Tag: subsidy

Categories
free trade & free markets too much government

National Public Railroadeo

The controversy about all the elitist condescension galloping through the halls and programming policies of National Public Radio are both on point and beside the point. Even if NPR’s appeal were universal, it is not the proper function of government to be funding and controlling media.

Just the same, NPR’s appeal is far from universal. It serves not “the public,” but a slice of it — about 11 percent, according to Sue Schardt, member of an NPR distribution committee. She concedes that those who built NPR “unwittingly cultivated a core audience that is predominantly white, liberal, highly educated, elite” but stipulates that it was “never anyone’s intention to exclude anyone.”

True, but not meaningful. Coca Cola would love to get all the Pepsi people, Mother Jones would love to get all the National Review people, plus Esquire and New Yorker people, plus CBS and NBC and ABC people. But every successful enterprise must target its product.

Schardt believes that the way to answer political challenges to NPR’s funding is to expand the base with a broader appeal. The 30-​year incubation period is over, now let’s be all we can be! Prove the nay-​sayers wrong!

Fine with me if NPR tries this — or any other audience-​building strategy. Just not on my dime. NPR would probably do best preaching to the liberal choir as they’ve always done. But, again, in the marketplace. Don’t make the rest of us pay for it.

This is Common Sense. I’m Paul Jacob. 

Categories
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.

Categories
free trade & free markets initiative, referendum, and recall too much government

Pay the Boatman

Attack the outsider — the first resort of the unarmed arguer.

My Townhall column praising Washington State anti-​tax activist Tim Eyman raised the ire of Seattle Times columnist Danny Westneat. He insinuates that it’s easy for me to like Eyman, for I never need to “catch the late boat after a Mariners game,” since I live in Virginia and Eyman’s initiatives affect the Evergreen State’s ferries.

Westneat complains that a voter-​approved Eyman measure reducing car taxes took away the main source of subsidy (he doesn’t use that word) for Puget Sound’s ferry system. Turning common-​sense responsibility on its head, he writes, “instead of levying a tax across a broad group (all car owners), as we did pre-​Eyman to help pay for ferries, the costs now are increasingly heaped on a narrow group — the ferry riders themselves.”

Horrors! People paying for what they use!

Westneat seems to be into financial irresponsibility. “Yes, [the system] wastes money sometimes. What big organization doesn’t?” Nice dismissal of the incompetence and corruption in a state-​run biz that cannot even account for its cash.

When the ferries were taken over from private business by the state, it was, he says, because of the previous owners’ “usurious 30-​percent fare hikes.” Not mentioned? This followed the cessation of Seattle’s wartime shipworks, and a huge decrease in demand.

Some folks sure apply basic economic insights selectively. Dispersing costs, concentrating benefits? That they idolize. Economies of scale? Their arguments run aground.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Latest Mixed-​Economy Mix

Mix special interests, politicians-​on-​the-​make, and expanding bureaucracies and what do you get? E15 gasohol.

Matthew Wald of the New York Times’s “green” blog reports that government ethanol mandates and subsidies make it harder to sell gas efficiently. Converting gas tanks to accommodate the new 15 percent ethyl alcohol/​gas blend, E15, could mean shortages of gas for customers with cars that can’t use it. Moreover, ethanol can damage some engines and gas pumps.

A slew of engine manufacturer associations have sued the EPA to block approval of E15. On the other side of the special-​interest coin, it’s worth noting that it was the ethanol industry that pushed for E15 approval in the first place. 

The approval by itself wouldn’t mean much if buyers and sellers weren’t being forced to use ethanol. New fuel products have been introduced by market participants in the past; with E15, producers and resellers could offer — and consumers buy — the fuel that makes the most economic and technological sense. Instead, the current innovation is an artifact of government policy. You can be sure that the problems caused by imposing ethanol will trigger other political “solutions” that worsen market disruptions, triggering even worse “solutions,” and so forth.

Our “mixed economy” isn’t generally efficient, like free markets tend to be. In a mixed economy, the political winners win big; the rest of us lose.

It’s a mixed bag. The headier mix resulting from freedom? Far better.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Winners and Losers in Sports and Government

Sports excite because of the contest: There are winners and losers. But in making “big shows,” some promoters make losers of us all.

South Africa’s sticker price for hosting the World Cup was marked up past $4 billion to nearly $6 billion. The games generated fewer billions in revenue, but the taxpayers of South Africa, one-​fourth of whom are out of work, will see little return on their massive investment.

So why would politicians want to “invest” only to lose?

They can’t resist the hoopla. They get to throw a big show with someone else’s bucks. And if some of the money they throw around reaches their pals’ businesses, all the better.

Around the world, governments vie to spend tax money like South Africa just did. In America, we have our city-​funded/​state-​funded sports stadiums. And remember when our president flew across the globe to pitch for the Chicago Olympics?

Rather than soccer fans paying for soccer, baseball fans for baseball, etc., taxpayers support soccer at the expense of those who find the game tedious, baseball fans helped at the expense of opera lovers, etc.

But considering the wages paid to athletes and the profits made by team owners, these subsidies flow bigger not so much from fan to fan but from regular folks to the rich.

Governments are supposed to serve us all. It ruins the game when governments pick sides through subsidies. That way we all lose.

This is Common Sense. I’m Paul Jacob.


Categories
free trade & free markets tax policy too much government

Cinema Without Subsidy

Yesterday I insisted that states stop subsidizing filmmaking. Implied, I hope, was the notion that states needn’t provide tax credits to lure movie shoots to their state, either.

No sooner did I wrap up that argument (with the premature proclamation “end of story”) than I read a fine article on Show Me Daily about how “States Can Entice Businesses and Industries Without Credits.” The article begins talking about making films in Wisconsin, where the tax credits were just cut by two thirds. And yet the state has nabbed some major film efforts.

According to Show Me, “Wisconsin sets a great example.…” Every state has something going for it, unique locations, geography, architecture, people, climate, what-​have-​you. “Firms will locate” where they do for relevant reasons; “they don’t need to be bribed with generous incentive packages.”

But, but, but, but! some will sputter. Film companies are special firms. They start up, inhabit a location for a while, and then vamoose. State regulations and business taxation often makes it very difficult to shoot in a particular place. Filmmakers need special help around encumbering bureaucratic obstacles.

I’m sympathetic. For example, the business-​and-​occupation taxes that increasing numbers of states are instituting are horrendously burdensome: They take from gross revenues, of all things! 

But the proper way around such counter-​productive laws is outright repeal, setting up better state revenue programs … ones that are not so generally destructive of industry, including the film industry.

This is Common Sense. I’m Paul Jacob.