Voice For Liberty

Tag: Interventionism

  • Articles of Interest

    Obama’s volunteer corps, Kansas cigarette taxes, U.S. Auto industry, Austrian economics

    The Rise of ObamaCorps (Americans for Limited Government) “Unless the Blue Dogs can muster enough support to halt Speaker Pelosi’s march to madness, the American taxpayer will have to pony up another $5 billion for paid ‘volunteers’ (an oxymoron if there ever was one) to politically-oriented organizations, the aims of many of which they will invariably oppose.”

    Study documents historic trend of decreased state tax revenues following cigarette tax increases “This study clearly shows that raising cigarette taxes simply drives Kansas consumers to other states to purchase tobacco products,” said AFP-Kansas state director Derrick Sontag. “It clearly results in lower cigarette tax revenues, not because more people are quitting, but because people go elsewhere to avoid paying those higher per-pack taxes. … We hope this document will show to lawmakers that raising cigarette taxes is an ineffective deterrent to smoking and that it is simply unwise to fund government programs with revenue that is likely to dwindle once the new tax takes effect.”

    Detroit’s Fate Sealed in West Wing (Wall Street Journal) Describes President Obama and his team’s involvement in the remaking of General Motors. “Mr. Rattner broke the news to [General Motors CEO] Mr. Wagoner at his office at the Treasury, according to an administration official. Afterward, Mr. Rattner met with Mr. Henderson, and told him he would take over as GM’s CEO.” The president plans to put some of his own staff into the auto companies. We can be sure that as the president and his team assert more control over GM and Chrysler, Congress will want to get in on the act too.

    The Obama Autoworks: At GM and Chrysler, politics is now Job One (Wall Street Journal) More analysis of just how bad things are likely to get now that the American automobile industry — at least GM and Chrysler — is on the road to nationalization. “Bankruptcy or not, the larger problem here is Washington’s industrial policy. Even if Chrysler merges and GM restructures, Mr. Obama wants the companies to make the kind of cars the political class favors, whether or not consumers want to buy them. ‘The United States of America will lead the world in building the next generation of clean cars,’ the President said yesterday. He didn’t mention a goal of profitability. … Mr. Obama’s industrial policy vision runs directly counter to a strategy that would get the companies back to profitability as soon as possible. … All of which is to say that the taxpayer commitment to the Obama autoworks is only getting started.”

    Austrians Can Explain the Boom and the Bust (Robert P. Murphy at the Ludwig von Mises Institute) An Austrian explanation of the recent boom and bust cycle, including the Austrian model of the structure of capital. Interest rates, as it turns out, are very important.

  • Articles of Interest

    Government intervention, Kansas budget, open records, Obamanomics, social security

    Did government or greed cause economic distress? (Thomas Sowell in the Detroit News) “An economist specializing in financial markets gave a glimpse of the history of housing markets when he said: ‘Lending money to American homebuyers had been one of the least risky and most profitable businesses a bank could engage in for nearly a century.’ That was what the market was like before the government intervened.”

    Budget based on hopeful numbers (Topeka Capital-Journal) “A $13 billion-plus state budget is likely to win approval from legislators this week, but it’s built on what seems a convenient fiction.” The problem is that revenues may again fall short of forecasts. The danger is that government spending lobbies will view this as an opportunity to press for tax increases.

    Exemptions from Kansas Open Records (Kansas Meadowlark) “The Kansas legislature recently extended certain exceptions to the Kansas Open Records Act to hide certain records from the public view at least until 2014.”

    Obamanomics Isn’t About Big Government (Robert B. Reich in the Wall Street Journal) The former secretary of labor says public investment is the defining characteristic of President Obama’s economic policy.

    Recession Puts a Major Strain On Social Security Trust Fund (Washington Post) “With unemployment rising, the payroll tax revenue that finances Social Security benefits for nearly 51 million retirees and other recipients is falling, according to a report from the Congressional Budget Office. As a result, the trust fund’s annual surplus is forecast to all but vanish next year — nearly a decade ahead of schedule — and deprive the government of billions of dollars it had been counting on to help balance the nation’s books. … And at some point, perhaps as early as 2017, according to the CBO, the Treasury would have to start repaying the billions it has borrowed from the trust fund over the past 25 years, driving the nation further into debt or forcing Congress to raise taxes.”

  • We need to not only remember, but to understand the past

    Charles Koch, Chairman and CEO of Koch Industries, Inc., wrote an article in a recent company newsletter that explains the similarities between today and the early 1930s, and how our present government leaders aren’t following the lessons we should have learned. The article may be read by clicking on Perspective.

    One of the myths surrounding the Great Depression is that Hoover did nothing to intervene. It was Roosevelt who swept in, and through massive intervention, ended the depression. Koch dispels that myth: “Hoover launched the most interventionist economic program in U.S. history. Hoover supported record income tax hikes and devastating import tariffs. He also initiated an explosion in government power by creating massive new programs. Far from helping, these programs created a destructive uncertainty that discouraged investment and entrepreneurship and contributed to the decline.”

    Koch documents Roosevelt’s massive expansion of government power, regulation, executive orders, and intervention, which didn’t help.

    What about the responses our government is making today? It’s making the same mistakes, Koch says. Expansionist monetary policy, bailouts, takeovers, make-work programs, expanding government agencies and regulation — this reliance on government to fix things is not likely to work.

    Then, as now, free markets were blamed for our problems, which means that we may not rely on what can get us out of trouble: “It is markets, not government, that can provide the strongest engine for growth, lifting us out of these troubling times. If we are foolish enough to ignore some of the most painful lessons of history, then we will almost certainly make the same mistakes on a devastating scale.”

  • Protest Pork in Kansas: Report and Photos

    The Kansas Meadowlark has a report with photographs of today’s protest at Representative Dennis Moore‘s office in Overland Park. Click on 500 in Overland Park brave cold, wind to protest stimulus, pork (photo essay) to see.

  • It’s My Money — I’ll Bailout Myself!

    From the Lone Star Times, economist Michelle Muccio appears in the video It’s My Money — I’ll Bailout Myself!

    It’s funny how many people would rather keep control over their own money rather than sending it to Washington (and their state, county, city, and school district). Can people be trusted to spend their own money? The alternative is to let politicians and bureaucrats have control. Their record — just look at some of the things in the economic stimulus bill — is not good.

  • Can Wichita government investment create jobs?

    Recently the president of the Greater Wichita Economic Development Coalition wrote an op-ed that engaged in a large measure of self-congratulation, while at the same time asking for even more resources. (Vicki Pratt Gerbino: Invest in recruiting, preserving area jobs, February 15, 2009 Wichita Eagle)

    We need to examine whether activities of groups like the GWEDC are really needed and desirable.

    First, Ms. Gerbino states “To date, our public investments have returned more than $2 for each public dollar invested.” Reading this, it sounds like a great deal — local taxpayers put up $1 and get $2 back. But it doesn’t quite work out that way.

    If you read a document at the GWEDC website titled GWEDC Economic Development Activity and Performance Evaluation 1st Half 2008, you’ll learn who really wins: local governments. Here’s what this document says: “To measure public benefit, the GWEDC evaluation model estimates the streams of tax revenues …”

    That’s right. More tax revenue flows to local governments. Somehow this is supposed to be viewed as “return on investment” for the taxpayers. If government were to reduce taxes in response to this increase of revenue, that might be a good return. But that doesn’t happen.

    Some of these programs don’t recognize the cost of providing the benefit. Consider Industrial Revenue Bonds (IRB). The purpose of these bonds is tax abatement, usually property tax, but sometime sales tax too. The company that receives the abatements benefits. But unless the city reduces spending by the amount of the abatement, taxes rise for other taxpayers. This leads to a loss of economic activity — and jobs — somewhere else.

    There are 12 different types of incentive programs listed on the GWEDC’s website. Each has its own set of criteria that companies must meet. It’s likely that each of these programs has administrative overhead that must be paid for, and companies undergo costs when they apply for these programs.

    This has the result of creating two classes of companies: those that are able to take advantage of these incentives, and those who, for whatever reason, can’t use them.

    A better strategy would be to eliminate economic development incentives and the distortions that accompany them. Instead, work to reduce taxes for all companies. People across the country will notice this without an expensive advertising campaign that get lost in the noise created by all the other cities and states competing with taxpayer dollars.

    Besides, for all this economic development to make sense, you have to believe that government is the best judge as to where investment capital should be directed. There’s not much evidence to support this.

  • Financial crisis caused by government

    Did the “excesses” of capitalism cause the current financial crisis? First, we really don’t have capitalism in the United States, at least not any reasonable semblance of laissez faire capitalism, as explained in my post The Myth that Laissez Faire Is Responsible for Our Present Crisis, based on the work of Professor George Reisman.

    The Wall Street Journal article How Government Created the Financial Crisis: Research shows the failure to rescue Lehman did not trigger the fall panic explains more in these excerpts:

    Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions — not any inherent failure or instability of the private economy — caused, prolonged and dramatically worsened the crisis. … The realization by the public that the government’s intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP? … Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.

  • NoStimulus.com Effort Crosses 200,000 Petitions

    Here’s a press release from Americans For Prosperity that talks about the tremendous success of the NoStimulus.com website. This site experienced tremendous traffic yesterday and had difficulty staying online. Things are working smoothly now, so I encourage you to visit the site to learn about the stimulus plan. Then, sign the online petition.

    NoStimulus.com Effort Crosses 200,000 Petitions as Taxpayer Outrage Intensifies

    “This is an avalanche of public opinion, and members of Congress ignore it at their own peril.” — AFP President Tim Phillips

    WASHINGTON — While the US Senate chose to ignore its constituents and vote in favor of a trillion dollars of debt yesterday, more than 100,000 American taxpayers expected to foot the bill signed Americans for Prosperity’s NoStimulus online petition, doubling the number in one day and bringing the count over 200,000.

    “There is growing citizen outrage against this spending nightmare and American citizens are not giving up,” said Tim Phillips, president of Americans for Prosperity. “In fact, taxpayers raised their voices louder, doubling the number of petitions in one day.”

    The amended bill will now go back to the House for a vote, giving taxpayers more time to examine its contents and voice concern to their legislators. If even one member of Congress changes positions, the stimulus ‘compromise’ will quickly be compromised.

    “Despite the outcome of this first test vote, this bill is far from a done deal,” said Phillips. “The American people are so angry that they flooded our NoStimulus.com web site off the Internet as we rushed to add more servers all day yesterday. Millions of people tried to reach the site. This is an avalanche of public opinion, and members of Congress ignore it at their own peril.”

    AFP launched NoStimulus.com, a website and online petition against the Pelosi/Reid/Obama spending package, with much success three weeks ago, collecting over 200,000 signatures to date and receiving national media coverage.

    More than 50,000 of those petitions were delivered to Senate offices last week during debate on the bill. AFP continues to drive citizens to the NoStimulus petition and urges them to contact their legislators, flooding Capitol Hill with overwhelming constituent opposition.

    The complete website and online petition can be viewed at NoStimulus.com.

  • Do Americans Support Obama’s Stimulus Plan?

    Despite mainstream media claims, not everyone agrees with President Obama’s plan. In fact, a Rasmussen poll shows that more Americans than not are skeptical about the stimulus. They’d rather see other things such as less government spending and lower taxes.

    National Survey of 1,000 Likely Voters
    Conducted February 6-7, 2009
    By Rasmussen Reports

    1. Generally speaking, do increases in government spending help the economy, hurt the economy, or have no impact on the economy?

    35% Help
    48% Hurt
    7% No impact
    10% Not sure

    2. Generally speaking, do decreases in government spending help the economy, hurt the economy, or have no impact on the economy?

    45% Help
    29% Hurt
    16% No impact
    10% Not sure

    3. As Congress debates the economic stimulus plan initially proposed by President Obama, would you like to see the plan include more tax cuts and less government spending, more government spending and less tax cuts, or would you rather see the plan pass pretty much as it is today?

    62% More tax cuts and less government spending
    14% More government spending and less tax cuts
    20% Pass pretty much as it is today
    5% Not sure

    Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence