Category: political economy

Categories
free trade & free markets political economy

Unconscionable Greed!

Bernie Sanders, Elizabeth Warren, price gouging, inflation

It’s easy to blame others for greed. And when prices rise, I suppose I can imagine being so upset that . . . well, if not my mind, Bernie Sanders’ mind . . . would become unhinged:

“Greed. Greed. Greed. While Americans are struggling at the pump,” the senator tweeted on Friday the 13th, “in the first three months of this year, oil and gas companies made over $41 billion in profits, more than double their profits from last year. The problem is not inflation. The problem is corporate greed.”

That’s Bernie Sanders for you. It’s not government profligacy or Federal Reserve monetary policy or the Biden Administration’s anti-fossil fuels agenda . . . or supply-line problems, persisting COVID-lockdown effects, or anything else.

Just greed.

But is greed somehow cyclical? Why were greedy corporations providing cheap gas a year ago and then able to raise it only under Democrats’ rule?

Alas, Bernie isn’t the only low-brow demagogue in the Senate. There’s Senator Elizabeth Warren pushing a new “price gouging” bill.

So, just as Bernie never answers “why is greed so successful at gouging now?,” how does Liz answer the burning question “how can we objectively define ‘price-gouging’?”

As journalist Catherine Rampell observes on Twitter, the senator’s definition in the bill is less than enlightening: “price-gouging” is “just pricing that is ‘unconscionably excessive.’”

Now that, Senator Warren, is unconscionably vague.

And incidentally, aren’t both senators on the record as demanding higher gas prices to usher in “green energy” to “save the planet”? This all seems unconscionably . . . deceptive.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Photo credits: Warren/Bernie/money

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
Accountability folly national politics & policies political economy

Whip Producers Now

inflation, shock

The Biden administration is siccing agencies like the Federal Trade Commission, Department of Agriculture, and the Federal Maritime Commission onto the producers of stuff who have recently dared to raise prices.

Stuff like gas. Higher prices at the pump must be an oil-company conspiracy.

It has nothing to do with (and don’t even think it!) governmental actions that impede production, including shutting down the Keystone oil pipeline on Biden’s first day in office or calling a halt to new oil leases on public lands. Etcetera.

Nothing to do with mammoth expansion of the supply of money and credit to facilitate trillion-dollar government spending sprees.

In case you hadn’t noticed, meat costs more, too. So obviously that must be the fault of malicious meatpackers. Rest assured that beef price inflation is utterly unrelated to pandemic-policy-induced labor shortages and delays.

Or to any recent increase in efficiency-impairing trucking regulations.

Same with sundry supply-chain problems, like the ships and crates piling up at ports. Greater consumer demand, new pandemic-induced screening protocols, union rules that prevent ports from operating 24/7 or improving automation — all irrelevant.

Must be. That’s the script from 1600 Pennsylvania Avenue, anyway.

But if companies can hike prices at will, ignoring whether regulations ease or obstruct production, why doesn’t the meat industry, for example, charge a thousand dollars per pound of flesh?

Well, we know why. 

Demand for a pound of ground beef would slide to zero, or close to it.

If only the government people knew! 

Or would stop pretending they don’t know. 

A consistent recognition of the laws of economics would sure make a great gift — in any season. Instead of bullying and making things worse, government could get out of the way.

This is Common Sense. I’m Paul Jacob.

PDF for printing

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
national politics & policies political economy too much government

The Slow Bullet

slow motion bullet, debt,

Modern government finance is like Russian Roulette . . . but with incredibly slow bullets.

We spend money. We create money out of thin air. We borrow it. We promise the Moon. We deliver rocks. With each action, we spin the chamber and pull the trigger. That slowround doesn’t immediately hit, so we do it again.

Calling the perennial deficits and ballooning debt a “predictable crisis,” Nick Gillespie at Reason writes that our federal government’s debt “is already choking down economic growth, but in the future, it could lead to ‘sudden inflation,’ and ‘a loss of confidence in the federal government’s ability or commitment to repay its debts in full.’” And worse: “‘Such a crisis could spread globally’ causing some ‘financial institutions to fail.’ That’s all according to the nonpartisan Congressional Budget Office (CBO), which has been warning Americans about the long-term consequence of the ballooning debt for years.”

This is an old warning. I have been talking about it for years, too. So have you. But once politicians start playing the game, it’s hard for them to stop. They see and we see the benefits, but that slow motion slug has yet to strike the target. 

Gillespie makes a better analogy than “slow bullets” (which don’t exist): “Like the coronavirus, the debt problem has the potential to seemingly appear out of the blue and turn our world upside down in a matter of weeks.”

Nassim Nicholas Taleb gained fame talking about “black swans,” major events we cannot predict. But he insists that the financial crisis resulting from government overspending is not a black swan. It’s predictable. We just do not know when.

Here’s a fourth analogy:

In free fall, you don’t feel a thing . . . until you hit the pavement.

This is Common Sense. I’m Paul Jacob.

PDF for printing

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
ideological culture political economy

Cash Machine Cachet

cash machine, ATM, money,

Shutting down capitalism almost worldwide may prove to be the grandest disaster of all time. Folks on the margin of poverty in poor countries are already starving. Though scads of people seem to think we could ride out a lockdown indefinitely just by cashing government checks, the problem is that if we don’t produce, we cannot buy and consume products. 

It’s not about money, or profits as such: “It’s the productivity, stupid!” 

Elon Musk put it this way: “If you don’t make stuff, there’s no stuff.” 

A “universal basic income” won’t help if the re-distributed money chases few-to-no goods.

So how did we come to believe that we can just shut down most business activity and still survive?

Maybe the idea seems plausible because many people already do not work to survive. As their numbers have increased, our civilization has forgotten that they survive upon the work of others. 

We guffaw at young children who, when their parents say something they want is too expensive, they innocently respond, ‘well, just go to the cash machine!’ But the more people rely upon checks and bank deposits from the government — for any reason — the harder it is to remember that the power to buy stuff doesn’t ultimately come from government. With taxation, redistribution and inflation thrown into the mix, even adults think of government as Cash Machine. 

And the Cash Machine as a model for the economy.

To fight a virus, the world has shut down production — as if we do not survive by producing goods in order to consume them.

Government has reduced capitalism — and us — to absurdity.

This is Common Sense. I’m Paul Jacob.

PDF for printing

cash machine, ATM, money,

Photo by Tax Credits

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
ideological culture political economy

The “Failure” of Capitalism?

bully, economy, Covid, corona virus, Wuhan, epidemic, pandemic,

“As the lock-downs come to an end,” writes economist Daniel Kian Mc Kiernan, “it will be expected by many — including many not on the political left — that the economy will pick-up at about where it was before the lock-downs.”

Mc Kiernan thinks a popular misconception will get in the way. 

Those who see the economy as “a kernel of processes that take inputs and produce outputs based upon purely technologic considerations” will let this techocratic model cloud their thinking. Viewing this “kernel” as producing not only “everything necessary to maintain itself” but also, and more importantly, a surplus that they treat as a zero sum affair — requiring the State to redistribute — they will regard the re-start as if a mere flipping on of a switch.

But the economy is not something to be un-plugged and plugged back in, and the lock-down super-quarantine was not a mere interruption of service. It was a huge blow that will demand uncountable adjustments. Those quite necessary adjustments may seem random, even wild, and because of this those on the “political left” will, Mc Kiernan predicts, do what they always do: “diagnose the failure to restore the economy quickly as ‘a failure of capitalism.’”

In other words, the bully knocks the victim down, stomps on him, and then taunts him for not getting up right away. 

Still worse: those taunts will become excuses for more kicking and stomping. And the flailing economy will be seen as all the more justification for more of the bully-boy Big Government policies that caused the “failure.”

This is Common Sense. I’m Paul Jacob.

PDF for printing

bully, economy, Covid, corona virus, Wuhan, epidemic, pandemic,

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
free trade & free markets national politics & policies political economy

Cure and Consequences

From the beginning of the panic-induced shutdown of much of what we call “the economy,” many of us were wondering if the cure might not become worse than the coronavirus disease.

The ramifications of the near-total curtailment of the production, processing and movement of goods and services? Potentially disastrous.

The notion that politicians and bureaucrats inhabit that sweet spot which allows them to distinguish “essential” from “non-essential” work activities? Dubious at best. 

It smacks of what F.A. Hayek called “the fatal conceit” and “the pretense of knowledge.” The consequences of the shutdown have from the first suggested a tragedy in the making.

On Tuesday, The Washington Examiner’s Emma Colton reported on a tweet: “Kentucky Rep. Thomas Massie warned that the United States could face food shortages due to the ‘brittle’ supply chain, bankrupting farmers and forcing them to euthanize livestock.”

Massie does not mince words: “We are weeks, not months, away from farmers euthanizing animals that would have been sold for meat/food. Also, fruits and vegetables are going to rot in the fields.”

The late psychiatrist Thomas Szasz liked to use a word applicable here: iatrogenic. Doctor-caused.

The insistence that President Trump follow every jot and tittle of advice from Dr. Anthony Fauci and the federal medical establishment may provide an object lesson on why we must not trust “doctors” and “scientists” to make policy alone.

They specialize.

And our commercial society (as Adam Smith called “the economy”) is the very opposite: a veritable cosmos of human interaction.

Which makes the politicization of medical doctoring potentially quite fatal, as Rep. Massie warns.

Just ask anyone who’s lived through Communism’s command economy.

This is Common Sense. I’m Paul Jacob.

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
ideological culture political economy too much government

Ex-Californians

Texas, California, democracy, migration, immigration,

California, “the U.S. state most synonymous with all varieties of growth — vegetal, technological, and human — is at the precipice of its first-ever population decline,” writes Derek Thompson of The Atlantic. And folks in other states like Texas and Idaho are none too happy. 

You see, the Californians fleeing are finding new homes elsewhere. Especially in Texas and Idaho.

Oddly, Mr. Thompson breezes by the biggest source of anxiety: ideology. “Texas Governor Greg Abbott issued a warning on Twitter to Californians moving to his state: ‘Remember those high taxes, burdensome regulations, & socialistic agenda advanced in CA? We don’t believe in that.’ The sentiment was echoed in various warnings in Dallas newspapers about the awful ‘California-ing’ of North Texas.” Thompson quickly moves on to interrogate how real the general exodus from the Golden State is.

Which is interesting — but much more important is the main worry about all immigration: will these new citizens vote to overturn the order that attracted them in the first place?

There is certainly anecdotal evidence that this can be a real problem.

Also not mentioned in the The Atlantic squib is just how messed up California now is.

What can be done? The idea humorously floated by an Idaho politician — a “$26 billion wall to keep out people moving from the Golden State” — is just a joke.

And secession/expulsion of the 23rd state in the union is not realistic, either.

What is realistic is for non-California politicians to float in the U.S. Congress a willingness to break up the state into separate pieces, creating at least two new states. At least then, Jefferson State citizens could put up with West California émigrés. 

This is Common Sense. I’m Paul Jacob.

N.B. There are very serious political problems of representation in California that breaking up could help fix, by increasing the number of legislators and minimizing the ratio between representatives and the people they serve.

PDF for printing

Texas, California, democracy, migration, immigration,

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
free trade & free markets political economy

Bitcoin to the Rescue

Bitcoin, cryptocurrency, Venezuella, freedom, privacy, cash, money

I own no Bitcoin; it’s not my thing. The blockchain concept Bitcoin is based upon seems clever, sure, but I often curse at my “devices,” so only my politics prevents me from full-blown Luddism. 

Besides, when I think “the people’s money” I don’t think “private fiat currency.” Which is what Bitcoin sure looks like to me.

But to quote from these very pages, “When times get tough, the tough . . . switch currencies.”

And times cannot get much tougher than in Venezuela right now. No wonder “many are turning to digital assets such as Bitcoin as an alternative to the Venezuelan bolivar,” writes Matthew Di Salvo for the BBC.

“Critics say Bitcoin and other cryptos — there are more than 1,600 globally — are unstable, use too much energy, and are used by money launderers or those wanting to buy illicit goods on the web,” Di Salvo explains.

These points need addressing. I’ll try:

  1. A wannabe money will be as unstable as investor demand. When actually used as money, though, we may expect more stability. And Bitcoin is deflationary, so it should be more stable than government money.
  2. As if our banks and ATMs don’t use energy!
  3. Used by bad people? Well, you can say that about cash. But if we get rid of cash — as many experts want to — you can kiss any hope for freedom goodbye.

Venezuelans, by turning to keeping “their money in a digital wallet in the form of Bitcoin, Litecoin, Dash or any of the others,” are grabbing at something much better than what their malign inflation-happy government provides.

It is a pity that the “free-market” alternative is called “crypto” — meaning secret.

Freedom is the world’s best-kept secret?

This is Common Sense. I’m Paul Jacob.

PDF for printing

Bitcoin, cryptocurrency, Venezuella, freedom, privacy, cash, money

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
free trade & free markets political economy Popular

Opportunity for . . . All?

licensing, license, permission, work, labor, regulations

Simple pleasures are the best. So are simple questions.

Senate Bill 2306 in North Dakota “would make it easier for spouses of military personnel to transfer their existing occupational licenses for use in North Dakota, provided they are in good standing and licensed by a reasonable entity,” explains Rob Port at his SayAnythingBlog.

Occupational licensing has exploded, covering a mere 4-5 percent of occupations 60 years ago, but nearly 30 percent today. That’s a serious hurdle for folks trying to break into the marketplace.

Over at the Foundation for Economic Education, economist Daniel Mitchell calls licensing a “win-win” for politicians and interest groups that “get to impose barriers that limit competition.” 

Not winning? Taxpayers and consumers, says Mitchell. “Or a poor person who wants to get a job.”

An Institute for Justice report released last November concluded that “licensing costs the American economy $197.3 billion” annually by “preventing people from working in the occupations for which they are best suited” and “forcing people to fulfill burdensome licensing requirements that do not raise quality.” Meanwhile, the health and safety benefits attributable to this licensing labyrinth seem scant.

A recent Grand Forks Herald editorial endorsing SB-2306 pointed to the state’s “more than 13,000 unfilled jobs, many of which require licensing,” arguing that “[o]ften, trailing military spouses are qualified to fill those openings, but because of the existing licensing process they are not able to immediately work.”

“[W]hy not make this sort of license reciprocity good for everyone moving into our state?” Mr. Port adroitly inquired.

Yes, Big Government: Tear down these barriers!

For all.

This is Common Sense. I’m Paul Jacob.

PDF for printing

licensing, license, permission, work, labor, regulations

See all recent commentary
(simplified and organized)
See recent popular posts


Categories
ideological culture political economy too much government

Socialism Doesn’t Work, But…

socialism, force, incentive, Occassio-Cortez

“Socialism” — we all want to be sociable, right?

Last week’s anti-socialist moment was not limited to the president’s promise that America would never go socialist, as I noted this weekend there was also Panera Bread’s abandonment of its quasi-charitable Panera Cares (“pay-what-you-want”) fast food chain.

Isn’t that a bit of a strange connection? Socialism is not charity. It’s bad because it is force through and through, not because it seeks to help people. 

Well, note that while Panera’s notion was the same as many socialists’, to help the poor. Panera’s method was to cajole, or “nudge,” the better-off to pay enough more to cover the costs of paying less. 

Kinda like ObamaCare, but without the force.

And without the force, it failed.

What Panera management discovered is that not only is it very hard to get the message across, it is almost impossible to set up coherent incentives to successfully alter consumer behavior. 

Getting incentives right is something that plagues all sorts of socialistic experiments, voluntary or coercive, within a capitalist society. 

Take Finland’s recent experiment with a Universal Basic Income (UBI). 

The idea of that nation’s centrist party was to take care of the unemployed beneficiaries’ basic needs so they could get back to work.

Well, those who received the basic income were happy enough receiving the moolah. Sure. But “there was no evidence from the first year of the experiment,” a report in Huffington Post admits, “that the scheme incentivized work.” Despite that, socialists in England are pushing for the UBI.

Socialism doesn’t work, and socialists would rather not work — except to advance socialism.

This is Common Sense. I’m Paul Jacob.

PDF for printing

socialism, force, incentive, Occassio-Cortez

See all recent commentary
(simplified and organized)
See recent popular posts