“An Afghan Comments on Wisconsin Democratic Rule”

Afghan: So everyone was elected?
 
Me: Yes.
 
Afghan: And so Obama’s party just leave because they don’t like their chances at the vote?
 
Me: Yes.
 
Afghan: That’s not very democratic.
 
Me: No.

Geographic Travels with Catholicgauze.

“Decision-Making in the Pressure Cooker: Lessons Learned from the Collapse of Lehman Brothers”

Presented by the Lumen Christi Institute and the Catholic Lawyers Guild.

Thursday, March 3, 5:30 PM, Jenner & Block, 353 North Clark Street.

Info here.

Register here.

The speaker whom I am most interested in hearing is Luigi Zingales. I mentioned his essay Capitalism After the Crisis in this post. Zingales was one of the economists who urged Congress to hold hold hearings on the Paulson bailout plan, and as we know that did not happen. I just read his essay Learning to live with not-so-efficient markets, which I commend to your attention. A compendium of his recent writing, entitled “MY LOSING BATTLE AGAINST THE LEVIATHAN (Public interventions of a desperate free-market economist” can be found here.

The Right to Earn a Living: A Revolutionary Idea in Tunisia and America

Revolution against tyranny has blazed across North Africa and Arabia, as President George W. Bush envisioned in his idealistic second inaugural address. The conflagration was lit on December 17, 2010 by Mohamed Bouazizi of Tunisia, who had been denied a license to sell fruits and vegetables from his cart because he didn’t pay a bribe. A policewoman confiscated his vegetable cart and his wares. He was beaten when he protested, and on December 17 the humiliated young man set himself on fire. He died a few weeks later. Contagious demonstrations in Tunisia quickly followed the fateful denial of Mr. Bouazizi’s liberty.

The liberty whose denial inspired the overthrow of regimes in Tunisia, Egypt and, with any luck, Libya was economic liberty, or the right to earn a living. Although that liberty was obviously important to Mr. Bouazizi, the left regards economic liberty, to the extent it regards it as a liberty at all, as a lower order of liberty.

So do the federal courts. Economic regulations get minimal scrutiny under the Equal Protection and Due Process Clauses of the Constitution. The Takings Clause and the Contract Clause, which were intended to protect property rights and contract rights, have been enfeebled by the Supreme Court.

The division between economic liberties and other liberties is not one the Founders of this republic would have understood. Our revolution too was provoked by economic depredations. The interrelation of liberties is hard to miss. Free speech is much more difficult to exercise effectively without property that individuals rather than governments control.

State and local governments do most of the suppressing of the right to earn a living and the confiscating of vegetable carts in the United States. Conservatives who believe in federalism should be careful not to romanticize the states. From the perspective of an entrepreneur, another layer of regulation is no more felicitous merely because it emanated from a state capital.

States require licenses for all manner of innocuous occupations. Although consumer protection is the usual excuse, little is accomplished by occupational licensing beyond preventing people from getting a start or a new start in life and restricting the supply and increasing the cost of a given type of professional.

The District of Columbia, which unfortunately for its residents possesses home rule powers, recently decided to require wildlife control operators (people who trap varmints infesting houses) to be licensed. As is often the case with occupational licenses, wildlife control operators will have to take a class, pass an exam, and pay a fee. But in addition, the legislation eccentrically requires licensed wildlife control operators to capture and remove animals in ways that aren’t lethal, painful, or even “stressful” for the animal.

While states are the primary malefactors when it comes to occupational licensing, the Obama administration, of course, would not want to miss out completely on a means of controlling economic activity. And so the Internal Revenue Service has recently adopted  regulations  requiring tax return preparers who aren’t lawyers or CPAs to obtain a tax preparer identification number and to pay a user fee. The IRS intends to require competency testing and continuing education of tax return preparers.

On a larger scale of licensing, the Obama administration has capriciously denied permits to businesses that want to produce energy. Last month the Environmental Protection Agency vetoed a water permit that the Army Corps of Engineers had granted to a West Virginia coal mine in 2007 after nearly a decade of study.

The administration has imposed a series of unlawful moratoria on drilling in the Gulf of Mexico. Companies servicing offshore oil and gas drilling argued before U.S. District Judge Martin Feldman, a fiery intellectual, that the first moratorium violated the Administrative Procedure Act because it was arbitrary and capricious. Writing that he was “unable to divine or fathom a relationship between the [government’s] findings and the immense scope of the moratorium,” Judge Feldman issued a preliminary injunction against the moratorium.

The Interior Department quickly issued another moratorium, which it withdrew in October. Since then, the administration has imposed a de facto moratorium by not granting any permits for deepwater drilling in the Gulf. Finding those evasions to be in contempt of his preliminary injunction, Judge Feldman ordered the government to pay the companies’ attorneys’ fees. And last week he ordered the Bureau of Ocean Energy Management to act on five pending permit applications within thirty days, saying that the “permitting backlog is increasingly inexcusable.” So far, neither the court’s order nor soaring oil prices have awakened the Bureau of Ocean Energy Management.

Perhaps the ardor for freedom will circle back from the Middle East to the United States without any unemployed miners or offshoremen having to set themselves afire.

The GOP is prepping the battlefield badly II.

It’s Easier to Blame Congress:

Whereas the 1995 shutdowns involved presidential vetoes, a 2011 version could result from Congressional failure to send the president a continuing resolution in the first place. The blame will thus fall on Capitol Hill instead of the White House. True, Democrats control the Senate and would arguably share responsibility for a deadlock. But as was the case 16 years ago, a gifted communicator sits in the White House and sets the tone for his fellow Democrats. Together, they will point the finger at the G.O.P. If the Republicans are as splintered as they were in 1995, they will again lose the war of perceptions.

RTWT.

Part I here.

Conflicts of Interest Inside of Government

You know, it amazes me that people never see conflicts of interest internal to government itself. The USDA guidelines are  a prime example.

Think about it. The guidelines purport to be an objective assessment of what food we should all buy and consume, but what is the USDA primary mandate? Oh, yeah, to advance the interests of agricultural producers in the US. It’s the Department of Agriculture, not the Department of People Who Eat.

Like all “regulatory” agencies USDA has long ago succumbed to regulatory capture, and now exists largely as just a means for people who make their livings in agriculture to advance their economic interests using the power of the state. The USDA only has an institutional incentive to advance the welfare of food producers. The USDA has no institutional incentive to look out for the welfare of food consumers.

By sheer coincidence, the USDA recommendations for the percentage of a particular type of food we should eat always seems to roughly parallel the relative economic size of the agricultural sector that produces that food. I wonder why?

One of the biggest reforms we could make in government would be to legally separate promotional, regulatory and research powers.

Read more