Voice For Liberty

Tag: Interventionism

  • The danger of auto industry nationalization

    In consideration for a bailout, Congress and the incoming Obama administration insist that the auto industry present a plan for survival of their companies. That sounds reasonable — until you consider that the auto companies must already be operating on a plan, and that plan isn’t working. How can they be expected to come up with a new plan in just a few weeks?

    Then, any plan will have to undergo the scrutiny of Congress. I, for one, have absolutely no confidence in the ability of Congress to evaluate a plan for the revitalization of the American automobile industry. Although congressional leaders, it seems to me, are quite eager to give it a try.

    That leads to real danger that we face. If Congress and the Obama administration approve a bailout, they’re going to insist on close oversight of the auto companies. In effect, this industry will come under the control of the federal government. And how many people want to buy a car designed and built under those conditions?

  • Wichita Chamber of Commerce values

    Here’s a message that Bryan Derreberry, president of the Wichita Metro Chamber of Commerce, sent to Chamber members. Note that this message doesn’t mention the role its political action committee played in the third Sedgwick County Commission district. In that race, the PAC spent some $19,000 of its $48,000 in an effort to elect Goddard mayor Marcey Gregory. Her opponent, longtime taxpayer advocate Karl Peterjohn, is just the type of candidate you’d expect chambers of commerce to support.

    But that’s changed. Stephen Moore in the article “Tax Chambers” published in The Wall Street Journal on February 10, 2007 wrote this: “In as many as half the states, state taxpayer organizations, free market think tanks and small business leaders now complain bitterly that, on a wide range of issues, chambers of commerce deploy their financial resources and lobbying clout to expand the taxing, spending and regulatory authorities of government. This behavior, they note, erodes the very pro-growth climate necessary for businesses — at least those not connected at the hip with government — to prosper.”

    Mr. Derreberry’s letter mentions “pro-business values.” At one time this meant something approaching free-market values. But now, Ronald Reagan’s prediction is being fulfilled here in Wichita: “What is euphemistically called government-corporate ‘partnership’ is just government coercion, political favoritism, collectivist industrial policy, and old-fashioned federal boondoggles nicely wrapped up in a bright-colored ribbon. It doesn’t work.”

    November 18, 2008
    Dear Chamber Members:

    This election cycle was a resounding success for the candidates supported by the Wichita Area Business Political Action Committee (WABPAC) as we raised more than $48,000 to support pro-business state and local candidates. The Chamber’s political action committee identified and supported 39 state legislative candidates and three Sedgwick County Commissioner candidates winning 36 of the 39 races in which WABPAC was involved (93% elected).

    The litmus test for the PAC’s engagement and support was whether a candidate had demonstrated an ability to listen and work with the business community to assure that your company, or organization, had the most competitive environment possible in which to excel. WABPAC’s Board of Trustees wants to thank every Chamber member who reviewed the PAC’s support recommendations and voted accordingly. The reason behind this appreciation is that the Chamber’s collective voice has its greatest impact when business members engage themselves in the election process and elect candidates who embrace pro-business values and understand the challenges you face daily.

    A strong, collective pro-business vote is also an outstanding way to support incumbent state legislators and local elected officials who have successfully advanced our region’s top priorities. Bottom line – we need to effectively support the business-attuned elected officials who support us. Our South Central Kansas state legislative delegation has been an adept and courageous partner in advancing our metro area’s top policy and program goals. Your combined voice, in supporting the PAC and re-electing a majority of this delegation, assures the return of legislators to Topeka willing to champion our most important business priorities.

    Respectfully,
    Bryan Derreberry

  • End Taxpayer-Funded Competition Between the States

    A Wichita Eagle story (Development speaker touts power of cash) reports on an economic incentive expert’s evaluation of our state’s effort.

    (It’s revealing to learn that an accounting firm has someone with the title “regional leader of credits and incentives,” whose duty, evidently, it is to help companies figure out which state’s incentives are most valuable. Actually, since the title is “leader” there’s probably a whole department of people doing this.)

    The problem with Kansas, according to this speaker, is that we grant tax credits to companies instead of outright cash. That puts our state at a competitive advantage compared to states that are willing to write checks upfront.

    The subsidies offered can be staggering. It’s estimated that a Mercedez-Benz plant in Alabama cost that state over $150,000 per job created.

    We should stop this competition among the states based on their willingness to spend taxpayer money to lure companies. As it is unlikely that any state will be willing to unilaterally stop this on their own, we need legislation at the federal level that will end this tremendous transfer of taxpayer funds to a few select companies.

    Then, states can start competing on things that really matter, like a lower tax climate for everyone.

  • Joe Scarborough: Please Stop Saying Laissez-faire

    I’m listening to Joe Scarborough on MSNBC, and he says: “Laissez-faire capitalism is a wonderful thing except in this case …”

    I’ve heard stuff like this over and over the past few months: A politician says “I’m a big free-market guy, but …”

    What’s sad to realize is that these people think that what we have in American is free markets and laissez-faire capitalism. We don’t have these. See my post The Myth that Laissez Faire Is Responsible for Our Present Crisis.

    The sooner that we understand that it is largely government that is the cause of the present crisis, we can realize that relying on government for a cure is dangerous and predetermined to fail.

    Resources: The Bailout Reader at the Ludwig von Mises Institute and Global Financial Crisis at the Cato Institute.

  • Bailouts National and Local

    A post at the Wichita Eagle Editorial blog titled Either way, taxpayers will pay for failing GM illustrates how when government and business become highly intertwined, a self-sustaining behemoth is created that can’t be slain.

    We say an example of this locally this year in Wichita, when a taxpayer subsidy to a development turned out to be underperforming. The solution? Pump more taxpayer money into a failing project. See Wichita and the Old Town Warren Theater Loan.

  • Problems with Wichita’s Economic Forecasts

    On October 7, 2008, the Center for Economic Development and Business Research at Wichita State University released a glowing economic forecast for the near future in Wichita. Events immediately following the release of this report, however, illustrate just how hard it is to forecast economic conditions. When policymakers rely on these reports, bad decisions are the fully predictable result.

    The report Wichita’s Economic Outlook: 2008 Review and 2009 Forecast, says “Next year will bring continued job growth in the Wichita market, despite the national economic downturn,” according to reporting in the Wichita Business Journal. But recent articles in the Wichita Eagle with titles such as Cessna warily eyes economy and Hawker Beechcraft plans to lay off 500 paint a different picture.

    It’s hard to forecast the economy, and events the past few months have unfolded at an alarmingly fast pace. But the Center for Economic Development and Business Research has produced other research that is problematic. I’ve written about these reports in posts such as Wichita School District Economic Impact and Stretching Figures Strains Credibility.

    Incredibly, as I report in WSU Study on Downtown Wichita Arena Not Complete, the former director of this center was not aware of important new government accounting standards when she and her staff prepared the forecasts that were used to justify the downtown Wichita arena in 2004.

    The problem is that Wichita and Sedgwick County policymakers use these studies to plan and justify their actions in intervening with our economy. As a result, we often proceed with plans based on unreliable information.

  • Why Austrian Economics Matters More Than Ever

    Here’s a talk recently delivered by Lew Rockwell, president of the Ludwig von Mises Institute. This organization remains the best place to learn about why our economy is in such trouble. The full speech can be read at Why Austrian Economics Matters More Than Ever. An excerpt:

    I report on this not so that we can say “We told you so,” but rather to underscore the need to stick to principle, depart from the crowd, avoid the fashion, and adhere to the truth no matter what. This is what Mises taught us, and if he had done nothing more than be his era’s most tough-minded resister to collectivism of all types, it would be enough to earn him an institute founded in his name.

  • The Myth that Laissez Faire Is Responsible for Our Present Crisis

    Professor George Reisman contributes the excellent (and lengthy) article The Myth that Laissez Faire Is Responsible for Our Present Crisis. I’ve had the distinct honor of attending a number of Professor Reisman’s lectures at the Ludwig von Mises Institute, and I’m slowly working my way through his monumental book Capitalism: A Treatise on Economics. Here’s a few excerpts from this article:

    “Laissez-faire capitalism is a politico-economic system based on private ownership of the means of production and in which the powers of the state are limited to the protection of the individual’s rights against the initiation of physical force.”

    Then Professor Reisman lists some of the ways in which our present system is far removed from anything resembling laissez-faire capitalism:

    The utter absurdity of statements claiming that the present political-economic environment of the United States in some sense represents laissez-faire capitalism becomes as glaringly obvious as anything can be when one keeps in mind the extremely limited role of government under laissez-faire and then considers the following facts about the present-day United States: 1. Government spending in the United States currently equals more than forty percent of national income … 2. There are presently fifteen federal cabinet departments, nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce … 3. The economic interference of today’s cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions … 4. the Federal Register contained fully seventy-three thousand pages of detailed government regulations. This is an increase of more than ten thousand pages since 1978, the very years during which our system, according to one of The New York Times articles quoted above, has been “tilted in favor of business deregulation and against new rules.” 5. And, of course, to all of this must be added the further massive apparatus of laws, departments, agencies, and regulations at the state and local level.

    What this brief account has shown is that the politico-economic system of the United States today is so far removed from laissez-faire capitalism that it is closer to the system of a police state. The ability of the media to ignore all of the massive government interference that exists today and to characterize our present economic system as one of laissez faire and economic freedom marks it as, if not profoundly dishonest, then as nothing less than delusional.

    Then, under the heading “Government Intervention Actually Responsible for the Crisis:”

    Beyond all this is the further fact that the actual responsibility for our financial crisis lies precisely with massive government intervention, above all the intervention of the Federal Reserve System in attempting to create capital out of thin air, in the belief that the mere creation of money and its being made available in the loan market is a substitute for capital created by producing and saving. This is a policy it has pursued since its founding, but with exceptional vigor since 2001, in its efforts to overcome the collapse of the stock market bubble whose creation it had previously inspired.

    I could go on for some time with more quotes from this article, but it is well worth reading the entire piece. Please do so at The Myth that Laissez Faire Is Responsible for Our Present Crisis.

  • Beyond Bailouts Is Recommended

    I recommend BeyondBailouts.org as a place to learn about the current situation in our financial markets. From their site:

    BeyondBailouts.org is a joint venture of the National Taxpayers Union (NTU) and Competitive Enterprise Institute (CEI). The purpose of the website is to educate about government’s role in our current financial difficulties, suggest reforms that address those root causes, and provide a clearinghouse for the latest analysis of the financial crisis. But most of all, it’s an outlet for Americans to contact their Members of Congress and the Administration to express their frustration.