The feature humor item you’ll be seeing everywhere this holiday season is about a drastic shortage of butter in Norway occurring just as the Christmas season is at hand.

The journalists are telling us that the scarcity is the result of recent high Norwegian butter consumption resulting from a fashionable low-carb, high-fat diet on top of reduced production caused by a shortage of hay due to an unusually rainy summer growing season.

Profiteers are reported trying to charge as much as 350 euros ($465) for a 500-gram (1.1 lb. or 1 lb and 1.6 oz) packet of butter.

Ho, ho! Isn’t it funny?

None of the features on this news item I have found, however, notes that no butter shortage exists elsewhere in Europe or in the United States. But the AFP story offers a clue:

Last Friday, customs officers stopped a Russian at the Norwegian-Swedish border and seized 90 kilos (198 pounds) of butter stashed in his car.

The butter shortage obviously is not result, in a modern world, of a local dairy feed shortage, or of local supplies being exhausted by unusual demand. With rising demand and consumers willing to pay higher prices, the supply would be being met by enterprising Russians trying to make a kroner, if government were not standing in the way.

It is obvious that some kind of Norwegian limits on butter importation, doubtless in place to protect Norwegian dairy farmers, prevents legal access to supplies from abroad.

Norway’s holiday problem isn’t really about diet fads or rainy summers. It’s about government doing what government likes to do: delivering favors to special interests at the expense of society as a whole.

Time

lynnux notes that government regulation establishes the rules by which banks operate and even creates their opportunities for profits, but these vital economic realities come into being in the first place through the agency of politicians, people like Barney Frank, whose expertise (such as it is), and interests and concerns have no connection to economic realities or markets.

Politicians seem such busy-beavers today, “doing things” “for” us. Why such whirling dervishes, generating laws in bulk? In its broadest outlines, law is mostly static. Politicians seek to appear to the public to be men of action “doing something.” This leads them to make too many economic and personal choices that they are not supposed to be making “for” us at all, picking winners and losers. It is now to the point where, famously, they no longer even read the laws they promulgate upon the body politic. Their process is finger in the wind (test the zeitgeist for what buzz evokes positives), then claim to be acting in name of the democratic will of the people—who, like banks to regulators, can later be blamed, should anything go wrong. As a republic, not a direct democracy, our representatives are supposed to be doing the right thing, in their best judgment. We rely on their decency, wisdom, and intelligence and vision for the long term. They have no way of knowing anything about their constituency anyway, because to pollsters, people only express self-interest, not the public interest. The public interest can only be assessed at a remove, which is the representative’s job. Pollsters get whatever they fish for. Responders also like to echo conventional wisdom. Implementing conventional wisdom is not politicians’ job. ...

Politicians wrapped in soundbites simply may not be qualified to make all the rules they seek to impose on us in their show of “caring” for us. This, I think, is what Richard Posner is getting at when he speaks of The Crisis of Capitalist Democracy. We need systems engineers today who really do understand the system. Politicians are mostly not this, but marketing specialists. They dissolve always into futile calls for infinitely ethical global governmental forces (themselves) to abolish investment uncertainty in a complicated utopian merger with perfect empirical risk analysis, forgetting that the past is no divining rod of the future (nor of truth. ...

The law is being asked to make business judgments law simply should not be making at all. Law is static. Markets are not. The market will adjust to any fixed rule, changing the “new normal.” Positive feedback loops (“positive” does not imply good) can ensue, at many unexpected levels. The media’s celebrity focus on political figure summiteering, however, follows an old trope, of suggesting to the public that our pseudo-gods and deities, through law, can command markets. These heroes then arrogantly begin to believe their press releases and to act accordingly.

Lawyers often go to law school precisely because they don’t like math or statistics. The type can quite easily ignore economic reality as they proceed to plug old forms and numbers into new contexts.

Read the whole thing.

Libertarian (sounds like the modern California version to me) Jason Brennan is in a position make his liberals allies uncomfortable, when he connects the dots between liberal statist policy prescriptions and the kind of crony capitalism in which fat cat banks and corporations get to use the state as their servant and ally to build deeper regulatory moats and higher walls against competitors.

Dear members of the moderate left,

America is suffering from rampant, run-away corporatism and crony capitalism. We are increasingly a plutocracy in which government serves the interests of elite financiers and CEOs at the expense of everyone else.

You know this and you complain loudly about it. But the problem is your fault. You caused this state of affairs. Stop it.

Unlike we libertarianish people, you people actually hold and have been holding significant political power in the US over the past 50 years. What have you done with this power? You’ve greased the corporatist machine every chance you’ve gotten. You’ve made things worse, not better. Our current problems are your fault. You need to stop.

We told you this would happen, but you wouldn’t listen. You complain, rightly, that regulatory agencies are controlled by the very corporations they are supposed to constrain. Well, yeah, we told you that would happen. When you create power—and you people love to create power—the unscrupulous seek to capture that power for their personal benefit. Time and time again, they succeed. We told you that would happen, and we gave you an accurate account of how it would happen.

You complain, perhaps rightly, that corporations are just too big. Well, yeah, we told you that would happen. When you create complicated tax codes, complicated regulatory regimes, and complicated licensing rules, these regulations naturally select for larger and larger corporations. We told you that would happen. Of course, these increasingly large corporations then capture these rules, codes, and regulations to disadvantage their competitors and exploit the rest of us. We told you that would happen.

It’s not rocket science. It’s public choice economics. You recognized, rightly, that public choice economics was a threat to your ideology. So, you didn’t listen, because you didn’t want to be wrong. Public choice predicted that the government programs you created with the goal of fixing problems would often instead exacerbate those problems. Well, the evidence is in. You were wrong and public choice theory was right. If you have any decency, it is time to admit you were wrong and change. Stop making things worse.

You spent the past fifty years empowering corporations and the most unscrupulous of the rich. You created rampant moral hazard in the financial sector. You created the system that socializes risks but privatizes profit. You created the system that creates a revolving door between Obama’s staff and Goldman Sachs. There’s a reason why Wall Street throws money at Obama. It’s because you, the moderate left, are Wall Street’s biggest supporters. Oh, I know you complain about Wall Street. But your actions speak louder than your words.

The Telegraph has a news item proving that the unelected elite bureaucracy does as excellent a job at supervising food standards as it does managing the European financial system.

Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Last night, critics claimed the EU was at odds with both science and common sense. Conservative MEP Roger Helmer said: “This is stupidity writ large.

“The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true.

“If ever there were an episode which demonstrates the folly of the great European project then this is it.”

The left is protesting Wall Street while Barack Obama continues to whip up popular resentment of the US financial industry, but the massive regulation of that industry effectuated by Sarbanes-Oxley and Dodd-Frank are already making sure that liberals are not going to have the world center of finance capitalism based conveniently in Lower Manhattan when they feel like kicking it around some more.

As the Wall Street Journal reported yesterday, Wall Street is in serious decline. Jobs are evaporating.

New York City’s securities industry could lose nearly 10,000 jobs by the end of 2012, New York state’s comptroller predicted, a painful blow to the area’s economy and government budgets.

New York City’s securities industry could lose nearly 10,000 jobs by the end of 2012, New York state’s comptroller predicted, a painful blow to the area’s economy and government budgets, Aaron Lucchetti reports on Markets Hub. Banks in the New York area are also poised to shed jobs. Photo: AP.

In a report set to be released Tuesday, Comptroller Thomas P. DiNapoli also said bonuses are likely to shrink this year, reflecting lower profits on Wall Street.

Since January 2008, the securities industry in New York has seen 22,000 jobs evaporate. If Mr. DiNapoli’s prediction of 10,000 more jobs losses between August 2011 and year-end 2012 comes true, that would represent a decline of 17%. About 4,100 jobs have been eliminated since April, and deeper cuts are widely seen as inevitable given a recent flurry of corporate expense-trimming announcements.

There is a 1:1 relationship between recent federal regulations and Wall Street’s decline. Disgruntled lesbian rockers who think that capitalism has not been properly compensating them will soon have to go demonstrate in London and Abu Dhabi.

MSNBC records the passing of another landmark on the road to ruin for the current administration.

The U.S. has tumbled further down a global ranking of the world’s most competitive economies, landing at fifth place because of its huge deficits and declining public faith in government, a global economic group said Wednesday.

The announcement by the World Economic Forum was the latest bad news for the Obama administration, which has been struggling to boost the sinking U.S. economy and lower an unemployment rate of more than 9 percent.

Switzerland held onto the top spot for the third consecutive year in the annual ranking by the Geneva-based forum, which is best known for its exclusive meeting of luminaries in Davos, Switzerland, each January.

Singapore moved up to second place, bumping Sweden down to third. Finland moved up to fourth place, from seventh last year. The U.S. was in fourth place last year, after falling from No. 1 in 2008.

The rankings, which the forum has issued for more than three decades, are based on economic data and a survey of 15,000 business executives.

In addition to the tragic spectacles of the vegetarian who met the hungry mountain lion while joggng in the state park, or the suburbanite who neglected to prepare properly for high altitude temperatures and snow when traveling in the high mountains, or the optimist who thought he could drive fast and inattentively around Devil’s Slide, California offers as well distressing scenes in which ordinary Americans encounter to their great misfortune hypertrophied large urban regulatory machines sprawling into their lives.

One day, while I was still living on the SF peninsula in San Carlos, I went outside to get something from my car, and the pretty Oriental young lady who lived in the house across the street (whose name I did not even know, we had only been on waving-hello terms) ran crying into my arms.

She and her husband, a silver-haired, distinguée executive-type who drove an S-class Mercedes, had purchased the typical run-down 1960s-era California spec house across the street from our rental for something north of a cool million. They then proceeded to gut snd completely rebuild the place. Construction activity had been going for about two years, and seemed finally to be nearing completion. I thought these neighbors seemed likely to be about to take up residence just about the same time I was scheduled to depart.

My neighbor began sobbing out her story. A building inspector from the city of San Carlos had just left. He had disapproved of the nails used to attach the wire-mesh to the outside of the house which had already been covered with stucco cement and painted. Because the city didn’t like the contractor’s choice of nail, my neighbors were going to have to give up plans to move in. They would be obliged to tear off the entire new exterior surface of their house, and re-attach new wire mesh and stucco, and paint the whole thing all over again. It would take months to do the demolition and exterior covering again, and it would cost a lot of money.

Beyond the many tens of thousands of dollars all that extra construction was going to cost, they’d have to do an additional move (their lease was up) and pay thousands of unnecessary dollars a month for another rental house. My neighbors had been hit with six figures in extra expenses by the local building code enforcement system over a nail.

No wonder the poor girl was sobbing. She probably felt a lot like Richard III.

I don’t doubt that there is some possibility that the use of a less-than-optimal nail to attach that wire mesh could result in problems. The mesh might gradually loosen, and come away from the wall of the house in places over time. Movement might occur, and the homeowner might find that portions of his stucco surface developed cracks. The poor homeowner might have to do some repairs one day. But, if every one of those nails fell right out, and the entire stucco coating on all four sides of the house fell right down onto the oleander bushes, it would be no skin off the nose of the city of San Carlos. San Carlos would not be paying for the repairs.

Building codes are represented to be necessary to protect the public. In urban California, at least, there is a reasonable argument for earthquake protection to be a factor taken into account in building standards. But codes obviously go characteristically far beyond addressing potential hazards to the general community. Building codes function to prevent competition from outside licensed guild-member businesses. Building codes protect the interests of unions. Building codes also operate as a secondary system of zoning, to protect the interests and impose the preferences of existing property owners. Building codes, finally, are also one more revenue source and a means of creating power.

In a lot of places, New York City would be a classic example, building codes describe an absolutely unattainable dream of perfection which never does and never can exist in the real world. Consequently, all buildings and all building owners are always guilty and in violation of lots of things. Officialdom can crack down and enforce the entire code any time it chooses. Make some kind of waves for officialdom, and watch the inspectors arrive, whip out their notepads and start writing.

All this is in reference to a horrifying LA Times story, describing how the long arm of big city city building regulation has, in recent years, begun reaching out to crush and destroy little people living far away in remote high desert locations which, unfortunately for them, nonetheless fall under the jurisdiction of the County of Los Angeles. Be sure to take your high blood pressure medication before reading the article or watching the video.

Hat tips to Glenn Reynolds and Iowahawk.

Big Brother is coming soon to take away your 100w incandescent light bulbs, and he’s planning to remove the rest of them by 2014. Virginia Postrel explains that Congress and George W. Bush did one of their crony capitalism deals at the expense of your freedom of choice (and your interior decor).

When compact fluorescent light bulbs were new, promoters sold them as a market-oriented, win-win proposition. They were like “lite” beer: the same great illumination, for a fraction of the electric bill.

But, as with beer, not everyone was convinced. Some consumers didn’t like the high out-of-pocket cost. (A basic CFL runs about three times the initial price of the equivalent incandescent.) Some didn’t like that bulbs could take a while to build up to full intensity.

Some didn’t like the occasional flicker. And a lot didn’t like the light. Its bluish cast lacks the warmth of traditional incandescents and gives skin tones a somewhat deathly tinge. “Fluorescent is just not attractive,” a resolute restaurant designer once told me. “I don’t care what they say.” ...

By the end of last year, CFLs had managed to capture only 25 percent of the general-purpose light-bulb market—a decent business, sure, but hardly the radical transformation evangelists were going for. Most Americans, for most purposes, have stuck to traditional incandescents.

So the activists offended by the public’s presumed wastefulness took a more direct approach. They joined forces with the big bulb producers, who had an interest in replacing low-margin commodities with high-margin specialty wares, and, with help from Congress and President George W. Bush, banned the bulbs people prefer.

It was an inside job. Neither ordinary consumers nor even organized interior designers had a say. Lawmakers buried the ban in the 300-plus pages of the 2007 energy bill, and very few talked about it in public. It was crony capitalism with a touch of green.

Of such deals are Tea Parties born.

Read the whole thing.

The Wall Street Journal finds Senator Chuck Schumer’s recent criticism of the regulatory impact on New York City’s financial industry of the Dodd-Frank bill, which he himself supported, to be an example of a recognizable pattern of political deception.

[W]ith Mr. Schumer, who voted to inflict this burden on an economy still struggling with high unemployment and slow growth, this is an all-too familiar pattern of behavior that can be summarized as follows:

Step One: Vote for destructive law.

Step Two: Complain about said law, while doing nothing to repeal it.

Step Three: Raise campaign money by showing to business community the volume of said complaints.

It was almost easy to forget that Mr. Schumer helped enact the 2002 Sarbanes-Oxley financial accounting law when he spent much of the rest of the decade complaining about the stifling burden of financial regulations.

Looking forward, we can expect Mr. Schumer to express at myriad fundraising events his sympathy for those living with the consequences of Dodd-Frank. It’s a good bet that he’ll also claim that, if not for his valiant efforts on Capitol Hill, the financial reform would have been so much worse. And expect New York’s financial elite to keep writing checks.

There’s a word for people who keep falling for this: suckers.

Epstein cites, as a particularly striking example, the kind of negotiations which have become customary in the case of building permits.

These days, to begin any new building project, every developer must obtain a sheaf of permits that go far beyond the relatively mundane functions of avoiding falling bricks or aligning curb cuts to secure entryways for indoor parking. Indeed, today’s new norm calls for exhaustive hearings before planning commissions and community boards; these investigations are intended to probe the size of a project, its exterior design, the number and type of apartment units, access for the disabled, the amount of affordable housing (with complex subsidies from both the government and the developer), project financing (with government guarantees), proper hiring practices (with appropriate set-asides for women and minority workers), and multiple inspections for just about everything.

Yet just as all these requirements can be imposed, they can also be waived. The waivers, though, often come at a price — or, more accurately, a land-use exaction. For instance, a cash-strapped local government may be willing to waive the requirement that a developer set aside a certain percentage of apartment units to rent at below-market rates to the poor. The catch, however, is that the developer must agree to provide funding to build or refurbish a public school, a public park, or a nearby train station. The developer almost inevitably yields to the exaction, because he knows that, if he does not, he faces prolonged resistance and constrictive red tape from the government — obstacles that could eventually sink his project. But the requests for exactions may come from many varied groups with different expectations and demands. Parents may want a new school or park, commuters may want a new train station, cyclists may want new bike lanes, the arts community a new public performance space, homeless advocates a new shelter, and so on. It may not be possible for the government or the developer to satisfy all of the groups simultaneously — and the attempt to do so can tie up development for years, or cause projects to be scrapped altogether. This phenomenon drives up the number of project failures, which in turn shrinks the supply of housing, which then drives up housing costs and puts even greater pressure on both the developers and the regulators.

Read the whole thing.

All you need to know about government bureaucracy:

** US Government regulations on sale of cabbage: 26,911 words.

Hat tip to Theo Spark.

Dan Mitchell argues that Barack Obama’s new alleged centrism, as manifested by his WSJ column about deregulation, is not sincere, was accompanied by his usual factual misstatements, and is flagrantly contradicted by his policies.

The President garnered some attention for his January 18 column in the Wall Street Journal, in which he said we need to control the regulatory burden.

Let’s start with the insincere part. He praised capitalism.

America’s free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.

I’m not really sure how to analyze this passage. Let’s just say it is akin to George W. Bush talking about the need for small government and fiscal responsibility.

Obama then talks about the need for balance, saying that regulations sometimes are too onerous, but then he gets to the inaccurate part.

…we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

I don’t know whether to laugh or cry at this statement. A part of the government, the Federal Reserve, creates far too much liquidity with an easy-money policy. Other government-created entities, Fannie Mae and Freddie Mac, then create enormous subsidies for bad housing loans. These combined policies lead to a bubble that bursts, and Obama wants us to believe it was a problem of inadequate regulation?!? For those who are interested, here’s a good article from the American Enterprise Institute explaining how government caused the financial crisis.

Now let’s get to the hypocritical part, where the President issues a new executive order, asserting we need to balance costs and benefits.

As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices.

I suppose we should give the President credit for chutzpah. Less than one month ago, his Administration proposes an IRS interest-reporting regulation that, in a best-case scenario, will drive tens of billions of dollars out of the U.S. economy. That regulation does not even pretend there are any offsetting benefits, yet Obama says his Administration will be diligent in applying cost-benefit analysis. This is sort of like a kid murdering his parents and then asking a court for mercy because he’s an orphan.

Read the whole thing.

Another column or two like that, though, and David Brooks and Peggy Noonan will be signing Obama’s praises again.

Your tax dollars support what the Declaration of Independence referred to as “a multitude of New Offices, and… swarms of Officers to harass our people and eat out their substance.” Every one of those officials feels obligated to see to it that the American property owner conforms to every item and detail of the regulatory regime which represents the entire raison d’etre of his career and livelihood.

Roland Toy, at American Thinker, describes his own, perfectly typical encounter with the system Americans have enthusiastically created to protect them from themselves.

133 days earlier I had submitted plans for my house to the county building department. A month later, the department sent a letter explaining that the proposed septic system had to be relocated 60 feet to the east of a location the county had approved earlier. However, in recent months a bald eagle’s nest had been spotted in adjacent public lands, and the county now required a buffer between the nest and any development on my property. Fine. I had seen a bald eagle soaring overhead—once with something that looked like a small animal it its claws. Anything for the symbol of America. And the septic system relocation was less than trivial, a few steps in one direction in the midst of millions of acres of sandy wilderness that was already officially sanctioned for a septic system.

The problem arose when the relocation required a new permit application, complete with fresh paperwork, hefty fees, a two-week waiting period for public input, and a new soil study by a professional soil engineer on a county-approved list.

I called the man who had signed the letter and appealed to his common sense, to his engineering acumen, and finally to his decency. Any moron could see that the septic system could be nudged a few feet with zero environmental impact—the approved sand dune was the same whether 8’ or 80’ or 8000’ feet from the property line. What could possibly be accomplished by breathing life into a new bureaucratic tangle? But in the end, my entreaties failed and the conversation amounted to mutual declarations of war. I backed off when he began making vague references to a possible environmental assessment report. Thus began a slow-motion shell game in which a bureaucrat, after extracting an extortionate fee, transferred irrelevant paperwork from one file folder to another. Some highlights of that loony process ($2,831.00, 103 days) are shown below:

• Submit plans to county ($450.00).
• County disapproves plans, requires variance.
• Variance request submitted ($125.00).
• Request denied. New application and soil study required.
• At an arbitration meeting ($250.00), the arbitrator rules for the county. Not technically a county employee, he’s on a chummy first-name basis with the county representatives.
• Start new application ($125.00) and commission a second soil study ($1,350.00) by an engineer on the county-approved list .
• Plan reviewers fail to show for a meeting. They’re at a ‘team-building’ retreat. In an unpleasant scene, two customer service representatives complain about my attitude after I tell them that for the non-meeting I had to drive 180 miles over winding mountain roads.
• County approves new septic system location.
• Craig makes site visit for percolation test ($541.00).

Back at the percolation test, all that was history. I understood it and wasn’t destined to repeat it. But Craig had been leafing through his papers for a long while. “Is there a problem?” I asked.

“Your soil engineer isn’t on the new approved list.”

“He’s gotta be there. You guys gave me his name.”

Craig pulled out his cell phone and spoke intently with his superiors. Eventually he hung up and said, “It’s probably nothing serious. But something’s screwy with the new list and I can’t do the inspection until the paperwork is right.”

“What’s the problem?”

“We’re not sure yet, but your engineer just isn’t on the list.”

“So you don’t know how long it’s going to take to fix or if it can be fixed?”

Craig muttered abjectly, “I’m sorry. I’m still on probation and they audit me.”

Like contentious litigation, every interaction with the building department had a tendency to take on an unpredictable life of its own. This was a moment of truth. God may have understood the SNAFU that had kept my engineer’s name off the list, but I didn’t. When does reasonable accommodation become craven appeasement? Would I continue working with the totalitarians who were polluting my life? Would I start another round of telephone tag, being stood up at meetings, preparing for rigged arbitrations, and paying the fees? Would I have to commission yet another soil assessment, the third one that would reiterate what everybody already knew? Or would I draw a line in the literal sand and rebel against the yoke of tyranny? A crazy image flashed through my mind. I was in the percolation test hole with a rifle, holding off swarms of g-men in bulletproof vests as helicopters and a lone bald eagle circled overhead.

Slavisa Tasic, of the University of Kiev, wrote a paper recently for the Istituto Bruno Leoni in Italy about [the psychology and neuroscience of government]. He argues that market participants are not the only ones who make mistakes, yet he notes drily that “in the mainstream economic literature there is a near complete absence of concern that regulatory design might suffer from lack of competence.” Public servants are human, too.

Mr. Tasic identifies five mistakes that government regulators often make: action bias, motivated reasoning, the focusing illusion, the affect heuristic and illusions of competence.

In the last case, psychologists have shown that we systematically overestimate how much we understand about the causes and mechanisms of things we half understand. The Swedish health economist Hans Rosling once gave students a list of five pairs of countries and asked which nation in each pair had the higher infant-mortality rate. The students got 1.8 right out of 5. Mr. Rosling noted that if he gave the test to chimpanzees they would get 2.5 right. So his students’ problem was not ignorance, but that they knew with confidence things that were false.

The issue of action bias is better known in England as the “dangerous dogs act,” after a previous government, confronted with a couple of cases in which dogs injured or killed people, felt the need to bring in a major piece of clumsy and bureaucratic legislation that worked poorly. Undoubtedly the rash of legislation following the current financial crisis will include some equivalents of dangerous dogs acts. It takes unusual courage for a regulator to stand up and say “something must not be done,” lest “something” makes the problem worse.

Motivated reasoning means that we tend to believe what it is convenient for us to believe. If you run an organization called, say, the Asteroid Retargeting Group for Humanity (ARGH) and you are worried about potential cuts to your budget, we should not be surprised to find you overreacting to every space rock that passes by. Regulators rarely argue for deregulation.

The focusing illusion partly stems from the fact that people tend to see the benefits of a policy but not the hidden costs. As French theorist Frédéric Bastiat argued, it’s a fallacy to think that breaking a window creates work, because while the glazier’s gain of work is visible, the tailor’s loss of work caused by the window-owner’s loss of money—and consequent decision to delay purchase of a coat—is not. Recent history is full of government interventions with this characteristic.

“Affect heuristic’” is a fancy name for a pretty obvious concept, namely that we discount the drawbacks of things we are emotionally in favor of. For example, the Deepwater Horizon oil spill certainly killed about 1,300 birds, maybe a few more. Wind turbines in America kill between 75,000 and 275,000 birds every year, generally of rarer species, such as eagles. Yet wind companies receive neither the enforcement, nor the opprobrium, that oil companies do.

If lawmakers are to understand how laws get applied in the real world, they need to know and understand the habits of mind of their officials.

Ever have a personal experience of some irrational and unnecessary federal regulation?

I can remember, decades ago, when I was still a student working at factory jobs during the summer, spending weeks and weeks installing OSHA-mandated improvised barriers on machine tools of every sort.

The activity was pointless. The rods, bars, and pieces of sheet metal I was attaching were simply nuisances that would only get in the way. No one wanted them. No one needed them. No one thought they were desirable. But someone in Washington, undoubtedly someone who had never operated a machine tool or worked in a factory, had decreed that a symbolic sacrifice of convenience and efficiency to the safety gods must be performed, and every factory and machine shop in the land was obliged to genuflect and sacrifice.

Nicole V. Crain and W. Mark Crain, in the Wall Street Journal explain that regulations have continued to increase over the years, by now amounting to a serious portion of our national income.

The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008, a 3% real increase over five years, to about 14% of U.S. national income. This cost is in addition to the federal tax burden of 21%, for a combined cost of 35% of national income. One out of every three dollars earned in the U.S. goes to pay for or comply with federal laws and regulations, and new policies enacted in 2010 for health care and financial services will increase this burden.

Congress approved a sweeping expansion of federal financial regulation on Thursday, reflecting a renewed mistrust of financial markets after decades in which Washington stood back from Wall Street with wide-eyed admiration.

The bill, heavily promoted by President Obama and Congressional Democrats as a response to the 2008 financial crisis, cleared the Senate by a vote of 60 to 39, largely along party lines, after weeks of wrangling that allowed Democrats to pick up the three Republican votes to ensure passage.

The vote was the culmination of nearly two years of fierce lobbying and intense debate over the appropriate response to the financial excesses that dragged the nation into the worst recession since the Great Depression.

The result is a catalog of repairs and additions to the rusted infrastructure of a regulatory system that has failed to keep up with the expanding scope and complexity of modern finance.

Over the last half-century, as traders and lenders increasingly drove the nation’s economic growth, politicians of both parties scrambled to get out of the way, passing a series of landmark bills that allowed financial companies to become larger, less transparent and more profitable.

Usury laws were set aside. Banks were allowed to expand across state lines, sell insurance, trade securities. The government watched and did nothing as the bulk of financial activity moved into a parallel universe of private investment funds, unregulated lenders and black markets like derivatives trading.

That era of hands-off optimism was gaveled to an end on Thursday as the Senate gave final approval to a bill that reasserts the importance of federal supervision of financial transactions.

The financial crisis, of course, had absolutely nothing to do with usury, banks expanding across state lines, selling insurance, or trading securities. The crisis had everything to do with mortgage lenders who, rather than being unregulated, were specifically federally required to make more risky loans to persons with dubious credit. At the center of the current financial crisis are the federally-created mortgage corporations and they are completely overlooked by the new legislation.

——————————————————————————
As the Wall Street Journal explains our saviours are now going to protect us with a bevy of new agencies and a blizzard of yet-to-be-defined regulations, to be worked out later behind closed doors.

The bill, to be signed into law soon by President Barack Obama, marks a potential sea change for the financial-services industry. Financial titans such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. may be forced to make changes in most parts of their business, from debit cards to the ability to invest in hedge funds.

Congress approved a sweeping rewrite of rules that touch every corner of finance in the biggest expansion of government power over banking and markets since the Great Depression.

The Senate passed the bill 60-39 Thursday, following House passage last month. Earlier in the day, three northeastern Republicans joined with Democrats to block a filibuster, allowing the bill to squeak through.

Now, the legislation hands off to 10 regulatory agencies the discretion to write hundreds of new rules governing finance. Rather than the bill itself, it will be this process—accompanied by a lobbying blitz from banks—that will determine the precise contours of this new landscape, how strict the new regulations will be and whether they succeed in their purpose. The decisions will be made by officials from new agencies, obscure agencies and, in some cases, agencies like the Federal Reserve that faced criticism in the run-up to the crisis. ...

The legislation creates a council of regulators to monitor economic risks; establishes a new agency to police consumer financial products; and sets new standards for the way derivatives are traded. “These reforms will benefit the prudent and constrain the imprudent,” Treasury Secretary Timothy Geithner said in a press conference. “Strong banks, the well-managed financial innovators, will adapt and thrive under the new rules of the road.”

Republicans said the bill could jeopardize the recovery by constraining credit and crimping the banking industry, and chided the expansion of government power it envisions.

The bill “is a 2,300-page legislative monster…that expands the scope and the powers of ineffective bureaucracies,” said Sen. Richard Shelby (R., Ala.).

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It’s all a farce, of course. The professional political class is simply taking advantage of the financial crisis it created itself to ride to the supposed rescue and carve itself out another huge chuck of power over the economy.

Well-connected people with the right kinds of background and education will regulate in collusion with the wealthiest and most influential financial industry players, friends of the system in Washington will get favors, their less-well-connected competitors will get the shaft, higher entry barriers will be put into place, and regulators when they leave office will move on to more lucrative positions and consultancies. The powers that be will prosper and the public will pay.

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Still the financial system will survive:

Kate Sullivan: One day we’ll smarten up and pass some laws and put you out of business.

Lawrence Garfield: They can pass all the laws they want. All they can do is change the rules. They can never stop the game. I don’t go away. I adapt.

—Other People’s Money (1991)

Unemployment is high and is in reality going higher if you count those who would take a job if they could get one. Incomes are weak. Plans to purchase discretionary items are falling. Housing is likely in for a further drop in prices. The stock market is not exactly booming. Treasury yields are falling, not from a credit crisis or a flight to quality, but because of economic conditions (deflation). Money supply is flat or falling. Prices are under pressure. The list goes on, and all factors are indicative of deflation.

As noted last week, the data suggests we could see weak growth in the last half of the year. Over two-thirds of the past quarter’s 2.7% growth was from inventory rebuilding, which surveys seem to show is abating as inventories begin to stabilize.

I was on Larry Kudlow’s show (links below) last Tuesday, and he gave me some time to air my views. My main concern, as readers know, is that we may have a weak economy in the latter half of the year and then introduce a large tax increase, which my reading of the economic studies on tax increases suggests will throw us into recession. Recessions are by definition deflationary. (Not to mention what another one would do to unemployment and the stock market!) With inflation at less than 1%, could we see the central banker’s nightmare of outright deflation? We very well could. I think that is what the bond market is saying.

Beyond the threat of economic destruction via deflation, we have additionally the reality of dishonest and irresponsible regulation.

“Why don’t you reform yourselves? That task would be sufficient enough.” – Frédéric Bastiat

I’ll finish with this thought. This financial reform bill should be thrown out and they should start over. So much has been tagged onto this bill that has nothing to do with reform but is all about political agendas. It is also far too vague. Essentially, they create all these new committees or empower the bureaucracies that missed it last time to come up with the actual details of regulation. For all intents and purposes, a small number of unelected individuals will be given almost total control to write new rules overseeing a huge part of our economy. No matter how well-intentioned, this is not something that should be done in closed rooms.

We need major reform, of course. And when are we going to get to Freddie and Fannie, which are totally ignored but will cost the taxpayer the most? Local Congressman Jeb Hensarling has it right. He estimates there are about 3 unintended consequences on every page of that 1,200-page bill.

Jon Stewart Asks David Axelrod: Has This Government Proven Itself Competent Enough To Regulate Industry?

4:58 video

JON STEWART, HOST: It’s clear that this administration believes that government can have a stronger hand in regulating Wall Street, in regulating energy, in doing these things. But, has government during this time proved itself competent? And are our only two choices sort of an incompetent bureaucracy that doesn’t quite regulate properly or free market anarchy? Before you can make the case that this administration and government can effectively regulate shouldn’t they, you know, the MMS case makes a pretty clear point that the regulatory system is somewhat broken, and you guys had a chance to…

DAVID AXELROD, SENIOR OBAMA ADVISOR: The answer Jon is not to abandon the notion that there have to be rules and oversight. ...

[E]verybody recognizes that government has to play a role. It shouldn’t be an oppressive role, but there has to be some firm oversight and some rules of people respond to. These, you know, it’s pretty clear the oil industry is not going to regulate itself.

STEWART: But do you think, I guess my point is before you have the opportunity, before you can earn the ability to go in and, and, and do that, don’t, don’t we have to show a certain baseline level of competence.

John Heilemann is a progressive, and thus believes that Wall Street greed and deregulation, not government mortgage policies, caused the financial crisis, Obama saved capitalism when he should perhaps have simply nationalized the entire financial industry, and those deluded bankers don’t understand the righteous anger of the workers and the peasants. It is the moderate Obama, you see, that has been standing between them and the pitchfork-waving mob.

Personally, I think all that is a crock, but Heilemann’s gossipy account of the politics of Wall Street “reform” is amusing, and I do believe that he is accurately reporting the Street’s disenchantment with the Chosen One. I’d say where those bankers were clueless was back in 2008 when they allowed image, demeanor, and style to persuade them to believe that ideas and political polarities don’t really matter.

The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicans—after witnessing the horror show that constituted John McCain’s response to the financial crisis—quietly admitted relief that the other guy had prevailed.

Today, it’s hard to find anyone on Wall Street who doesn’t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as “hostile to business,” “anti-wealth,” and “anti-capitalism”; as a “redistributionist,” a “vilifier,” and a “thug.” A few days later, I recounted this experience to the same Wall Street CEO who’d called the Volcker Rule a testicular blow, and mentioned I’d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a “Chicago mob guy.” Do all your brethren feel this way? I asked. “Oh, not everybody—just most of them,” he replied. “Jamie [Dimon]? Lloyd [Blankfein]? They might not say Obama’s a socialist, but they come pretty close.” ...

At Goldman and elsewhere, the belief is strong that the case against Wall Street’s most storied firm was politically motivated; lately, Blankfein has taken to trashing Obama to his friends in unusually brutal personal terms. Dimon—who is fond of declaring, “I’m a patriot!” in meetings with White House officials—recently described himself publicly as “a wavering Democrat.”

And even those less bruised than them have found the experience traumatizing. “They’re not accustomed to being engaged in politics this way,” says a private-equity investor. “Their skin isn’t toughened. They actually take [the attacks by Obama] personally. This is a profession with a lot of smart people, but who aren’t necessarily terribly introspective. They think they actually deserve to make all this money. So any attack on their livelihood is, ahem, unpleasant.”

Maybe it was inevitable that the dewy-eyed affair between Wall Street and the White House would so quickly and nastily come a cropper. For more than 30 years, the approach of every administration to the financial industry has been either laissez-faire or actively deregulatory. On the left, much blame is placed at the feet of Clinton, Rubin and his then-deputy, Summers, but in truth they were merely part of a continuum that stretched back to Jimmy Carter. Considering how close the financial system came in 2008 to Armageddon, the consensus for imposing new rules and greater order was nearly universal (among the sane, at least). Yet that does little to lessen the sense of shock—of violation, really—that Wall Street feels. ...

There are those who reckon that, what with the wailing and gnashing among both the plutocrats and the populists, Obama has actually found the political sweet spot. “Main Street is mad at the president because he’s too close to Wall Street, and Wall Street is mad at him because he’s too populist,” Altman says. “Therefore, almost by definition, he’s in the right place.”

Yet the political and financial implications of the rift between Obama and Wall Street may be significant. Already, Goldman, JPMorgan, UBS, and many other financial-services firms are shifting their contributions toward the GOP. Not long ago, a big-time Obama Wall Street fund-raiser asked his go-to guy at one of the megabanks that had lavishly supported the candidate in 2008 what level of donations the president might expect from the firm’s people in 2012. The answer was less than a tenth of the previous total.

Libertarian Sheldon Richman, in the Freeman, explains that the reality of the current situation is far more complex.

[T]his is not just a simple matter of regulation. More fundamentally it’s a matter of ownership. The government has proclaimed itself the owner of the offshore positions where oil companies drill. In a free market those positions would be homesteaded and managed privately with full liability. In the absence of a free market and private property, built-in incentives that protect the public are diminished if not eliminated. Bureaucrats and “political capitalists” are not as reliable as companies facing bankruptcy in a fully freed market. ...

Negligent or not, BP is a player in a corporatist system that for generations has featured a close relationship between government and major business firms. (It wouldn’t have surprised Adam Smith.) Prominent companies have always been influential at all levels of government — and no industry more so than oil, which has long been a top concern of the national policy elite, most particularly the foreign-policy establishment. When state and federal governments failed in the 1920s to put a lid on unruly competition and low prices through wellhead production quotas (prorationing), the oil companies turned to Franklin Roosevelt and the federal government, winning the cartelizing Petroleum Code, significant parts of which were revived after the National Recovery Administration was declared unconstitutional. In the 1950s, when cheap imports depressed prices, the national government imposed quotas on foreign oil. Venezuela was the chief target at the time. (In 1960 OPEC, a “cartel to confront a cartel,” was founded.) Republican or Democratic, energy policy is not made without oil industry input.

In this context there’s less to the contrast between government regulation and corporate self-regulation than meets the eye. Self-regulation in a corporate state does not constitute the free market. When companies are sheltered in any substantial way from the competitive market’s disciplinary forces, incentives turn perverse. Moreover, “state capitalism” and the corporate form – with its agency problem – can produce the temptation to cut costs imprudently in order to make the next quarterly report look attractive to shareholders.

“Putting profits before people” is a feature of state, or crony, capitalism not the free market.

America faces a new culture war.

This is not the culture war of the 1990s. It is not a fight over guns, gays or abortion. Those old battles have been eclipsed by a new struggle between two competing visions of the country’s future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise—limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose.

It is not at all clear which side will prevail. The forces of big government are entrenched and enjoy the full arsenal of the administration’s money and influence. Our leaders in Washington, aided by the unprecedented economic crisis of recent years and the panic it induced, have seized the moment to introduce breathtaking expansions of state power in huge swaths of the economy, from the health-care takeover to the financial regulatory bill that the Senate approved Thursday. If these forces continue to prevail, America will cease to be a free enterprise nation.

I call this a culture war because free enterprise has been integral to American culture from the beginning, and it still lies at the core of our history and character. “A wise and frugal government,” Thomas Jefferson declared in his first inaugural address in 1801, “which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” He later warned: “To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one of a free exercise of his industry and the fruits acquired by it.” In other words, beware government’s economic control, and woe betide the redistributors.

Now, as then, entrepreneurship can flourish only in a culture where individuals are willing to innovate and exert leadership; where people enjoy the rewards and face the consequences of their decisions; and where we can gamble the security of the status quo for a chance of future success.

Yet, in his commencement address at Arizona State University on May 13, 2009, President Obama warned against precisely such impulses: “You’re taught to chase after all the usual brass rings; you try to be on this “who’s who” list or that Top 100 list; you chase after the big money and you figure out how big your corner office is; you worry about whether you have a fancy enough title or a fancy enough car. That’s the message that’s sent each and every day, or has been in our culture for far too long—that through material possessions, through a ruthless competition pursued only on your own behalf—that’s how you will measure success.” Such ambition, he cautioned, “may lead you to compromise your values and your principles.”

I appreciate the sentiment that money does not buy happiness. But for the president of the United States to actively warn young adults away from economic ambition is remarkable. And he makes clear that he seeks to change our culture. ...

[T]he real tipping point was the financial crisis, which began in 2008. The meltdown presented a golden opportunity for the 30 percent coalition to attack free enterprise openly and remake America in its own image.

And it seized that opportunity. While Republicans had no convincing explanation for the crisis, seemed responsible for it and had no obvious plans to fix it, the statists offered a full and compelling narrative. Ordinary Americans were not to blame for the financial collapse, nor was government. The real culprits were Wall Street and the Bush administration, which had gutted the regulatory system that was supposed to keep banks in line.

The solution was obvious: Vote for a new order to expand the powers of government to rein in the dangerous excesses of capitalism.

It was a convincing story. For a lot of panicky Americans, the prospect of a paternalistic government rescuing the nation from crisis seemed appealing as stock markets and home prices spiraled downward. According to this narrative, government was at fault in just one way: It wasn’t big enough. If only there had been more regulators watching the banks more closely, the case went, the economy wouldn’t have collapsed.

Yet in truth, it was government housing policy that was at the root of the crisis. Moreover, the financial sector—where the crisis began and where it has had the most serious impact—is already one of the most regulated parts of our economy. The chaos happened despite an extensive, intrusive regulatory framework, not because such a framework didn’t exist.

More government—including a super-empowered Federal Reserve, a consumer protection watchdog and greater state powers to wind down financial firms and police market risks—does not mean we will be safe. On the contrary, such changes would give us a false sense of security, especially when Washington, a primary culprit in the crisis, is creating and implementing the new rules.

The statist narrative also held that only massive deficit spending could restore economic growth. “If nothing is done, this recession could linger for years,” Obama warned a few days before taking office. “Only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the cycle that is crippling our economy.”

This proposition is as expensive as it is false. Recessions can and do end without the kind of stimulus we experienced, and attempts to shore up the economy with huge public spending often do little to improve matters and instead chain future generations with debt.

Unnecessary bureaucracy has a venomous effect on the national security establishment, whether it’s infantry or intelligence. The director of national intelligence, which has ballooned to a 1500-man supporting office, was a top down solution to a bottom up problem.

Admiral Blair was a casualty of Intelligence Community turf wars. Closing the DNI office would reduce unnecessary conflicts and duplication of effort. It’s too logical a course of action to be given serious consideration most likely though.
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Bruce Fleming says that standards at US service academies have been lowered for affirmative action and to allow academy teams to compete in the NCAA top divisions. He thinks standards should be restored or all the service academies closed down.
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Robin Hanson observes a unidirectional dynamic at work in progressive statism.

[I]n any area where we let humans do things, every once in a while there will be a big screwup; that is the sort of creatures humans are. And if you won’t decrease regulation without a screwup but will increase it with a screwup, then you have a regulation ratchet: it only moves one way. So if you don’t think a long period without a big disaster calls for weaker regulations, but you do think a particular big disaster calls for stronger regulation, well then you might as well just strengthen regulations lots more right now, even without a disaster. Because that is where your regulation ratchet is heading.

What if you can’t imagine ever wanting to weaken a regulation, just because it was strong and you’d gone a long time without a big disaster? Well then you apparently want the maximum possible regulation, which is probably to just basically outlaw that activity. And if that doesn’t seem like the right level of regulation to you, well then maybe you should reconsider your ratchety regulation intuitions.

Hat tip to the News Junkie.
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Ann Althouse chides the Washington Post: If you’re going to criticize the new social studies curriculum adopted by the Texas Board of Education, you’d better quote it or link it, not paraphrase it inaccurately.

My instinct is to call the proposed legislation a “blame deflection bill” rather than financial reform. But I admit that I have not read the whole bill. Has anyone?...

I have to rant about the notion of a consumer financial protection agency. I know that it’s axiomatic that poor people are helpless victims. But in the case of these mortgages, that is a really hard sell. The banks did not take from poor people. They gave to poor people. If you were lucky enough to get one of these exotic mortgages when house prices were still going up, then you got to reap a nice profit on your house. If you were not so lucky, you lost…close to nothing. I’m sorry, but if you borrowed up to 100 percent of the value of the house or more, then all you really lost were your moving expenses.

What about predatory lending? As I understand it, the idea of predatory lending is to saddle the borrower with an expensive mortgage so that you can foreclose on the property and sell it at a profit. How many times did that happen? Have you read of a single instance in the past three years where the bank made a profit on a foreclosure?

I am always ready to feel sorry for poor people because of their poverty. But I cannot feel sorry for somebody who was given a basically free option on a house and the option didn’t happen to come into the money.

The reason that those of us on the right are left somewhat speechless by the financial reform bill is that it seems to us to be based on premises that strike us as preposterous.

Hat tip to the News Junkie.

Instead of fighting major policy battles to secure the power needed to make you do what liberals think you should using naked force, clever persons on the left, like Cass Sunstein (recently appointed head of the White House Office of Information and Regulatory Affairs) recognize that the same results can largely be obtained by the application of much-easier-to-enact regulatory tweaks and nudges.

For as far back as memory reaches, people have been telling other people what’s good for them — and manipulating or forcing them to do it. But in recent years, a novel form of paternalism has emerged on the policy stage. Unlike the “old paternalism,” which sought to make people conform to religious or moralistic notions of goodness, the “new paternalism” seeks to make people better off by their own standards.

New paternalism has gone by many names, including “soft paternalism,” “libertarian paternalism,” and “asymmetric paternalism.” Whatever the name, it arose from the burgeoning field of behavioral economics, which studies the myriad ways in which real humans — unlike the agents who populate most economic models — deviate from pure rationality. Real people suffer from a variety of cognitive biases and errors, including lack of self-control, excessive optimism, status quo bias, susceptibility to framing of decisions, and so forth. To the extent such imperfections cause people to make choices inconsistent with their own best interests, paternalistic interventions promise to help them do better. ...

New paternalists, like many well-meaning advocates of expanded government, imagine conscientious policymakers carefully evaluating all the evidence, considering alternatives, consulting unbiased experts, and acting only when the benefits clearly outweigh the costs. That’s the idealized picture that comes to mind when Camerer, et al., call their perspective “a careful, cautious, and disciplined approach” to paternalism.

In political reality, legislators and bureaucrats face a constant stream of policy temptations, including both new policies and expansions of old ones. Rather than considering each new law on its merits, policymakers do what normal people do — they use simple heuristics and rules of thumb. They display what behavioral economists call extension neglect: the tendency to focus on “prototypes” instead of measuring the true degree and extent of a problem. In the paternalist context, the prototype citizens are chain-smokers and junk-food junkies. And the new paternalists have made sure the prototype policies are gentle nudges like reordering the food selections in cafeteria lines. These prototypes are, unfortunately, more likely to guide policy than studious consideration of behavioral economic research.

To make matters worse, policymakers will be influenced not only by supposedly neutral experts, but by special interests as well. Some will support policies for financial reasons — like milk producers who favor ever-greater restrictions on the availability of soft drinks, or financial services firms that favor ever-larger requirements for people to save and invest. Others will have a moral or ideological agenda, as in the case of temperance organizations (like Mothers Against Drunk Driving) or personal health advocates (like the Center for Science in the Public Interest). These groups may not share the new paternalists’ stated concern for the subjective preferences of targeted people.

Reason TV: Light Bulbs vs. the Nanny State
2:07 video

Hat tip to Roger Kimball via Karen L. Myers.

The five-year-old girl, her-six year-old brother and their father Chris Grady were in the car when it plunged into the river Avon in Evesham, Worcestershire, on Thursday morning.

Mr Grady and his son Ryan, managed to escape from the submerged car. They were helped clear by police officers on the riverbank.

However, Mr Grady’s daughter, Gabrielle, was trapped inside the vehicle for 97 minutes before the closest police dive team, based in the next county, could arrive. The divers then took a further 12 minutes to rescue her.

The officers already on the scene were prevented from diving in earlier to rescue her by police safety regulations.

The little girl remained in a critical state in hospital yesterday while her brother yesterday began to make a recovery.

He was well enough to sit up in bed and talk to family at his bedside.

West Mercia police admitted last night that safety regulations barred normal police officers from jumping into rivers to try to save people.

A police spokesman said the closest available police dive team was Avon and Somerset constabulary.

“Their team arrived within 97 minutes of the original request being made.

“Once they had arrived it took only a further 12 minutes to rescue the child from the submerged vehicle.

“At the time of the original request Avon and Somerset Dive Team were involved in an underwater search for a missing person in Gloucestershire.

“Police officers are not trained or equipped to enter rivers in order to rescue people.

“They are trained and equipped to make rescues from riverbanks.

“The risk involved in untrained and ill-equipped officers entering the water in these circumstances are generally too high to contemplate.

The American Pseudo-Intelligentsia desires above all things that the United States should become ever more like Europe. The tragedy in Worcestershire demonstrates that the brave new Progressive world all tidily ruled over and arranged into order by centralized authority leaves no room for initiative, improvisation, and reckless courage, no room for humanity. Yet, in a real emergency, it is precisely the unruly individual, the human being willing to risk everything and to ignore the rulebook, that makes the critical difference. They’ve done an excellent job of eliminating people like that in the socialist bureaucracies of modern Europe, including Britain.

Step out of the loop, do something unusual and you’ll encounter a wall of low-paid, low-intellect workers whose sole job is to prevent their bosses from being sued. As a result, you never hear anyone say: “Oh I’m sure it’ll be all right.” ...

You know the Stig. The all-white racing driver we use on Top Gear. Well, we were filming him walking through the Mojave desert when lo and behold a lorry full of soldiers rocked up and arrested him. He was unusual. He wasn’t fat. He must therefore be a Muslim.

It gets worse. I needed money to play a little blackjack in Vegas but because I was unable to provide the cashier with an American zip code he was unable to help. It’s the same story at the petrol pumps. Americans can punch their address into the key pad and replenish their tank. Europeans have to prove they’re not terrorists before being allowed to start pumping.

I seem to recall a television advertisement in which George W Bush himself urged us all to go over there for our holidays. But what’s the point when you can’t buy anything? Or do anything. Or walk across the desert in a white suit without being arrested.

The main problem I suspect is a complete lack of knowledge about the world. I asked people in the streets of Vegas to name two European countries. The very first woman I spoke to said: “Oh yes. What’s that one with kangaroos?”

Then you’ve got New Orleans, which, nearly a year after Katrina, is still utterly smashed and ruined. Now I’m sorry but insects can build shelter on their own. Birds can build nests without a state handout. So why are the people of Louisiana sitting around waiting for someone else to do the repairs? ...

Among the things I don’t like is the way everyone over 15 stone now moves about in a wheelchair. As a result, it takes half an hour to get through even the widest door. And I really don’t like the way that every small town looks exactly the same as every other small town. Palmdale in California and Biloxi in Mississippi are nigh on identical. They have the same horrible restaurants. The same mall. The same interstate drone. Live in either for more than a week and you’d be stabbing your own eyes with knitting needles.

But it’s the idiocracy that really gets me down. The constant coaxing you have to do to get anything done. “No” is the default setting whether you want to change lanes on a motorway or get a drink on a Sunday. It’s like trying to negotiate with a donkey. Once, I urged a cop in Pensacola, Florida, to use his common sense and let me load a van in the no loading zone, since the airport was shut and it would make no difference. “Sir,” he said, “you don’t need common sense when you’ve got laws.”

Come to think of it, I usually link books mentioned using Amazon’s Associates program, but Amazon has not had a sale from one of those in a very long time, as best I can recall. Does that count as disclosing?

Publishers sometimes send me books in hopes I’ll review or at least mention them. I occasionally attend free advance screenings of new movies (typically law-related documentaries) that filmmakers hope I’ll write about. This site has an Amazon affiliate store which has from time to time provided me with commissions after readers click links and proceed to purchase items, though it’s been almost entirely inactive for years. I get invited to attend the odd institutional banquet whose hosts sometimes give away a free book or paperweight along with the hotel meal. I’ve been sent “cause” T-shirts and law firm/support service provider promotional kits over the years, pretty much a waste of effort since I don’t much care for wearing such T-shirts and am not exactly famed for posts that sing the praises of law firms or their service providers.

Under new Federal Trade Commission guidelines in the works for some time, I could apparently get in trouble for not disclosing these and similarly exciting things. In addition, the commission’s scrutiny will extend to areas less relevant to this site, such as targeted Google advertising and results-not-typical testimonials.

Robert Ambrogi at Legal Blog Watch finds it hard to see why the blogosphere has raised such a big fuss about these rules. After all, the rules (to be precise, “guidelines” backed by government lawyers with relevant enforcement powers) make clear that nondisclosure of a single minor freebie will not in itself suffice to trigger liability but instead will be counted “among several factors to be weighed” in evaluating the continuum of behavior by individuals engaging in social media (it seems the rules also apply to Twitter, Facebook, and guest appearances on talk shows, to name a few). FTC enforcers will engage in their own fact-specific, and inevitably subjective, balancing before deciding whether to press for fines or other penalties: in other words, instead of knowing whether you’re legally vulnerable or not, you get to guess.

Olson also quotes Ann Althouse, who identifies the crucial point here quite succinctly.

The most absurd part of it is the way the FTC is trying to make it okay by assuring us that they will be selective in deciding which writers on the internet to pursue. That is, they’ve deliberately made a grotesquely overbroad rule, enough to sweep so many of us into technical violations, but we’re supposed to feel soothed by the knowledge that government agents will decide who among us gets fined. No, no, no. Overbreath itself is a problem. And so is selective enforcement.

What do you suppose are the odds that Obama’s FTC is going to go after Kos for taking “consulting fees” (Kosola) from particular democrat candidates?