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free trade & free markets national politics & policies tax policy

State Violence in Vladivostok

While our president was finagling his way to support two out of three of the Big Three automakers, folk in Vladivostak were protesting Vladimir Putin’s new high tariffs on foreign-made used automobiles. As many as 6,000 protesters on Russia’s Pacific Coast took to the streets, some even calling for Putin’s ouster.

Used cars are a big deal on the eastern end of the Russian empire. Over 200,000 people in and around Vladivostok work on — or professionally trade — used cars. The used car business heavily undergirds the economy of the area . . . just across the East Sea from Japan. (I add this topographical note in case you forgot your grade school geography lessons.)

Not only did Putin insist on keeping the high tariffs, he sent in extra police to beat heads. The police attacked not only protesters, but journalists, too — without regard for nationality.

On the Sunday before Christmas, smaller protests were held around the vastness of Russia, including Moscow.

Don’t dismiss the tariff as “mere” economic policy — Putin sure doesn’t. One protester went on record, saying, “First, we have been deprived of our right to elect, now they are taking away our right to choose cars.”

An important lesson for America, too. Government policy skews our ability to choose. Favors to local business (whether by subsidy or tariff) decrease our ability to contract to get what we want. Which, often, includes imports.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

You Can’t “Give” Me What’s Already Mine

A mooching relative borrows $500 from you, wastes it all in a drunken spending spree, never pays you back.

Eventually, he loftily hands you a fiver.

He says, “I don’t even know why I give you this money, but I’m a nice guy. Use this gift to create jobs or something, okay?”

In response, do you a) Punch him in the nose; b) Punch him in the nose; c) Punch him in the nose; or d) Thank him for the gift.

We all know which three of these four options is the correct answer. Yet, again and again in tax cut discussions, people talk as if reducing the amount of money the IRS grabs from someone is tantamount to “giving” that person something.

Political commentator E.J. Dionne recently repeated this fallacy. “For years,” he wrote, “Republicans have argued that the way to help struggling working people is to give more money to the wealthy.” Dionne adds that Obama “is saying that we should cut out the middleman and help working people directly.” And Dionne thinks this a good idea.

So, why not just grab all the money the wealthiest people earn and divide it amongst the have-nots? Sure, this would kill the economy. But at least the terrible “middlemen,” the producers who make a complex economy possible, will be cut out of the loop.

An accomplishment we can all cheer as we starve to death.

This is Common Sense. I’m Paul Jacob.