Category: national politics & policies

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folly free trade & free markets national politics & policies Tenth Amendment federalism too much government

Derailing Washington’s Train Fixation

The great age of trains — the 19th century — spawned a few amazing political careers, not excluding the railway lawyer, Abraham Lincoln. Many major railroads depended on moving politicians first, earth and iron second.

More than ever, today’s passenger rail lines are creatures of the state. Amtrak loses money, and could only be successful as a private operation were politicians able to let its unprofitable lines go.

Congress insists, instead, on putting up more money-losing railways in as many places as possible. President Obama even tried to get a bullet train put through between Tampa and Orlando, despite the fact that the two Florida cities were too close to each other for a super-fast train to make any sense.

Worse for the bullet was the politics.

In 2000, Floridians had voted in high-speed monorail; in 2004, they voted in greater numbers to kill their own project. Voters realized that, with politicians in charge, railroad projects tended to go runaway.

Perhaps that helped convince Rick Scott, the new governor, to reject the federal government’s offer to pay $2.4 billion of a $2.6 billion bullet train. The billions of “free money” that the Obama Administration promised began to seem, well, costly.

So, of course, the federal government sued. In early March, a Florida court ruled that the governor did indeed have the power to tell the feds to play with trains elsewhere.

A minor victory for railway sanity. A major victory for federalism.

This is Common Sense. I’m Paul Jacob.

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national politics & policies

Spain Slows Down

Spain has reduced its speed limit, from 120 kmh to 110 (about 68 mph). So of course some are asking whether the U.S. should similarly put on the brakes.

It’s ’70s déjà vu: OPEC was throwing its cartel weight around, Nixon responded with wage and price controls, which led to long lines at gas stations. And, for the first time, the federal government cajoled states to reduce highway speed limits to 55 mph.

We still argue about the results. Freeway deaths went down, to hurrahs.

But, forced to travel 55 or thereabouts, more and more drivers opted to drive the secondary roads, roads less capable of handling increases in speed and congestion. Traffic fatalities there went up.

Most obviously, we saved gas but wasted time.

If you are narrowly focused on one thing — gasoline used, in toto — you are unlikely to care. But wasting people’s time comes with many social costs, from fewer hours spent with kids to more hours driven drowsily. So a number of deaths by speed were swapped for a number of deaths by fatigue.

Right now each of us can save gas — by driving less, or slower, or trading in the commuter car for a motorcycle. But each of these comes at a cost, with trade-offs ranging from lost productivity to what for some would be a net loss in safety.

Any attempt to force such trade-offs as policy warrants careful thought, a reasonable understanding of all the costs.

This is Common Sense. I’m Paul Jacob.

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crime and punishment national politics & policies U.S. Constitution

Indefinite Detention, Definitely Wrong

“No western government has ever claimed the power to do this,” said Judge Andrew Napolitano, on Fox’s The Plain Truth. “Not the King of England, not Hitler, not Stalin, not even the Russian and Chinese Communists.”

Hitler comparisons are a dime a dozen these days, but Napolitano was not referring to something minor. He was talking about the power to hold someone for the whole of his or her natural life, even after being acquitted in a U.S. court of law.

By a jury.

Yes, on March 7, 2011, Barack Obama, President of the United States, signed an executive order detailing how detainees will be held. Key word: “continued” — which is code for Indefinite.

The president’s supporters squirmed. Obama had promised to close the Guantánamo Bay facility during his campaign. On AlterNet the story was covered as a “step forward.” The Washington Post, on the other hand, quotes Republican Representative Peter T. King saying the order vindicates George W. Bush, whose administration had established the practice of indefinitely holding suspected terrorists at the site.

The order does affirm the right of habeus corpus for detainees. But its aim is to merely provide a review of cases. It doesn’t question “the executive branch’s continued, discretionary exercise of existing detention authority” — which is what rightly bothers Judge Napolitano.

The order is legalese; non-lawyers may nod off. It’s hard to see the Hitlerian element.

But that’s what the “banality of evil” is all about.

This is Common Sense. I’m Paul Jacob.

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

Life, the Universe, and Everything

The answer is 42.

The question? Not Douglas Adams’s Ultimate Question concerning “life, the universe, and everything.” Instead, it’s the answer to the question, “How many mandates does the State of Oregon place on the medical insurance packages Oregonians are allowed to buy?”

Forty-two.

The number is far too large — and yet the number will likely increase this year, courtesy of the state legislature, despite the fact that the current mandates raise the cost of medical insurance for Oregonians.

Steve Buckstein, speaking before the state’s House Committee on Health Care, for-instanced Iowa, which sports 16 fewer mandates. The state has lower percentages of uninsured folks and lower premiums than in states with higher numbers of required services.

Buckstein, a policy analyst for Cascade Policy Institute, was arguing for HB 2977, which would allow Oregonians to purchase medical insurance from other states. This would add competition to the current highly over-regulated market.

Buckstein shouldn’t have to do this. The purpose of the federal union was to create a vast free trade zone. Misguided state mandates such as the ones he’s fighting rest upon prohibiting state citizens from buying outside the state, which runs up against the grain of the Constitution. For too long Congress has exempted the medical insurance industry from the correct application of the Commerce Clause, leading to a crippled industry and opening the way for disastrously unworkable ideas like, well, “Obamacare.”

This is Common Sense. I’m Paul Jacob.

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

Stop the Mortgage Madness

The New York Times wonders how “home buying [might] change if the federal government shuts down the housing finance giants Fannie Mae and Freddie Mac.” Despite vague agreement that misguided government policy somehow encouraged short-sighted, irresponsible conduct, many want government to keep it up.

It’s supposedly “well understood” that Fanny and Freddie “misused” government’s support to back “millions of shoddy loans.” Shoddy how? Shoddy because awarded to high-risk debtors on terms impossible without the government’s easy credit, subsidies, regulations, exhortations and bailout net. Many of the loans would not have been made by creditors obliged to consider not only potential profits but also all the actual and potential costs, without government interference.

In the article’s very next paragraph, however, we learn that although the consequences of “misused” government support for untenable loans are now “well understood,” there’s a “much more divisive question” now in play: “whether the government should preserve the benefits that the companies provide to middle-class borrowers, including lower interest rates, lenient terms and the ability to get a mortgage even when banks are not making other kinds of loans.”

Huh? You mean, many politicians and beneficiaries of government largesse are “divided” over whether a policy of destructively encouraging irresponsible conduct should be clung to with only cosmetic, if any, changes — even though this policy sank the economy?

Scavengers picking carcasses may not care about the long run. But the rest of us should.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Unkinder Cuts

The Republicans’ proposed cuts to the federal budget are called “deep” in Washington. So deep that Democrat Sen. John Kerry called them terrible, and Illinois Senator Dick Durbin protests that “Republicans are unfairly and unwisely placing the burden of spending cuts on domestic programs. Durbin tells Fox News Sunday he’s ‘willing to see more deficit reduction, but not out of domestic discretionary spending.’”

The Democrats have offered, instead, a shallower set of cuts, of $6.5 billion from domestic spending, hardly a tenth of what the Republicans offer.

But what the Republicans offer is only 5 percent of the budget deficit. Not the budget, mind you, just the Godzilla-sized deficit.

I’m curious where Durbin wants to cut. He’s offered no reduction in domestic “mandatory spending,” which is made up chiefly of Social Security, Medicare, Medicaid, and interest on the debt. Barring repudiating the debt, where would he attack the budget?

That leaves one huge hunk open for paring down: war spending. But realize that shutting down our entire military, zeroing it out, wouldn’t completely close this deficit. To make substantial Defense Department cuts, we’d have to extricate ourselves from wars abroad or pull our troops out of Europe and Japan and Korea, etc. All things I think we can, should and must do.

Talk is cheap, and awfully vague. “A terrible idea”; “unfairly and unwisely” . . . as if our current budget mess wasn’t the result of a thousand terrible ideas . . . and unfair and unwise spending galore.

The Republicans’ proposed cuts are disappointing. The Democrats’ objections? Witless.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Fine-Tuning the Shackles

Loathe handcuffs and leg irons? No problem. We’ll adjust the restraints slightly. Shave a gram off the weight. Paint them a new color. And throw away the key.

Feel liberated?

Nobody in a chain gang would be fooled.

But the Obama Administration expects phony “concessions” in the implementation of last year’s Patient Protection and Affordable Care Act (“Obamacare,” for short) to be treated as a sign of generous and reasonable compromise. The president supports an amendment to the health care law that, according to the New York Times, would “allow states to opt out of its most burdensome requirements three years earlier than currently permitted.”

If you dislike the program’s taxes and mandates, which after all constitute Obamacare’s most burdensome requirements, you’d approve. Right? All we need do is move in 2014 to some state that has opted out . . .

Not so fast. The state programs would have to cover just as many people and be just as “comprehensive and affordable” as the federal program. How to do this except by forcing people to participate?

The amended legislation would also allow states to establish single-payer systems in which the state government is the only insurer of health care. Compromise?

As Michael Cannon observes, “President Obama’s move is not about giving states more flexibility. It’s about moving the nation even faster toward his ideal of a Canadian- or British-style single-payer health-care system.” Which is where Obama and many Democrats have been hankering to go all along.

This is Common Sense. I’m Paul Jacob.

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

Why Such Slow Growth

Why such slow growth, after the federal government spent trillions to spark recovery?

Could it be that binges of throwing borrowed money around don’t matter? Spending money can’t be the solution if the problem is low or dark expectations of the future — and the spending of borrowed money feeds that dark view.

So what is the solution?

Well, take a step back. According to economic historian Robert Higgs, the key to economic growth is “private domestic business net investment.” And that’s down.

The peak occurred in 2007. The next two years saw the very opposite of growth, a precipitous fall in investments in private business. Last year, Higgs tells us, “net private investment increased smartly for three quarters, reaching an annual rate of $270 billion in the third quarter, then contracted sharply — by almost 47 percent — to $144 billion in the fourth quarter,” which is about a third of what it was at peak in 2007.

“Jobs,” which everybody’s thinking about, don’t come from spending as such. New jobs happen when people who save take their unspent money and invest it in production processes that they hope will yield goods that consumers in the future will spend money on.

So, private investment depends on positive expectations, a kind of rational hope.

What could government do?

Provide less reason for fear by putting a halt to doing things that elicit rational fear instead of rational hope.

Saner government, more productive economy.

This is Common Sense. I’m Paul Jacob.

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

Ride the Market Express

What’s the biggest expense for people in the lowest income bracket? Housing? Food? Medical care?

No.

It’s transportation.

Across all income levels, transportation comes in as the second largest expenditure. It’s a big deal.

Places to go; people to see. Often, it’s business to do. Our way of life depends on moving things and people around.

The Washington Post headlined a recent story, “Infrastructure is a priority, survey shows, but paying for it isn’t.” The implication? Americans want a free lunch.

That’s bad. But not true.

The Post should have made it clear that people are specifically skeptical about “paying for it” through higher taxes. The Rockefeller Foundation Infrastructure Survey found that over 70 percent of us oppose raising the gas tax, 64 percent are against adding tolls to existing highways, and 58 percent aghast at the thought of a tax on each mile driven.

However, the survey’s most interesting number was 78 — that’s the overwhelming percentage of Americans who want private sector investment in transportation projects. As consumers, we know we’re not responsible for all the costs and cost overruns involved in bringing most products or services to market. When we decide to purchase something we do pay some of these costs, but not before. Privatizing transportation would allow market forces like “price” and “consumer demand” to get better transportation to market, with investors — not consumers — taking the bulk of the risk.

Or we could let politicians and bureaucrats continue to make things worse.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Brew Stronger Tea

The Tea Party’s House Republicans have begun work, outlining a “plan to attack the federal deficit. The result: A proposal to cut $100 billion,” which amounts, in the words of Tom Mullen, on LewRockwell.com, to a mere “[s]even percent of the deficit.”

Disappointing. But wait, Mullen goes on, “if history has taught us anything, it is that this isn’t ‘just the beginning,’ with more substantial cuts to follow. This will be the high water mark as far as reduction in government spending is concerned.”

Mullen then offers an alternative venue: The states should unite in defiance of Washington, authorizing and defending citizens who withhold income tax payments until Congress balances the budget. He calls this “interposition.”

Radical, yes. But it will prove even less effective than our first House’s first foray.

Why? Many of the states are in just as bad a financial shape — or worse — than the federal union, and are presumably right now primping for federal bailouts.

What to do?

Brew stronger tea.

And throw it at Congress.

No state bailouts. The only thing the House can do, alone, is prevent more debt. Don’t raise the debt ceiling, and force President Obama and Democrats in the Senate to take budget cuts seriously — big budget cuts — now.

As I wrote a few days ago, let’s put the federal government onto a cash, pay-as-you go finance plan immediately. This would require, certainly, no small amount of courage from House Republicans.

Brew stronger tea.

This is Common Sense. I’m Paul Jacob.