Quotulatiousness

February 26, 2012

The Freeman: An open letter to statists everywhere

Filed under: Economics, Government, Liberty, Politics, USA — Tags: , , — Nicholas @ 12:09

In a posting from twelve years ago, Lawrence W. Reed has some questions he’d like statists to answer:

You clever guys are always coming up with new schemes for government to do this or that, to address this issue or solve that problem, or fill some need somewhere. You get us limited-government people bogged down in the minutiae of how your proposed programs are likely to work (or not work), and while we’re doing the technical homework you seldom do, you demonize us as heartless number crunchers who don’t care about people.

Sometimes we all get so caught up in the particulars that we ignore the big picture. I propose that we step back for a moment. Put aside your endless list of things for government to do and focus on the whole package. I need some thoughtful answers to some questions that maybe, just maybe, you’ve never thought much about because you’ve been too wrapped up in the program du jour.

At the start of the 1900s, government at all levels in America claimed about 5 percent of personal income. A hundred years later, it takes more than 40 percent — up by a factor of eight. So my first questions to you are these: Why is this not enough? How much do you want? Fifty percent? Seventy percent? Do you want all of it? To what extent do you believe a person is entitled to what he (or she) has earned?

[. . .]

This raises a whole series of related questions about how you see the nature of government and what you’ve learned, if anything, from our collective experiences with it. I see the ideal government as America’s founders did — in Washington’s words, a “dangerous servant” employing legalized force for the purpose of preserving individual liberties. As such, it is charged with deterring violence and fraud and keeping itself small, limited, and efficient. How can you profess allegiance to peace and nonviolence and at the same time call for so much forcible redistribution?

February 23, 2012

Thomas Sowell on the “Fairness Fraud”

Filed under: Government, Media, USA — Tags: , , — Nicholas @ 11:49

It’s become endemic in political discourse — the “fairness” argument. Thomas Sowell explains why it’s a fraud:

During a recent Fox News Channel debate about the Obama administration’s tax policies, Democrat Bob Beckel raised the issue of “fairness.”

He pointed out that a child born to a poor woman in the Bronx enters the world with far worse prospects than a child born to an affluent couple in Connecticut.

No one can deny that. The relevant question, however, is: How does allowing politicians to take more money in taxes from successful people, to squander in ways that will improve their own reelection prospects, make anything more “fair” for others?

[. . .]

To ask whether life is fair — either here and now, or at any time or place around the world, over the past several thousand years — is to ask a question whose answer is obvious. Life has seldom been within shouting distance of fair, in the sense of even approximately equal prospects of success.

Countries whose politicians have been able to squander ever larger amounts of a nation’s resources have not only failed to make the world more fair, the concentration of more resources and power in these politicians’ hands has led to results that were often counterproductive at best, and bloodily catastrophic at worst.

More fundamentally, the question whether life is fair is very different from the question whether a given society’s rules are fair. Society’s rules can be fair in the sense of using the same standards of rewards and punishments for everyone. But that barely scratches the surface of making prospects or outcomes the same.

February 19, 2012

Building a football stadium: corporate welfare at its most grotesque

Filed under: Football, Government, Media, Politics, Sports — Tags: , , , — Nicholas @ 12:07

Patrick Reusse writes for the Minneapolis Star Tribune. He’s a sports columnist, so his job — to some degree anyway — depends on the local professional sports teams (the Vikings, the Twins, the Wild, and the Timberwolves) sticking around and being competitive. Part of the sticking around these days is finding a new home for the Minnesota Vikings, who are at the end of their 30-year lease on the Hubert H. Humphrey Metrodome in downtown Minneapolis. Reusse is critical of those who don’t want their tax money going into the pockets of billionaire owner Zygi Wilf:

We so easily could be another decayed downtown, if not for the corporations, and the law firms and the accounting firms, and the retailers that remain committed to being in the city, when everything could be cheaper and more convenient by joining the sprawl in Maple Grove or Eden Prairie or Eagan.

Last month, Sandra Colvin Roy, another of the dedicated lefties on the Minneapolis City Council, announced opposition to the plan for a new Vikings stadium in downtown Minneapolis without a citywide referendum (that she knows would fail).

[. . .]

And yet it’s not only Roy and her lefty colleagues who offer a roadblock to Minneapolis coming up with its stadium share. There are righties in the Legislature with equally mysterious thoughts on the city’s entertainment tax.

“You know who pays for this?” Rep. Sarah Anderson of Plymouth said. “The citizens in my district, my constituents that decide to go to Minneapolis, maybe go out to a restaurant for the night.”

Some way, we have wound up with politicians who would put the cleaver to a great asset for the state’s largest city, and then offer the silliest of explanations, like 1) several score of people sleeping outside on government property, and 2) a few guys from Plymouth who would rather not pay an extra 3 percent for a Dewars and water at the Seville.

What stands in the way of a stronger heartbeat for downtown Minneapolis are the collections of the nearsighted that we have elected.

As you’ll know if you’ve read the blog for any length of time, I’m a big fan of the Minnesota Vikings, despite never having lived there or even visited the state. I’d be very upset if they became the L.A. Vikings. But I also totally sympathize with Minnesotans who don’t want their taxes being used to give corporate welfare to the billionaire owner of the football club. Pouring money into facilities for professional sports teams is one of the very worst ways to use tax dollars, as the lads at Reason.tv explain:

And from an article last year at Hit & Run:

To put it bluntly, regardless of how much money the state treasury might be rolling in, a public stadium is not a good use of money. Indeed, sports economists Dennis Coates and Brad Humphries estimate the presence of a major-league franchise reduces overall GDP by about $40 per resident in a given metro area.

The Vikes’ ownership has graciously offered to put up $400 million and the state is looking at ponying up $300 million, which means county and local taxpayers (read: suckers) would be on the hook for the remaining $400 million. So generous of the owners, don’t you think? Needless to say, the team would get all naming rights and a host of other related goodies.

[. . .]

Here’s a real surprise: Almost 75 percent of local residents don’t think public money should be used for a new stadium but the folks literally invested in the team and the building of the stadium are all for it!

February 18, 2012

“Somewhere in the near-eternal labyrinth of the Drummond report there must be evidence that the McGuinty’s Liberal government did something right over the last decade. If there is, I haven’t found it yet.”

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , — Nicholas @ 00:01

Terence Corcoran brings the gloom on the Ontario government’s most likely response to the Drummond report:

Ontario, get ready for The Big McGuinty. The 562-page report from the government-appointed Commission on the Reform of Ontario’s Public Services, chaired by economist Don Drummond, has all the makings of a diversionary shell game in which everybody is directed to follow the pea of spending cuts while the real game is something else.

With attention now focused on carving Mr. Drummond’s 362 recommended slices off the great Ontario spending bologna, the real bait-and-switch objective, The Big McGuinty of this giant exercise in fiscal self-flagellation, is something else altogether: tax increases.

Does anybody seriously think the Liberal government of the Rev. Dalton McGuinty, after a decade of installing feel-good spending increases and extravagant policy schemes, is suddenly going to roll it all back and reverse a decade of ideological commitment to government intervention and liberal spending programs?

The Drummond report would require policy-backtracking on a vast scale. Somewhere in the near-eternal labyrinth of the Drummond report there must be evidence that the McGuinty’s Liberal government did something right over the last decade. If there is, I haven’t found it yet.

February 3, 2012

Reason.tv: A non-hagiographic analysis of FDR, the New Deal, and the expansion of federal power

Filed under: Economics, History, USA — Tags: , , , , — Nicholas @ 14:16

January 25, 2012

The Cato Institute response to the State of the Union 2012

Filed under: Economics, Government, Liberty, Politics, USA — Tags: , , , , , — Nicholas @ 12:00

January 10, 2012

When “everyone agrees” about excessive executive pay, something else is being sold

Filed under: Economics, Media, Politics — Tags: , , , , — Nicholas @ 09:45

Tim Black on the amazing unanimity of thought that the most pressing problem in the world right now is big pay packets for corporate CEOs:

Occupy London, the Labour Party, the Lib-Con coalition, the Archbishop of York… It doesn’t matter to what or to whom you look, you’ll find the same simple-minded sentiment: the root cause of our economic and social problems is greed. The greed, that is, of bankers, of overpaid CEOs, of those at the top of society who simply have and want too much.

[. . .]

If there was ever a striking indication of the deadening political conformism, the dearth of social imagination, that so characterises our contemporary impasse, it is there in the sheer ubiquity of the Greed-is-Bad argument.

So what is driving this pervy, across-the-board obsession with the pay packets of super execs? It’s certainly not impelled by a desire to get to grips with the economic crisis that holds most of the developed world in its grip. No doubt there are some simple-minded souls in a state of Occupation who believe that blaming and bashing company CEOs or bankers is somehow to understand the economic crisis. But just as the remuneration packages of a few bankers and bosses did not bring about the current crisis, so seeking to limit their wages, to impose a maximum national wage, will not solve the crisis. And while £3million or £4milllion for a CEO’s annual salary does seem huge, such figures amount to very little in the grand economic scheme of things. As the Investor’s Chronicle points out: ‘The average FTSE 100 CEO is paid £3.9million year. But this is only one four-thousandth (0.025 per cent) of the average market capitalisation of a FTSE 100 company.’

The current fashion for attacking large pay packages, then, is economic neither in impulse nor intent. Rather it is driven, in the first instance, by a narrow moralism. For its numerous proponents, either in party offices or in spartan tents, it represents an easy posture, a cheap critical pose. One Guardian columnist virtually gave the game away: ‘Like phone hacking or MPs’ fiddled expenses, this is an issue that only needs to be described to seem reprehensible.’ That is, to the right-thinking types on liberal broadsheets, criticising large salaries is just too good an opportunity to miss. Indeed, like attacking tabloids and MPs, it is a mark of one’s membership of the right-thinking to have a pop at the really, really rich.

But there’s a deeper, darker impulse driving this cheap attack on exorbitant pay packages than just preening self-righteousness. And that’s the belief that the large pay packets pursued by the undeservedly wealthy are a symbol of a society-wide pathology. The cheap attack on top earners is also an attack on the material aspirations of the rest of us. We are, in short, just too greedy now to be left to our own unregulated, uncontrolled devices. A report from the High Pay Commission — a grandiosely monikered body established by centre-left think tank Compass, a few trade unionists and business secretary Vince Cable — makes this clear by drawing the highly questionable link between this putative celebration of ‘greed’ — or ‘an elevation of the concept of the rational self-interested man to unprecedented heights’ — and the August riots. ‘It should not perhaps surprise us’, the report states, ‘that the rioters took the trappings of wealth that they could not afford — the TVs and designer trainers. It reflects a sense of entitlement that pervades society from the very top to the bottom.’

January 8, 2012

George F. Will on big government

Filed under: Bureaucracy, Economics, Government, Politics — Tags: , , , — Nicholas @ 10:54

Even fans of bigger government should recognize the accuracy of this short summary:

Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.

Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.

The left’s centuries-old mission is to increase social harmony by decreasing antagonisms arising from disparities of wealth — to decrease inequality by increasing government’s redistributive activities. Such government constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities. But as government presumes to dictate the correct distribution of social rewards, the maelstrom of contemporary politics demonstrates that social strife, not solidarity, is generated by government transfer payments to preferred groups.

[. . .]

The tax code, government’s favorite instrument for distributing wealth to favored factions, has been tweaked about 4,500 times in 10 years. Generally, the beneficiaries of these changes are interests sufficiently strong and sophisticated to practice rent-seeking.

Not only does redistributionist government direct wealth upward; in asserting a right to do so it siphons power into itself. A puzzling aspect of our politically contentious era is how little contention there is about the ethics of coercive redistribution by progressive taxation and other government “corrections” of social outcomes it considers unethical or unaesthetic.

January 7, 2012

Conrad Black: Current events vindicate Margaret Thatcher

Filed under: Britain, Economics, Europe — Tags: , , , , — Nicholas @ 11:25

The current situation in Europe proves that British prime minister Margaret Thatcher was right all along:

Though it is probably happening too late to be overly gratifying to her, events are piling on to vindicate Margaret Thatcher completely in her reservations about British integration in Europe. Her response to the proposal to reduce Britain to a local government in a federal Europe was, memorably: “No, no, no, and never.” And her reward for her refusal to get on board what was then the thundering bandwagon of Eurofederalism, was to be sent packing by her own ungrateful party, though she was the only British political leader who had won three consecutive, full-term election majorities since before the First Reform Act expanded the electorate in 1832.

She was immensely popular with millions of Britons as a patriotic and courageous leader who took Britain off financial life support, saved it from strangulation by over-mighty, almost anarchistic unions, built a prosperous, home-owning democracy, threw the Argentinians out of the little corner of the British Empire they had wrongfully seized (the Falkland Islands), and played a starring role in winning the Cold War.

[. . .]

And as she liberalized the economy; imposed a free, secret ballot for labour strikes; lowered all taxes; privatized industry, housing, airports, almost everything except the National Health Service and the BBC; jolting economic growth resulted. Unfortunately, its most conspicuous exemplars included many successful entrepreneurs and financier types who offended British sensibilities by their garish and spivvy ostentation. The basis of Margaret Thatcher’s support was the Daily Telegraph-reading, gin and tonic-drinking, cricket-loving middle class, the backbone of the nation. But her enemies identified her with an infelicitous combination of Colonel Blimp fuddy-duddies and sticky-fingered, vulgar parvenus.

She had a somewhat hectoring manner in debates, and was notoriously impatient with what she considered pusillanimity from senior colleagues, sometimes calling cabinet members “blanc-manges,” or “suet puddings,” or even “spineless, boneless, men” (not necessarily inaccurately). Naturally less known was her exquisite courtesy and unaffected and egalitarian kindness to subordinates and strangers. It annoyed feminists that she was such a traditionalist, and weak men that she was a strong woman. But she triumphed by perseverance and courage; to the end, though a stirring speaker, she was nervous before a speech. She was a strong woman, but not at all a mannish one.

December 12, 2011

Defining crony capitalism

Filed under: Economics, Government, Liberty, Politics — Tags: , , , , , — Nicholas @ 14:51

Bill Frezza explains what crony capitalism is and how it differs from free market capitalism:

If defenders of capitalism hope to win over fair-minded fellow citizens who are honestly upset and confused, we need to define these terms and answer some basic questions. In what ways are Crony Capitalists and Market Capitalists the same and in what ways are they different? What makes the former immoral and the latter virtuous? Why are Crony Capitalists a threat to democracy and prosperity while Market Capitalists are essential to both? How is it that ever larger numbers of Market Capitalists are being corrupted, turning into Crony Capitalists? And what can we do to reverse that trend?

All capitalism is driven by greed — the desire to not only achieve economic security, but to amass pools of capital beyond one’s basic needs. This capital can fuel the kind of conspicuous consumption that offends egalitarians. But it also finances investments in new products and businesses, without which the economy cannot grow. [. . .]

What makes Crony Capitalists different is their willingness to use the coercive powers of government to gain an advantage they could not earn in the market. This can come in the form of regulations that favor them while hindering competitors, laws that restrict entry into their markets, and government-sponsored cartels that fix prices, grant monopolies, or both.

Crony Capitalists are also more than happy to help themselves to money from the public treasury. This can come from wasteful or unnecessary spending programs that turn government into a captive customer, subsidies that flow directly into their coffers, or mandates that force consumers to buy their products.

[. . .]

Beyond these obvious Crony Capitalists lies a slippery slope designed to attract and entrap Market Capitalists: the tax code. By setting nominal corporate tax rates high while marketing tax breaks to specific companies and industries, Congress assures itself a steady stream of campaign contributions from companies looking to lighten their tax load. While there is no shame in reducing one’s tax burden from 35% to a more globally competitive 20%, is it any wonder that people get sore when some extremely profitable corporations manage to get their tax burden down to nearly 0%?

December 10, 2011

Barack Obama and Teddy Roosevelt: the economic parallels

Filed under: Economics, History, USA — Tags: , , , — Nicholas @ 12:12

Jim Powell looks more deeply at the similarities between Barack Obama and Theodore Roosevelt:

President Obama is a smart man who believes great wealth is a social problem, and ordinary people would be better off if wealth were substantially taxed away. Recently he drew inspiration from Theodore Roosevelt, another smart man who had a similar view, completely misinterpreted what was happening in the economy, and actively disrupted it.

Theodore Roosevelt was the man who, in 1906, encouraged progressives to promote a federal income tax after it was struck down by the Supreme Court and given up for dead. He declared that “too much cannot be said against the men of great wealth.” He vowed to “punish certain malefactors of great wealth.”

Perhaps TR’s view was rooted in an earlier era when the greatest fortunes were made by providing luxuries for kings, like fine furniture, tapestries, porcelains and works of silver, gold and jewels. Since the rise of industrial capitalism, however, the greatest fortunes generally have been made by serving millions of ordinary people. One thinks of the Wrigley chewing gum fortune, the Heinz pickle fortune, the Havemeyer sugar fortune, the Shields shaving cream fortune, the Colgate toothpaste fortune, the Ford automobile fortune and, more recently, the Jobs Apple fortune. TR inherited money from his family’s glass-importing and banking businesses, and maybe his hostility to capitalist wealth was driven by guilt.

Like Obama, TR was a passionate believer in big government — actually the first president to promote it since the Civil War. He said, “I believe in power … I did greatly broaden the use of executive power … The biggest matters I managed without consultation with anyone, for when a matter is of capital importance, it is well to have it handled by one man only … I don’t think that any harm comes from the concentration of power in one man’s hands.”

November 30, 2011

George Jonas: “All governments are communist”

Filed under: Cancon, Economics, Government — Tags: , , , , — Nicholas @ 08:52

George Jonas looks at how the government of Ontario managed to go a quarter of a trillion dollars into debt:

All governments are communist. Please, relax. What I mean is that all governments expect to be recompensed, not according to the value of their contributions to society, but according to their needs.

Marxist mythology defines progress as capitalism changing into socialism and socialism into communism. Under socialism, everyone contributes according to his abilities, and is compensated according to his contribution. This is an improvement over the vagaries of the market, but communist society goes further. While citizens still contribute according to their abilities, they’re compensated according to their needs.

[. . .]

In a free-market-cum-welfare-state such as Canada, people contribute to society according to their abilities, and are compensated for it at the whim of the market, minus the whim of the government, a.k.a. the taxman. Governments also contribute according to their abilities, but then compensate themselves according to their needs. Their needs vary as they aren’t equally corrupt or ambitious, though they seem equally insatiable. Premier Dalton McGuinty isn’t a communist but Ontario’s debt increased by $110-billion since his party came to power in 2003. We could have had Fidel Castro for less — well, Raoul, anyway.

A gentleman has his hand up. Yes? “Didn’t the debt go up because McGuinty kept his promise and didn’t raise taxes?” Nice try, sir, but no. He did.

November 26, 2011

Daniel Hannan on how the “Occupy” movement misunderstands the right

Filed under: Britain, Economics, Liberty, Media, Politics — Tags: , , , , — Nicholas @ 09:57

In his latest column in the Telegraph, Daniel Hannan lists ten mistaken beliefs that the “Occupy” folks seem to have about conservatives:

1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.

2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny.

[. . .]

6. Nor, by the way, does state intervention seem to be an effective way to promote equality. On the most elemental indicators — height, calorie intake, infant mortality, literacy, longevity — Britain has been becoming a steadily more equal society since the calamity of 1066. It’s true that, around half a century ago, this approximation halted and, on some measures, went into reverse. There are competing theories as to why, but one thing is undeniable: the recent widening of the wealth gap has taken place at a time when the state controls a far greater share of national wealth than ever before.

7. Let’s tackle the idea that being on the Left means being on the side of ordinary people, while being on the Right means defending privileged elites. It’s hard to think of a single tax, or a single regulation, that doesn’t end up privileging some vested interest at the expense of the general population. The reason governments keep growing is because of what economists call ‘dispersed costs and concentrated gains’: people are generally more aware the benefits they receive than of the taxes they pay.

November 3, 2011

A “fat tax” would not improve anyone’s health or the healthcare sector

Filed under: Government, Health, Liberty, Media — Tags: , , , — Nicholas @ 09:10

Politicians and “food celebrities” in many western countries are calling for a tax on obesity, either on the foods that “make people fat” or on obese people themselves. Other than being incredibly regressive (poor people in the west tend to be fatter than well-off people), such a tax would do nothing to address the problem it is supposed to solve:

The regular calls for a fat tax — whether on the ‘wrong’ foods or on fat people themselves — are symptomatic of two regressive trends in society. The first is the view that experts know best, that these latter-day sages can come to an impartial view based on The Science, then guide government about the appropriate policy action. The new, evidence-based policy usually involves some kind of manipulation of our individual behaviour from gentle ‘nudges’ and increasing taxes through to criminalisation, as in the case of the smoking ban.

But this is not evidence-based policy, but policy-based evidence, with preconceived ideas being pushed through in the name of science at a time when those at the top of society have lost the ability to convince the electorate on the basis of a moral or political argument. This style of policymaking rarely solves social problems, but it does distort both politics and science.

The second worrying trend is the sheer intolerance towards obese people. Being very overweight has always attracted a certain amount of moral opprobrium. But Hatton’s outlook reflects a sea-change. Once, the NHS reflected a progressive outlook that disease was a misfortune that could strike any of us at any time and that the best thing to do was to share that burden across society. Now it’s every man and woman for themselves. In the worldview of Hatton and Coren, some morally weak individuals are costing them money and must be punished.

Ironically, this flows from a left-wing view of disease as having social causes. In the late Seventies, left-wingers correctly saw that some ill-health was the result of poverty, poor housing, polluted air, and so on rather than infection or bad luck. Unfortunately, this has morphed into the idea that disease is caused by individual behaviour — and so health professionals have taken to camping out in our private lives, demanding we stop smoking, drinking and eating the wrong things. Every naughty little pleasure must now be sacrificed to the god of longevity. If we don’t play ball, this intolerance suggests we should lose our right to treatment.

The disease of intolerance is likely to have a far more detrimental effect on society than obesity ever could.

November 1, 2011

Alberta’s policy to help small breweries has unintended consquences

Filed under: Cancon, Economics, Government — Tags: , , — Nicholas @ 08:20

When governments try to rig markets to achieve certain goals, they often end up getting results they didn’t foresee:

The Alberta Gaming and Liquor Commission presumably had good intentions in mind when it brewed up a policy to lend a helping hand to small breweries. Namely, beer companies qualify for substantially reduced beer tax rates on the first 200,000 hectolitres sold in Alberta. The explicit aim was to help small players compete against industry leviathans such as Molson and Labatt. And, implicitly, the tax break would entice craft breweries to set up shop in the province.

However, eight years after the reduced beer tax rates—estimated by one analyst to total about $200 million in savings—were first implemented, little in the Alberta beer business has worked out the way the AGLC envisioned. Only five small breweries have opened for business in Alberta since the policy was implemented. And in that time Alberta has, in fact, become a market characterized by discount beer. And at least one of the breweries taking advantage of the AGLC policy doesn’t even brew in the province, let alone Canada.

[. . .]

Alberta’s small brewer system would appear to be yet another case of the law of unintended consequences—especially when a government agency tinkers with the free market economy. From a dearth of craft brewers to a helping hand for American jobs, the AGLC’s beer tax policy is enough to drive a teetotalling Albertan to drink.

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