I’m getting ready to take a bus ride this week. For under $70, I get a round-trip from my city to Chicago. I’ll have free wi-fi, a clean and comfortable ride, and I don’t have to deal with Chicago traffic. It’s convenient, quick, inexpensive and easy. It’s also an entrepreneurial dream. So what does the government have against bus travel in America? Check out this video from Reason:
One line from last night’s debate leapt out at me. It wasn’t a stumble amidst the cut and thrust of open debate. It was during President Obama’s closing statement—400 words that I’m guessing he and his staff crafted with painstaking care.
About half way through his summation, the president gave his vision of government in a nutshell. He said that “everything that I’ve tried to do, and everything that I’m now proposing for the next four years,” was “designed to make sure that the American people, their genius, their grit, their determination, is – is channeled.”
In that one word, channeled, President Obama distilled the problem. It isn’t his job to channel America’s genius, grit and determination anymore than it’s a traffic cop’s job to tell you where to go when you hop in your car. The police officer has an important role. Government has an important role. But it isn’t to channel.
That isn’t how you free a country for greatness; it’s how you suffocate it, by having politicians and bureaucrats endlessly picking winners and losers, inserting themselves into the middle of every market bigger than a lemonade stand. (Oh wait, they got to the lemonade stand, too.)
President Obama quickly went on to explain what he meant by the federal government channeling, but the gloss was cold comfort. The good parts of the gloss—“everybody’s getting a fair shot,” “everybody’s playing by the same rules”—had nothing to do with channeling. And the part that was all about channeling—the government making sure that “everybody’s getting a fair share, everybody’s doing a fair share”—was just same failed, slightly creepy vision of an all-embracing nanny state that has Europe on the brink.
In my commentary this week, I reflect on the unemployment rate of many newly separated military veterans of our Armed Forces. The grim jobs outlook affects our reservists and National Guard forces too. As You Were, a book I reviewed on the PowerBlog in late 2009, touched on this topic quite a bit.
My first job out of college was working on veterans issues for former Congressman Gene Taylor (D-Miss.) I was able to meet and get to know combat veterans from battles like Okinawa, the Chosin Reservoir and Khe Sanh. It was a rewarding and educational experience.
I suspect we will hear more from Washington about how to solve this problem with additional centralized government action. But we already have real commitments and promises to veterans that must be honored and a debt of $15 trillion and growing that is staring down at us. My commentary is printed below in its entirety.
Playing Politics with Unemployed Veterans
Getting the U.S. economy back on a path to solid growth and the job creation engine jumpstarted is dominating the headlines, talk shows and policy debates in Washington right now. Many of the legislative prescriptions focus on the dismal unemployment woes of newly separated military veterans, whose rates outpace the civilian population. The troubling figures reveal a persistently bleak and stagnant economy.
National unemployment currently hovers around 9 percent, while unemployment for veterans of the Afghanistan and Iraq wars is more than 13 percent. Veterans in the age group of 18-24 are worse off, with an unemployment rate of 30 percent. Dead last in the Union is Michigan, where 30 percent of all former service members are unemployed.
These numbers may only get more discouraging as defense budget cuts push more and more from the active duty ranks into a weak job market.
Federal legislation passed at the end of last year seeks to address the problem with tax credits for companies who hire veterans. The measure could help some, but tax incentives like these generally offer no substantial improvement for removing people from the unemployment rolls.
Better immediate solutions would be omitting special licenses and training required by states to work in certain fields. There is no reason a combat medic in Iraq should not be able to work as an emergency medical technician. Many already have more training than their civilian counterparts do.
In his election-year State of the Union address, President Barack Obama painted a vision of a post-WWII society where triumphant veterans came back and created the strongest economy in the world. In his words, they understood that they were “part of something larger.” Part of that “something larger” after the defeat of fascism was a growing free economy, but they also faced a long twilight struggle against the spread of communism.
To restore prosperity today, President Obama called for a “common purpose” to rally behind. But the obvious common purpose, the reduction of the staggering national debt, was largely ignored by the commander-in-chief during his address. For the unemployed, all Americans, and a free economy, the debt is the largest obstacle to restoring prosperity and reawakening the most expansive economy the world has ever seen. The failure of the American government to live within its means threatens to eviscerate the promises made to America’s veterans. It is a classic case of one moral failing leading to another.
The “something larger” greeting veterans when they come home today is a national debt of more than $15 trillion and an economy burdened by more and more regulations. The White House has already requested a debt ceiling increase to a whopping $16.4 trillion dollars. So great is the obstacle, and so serious is the threat, Indiana’s governor Mitch Daniels dubbed it “the new Red Menace.”
The threat to veterans is substantial. Although veterans’ benefits are justly generous, the government’s fiscal crisis has put those guarantees at risk. Last year, for the first time, some in Washington talked about the necessity of trimming promised pensions and health benefits for military retirees. Politicians are playing politics with veterans when they talk of reducing promised benefits with one side of their mouth and say they are creating jobs for veterans with the other.
Older military retirees can remember a time when they counted on the promise of free health care for life. Many sacrificed more lucrative private sector careers, nonpayment for overtime, and additional time with their family because of patriotism and promised security. Now they pay premiums for their care.
Thomas Jefferson warned of the moral pitfalls and decay of debt when he said, “The earth would belong to the dead and not to the living generation.” Profligate spending in the past undermines our capacity to honor present commitments.
With their skills, work ethic, and patriotism, veterans have the ability to overcome the challenges confronting them. Most businesses and companies want to hire veterans. All they need is some assurance that their prospects going forward will not be dimmed by burdensome regulation or economic instability stemming from federal fiscal irresponsibility.
Washington does not understand there is little to be done in terms of a prescriptive policy to cure veteran unemployment. The oft forgotten Calvin Coolidge once warned, “Unsound economic conditions are not conducive to sound legislation.”
The best cure is still a market unleashed from needless regulation and spending policies that reflect a moral and rational resolve. In the end, a federal government that is broke can do little for veterans who earned and are entitled to benefits already promised.
My commentary this week addresses the demonstrations in New York and in other cities against free enterprise and business. One of the main points I make in this piece is that “lost in the debate is the fundamental purpose of American government and the importance of virtue and a benevolent society.” Here is the list of demands by the “Occupy Wall Street” movement. It is in essence a laundry list of devastating economic schemes and handouts. Additionally, the demands are counter to America’s founding principles. The commentary is printed below:
Class Warriors for Big Government
By Ray Nothstine
Acting as unofficial scorekeeper, Sojourners Founder and CEO Jim Wallis recently declared, “There really is a class war going on, and the upper class is winning.” However, many of the class warfare protesters who are taking to the streets to “occupy” Wall Street and American cities are the disgruntled children of well-to-do parents. A quick sampling of video clips from the protests shows students from elite universities like Harvard, George Washington, and Columbia. Such protestors are driven less by genuine economic hardship than by misguided animus toward the market system that has enabled the wealth from which they have benefited.
One such protestor, Robert Stephens, launched into a tantrum about a bank seizing his well-educated parents’ $500,000 home. The claim turned out to be bogus, but he managed to convince sympathetic media outlets that he was the victim of abuse and scorn at the hand of free enterprise. Stephens, a student at the prestigious George Washington School of Law in Washington, is just one of many out-of-touch protestors pointing simplistically to the market as the culprit in the current economic downturn while ignoring other sources of financial dysfunction, such as the crony capitalism of government subsidies to business or government fiscal irresponsibility.
Struggling to make ends meet, most Americans lack the time to tune into protestors who are just as distant from their problems as Washington bureaucratic elites. Ronald Reagan offered these poignant words as he called on his own political party in the 1970s to shed its big-business country club image and to embrace the factory worker, the farmer, and the cop on the beat:
Extreme taxation, excessive controls, oppressive government competition with business, frustrated minorities and forgotten Americans are not the products of free enterprise. They are the residue of centralized bureaucracy, of government by the self-anointed elite.
Excessive taxation, regulation, and centralization of power always save their most vicious bite for the middle class. They are the hardest hit, not the super wealthy, some of whom call for higher taxes and are fawned over by a bloated government with an insatiable appetite for revenue. If there is any class conflict, it will come from the taxpaying class as it tries to tame the avarice of the political class. Most Americans are not very sympathetic to radical protestors because they still believe in an American Dream of limitless potential and opportunity.
While some protestors call for more government—or even the use of force—to restore their version of social justice and utopian economic schemes, lost in the debate is the fundamental purpose of American government and the importance of virtue and a benevolent society.
This nation’s founders adopted a system of government emphasizing a separation of powers and federalism to protect private property and the harmony of the Republic. Protestors calling for a dismantling of these ideas, whether it is through the confiscation of another’s property or through massive, centralized power seem alien to most Americans. During his inauguration another American President, Bill Clinton, aptly declared, “There is nothing wrong with America that cannot be cured by what is right with America.”
The virtues and values that have shaped our Republic offer the best for America. One of the wealthiest men of America’s founding era was John Hancock. Yet the man who once quipped, “They [the Crown] have no right to put their hands in my pocket,” was no miser. Often a political foe of the founder known for his oversized signature on the Declaration of Independence, American President John Adams nonetheless wrote, “If benevolence, charity, generosity were ever personified in North America, they were in John Hancock.” Hancock supported churches, city improvements, the arts, assisted widows, and paid for the education of orphans. However, a much greater compliment was bestowed upon him. He was widely known for treating those of modest means with the same respect as those with wealth and power.
History too shows the consequences of regimes that wished to redistribute the wealth of others and make denunciations about greed, especially wrapped within a materialistic, secular worldview. That was class warfare, too, and it ended in blood and wretched poverty.
Detroit has has been plagued by the economic downturn more than most cities, and has struggled to recover. However, sometimes gloomy economic conditions breed innovation. That is the focus of Jordan Ballor’s “Let Detroit’s farms flourish” which appeared in the Detroit News.
Ballor explains that residents are putting vacant lots to use by urban farming:
These areas of growth, in the form of cooperatives, community programs and individual plots, represent a significant avenue for the revitalization of the city. The benefits of urban farming are manifold. Otherwise unproductive vacant lots, which have been estimated to number close to 100,000, are put to an economically and socially positive use. Urban farmers learn skills and discipline necessary to have long-term economic success.
For some, urban farming is a necessity, for others, such as the youth, it may be a new opportunity to keep them off the streets; however for everyone partaking, it is form of creativity and responsibility rooted in the Bible:
In these kinds of efforts we see the spark of human creativity and responsibility shine through in the face of adversity. This creativity reflects in a human way the creativity of the divine. The biblical account of creation includes the blessing to humankind, “Be fruitful and increase in number; fill the Earth and subdue it.” (Genesis 1:28). This blessing has been understood to refer to human cultural work in all kinds of areas, including the cultivation of the land and the raising of crops. We find God’s specific injunction to Adam to reflect this aspect of cultivation quite clearly: “The Lord God took the man and put him in the Garden of Eden to work it and take care of it.” (Genesis 2:16). And as the Bible begins with human beings caring for a garden, it ends with restored humanity living in a city, the New Jerusalem (Revelations 21).
Unfortunately some Detroit residents are discovering that everyone isn’t encouraging their innovation and desire to farm. City regulations are preventing some from succeeding:
There are perils, of course, and perhaps there are none greater than the political culture of regulation, entitlement and corruption that has marred the city for decades. The city government must not crush this nascent urban gardening movement through superfluous regulation and the instinctive reflex to government control.
This has already happened in the case of Neighbors Building Brightmoor, which maintains gardens on city-owned lots. Reit Schumack, who heads up the group, says that new city regulations will, among other things, prevent him from organizing a youth group as he has done in the past to grow food and sell it at a farmers market. “It’s a beautiful self-sustaining program where 15 kids are busy the entire growing season, make money, learn all kinds of skills, and really, I can’t do this. This is forbidden, what I’m doing,” Schumack recently told Michigan Public Radio.
Let’s hope that Detroit sends a message of hope and encouragement to its residents. In these struggling times, innovation and the entrepreneurial spirit should be encouraged. Detroit’s past has been plagued by a corrupt overregulated political culture. Instead of stifling growth, Detroit should seize upon this opportunity to demonstrate that it is going to take a new path towards creating a political environment that allows it to flourish once again.
Click here the read the full article.
My latest for Acton Commentary. I’m also adding a couple of videos from Hotep and the Institute for Justice.
Let the Hustlers Hustle
By Anthony Bradley
If necessity is the mother of invention, then there is nothing worse than quenching the entrepreneurial spirit of people seeking to improve their situation by imposing arbitrary third-party constraints. America’s unemployment problems linger because hustlers cannot hustle.
For many, “hustling” connotes business activity that is shady, or even illegal. But in the black community it is common to use the term to describe the entrepreneurial spirit that drives people to take risks to meet one’s needs and to provide legitimate services through creative enterprise in the marketplace. The latter view is the one taken by indie Hip-Hop mogul Hotep, who has created Hustler University as an effort to redeem hustling as a way to create space for economic empowerment. Clients include the NAACP, the Urban League, Clemson University, the National Education Association, Illinois Public Schools, and Morehouse College.
Hotep defines a “hustler” as “an enterprising person determined to succeed, [a] go-getter.” Participants in Hustler University are exposed to the idea that human beings were made to be innovative and creative and “to manifest our dreams into creation,” says Hotep. Among the Hustler’s 10 Commandments that Hotep aims to teach today’s entrepreneur are the aphorisms “your network is your networth,” “the early bird gets the worm,” and success is “where opportunity meets preparation.”
Hotep offers helpful direction, but for independent-minded hustlers to succeed and thereby benefit both themselves and their communities, they need an environment that provides them opportunities to work freely. While there are many factors that keep entrepreneurial spirit dormant such as laziness, the absence of mentors, and skill deficiencies, one of the greatest obstacles is the mass of regulations generated by federal, state, and local governments.
The Institute for Justice recently released a report describing how government regulations prevent entrepreneurs from taking off. In Houston, for example, hustling a mobile food truck business is nearly impossible. For starters, a would-be mobile food entrepreneur must obtain a license from the City of Houston Department of Health and Human Services. Potential hustlers must submit, in-person, two sets of plans that satisfy a 28-point checklist. During the government truck inspection, the vendor must provide extensive documentation including an itinerary and route list. He is required to pay $560 in fees, which includes $200 for the installation of an electronic tracking device. Operators must also disclose their menu, including every ingredient used as well as its origin, and how each dish is prepared. Even worse, a form must be filled out for each ingredient. This is just a sampling of the regulations in one city. Similarly daunting tangles of red tape exist in every jurisdiction in America, preventing entrepreneurs from starting and maintaining small businesses.
It’s clear that this regulatory regime especially hurts small businesses, the primary source of new jobs. Mark Crain, William E. Simon Professor of Political Economy at Lafayette College, conducted a study several years ago describing the disproportional burden imposed by federal regulations on small business. Crain found that firms with fewer than 20 employees spend 45 percent more per employee complying with federal regulations than do larger firms. Small firms spend 67 percent more per employee on tax compliance than larger firms do, and, compared to the largest companies, more than 4 times as much ($3200 vs. $700) per employee to comply with environmental regulations.
The black unemployment rate currently (January 2011) stands at 15.7 percent. Hispanics are a little better at 11.9, but both lag whites at 8 percent. The last thing we need are burdensome government regulations preventing hustlers from hustling. Whether intentionally job-killing or not, these types of government regulations dampen the entrepreneurial spirit of people who are trying to improve their situation and make contributions to the civic good by providing services that people need. Based on employment figures, these regulations arguably affect blacks and Hispanics disproportionately.
If America is really serious about addressing abysmal unemployment rates, federal, state, and local governments would do well to take the handcuffs off of hustlers and free them from the regulations that keep them from creating wealth. In other words, get government out of the way and let the hustlers hustle!
Much of the blame for the current financial crisis has been aimed at Wall Street and the bankers who, the story goes, created toxic debt instruments and then lined their own pockets with the proceeds. In “Verdict on the Crash: Causes and Policy Implications,” a new analysis from economists and scholars — including Acton Institute Research Director Samuel Gregg — the London-based Institute of Economic Affairs comes to the opposite conclusion: It was governments and regulators who erred. Moreover, the IEA report says, the people most often berated for their part in the crisis – the hedge fund managers and those who run tax havens – are among the least guilty. The report also spells out the need for a “radical overhaul” of the financial system to guard against a repeat of the errors that led to the crisis.
The authors of “Verdict on the Crash” assert that “a revolution in financial regulation is needed. The proposals of the G20 governments and the EU are wholly misconceived. Specific and targeted laws and regulations could restore market discipline.”
Read a letter to London’s Daily Telegraph from the economists and scholars who wrote the “Verdict on the Crash” report for IEA. Read highlights and download the full report from the IEA blog. Acton’s Samuel Gregg authored the chapter titled, “Moral Failure: Borrowing, Lending and the Financial Crisis.”
California continues to be burdened with high taxes, punitive regulations, huge wealth-transfer programs, out-of-control spending, and lawsuit abuse. And there’s no end in sight to the state’s fiscal madness.
Some entrepreneurial minded residents are finding states like Nevada more hospitable for economic opportunity. Nevada ranks second when it comes to inbound migration. The Pacific Research Institute’s 2008 U.S. Economic Freedom Index ranked Nevada sixth in the country in “economic freedom.” South Dakota secured the top spot for 2008.
The rankings and report PRI has compiled is worth studying. It’s not a bland read either, for example thoughts and quotes concerning the relationship between political and property rights by leaders like James Madison are included.
Undoubtedly the report would be very beneficial for state legislators to use as a tool for serving their constituents. McQuillan also notes in his piece:
Economic freedom—or the lack thereof—affects states in multiple ways. Migration alters the political map through congressional apportionment. Current projections suggest that California’s mass exodus will deprive it of a seat in the U.S. House of Representatives after the 2010 census. Economic freedom also impacts pocketbooks. In 2005, per-capita income in the 15 most economically free states grew 31 percent faster than in the 15 states with the lowest levels of economic freedom. Policies friendly to economic freedom help states shore up their finances, too. The 15 freest states saw their general-fund tax revenues grow at a rate more than 6 percent higher than the 15 states with the least economic freedom.
The Business and Media Institute highlights House Speaker Nancy Pelosi’s response to a question about why conservatives and advocates for the free market degrade San Francisco as a city out of step with mainstream America. Pelosi believes it’s all about economics, and she points to the fact that government regulation and government programs in San Francisco are the model for America, and advocates for free markets are afraid of other citizens recognizing that. Pelosi says:
In San Francisco, every child has health care until 25 years old. In San Francisco, we don’t have a minimum wage, we have a living wage. In San Francisco, the environment is not an issue for us, it is a value. It is an ethic – it is protecting God’s creation. And so the exploiters of nature, of workers and the rest – like to use other aspects of our lives, which we take great pride in.
Pelosi goes on to note that conservatives try to use social and traditional values as a wedge issue to stop the spread of San Francisco’s economic values across America. She seems to be expressing the view that San Francisco is the new “city upon a hill.”
But are loss of economic freedoms and increased regulations in San Francisco a beneficial economic policy for all of America’s businesses and citizens? San Francisco’s mayor has also gone after bottled water. What about the city’s recent treatment of the U.S. Marines? Thomas Sowell does a good job explaining the reason for amazingly high housing prices in San Francisco because of increased government environmental regulations.
San Francisco is a beautiful city with many great citizens, but their economic policies are certainly not a shining example for all of America to follow. The Speaker’s comments however are a reminder of the need for free market advocates to do a better job in articulating the moral value and benefits behind their own ideas. If the arguments against San Francisco are led by people who may primarily be interested in social issues, there is merit of course, but the argument against exporting San Francisco values are incomplete.
Surely these are the words of a disciple of Hayek or Friedman, right?
Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior…
…The real question for policy makers is how to protect those worthy borrowers who are struggling, without throwing out a system that works fine for the majority of its users (all of whom have freely chosen to use it). If the tub is more baby than bathwater, we should think twice about dumping everything out…
…Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next…
… I’ve come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.
Why do we think we are helping adult consumers by taking away their options? We don’t take away cars because we don’t like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don’t operate mindlessly in trying to smooth out every theoretical wrinkle in life.
The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.
Give up? How about George McGovern?
Ed Morrisey, writing at Hot Air, notes:
I find it fascinating that McGovern has transformed himself from a statist to a free-enterpriser simply because he left office. That isn’t a coincidence, and it explains why politicians tend to “grow in office” towards state-based solutions. After McGovern had to stop justifying his existence as a legislator, he discovered that legislators don’t need to intervene in the markets anywhere near as much as he presumed while in office.