Category Archives: Business

Obama Using “Net Neutrality” to Obscure Federal Take-Over of Internet

fiber-optic-cable“The government will fuck the Internet up.”

So says Mark Cuban. Truer words were never spoken. Allowing the federal government to treat the Internet as a public utility, as President Obama is calling for, under the guise of “net neutrality,” is an abysmally bad idea.

To be clear, “net neutrality” and public utility regulation are two different but equally bad ideas. It appears Obama is using the former in a cynical bid to trick the electorate into accepting the latter. Neither is needed and both are undesirable.

“NET NEUTRALITY”

Net neutrality is the idea that, having paid for Internet service, consumers should have unfettered access to all content. It would prevent a whole host of business model experiments that Internet Service Providers (ISPs) might otherwise try:

  • Selling tiered data plans like cell phone companies do.
  • Developing their own content and then delivering that content at higher speeds than they deliver a competitor’s content.
  • Creating different “lanes” of Internet traffic and charging higher prices to content providers or users for access to the “fast lanes.”
  • Preferring certain content providers to others, likely depending on who pays.
  • Blocking users from using certain online content that takes up too much bandwidth and slows down the network for other customers.

I see none of this as frightening. We pay different rates based on the size and weight of the mail we send. We pay different rates for concert seats, cell phone plans, Netflix memberships, cable subscriptions and a whole host of other services.

The sun still rises.

What consumers who demand heavy content at low cost really want is to have other users overpay for light content while suffering the slow buffering speeds caused by the heavey users. As Casey Given, writing for Rare, observes:

Even if the FCC’s worst fears come to fruition and ISPs start charging cell phone-style “plans” for different levels of Internet access, online access would only become cheaper for low data users. As it is today, a grandmother who logs online once a day pays just as much as the tech-savvy teenager next door who regularly downloads gigabytes of data. As such, she is subsidizing his usage and could instead be paying a cheaper rate if her ISP offered varying plans.

In any case, ISPs own their technology and infrastructure. They invested in that property with the aim of making a profit. The idea that the public has some sort of claim against the property of ISPs reflects a sense of entitlement I cannot endorse. Rights are things we get to do—not things we get to have at others’ expense.

It is where we stand on this principle in the hard cases that defines us.

In addition to heavy content users, the other main beneficiaries of net neutrality are Internet giants like Facebook, Google and Netflix. These companies do not want to be charged by ISPs for the heavy traffic their users generate while slowing down buffering speeds for everyone else.

But is there any reason we should prefer the profit of big content providers over the profit of ISPs? Is there some principle that says Netflix should be allowed to earn whatever profit the market permits—but not the ISPs who deliver its content to consumers?

As Doug Mataconis wrote for TLP back in 2010:

It’s Comcast’s network, [it] should have the right to decide how it’s used and to take action to protect its property and its other customers.

PUBLIC UTILITY REGULATION

Obama’s plan to regulate the Internet is not the same as net neutrality. His plan is to treat it as a public utility, the “most draconian” level of regulation that could apply. It would require ISPs to provide universal service, i.e., “wire up every house.”

It would also allow them to charge the rates necessary to recoup that expenditure at a profit. In fact, public utility regulations allow the type of tiered pricing net neutrality advocates want to prevent:

What some critics of the Commission’s recent proposal may not realize is that even if the FCC agrees to impose the price, non-discrimination, and other forms of common carrier regulation on ISPs, Title II reclassification, would not necessarily ban paid prioritization. As former enforcement director at the Federal Trade Commission, David Balto, has pointed out, the title only prohibits “unjust and unreasonable” differences in services. Carriers regulated under Title II still “may offer different pricing (including volume and term discounts) … so long as they are ‘generally available to similarly situated customers.’”

In plain English, all this means that if some websites, like Netflix, want “faster lanes” on broadband networks, the providers of those networks can charge extra for that service even under Title II, so long as they stand ready to offer the same service to all similarly situated comers.

So Obama’s proposal presents a solution that does not fit the purported problem—which may not even exist.

In June 2006, there were two or more broadband providers in 92 percent of the nation’s zip codes, and four or more providers in 87 percent. A June 2014 study found at least two providers (wireline and wireless) for virtually all of the U.S., and at least two providers (cable and telephone) in nearly three quarters. Nick Gillespie reports at Time Magazine that 80% of households have at least two providers capable of delivering the Internet at 10Mbps or faster.

This access has been achieved even as prices have gone down:

President Obama’s call this week to regulate the Internet as a public utility is like pushing to replace the engine of a car that runs perfectly well. The U.S. data sector — including wired and wireless broadband — is the envy of the world, administering a powerful boost to consumer welfare, generating high-paying jobs and encouraging tens of billions of dollars in corporate investment. Indeed, the prices of data-related goods and services have dropped by almost 20 percent since 2007.

So what is really going on? Does Obama really think the future of the Internet requires the government to sort out squabbles between Netflix and Comast?

I doubt it.

Maybe it is intended to deliver to big donors. Maybe it is about the 16.1% tax on interstate revenues that would be paid by broadband consumers. Or maybe it is something more sinister. As Christopher Bowen wrote last week:

The problem with the government regulating the internet is that … when they get to determine the rules, the consequences turn sinister.

*     *     *

What about communications of interest to the government, such as anything with heavy encryption? Or Tor?

The government has a direct interest in controlling that kind of traffic—hello, Wikileaks/Edward Snowden/any other whistleblower—and if anyone thinks the federal government will look the other way on these things, they are naive.

This isn’t just a possibility, it’s the reality of current legislation on the books, as Chris Byrne pointed out in 2006. Every single packet, every communication, every image, would be captured and stored—by law—if common carrier became the letter of the law in regards to internet traffic, without a warrant, and it would take just a rubber stamp to get a warrant that would be used to punish anyone the government pleases…

REGULATION HURTS INVESTMENT IN INFRASTRUCTURE

For years, federal agencies themselves have resisted calls for regulation, on the states basis that forcing ISPs to treat content neutrally was not necessary, would impede the development of infrastructure, and would have an adverse effect on consumer welfare.

That is because developing the technology to respond to demands for bandwidth requires heavy investment. In fact, in 2013, telecom and cable companies topped the list of industries investing in the U.S., to the tune of $46 billion in investment.

Regulation cuts into the profits that encourage that level of investment.

This Cato Institute podcast, for example, covers the fact that Google Fiber does not provide Title II (public utility) services precisely to avoid the onerous regulations that come along with such endeavor. Another stark reminder of this basic fact came in the wake of the President’s message. On November 12, 2014, AT&T announced it would delay installing high-speed fiber-optic Internet infrastructure in 100 U.S. cities until the rules were clarified.

Perhaps this is why the American people oppose regulation. A November 2014 survey by Rasumussen Reports found that 61% oppose federal regulation of the Internet. Only 19% want more regulation than we already have. What is more, seventy-six percent like the quality of their Internet access.

Only 5% have complaints.

At best this is a solution in search of a problem. At worst, this is a Jonathan Gruber style misinformation campaign, designed to lull the public into complacency as the federal government assumes control of the Internet.

This time, let’s not fall for it.

Image via BandwithPlace.com

Sarah Baker is a libertarian, attorney and writer. She lives in Montana with her daughter and a house full of pets.
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More on Amazon, ebooks, and monopolies

Yesterday, Brad wrote a wonderful piece blasting away at accusations that Amazon has a monopoly on the ebook. As an indie author who making most of his income via ebook sales, I thought it might be worth getting another take on the same issue.

Brad makes excellent points, but there are some points that I figure he missed. First, let’s look at the definition of the term “monopoly“.

1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.
3. the exclusive possession or control of something.
4. something that is the subject of such control, as a commodity or service.
5. a company or group that has such control.
6. the market condition that exists when there is only one seller.

[I did leave out one possible definition, but that was because it involved the board game, hence irrelevant]

So, the implication is that there is no competition in the realm of ebooks. Amazon controls the whole shebang. Now, Brad points out how myopic that thinking is in his post yesterday. » Read more

First, I’d like to take a moment to mention how great it is to be posting something to The Liberty Papers. In 2009, I joined with a friend in a project he had started where we blogged about area politics. I’d blogged a little bit here and there before about whatever random things, but my libertarian streak had never really gotten a chance to fly.

Suddenly, I had a platform. To say it changed my life was…well, a significant understatement. It lead to me getting to know some pretty cool people, many of whom are here at The Liberty Papers. It gave me the opportunity to first write for a local newspaper, and then eventually buy it. While that didn’t necessarily work out, it was yet another example of me being able to write a lot of words in a fairly short amount of time. So, I did like a lot of people and decided to write a book. Bloody Eden came out in August and is available at Amazon (or your favorite book website for that matter).

Now that we’ve gotten the history out of the way, a bit about the politics. First, I’m probably best described as a classical liberal. At least, that’s what every “What kind of libertarian are you?” quiz has told me, and they’re probably right. I’m a constitutional libertarian, for the most part. If the Constitution says they can do it, it doesn’t mean they should, but if the Constitution says they can’t, then they can’t. It just doesn’t get any simpler than that.

I look forward to contributing here at The Liberty Papers.

What’s that got to do with the price of whiskey in West Virginia

Sometimes it can be hard for people to grasp how government distortion of the free market actually impacts them, and why it’s such a corrosive and destructive force.

The whole issue is so big, and so pervasive, that people can’t relate to it, or focus on it, or see how it hurts them personally… at least until it does something like say, get them thrown in jail, or shuts down their business, or costs them their job; at which point the local news stories and the facebook posts and the buzzfeed and upworthy click bait flood out with sympathy for the individual story… but the larger issue is never addressed.

In this short post, consisting of nothing but some bare facts, Gizmodo illustrates the direct personal impact of the nanny state, rent seeking, regulatory capture, state sponsored monopolies, and regressive tax policies… all in one piece about whiskey:

GIZMODO: How Much a Bottle of Whiskey Costs in Every State

Alcoholic beverage sales in the United States are a nearly perfect example of government induced market distortion.

In many states (18 as of this writing), all liquor sales and pricing are exclusively controlled by the state. Some states (and many cities and towns) explicitly set the minimum price for which a bottle or a drink can be sold. In ALL states, there is relatively restrictive licensing to sell liquor (often extremely restrictive, and almost always politically controlled).

Additionally, most states require liquor retailers purchase their liquor either from the state directly, or from a strictly limited number of state licensed distributors.

This can extend to ridiculous extremes, such as Florida, where a recent reinterpretation of the law requires brew pubs to sell their product to a state licensed distributor, who then sell it back to them (both required to sell at a minimum price, and both paying taxes on the “sales” between each other, and THEN retail taxes on top) just so they can serve their own customers.

The states offer many rationales for these restrictive regulatory regimes, including reducing drinking, limited access to minors, reducing fraud and tax cheating…

…All of which have not only been ineffective, they have in fact generally had an impact opposite of their stated intent.

The REAL purpose behind this restrictive control, is of course the real purpose of most restrictive licensing and pricing schemes…

Power, Control, and Money

Retail, restaurant, and bar liquor licenses, in restrictive licensing areas; can sell for huge amounts of money, or can be subject to years of delays (or both); generally at the whim of politicians and bureaucrats .

These business owners, are mostly willing to play along with this scheme, because it limits their competition, and it increase the value of their business (which they can later sell for a very high price).

In fact, in some areas, local liquor license holders are allowed input (or even a veto) on whether a new business can obtain a liquor license, or whether (or to whom) a liquor license can be transferred.

Even if a license holder is opposed to restrictive licensing, they may have had to pay hundreds of thousands of dollars… even millions in some cities… to obtain their license (or to purchase a business that already had one, which is often the only way to get a license); so often they actively work against reform, because they don’t want to see the value of their investment plummet.

Liquor distribution can be even more lucrative, particularly with state granted near monopolies, and often state regulated minimum pricing; guaranteeing distributors little or no competition and huge profits.Some states go so far as to only license a handful of distributors for the entire state, or even license them exclusively within certain counties, municipalities or regions; giving them effective monopolies on all liquor sales in their areas.

Of course, as with anything of great value, the politicians and bureaucrats who control licensing, can get great benefit from granting them, allowing them to be transferred,  reducing the costs associated with obtaining them; or more destructively, for NOT granting a license to a potential competitor.

A few minutes talking with anyone in the hospitality trade, or anyone with an interest in government corruption, and you’ll hear endless stories of shakedowns, bribes, organized crime influence, naked influence peddling…

Liquor licensing is possibly the single most corrupt area of government in this country… and that’s really saying something.

And then there’s the taxes… oh the taxes…

Even if we ignore the inherently corrupt and corrupting issue of restrictive licensing,  the states (and for that matter federal government), derive considerable revenues from liquor sales.

In some states, there is both an excise tax on all alcohol sales, PLUS a “spirit tax” (charged per gallon of “spirituous liquor”), AND a separate (and much higher) sales tax on alcohol or spirits (beer, wine, and “spirituous liquors” are often taxed very differently).

In Washington state (the highest alcohol tax state, which has only recently decided to allow, in a very limited and restricted way, sales of liquor through some private retailers), the combined excise and spirit tax is $35.22 a gallon, PLUS a 20.5% sales tax on liquor (the national average is $5.33 per gallon, and most states do have a separate sales tax for spirits)

… But wait, there’s more… 

Washington, like many other states, also charges all liquor retailers and distributors an additional fee; which in their case, is 17% of gross revenues from alcohol sales.

Obviously, businesses are going to pass that fee onto consumers; so, in effect, Washington is adding a 37.5% sales tax, on top of the spirit tax, to every sale.

For a 750ml bottle of whiskey costing $18, that ends up being $6.98 in excise tax (hidden from the consumer), plus $6.75 in sales tax; a total of  $11.02 for the whiskey, and $13.73 in tax.

This map, from  http://www.Taxfoundation.org , shows the spirit taxes around the country (not including additional sales taxes on spirits):

State Spirit Tax Rates

 

All of this of course, is on top of the federal taxes on liquor manufacture, distribution, and sales; which for “spirituous liquors” (generally defined as alcohol for human consumption, packaged and sold above “50 proof” or 25% ethanol by volume) are $13.50 per proof gallon (a “proof gallon” is the amount of ethanol in one gallon of 100 proof liquor. If you are distilling and blending 80 proof liquor, the tax will be 80% of that rate per gallon. For an 80 proof 750ml bottle of whiskey, the federal spirit excise is $2.14).

These federal taxes are first paid directly by the producer to the ATF. Then more taxes are paid from the distributors, and finally, by the retailers.

So actually, that example above? It’s not really a total of  $11.02 for the whiskey, and $13.73 in tax… It’s really a total of…

…Well, if we tried to do a real total cost accounting for what the total tax burden, including all liquor taxes, sales taxes, and regulatory compliance costs… It’s probably more like $3 for the whiskey, $6 in federal taxes and other compliance and regulatory costs, and $16 in state taxes, and compliance and regulatory costs.

And then there’s the actual state monopolies…

Some states don’t bother taxing liquor separately, or they tax it at “normal” rates as they would any other product; they just hold a legal monopoly on all liquor sales.

The revenues available to the states through liquor sales are so great in fact, that in a rare example of a state government doing something that makes economic sense, and is even almost libertarian (as libertarian as any state controlled enterprise could be anyway); the state of New Hampshire (which has no income or sales tax) explicitly operates their state controlled liquor stores as a (relatively) efficient business, with good pricing and marketing designed to attract buyers from other states; helping them to keep tax burdens in the state otherwise among the lowest in the nation.

If you’ve ever driven into or out of New Hampshire on I-93 or I-95, those giant Costco sized buildings on both sides of the highway at the first rest stop after the tolls  (of course they’re after the tolls… have to capture that revenue), are state liquor stores; specifically designed and located to capture sales and revenue from Massachusetts, Connecticut, Rhode Island, Vermont, Maine, and New York residents, many of whom drive to New Hampshire specifically to buy liquor and avoid the high prices and taxes in their own states (appx. 50% of all liquor sales in NH are to out of state residents, about 50% of which come from the four state liquor stores on 93 and 95).

Just how much difference does this make to the price of whiskey? 

Like I said above, it’s all so big, so pervasive, it can be hard to get a handle on. Some of the costs you can see directly, like sales taxes. Some of them are partially hidden, like excise taxes. Some of them are completely hidden, like the costs of reduced competition, and the costs of regulatory compliance (in economics these are called hidden externalities).

How about we simplify, and just show you the money?

One product, compared across all 50 states, and just see how the regulatory and tax environments in each state effect the price…

Gizmodo chose the most common and popular American whiskey, in the most popular sized bottle: A 750ml bottle of Jack Daniels (which by the way sells for about $8 from the distiller to the distributors, which includes the $2.14 in tax paid by the distiller to the ATF).

What do you think the price difference might be?

On one 750ml bottle of Americas best selling whiskey, what do you think the price difference might be from state to state? (this is comparing the lowest advertised or verifiable price within a state, not cherrypicking a high price)

Oh and by the way, this includes the excise tax, but DOES NOT include sales tax (making the differences even higher).

$1… $2… $5… $10?

How about $20…

Well, actually, $19.

In New Mexico, you can get a bottle of Jack for $15.99. In Alaska, that same bottle costs $35…

Ok… well.. that’s Alaska… transportation costs and all that, right?

Jack Daniels is famously distilled in Lynchburg Tennessee, which by the way, is in a dry county, where all alcohol sales are banned (as is the case in appx 220 counties in 32 states, with another 250 or so counties having near bans or extremely tight restrictions). How much does a bottle of Jack cost in Tennessee?

$25…

Yes, Jack Daniels costs $10 more IN THE STATE THE STUFF IS ACTUALLY MADE, than it does 1300 miles away in New Mexico.

Even worse, is West Virginia, which almost shares a border with Tennessee (less than 30 miles of the extreme western edge of Virginia separate them… My wifes family is from there, it’s a very pretty drive, I highly recommend it), where a bottle of jack costs… wait for it… $32.99.

It’s not just the taxes… it’s all of the other effects of the regulatory burden…

The great part of this comparison is that it accounts for more than just the tax rates. It shows you the complete total cost impact of market distortions and differential burdens across the states; not just for alcohol, but for retail business in general.
Tennessee has one of the lowest spirit taxes in the country, at only $4.46 per gallon, but a bottle of Jack costs $32.99. Washington has the highest taxes in the country, at $35.22 per gallon, but a bottle of Jack costs $18.99 (again, both before sales tax).

Show me the numbers

From the Gizmodo piece:

Here’s the complete list, arranged by price:

  1. New Mexico: $15.99 (Quarter’s Discount Liquors, Albuquerque)
  2. Arizona: $16.99 (Total Wine and More, Phoenix)
  3. Florida: $17.99 (Wine and More, Daytona Beach)
  4. Texas: $17.99 (Wine and More, Dallas)
  5. California: $17.99 (BevMo, Culver City)
  6. Washington: $17.99 (BevMo, Bellingham)
  7. Oklahoma: $18.53 (Bryan’s Liquor Warehouse, Oklahoma City)
  8. Nevada: $19.99 (Lee’s Discount Liquor, Las Vegas)
  9. Louisiana: $19.99 (Prytania Liquor Store, New Orleans)
  10. Wisconsin: $19.99 (WI Discount Liquor, Milwaukee)
  11. Kansas: $19.99 (Lukas Liquor, Overland Park)
  12. Missouri: $19.99 (Lukas Liquor, Kansas City)
  13. Minnesota: $19.99 (Zipp’s Liquor, Minneapolis)
  14. Illinois: $19.99 (Binny’s, Chicago)
  15. Maine: $19.99 (Lou’s Beverage Barn, Augusta)
  16. Wyoming: $20.99 (Dell Range Liquor Store, Cheyenne)
  17. Delaware: $21.99 (Tri-State Liquors, Claymont)
  18. Georgia: $21.99 (Midtown Liquor, Atlanta)
  19. South Carolina: $22.90 (Burris Liquor Store, Charleston)
  20. Colorado: $22.99 (Colorado Liquor Mart, Denver)
  21. Pennsylvania: $22.99 (Wine and Spirits Store, Philadelphia)
  22. Mississippi: $23.32 (Stanley’s Liquor and Wine, Jackson)
  23. Idaho: $23.95 (State Run Liquor Store, 17th and State, Boise)
  24. South Dakota: $23.94 (Capital City Wine & Spirits, Pierre)
  25. Indiana: $23.99 (Nick’s Liquor Store, Hammond)
  26. Maryland: $23.99 (Eastport Liquors, Annapolis)
  27. Nebraska: $23.99 (The Still, Lincoln)
  28. Alabama: $23.99 (ABC Liquors, statewide)
  29. Vermont: $24.00 (Beverage Warehouse, Winooski)
  30. Ohio: $24.25 (Campus State Liquor Store, Columbus)
  31. Arkansas: $24.52 (Lake Liquors, Maumelle)
  32. Virginia: $24.90 (ABC Store, Richmond)
  33. Oregon: $24.95 (Northside Liquor Store, Eugene)
  34. Tennessee: $24.99 (Frugal MacDoogal Liquor Warehouse, Nashville)
  35. Connecticut: $24.99 (BevMax, Stamford)
  36. New Jersey: $24.99 (Super Buy Rite, Jersey City)
  37. North Dakota: $24.99 (Empire Liquors, Fargo)
  38. Utah: $25.49 (State Liquor Store, Salt Lake City)
  39. New Hampshire: $25.99 (Liquor and Wine Outlet, New London)
  40. Kentucky: $25.99 (Old Town Wine and Spirits, Louisville)
  41. Montana: $26.75 (Bottle and Shots West Liquor Store Billings)
  42. North Carolina: $26.95 (ABC Store, Raleigh)
  43. Rhode Island: $28.00 (City Liquors, Providence)
  44. Michigan: $28.62 (Calumet Market and Spirits, Detroit)
  45. New York: $28.99 (Warehouse Wine and Spirits, New York)
  46. Iowa: $28.99 (Liquor House, Iowa City)
  47. Massachusetts: Charles Street Liquors: $28.99
  48. Hawaii: $29.99 (The Liquor Collection, Honolulu)
  49. West Virginia: $32.99 (Liquor Co, Charleston)
  50. Alaska: $35.00 (Percy’s Liquor Store, Juneau)

Disclaimer: This is not a scientific survey, but I tried to call basic, non-fancy liquor stores for the price check. It’s not clear how much of the discrepancy from state to state is caused by cost of living, tax rates, regulations, or just good ole fashioned price gouging.

You can see, the majority of states are clustered around $20-25, only 7 states cheaper than that, and 12 states more expensive, even though the spirit taxes in those states vary widely. Again, this just shows you the overall burden… the effects of what is seen, and what is unseen… in a highly regulated market.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Michigan Reaffirms Protectionist Legislation for State Auto Dealers

As Tom Knighton covered earlier this week, the Michigan state legislature let its crony capitalist flag fly when it passed a bill affirming Michigan’s protectionist legislation for traditional franchise auto dealers. Yesterday, Republican Michigan Gov. Rick Snyder signed the bill into law.

Under existing law, an auto manufacturer could not a sell new vehicle directly to retail customers other than through “its franchised dealers.” The new legislation signed by Gov. Snyder deletes the word “its.” It thus allows manufacturers to sell through other manufacturers’ dealers, so long as they do sell through someone’s franchised dealer. This legislation is intended to protect Michigan dealers from competition via direct-to-consumer models like that employed by Tesla Motors.

I love capitalism. But I hate crony capitalism.

Tesla wants to bypass traditional auto dealers, who operate via franchises licensed by manufacturers, and instead sell directly to consumers. This would benefit consumers—and manufacturers like Tesla—by eliminating the dealer middlemen.

Michigan does not want its consumers to enjoy those savings.

In this ignominious regard, it joins New Jersey, Maryland, Texas and Arizona. In addition to those, Georgia’s dealers are currently, in the words of Reason’s Brian Doherty, trying “to use the violent force of the state to stop Tesla Motors from innovating and competing against them.”

Auto blog Jalopnik reports that:

The dealer’s case—and GM’s—is that dealers provide a valuable service to consumers and by continuing to employ the traditional dealership model, they’re protecting car owners.

If it were a valuable service, it would not require protectionist legislation. It requires protectionist legislation precisely because it would have trouble competing in a market where consumers were given a choice. Jalopnik further reported GM’s position as follows:

“Competition is always healthy,” GM spokeswoman Heather Rosenker tells Jalopnik. “But it needs to be on a level playing field.”

In other words, GM thinks a level playing field is what is created when one of the world’s largest automobile manufacturers uses the strong arm of government to force other manufacturers to follow its chosen sales model, instead of allowing each to experiment with its own methods and models.

As more than 70 law professors and economists complained when Republican New Jersey Gov. Chris Christie signed similar protectionist legislation:

There is no justification on any rational economic or public policy grounds for such a restraint of commerce. Rather, the upshot of the regulation is to reduce compe- tition in New Jersey’s automobile market for the benefit of its auto dealers and to the detriment of its consumers. It is protectionism for auto dealers, pure and simple.

*     *     *

[W]e have not heard a single argument for a direct distribution ban that makes any sense. To the contrary, these arguments simply bolster our belief that the regulations in question are motivated by economic protectionism that favors dealers at the expense of consumers and innovative technologies.

If our Republican elected officials actually practiced capitalism—instead of its crony capitalist impersonator—they might fare better at the polls. Without a doubt, consumers would be better off.

Sarah Baker is a libertarian, attorney and writer. She lives in Montana with her daughter and a house full of pets.

57,000 Federal Workers On Paid Leave For Months: WaPo

The Washington Post has written about a Government Accountability Office (GAO) report that makes the claim that over 57,000 federal workers are on paid administrative leave for over a month.

Tens of thousands of federal workers are being kept on paid leave for at least a month — and often for longer stretches that can reach a year or more — while they wait to be punished for misbehavior or cleared and allowed to return to work, government records show.

During a three-year period that ended last fall, more than 57,000 employees were sent home for a month or longer. The tab for these workers exceeded $775 million in salary alone.

(…)

But a forthcoming report by the Government Accountability Office found that 53,000 civilian employees were kept home for one to three months during the three fiscal years that ended in September 2013. About 4,000 more were kept off the job for three months to a year and several hundred for one to three years. The study represents the first time auditors have calculated the scope and cost of administrative leave.

All of this is despite clear government regulations stating that paid time off should never go beyond a few days; the Justice Department, in one example, limits the time to ten days unless the assistant attorney general approves a longer period. However, one particular case – of someone who was put on leave, and wanted a resolution – indicates a clear problem with the left hand not talking to the right:

“Six months went by and we didn’t hear anything,” said Scott Balovich, who was put on administrative leave from his computer job at the National Oceanic and Atmospheric Administration in Alaska. “You’re so anxious. You don’t know if you’ve got a job. You’re getting paid, but it’s no vacation.”

Balovich was kept out of work while investigators examined how pornographic images had gotten onto his computer hard drive. He ultimately was cleared of any personal involvement and returned to his job last week. His attorney, Debra D’Agostino, a founder of the Federal Practice Group, said he “got stuck in the inertia of bureaucracy.”

Linked in the piece is another WaPo report from December 30, 2012, going over the minutia of the federal workers themselves when they get stuck in legal pergatory.

Paul Brachfeld, the inspector general for the National Archives, planned to ring in the new year with his wife with a relaxed visit to their vacation home near Bethany Beach, Del. In October, the couple took a cruise to Puerto Rico. Brachfeld runs every morning in Silver Spring, hikes with Spree, his Jack Russell terrier, in the woods most afternoons and catches up with his adult daughters in the evening. All while collecting his $186,000 government salary.

These days, his life seems like one long vacation. The veteran watchdog for the historical records agency is entering his fourth month on paid time off, one of an unspecified number of federal employees who are collecting paychecks and benefits to do .?.?. nothing. At least nothing to advance the immediate interests of the government.

(…)

In a system that rarely fires people, no one can say how many are on paid administrative leave. It’s one number the government apparently doesn’t track.

There are many reasons for this, and most of them involve a desire to not be sued by workers. Between union contracts, interpersonal squabbles and outright sour grapes, workers are a threat to sue their employer, and when it’s the federal government, there’s additional layers of oversight, obfuscation and confusion worked in. This leads to many people having an interest to prevent that from happening, and those people tend to work slow.

As far as direct supervisors – middle managers – are concerned, putting someone on administrative leave is a win-win situation: they get rid of a problem for whatever reason, and they don’t have to pay the person so they could care less. What’s another $50,000? But it adds up, to the tune of $775m, plus benefits, and asking the government to oversee itself in this case is like asking a wolf to guard the flock.

The answer, however, isn’t necessarily to just make government work right-to-work. Between existing workers unions (which have brought good things to American workers all around, whether they’re union or not), the continued skittishness of the existing job market, and the potential for abuse due to personal or political connections – imagine a Democratic takeover of an office resulting in any Republicans in that office being thrown out onto the streets – going completely right-to-work would be a tremendous shock to the system that would damage workers and cause tremendous instability in public sector work. The only justification for that is that the resulting inefficiency that comes from such high turnover could potentially lead to a reduction in government because the existing one isn’t working, but breaking ones toys to get new ones is never a solid answer.

The answer here is simply stronger enforcement: five working days of leave, with back pay due if no issues are found or if termination cannot be adequately justified. If an HR department cannot build a case for termination within that amount of time, then the worker can go back to work, even if they’re a “threat”. It will force people to think long and hard before going that route. Government bureaucrats who need a fainting couch reading that can simply look at the other side of the argument – full right-to-work, which I’m sure many of my colleagues would argue for – and pick which side they prefer.

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, TalkingAboutGames.com and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.

Michigan lets its crony capitalism flag fly

Michigan lawmakers are looking out for auto dealers. Sounds nice, right? Well, it does if you’re a new car dealer who doesn’t like the fact that that upstart auto maker Tesla hasn’t followed the herd when it comes to selling their new cars.

The state’s legislature recently passed a bill that bans direct sales of new cars to customers, requiring a dealer to broker the sale. The bill is awaiting signing by governor Rick Snyder.

From Bloomberg:

The National Automobile Dealers Association, which represents almost 16,000 new-car dealers, favors the franchised-dealer network.

“States are fully within their rights to protect consumers by choosing the way cars are sold and serviced,” Charles Cyrill, a spokesman, said in an e-mailed statement. “Fierce competition between local dealers in any given market drives down prices both in and across brands. While if a factory owned all of its stores, it could set prices and buyers would lose virtually all bargaining power.”

Are states “fully within their rights” to block consumers purchasing a legal product directly rather than going through an approved agent? I’m going to say that they’re not. At all. Sure, there may be no laws that expressly forbid them from doing it (though this seems more a case for the Federal government under the Interstate Commerce Clause), but just because you can do something doesn’t mean you should. This is a big old “don’t”. » Read more

First, I’d like to take a moment to mention how great it is to be posting something to The Liberty Papers. In 2009, I joined with a friend in a project he had started where we blogged about area politics. I’d blogged a little bit here and there before about whatever random things, but my libertarian streak had never really gotten a chance to fly.

Suddenly, I had a platform. To say it changed my life was…well, a significant understatement. It lead to me getting to know some pretty cool people, many of whom are here at The Liberty Papers. It gave me the opportunity to first write for a local newspaper, and then eventually buy it. While that didn’t necessarily work out, it was yet another example of me being able to write a lot of words in a fairly short amount of time. So, I did like a lot of people and decided to write a book. Bloody Eden came out in August and is available at Amazon (or your favorite book website for that matter).

Now that we’ve gotten the history out of the way, a bit about the politics. First, I’m probably best described as a classical liberal. At least, that’s what every “What kind of libertarian are you?” quiz has told me, and they’re probably right. I’m a constitutional libertarian, for the most part. If the Constitution says they can do it, it doesn’t mean they should, but if the Constitution says they can’t, then they can’t. It just doesn’t get any simpler than that.

I look forward to contributing here at The Liberty Papers.

#GamerGate: The Microcosm of the Culture Wars

As a games writer by trade, it’s been funny watching mainstream news sites pick up the story known simply as “GamerGate”. Everyone from Reason to The New York Times has picked up on the story, with some doing a better job of reporting a two month old story than others. Naturally, the articles have a slant of their own for the most part that goes along that site’s political lines, and the signal-to-noise ratio at this point has gotten so poor that it’s hard to even remember what caused all of this in the first place.

When looking at GamerGate, it’s important to remember a couple of points:

1) Ultimately, it’s really not about video games, it’s about culture. GamerGate is a microcosm of the culture wars.
2) Everyone is missing key free-market solutions to all of the issues brought up.

I will preface, in the interests of full disclosure, a few things about myself in this that people will want to bear in mind as they read everything below the cut. First, I have been, on my video game Twitter feed (@gamingbus), 100% anti GamerGate. Also, as previously mentioned, I spent a while writing about video games, centred around the industry itself, for a living, a perspective I believe few other political sites have, so a lot of the smoke regarding issues with women – particularly opinionated ones on both sides of this issue – has a fire that I’ve personally witnessed. With that in mind, I will do my utmost to keep this one down the middle. » Read more

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, TalkingAboutGames.com and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.

136 Companies Band Together to Close “Police Loophole”

Just about everyone has heard of the “gun show loophole” by now but there’s another gun loophole that some of the gun manufacturers themselves with to close: the police loophole.

What exactly is the police loophole? According to thepoliceloophole.com, this is the site’s definition:

There are some states, counties, cities, and municipalities in our great nation that fail to allow their citizens to fully exercise their right to keep and bear arms with restrictions such as magazine capacity or types of firearms. However, these government entities do not place these restrictions upon their own employees, such as police officers.

Now that the police loophole has been identified, what are the people behind the site planning to do about it? They have compiled a list which they describe:

This is a list of companies that have taken the step to publicly announce that they will not sell items to states, counties, cities, and municipalities that restrict their citizens rights to own them; therefore closing the “police loophole” themselves. It is important to note that we are against gun control; we are not against any particular government agency or individuals.

I cannot express how much I love this idea. So far, there are 136 firearms companies (primarily) on the list; 136 companies using a market approach to fight back against government at all levels that would infringe on the rights of an individual to bear arms. One might say they are “going Galt” by not selling their products to the very government that would disarm us. It’s a bold move and I’m sure this will cost these companies a good deal of money (who knows, some might go out of business…let’s hope not).

So if you are in the market for a new firearm, ammunition, magazine, or whatever, check the list and patronize these companies. And be sure to thank them for making this courageous stand against tyranny.

Farming in an Equilibrium Trap

JayG wrote something today about how this summers drought is hitting farmers very hard; which is absolutely true. And it’s already having an impact on food prices, and that impact is just going to grow.

The crop that’s being impacted worst is dent corn, which makes up the majority of livestock feed in this country; particularly beef feed. This is exacerbated by the governments ethanol mandates, which take even more of the feed corn crop out of the feed market.

Over the next couple months, we’re going to see beef prices crash, as ranchers and feedlots come to the end of their stored feedstocks and slaughter more steer than normal (so they don’t have to keep feeding them), and then SOAR to highs we haven’t seen in years over the fall and winter.

Jay points out that some are “blaming subisidies” for the state of things… which I think is silly, you can’t blame subsidies for weather (well… usually… Microclimate and regional climate adjustments due to overplanting can sometimes be blamed on subsidies… but that’s not what we’re talking about here).

But honestly, there’s something that no-one wants to admit, no-one wants to say, and no-one wants to hear in this country….

We have too many damn farmers.

By far.

Probably by more than half, at least for some crops.

In particular we have too many grain farmers. In even greater particular, we have far too many corn and wheat farmers.

We have a natural market for corn and wheat that would support… something like half… of the farmers that we have now.

All of those people who are only making money because of subsidies; we really don’t need them growing corn or wheat.

Either they need to grow something else, or they need to sell their land and stop being farmers.

Even the argument that it “keeps our food prices low” is false; because it actually keeps them higher most years. If there were no subsidies, the market would find its natural level of supply, demand, and price; and the resources inefficiently allocated to subsidized crops would simply be allocated elsewhere (and I’m not even going to get into the second order effects of this regime like obesity, HFCS vs. sugar pricing, ethanol etc…).

But we don’t want to hear it.

We are constantly being presented with images of the “struggling family farmer”… And have been for over 100 years.

Shouldn’t that tell you something?

There are plenty of very profitable and prosperous farmers in this country, and plenty of large farming corporations that do quite well…

And who are they?

They’re farmers that grow crops which don’t get subsidies, who have found ways to be economically efficient; or they are farm corporations who have found ways to extract the maximum amount of government benefits.

Again… shouldn’t that tell you something?

When a business is failing, that doesn’t tell you “we need to subsidize it”, it tells you we need to reduce its regulatory and tax burdens and operational restrictions (stop artificially reducing its competitiveness); or we need to let that business die.

Farming is no different from any other business. If it’s not competitive, we shouldn’t be encouraging people to do it (unless it’s of importance to national security, and thus can’t be outsourced or offshored; and even then that’s an iffy one, and we should still be encouraging competitiveness internally ) and we shouldn’t be rescuing or subsidizing it.

Why on earth have we been subsidizing these non-viable crops for 80 years?

Oh wait… I know… it’s because to get elected president, you need to win the majority of Iowa, Kansas, Nebraska, Missouri, Minnesota, Illinois, Indiana, Michigan, and Ohio; and to be elected to congress (outside of a major urban constituency anyway) or win those states in the general election, you have to support subsidies for grain farming.

Right now, these farmers are in an equilibrium trap, where because of government subsidies they can just barely get by; but because of inefficiency, actual market conditions etc… they can’t get ahead

The way to deal with equilibrium traps, is to break out of them completely. You can’t do that by keeping on doing what put you in the trap to begin with; and they’ve been doing that for 80 years.

If we stopped subsidizing these crops, people would take huge losses in the first few years; particularly as their land prices fell dramatically. It would hurt. A few hundred thousand people would take a big hit…

An aside about numbers: there are about 2.3 million “farms” in the united states. 65% of all crops are produced by 9% of all farms (which farm 59% of the agricultural land), and 85% of all crops are produced by 15% of all farms.

Of the appx. 2.3 million “farms”, about 2.1 million are considered “family farms”. About 1.9 million of those farms are considered “small family farms”, which have gross revenues of less than $250,000 per year, and produce less than 15% of all crops. Of those, about 35%, produce about 9% of the total crops in this country and are generally considered viable. 40% are essentially “hobby” or “part time” farms that produce less than 3% of all crops per year. It’s the 25% or so of those 2 million farms, which only produce 3-4% of all crops, and which are basically non-viable, that are the biggest issue.

Oh and 10% of all farms receive 75% of all subsidies, for producing about 25% of all crops. Corn, wheat, cotton, rice, soybeans, dairy, peanuts, and sugar, make up 97% of subsidies. Corn and wheat alone make up 52%, cotton about 14%, rice and soybeans another 23%). The VAST majority of those subsidies go to large corporate feed grain farms in Iowa, Illinois, Nebraska, Kansas, and Ohio, and to Cotton farms in Texas (Texas produces 30% of all cotton in the U.S., with Arkansas, California, Mississippi, and Georgia accounting for another 40%); NOT to small family farmers

And then, we would be better off as a nation; and THEY would be better off as individuals. They, and their children, would no longer be trapped into a just barely livable, just barely getting by, dependent on the government economic condition for decades. They would move to more productive more useful employment. They would be better off eventually, as would the country as a whole.

The problem? Many of them don’t want to. They WANT to be farmers, even though they KNOW it’s a bad business. They love being farmers. They’ve been farmers for generations in their family. It’s all they know, it’s what they’re passionate about, it’s part of their culture and they can’t see ever doing anything else.

Well… I want to be an Aerospace Engineer, and design and build airplanes; or even boats (many boat designers are also aerospace engineers. It’s a very similar field of study). It’s what I trained for, and I love it and am very passionate about it.

But it’s not viable for me.

There are more than enough airplane designers out there for the market as it exists today; so I can’t find employment as an airplane designer. The fact is, very few new airplanes are being designed.

Now, I’m the first to say that we should get the excessive regulatory burden out of the way of the aircraft industry, and if we did that it’s likely that more aircraft would be designed and more aerospace engineers could find jobs…

But would you say that just because I can’t find a job in the field I was educated in, that we should subsidize that field just so I could?

…Well… Sadly, some would… Or at least they would, if the field I was in was politically or socially favored… But anyone with any sense or integrity knows better.

We have romanticized the idea of the “family farmer” in this country for far too long.

The fact is, it is no longer economically viable, nor is it necessary, for many of these people to be farmers, and we should stop enabling the equilibrium trap constantly keep them locked into farming, but always on the edge of failing.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Auto Bailout; Can’t Prove A Counterfactual, But You Can Infer

So the big debate is whether the gov’t should sell their post-IPO shares in GM. At current prices, they’d [unsurprisingly] be losing money on the sale, compared to the amount put up in the bailout.

So we have to ask — was it worth it? To determine that, we can’t base our entire calculation on the return of the bailout. A bailout is offered with the expectation that you might not get *any* return — you bail to prevent the craft from sinking; anything else is gravy. So to determine the worth of the bailout, we have to ask what would have happened in the absence of a bailout. Thankfully, the Center for Automotive Research released their prediction back in 2008:

Researchers at the Center for Automotive Research (CAR) in Ann Arbor, Michigan, estimate the impact on the U.S. economy would be substantial were all—or even half—of the three Detroit-based automotive manufacturers’ U.S. facilities to cease operations. The immediate shock to the economy would be felt well beyond the Detroit Three companies, negatively impacting the U.S. operations of international manufacturers and suppliers as well. Nearly 3 million jobs would be lost in the first year if there is a 100 percent reduction in Detroit Three U.S. operations.

“Our model estimates that a complete shutdown of Detroit Three U.S. production would have a major impact on the U.S. economy in terms of lost wages, reductions in social security receipts, personal income taxes paid, and an increase in transfer payments,” said Sean McAlinden, CAR chief economist and the study’s leader. “The government stands to lose on the level of $60 billion in the first year alone, and the three year total is well over $156 billion.”

Yikes! Sounds bad!

But would the automakers “cease operations”? Would they disappear into an economic black hole, never to be seen again, with only confused and unemployed UAW workers left behind like the un-Raptured masses?

Or would they, as Warren of Coyote Blog suggested way back when, be freed from working for an unproductive corporate environment and re-deployed in ways that their contributions will actually generate value?

So what if GM dies? Letting the GM’s of the world die is one of the best possible things we can do for our economy and the wealth of our nation. Assuming GM’s DNA has a less than one multiplier, then releasing GM’s assets from GM’s control actually increases value. Talented engineers, after some admittedly painful personal dislocation, find jobs designing things people want and value. Their output has more value, which in the long run helps everyone, including themselves.

I can’t find the specific post, but he has another where he suggests that if GM were even to face liquidation, it would not entail the loss of GM’s assets, much of its workforce, or its supply chain. The failure of GM [or Chrysler] would be painful, but fundamentally going through a serious bankruptcy [and/or liquidation] would free GM from its worst corporate problems, possibly returning them to a point where they actually generated value from their operations rather than losses.

Liquidation, of course, is the worst-case scenario. And there were plenty of folks suggesting that liquidation was impossible in the 2008-2010 era, because credit markets had seized and there was NO way anyone in the world would have the capital to buy up assets. But is it true?

Nope. Not at all. You need look no farther than Nortel. Nortel was a MAJOR telecommunications company, existing in one form or another since the late 1800’s, back in the days of the first telephone. It was built into an absolutely enormous conglomerate during the technology boom of the 1990’s, but like many companies in that sector, fell on hard times after the tech crash. They fought through bailouts in 2003 and 2009, but ultimately they declared bankruptcy right in the heart of the credit crunch, hoped to escape intact, but eventually had to go through liquidation. Between then and today, Nortel has basically ceased to exist. A look at the Wikipedia page for the liquidation results suggests that seized credit markets didn’t exactly stop them from finding buyers for their assets.

As an engineer who has dealt with what used to be Nortel and is now a collection of disparate companies that have purchased their assets, I can attest that Nortel has not “ceased operations”. That’s not to say that the changes over the last few years have been pain-free. There has been dislocation, there have been layoffs, and from my discussions with former Nortel employees as well as being a supplier, many things have changed. Fundamentally, though, Nortel’s business units are still in operations under different names. Many Nortel engineers are still employed within the same organization, only with a different letterhead on their business card. And as a supplier, I can say that the disruptions at Nortel have not put all of their suppliers out of business. Being a supplier has become more difficult in many ways — largely because the companies that bought Nortel units are run more efficiently than Nortel was, and this means that supplier competition is tougher — but that is fundamentally a good thing.

Would the experience of Nortel be the same as a potential GM or Chrysler bankruptcy? Obviously, it’s impossible to prove a counterfactual. But that also doesn’t mean that we should accept the claim that bailouts “saved the US auto industry” at face value. Had GM or Chrysler gone bankrupt, it’s likely that their various brands would have been picked up on the open market at various discount rates. Some might have been purchased for their own brand value, others might be purchased to use their factories and design engineers to produce vehicles under different nameplates.

One thinks, then, that the fear was not that the American auto industry would evaporate. The fear, instead, was that the psychological pride of having the “Big Three” would disappear. They didn’t care about jobs, they cared that Americans might be employed working for Toyota rather than for GM. It was nationalism, not economics, that drove decisions. As a result, the US taxpayer is going to prop up a manufacturer with a history of failure and little incentive to change (since one bailout can easily become two or three) solely in order to be able to say that GM still exists. You didn’t save an industry, America. You saved your ego.
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Donald Trump: Corporatist Bully

I do not like Donald Trump. I don’t dislike him because of his wealth; he probably earned most of his wealth honestly. Some dislike Trump because he is a self promoter. I don’t dislike Trump for this reason either. Many successful individuals are great at self promotion and developing a successful brand (a very good attribute to have to have a successful political campaign).

No, the reason I really dislike Donald Trump – even putting aside his becoming the new face of the Birther movement in recent weeks, his support of the auto bailouts, raising taxes, his anti-free trade proposal that would place a 25% tariff on all Chinese products, and his support for single payer universal healthcare – is quite simply that he is a corporatist bully.

For those who don’t quite understand the difference between a capitalist and a corporatist, I highly encourage you to read Brad’s post “Mercantilism, Fascism, Corporatism — And Capitalism.” This distinction is an important one. Donald Trump is the poster child for what many on the Left as a greedy capitalist; a caricature of everything that is wrong with capitalism as preached by the Ralph Naders and Michael Moores of the world.

But those of us who know better know that Donald Trump isn’t a capitalist at all but a corporatist. Trump doesn’t try to work within a framework of a free market as a true capitalist would, but like far too many businessmen, he uses his wealth and influence to encourage the government to work on his behalf to his advantage (and at the expense of anyone else who would dare get in his way).

In the early 1990’s, an elderly widow by the name of Vera Coking was in the way. Coking’s home that she had lived in for 30 years was on a plot of land that the Donald coveted. The Donald wanted the property so he could add a limousine parking area to one of his Atlantic City casinos. When Coking turned down his $1 million offer to buy the property, the Donald decided to enlist the help of his goons on the New Jersey Casino Reinvestment Authority. In 1994, these government thugs filed a lawsuit to take Coking’s property for $251,000 and gave her 90 days to leave her property (if she were to stay beyond the 90 days, men in uniforms with guns would forcibly remove her from her home).

Fortunately, Coking’s case gained enough media publicity to gain the attention and help of The Institute for Justice (think a more libertarian ACLU with a focus on property rights). With the IJ’s help, Coking was able to keep her property. In 1998, a judge made a decision that turned out to be final finding that the Donald’s limousine parking area was not a “public use.”

John Stossel confronted the Donald about his failed attempts to take the widow’s home away; he reprinted this exchange in his book Give Me A Break on pages 152 and 153:

Donald Trump: Do you want to live in a city where you can’t build roads or highways or have access to hospitals? Condemnation is a necessary evil.

John Stossel: But we’re not talking about a hospital. This is a building a rich guy finds ugly.

Donald Trump: You’re talking about at the tip of this city, lies a little group of terrible, terrible tenements – just terrible stuff, tenement housing.

John Stossel: So what!

Donald Trump: So what?…Atlantic City does a lot less business, and senior citizens get a lot less money and a lot less taxes and a lot less this and that.

Earlier in the book (page 25) Stossel gives his impressions of this confrontational interview:

Donald Trump was offended when I called him a bully for trying to force an old lady out of her house to make more room for his Atlantic City casino. After the interview, the producer stayed behind to pack up our equipment. Trump came back into the room, puffed himself up, and started blustering, “Nobody talks to me that way!”

Well, someone should.

Had this case taken place after Kelo, the Donald may well have prevailed. In the wake of the Kelo decision, Neil Cavuto interviewed the Donald on Fox News (7/19/05) to get his reaction.

Trump:

I happen to agree with [the Kelo decision] 100 percent, not that I would want to use it. But the fact is, if you have a person living in an area that’s not even necessarily a good area, and government, whether it’s local or whatever, government wants to build a tremendous economic development, where a lot of people are going to be put to work and make area that’s not good into a good area, and move the person that’s living there into a better place — now, I know it might not be their choice — but move the person to a better place and yet create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Donald Trump is not one who respects property rights (other than his own). “Tremendous economic development” and “jobs” are great reasons to employ the full police power of government to take away someone’s property in the Donald’s world view.

I shudder to think of what a Donald Trump presidency would look like. Imagine the Donald with control of our CIA and our military. The Donald doesn’t have any problem using force to get what the Donald wants.

Now consider President Trump with a vacancy on the U.S. Supreme Court. What sort of Justice would he appoint? Most likely one who would view Kelo quite favorably.

This bully, Donald Trump is the guy who is polling second place in some early Republican primary polls? Wake the hell up Republicans!

“Hallowed Ground”

A friend of mine who I worked with at a hip-hop magazine years ago was a big influence on me turning toward libertarianism. He said this on the mosque fiasco:

The next person who tells me Ground Zero is ‘hallowed’ or ‘sacred’ ground, is getting punched in the balls. If it really were special, it would be more than a hole in the ground NINE YEARS after the fact. Build the goddamn mosque. If you want to honor the people who died on 9/11, assimilate Islam and turn it into the same hollow facade every other ideology in this country is.

Also, I’m sure I’m not the only person who has become far less comfortable talking about this topic than I was years ago. The debate over Islam and America has gone beyond ideological and geopolitical terms and taken on dimensions of immigration, nationalism and assimilation.

Supreme Court Opposes Nazis 90% Of Time — Kevin Drum Labels Them Ideologues

Kevin Drum, on the Supreme Court’s pro-business stance:

(original linked article from Constitutional Accountability Center)

A good guidepost to these rulings is the position taken by the United States Chamber of Commerce, which bills itself as the “voice of business.” Roberts’s record? In the past five years he’s sided with the Chamber 70% of the time. In close cases he’s sided with the Chamber a stunning 90% of the time. As an umpire, it turns out that if you’re filing a case against the business community Roberts has declared a strike zone only a few inches wide.

And Roberts isn’t alone. Samuel Alito and Antonin Scalia also sided with the Chamber over 70% of the time. (Alito sided with the Chamber a stunning 100% of the time in close cases.) Clarence Thomas took their side 68% of the time. And “centrist” Anthony Kennedy? He clocked in around 66%.

Missing from either the original source or from Drum’s analysis is a critical aspect of analysis: whether or not the justices’ opinions were Constitutionally sound.

While cases taken up by the Supreme Court are not the frivolities that a lesser court might be burdened with, but neither is there any reason to assume that they will be decided on a 50/50 split. Deciding cases evenly is a far different matter than deciding them fairly. Since the Court chooses which cases it hears, we know the sample can not be expected to be representative of a 50/50 split.

Nor is it necessarily fair to categorically label these justices pro-business, in as much as their opinions may be consistent with a wider Constitutional law philosophy that these cases exposed. The Chamber of Commerce’s legal arm regularly offers briefs in cases of corporations against government, so a philisophical animus against overreaching government (Thomas, Scalia), for example, would likely cause a >50% finding in favor of the Chamber, while an expansive view of government power (Ginsberg, Stevens) would suggest a >50% finding in favor of the government — at least in cases dealing with the Chamber fighting state, federal, or local regulations it finds intrusive.

I would assume that Drum would expect justices to side in favor of free speech >50% of the time. Why would he think this to be different?

Tom Martino’s ‘Hot Button’ Earth Day Rant

I just happened to come across this wonderful rant from Tom Martino concerning Earth Day and environmentalism. For those of you who live outside the Denver media market, Tom Martino (a.k.a. ‘The Troubleshooter’) isn’t a political commentator per se but a consumer advocate with both a radio and TV show (similar to Clark Howard, but unlike Howard he does endorse products and services).

So what’s getting this apolitical consumer advocate so worked up concerning Earth Day?

Answer: the fact that the environment has become a Left/Right political issue. The Left uses the environment to ‘fear monger’ citizens into accepting bigger government while some on the Right dismiss the need to combat pollution altogether. Isn’t there a middle ground?

 

Martino hit on two main points about improving the environment which bear repeating: environmental education and technology. I know first hand that the construction industry’s big mantra right now is ‘sustainable design.’ Engineers, architects, MEP professionals, contractors, and designers at every level are receiving training for LEED certification to make their designs more energy efficient and better for the environment. Being LEED certified helps these individuals become more marketable in a very difficult economy (I’m considering receiving this training myself) and nearly every new building design has a LEED rating or some sort of sustainability rating.

The latest CAD and BIM software packages have better tools to calculate energy use, water use, emissions, and the overall carbon footprint of the building in the construction phase as well as the overall expected life of the building. There is definitely a market demand for efficiency in these designs; one does not have to buy into man made global warming or be of a particular political philosophy to realize the benefits (both from an economic and environmental standpoint).

The market plays a role and yes, sometimes reasonable government regulation does as well. Who among us would like to return to a time when automobiles had 12 mpg or less and belched giant black clouds of smoke? One only need spend a few minutes behind the tailpipe of one of these cars* to appreciate just how clean burning modern engines are. It’s in the auto industry’s best interests to make their vehicles even more fuel efficient and cleaner burning, not because government demands them but because consumers demand them.

Perhaps Earth Day is a political day but it doesn’t have to be. I tend to believe there are a good number of people out there who have a similar view of Earth Day, the environment, and environmental policy as Tom Martino who just happen to not be as outspoken as he is. It’s definitely nice to hear someone verbalize and broadcast what many of us are already thinking and is certainly a message worthy of recycling.

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Instead Of Trying To Save The Post Office, Let’s Try Freedom Instead

It’s been rumored for more than a year now, but the U.S. Postal Service is taking the first steps toward eliminating Saturday mail delivery:

NEW YORK (CNNMoney.com) — Saturday mail could be one step closer to cancellation when the United States Postal Service submits an official proposal to a government regulatory board on Tuesday to eliminate 6-day delivery.

A new 5-day delivery schedule could save the cash-strapped Post Office $3 billion annually, the agency said. Earlier this month, USPS said it plans to incur about $238 billion in losses in the next 10 years if it doesn’t revamp its outdated business model.

“Every day, every month, every year this gets delayed, we end up further in the hole,” said USPS Deputy Postmaster Patrick Donahoe at a Monday briefing in New York.

Donahoe said a service cut would result in the loss of about 40,000 full-time jobs. About 600,000 workers currently work for the Post Office.

The Post Office hopes to drop Saturday mail in its next fiscal year, which starts Oct. 1. But first, it has to jump through a series of regulatory hoops that could take much longer.

Although it’s an independent government agency and does not receive taxpayer dollars, USPS is overseen by the Postal Regulatory Commission, a separate government agency with five commissioners appointed by the president.

Ruth Goldway, chairwoman of the commission, said that once the board receives the proposal, it will open the issue to public comments and hold hearings throughout the country.

This, of course, is part of the USPS’s problem. If it were a real business, with competitors, it wouldn’t need to seek government permission to engage in cost cutting moves like this.

The Post Office has already set up a website explaining why the move to five day delivery is necessary, and a new poll shows that most Americans support eliminating Saturday delivery:

A majority of Americans support ending Saturday mail deliveries to help the U.S. Postal Service solve its financial problems, but most oppose shuttering local branches, according to a new Washington Post poll.

The public support for moving to five-day deliveries may bolster a new proposal to end six-day deliveries to help the mail agency trim hundreds of billions of dollars in losses by 2020.

Cutting Saturday mail deliveries would save $3.3 billion in its first year and about $5.1 billion annually by 2020, Postmaster General John E. Potter said Monday. But the changes would also mean cutting the equivalent of 40,000 full- and part-time jobs through layoffs and attrition, Potter said as he prepared to formally submit his proposals to postal regulators on Tuesday.

Under the plan letter carriers would stop delivering mail to American homes and businesses and would not pick up mail from blue collection boxes on Saturdays. Post offices would stay open on Saturdays and mail would be delivered to post office boxes. Mail accepted at post offices on Saturday would be processed on Monday. Express mail and remittance mail services also would continue seven days a week.

Potter’s proposal has the support of 71 percent of Americans, with most Democrats, Republicans and independents in favor of the idea, according to the poll.

It sounds like a good idea, but over at Cato@Liberty, Ted DeHaven has an even better one:

Here’s a better idea: give Americans the freedom to choose the mail services they want by repealing the USPS monopoly. That way consumers and businesses could choose to provide and use mail services zero days a week or seven days a week.

Online movie rental services like Netflix offer a small example. A lot of folks time their Netflix rentals so that they have movies for Saturday night. Eliminating Saturday delivery will necessarily degrade the quality of online movie rental services that people are paying for. With competition, Netflix could offer Saturday (or even Sunday) delivery through a private alternative. Perhaps there would be a surcharge, but at least consumers would be allowed to make that choice.

(…)

I find it more impressive that I can go into a grocery store almost anywhere in the country and be met with an incalculable number of choices. Take Coke products for instance. I recently made a list of the various Coke products available to me at a local grocery store. The following is just a sample: regular Coke, Diet Coke, Caffeine-Free Coke, Diet Caffeine-free Coke, Coke Zero, Coke with Splenda, Coke with Lime, Coke with Lemon, and Diet Coke Plus. Don’t like Coke? There’s a similar array of Pepsi products. Don’t like either? The grocery stores also offer pricier micro-brands with all sorts of unique flavors.

These choices reflect the awesome power of the market, which provides nearly all the goods and services people want without any direction from officials in Washington. It would interesting to see what sorts of innovations and products private mail deliverers would come up with if the government’s mail monopoly didn’t exist. Instead, Americans are stuck with a government operation whose floundering business model will require it to raise prices while simultaneously reducing its services. So much for freedom of choice.

Eliminating Saturday delivery is likely to help the USPS achieve fiscal solvency, but it will only be temporary. The forces of technology that are making much of the mail obsolete will continue to work in ways that we can’t begin to anticipate and, some day not to long from now, we’ll be reading they want to cut back to a four day a week schedule to “save money.”

Instead of going through all that, let’s do what we should have done a long time ago — privatize the mail.

Is The Free Market Democratic?

In my post on whether America is ungovernable, one comment from CJS stuck out. It illustrates what I think is a common misconception of the average consumer, who sees a Starbucks on every corner, chooses between Microsoft and Apple for their operating system, and chooses whether to shop at the Super Wal-Mart or Costco each weekend.

A free market seems to have its own form of democratic majority rule. It may be a majority of money, but your small sum may be as ineffective at changing the actions of a business as it is at changing the actions of a government.

This view looks at the free market as a lowest-common-denominator, winner-take-all system, when it is the exact opposite. When it comes down to it, any need will be met if the conditions are right.

As I’ve mentioned before, I’m an engineer, and I work in the electronics industry. I’ve worked at big companies, I’ve worked at small companies, and most recently I worked [and continue to work] for a small company that was acquired by a much larger company. In my role (customer-facing), I’ve seen the ins and outs of business at all levels.

One thing that you see about many small companies is that they work hard to define a niche that they can fill and compete in. At the same time, larger companies tend to use their size, economies of scale, and greater resources to find very large market segments where their advantages allow them to overwhelm their smaller competitors.

I think of that small niche company as a military special forces unit. They’re the SEAL unit. They can deploy quickly, they can accomplish jobs that nobody else can get done, and what they do well, they do better than anyone. But they have very limited capacities. You’re not going to ask them to project force across an entire theatre of battle. The large company, however, is a carrier battle group. When they decide where they’re going, you join them or you get out of the way. They have the power to change the game. But they’re not as nimble. They can’t go in 15 different directions at once. They have enormous power, but they must make strategy in broad strokes, not in fine lines. The SEAL unit won’t defeat a carrier battle group in open combat, yet nobody in their right mind will claim that they’re not a formidable fighting force to accomplish the right-sized objective.

To push it back to the original point, if you have a need and a budget, you have two options. If the big company has something that fits your need, you’re in luck. And as CJS says, if the big company doesn’t have something that fits your need, you’re probably not going to get them to change their mind without a compelling story. But it doesn’t end there. There are entire industries devoted to picking up “the scraps” not serviced by the big companies. They might be a bit more expensive, but they’re there.

Leaving electronics, this is a common refrain all through the business world. If business were democratic, like our government, all restaurants would be McDonald’s, all beer would be Budweiser, all cars would be GM, and all computers would run Windows and use Internet Explorer. In democracy, everyone votes on what everyone else will have access to.

But the free market isn’t democratic. There is no single entity from which you are voting to have your needs met. You have competing entities trying to earn your custom. If I want something cheap, known, and tasty, I’ll stop at McDonald’s. But McDonald’s doesn’t make a burger like St. John’s does. I may drink Miller Lite out of nostalgia for my college days, but The Bruery is a bit more my speed. I love my Ford truck, but I like the fact that I could buy (at varying prices) all sorts of small-production automobiles — and someday hope to buy or build a Shelby Cobra. And while I use Windows for most of my computing, I browse with [free] Firefox and do quite a bit with [also free] ubuntu Linux — not to mention all the options out there that I’ve encountered in business (QNX, VxWorks, Solaris, etc etc).

How powerful is the free market? Well, in a free market, even if what you want is illegal someone will supply it to you. Whether it’s drugs, or sex, or just a bacon-wrapped hot dog, the market will supply what is in demand.

Democracy is a method to work together to make joint decisions. The free market is a place to trade value you’ve created (often money, the proxy for such value) for value others have created. In both, a lot of people choose the same thing. The difference is that in a market, people only choose for themselves. In a democratic government, people choose for themselves, their neighbors, and a whole host of people they’ve never even met. In a market, choosing differently than the majority limits options somewhat, but you can still get your needs met. In a democracy, choosing differently than the majority means that you get what the majority wants you to have.

An Aristocracy of Talent, and the Triumph of Markets

This is possibly the single best business document I have ever read; and I mean that with no hyperbole. It is also the single most libertarian document I have ever seen applied to a large corporate environment.

You HAVE TO read this.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra