDA.

So, this legislation was, more correctly put, a way to announce that the congressionally-​created FDA would stop blocking our freedom … provided we are dying and the government-​approved medical establishment has no more licensed hope to offer.

The bill now goes to President Trump. “People who are terminally ill should not have to go from country to country to seek a cure,” he declared in his last State of the Union, “I want to give them a chance right here at home.”

Democrats overwhelmingly disagreed. 

“This will provide fly-​by-​night physicians and clinics the opportunity to peddle false hope and ineffective drugs to desperate patients,” argued Rep. Frank Pallone (D‑N.J.).

Rep. Jan Schakowsky (D‑Ill.) likewise charged that the legislation “puts patients at risk by allowing the sale of snake oil.”

But of course these patients are dying. That’s already as “at risk” as it gets. Our right to live includes a right to try to live.

This is Common Sense. I’m Paul Jacob.

 

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Accountability folly free trade & free markets ideological culture local leaders moral hazard nannyism property rights too much government

Amazon’s Jeff Bezos Is …

Jeff Bezos, Amazon, Seattle, taxes, homeless tax, business

A half a year ago, when trying to make sense of the much-​publicized search for Amazon’s “HQ2” — a second headquarters city, away from Seattle — I concentrated on the subsidies that cities and metro areas were apparently throwing at Amazon.

It all seemed desperate, indecent.

But there was a story behind the story. Amazon has every reason to be looking for an escape route from the Evergreen State’s biggest city. 

The city’s leadership is nuts. 

“Seattle City Council members have finally released draft legislation,” the Seattle Times’ Daniel Beekman wrote last month, “for a new tax on large employers that would raise $75 million next year to address homelessness.”

The council blames the big companies for enticing workers into the city, thereby driving up rental costs and housing prices.

The tax would be on employee hours, would go into effect next year, and “in 2021, it would be replaced by a 0.7 percent payroll tax on the same category of companies,” explains the Seattle Times.

Now, if you tax something you discourage that something. That’s why progressives like sin taxes on sodas and fast foods. To discourage consumption. 

So when progressives seek to tax big producers, they are apparently trying to tax away the housing crunch by driving away big business.

Amazon reacted. It put a halt to an expansion project.

“Jeff Bezos is a bully,” said Kshama Sawant, the confessed socialist, speaking for the council. “I think we are in broad agreement on that.”

If that is her attitude, and that of the council — and the consensus of the city’s denizens — then what Amazon’s Jeff Bezos really is?

A “good businessman.”

This is Common Sense. I’m Paul Jacob.

 

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Photo by JD Lasica