Tag: economics

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

Just Like That!

socialism, magic wand, economics, healthcare, prescription drugs, drugs,

“We will do that,” he said.

Do what?

“We will look at the average costs of prescription drugs in Canada, the UK, Germany, Japan and France,” says Sen. Bernie Sanders (I/D-Vt.), “which are 50 percent lower than they are in the United States,” he told Margaret Brennan on Face the Nation. 

And Sanders promises: “if I am elected president I’m going to cut prescription drug costs in this country by 50 percent so that we are not paying any more than other major countries are paying. Maybe we can do better than that.” 

When Ms. Brennan asked how, he replied as above — looking at “average costs” as directly priced to consumers (patients) —  and then . . . “we will do that.”

Socialism is so easy!

Why have we waited so long for utopia?

Well, saying is not the same as doing. We must think “beyond Stage One,” as Thomas Sowell advises. For if “Medicare for All” tells a company it will pay only so much for a drug, that company cannot just sell that drug and all others below cost. No wonder that in socialized medicine schemes around the world, not all drugs are even available.

The world prescription drug market is set up . . . peculiarly. Americans in effect pay more (because of patents and trade agreements) thereby covering development costs. If we pay less, others may have to pay more (which would be an odd thing for a “socialist” to want) and we would all come to get even less.

Bernie is no wizard, and socialism has no magic wand with which to wave away scarcity.

This is Common Sense. I’m Paul Jacob.

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socialism, magic wand, economics, healthcare, prescription drugs, drugs,

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Test of Humanity

Velfredo Pareto, economics,laws, socialism

It has been a big week for socialism — or, rather, anti-socialism.

The high point was probably President Trump’s State of the Union Address, in which he opposed not only the murderous, ruinous regime in Venezuela, but also the rising tide of socialism in the Democratic Congress — with Senator Sourface, er, Bernie Sanders, trying not to explode as he heard that taboo word “free” applied to America . . . not goodies.

Meanwhile, Panera Bread announced, The Blaze reports, that it is closing “its last pay-what-you-can restaurant, located in Boston, on Feb. 15.”

“Panera Cares” was, it appears, “initially created to serve food to low-income people nine years ago in 2010,” but sure seemed to be itching to prove a sort of post-capitalist point. The company’s founder, Ron Shaich, said that “the program’s aim was a ‘test of humanity.’”

More like a test of gullibility.

No branch of the “experiment” ever ran in the black. Like experiments in society-wide socialism, it relied upon subsidy to carry on — but unlike in socialism, Panera could not force people to cough up the dough needed to keep it going.

Once upon a time, the great economist Vilfredo Pareto, during a lecture, was repeatedly interrupted by one Gustav von Schmoller, who denied that economists had discovered any enduring principles, especially ones that would undermine his beloved socialism. So Pareto dressed down as a bum and approached Schmoller on the streets, inquiring about a restaurant that served meals for free. When Schmoller told him that there were only cheap, but no free meals, at restaurants, Pareto stood up with the ultimate gotcha: 

“So there are laws in economics!”

Socialism fails reality’s test. 

Humanity has not failed socialism’s.

This is Common Sense. I’m Paul Jacob.

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Velfredo Pareto, economics,laws, socialism

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Accountability free trade & free markets general freedom ideological culture media and media people national politics & policies

Driven to Sanity

Washington Post, economics, economy, control, government, limited

Having the federal government centrally plan the economy is “a huge waste of everyone’s time and resources” states an amazingly common-sensical Washington Post editorial.

“In a well-functioning modern economy, businesses are generally free to buy and sell the things they need, absent a compelling public need for government intervention,” the editors further expound.

Hmmm, a capitol-town rag that regularly extols the virtues of big government regulation of everything now notices the importance of freedom.

Of avoiding, especially, a system where bureaucrats and other government bullies micromanage commerce.

“Were we directed from Washington when to sow and when to reap,” Thomas Jefferson wrote long ago, “we should all want for bread.”

And aluminum.

“Worse,” the Post argues, the system “also politicizes — and, indeed, corrupts — economic life. Companies that feel threatened by any particular tariff exclusion request have the right to present their objections to the Commerce Department, meaning that each decision represents a high-stakes competition for federal favor between at least two companies with every incentive to influence it through lobbying, campaign contributions, you name it.”

Correct. It seems we may have Donald Trump to thank for opening the Post’s eyes. 

“[T]he way to get ahead in Mr. Trump’s economy,” those editors conclude, “is not making better products for the people, but making better connections in Washington.”

Tragically true.

But, sadly, true long before Mr. Trump entered the White House. No new powers have been given to Trump. 

Let’s drain the stinking Washington swamp. Let’s end the corrupting influence of a regulatory state run amok. Let’s limit the power of the people wielding political power.

How?

Free the markets!

This is Common Sense. I’m Paul Jacob.

 

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Accountability folly general freedom government transparency moral hazard national politics & policies porkbarrel politics responsibility too much government

While the Clock Ticks

national debt, debt clock, Mercatus Center, economics, economy, folly,

Pushing annual federal spending over a trillion bucks into the red?

It has consequences.  

“Our debt is growing, and it’s growing fast,” writes Veronique de Rugy at Reason. “Though it’s a shame that lawmakers passed tax cuts without cutting spending to offset short-term losses in revenue, there’s no doubt that Social Security and Medicare deficits are almost entirely to blame for our impending debt crisis.”

Ms. de Rugy, a senior research fellow at the Mercatus Center, has a typo in the version of her article that I read (it has probably since been corrected): “Based on current trends, the debt held by the public is set to reach $15.7 trillion by the end of this year and continue rising to $28.7 trillion by 2028.” She surely meant “$25.7 trillion,” since the current debt clock figure shows the U.S. public debt at over $21 trillion. Still, $25.7 seems a bit high . . . but at this point we can leave the exact numbers to the professionals.

We just know that the debt’s too damn high.

As de Rugy explains, it has present as well as future cost. And, yes, entitlements are the biggest problem — but even more than Ms. de Rugy suggests. Congress owes the Social Security “trust fund” (in Al Gore’s infamous and non-existent “lock box”) nearly $3 trillion.

Our solons would have to (painfully) switch from revenue deficits to revenue surpluses just to pay off its debt to a much-relied upon institution.

What will happen, though, is surely this: Congress will borrow more from elsewhere to pay what Social Security needs — which all too soon will be a lot more than $3 trillion.

That’s not Common Sense. (But I am Paul Jacob.)

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Accountability free trade & free markets general freedom national politics & policies tax policy

Death and . . .

taxes, tax cut, Trump, gift, give away, rights, growth, economics

It’s a sure thing — that most folks will like President Trump’s tax cuts. Though we don’t yet know all the details.

When it comes to taxes, less is more. 

That is, if you’re paying taxes. It is no great mystery that people like it when their own taxes are reduced.

But what about reducing other people’s taxes?

“The core economic case for tax cuts is that they reduce the obstacles to creative and productive activities,” economist Don Boudreaux explained yesterday at the Café Hayek blog.

Cutting the corporate tax rate — which even former President Bill Clinton supported during last year’s campaign — won’t immediately appear in people’s paychecks, but can stimulate economic growth helping everyone. Recent experiences in both Britain and Canada bear this out.

Cutting taxes, of which “the rich” pay more, can also spur growth.

Yet, these ideas do not dominate popular discussions of tax cuts. Boudreaux lamented media reporting that treats any tax reduction as simply a “‘gift’ to high-income earners,” dubbing the coverage: “Biased. Benighted. Blind.”

“Suppose that freedom of the press were reported in the same way as . . . a ‘giveaway to the press’?” he asked. “Most people, of course, do not own newspapers or other media outlets.”

Boudreaux concluded, “When the press is free, the chief beneficiaries are the general public.”

Freedom — of both the press and to keep more of the fruits of our labors — helps the common man. As well as the uncommon man. A tax cut for me helps me directly, and you indirectly. And vice versa. Just as a free press is great for those in journalism as well as those of us not in journalism.

That is not blind, but eyes open; not benighted, but enlightened; not biased, but . . .

. . . Common Sense. I’m Paul Jacob. 

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Accountability free trade & free markets national politics & policies property rights too much government

Three, Three, Three Mints in One!

monopoly, Microsoft, Google, Chrome, competition, cooperation

Microsoft just announced an innovation that might give folks who fear business behavior — or are extremely skeptical of the positive public outcome of markets — pause.

The Bellevue, Washington, company is adding Google calendar connectivity for its Macintosh users of Outlook 2016.

[Pause.]

You see, monopolies give us the willies. We do not trust them. Yet, despite our fears and suspicions, big business activity in a free market does not lead inevitably to One Corporation Ruling Them All. Or chaos.

Why believe that? This Microsoft Outlook story.

Most folks’ worries about monopoly come down to fear of out-of-control competition. In many industries, for the industry to work, there must be general cooperation among competitors. (Think of telephones and electricity distribution, etc.) The reason many people* want to regulate “natural monopolies” is that it seems only natural that businesses would balk at working together on shared standards — they would balk at any form of cooperation . . . they’re competitors, dagnabbit!

But evidence of competitors cooperating for consumer good is all around us. The classic case? Railroads, when the rail gauges in America were standardized to 4′ 9″ — without government edict.

The current case? This, where one of the three biggest computer outfits in the world offers customers on a competitive platform (Apple) easy syncing with a company that competes directly with it as well as its platform competitor (Google).

Why do this?

The better to serve their customers. As much as Microsoft might want to shun their competitors’ products, its customers do not share that view.

And that is enough.

Welcome to free-market capitalism.

This is Common Sense. I’m Paul Jacob.**

 

* It is worth noting that economists have a different concern regarding natural monopolies. Something about “cost curves.” Meanwhile, the opposite fear — of cooperation among businesses when cooperation would be generally harmful (price fixing) — has been an issue dealt with by economists since Adam Smith.

** Full disclosure: this came to my attention courtesy of a story on Apple’s News app.

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