free trade & free markets

Apple is on trial for refusing to pretend that the company has done something wrong.

In 2009, Apple invited five major publishers to sell e-books through the forthcoming iPad, on the basis of the “agency model.” The publishers would set the prices, Apple would take a 30% cut. Apple also required that the e-books not be sold more cheaply elsewhere.

The publishers were happy to agree because Amazon had been buying new e-books wholesale and steeply discounting them, sometimes at a loss to itself, in order to sell them at $9.99. In the eyes of the publishers, this price seemed too low a benchmark. Apple’s deal gave them new clout in negotiating with Amazon.

The government says average book prices rose in the wake of this “conspiracy.” Apple says prices declined. It’s irrelevant.

To charge a price that some persons dislike violates nobody’s rights. Nor does stipulating terms of contract that a prospective partner dislikes and may reject. Anti-trust law has nothing to do with justice. It’s a bludgeon that some businesses — in conspiracy with the government — use to thwack competitors.

No violation of anyone’s rights has even been claimed in this case, let alone established. Yet five innocent parties have been forced to pay tens of millions to the government and accede to curtailment of their right to contract. And Apple, having refused to be bullied, must defend itself in court.

That’s the crime, and government officials are the ones committing it.

This is Common Sense. I’m Paul Jacob.

No one is really fit to “run the economy.” The pretense of the ability can be fun to watch, amongst economists as well as pundits. But because they’re doing the impossible, what they say can lurch from wisdom to utter folly in the space of a paragraph.

Neil Irwin, at the Washington Post, admits that the Federal Reserve’s current policy of pumping more and more money into the economy may finally be working, “but that may not be a good thing.”

I suspect he’s right.

But not for the right reason.

Irwin notes that the Fed “in September introduced a policy meant to boost housing and stock prices, and now, nine months later, housing prices and stock prices have risen quite a bit. Enough, indeed, to (so far) offset the impact of higher taxes that went into effect Jan. 1 and federal spending cuts that took effect March 1.” But the problem, he goes on, “is that these channels through which monetary policy affects the economy tend to offer the most direct benefits to those who already have high incomes and high levels of wealth.”

Irwin sees the problem as inequality: the policy helps the rich get richer and does little for the poor. His solution is fiscal policy that throws more money directly at the poor.

Yet there’s not much reason to believe his preferred giveaway would actually “stimulate” the economy. The Fed’s current policy, on the other hand, may stimulate, a bit, but will lead to a new boom-bust cycle.

The poor need jobs; the rich need to invest. But all this requires a degree of stability and trust and sustainable prices — not government-knows-best tinkering with the money supply. Or yet more deficit spending.

This is Common Sense. I’m Paul Jacob.

Any number of economists will tell you that medicine just has to be different from other goods and services provided on the market. They will offer elaborate theories to explain, for instance, why competitive markets won’t work for health care, and why more government is necessary, and why, in fact, today’s hospitals don’t publish their prices.

I see this mainstream “explanation” as mere apologetics, designed to justify evermore government. The truth is that medicine is “different” because legislation — at local, state, and federal levels — has made the industry different. It’s an accident of history, not something “natural” to this particular market.

But, as Obamacare further consolidates medicine under the government rubric, there appear some daring examples of non-compliance. The latest is from Dr. Michael Ciampi, of South Portland, Maine, whose family practice group has stopped accepting insurance payments of any kind, public or private.

Posting its prices on the Web, Ciampi Family Practice claims to offer substantial savings over other providers. And other benefits, too, including house calls:

Because we no longer contract with insurance companies, Medicare or Medicaid, we can be more flexible and innovative. We use technology when it helps us take better care of patients, but we refuse to use it for technology’s sake. We will not spend our visit staring at a computer screen instead of looking at you. We can also spend more time with patients than the typical provider in a “big box” medical practice. . . . We do not have physician assistants or nurse practitioners.

Ciampi is not the only (or biggest) provider to do this.

Could competition just erupt without a government-provided “solution”? Could “the market” provide the leadership medicine needs now?

This is Common Sense. I’m Paul Jacob.

The business of business is to profit by helping others. The business of government is to make sure that businesses don’t profit by cheating others.

Unfortunately, sometimes it’s the governments that cheat.

Take the airline industry. Though substantially deregulated by the early 1980s, government has not treated it in an exactly laissez faire manner since. First there are the taxes, quite heavy. And recently the Department of Transportation decided that it must regulate the way in which airlines may advertise their prices . . . and the taxes. That is, the DOT insists that the “total price” — by which it means the price-plus-tax — must be shown prominently, with the tax portion “presented in significantly smaller type than the listing of the total price.”

Talk about regulatory micromanagement!

Now, this rule isn’t something Congress cooked up. It’s the result of a bureaucracy gone wild.

And the rule has one obvious effect: It shields government from consumer criticism, showing bureaucrats at their most self-serving. About one fifth of every airline ticket goes to the government, and folks in government don’t want you to know that.

This being the case, you might think — as George Will does — that the First Amendment would apply, especially since the First Amendment is now routinely held as protecting political speech more strictly than commercial speech. But, so far, courts have ruled for the taxing and regulating bureaucrats, not the competitive airlines. Or consumers.

Frequent fliers (I’m one) should hope the Supreme Court justices take up the case, which shows why economic and political freedom go best together.

This is Common Sense. I’m Paul Jacob.

That might as well have been the headline of the Spiegel Online article. What else could Der Spiegel mean by the words “Health Be Damned: Denmark Hopes Cheaper Soda Will Boost Economy” except that Denmark’s government is endangering the lives of citizens merely to promote their prosperity and to respect their rights to life, liberty and the pursuit of happiness?

Letting individuals again govern their own beverage intake, unimpeded! How is that not tantamount to shoving them over a cliff?

On the other hand, if you live in Denmark, enjoy soda, and dislike being harassed for doing so — thank goodness for tax competition.

Steep new taxes on drinks like beer and soda have been sending Danes across the border for these items. They have long shopped in Germany anyway, but the “sinful drink” taxes have inspired an increase in the international jaunts. Research by a Danish grocers’ association suggests that over the past year, members of some 57 percent of Danish households have zipped over to Germany to buy beverages onerously taxed at home. Denmark officials therefore plan to phase out the new taxes.

The government has already abandoned a notorious “fat tax” on foods with saturated fats. It seemed that Danes disliked the higher prices and unemployment caused by the tubby tax.

At least for now, then, Denmark officials have declared defeat on key fronts in the paternalistic war on soda, fats and liberty.

So, take heart, victims of America’s nanny state! The incursions are reversible.

This is Common Sense. I’m Paul Jacob.