Tag Archives: Big Government

Tuesday links: Laffer curve, beautiful behavior, and bikeshare overcrowding

The Megabus Effect — how cheap, efficient substitute goods make it pointless for the government to throw tax dollars into unwanted, unneeded high speed rail.

More budget errors, this time from Paul Ryan — haven’t these folks ever heard of a Laffer Curve

Arthur Laffer on how taxes work: Tax compliance in the USA costs $431 billion annually and employs more workers than Wal-Mart, UPS, McDonald’s, IBM and Citigroup combined.

Who’s to blame for big government? It’s not politicians just don’t what we pay them to do — it’s judges who won’t take a stand on their “checks and balance” authority.

Rent the entire country of Lichtenstein for $70,000 a night!

What is the right way for beautiful girls to behave — is it possible for a beautiful girl to admit she knows she’s pretty without sounding like a bitch?

How many bikeshare memberships did Capital Bikeshare sell on its LivingSocial urban coupon? 8,118.

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What’s in a Name: Corn Syrup Goes Corn Sugar

Would corn syrup by any other name taste as sweet?

Tired of its bad rap, America’s favorite subsidized industry is changing its ways.  Not by creating a better or more sale-able product, mind you, but by embarking on a new, highly-subsidized marketing campaign!

The Corn Refiners Association has deemed “high fructose corn syrup” a tainted phrase, and is seeking FDA clearance to change the name to “”corn sugar.”

The Wall Street Journal reports:

“We hope to erase consumer confusion,” said Audrae Erickson, president of the Washington, D.C., trade group, which has been waging a two-year campaign to dispel the growing perception among some consumers that the corn industry’s sweetener isn’t as natural as sugar.

You may have seen the trade group’s advertising campaign trying to sway public opinion, and attempting to convince food manufacturers–from Starbucks to Kraft Foods not to remove high fructose corn syrup from its list of ingredients and replace it with “real sugar.”

Notorious for actually diminishing consumers’ ability to metabolize food, the sweetener formerly known as High Fructose Corn Syrup first appeared on the market in the late ’70’s.  Hefty sugar tariffs imposed in 1977 drove food producers to seek substitutes for natural sugar.

American manufacturers now use high fructose corn syrup to sweeten most consumer products.  Coke and Pepsi use natural sugar in all of their sodas abroad, but stick to cheaper corn syrup in the US.  Many nutritionists even blame this concentrated syrup for spikes in American obesity and lagging health.

Wikipedia blurbs health studies on HFCS’s health impact:

Two experiments done by Princeton University fed rats water sweetened with either HFCS or table sugar (glucose) but kept food calories the same for all rats. The study found that rats who consume water sweetened with HFCS gained 48 percent more weight then water sweetened with sucrose despite an identical caloric intake.

The second experiment monitored the rats’ overall health for six months and found that rats who consumed HFCS developed signs of metabolic syndrome. It also found that every HFCS rat became obese while not every sucrose rat did. This study has been cited as causal proof for obesity in America since the HFCS rats had worse outcomes then the sucrose rats.

Yet corn remains among the most protected products in the American economy.  In 2005 alone the American government propped up the corn industry to the tune of $10,121,533,998.

That’s ten billion government dollars — those are our taxes — on top of whatever market demand — that’s our preference — yields for ethanol, sweetener, etc.  In other words, we’re willing to pay some amount, but through a series of rationally ignorant loops we wind up paying corn farmers ten billion dollars more than market yield to farm more corn.

How many jobs might be created or saved if those corn farmers moved to jobs where they’d be putting more into the economy than they’re taking out?

When it comes to the sweet stuff, it’s transparently bad juju for the corn industry to embark on a subsidized ad campaign to trick Americans into eating more unhealthy high fructose corn syrup.  Let’s  tear down those tariffs instead and see what the market really wants in terms of nourishment.

Fact Sheet re King Corn

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Libertarians and the Gulf

What would a libertarian propose as a Gulf solution, asks Edward Glaeser, via Andrew Sullivan:

Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But what if the leak is so vast that the driller doesn’t have the resources to pay? The libertarian would respond that the driller should have been forced to post a bond or pay for sufficient insurance to cover any conceivable spill. Perhaps, but then the government needs to regulate the insurance contract and the resources of the insurer.

Government is a contract among a group of people who want to centralize certain powers.  Nearly every governmental experiment in history suggests that the fewer powers get centralized, the better off the community.

Control is not a public good.  Whatever control powers individuals relinquish to the centralized entity are powers they no longer have — and, the experiments teach us, powers individuals are unlikely to regain.

Yet individuals do give up certain powers.  There are certain areas where we simply cannot look out for ourselves.  The common theme across powers likely to get centralized when a group of people get together is that we give up control over public goods.

When it comes to the oil spill, we are not dealing with a series of private violations commensurable with a class action torts suit.  BP spilled enough oil to affect many states’ domestic product, to eliminate species of wildlife, to affect coastlines for decades to come.

Libertarians might suggest insurance as one solution.  Yet insurance companies will teeter under the strain of compensating even one livelihood prospect.

Even with private indemnification from BP, insurance companies will not collect funds in time to weather the imminent hurricane season.  Indeed, many Gulf insurance companies remain mired in the mud after Katrina claims — so much risk has been realized in this region that pooling has become impossible, premiums are not enough, and private insurance no longer offers a libertarian solution.

The oil spill has catapulted into the realm of public problems, demanding a public solution.  Regulation may well have prevented such a disaster.  Indeed the dearth of enforceable oil regulations is just one more example of how cozy big business remains with big government.

The Obama Administration should give careful consideration to its goals in this matter.  It makes little sense for Big Government to capitalize on such a disaster in an attempt to squeeze blood from the crude, or an energy reform agenda from the pits of despair.

Searching for a private “libertarian” solution to the problem is a worthy mental callisthenic, but it does not exculpate Big Government from failing to create the right incentives when we still might have avoided the accident.

Professor Richard Epstein wrote for today’s Wall Street Journal:

Legal reform should not just be limited to oil spills. Environmental priorities also need to be straightened out. To take just one example, in virtually every coastal location today, acerbic green lobbies parade about as if new luxury beachfront homes are the moral equivalent of oil pollution. Those histrionic outbursts create civic discord and stunt our economic base. They can be stopped by insisting that private developers be compensated for the full costs of any new-fangled land use restrictions, at which point popular support for such lobbying will collapse.

Government should limit its response to removing the centralized policies that encourage bad behavior, like incentive for special interest lobbying or liability caps.  BP should have to pay an amount suitable to its crime, but that money should be channeled through the public system to BP’s victims – the government should not be in this mess hoping to collect.

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Constitutional Creep

Where exactly is the rub in Arizona’s immigration law?  Arizona’s legislature responded to cries of constitutional offense by amending the law, but stopped short of repeal.  By passing a questionably-constitutional bill, Arizona commits the most insidious legislative offense: Constitutional Creep.

Constitutional Creep is what happens when legislatures find permissive loopholes in governing documents.  Legislators prey upon a combination of fear-mongering and constituent disinterest to force vague or offensive bills through the loopholes, therefore creating larger loops awaiting larger legislation later on.

Legislation means much more than mere statutory language.  Typically the way people implement a bill—which provisions officials enforce, and which they ignore—is what actually defines what a statute means in practice.

SB 1070 does not fall far outside the boundaries of laws most states already have in effect.  Arizona’s immigration law is offensive, but all liberty-infringing legislation is offensive, and nearly all legislation is liberty-infringing.

For example, the text of the bill forbids racial profiling “except to the extent permitted by the United States or Arizona Constitutions.”  Both SCOTUS and the Arizona Supreme Court have explicitly determined that “ethnic factors” are relevant considerations when it comes to immigration issues.

Indeed, it was in 1975 that the United States Supreme Court determined that the US Constitution permits race to be considered in immigration enforcement.  1975 becomes a significant date, because immigration outcry tends to parallel the national economy, and in the mid-70’s outlook seemed perhaps as grim as it does today.

Though the bill’s racial language seems shocking, nearly all legislation is designed to permit profiling.  Vagabond laws precluding individuals from walking aimlessly overlap with loitering laws that prohibit standing still, for instance, so that officers may at their discretion stop nearly any citizen in most states.  Only when officers stop disproportionately more of one race than another in response to these omni-prohibitory laws does the presumption shift away from fair officers’ evenhanded application.

Similarly, the practical effect of Arizona’s law remains to be seen.  SB 1070 calls for immigration officers to ask any stopped individual whether he is a United States citizen.  If the individual answers “no,” he must provide documentation that proves he has a right to reside in this country.

If the individual answers that he is an American citizen, immigration officials may not demand further proof of right to reside.  When was the last time you were asked to produce your birth certificate?  Constitutionally the presumption falls in favor of citizens, as it should.

Constitutional offense turns not on the notion of “fairness,” but rather on questions of natural rights and the most effective ways a minimalist government can protect citizens without interfering with our lives.

The answer to preventing offensive bills like SB 1070 from passing is the same as the best method for keeping Constitutional Creep to a minimum.  Citizens should focus on keeping legislation small, government minimal, and keeping government out of our backyards.  Because once government is in our backyards no amount of Constitution-waving will keep them from demanding papers, and proof, and generally acting like, well—constitutional creeps.

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“Taxed Enough Already”

I hardly ever drive. At the tail end of today’s biannual foray into the District I found myself predictably lost somewhere in Whitehurst territory, my personal Birnam Wood. Today my wanderings quickly turned serendipitous. I happened across the Sept. 12 TEA party, which was nothing like what I’d expected.

I found myself at the corner of Constitution and 16th — ironic, because #16 is the Amendment that permits taxing income at all — and witnessed the power of hordes of people jointly, massively frustrated with their Government.

I’d assumed the tea parties were a fun way for college kids to engage in some loud, creative destruction. It’s not that I snub college events. I’ve had the fortune to encounter some exceptionally good mentors and I love paying forward that mentoring favor by getting involved with students. But when the activity struck me as reactionary and took place on a rainy February afternoon in the middle of Moot Court season, the opportunity cost just skyrocketed.

Living in DC provides an almost-constant opportunity to Get Involved. I’m a pretty discerning joiner. Law school presents such a steep opportunity cost! Why get involved in something reactionary (rather than plain “action”) when if I just study hard soon I’ll be able to file an official complaint replete with a time stamp and the promise of judge’s attention?

I was blown away. It was pretty powerful stuff. A five-year-old waving a “Taxed Enough Already” poster confronted me from the street. Was it a commentary on perverse incentives against school choice? It didn’t matter. The point was that here were thousands of people (reportedly well over a million) who recognize that their elected representatives have become so full of sound and fury, signifying none of their constituents’ needs.

The Declaration of Independence compels citizens to take an active role in their government. Government is nothing more than a contract among many people to give up some degree of freedom for requited and more permanent stability. When one party begins to breach that contract, i.e., when Big G establishes a pattern of infringing upon the freedom we the people never offered up at the negotiation table, we’re not merely permitted but required to make some noise.

It was inspiring, to say the least, to see an organized group addressing their Government. Many of us have found ourselves behind a nonfilibusterable veil. This is not a statement against our structure of government, but rather an objective observation that all organized things tend towards chaos. Majorities speak pretty loudly, unfortunately cultural evolution behaves like all things to which chaos theory applies. James Madison anticipated “factions” in the form of organizing protections like the Food and Drug Administration and the Americans w/ Disabilities Act. None of the framers imagined that our country would devolve to a two-party system. None thought the sugar industry would develop an organized “faction” w/ a discrete lobby in the Congress.

Through some combination of appeal and personality, the “right” has simply ceded America to an indoctrinated voting supermajority between the ages of 18 and 35. There’s no question these masses have spoken. I personally would rather any potential first family stripped of pride in their country vote with their feet and go see their ideal policies already in place in a country like France than mess with my country, but c’est la vie. As my spectacular sister-in-law frequently reminds me: The masses are asses.

I take back any disparaging remarks I may have made about the tea parties. I thought I was too cool for school. Today my complacent, beltway-Scrooge-ish exterior was shattered by seeing hordes of Americans gathered for the first time in a long time to demonstrate something with which I agree. Reminding Big G that gov’t is a contract is our wont, and, as the descendants of those who penned and signed the Declaration of Independence, this is our duty.

It was incredibly inspiring to see Americans recall that contracts require that both parties adhere to their terms. It’s nice to be knocked out of complacency when, if I won’t leave the District, the mountains will come to DC. Above all, it’s tremendous to see Americans doing what we do best, acting on our heritage, and taking matters into our own hands.

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Health and the Postal Service

In an attempt to quell the uproar claiming that public health care will drive private providers out of market, Obama said:

[I]f the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining — meaning taxpayers aren’t subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do — then I think private insurers should be able to compete. They do it all the time. I mean, if you think about — if you think about it, UPS and FedEx are doing just fine, right? No, they are. It’s the Post Office that’s always having problems. (emphasis mine)

The error in this thinking almost speaks for itself.  Economist Milton Friedman famously observed: “The government solution to a problem is usually worse than the problem itself.”

Differentiating between right-leaning and left-leaning politics requires nothing more than determining how much each side trusts individuals to think for themselves.

Right-leaning politicians  believe that people are basically rational and will make choices based on what’s best for themselves.  Thus these right-leaners reject proposed insurance mandates as bordering on facsism, and fear that public health care will deal a deadly blow to the private market, decreasing the number of options available for individuals to realize their choices.

Left-leaning politicians believe that people are basically helpless and will not make proper choices without government assistance.  These politicans suggest that Government — personalize it by imagining Rahm Emmanuel at the helm and you and I keeping the system afloat — should help even sophisticated decision-makers.  Because after all, without the big, sloppy hand of government, who are we to know what’s best for us?

Indeed, if men were angels, no government would be necessary.  If angels were to govern men, neither external nor internal controls on government would be necessary.

Even if an angel like Rahm Emmanuel takes the helm of a monolithic public health care system now, he will have to pass those reins on in the future.  The problem with the left-leaning vision of government is that the future always promises some man who is not an angel waiting to govern men.  To avoid leaving our well-being in the hands of someone who does not know better than we do, we should not concentrate that power into one man’s hands now.

Government, by its nature, makes mistakes.  I tend to lean right because I believe that people prefer to decide what they want than to be told what they will have.  Both sides have erred, and both will continue to err.  But to avoid turning our hospitals into a Postal Service, a Katrina, a $900 toilet seat, we should avoid permitting that kind of power to congeal into a mass tangible in one person’s hands.

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Huge Braille

I haven’t personally verified what I’m about to share, but I heard it from good authority—a bunch of soldiers gossiping at Union Station—and it’s such a good illustration that I have to share.

Apparently the Army decided to make the signs atop the Tomb of the Unknown Soldier disability-friendly.  Beneath the large lettering denoting the Tomb for seeing folks, the Army included a similar sign in Braille for blind visitors.  Like the letters designed to be seen a few feet away, the Braille is “written” in huge font.

Only problem is that Braille can’t be seen far away.  To read Braille one has to be right on top of it, touching it.  With such large font it’s impossible for someone to read the Braille, so these huge dots are illegible to anyone touching it.  Hands are accustomed to tiny dots on a small grid, so huge dots mean nothing even to fluent readers of Braille.

What a perfect illustration for government action.  They try to do something nice, but Big Government fails to do its homework and the attempt ends as a flop.  A better move might have included outsourcing the translation to a blind focus group, or financing audio guides.

All those tax dollars must be worth more than representatives sitting back with a smug sigh after totally failing to make a measureable difference.

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