Feb 232010

PajamasMedia has just published my latest OpEd, “Government Grab of Retirement Accounts a Matter of ‘Social Justice’“.

In this piece, I criticize the latest Obama Administration proposal to convert some of our private 401(k) retirement money into government annuities in order to help prop up the failing Social Security system. I also attempt to make the moral argument for the phasing out and eventual elimination of Social Security.

Here is the opening of “Government Grab of Retirement Accounts a Matter of ‘Social Justice’“:

Uncle Sam wants your retirement money.

The Obama administration has just solicited public comment on their proposal to take money from Americans’ private 401(k) retirement accounts and convert it into government-backed annuities. In other words, they want to take your money now to purchase U.S. Treasury bonds, then pay you a monthly sum later after you’ve retired.

Although this proposal is being initially portrayed as a voluntary choice, Americans already have the ability to purchase Treasury Bonds with their retirement money. Moreover, the Obama administration is considering making these annuities the default option. And as analyst Karl Denninger noted, “‘choices’ have a funny way of turning into mandates.” Nor is his concern unjustified.

In 2008, Professor Teresa Ghilarducci of the New School of Social Research testified before Congress proposing a similar scheme to convert private 401(k) accounts into government-run “Guaranteed Retirement Accounts” that would pay a 3% return. And in 2008, the Argentinian government attempted to nationalize private retirement funds to help cover its runaway deficit.

As the U.S. Social Security system moves ever closer to bankruptcy, the billions of dollars Americans have saved in their private retirement accounts will become an increasingly tempting target for our politicians…

(Read the full text.)

Sales in France

 Posted by on 19 January 2010 at 8:00 am  Economics, Government
Jan 192010

Although economic regulations in the US have become increasingly onerous, they’re still relatively mild compared to other Western countries.

For example, I just learned that stores in France must abide by a variety of insane laws in order to hold a sale.

On January 5, 2010, blogger “DirkBeauregard” in France wrote:

Hooray, the sales start tomorrow in France. A chance to pick up a few bargains, if you actually have any cash left after Christmas. There again, you can always spend the credit note you got when you took your Christmas presents back, or you can spend all the money you made selling your unwanted gifts on E-Bay.

So, sales in France. Like everything else in this country, there is specific legislation relating to sales – laws designed to stop unfair competition and protect small shopkeepers from those “all year” sales by large stores who can afford to sell some items at a loss.

In France out of the sales period, it is actually an offence to knowingly sell goods at a loss, again a measure designed to protect small shopkeepers from large retail groups

Trading laws stipulate that there are two periods for sales in France. Winter sales from January to February and summer sales from June to July. In each case, the sales last for five weeks. All goods on sale must have been in the shop for a minimum of thirty days prior to the sale date – no buying in cheap stock and selling it as a sale item. Reuctions must be visibly displayed in percentage terms. Labels must also show the old pre-sale price and the new sale price. Retailers are allowed to reduce their prices three times in the sales – after the first fortnight, and again in the final week.

Outside the official sale periods, retailers are allowed two weeks in the year, to use at their discretion, for extra sales such as pre-Christmas sales or spring sales.

Shops are allowed to run “special offers” on certain items of stock throughout the year i.e. – a rack of cheap “end of line” clothing.

Shops that are closing down, or refitting are allowed to hold sales – “everything must go” with written permission from local authorities.

(I corrected a few typos in the original post, but otherwise quoted it verbatim.)

How nice of the French government to protect consumers from the danger of being able to purchase goods from willing merchants at low prices year-round!

(Via Tyler Cowen.)

Brook on the Estate Tax

 Posted by on 12 January 2010 at 8:00 am  Economics, Government
Jan 122010

The January 9, 2010 edition of PJTV includes an interesting discussion by Yaron Brook and Terry Jones on the estate tax.

Apparently, due to a fluke in US tax laws, the estate tax for 2010 is zero percent. (It’s scheduled to go back up to 55% in 2011.)

Brook video

One of the points Yaron Brook discussed was this view expressed by Bill Gates, Sr. (father of the Microsoft founder Bill Gates, Jr) that, “Society has a just claim on our fortunes, and that claim goes by the name estate tax.”

Brook video

As Brook notes, this battle is not just over economics but over fundamental philosophy. Does wealth properly belong to “society” or to the person who created it? The way our country answers that question will determine our future.

The segment on the estate tax begins at 8:35 minutes, but I enjoyed watching the whole video. (You can click on either image above to go to the PJTV video.)

Dec 222009

Duke University professor John Lewis has a great essay up at PajamasMedia (12/22/2009) entitled, “Arbitrary Power, Dictatorship, and Health Care“.

Here is the opening:

The essence of a dictator’s method is not to write harsh laws and enforce them rigidly. The world’s most destructive thugs have wanted something different. They have wanted to impose their wills on a compliant populace using arbitrary power — power not limited by laws or constitution, but power that was open-ended, ill-defined, and could be expanded based on the whims of the moment.

Well-written laws are the enemy of the dictator. As philosopher Ayn Rand put it, “When men are united by ideas, i.e., by explicit principles, there is no room for favors, whims, or arbitrary power: the principles serve as an objective criterion for determining actions and for judging men, whether leaders or members.” Laws, properly formulated, are based on principles, and serve to translate those principles into firm criteria for judging particular cases. What a dictator wants is to be free of such principles and to use his power as he wishes.

Professor Lewis then proceeds to show how the current ObamaCare health bill gives an unprecedented degree of arbitrary power to bureaucrats to determine what sort of health insurance you may buy and what sort of health care you may receive.

Some examples:

If you are an employer, you will not escape punishment if a bureaucrat decides that your health plan is not “acceptable” and that you must be fined for your failure to meet his decision. If you are an individual who does not want to purchase full-coverage health insurance, but would rather buy catastrophic insurance that covers hospitalization only, your decision will not be “acceptable” and you may face a government audit and a new tax.

Do you have a serious disease? Does your doctor wish to readmit you to the hospital? A bureaucrat will decide whether or not you get treatment, based on a statistical analysis of the number of such readmissions by the bureaucrats: “excess readmissions shall not include readmissions for an applicable condition for which there are fewer than a minimum number (as determined by the secretary) of discharges for such applicable condition for the applicable period and such hospital” (Sec. 1151).

(Read the full text of “Arbitrary Power, Dictatorship, and Health Care“.)

As Dr. Lewis notes, the current health care debate is not just about health care. It’s about basic American freedoms.

(Crossposted from the FIRM blog.)

Hsieh LTE on Federal Debt

 Posted by on 21 December 2009 at 2:00 pm  Activism, Government
Dec 212009

The December 20, 2009 Denver Post has printed my LTE on the federal debt. It was written in response to their December 12, 2009 story, “Democrats plan nearly $2 trillion debt-limit hike“.

My LTE is 4th on this page:

Congress’ plan to cut the deficit by raising the debt limit now, then reducing spending later, is like trying to lose weight by eating a box of chocolate chip cookies now, then promising to exercise next week.

Paul Hsieh, Sedalia

(The Denver Post has a dedicated LTE section called “To The Point” for short LTEs. This one came in at 37 words.)

Sep 232009

The Fall 2009 issue of The Undercurrent includes two excellent articles.

It’s Not Stealing Because I Don’t Want It to Be” by Rituparna Basu
Summary: FileSharing – Rationalization = Theft

Putting a Price on Freedom” by Noah Stahl
Summary: U.S. – Freedom = Disaster

Sweden Lowers Income Taxes

 Posted by on 22 September 2009 at 11:00 am  Economics, Government
Sep 222009

Sweden’s government has just announced that it will lower income taxes in order to stimulate economic growth.

This is the same country that refused to bail out the Saab motor company.

You know that the US is in trouble when Sweden is acting more capitalist that the United States!

Amit Ghate OpEd on Principled Government

 Posted by on 16 September 2009 at 4:00 am  Activism, Government
Sep 162009

PajamasMedia has published Amit Ghate’s latest OpEd, “We Need a Return to Principled Government“.

Here is the introduction:

It’s widely recognized that our government is in dire shape. Our annual deficits are in the trillions of dollars. Unfunded entitlement programs run many times that. Lobbyists and earmarking rule Washington. Special interests, including public-sector unions, environmental groups, the AARP, and countless others, vie against one another for exorbitant privileges — all meted out at taxpayers’ expense.

Our most responsible mainstream news venues, like Forbes and the Wall Street Journal, often carry stories exposing the sobering facts. The analyses are penetrating, succinct, and eloquent. But the recommendations? Timid and trite. The best they can offer is to advise moderation: slow the growth of government here, cut back a program there, oppose a few details of the most onerous regulations, but basically resign oneself to the status quo.

It wasn’t always so. When faced with more difficult problems, our Founding Fathers imagined, created, and then fought for a radically new idea of government. Why were they able to do so, when our modern leaders and pundits can’t?…

(Read the full text of “We Need a Return to Principled Government“.)

Please feel free to link to it, leave supportive comments, and e-mail it to friends, family, elected officials, etc.

Congratulations, Amit!

Amit Ghate On Government Waste

 Posted by on 26 August 2009 at 3:01 pm  Activism, Government
Aug 262009

PajamasMedia has published Amit Ghate’s latest OpEd on the real cause of goverment waste.

This is Amit’s third essay for PJM. His example again proves that a citizen-activist can gain nation-wide exposure, if he is willing to publicly advocate his ideas and to clearly articulate them in a fashion that others can relate to.

Congratulations, Amit!

Simpson on Licensing

 Posted by on 22 May 2009 at 12:01 am  Government, Health Care
May 222009

During an earlier NoodleFood discussion on whether physicians should be forced to work during pandemics as a condition of retaining their medical license, the discussion turned towards the appropriateness of medical licensing in general.

Steve Simpson of the Institute of Justice had the following excellent comments to make in response to some questions. With his permission, I’m reposting his remarks here.

With respect to the question that doctors know up front that they agree to certain terms before they accept a license, hence they’ve voluntarily contracted to any associated obligations:

First, doctors do not consent to medical licensing in the sense in which that consent could legitimately be said to impose further obligations on them, the way one consents to the obligations in a contract.

Doctors do not get to decide to practice with a license or without a license. They are compelled to practice with a license whether they want to or not. So it is wrong to claim that they somehow consent to whatever obligations come with licensing. The state offers them the “choice” of practicing with a license or not practicing at all. That is not a choice the state has to authority to impose upon doctors, any more than it has the moral authority to offer citizens the “choice” of being enslaved citizens or not being citizens at all. I could say much more about this, but I’ll leave it at that.

With respect to the concern that private medical licensing groups would have a conflict of interest between setting high standards vs. retaining their members (and hence government would be better at protecting the public from shady practitioners):

Second, your view that private medical licensing would constitute an inherent conflict of interest because it would be doctors essentially engaging in self-regulation is wrong on many fronts. The fallacy at the root of your view is that individuals are capable of objectively governing the lives of others but not capable of governing their own lives because of their own self interest in the latter situation but not the former. There is much to say to this, and reading Atlas Shrugged would be a good place to start in learning why that view is the exact opposite of the truth, but let me say just a couple things.

You say that there is no guarantee that private medical boards will set high standards or improve them as necessary. But there is, and it’s the best guarantee that has ever existed–rational self interest. Doctors are neither insane, nor irrational (indeed, if they were, I submit they would not be doctors now would they). Nor are their patients. Doctors have no desire to harm or injure their patients, for, among other reasons, if they do they will not remain doctors for very long, they will have no patients, they will get sued, etc.

Moreover, there is no guarantee that state regulatory boards will set high standards either. Indeed, state regulatory boards have no incentive whatsoever to keep current with the latest developments in medicine and to ensure that their standards are high. What is the cost to them if they do not do so? They are committees, and thus each individual can always shuffle off the responsiblity for their failures to someone else, and even if they are found to have failed to set high enough standards, they suffer no consequences whatsoever. Their income and careers are not on the line, they will never be fined or sanctioned for their failures, and rarely, if ever, are any regulatory boards ever held accountable for their failures.

But there’s another mistake in your thinking about this that many people make, which is to consider any regulatory boards to be separate from the professions they regulate. This is flawed as a matter of both history and common sense. Historically, occupational licensing has typically been championed by the very professionals who are to be licensed. They do this both to “professionalize” their industries–because it is much better to be “state licensed” than simply to be qualified–and to make it much harder for others to compete with them.

As a result, all occupational licensing agencies or boards that exist today are composed of the very professionals that they regulate. This makes perfectly good sense when you consider that no one else is qualified to regulate them. Who is going to decide what the proper standards for doctors are but doctors? Likewise lawyers, plumbers, carpenters, engineers, architects, stenographers, morticians and funeral directors, barbers and cosmetologists, florists, etc. Do you know what standards even a licensed florist or interior decorator must meet to be qualified? I don’t. So who, but other florists and interior designers are going to regulate the florists and interior designers?

The term for what I am talking about is “regulatory capture,” which simply means that the idea that regulatory boards and agencies of any type are somehow “separate” from the industries they regulate and thus “objective” is utter, unbridled nonsense. It is a pipe dream. It is the sort of thing that we all believed in fourth grade when we thought that committees should run the whole wide world because that would be “fair.” My point is not simply that regulatory capture is likely to happen.

My point is that occupational and industrial or economic regulation is virtually impossible without regulatory capture, and, indeed, the regulators actively want the participation of the industries they regulate because otherwise they would not know what the hell they were doing. So your view that regulatory boards are somehow more “objective” and less “conflicted” than private boards is just not true factually and by the very logic of what such regulation aims to do.

And with respect to occupational licensing in general:

I could go on about occupational licensing all day. At IJ, we’ve done quite a lot of work on the subject, so if anyone is interested in more concrete examples of how licensing evolves in a given profession, check out our website, particularly the economic liberty cases and some of our research publications (www.ij.org). Or just shoot me an email (or ask a question here) and I’ll do my best to answer it or direct you to more information.

The idea that licensed workers voluntarily consent to the obligations imposed on them by states is really unjust in more ways than I mentioned. As a lawyer, I see this all the time.

The states in which I’m licensed are constantly imposing new requirements, like mandatory pro bono, additional “continuing legal education” and the like to which I never consented and that are burdensome, costly, almost always a complete waste of time, and useless from the standpoint of improving my qualifications. In fact, what does motivate me to do a good job is precisely the opposite of all of these (and more) unchosen obligations.

I am motivated by the chosen obligations I freely decided to accept when I became a lawyer. My own desire to produce excellent work, to give my client the best work I can, to win my cases or at least to outlitigate the other side at every step, and to constantly produce a better brief or better argument or better analysis than I did the last time out.

But even if those things didn’t motivate me, I and every other regulated professional would be motivated by the desire not to be embarrassed or to develop a bad reputation (and I have both colleagues, clients, and judges to worry about) or the other things I mentioned in my last post. In fact, I have never in my 15 year career met anyone who was ever motivated to produce good work by the states in which they were licensed. I could produce consistently incompetent and crappy work for years before any of the three states in which I’m licensed would take notice. My colleagues, my employer, my clients, and all the judges I appear before would take notice long before the state bars.

So my point is that the notion that we voluntarily assume the obligations of our state licenses is both a classic moral inversion–because it is in fact the voluntary obligations that motivate professionals and regulated occupations to produce high quality work–and it is illogical in that it contradicts the supposed purpose of licensing, which is to impose obligations on regulated occupations that they did not choose, because, allegedly, they can’t voluntarily regulate themselves. See the contradiction? On the one hand, the obligations of licensing are “voluntary.” On the other, licensed occupations can’t be self-regulated because “voluntary” regulation would not work. Heads they win, tails we lose.

Thank you, Steve, for this great impromptu analysis!

Here’s the full discussion thread, which includes links to additional articles on licensing by Alex Epstein (“End Government Licensing“) and Shirley Svorny (“Medical Licensing: An Obstacle to Affordable, Quality Care“).

(Crossposted from FIRM blog.)

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