Category Archives: Role of Government

Wikipedia blackout.

With a Web-wide protest on Wednesday that includes a 24-hour shutdown of the English-language Wikipedia, the legislative battle over two Internet piracy bills has reached an extraordinary moment — a political coming of age for a relatively young and disorganized industry that has largely steered clear of lobbying and other political games in Washington.

The bills, the Stop Online Piracy Act in the House and the Protect IP Act in the Senate, are backed by major media companies and are mostly intended to curtail the illegal downloading and streaming of TV shows and movies online. But the tech industry fears that, among other things, they will give media companies too much power to shut down sites that they say are abusing copyrights.

The legislation has jolted technology leaders, venture capitalists and entrepreneurs, who are not accustomed to having their free-wheeling online world come under attack.

One response is Wednesday’s protest, which will direct anyone visiting Google and many other Web sites to pages detailing the tech industry’s opposition to the bills. Wikipedia, run by a nonprofit organization, is going further than most sites by actually taking material offline — no doubt causing panic among countless students who have a paper due.

Source.

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Filed under Role of Government, Technology

Do Tell

I love the cynicism… and the truth. George Will on the belief that we need to be told everything:

You step onto an airport’s moving walkway, a flat metal conveyor belt that conveys travelers down an airport concourse, sparing them the indignity of burning a few calories by walking a bit. And soon a recorded voice says: “The moving sidewalk is coming to an end. Please look down.”

Well, yes. Pretty much everything does come to an end, doesn’t it? Besides, we can actually see what we already knew — the moving walkway does not go on forever. So, is that announcement about it ending really necessary? Whatever happened to the rule, “Do not speak unless you can improve the silence”?

Passing through a U.S. airport is an immersion in a merciless river of words. They are intended to be helpful, but clearly they flow from an assumption that increasingly animates our government in its transactions with us. The assumption is that we are all infants or imbeciles in need of constant, kindly supervision and nudging, lest we allow ourselves to be flung off a moving walkway and over the edge of the world.

In Denver, underground trains take passengers to and from the ticketing area and departure concourses. As a train arrives, an announcement slightly louder than the noise of the arriving train says: “A train is arriving.” Do tell.

On the topic of mindless banter, George Carlin comes to mind.

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Filed under Philosophy, Role of Government

The Legal Industry As a Monopoly

Clifford Winston writes:

For decades the legal industry has operated as a monopoly, which has been made possible by its self-imposed rules and state licensing restrictions — namely, the requirements that lawyers must graduate from an American Bar Association-accredited law school and pass a state bar examination. The industry claims these requirements are essential quality-control measures because consumers do not have sufficient information to judge in advance whether a lawyer is competent and honest. In reality, though, occupational licensure has been costly and ineffective; it misleads consumers about the quality of licensed lawyers and the potential for non-lawyers to provide able assistance.

Is this necessary? Most licensing restrictions are self-imposed to protect those already in the industry. A case could be made for electricians as faulty electrical wiring can lead to fires, but do we need licensing for barbers and stylists, or for taxi drivers? What about lawyers?

What if the barriers to entry were simply done away with?
Legal costs would be reduced because non-lawyers, who have not had to make a costly investment in a three-year legal education, would compete with lawyers, who in many states are the only options for basic services like drafting wills. Because they will have incurred much lower costs to enter the field — like taking an online course or attending a vocational school — and can operate as solo practitioners with minimal overhead, these non-lawyers would force prices to fall. The poor would benefit from the lower prices for non-criminal matters, and poor litigants, who might be unrepresented in criminal matters like hearings because they could not afford a lawyer and because of dwindling state legal aid, would be better off.
At the same time, if corporations — and not just law firms, now structured as partnerships — could provide legal representation, their technological sophistication and economies of scale could offer much more affordable services than established law firms do. These firms, in turn, would have to reduce prices to compete.
Of course, lower legal prices would cause new law school graduates to be paid less, but more jobs would be available for such graduates because the demand for lawyers would increase. And new graduates would begin their careers with less law-school debt, because alternative providers of legal education would force law schools to reduce tuition.

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Filed under Law, Role of Government

Martin Luther King, Jr. Endorses Obama

President Obama speaking at the MLK Memorial dedication this morning in DC. (Full text here.)

And so at this moment, when our politics appear so sharply polarized, and faith in our institutions so greatly diminished, we need more than ever to take heed of Dr. King’s teachings. He calls on us to stand in the other person’s shoes; to see through their eyes; to understand their pain. He tells us that we have a duty to fight against poverty, even if we are well off; to care about the child in the decrepit school even if our own children are doing fine; to show compassion toward the immigrant family, with the knowledge that most of us are only a few generations removed from similar hardships. (Applause.)

To say that we are bound together as one people, and must constantly strive to see ourselves in one another, is not to argue for a false unity that papers over our differences and ratifies an unjust status quo. As was true 50 years ago, as has been true throughout human history, those with power and privilege will often decry any call for change as “divisive.” They’ll say any challenge to the existing arrangements are unwise and destabilizing. Dr. King understood that peace without justice was no peace at all; that aligning our reality with our ideals often requires the speaking of uncomfortable truths and the creative tension of non-violent protest.

But he also understood that to bring about true and lasting change, there must be the possibility of reconciliation; that any social movement has to channel this tension through the spirit of love and mutuality.

If he were alive today, I believe he would remind us that the unemployed worker can rightly challenge the excesses of Wall Street without demonizing all who work there; that the businessman can enter tough negotiations with his company’s union without vilifying the right to collectively bargain. He would want us to know we can argue fiercely about the proper size and role of government without questioning each other’s love for this country — (applause) — with the knowledge that in this democracy, government is no distant object but is rather an expression of our common commitments to one another. He would call on us to assume the best in each other rather than the worst, and challenge one another in ways that ultimately heal rather than wound.

The Washington Post reported that the speech “at times seemed to link King’s own struggles for civil rights with Obama’s political struggles during the economic downturn.” Is using the speech for these purposes is appropriate or not? Does it cheapen the event, or would King want Obama to use the event as an opportunity for social change? I tend to side with the former. Let the speech just be a commemoration of the great man to whom it is dedicated, and don’t cheapen it by making it more political, at least in such specific terms, i.e. “I believe he would remind us that the unemployed worker can rightly challenge the excesses of Wall Street without demonizing all who work there,” or, “Government is not distant object, but rather an expression of our common commitments to one another.”

Additionally, what would King have thought of the inverted American flags or protesters singing “F*ck the USA”? (H/t to Drudge).

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Filed under Domestic Politics, Election 2012, Role of Government

Who Besides Solyndra Got Loan Guarantees?

Megan McArdle explains, with many helpful infographics.

She also explains why the program’s success rate is misleading. Most of the firms receiving the money don’t need the help. They’d succeed with our without it. Those that most need the help – e.g. Solyndra – may fail, but the failure rate is hidden by the “success” of the other loans.

That is, I hope that the infographic will be broadly useful to people who support the program: I figure everyone should be interested to know where the money went.  (And here’s a spreadsheet for those who want to trundle through the data themselves). But I have highlighted what jumped out at me: most of the money has gone to enormous companies that should have no trouble accessing capital.  Established utilities, large multinational auto manufacturers, a global warehouse owner.  The bulk of these funds are not going to rectify some gap in the capital markets.  They’re straight subsidies to huge corporations.  Even some of the smaller firms/deals are owned by large corporations like Total SA.
Giving large, established companies extra-cheap loans to build power plants, run transmission lines, and fix up the roofs of their warehouses is, in the immortal words of P.J. O’Rourke, like paying a Dairy Queen owner to keep his ice cream freezers on.

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Filed under Domestic Politics, Economy, Energy, Role of Government

“You Gotta Fight for Your Right to Foie!”

LOS ANGELES — A line up of people streamed into an unmarked, dimly lighted storefront on Fairfax Avenue as night fell Friday, on a mash-up Los Angeles block catering to religious Jews and hungry hipsters. Before long, a smattering of protesters arrived.

Behind the glass doors, an act of culinary defiance was taking place.

In eight months, the sale of foie gras will be banned in California. But for seven hours on Friday night, at a restaurant appropriately known as Animal, three chefs presented an eight-course meal that was nothing short of a glorification of this soon-to-be outlawed delicacy. There was smoked foie gras, roasted foie gras, steamed foie gras and liquefied foie gras, injected into agnolotti. It was served with veal tongue, yogurt, prosciutto, mustard ice cream and truffles. There was even a foie gras dessert: a brownie sundae with foie gras Chantilly.

That’s one heck of a menu. It’s also a sign of PETA’s influence and the mindset of micromanaging legislator. John L. Burton jokes that he’ll sell Lipitor outside, unaware that fat is not what causes heart disease according to the latest scientific studies. He also makes a comparison to the start of prohibition – “Everyone was giving away the booze. Whatever makes them happy.” Mr. Burton seems unaware that prohibition was a failure, as was the foie gras ban in Chicago in 2006, which lasted barely two years. If this ban succeeds, health problems will persist, jobs will be lost, and freedom will be diminished, all because PETA believes the animals are mistreated. Regardless, the PETA lobby wins and Mr. Burton feels especially proud. That is ultimately what matters.

Will foie gras producers be eligible for state aid for jobs destroyed?

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Filed under Economy, Food & Wine, Health & Nutrition, Role of Government

George Will on the Social Contract

Hot off the Washington Post’s press. I’m tempted to quote it in its entirety because George Will is the best defender of the case for limited government: it frees individuals by maximizing their liberty, and respects individuals by honoring their personal decisions.

Here Will puts his pen against a rant by Massachusetts senatorial candidate Elizabeth Warren that recently went viral on the internet. He quotes her at length.

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. . . . You built a factory and it turned into something terrific or a great idea — God bless, keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

According to Will,

Warren’s statement is a footnote to modern liberalism’s more comprehensive disparagement of individualism and the reality of individual autonomy. A particular liberalism, partly incubated at Harvard, intimates the impossibility, for most people, of self-government — of the ability to govern one’s self. This liberalism postulates that, in the modern social context, only a special few people can literally make up their own minds.

An invigorating read for those of us who believe in maximum freedom.

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Filed under Domestic Politics, Philosophy, Role of Government

From Money.CNN.com:

The federal government can’t even give money away to help the unemployed pay their mortgage.

A $1 billion program to assist the jobless will likely end up spending only half the funds, at most, because so few people met the strict criteria.

The Housing Department, which had to approve the applications for the Emergency Homeowners’ Loan Program by Friday, expects that only 10,000 to 15,000 people will qualify. That’s only a small sliver of the roughly 100,000 who applied.

The only way the market will recover is after it hits the bottom. Programs such as this will most likely just prevent the inevitable. So am I to be happy that the government is failing even at giving money away? Do I fear its success more than its failure?

 

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Filed under Domestic Politics, Role of Government

Fannie and Freddie to End Philanthropy

After requiring hundreds of billions of dollars in 2008 – 2010, why do Fannie Mae and Freddie Mac have philanthropy programs at all? The WaPo reports that those program may come to an end in the next few years. It’s about time. The problem is not with charity or the laudable aims of the programs Fannie and Freddie have been generously funding. The problem is with the continued reckless spending of the two GSEs whose daily activities – philanthropy, lobbying, political activism – have so far strayed from their original charters. Leave aside their faulty accounting and their conflicts of interest. Leave aside their negligent practices and irresponsible executive compensation. Just look at their current bottom lines. If the federal government were the least bit committed to preventing another housing bubble and to truly reining in both needless government spending and the prevailing Washington attitude that seeks to do everything for everyone, then they could start by liquidating Fannie and Freddie and starting to clear the housing market. Instead, we debate on whether or not a GSE with no money should continue to give away money that they don’t have. It is unfortunate for the laudable charities that they have supported, but those charities have been fed far too many free lunches over the years. It needs to end.

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Filed under Domestic Politics, Role of Government

Becker on Government Failure

Gary Becker writes:

When an industry in the private sector is not performing efficiently or effectively, there is said to be “market failure”. The recommendation by economists and others typically is then for government actions to combat such failure, such as taxes to help reduce pollution. The diagnosis of market failure may be accurate, but the call for government involvement may be naïve and inappropriate.

The reason is that actual governments do not necessarily do what economists and others want them to do because there is “government failure” as well as market failure. Before recommending government actions to correct market failures, one should consider whether actual government policies would worsen rather than improve private sector outcomes. Since many factors often make for considerable government failure, considering such failure is crucial and not just a theoretical fine point.

Those on the Left often call for government intervention in the private sector at the first sign of imperfections. Such imperfections are not limited to the more highly visible examples of millions of people without health insurance or severe environmental damage. I have friends who want the government to most actively regulate the cell phone industry because they think the services are better in Europe. That our phones have improved tremendously over the years – compare your Droid or iPhone to your first cell phone from 10 or 12 years ago, for instance – as have the coverage and plans, is insufficient. It is imperfect, thus can improve. The default measure is regulation. It will sometimes – no, often – make the situation worse, but that only means the regulation needs to be adjusted or the regulators replaced with more competent professionals. Imperfections in the regulation are worth tolerating because they done are in pursuit of improvements, not profits.

Government actions sometimes not only fail to overcome market failure but rather worsen the failure. Fannie Mae and Freddie Mac were formed as quasi-governmental institutions to help encourage mortgages in the residential housing market because of a belief that the private sector was not providing enough mortgages, especially to lower income families. Yet, as documented in detail in Reckless Endangerment by Gretchen Morgenson and Joshua Rosner, these two companies used their privileged positions to take excessive risks, and to insure large numbers of mortgage loans that should never have been made.

More damage was done by Fannie and Freddie, of whom the government has more control and information than it does of any private sector company – than all the reported private sector monopolies (Microsoft, Google, General Electric, Intel, etc.) combined. The problem wasn’t the regulation itself, of course, but rather the lack of it.

Hardly. The problem is often in the regulation itself. Regulators distort markets and create costs to be paid by others. They also create unintended consequences for which they are not responsible. The market is like a mobile, where movement on one side creates unpredictable and uncontrollable movement in the others. Market distortions are not easily contained, and we are foolish to think we can manipulate an industry as easily as we do computer code. The market, in its nature the cumulative result of millions of individual decisions, will almost always respond to a problem with more efficiency and information than the government can. Such understanding is what led economist Thomas Sowell from Marxism to capitalism.

Becker also offers his thoughts on how to decide if and when the government should intervene and regulate.

How does one approach policy once it is recognized that government failure is substantial, and often much worse than market failure? As a general rule I believe the presumption should be in favor of government actions only when market failures are quite large and persistent. So clearly governments should have the dominant role in the military and police areas, in the judiciary, in protecting against massive pollution, and in providing a safety net for its least fortunate members (private charities are important but do not do enough). On the other hand, when market failures are relatively small and likely to be temporary, as in monopoly situations or in exploiting consumer ignorance, government involvement should be minimal, as in minimalist anti-trust policies, and in allowing consumers generally to make their own decisions.

The intermediate cases are the most difficult: when market failures may be significant, and yet government alternatives are not attractive. This may be decided on a case-by-case basis, but I believe the usual rule should then be to let the market operate. This belief is based on the conclusion that, on the whole, government failure is far more pervasive, damaging, and less self-correcting, than is market failure. Others may reach different conclusions, but these are the problems that a relevant welfare analysis should focus on. Simply concluding that in particular instances markets are not working perfectly is a misleading and incorrect basis for supporting active and sizable government involvement.

 

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Filed under Economics, Role of Government