Tag Archives: Big Government

Liberals don’t acknowledge trade-offs

The left almost never acknowledges the trade-offs associated with the policies it advocates.  Its ongoing attempt to raise minimum wage is the latest example.

It would be nice if liberal politicians or pundits said, We understand that raising the minimum wage always reduces employment, but we are willing to make that trade-off in favor of a higher standard of living for those who keep their jobs.  Instead, the left usually denies the existence of any trade-off (a New York Times editorial in favor of California’s recent law gradually raising the statewide minimum wage to $15 per hour sort of acknowledged some associated costs, but tried to explain them away via economic bunk) or resorts to demagogic attacks against the more productive.

Similarly, you almost never hear liberals make arguments like these:

  • We understand that raising income taxes reduces economic growth, but we are willing to make that trade-off to redistribute resources to government services that benefit some subset of the population in the short-term.
  • We understand that Obamacare will result in healthy people, and taxpayers, paying more for inferior health insurance, but we are willing to make that trade-off so that everyone will have some minimal level of health care coverage.
  • We understand that tariffs and other protectionist measures hurt consumers and overall economic growth, but we are willing to make that trade-off to protect certain workers who have good jobs.  (This stance has become more bipartisan lately.)
  • We understand that carbon taxes, regulations that shutter businesses, and other mechanisms that we propose to reduce the effects of “climate change” will seriously harm the economy and jobs, but we are willing to make that trade-off to prevent more catastrophic consequences–which would result in much lower levels of economic activity and human welfare—in the future.

These are legitimate philosophical positions to take and defend in a democracy, and they might win the day in today’s America.  But it is a striking feature of our culture in the last half-century or so that debate is rarely cast on these terms.

Why don’t liberals mention trade-offs?  One factor is that they think that such arguments are too sophisticated and would make it more difficult to sell their policies; it’s much easier to promise everyone a free lunch.  In some cases, they probably don’t understand that a trade-off exists in the first place (most liberals lack appreciation of basic free-market principles).  In others, they don’t see the trade-off as a cost at all:  when it comes to “climate change,” the massive reduction of industry, redistribution of resources from innovative capitalist societies to retrograde third-world countries, and the creation of supranational bureaucracies to centrally plan the economy are features, not bugs.

The essential problem is that the left has universalized its ideology that government is the solution to all problems.  Whenever there is any unintended consequence—and the consequences are almost always unintended, because the left’s first principles simply don’t understand that their good intentions have costs—they can simply enact another government program to solve the problem.

 

 

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Government programs are like prescription drugs

Kudos to an excellent column by Glenn Reynolds linking the growth of government—and what he calls the “web” of patronage that radiates from it—to the decline of civilizations.  We have always believed that the only way to really counter government corruption, at least in a Western society that values individual liberty, is to reduce the scope of government.  Wouldn’t it be nice if most companies simply didn’t see the need to hire lobbyists, or pay bribes, because there weren’t that many areas in which the state would be inclined to interfere in their businesses?  Wouldn’t it be nice if the only way that a government bureaucrat could steal were to raid the petty cash box, as opposed to misappropriating funds via the countless overlapping, unaccountable ways that the government spends our money?

Most government programs are enacted largely to mitigate the effects of other government programs.  In turn, each program has its own constituents who know how to work the system to keep their goodies.  Liberals like to think of complex legislation, like Obamacare, as a piece of exquisitely-engineered and finely-tuned machinery, with savvy operators balancing the various mechanisms and behavioral responses to achieve their desired ends.  (Actually they think of the whole economy this way.)

In the case of Obamacare, much of the purported problem that it was intended to solve—that many Americans do not consume enough health care—largely came about due to government programs, such as the tax treatment of employer-provided health insurance and the hyper-regulation of the health care and insurance industries, which create all kinds of distortions in the market such as de-linking supply and demand for health care.  Beginning with the premise of making health insurance mandatory, then subsidizing it, the law includes hundreds of provisions to mitigate the iterative incentives and distortions layered upon one another in pursuit of these objectives.

We are reminded of a relative who takes around 15 prescription drugs each week.  Two of them are supposed to treat certain diagnosed ailments, and the other 13 are to counteract the side-effects of those two and among themselves.

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The Hastert case seems like a series of injustices

Former Speaker of the House Dennis Hastert (R-Ill.) received a 15-month sentence in Federal prison for sexual abuse of a young man.  No, it was for laundering excessive amounts of ill-gotten cash.  No, actually, it was merely for “illegally structuring” bank withdrawals to avoid breaching limits that would have required his bank to report the activity to the government.

Note that Hastert is guilty of “illegally structuring” withdrawals, not deposits.  There are laws governing reporting of deposits, to protect against money laundering and tax evasion, which arguably serve a legitimate public policy purpose.  But in this case, Hastert was dealing with his own money.  There was not necessarily anything illegal about what he was doing with the funds; it’s unclear whether he was a blackmail victim, and we don’t expect the Feds to investigate that.

It’s outrageous that there are laws on the books that impose conditions on withdrawing one’s own money, and perhaps even more outrageous that there are laws on the books that criminalize “structuring” withdrawals to avoid running afoul of the underlying laws that are ridiculous to begin with.

Moreover, Hastert must now register as a sex offender, even though he was not convicted of any sexually-based offense.  He presumably agreed to register, as well as to receive some sort of “sex offender treatment,” as part of a plea agreement, but it strikes us as inappropriate that the judge in the case proclaimed, “The defendant is a serial child molester.”

We will insert the compulsory “we don’t condone the sexual abuse of which Hastert is accused, and if he did it, he deserves to be punished.”  Regardless, we consider it a miscarriage of justice that the government can use the threat of long jail time under preposterous financial laws to coerce a defendant to admit conduct that they couldn’t prosecute because of statutes of limitations, and then, as a bonus, the judge can pontificate from the bench on matters not tried.

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Restricting Muslim immigration is impractical, harms freedom, and is legally dubious, and therefore not worthy of considering even if it improves our safety. Restricting gun ownership, on the other hand. . .

All right-thinking people seem to think that, even if it were practical, banning Muslims from visiting the United States would be at best an ineffective overreaction and at worst, a violation of human rights and abdication of America’s standing as a beacon of liberty in the world.

We—and Donald Trump—concede that banning all foreign Muslims would ensnare some innocent people who only want to visit the U.S. and have no terrorist sympathies at all.  But we are apparently not allowed to consider such trade-offs in debating how best to promote Americans’ safety when it comes to deciding which foreigners to allow the privilege of entering the country.

Meanwhile, President Obama has gone ahead in unveiling various actions to restrict Americans’ access to guns.  “We understand there are some constraints on our freedom in order to protect innocent people,” the President said, while claiming to support the Second Amendment.  “Our unalienable right to life, and liberty, and the pursuit of happiness — those rights were stripped from college students in Blacksburg and Santa Barbara, and from high schoolers at Columbine, and from first-graders in Newtown.”

We understand there are some constraints on our [sic] freedom in order to protect innocent people.  Our unalienable right to life, and liberty, and the pursuit of happiness — those rights were stripped from Americans serving their country at Fort Hood and in Chattanooga , police officers serving their communities in Philadelphia and New York, and innocent civilians attending a holiday party in San Bernardino, the president did not say.

Banning foreign Muslims from entering the U.S. would create unforeseen problems in our foreign policy, would be difficult to implement, and might entail some legal challenges—so we should not even think about how to overcome these barriers.

Obama’s executive actions on gun control would “present new and unforeseen enforcement problems,” “create untold logistical . . . difficulties,” and be “subject to legal challenge,” according to a White House staffer.  But it’s worth it.

Banning foreign Muslims from the U.S. enjoys majority support in polls, but that is not reason to consider it, according to mainstream media editorialists (most of whom supported the president’s proposals on guns).  According to the Washington Post, majority support is a good reason for Obama to act:  “Obama said gun owners would support his new restrictions. He was right.”

Banning Muslims from entering the U.S. would affect some innocent people, who just want to enjoy their vague “right” to visit the U.S. and are no threat to our safety.  Making it harder to purchase a firearm would affect mostly innocent people, who just want to enjoy their constitutionally-protected right to own a gun and are no threat to our safety.

So are we to conclude that personal freedom, implementation challenges, and public opinion are relevant factors in considering measures to improve public safety only when it comes to some issues?

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UPDATE: “Mental health” will be a screen for gun ownership

President Obama’s executive action on gun control includes one of the provisions about which we fretted a couple of years ago.

Bureaucrat:  Why do you want to acquire a gun?

Citizen:  I like to camp in the woods and hunt animals.

Bureaucrat:  [Marks “mentally ill” in his notebook.]

. . .

Bureaucrat:  Why do you want to acquire a gun?

Citizen:  I want to be able to defend my business in case of Ferguson-style rioting.

Bureaucrat:  [Marks “mentally ill” in his notebook.]

. . .

Bureaucrat:  Why do you want to acquire a gun?

Citizen:  I want to defend myself in case of an Islamic terrorist attack.

Bureaucrat:  [Marks “mentally ill” in his notebook.]

. . .

Bureaucrat:  Why do you want to acquire a gun?

Citizen:  I fear government tyranny.

Bureaucrat:  [Marks “mentally ill” in his notebook.  Adds Citizen to the FBI watch list.]

The framework starts, according to Politico, with “enabl[ing] health care providers to report the names of mentally ill patients to an FBI firearms background check system.”  Even if this is all that will be in place, what could possibly go wrong?  Let’s see:  delays in background checks; false positives and name mix-ups, followed by a bureaucratic maze akin to the “no-fly” list; data sharing that will find someone’s supposed mental illness being recorded elsewhere; data breaches, either intentional (government bureaucrats spying on their neighbors or their daughter’s boyfriends) or negligent (e.g., OPM); new liability risks for doctors who are found to have treated patients who later commit gun crimes but did not report them.

An even bigger risk is when this program expands, to become compulsory, eventually resulting in an affirmative mental health check being a prerequisite to gun ownership.  “The administration has taken great pain to try to clarify that there is very limited information that would be reported only within a very limited group,” quotes the credulous Politico article, which naturally only cites “mental health” and gun control advocates and does not raise any of these potential pitfalls.

Luckily, we needn’t worry about a government program that begins with “very limited information that would be reported only within a very limited group” and greatly expands, often surreptitiously, thereafter.

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Conservatives shouldn’t refer to “rationing” health care

Much commentary from the right on health care uses the term “rationing,” such as a recent piece by Wesley Smith in National Review Online.  Please indulge our minor quibble with the term “rationing,” because rationing supply and demand of goods for which we would like all an unlimited amount, such as health care, is exactly what markets are for.

Health care will be rationed by one mechanism or another.  Conservatives should cast the debate as rationing via market mechanisms versus rationing by government bureaucrats (sorry, “experts”), who, as Smith points out, are subject to all sorts of perverse incentives.  People who understand markets comprehend that, even were bureaucrats completely benevolent and possessing as much information as humanly possible, they could not ration health care (or any other good) to maximize welfare as well as the market could.

Perhaps when conservatives use the term, they merely are applying short-hand for the concept of “rationing by bureaucratic fiat” or rationing by non-market mechanisms in general.  But this does a disservice to the audience’s understanding of the free market:  we should make it clear that we are talking not about rationing as what markets do by definition, but rather by something akin to central planning.

I propose the use of more descriptive terms, such as “politicization of health care provision” or “death panels.”

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Liberals may finally get their wish to eradicate car ownership, but miss the point as usual

Liberals hate cars.  The automobile, made a mass consumption item by American ingenuity, capitalism, and prosperity, is the ultimate symbol of personal freedom.  The car owner can drive wherever he wants, whenever he wants, accompanied by whomever he wants.  The milestone of owning one’s own car is a symbol of success to which many Americans aspire.  They open economic opportunity for commuters.  Cars are, for many enthusiasts, an expression of their individual style.  For many an individual living in a crowded home with a bickering wife and screaming kids, schlepping to a workplace comprised of people he doesn’t like, having to stand in line at the grocery store to pick up ingredients for dinner, those minutes in his car are a welcome respite of solitude in one’s own personal space.

These are all mindsets that liberals despise.  They decry the “suburban sprawl,” “gas-guzzling,” “road rage,” conspicuous consumption, luxury,  pollution, and overall selfishness that cars enable.  Liberals would prefer that you took the train or bus—quintessential symbols of collectivism—to travel from where they want you to be to where they want you to go, with the added benefit of being forced to mingle literally toe-to-toe with the rest of humanity.  It’s no coincidence that, unlike Europeans, Americans have not bought into large-scale rail travel.

Liberals have designed entire utopian frameworks, under banners like “smart cities” and “transit-oriented development” to centrally plan the organization of society in the manner that they find morally virtuous.  (Not to mention that liberal politicians love all manner of rail proliferation because it presents copious opportunities for graft, what with the land acquisition along future rail lines, to bloated construction and maintenance contracts and overstuffed union sinecures, to boards and commissions, tax increases, and ribbon cuttings.)

This is apparently the perspective of Dan Neil, writing in Wall Street Journal, whose ideology curtails his ability to analyze the economic implications of self-driving cars in an article entitled “Private car ownership is on the road to becoming a rarity.”

We agree that self-driving cars combined with car sharing have the potential to yield tremendous benefits for society:  reducing costs, allowing people to make better use of their time, allowing more people to be mobile, improving safety, reducing congestion, and, ultimately, allowing people to expand the radii in which they can readily travel, making for great economic benefit.

That’s all well and good, but Mr. Neil can’t help but ooze disdain for the very concept of private car ownership.  He lectures that it makes us “forget the joys of selflessness” in an era of “reckless glut.”

“In 25 years, the only people owning cars will be hobbyists, hot rodders and Flat Earthers,” he gushes, failing to acknowledge any of the benefits of private car ownership other than in these supposed fringes, and barely accepting the existence of a free-market outcome that means that people have the right to express their own preference.  Referring to China, he dismisses cars as nothing more than “status item, as luxury, as totem of personal mastery in a fragile postcolonial mind-set.”  Only a coddled liberal would so glibly dismiss the ability of a Chinese subject to unshackle state control of all aspects of his life in at least one dimension.

He concludes, “The notion that we as consumers will forgo the awesome pleasures of the automobile—the privilege, the mobility, the identity—to share vehicles is, I grant, unfamiliar.”  Mr. Neal, I would respectfully recommend that you familiarize yourself with it before breezily dismissing the benefits of freedom and autonomy that cars bring to so many people.

 

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Where are the citizens with pitchforks?

We were sitting recently with some neighbors on the stoop in a sleepy central California beach town.  Like most of the state’s coast, this area continues to gentrify; the community combines the long-time eccentrics typical of a California beach town with upscale Californians who live within driving distance buying weekend or retirement homes.  This particular street runs perpendicular to the beach, with great views of the surfers and the whales, and increasing prices as the modest properties proceed down the block from Highway 1 to the ocean.  There are not many better places to live in the world.

One homeowner just completed an arduous years-long process to secure planning permission to build an extension of his back deck on his own property.  The neighbor next door took a long time to secure the necessary permits to knock down the junk house that was there when he bought it and build a new one on a prime lot on a bluff over the ocean.  The neighbor on the other side said, we would like to do the same, but will perhaps remodel instead if we can’t get permission, due to either the whims of some bureaucrat or simply government inertia.  The city has delayed getting back to him for six months, he shrugged, and continued with his drink.

Across the street, a house is completely gutted to the rafters; when we asked why the owner took this approach instead of demolition, we already knew the answer:  it’s easier to get permits for a renovation than for a new construction.

In addition to the myriad levels of local government and numerous departments to navigate for permission to modify one’s own property, one needs to secure permission from the California Coastal Commission even to repaint one’s own house.

We sat astonished as these various property owners—all affluent, civic-minded, taxpaying citizens who are certainly capable of comprehending how government works—shrugged with mild perturbation, yet resignation, at the gauntlets before them.

How can we tolerate this encroachment on property rights?

California is certainly one of the world’s leading lights on NIMBY-ism, also known as, I have secured my comfortable place, and now I am going to pull up the drawbridge in front of everyone else.  And you’re lucky to live here so shut up.  But this is a town of several thousand people; perhaps a concerted effort could replace the entire city council, or county board, although there would always be more bureaucrats standing beyond the reach of accountability and more vested interests that know how to work the system—if for no other reasons than envy, petty power-grubbing, or a vague sense of sentimentality for the status quo.  Many municipalities in the state have layer-upon-layer of restrictions, ranging from days (most days, as it turns out) in which homeowners are not allowed to use the fireplaces in their own homes, to limiting the square footage that a house can expand based on the size of the garage.

We remain astonished at the complacency with which citizens accept the lazy, irrational, often corrupt, machinations of the state.

This is the same California that, due to profligacy and mismanagement, had to issue IOUs in lieu of payments in 2009, including for tax refunds.  That’s right, citizens were compelled to loan the government their money interest-free by over-withholding throughout the year, then when it was time to repay, the state said, don’t worry, we’ll catch you later.  We remember thinking at the time, where are the citizens descending upon Sacramento with pitchforks?  Moreover, nothing has changed via the ballot box since then.

Illinois recently paid lottery winnings with IOUs.  Again, we wondered, where are the citizens with pitchforks?  The lottery is a supposedly self-financing fund; how is it acceptable that the government confiscates the pot and shrugs when beneficiaries come to collect?

In Greece—i.e., the California and Illinois of the future—the government last summer not only refused to let people withdraw their own money from banks, but also didn’t allow them to remove cash and precious metals from their own safe deposit boxes.  Despite media reports of widespread suffering and outrage (usually directed by Greeks at Germany), nothing has really changed in Greece; the voters returned the left-wing government to office and virtually ensured that this crisis will recur in a couple of years.

The western world is in a sickly decadent stupor.  We mentioned earlier that this particular coastal California city is indeed one of the best places one could hope to live; but it does not follow that we should consider residing there a privilege, granted at the pleasure of the state, and we should just pipe down and accept infringements of our liberty.  These examples of what citizens will accept from their supposed “representatives” certainly constitute leading indicators of complete societal collapse.

We know, you’re saying, these are first-world problems compared to what governments in most of the world do to their citizens.  But anyone who has worked hard and participated honestly in society cannot take much comfort in that.

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Lovers of liberty should hope for more Kim Davises when they come for our guns

There’s a thoughtful debate on the right about whether Kim Davis, the county clerk in Kentucky who, citing her conscience, defied the Supreme Court’s ruling in Obergefell v. Hodges discovering that the Constitution grants the right of marriage to gay couples.  Davis refused to issue marriage licenses in her jurisdiction and was briefly jailed.

A core tenet of conservatism  is the rule of law.  The Obergefell ruling, absurd as it is, is the law of the land.  Not only was resistance on Davis’s part futile, but arguably inappropriate as a public official.  When one takes a job as a public servant one must uphold the law.  Civil disobedience is only the right of civilians.  The proper action from a public servant would be to resign; perhaps mass resignations would be an effective tool in persuading legislators to change the law.

On the other hand, Americans are rightly proud of their traditions of defying oppression that comes under the color of law.  And such defiance—by government agents—would likely be the only recourse in what this blogger fears will eventually be an attempted government usurpation of our right to bear arms.

It is within the realm of possibility that, one day, Congress w ill pass a law banning and confiscating handguns and the Supreme Court will uphold it under whatever imaginary constitutional logic it can muster.  Fortunately the legislative element remains a formidable hurdle at this point in time, but that is not always certain to be so.  And once Congress passes a law, all it will take is for five liberal Supreme Court justices to overturn centuries of precedent.

At that point, it would be up to the executive branch to implement the law.  Eventually, this would require a door-to-door effort, such as Australia completed for certain types of guns in the late 1990s, much to President Obama’s and Hillary Clinton’s admiration.

Noble “from my cold, dead hands” rhetoric notwithstanding, it’s not likely that many Americans would respond to a federal agent’s knock at the door with an armed standoff in which the government would certainly win.  Thus the only barrier to confiscation would be if ATF and FBI agents, and maybe members of the military, that the federal government would send a-knocking were to refuse to follow orders.

Is such a scenario likely?  It would get ugly, leading to calls for martial law by some and secession or outright revolution by others.  We can all hope our last hope is not to rely on government functionaries disobeying their elected leaders, but it might come to that.

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Coming soon: Abolition of cash?

Andy Haldane, the chief economist the U.K. central bank, has brought to the mainstream a scary fantasy held by many liberals:  abolishing cash.  In an era of zero interest rates, and even negative rates in some countries, governments are finding it difficult to continue printing money to stimulate the economy.  When their attempts to induce inflation by printing and spending more money aren’t effective, they may move to more draconian measures.

No doubt our enlightened leaders will point to the supposed obsolescence of physical cash, the costs that cash handling imposes, and the wondrous technology that can be brought to bear to relieve us of these burdens.  They also mutter about tax evasion and money laundering, which is closer to their real agenda of fully controlling the economy’s resources.

There will possibly come a day when all cash is electronic, on which the government can mandate “negative interest rates”—i.e., theft of depositors’ assets, either to prop up banks and/or to go directly into state coffers.  Such totalitarians dream of the scenario in which all assets that you hold are at the pleasure of the government, to be spent as you are told.  This is already true to an extent in the era of fiat money, but many central bankers and government treasurers would be very happy to take away citizens’ freedom to stash money under their proverbial mattresses.

Of course, we have seen plenty of capital controls lately, such as Cyprus “bailing in” banks (i.e., stealing from large customers) and Greece not only refusing to allow depositors to withdraw their own money from bank accounts, but even refusing to allow people to remove cash from safe deposit boxes in those banks.  (Note to self:  buy stock in manufacturers of household safes.)

When a government bureaucrat hears about a bank robbery, he probably laments, “such a missed opportunity.”  Our best advice is to think twice about any whiz-bang technology that ties up your money in a place where the long arm of the state can reach it.

 

 

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