Posts tagged with: government regulation

Blog author: mvandermaas
posted by on Friday, March 7, 2008

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.

Blog author: mvandermaas
posted by on Friday, February 15, 2008

Interesting:

Backed by studies showing that middle-class Seattle residents can no longer afford the city’s middle-class homes, consensus is growing that prices are too darned high. But why are they so high?

An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.

Just some food for thought on a Friday afternoon.

Last week, Istituto Acton’s close Italian ally in defense of liberty, Istituto Bruno Leoni (IBL), presented the 2008 Index of Economic Freedom in Rome. The IBL invited speakers to discuss the decline of economic freedom in Italy over the last 12 months. Il bel paese ranks as the 64th freest economy in the world, with Hong Kong at number one and the U.S. at five.

Italy’s economic problems were blamed on corruption and weak law enforcement. While corruption to some extent reflects individual moral failings and certainly does affect economic growth, the reverse is also true: corruption tends to flourish in environments already hostile to markets and free competition.

Bad and excessive regulation tends to create opportunities for the arbitrary use of power when dealing with citizens and companies. This, in turn, distorts market incentives and deters investment but it also creates mistrust among people and alienates them from the governing institutions. Better and less regulation, on the other hand, not only boosts economic growth but could tackle a more deeply-rooted crisis of political and social ethics.

Not surprisingly, a labor union representative at the IBL event argued for stronger government to fight corruption at the expense of additional economic reforms. He unfortunately missed the point: The lack of economic freedom simply leads to more opportunities for the moral evils that already plague Italy.

Normally, I’m not a huge fan of Congressman John Dingell. But on this issue, I have to at least give him points for honesty:

Democrats took over Congress vowing to make global warming a top priority, and House Speaker Nancy Pelosi planned to notch a quick victory with a bill that was long on political symbolism and cost, if short on actual emissions reductions.

Standing in her way has been Mr. Dingell. Much to the speaker’s consternation, the powerful chairman of the Energy and Commerce Committee is insisting that any bill should actually accomplish something, and that its pain be borne by all Americans (rather than just his Detroit auto makers). In recent months he has been circulating his own proposals for hefty new taxes on energy, gasoline and homeowners–ideas that are already giving the rest of his party the willies.

His position arguably makes Mr. Dingell the lone honest broker in the global warming debate. But it also makes him a headache for all his Democratic friends, who’d prefer he just play political nice. For his part, the 81-year-old Dean of the House–as feisty and courtly and colorful a congressman as you’ll ever find–is unrepentant.

“I wasn’t sent down here to destitute [my district]. And I wasn’t sent down here to destitute anyone else. . . . I’ve got a responsibility to legislate, but I’ve got a responsibility to legislate well. I’m going to be honest with the American people about this and say ‘look here, fellas, this is what we’re going to have to do to you to fix global warming. You tell us whether you like it or not.’ “

Read the whole interview, and be sure to savor the ease with which Dingell talks of directly controlling or changing your life from his perch in the government. Honest, and frankly – chilling.

The mammoth Congressional expansion of SCHIP is such a bad idea, even the normally big spending President Bush vetoed the bill. I wrote a piece titled, “Abandon SCHIP: Big Government Returns,” which is now available on the Acton Website.

The political posturing concerning the program has reached a troubling level. Supporters are using using kids as props to usher in socialized medicine and government expansion. But one of the main problems with the bill is the regressive characteristic of the expanded version. Money will be transfered from poorer states and citizens to fund a permanent middle to upper-middle class entitlement. While the growing cost of health care is a serious problem, we need to find solutions that provide affordable private coverage outside of the impending bureaucratic and regulatory nightmare.

Another growing frustration is a lack of conservative leadership on explaining the consequences of expanding this program. In general it seems, in the last few years political and moral leadership on government expansion has been largely vacant. Conservatives use to fight the expansion of these programs and point out the unintended consequences of such measures. Do we really want a permanent entitlement for the well to do?

Blog author: rnothstine
posted by on Wednesday, August 8, 2007

A new film titled “Things of the Spirit,” takes a fresh look at the life and presidency of Calvin Coolidge. Coolidge, understandably, received renewed interest during the Reagan era of American politics. Coolidge is perhaps best known for his laissez-faire economic policies and the famed moniker, “Silent Cal.” What makes “Things of the Spirit” different is that it’s produced by a self avowed “liberal filmmaker,” John Karol.

Karol penned a piece last week for the New York Sun titled, “The Case for Cal.” When he first set out to tackle Coolidge years ago he admitted to not knowing all that much about his subject. “What little I knew of Coolidge came from New Deal historians who view him as a somnambulant capitalist tool whose presidency served only as a prelude to disaster,” Karol said. Here are some fascinating observations from his article, which puts Coolidge in a new light:

– If I had to fashion a sound bite to describe him, I would call Coolidge a political minimalist who chose to guide rather than legislate.

– It is on economic matters that Coolidge is most remembered. World War I and its aftermath caused skyrocketing national debt. At the same time, the top income tax rate soared to 73%, stifling private investment. Post-war America was a chaos of strikes, race riots, anarchist bombings, inflation, and unemployment.

– Harding, Coolidge, and Secretary of the Treasury Andrew Mellon sought to kick-start the economy by reducing the top marginal tax rate to 25%. They did. Revenues increased dramatically, presaging Arthur Laffer by half a century. Both presidents ran surpluses in all their annual budgets. By the time Coolidge left office, the national debt had been cut by one-third.

– New Deal historians maintain that the tax cuts of the 1920s reversed the progressive tax policies of Woodrow Wilson. Far from it. Exemptions increased so much that by 1927 almost 98% of the American people paid no income tax whatsoever. When Coolidge left office in 1929, wealthy people paid 93% of the tax load. During Wilson’s last year in office they had paid only 59%.

– Less remembered, and less appreciated by contemporary politicians, was Coolidge’s aversion to farm subsidies. At great political risk, Coolidge twice vetoed the popular McNary-Haugen farm subsidy bill.

Karol also makes note of Coolidge’s aggressive actions in cleaning up the scandals from Harding’s administration, and his very progressive views on race for his time. Coolidge was known as a man of immense integrity. He even cut the name tags out of his suits when he asked his wife to resale them, so not to profit from his name and position.

On the film’s website, columnist and radio talk show host Michael Medved, calls “Things of the Spirit,” the finest documentary he has ever seen. George Gilder notes, “The film completely dispels the cliché notion of New Deal historians that Coolidge was a small-minded materialist “Babbitt” whose Presidency served only as a prelude to disaster. See it. You’ll never think the same way about Calvin Coolidge again.” Former Democratic Presidential nominee Michael Dukakis also weighs in with a glowing review.

Calvin Coolidge in many ways represents the old fashioned idealism of a largely forgotten generation of common sense and practicality. In a sound clip provided by Michigan State University from 1920, Coolidge warns the country about the dangers of excessive taxation and federal spending. This high quality recording is worth a listen.

Other memorable statements from Coolidge:

– I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical form.

– The strength of our country is the strength of its religious convictions.

– If only his countrymen would fulfill their basic obligations to one another, most of their problems would take care of themselves.

The theme for Coolidge’s presidential reelection in 1924 was, “Keep Cool with Coolidge.” Today that would sound like a presidential campaign slogan under a global warming platform. Perhaps as the government becomes more regulatory and intrusive, and far less practical, the lessons of Keeping cool with Coolidge will echo louder still.

Blog author: rnothstine
posted by on Wednesday, July 18, 2007

John Edwards formally kicked off his poverty tour in New Orleans’s Lower Ninth Ward this week and of course blamed the president for the government’s mishandling of the Hurricane Katrina disaster. Edwards also played up symbolism by visiting some of the samel cities Martin Luther King, Jr. and Robert Kennedy visited during their famed poverty tours. Edwards may not significantly differ from other Democratic front runners for the White House, although some say he is the only candidate with a truly universal health care program.

Edwards does however stand out from the field of Democratic front runners in terms of actually visiting impoverished locations, although not always to the delight of everybody in the region. In addition, there is not a lot of vote power or political contributions likely to emerge from the places he stopped on his poverty tour. He is often accused of orchestrating a well crafted political strategy for trying to draw attention to the nation’s poor, while attempting to distance himself from recent criticisms of his own affluence and lavish spending. Even in the age of overly scripted politicians he should be given the benefit of the doubt, and acknowledged for raising awareness to a critically important moral issue, although his solutions lack the right method for addressing poverty.

While the language and symbolism of his tour is recycled Great Society rhetoric, it adds a dynamic reminder of the failed attempt at combating poverty through massive federal spending and initiative. Of course, that’s not Edwards’ intention but he helps us recall these failed policies.

Lyndon Johnson in his first State of The Union Address declared “an unconditional war on poverty in America.” The same president vowed to “not rest until that war is won.” The War on Poverty in fact institutionalized poverty by trapping people in a vicious cycle of dependency. No doubt, there won’t be any talk of meaningful tax cuts, deregulation, and economic freedom in the Edwards poverty tour. If there is one legacy the Great Society left, it is that the government is not a job or wealth creator — the entrepreneur creates jobs and wealth. Jesus himself proclaims the “poor shall always be with us,” and so shall well meaning but misguided poverty tours.

Mortgage foreclosure rates soared 53 percent in August, compared with a year earlier, and many people who were eager to buy a house with low “teaser” interest rates and creative financing are in trouble. Acton Senior Fellow in Economics Jennifer Roback Morse expects new calls for goverment oversight of the mortgage industry, which is already highly regulated. A better idea, she suggests, would be for buyers to examine their motives for acquiring real estate with gimmicky loans and take some responsibility for their actions.

Read the full commentary here.

Conserve water by FLUSHING AS OFTEN AS POSSIBLE

A report from the road: I’m in Colorado Springs this week, and I noticed this note taped to the wall of the bathroom in my spartan lodgings at the local Ramada Inn:

Due to restrictions made by the City of Colorado Springs, the toilets have reduced water pressure and may not flush as well as you are accustomed to. In order to prevent the toilet from stopping up, please flush the toilet as frequently as possible while using it. Thank you!

Now I may be wrong here, but I think it’s safe to assume that the City of Colorado Springs was attempting to conserve water resources by putting these restrictions in place. The practical result of their action seems to have been to cause a local hotel to actively encourage greater water use.

Aaah, the irony.

The CrunchyCon blog at NRO is currently discussing the issue of factory farming, which is apparently covered and described in some detail in Dreher’s book (my copy currently is on order, having not been privy to the “crunchy con”versation previously).

A reader accuses Dreher of being in favor of big-government, because “he thinks we ought to ‘ban or at least seriously reform’ factory farming.” Caleb Stegall responds that he, at least, is not a big-government crunchy con, and that this was made clear “early on.” He issues a somewhat strange rejoinder a bit later.

But I think there’s something to the claim. It is one thing to argue that factory farming of the type Dreher describes is immoral, which as Frederica Mathews-Green relates involves “endless rows of pigs in cages too small for them either to stand or lie down; limbs protruding into adjoining cages get wounded and broken. But this damage is ignored, because it won’t affect the production of meat. The pig only has to cling to life long enough to be worth slaughtering.”

It’s quite another to argue that government should take a primary or definitive role in banning such immoral activity. As Aquinas notes, this calls for wisdom.

The purpose of human law is to lead men to virtue, not suddenly, but gradually. Wherefore it does not lay upon the multitude of imperfect men the burdens of those who are already virtuous, viz. that they should abstain from all evil. Otherwise these imperfect ones, being unable to bear such precepts, would break out into yet greater evils: thus it is written (Pr. 30:33): ‘He that violently bloweth his nose, bringeth out blood’; and (Mt. 9:17) that if ‘new wine,’ i.e. precepts of a perfect life, ‘is put into old bottles,’ i.e. into imperfect men, ‘the bottles break, and the wine runneth out,’ i.e. the precepts are despised, and those men, from contempt, break into evils worse still (Summa Theologica, II.1.96.ii).

As I summarize, “In cases where the law would cause greater evil to be done, it is not prudent to criminalize the behavior.” Once the moral permissibility or impermissibility of an act has been settled upon, it does not settle the question of government’s responsibility.

It may well be that factory farming is disgusting and morally repulsive, but it also may be that the way to deal with it is not through government prohibition but through market mechanisms, i.e. morally-informed consumer choice. There is an underlying current that I sometimes detect in the depiction of crunchy conservatism that seems to confuse consumerism and materialism with capitalism, and accordingly ignores non-governmental market-based solutions to moral issues.