Categories
free trade & free markets

Tire Trade War, Tiring

Political folly comes around, again and again, like a puncture in a rapidly deflating tire as you drive down the freeway. The end is never good.

President Obama and congressional Democrats pushed a tariff hike on China-made tires, up to 35 percent — and the WTO okayed it. They excuse their action because they wish to “retaliate” against China for its alleged monetary “manipulations” — manipulations that bear remarkable resemblance to our own Federal Reserve’s policies, by the way — which they say cause our current trade imbalance.

And, like non-economists everywhere, these buffoons judge the trade deficit a horrible thing. The fact that U.S. consumer’s get great benefit from lower-priced goods coming from China, and can — as a result of less expensive, Chinese-made tires – afford to replace their tires more often, thereby saving lives and health-care costs, doesn’t appear in politicians’ protectionist arguments.

It’s the economy that’s making our representatives stupid, of course. Blaming foreign competition is an easy out, when times get tough. It helps you avoid blaming your own country’s regulations, taxes, and (ahem) monetary policy.

This blame game is nothing new. The Smoot-Hawley Tariff was pushed through early in the Great Depression, and it made a lot of sense to . . . politicians.

But the the trade wars the infamous tariff engendered became a major factor in making the Great Depression so Great.

Our politicians, reviving tired old policies — regarding tires, no less — merely make matters worse. Greatly worse.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets general freedom national politics & policies too much government

Commerce, Compulsion and the Constitution

Every once in a while a judge attends to the Constitution, and freedom lovers cheer wildly as if this were very strange, even wondrous. I guess it is, considered in light of the sweep of human history.

Should the Democrats’ “health care reform” package kick in fully, it would compel people to purchase medical insurance by punishing abstainers with a steep, extra tax. So hurray for Judge Henry Hudson of the federal district court in Richmond, according to whose recent decision the Commerce Clause of the Constitution does not empower Congress to point a gun to our heads and force us to buy health insurance.

If the Constitution could be honestly read that way, it would mean that the Founding Fathers had fought to replace British tyranny with an even worse home-grown one. But no, no Founder thought that giving the federal government power to smooth trade relations among the states equaled authorization for universal, compulsory purchase of books, booze, bobby pins — or whatever Congress-Approved “health care” delivery system some future central planners might concoct. Nor does it.

We’re not out of danger yet, obviously. There are many more battles to come, many other provisions of “Obamacare” that have yet to be challenged and quashed in courts or in Congress. But in any tough job, you need to accomplish the first step.

Judge Hudson’s common-sense conclusion sounds like a great first step to me.

This is Common Sense. I’m Paul Jacob.

Categories
term limits

Starting Somewhere With Term Limits

To be effective in reversing the big-government tide, the new GOP majority in the House must exercise the discipline to shake off bad old habits. Where to start? Term limits.

And the term limits can start with leadership.

In 1994, the GOP imposed term limits on committee chairmen. Although there was a little wavering around the edges of that reform, the party did retain it until the Democrats gained the majority in 2008 and promptly chucked the idea of committee chair term limits.

Having regained the majority, some Republicans are mumbling about “granting exceptions” to committee chair limits for this guy and that guy and the other guy. But rampant exceptions to sensible reforms would show that nothing much is changing in how Congress does business. And a lot’s got to change.

Other Republicans, though, are talking about term limits not only for committee chairmen but for all leadership positions. The new Majority Leader-to-be, Eric Cantor, tells The Hill he’d support “a six-year term limit for each position.”

Hear, hear. Bravo!

But let’s shout out loudest for term limits on all members of Congress. Senator Tom Coburn and others have sponsored a constitutional amendment to impose a maximum of two six-year terms in the Senate, three two-year terms in the House. A hard sell to the entrenched incumbent? Sure. Fifteen years ago, a similar effort failed. But like most good failure, it can be built upon.

Let’s start at the top.

This is Common Sense. I’m Paul Jacob.

Categories
property rights

Sad Ending to a Vexing Tale

Officials of and lawyers for Columbia University must be chortling in ecstatic gloat. They’ve gotten away with something very much like theft.

But it’s all above-board and legal, thanks to the Supreme Court, which would not hear the case of property owner Nick Sprayregen, from whom Columbia aims to take property. Sprayregen doesn’t want to sell, as he makes quite clear in something he wrote a few days ago for The Huffington Post.

Yup, this is another travesty of “eminent domain.”

Actually, I’ve written about this case before. Two years ago I called your attention to some of what was going on, calling it a scam: “Columbia has acquired many buildings in the neighborhood, but is not maintaining them. Because of Columbia’s own run-down buildings, the state has formally declared the neighborhood to be ‘blighted.’ If the entire area is now condemned, full ownership can be transferred to Columbia.” In 2009, Damon Root wrote in the New York Post more extensively about Columbia’s tricky maneuvers.

The first legal battle against Columbia succeeded, but an appeals court ruled against that initial finding, on dubious grounds.

Sprayregen understands what’s at issue:

Eminent domain is not for private institutions like Columbia to expand their profit-making efforts beyond what the free market would allow. I believe that what Columbia has been trying to do is illegal. . . .

You might think that the Supreme Court, after Kelo, would want to clarify the matter. No such luck.

This is Common Sense. I’m Paul Jacob.

Categories
ballot access First Amendment rights initiative, referendum, and recall

Red-lining Democracy

Why does a fellow who’s the executive director of the Greenlining Institute want to red-line democracy?

Recently, in the pages of California’s Capitol Weekly, Orson Aguilar called the state’s initiative process a “monster.” Mr. Aguilar’s main beef is that “huge corporations and business groups” spent “massive” amounts of money, and that of the more than $200 million spent on ballot measures “hardly any of it came from ordinary citizens.”

Whether one agrees with a corporation or a labor union or an interest of any kind, freedom of speech still carries moral weight. It’s worth noting that while Aguilar doesn’t like corporate spending on ballot measures, he probably doesn’t mind the corporate contributions that account for over 16 percent of the Greenlining Institute’s annual income.

But what was the result of business spending? He informs us, “Happily, many of these corporate initiatives were defeated . . .”

Aguilar doesn’t name a single detrimental measure passed by voters.

Still, according to Aguilar and seemingly every special interest group, something must be done to undercut the democratic check on government that citizens enjoy via initiative and referendum.

While admitting that the “huge number of signatures required” to place an initiative on the ballot “is almost impossible to do with just volunteers,” Aguilar bemoans the use of paid petitioners.

Never does he suggest the obvious: If we want the citizens’ voice in government, petition requirements should be made less onerous, not more.

This is Common Sense. I’m Paul Jacob.

Categories
folly too much government video

Video of the Week: California PERS Aristocracy

In vignette after vignette, this mash-up provides a helpful (and amusing) take on California’s pension fiasco:

It’s not easy thinking about government-enacted pensions, I guess. Everyone wants to retire young and well-off, and no one wants to appear stingy. But there has to be responsibility in how these things are set up.

I touched upon the subject earlier this week, in “Pension Declension.” Two of my commenters — Charles Sainte Claire and SkipppingDog — strike me as perhaps not quite getting why pension reform is necessary.

What Charles and Skipping aren’t saying is that a defined benefit plan guarantees a certain return whether or not the money has been invested to produce such a return. So, where does the money to pay the defined benefit come from?

Yep, you guessed it: The taxpayers. Future taxpayers who can’t even be blamed for having elected the dishonest pols who cut these fraudulent deals with the politically active and powerful public employee unions.

In the public sector, the pressure will then be off the workers and politicians to actually fund today what will be spent tomorrow. Which means embracing the sort of chaos now destroying states and municipalities in California and across these United States.

What about in the private sector? Did someone say “private” sector? Well, even in the private sector, it will be the taxpayers who get stuck with the bill.

To suggest that defined benefit plans are the way to go is to suggest that workers can have whatever they desire and some magic person named The Taxpayer will always be there to pay for it. It is to embrace fleecing future generations.

Of course, we’ll be told that it “worked well in the past.” In a manner of speaking. After all, Bernie Madoff’s fraudulent scam worked well “in the past.” Most rip-offs “work well” . . . that is, until the very moment when honest, hard-working people realize they’ve been had.

Categories
national politics & policies porkbarrel politics

Good and Bad in the 112th

The 112th Congress is beginning to take shape, and, well, we have good news and bad news.

Good news first: Ron Paul has been slated to chair the Domestic Monetary Policy Subcommittee.

The Texas congressman has been toiling away at the margins of power on Capitol Hill for years. A proponent of a gold standard and a free-marketer of the “Austrian” School, he has been a voice crying in the wilderness. One of the few people in Congress who did not treat Alan Greenspan as a divine oracle, he is now one of Ben Bernanke’s harshest critics.

Of course, after recent events and bailouts and all, Federal Reserve Chairman Bernanke has lots of critics.

As chair of the subcommittee that watches over the Fed, Ron Paul has finally attained a position to accomplish something. This is a major reversal in the power structure. We can’t expect miracles (Ron Paul being but one man), but do expect fireworks.

Now, the bad news.

It’s been less than a month since Republicans in the House voted on a moratorium on earmarks. And already they are, reportedly, beginning to feel queasy. Perhaps as a sign of a general turncoatish nature, the next chair of the House Appropriations Committee is set to be Rep. Hal Rogers.

Sixteen-term congressman Rogers has earned a reputation for pushing pork. His hometown has received so much federal largesse it’s called “Mr. Rogers’ Neighborhood.”

Still, he says he’ll enforce the pork moratorium. We’ll see.

This is Common Sense. I’m Paul Jacob.

Categories
porkbarrel politics

Bribing Our Way to Bankruptcy

Many of the voters who swept so many Republicans into Congress only a few short years after having swept so many Republicans out of Congress are trying to tell all politicians: “Stop your wastrel ways.”

Republican newcomers often get that the GOP is on probation. But many Republican incumbents don’t. GOP Senators Bob Bennett, Thad Cochran, Susan Collins, Lisa Murkowski and George Voinovich all recently voted against a ban on congressional earmarks.

Is their recalcitrance no big deal? We often hear that earmarks are just a sliver of the overall bloated budget, so fiscal conservatives should therefore stop harping on them.

Well, first, it’s not as if all the individual million-dollar or billion-dollar expenditures don’t add up to the multi-trillions in ballooning budgets and debt now sinking the republic. But, second, assertions about the triviality of earmarks also ignore the fact that rationalizing earmarks and boondoggles as the price of power also makes it easier to rationalize larger-scale incontinent federal spending.

The Heritage Foundation points to a strong correlation between high numbers of earmarks and high spending overall. This isn’t mysterious. The congressman who trains himself to be indifferent to what he does with taxpayers’ monies in “small” ways also learns to inure himself to greater temptations.

Those who can’t resist such temptations enter the current realm of mutual bribery: To get their earmarks, they’ll endorse bills with spending they nominally oppose.

Sweat the small stuff. Including the millions and billions in earmarks.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall responsibility

Pension Declension

The ugliest truth about California’s newest, gimmick-ridden budget, is that it doesn’t address the looming public employee pension issue. Adam Summers, a Reason Foundation policy analyst, gave some figures in the Orange County Register, explaining that these pensions have been “recently pegged at up to roughly $500 billion — roughly $36,000 for every household in California”:

Throw in the $50 billion or so in unfunded retiree health care liabilities, a $10 billion unemployment insurance fund debt, and the state’s $152 billion in general obligation bond debt, and you start to get a fuller sense of the state’s true financial problems.

The current plan to deal with this — reducing pensions for new state hires back to 1999 levels — Summers says was tried before, and failed. And by “failed” I mean revised after the fact and retroactively negated by the state Assembly.

Summers says there’s only one way out:

Politicians can’t continue to merely nibble around the edges of the state’s pension crisis. It’s time to admit that the 401(k)-style retirement plans that are good enough for nearly every private sector worker are going to have to be good enough for state workers, too.

But do politicians have the guts or the principles required? An initiative is needed. No level of government should be allowed to offer any pension not fully invested at the time of wage or salary payment — or promising a specified pay-out.

That would be as revolutionary as the legendary Prop 13.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability initiative, referendum, and recall

The Maine Con

Should taxpayers be forced to fund their own foes?

A group that opposes Maine’s public financing of campaigns — in particular the perverse requirement that the campaign spending of a candidate not participating in the public financing be matched by taxpayer-funded dollars to the coffers of candidates who do participate — is now fighting another abuse of taxpayer dollars.

The Maine Heritage Policy Center has sued the Maine Municipal Association for using government funds to oppose ballot measures designed to save taxpayers money.

MMA doesn’t deny that the two million dollars it used to campaign against several tax-cut initiatives in recent years are government funds. But the front group pretends that it is not really a “government entity,” even though its membership consists of municipal governments in Maine. Far from being a government entity, they say, they merely “provide professional services to our members as a nonprofit organization.” But this is a distinction without a difference.

The Lewiston Sun Journal observes that most folks would be “outraged to learn that our city council had voted to use municipal funds to influence a political campaign. In fact, we might say it is illegal.” Is the nature of what’s going on sanctified if the municipal campaign contributions are being routed through a nominally separate party? The MMA’s own articles of incorporation state that it must be “nonpolitical and nonpartisan.” That hardly describes spending millions in taxpayers’ money to foil tax-cut campaigns.

This is Common Sense. I’m Paul Jacob.