Category Archive 'Government'
15 May 2016

Iowahawk Thought For the Day

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27 Apr 2016

US GDP 25% Smaller Due to Federal Regulation

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RegulatoryCosts

Investors Business Daily cites a George Mason University Study of the compliance cost of federal regulations which finds that those costs are truly staggering.

Economists scratch their heads when asked to explain the economy’s tepid growth over the past several years. A new study gives a possible answer: the growing, cumulative burden of federal regulations.

Under President Obama, annual GDP growth never once even hit 3%. Under Bush before him, there were only two years when growth topped 3%. But in the two decades before that, annual GDP growth was above 3% in all but six years.

Growth has been so anemic for so long, we’re now being told that this is the “new normal.” As the Bureau of Labor Statistics put it, “annual U.S. GDP growth exceeding 3% … is not expected to be attainable over the coming decade.” It lists everything as a cause, except for one thing: federal regulations.

Whenever a new regulation gets passed, the government puts out a cost analysis, which focuses on annual compliance costs. That’s fine for a point in time. But these regulations don’t go away. And every year more get added to the pile. The Code of Federal Regulations is now more than 81,000 pages long.

What’s the cumulative impact of all these rules, EDIT3-regu-042616regulations and mandates over several decades? A new study by the Mercatus Center at George Mason University tries to get an answer, and what it found is mind-boggling.

The paper looked at regulations imposed since 1977 on 22 different industries, their actual growth, and what might have happened if all those regulations had not been imposed.

What it found is that if the regulatory state had remained frozen in place in 1980, the economy would have been $4 trillion — or 25% — bigger than it was in 2012. That’s equal to almost $13,000 per person in that one year alone.

Looked at another way, if the economic growth lost to regulation in the U.S. were its own country, it would be the fourth largest economy in the world, as the nearby chart shows.

Read the whole thing.

02 Apr 2016

Investment Banks Get No Respect

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BankBuildings

Robert Arvanitis explains that their utility and functions have changed.

This begins with the historical merchant banks. These were firms that helped fund the Age of Exploration, and grew along with their clients during the Industrial Revolution.

A merchant banker was knowledgeable in one or more lines of business, put his own money into investments, and gathered more investors based on his own reputation. A merchant banker was the finance department for his clients. He not only lent and invested, he advised on markets, delivered correspondent services, knew the broader economy, and participated in the risks.

That was a lot of hard work, and a lot of sincere risk taking, and the merchant bankers were well-respected. …

as government grew, it had a baleful impact on banking. Government imposed increasing regulation, it set ever more complex tax schemes, and it used capital markets for its own deficit financing. The classic “elephant in the bath tub” of economic distortions.

By the 1970s, the investment banks, starting with Drexel, responded to these new signals. Investment banks began to disintermediate the commercial banks, with high yield bonds. Here, the investment banks acted as agent, not principal. They matched borrowers to investors but took no principal risk. That removed the need for capital, but also left the investors with both the default and liquidity risk. This further detached banks from clients, and in fact made them competitors in trading.

It turned out there were more — and more profitable — opportunities in arbitraging tax and regulation than there were in actually serving businesses. …

[T]he new-style investment bankers sold bonds to investors, and then traded against both the investors and the issuers, making a relatively safe turn on each sale. Or else they read the tax code, and fabricated deals that were tax-deductible debt for the IRS, but counted as regulatory capital for the other parts of government. That’s easier and more profitable than actually building something.

In short, rather than solving real challenges, today’s investment banks work to exploit the growing incoherent web of government intrusions on the market. Profitable, yes, but not worthy of our respect.

01 Feb 2016

How Much Consent of the Governed Has Modern American Democracy Really Got?

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Leviathan
detail, frontispiece of Thomas Hobbes, Leviathan, 1651.

In Iowa today, we are beginning participation in ritual activities intended to persuade us that we are a free people electing our own government which governs with our assent. Jason Brennan, a professor at Georgetown, recently posted a short essay arguing that the degree of consent we actually have in a mass democracy is so limited as to be, in most real circumstances, practically non-existent.

In general, our relationship as individuals to our government doesn’t look much like a consensual relationship.

If you don’t vote or participate, your government will just impose rules, regulations, restrictions, benefits, and taxes upon you. Except in exceptional circumstances, the same outcome will occur regardless of how you vote or what policies you support. So, for instance, I voted for a particular candidate in 2012. But had I abstained or voted for a different candidate, the same candidate would have won anyways. This is not like a consensual transaction, in which I order a JVM and the dealer sends me the amp I ordered. Rather, this is more a like a nonconsensual transaction in which the dealer decides to make me buy an amp no matter whether I place an order or not, and no matter what I order.

If you actively dissent, the government makes you obey its rules anyways. For instance, you can’t get out of marijuana criminalization laws by saying, “Just to be clear, I don’t consent to those laws, or to your rule”. This is unlike my relationship with my music gear dealer, where “no” means “no”. For government, your “no” means “yes”.

You have no reasonable way of opting out of government rule. Governments control all the habitable land, and most of us don’t have the resources or even the legal permission to move elsewhere. Governments won’t even let you move to Antarctica if you want to. At most, a privileged few of us can choose which government we live under, but the vast majority of us are stuck with whatever government we’re born with. This is unlike buying an amp from Sweetwater.com, which, by the way, I highly recommend as a dealer.

Finally, governments require you to obey their rules, pay taxes, and the like, even when they don’t do their part. The U.S. Supreme Court has repeatedly ruled that the government has no duty to protect individual citizens. Suppose you call the police to alert them that an intruder is in your house, but the police never bother dispatch someone to help you, and as a result the intruder shoots you. The government still requires you to pay taxes for the protection services it chose not to deploy on your behalf.

So, in summary, it looks like in general our relationship to our governments lacks any of the features that signify a consensual transaction.

None of this is to say that governments are unjust or illegitimate, or that we ought to be anarchists. There are other reasons to have governments. Nor is it to say that democracies are not in some way special. Democracies in fact do a much better job than alternative forms of government of responding to their concerns and interests of most of their members. But it’s a stretch to say that democracy rests on the consent of the governed, or, more precisely, it’s a stretch to say that you consent to democratic rule.

Read the whole thing.

28 Jan 2016

The Dowager Countess of Grantham Is Right

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Downton Abbey’s Violet Crawley (Maggie Smith) explains her opposition to the absorption of the private local hospital by the national public system.

21 Aug 2015

Love Gov: 5 Episodes

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A series of videos from the Independent Institute depicting Alexis’s relationship with Gov, from first date to mandate.

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05 Jun 2015

The Numbers Are In: The FDA Kills More People Than It Saves

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FDACartoon

Cato Institute:

Analyst Dale Gieringer figured that the benefits of FDA regulation “could reasonably be put at some 5,000 casualties per decade or 10,000 per decade for worst-case scenarios. In comparison … the cost of FDA delay can be estimated at anywhere from 21,000 to 120,000 lives per decade.”

Hat tips to Sarah Jenislawski and Jim Harberson.

06 Oct 2014

Priorities

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EbolaCartoon

Mark Steyn notes that when government gets too big, it completely loses its sense of priorities, devoting unlimited energy to enforcing petty regulations while totally failing to perform its legitimate functions in cases when it really matters.

Thomas Eric Duncan has the distinction of being America’s Patient Zero – the first but not the last person to develop Ebola symptoms in the United States.

Is he a US citizen? No, he’s Liberian.

Is he a resident of the United States? No, he landed at Washington’s Dulles Airport on September 20th, in order to visit his sister and having quit his job in Monrovia a few weeks earlier.

So he’s a single unemployed man with relatives in the US and no compelling reason to return to his native land. That alone is supposed to be cause for immigration scrutiny.

In addition, visitors from Liberia have the fifth highest “visa overstay rate” in the United States. That’s to say, they understand very clearly that all that matters is getting in. Once you’re in, they’ll never get you out.

And, of course, Liberia is one of the hottest spots of Ebola’s West African “hot zone”. It’s been all over the front pages, except apparently in The US Customs & Border Protection Staff Newsletter, where it rated a solitary “News In Brief” item at the foot of page 37.

Just to give you an example of how hard-assed the boneheads of America’s immigration bureaucracy can be when they want to:

The legendary Gord Sinclair, longtime news director of CJAD in Montreal, had a ski place near Jay in northern Vermont, and he invited his engineer on the show to come down and visit him. “What’s the purpose of your visit?” asked the agent at the small rural border post.

“Oh, just a relaxing weekend at my boss’ place,” said Gord’s colleague affably, and then chortled, “although I don’t know if it’ll be that relaxing. He’ll probably have me out in the yard chopping wood all day.”

So the immigration agent refused him entry on the grounds that he would be working illegally in the United States.

They all had a good laugh about that back on the air on Monday, but it took forever to straighten out. A single man with contacts in the United States: He says he’s coming for the weekend, but we all know any Montrealer would willingly trade a job at Quebec’s Number One anglo radio station for casual yard work in Vermont, right?

And yet the unemployed guy from an Ebola hot zone gets in.

Every day CBP agents pull stuff like that weekend-in-Vermont thing, screwing over perfectly obviously law-abiding persons – tourists, businessmen, legal residents and, indeed, citizens.

But the Ebola guy gets in.

What is the priority of America’s deranged border regime right now? As I wrote two months ago:

This weekend [Campbell Webster] was returning to New Hampshire from a competition in Canada, which is how a newspaper story comes to open with a sentence never before written in the history of the English language:

    ‘BAGPIPERS have expressed their fear over a new law which led to two US teenagers having their pipes seized by border control staff at the weekend.’

They can chisel that on the tombstone of the republic. On the northern border, bagpipers are “expressing their fear”, while on the southern border gangbangers have no fear and stroll through the express check-in.

As do Ebola-bearing Liberians at Dulles. US border security devotes more time and resources to Campbell Webster of Concord bringing in a bagpipe than to Thomas Duncan of Monrovia bringing in Ebola.

Read the whole thing.

Hat tip to Bird Dog.

06 Oct 2014

Our Incompetent Federal Goverment

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SecretService3

Doyle McManus, at the LA Times, contends that the federal government is focused on political competition at the expense of competence.

Whatever happened to good old American know-how?

The nation that invented modern management seems to be suffering a crisis of competence.

The Secret Service can’t protect the White House. Public health authorities can’t get their arms around a one-man Ebola outbreak. The army we trained in Iraq collapsed as soon as it was attacked by Islamic extremists, and our own veterans can’t get the care they need at VA hospitals. And, lest we forget, it was only a year ago that the White House rolled out its national health insurance program, only to see its website grind to a halt.

Yes, you can argue that these problems all have different causes.

But it’s hard not to conclude that something basic is amiss in Washington.

“This isn’t a partisan problem,” argues Linda Bilmes, a public policy scholar at Harvard’s Kennedy School who worked in the Clinton administration — although she does fault the people at the top. “It hasn’t been a priority under this president to appoint good managers to top positions, but it wasn’t a priority under George W. Bush either.”

Read the whole thing.

21 Sep 2014

The Rationing Society

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Bowery-Bread-Line

Dan Greenfield explains how Progressivism has changed the fundamental nature of American society.

There are two types of societies, production societies and rationing societies. The production society is concerned with taking more territory, exploiting that territory to the best of its ability and then discovering new techniques for producing even more. The rationing society is concerned with consolidating control over all existing resources and rationing them out to the people.

The production society values innovation because it is the only means of sustaining its forward momentum. If the production society ceases to be innovative, it will collapse and default to a rationing society. The rationing society however is threatened by innovation because innovation threatens its control over production.

Socialist or capitalist monopolies lead to rationing societies where production is restrained and innovation is discouraged. The difference between the two is that a capitalist monopoly can be overcome. A socialist monopoly however is insurmountable because it carries with it the full weight of the authorities and the ideology that is inculcated into every man, woman and child in the country.

We have become a rationing society. Our industries and our people are literally starving in the midst of plenty. Farmers are kept from farming, factories are kept from producing and businessmen are kept from creating new companies and jobs. This is done in the name of a variety of moral arguments, ranging from caring for the less fortunate to saving the planet. But rhetoric is only the lubricant of power. The real goal of power is always power. Consolidating production allows for total control through the moral argument of rationing, whether through resource redistribution or cap and trade.

The politicians of a rationing society may blather on endlessly about increasing production, but it’s so much noise, whether it’s a Soviet Five Year Plan or an Obama State of the Union Address. When they talk about innovation and production, what they mean is the planned production and innovation that they have decided should happen on their schedule. And that never works.

You can ration production, but that’s just another word for poverty. You can’t ration innovation, which is why the aggressive attempts to put low mileage cars on the road have failed. As the Soviet Union discovered, you can have rationing or innovation, but you can’t have both at the same time. The total control exerted by a monolithic entity, whether governmental or commercial, does not mix well with innovation.

The rationing society is a poverty generator because not only does it discourage growth, its rationing mechanisms impoverish existing production with massive overhead. The process of rationing existing production requires a bureaucracy for planning, collecting and distributing that production that begins at a ratio of the production and then increases without regard to the limitations of that production.

Read the whole thing.

29 Aug 2014

UK Freedom of Information Requests

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Dragon1

The Local Government Association recently released to the press a list it compiled of the most unusual Freedom of Information (FoI) requests by borough councils throughout England.

The winner was:

What plans are in place to protect the town from a dragon attack? (Wigan Council)

(Independent)

18 Jul 2014

The Working Gas Can, Murdered by Government

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GasCan
Old-fashioned (now illegal) plastic gas can with built-in vent.

Jeffrey Tucker discusses in loving detail one prominent example of the countless ways in which government regulation has impacted the lives of just about every American.

[Y]esterday, [I ran out of gas and] had to get a can of gas from the local car shop. I started to pour it in. But, hmmm, this is strange. The nozzle doesn’t quite go in. I tilted it up and tried to jam it in.

I waited. Then I noticed gas pouring all down the side of the car. So I pulled it out and experimented by pouring it on the ground. There was some weird contraption on the outside and it wasn’t clear how it worked.

I poured more and more on the ground. Some got on my shoe. Some got on my hands. Some got on my suit.

Gas was everywhere really — everywhere but in the tank. It was a gassy mess. If someone had lit a match, I would have been a goner.

Finally I turned out the crazy nozzle thing a few times. It began to drip in a slightly coherent direction so I jammed it in. I ended up putting about one cup of gas in, started my car and made it to the gas station.

I’m pretty sure gas cans used to work. Yes. It was a can. It had a spout. It had a vent hole on the other side. You stuck in the spout and tipped. You never saw the gas.

Then government “fixed” the gas can. Why? Because of the environmental hazards that come with spilled gas. You read that right. In other words, the very opposite resulted. Now you cannot buy a decent can anywhere. You can look forever and not find a new one.

Instead you have to go to garage sales. But actually people hoard old cans. There is a burgeoning market in kits to fix the can.

The whole trend began in (wait for it) California. Regulations began in 2000, with the idea of preventing spillage. The notion spread and was picked up by the EPA, which is always looking for new and innovative ways to spread as much human misery as possible.

An ominous regulatory announcement from the EPA came in 2007: “Starting with containers manufactured in 2009… it is expected that the new cans will be built with a simple and inexpensive permeation barrier and new spouts that close automatically.”

The government never said “no vents.” It abolished them de facto with new standards that every state had to adopt by 2009. So for the last five years, you have not been able to buy gas cans that work properly. They are not permitted to have a separate vent. The top has to close automatically. There are other silly things now, too, but the biggest problem is that they do not do well what cans are supposed to do. …

Never heard of this rule? You will know about it if you go to the local store. Most people buy one or two of these items in the course of a lifetime, so you might otherwise have not encountered this outrage.

Yet let enough time go by. A whole generation will come to expect these things to work badly. Then some wise young entrepreneur will have the bright idea, “Hey, let’s put a hole on the other side so this can work properly.” But he will never be able to bring it into production. The government won’t allow it because it is protecting us! ….

There is no possible rationale for these kinds of regulations. It can’t be about emissions really, since the new cans are more likely to result in spills. It’s as if some bureaucrat were sitting around thinking of ways to make life worse for everyone, and hit upon this new, cockamamie rule.

These days, government is always open to a misery-making suggestion. The notion that public policy would somehow make life better is a relic of days gone by. It’s as if government has decided to specialize in what it is best at and adopt a new principle: “Let’s leave social progress to the private sector; we in the government will concentrate on causing suffering and regress.” …

Ask yourself this: If they can wreck such a normal and traditional item like this, and do it largely under the radar screen, what else have they mandatorily malfunctioned? How many other things in our daily lives have been distorted, deformed and destroyed by government regulations?

If some product annoys you in surprising ways, there’s a good chance that it is not the invisible hand at work, but rather the regulatory grip that is squeezing the life out of civilization itself.

Read the whole thing.

Air conditioners which don’t cool as well as their predecessors made 60 years ago, toilets that won’t flush, automobiles without spare tires which cost more than the house you grew up in… the list of products of federal regulatory intervention to make the world a better place is long, and it keeps growing.

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