Voice For Liberty

Tag: Regulation

  • Articles of Interest

    Kansas budget, wind power, alternative fuels gone wild, newspaper bailouts, journalism entrepreneurship

    House pushing big K-12 cuts (Topeka Capital-Journal) “The Republican-led House Appropriations Committee on Wednesday approved a budget-reduction plan that would trim $100 million in state aid to public schools in Kansas. The 3.3 percent reduction for the upcoming 2010 fiscal year would help balance the state budget.” With K-12 schools consuming about half of state general fund spending, it’s surprising that is all they’re asked to sacrifice.

    Wind farm to provide power to Greensburg homes, businesses (Wichita Eagle) A town destroyed by too much wind now seeks to benefit from wind. Actually, it’s milking the government subsidy that will benefit Greensburg: “And NativeEnergy Inc., a leader in climate solution services, will buy about two-thirds of the wind farm’s renewable energy credits over 20 years.” It’s unlikely this would be happening without taxpayer subsidy.

    Brownback backs Open Fuels Standards Act (Kansas Liberty, a subscription service) “Republican Sen. Sam Brownback today endorsed the introduction of legislation that would require 50 percent of new cars to have the capability to operate on gasoline, ethanol and methanol or diesel or biodiesel.” This is more of government trying to plan the future of the automobile industry, this time from someone who is considered a conservative.

    Kerry aims to rescue newspapers (Washington Times) “Troubled by the possible shuttering of his hometown paper, Sen. John Kerry reached out to the Boston Globe on Tuesday, then called for Senate hearings to address the woes of the nation’s print media.” Bailout fever continues to spread. If you think it’s bad for the federal government to run banks and automobile companies, just think how bad things will be when the press is beholden to people like Kerry for its survival.

    True/Slant Tests Another Model Of Web Journalism (Wall Street Journal) “This week, a new Web news site is entering the fray, with a novel approach to journalistic entrepreneurship, new forms of advertising, and an effort to blend journalism and social networking.” This site’s address is trueslant.com. If journalism is to survive — and let us hope it thrives — it will serve America best if it is through private initiative like this, rather than through Sen. John Kerry’s government bailouts.

    Alternative Fuel Folly (Kimberly A. Strassel in the Wall Street Journal) Describes how a paper company may reap a $1 billion annual windfall by simply continuing to do what it already does. It’s an example of how government policies often produce unintended effects.

  • The ABC’s of Virginia Alcohol Law

    At the recent Sammies awards presented by the Sam Adams Alliance, a video titled The ABC’s of Virginia Alcohol Law received an award.

    It’s a funny video. It’s not the most important issue in the world, but it shows us another example of the ways that government get so twisted up in a knot (of its own making) that it doesn’t make sense anymore.

    Caleb O. Brown (his blog is catallaxy.net) and Austin Bragg created the video and won the award.

  • How does Kansas fare in freedom, compared to other states?

    The Mercatus Center at George Mason University has just published a fascinating paper that ranks the states in several areas regarding freedom. According to the authors, “This paper presents the first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres.”

    What is the philosophical basis for measuring or determining freedom? Here’s an explanation from the introduction:

    We explicitly ground our conception of freedom on an individual rights framework. In our view, individuals should be allowed to dispose of their lives, liberties, and property as they see fit, so long as they do not infringe on the rights of others. This understanding of freedom follows from the natural-rights liberal thought of John Locke, Immanuel Kant, and Robert Nozick, but it is also consistent with the rights-generating rule-utilitarianism of Herbert Spencer and others.

    It’s something that Kansas Governor Kathleen Sebelius wouldn’t understand. At least she doesn’t want to trust us with these freedoms.

    According to the authors, “No current studies exist that measure both economic and personal freedom in the fifty states.” So this is a ground-breaking work.

    How does Kansas do? Surprisingly, not too badly. Not outstanding, but not as bad as I might have thought.

    For the four areas measured, here’s how we did: In fiscal policy, Kansas is 28. In regulatory policy, 4. In economic freedom, 18. In personal freedom, 15. (In all cases, a ranking of 1 means the most freedom.)

    Our overall ranking is 12.

    Some of our neighbors do pretty well in the overall ranking. Colorado is 2, Texas is 5, Missouri is 6, and Oklahoma is 18.

    Nebraska is not as good at 28.

    In case you’re wondering, for overall ranking, New Hampshire is best. The worst? It’s no surprise that it’s New York by a wide margin, with New Jersey, Rhode Island, California, and Maryland rounding out the bottom five.

    The full study contains discussion of the politics surrounding these rankings, and a narrative discussion of the factors present in each state.

    You may read the entire study by clicking on Freedom in the 50 States: An Index of Personal and Economic Freedom.

  • Another inept Kansas smoking analogy

    In today’s Wichita Eagle, Wichita busybody Charlie Claycomb makes another inept analogy in an attempt to press his anti-smoking agenda statewide.

    A while back he tried to compare a smoking section in a restaurant with a urinating section in a swimming pool. This is ridiculous to the extreme, as I show in the post It’s Not the Same as Pee In the Swimming Pool.

    Now in today’s letter in the Eagle, Claycomb says that although the United States Constitution gives us the right to bear arms, since that right is heavily regulated, government has license to regulate smoking, as smoking isn’t mentioned at all in the Constitution.

    Here’s why this is another ridiculous analogy (without conceding the regulations on arms are justified or effective): A person in, say, a bar that’s carrying a gun can’t be detected as you enter the bar. You just can’t tell upon entering an establishment whether someone has a concealed gun and intends to cause harm to patrons. This is the case even if there’s a law prohibiting carrying guns into bars, and even if the bar has a “no guns” sign.

    But you sure can tell if people are smoking.

    Smoking ban supporters might argue that since there may be smoking in some establishments, my rights are being infringed since I can’t patronize those places without exposing myself to harmful smoke.

    That’s true. But there’s definitely no right in the Constitution to be able to go everywhere you want on your own terms.

    By the way, did you know that Claycomb is treasurer for Wichita city council candidate Janet Miller? Expect more nonsense like this if she is elected.

    “Mankind are greater gainers by suffering each other to live as seems good to themselves, than by compelling each to live as seems good to the rest.” — John Stuart Mill

    “Whenever we depart from voluntary cooperation and try to do good by using force, the bad moral value of force triumphs over good intentions.” — Milton Friedman

  • The “Watchful Eye” Fallacy

    “In his inaugural address on January 20, 2009, Barack Obama said: ‘Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control.’ To prevent such unfortunate episodes, says Mr. Obama, the market needs to be supervised and regulated by the watchful eye of government. … The fallacy in this view lies in the assumption that government regulators rise above the human limitations that apply to everyone else. It assumes that while the businessman can be shortsighted, the senator will be farsighted, or that while the banker may be inattentive, the deputy undersecretary will not be.”

    This is from the outstanding article The “Watchful Eye” Fallacy at FEE, the Foundation for Economic Education.

  • Kansas exempts itself from onerous regulation

    Yesterday the Kansas Senate passed a sweeping state-wide smoking bill that prohibits smoking in nearly all indoor places in Kansas.

    Except for casino gaming floors.

    Why? The state hopes someday to generate a lot of revenue from gambling. Does the state realize that customers of some establishments may like to smoke while they’re there, and that banning smoking might be bad for business?

    It’s outrageous that the state so desperately wants to earn as much as possible from gambling that it will tolerate smoking in casinos. It gives an unfair advantage to these casinos as compared to other places of business.

  • Markets are the best regulators

    Since the start of the current financial crises, we’re told that markets are at fault. The most common diagnosis is that there’s not enough regulation in place, and only a move away from reliance on markets and toward more laws and regulations will save the economy.

    One thing that did happen is that someone misjudged the risk that was present in the mortgage-backed securities that led to the downfall of several investment banks. A recent article in the Wall Street Journal does the best job I’ve seen of explaining how this mistake, made by credit rating agencies, was responsible for this crisis. The article, written by Robert Rosenckanz, is Let’s Write the Rating Agencies Out of Our Law. Here’s a summary, as best as I can produce, of this article:

    Rating agencies can make mistakes.

    Regulatory agencies used these ratings in formulating their regulations. “Most importantly, bond ratings determine — as a matter of law — how much capital regulated institutions need in order to own the bonds.”

    “Since the ratings determine required capital, they have a profound influence on how financial institutions invest their assets — in effect, the regulatory reliance on ratings makes the rating agencies the de facto allocators of capital in our system. And every actor in the financial system has every incentive to group and slice assets in ways that maximize not their fundamental soundness but their rating.”

    “The problem was not the erroneous ratings per se; everyone misgauges risk and ratings agencies are no different. The problem is that these erroneous ratings were incorporated into law. Regulators should not have relied on ratings agencies to asses the risk of bond holdings. Instead, they should have relied on markets.”

    Markets are superior to small groups of people — the credit rating agencies in this case — in making decisions. Because of regulation, however, the financial system was forced to accept and rely on these ratings. That, in turn, led to disaster.

  • Do We Have Too Little Regulation?

    One of the things we’re being told by the mainstream media is that deregulation is the cause of our current economic crisis. If only Bush hadn’t torn up so many regulations, we wouldn’t be in this trouble. Only adding more regulation will save the economy. Free markets — as if our economy is based on anything like that concept — are also blamed.

    The most recent Cato Policy Report has an article Are We Ailing from Too Much Deregulation? that shows why these beliefs are incorrect.

  • Pragmatism must recognize reality

    Any editorial that starts with “Karl Marx was right about at least one thing …” deserves close examination, especially when it appears in Kansas’ largest newspaper and is written by that newspaper’s former editor. The thrust of Davis Merritt’s article is that the theory of free markets hasn’t worked: “We’re painfully experiencing right now the unraveling of neat free-market theory.” (Pragmatism needs to trump ideology, November 18, 2008 Wichita Eagle)

    Here’s the first problem with Mr. Merritt’s argument: what we live in is anything but a free market society. George Reisman details just how far removed we are from anything resembling free markets in The Myth that Laissez Faire Is Responsible for Our Present Crisis.

    Then, Mr. Merritt warns that free market theory is doomed to fail because “perfect theories require perfect people.” I don’t know precisely who he refers to as not perfect, but judging from the tone of the article, I think he’s condemning greedy businesspeople who are the cause of the present financial crisis. In particular, investment bankers. Demonizing these people on general grounds doesn’t help. Instead: Did they steal from their shareholders? Did they commit fraud when they issued sub-prime loans? These acts are illegal, and to the extent they were committed, let’s prosecute them.

    Greed — human self-interest — is a constant factor. It’s what drives people to expend tremendous effort to accomplish great things for the betterment of mankind. It can also drive people to accept a sub-prime mortgage loan that they can’t repay in order to buy a house they can’t afford — but, greedily, want nonetheless. It works both ways. So we need good rules that prevent people from using theft, force, and fraud to unjustly enrich themselves. These good rules are easier to create and enforce, and more reliable, than a false hope the people will start behaving “good.”

    Besides, couldn’t we also say that good government requires good politicians, bureaucrats, and administrators? I’m surprised that an editor of a newspaper — someone who must have experienced the political process close-up — would have such confidence in government instead of people.

    Mr. Merritt cites the “hands-off, no-regulation attitude of the current administration” as bad for people and economic welfare. If we had been experiencing a period of reductions in regulation, we might have evidence for this claim. The Heritage Foundation report Red Tape Rising: Regulatory Trends in the Bush Years debunks the myth that regulation has decreased during the presidency of George W. Bush: “Far from shrinking to dangerously low levels, regulation has actually grown substantially during the Bush years. By almost every measure, regulatory burdens are up.”

    Mr. Merritt’s editorial, if its advice is taken, will lead us towards more regulation and reliance on government. That’s not what we need.