Leftists Shouldn’t Complain about Corporate Rent-seeking when Leftists Encourage Corporate Rent-seeking
A notice in this morning’s Federal Register gives us insight about how regulatory capture begins.
The Department of Energy is looking to create a a regulatory subcommittee of vetted stakeholders to develop energy efficiency standards for electricity distribution transformers:
SUMMARY: The U.S. Department of Energy (DOE or the Department) is giving notice that it intends to establish a negotiated rulemaking subcommittee under ERAC in accordance with the Federal Advisory Committee Act (FACA) and the Negotiated Rulemaking Act (NRA) to negotiate proposed Federal standards for the energy efficiency of low- voltage dry-type distribution transformers. The purpose of the subcommittee will be to discuss and, if possible, reach consensus on a proposed rule for the energy efficiency of distribution transformers, as authorized by the Energy Policy Conservation Act (EPCA) of 1975, as amended. The subcommittee will consist of representatives of parties having a defined stake in the outcome of the proposed standards, and will consult as appropriate with a range of experts on technical issues. DATES: Written comments and requests to be appointed as members of the subcommittee are welcome and should be submitted by August 29, 2011.
So the government is looking for parties with “a defined stake” — meaning entities operating in distribution transformer space, from electricity companies and device manufacturers to green groups and (probably) well-heeled and connected Democratic donors — to appoint (not elect) to a committee responsible for promulgating efficiency criteria that will eventually have the force of law.
In Midway, Georgia, local police have stopped a crime cold. No, they didn’t thwart a jewel heist in progress. They didn’t stop a murder. The instance I’m talking about doesn’t even catching the guy who knocked over a convenience store. No, they stopped some really hardened criminals. They got a couple of kids with a lemonade stand.
Three Midway girls wanted to pay for a trip to a water park. They needed money, so the set about making it. They were going to make it the old fashioned way. They wanted to earn it. However, they didn’t get a business license, a peddler’s permit, or a food permit. That is a $50 per day cost, or $180 per year according to Fox-5 in Atlanta that reported this vigilance of local police officers.
This isn’t particularly unusual either. This has happened, and for similar reasons, all over the country. Lemonade stands, which once were a great way to teach kids how to actually make money for themselves, now serve as a harsh lesson in governmental control. No business is allowed to start up without the government extracting it’s pound of flesh first.
Make no mistake, the Midway Police are part of the problem as well. In most communities, police do act with enough discretion to recognize a couple of kids with a lemonade stand and let it go. Few people honestly expect a kid’s lemonade stand to have been inspected by the health department or any such thing. They purchase it because they want to help out a couple of kids who aren’t asking for a handout, but hoping to make an honest buck. Most local cops see it, maybe smile to themselves, and move on…if they don’t buy a glass of lemonade themselves.
The rogue Internet hacker group @Lulzsec has disbanded after a two-month battle against targets across the world. In the wake of their attacks are many questions. How can organizations protect themselves against such attacks? How long will other hacker groups continue their cyberwars? And, is what they’re doing actually…ethical?
Without question, hacking is illegal. Yet, despite the illegality of what hacker groups like Anonymous do, there does appear to be a “moral code” to their actions. For example, Anonymous recently took down several Orlando-area websites, including Orlando Mayor Buddy Dyer’s re-election site. Why would an international hacker collective target Orlando? They felt arresting members of Orlando Food Not Bombs, a charitable organization that feeds the homeless in city parks, was wrong. “Anonymous believes that people have the right to organize, that people have the right to give to the less fortunate and that people have the right to commit acts of kindness and compassion,” the group stated in a release.
Wait, a hacker group that stands for “kindness and compassion”? Are there really “hacktivists” out there? Apparently.
Black markets come to life after government regulations force the natural economy underground. Anonymous is fueled by a similar mechanism. The traditional (and, legal) methods of counter-balancing government abuse have ultimately failed. Freedom of Information Act requests are frequently sidestepped, or altogether ignored. The Mainstream Media — both Left and Right — have become nothing more than cheerleaders for whatever administration is in charge. And, real investigative journalism, like that of gadfly James O’Keefe, is far too rare. Nobody is left to watch the watchers.
…and in breaking news, the sky is blue! President Obama, speaking to the US Chamber of Commerce, tried to put forth the idea that regulations are a good thing.
From the Fox News report:
Speaking on matters that concern the business community with which the president has had a rocky relationship, Obama said, “The perils of too much regulation are matched by the dangers of too little.”
But, he said, regulations also serve a purpose.
“Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs,” he said. “But ultimately, winning the future is not just about what the government can do to help you succeed. It’s about what you can do to help America succeed.”
He added, “We cannot go back to the kind of economy — and culture — we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class.”
The president took the opportunity to defend two of his primary legislative achievements — a Wall Street banking bill and health insurance reform.
“I know you have concerns about this law,” he said of the health law. “But the nonpartisan congressional watchdogs at the CBO estimate that health care tax credits will be worth nearly $40 billion for small businesses over the next decade.”
Of course, he neglects to point out that the “nonpartisan congressional watchdogs at the CBO” are hamstrung in how they can figure up their numbers, so you can trust what they say about as much as you can trust Paris Hilton to score perfect on the SAT.
One of the most common refrains from the political left and the media is that, regarding the economy, conservatives advocate for unchecked freedom for big business to do whatever it wants to do, and for no government interference with business at all. These assertions stem from a fundamental misunderstanding of the nature of conservatism.
For the conservative, the issue comes down to the proper role of government. To have no government at all is anarchy, and certainly no conservative would argue that. So the question is not whether or not there should be government involvement (there should), but what level of government involvement is appropriate.
When we look at the biggest financial scandals of the last decade (Enron, WorldCom, Fannie Mae and Freddie Mac, etc.), they all have one thing in common. At some point, whether through active complicity or negligence, government played a huge role in allowing the scandals to occur. And with every scandal, it becomes an excuse, or rather an imperative, to increase the level of government involvement to keep it from occurring again.
Some of the major scandals have occurred because the regulatory oversight assigned to one government agency or another was either inadequately enforced, or government employees were co-opted into the fraudulent scheme. Others occur because our statutory and regulatory law has become so complex that it is inevitable that a crafty thief will be able to find technical loopholes that fulfill the letter of the law while being contradictory to the clear intent of the law. Either way, we continue to add layer after layer of government bureaucracy, regulation and complexity, and yet the scandals keep getting more and more expensive. That is because the more complex the law, the easier it is to find a technical Get-Out-of-Jail-Free Card.
As a libertarian, I hear a lot about how licensing and regulation is important. “We need this for our protection,” they argue. That may be, in some cases. But in others? Hardly. Licensing and regulation have long since run beyond anything approaching reasonable.
It’s easy to say we need licensing. Doctors, someone will say, are a prime example. Licensing supposedly insures that they know what they’re doing. Contractors are another, some will argue. Heaven forbid you use an unlicensed general contractor. After all, your house could collapse.
I’m not going to get into doctors, because that discussion could take all day on its own and never quite get resolves. Contractors are another matter entirely. In Dougherty County, Georgia, getting a Contractor’s License requires an outlay of money based on what you think you’ll make and how many people you think you’ll employ. No skills test is required. No competency has to be shown. You just get the license and then start trying to get jobs.
And you know what? Houses don’t collapse in Dougherty County any more frequently than anywhere else.
The thing is, I can actually see the point of those who favor licensing on contractors. I disagree with them, but I see where they’re coming from on that. There are a myriad of other licenses that are required to perform a profession that are ridiculous.
For one, barbers and hair stylists have to be licensed in many places (are there any places that don’t require it?). Now, this may have made sense in the Middle Ages when barbers also performed surgery, but now? The absolute worst thing I can get from an unlicensed barber is a horrible hair cut. Guess what? I’ve gotten that form licensed barbers too.
Last week the GOP released their Pledge to America, attempting to give American voters a clear view of where the Republican Party stands on current issues. Since so many Americans – especially those of us who identify as Republicans – are furious with our out-of-control federal government, a specific plan of attack is a great idea.
One of the biggest concerns among Republicans that the Pledge to America addresses is the new health care law. Good points can be found in the health care section of the Pledge, but we should be cautious not to blindly accept everything the Republicans are offering. For example, the GOP’s Pledge promises to require health insurance companies to offer coverage to people with pre-existing medical conditions.
The party in Washington that has allegedly heard the concerns of America has pledged to extend regulations that dictate how insurance companies must operate.
Requiring insurance companies to cover customers with pre-existing conditions is a violation of free market economic principles and is a regulation that will raise insurance costs for everyone.
People with pre-existing conditions will buy the insurance (because government regulations will require insurance companies to offer them coverage), and the higher costs incurred because of the pre-existing conditions will lower the insurance company’s profit margin.
To offset the lower profit margins, insurance companies will raise their policies’ premiums, offer less extensive coverage, and give lower payments to doctors. As health insurance costs increase, we will find ourselves paying for coverage too costly to afford, receiving fewer benefits, and being treated by disgruntled doctors who have been forced to accept lower payments for their services.
Is this reform, or is this the status quo?
We’ve been covering the discovery of a provision in ObamaCare that would place a burden on small businesses by requiring that they file 1099 forms for expenditures over $600. Even Democrats realized that this requirement was bad for business, especially as President Barack Obama tries to convice voters otherwise.
Instead of voting on an outright repeal of the provision, Democrats tucked it away with other provisions that hiked taxes and it ultimately failed when it came up on the floor:
The House rejected a bill Friday that would have repealed the provision. The two parties disagreed on how to make up the lost revenue.
“This foolish policy hammers our business community when we should be supporting their job growth,” Sen. Mike Johanns of Nebraska said in the Republicans’ weekly radio and Internet address Saturday. “It’s only one example of how the administration’s promise to support small businesses really rings hollow.”
Democrats blamed Republicans for Friday’s failure.
“Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most,” said Rep. Sander Levin, D-Mich., chairman of the tax-writing House Ways and Means Committee.
Businesses already must file Form 1099s with the IRS when they purchase more than $600 in services from a vendor in a year. The new provision would extend the requirement to the purchase of goods, starting in 2012.
Note: I intended to merely comment on this chart when sharing it via my Posterous. During the 5 or so minutes I was commenting, it grew to be something more substantial, and at the urging of others, it has been cross-posted here.
Since the 1960s, the percentage of total healthcare cost paid directly by the end consumer, aka patient, has dropped drastically, but out of pocket costs have risen and the cost of healthcare has risen drastically over that same period.
What has happened between then and now? The intervention of government into the marketplace. Insurance regulations, government mandates about what MUST be covered, Medicare/caid, and inflation make costs skyrocket, but the opacity of the prices keeps patients from seeing what each visit, prescription, and procedure actually costs. With that opacity, there is no competitive pricing, because the prices paid by patients are merely co-pays and the withholding from their paycheck for employer-sponsored health plans, insurance companies, and government programs that pay negotiated rates. Without competition and price transparency, prices will continue to rise.
In addition, patients largest out of pocket expense is their insurance coverage, which does not fluctuate to accommodate the amount of healthcare services consumed. The patient knows they only pay $10-$50 for each office visit, but the overall costs of those visits can be thousands of dollars. The patient rarely, if ever, sees the actual cost… Usually only if their insurance claim is denied.
Sen. Rand Paul (R-KY) plans to introduce legislation that would empower impoverished cities to break the chains of big government tax and regulatory policies that have prevented economic opportunities.
In a speech in the heart of Detroit, arguably the most financially troubled city in the country, Paul detailed the principles behind the legislation — The Economic Freedom Zone Act — and explained that the resilience and optimism of its residents and economic freedom are a way to break the stagnation in which they currently find themselves.
“Detroit’s future…will not come from Washington. The magic of Motown is here in the city,” Paul said on Friday at the Detroit Economic Club. “It’s not in some central planner’s notebook. What Detroit needs to thrive is not Washington’s domineering hand — but freedom from big government’s mastery.”
“To thrive, Detroit needs less government and more freedom — less red-tape, less punitive taxes, more money left in Detroit,” he said. “The answer to poverty and unemployment is not another government stimulus, it’s simply leaving more money in the hands of those who earned it.”
“These ‘freedom zones’ will dramatically reduce taxes and red-tape so that Detroit businesses can grow and thrive,” he explained, noting that the idea is similar to one proposed by the late Rep. Jack Kemp (R-KY). “This bill will lower personal and corporate income taxes in Detroit to 5%. My bill will also lower the payroll tax — 2% for the employees, 2% for the employers.”