Category: free trade & free markets

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free trade & free markets political economy too much government

The Not-Unintended Consequences

Gavin Newsom, California, fast food, regulation

When bad outcomes are obvious, we can no longer call them “unintended consequences,” can we?

Take the case of California’s double-barreled attack upon “fast food”: last year’s push through the legislature of Assembly Bill 102 and Assembly Bill 1228. These regulatory schemes would have introduced collective bargaining into fast food franchises and enforced much higher minimum wage rates.

The two laws sparked an industry backlash, in the form of ballot referendums to halt the regulatory onslaught, which Steven Greenhut writes about at Reason. “In September, Gov. Gavin Newsom announced a ‘truce,’” Greenhut explains. “The industry pulled its ballot measure and agreed to a $20 minimum wage. In return, Newsom and unions limited the power of the Fast Food Council and removed joint-liability provisions.”

The concession on hiking the legal wage minimum was agreed to, notice, by the fast food lobbyists. Not the workers. 

As those familiar with elementary economics understand, when the costs of an input (like labor) are increased, alternatives to those inputs will be sought. So we can expect more replacements of workers with automation — as we’ve seen all around the country in fast food, especially at McDonald’s — as well as higher prices.

Which, in a state sporting huge homelessness and unemployment problems, will only hobble the one industry that helps the poorest members of society both in terms of consumer products (inexpensive food) and entry-level jobs (at fast food joints).

Perhaps California’s Democrats know full well what they are doing. They push crazy policies not because the negative outcomes are “unintended” or unforeseeable.

You see, it’s not disastrous for them.

This is Common Sense. I’m Paul Jacob.

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Why the Banks Are Failing Us

banking, surveillance, government, control

We depend on big businesses, especially upon banks. We pay for our food, clothing, medicines, and much else with little plastic cards from our banks. So when those cards stop working, all of a sudden — without warning — our hearts are going to do a bit more than beat just a little faster.

Why would there be big hiccups at all? 

As Brian Doherty remarks at Reason, it’s not just “frustrating when those businesses make seemingly arbitrary decisions that cripple your ability to function in a modern economy,” it’s hard to understand. After all, “the incentives of businesses are to, well, do business with customers.”

Why would banks, then, increasingly treat customers badly?

I’m not talking about the allegedly transient snag in the direct deposit system last week — apparently due to human error — but something more persistent, if scattershot.

Doherty found an answer in The New York Times, in an article “giving infuriating details of innocent Americans being cut off by their banks.” 

It should not shock the reader, Mr. Doherty explains, revealing: “the real cause of the banks’ seemingly arbitrary behavior is government rules designed to make sure it knows everything it can about citizens’ banking business, to discourage big cash transactions, and to ensure businesses the government disapproves of have as difficult a time as possible without being explicitly banned.”

Nearly ten years ago I wrote about it in a discussion of Operation Choke Point. Since then, in the words of the New York Times, “a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers.”

Who’ll be next?

This is Common Sense. I’m Paul Jacob.

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free trade & free markets general freedom too much government

Mass (Private) Transit

Washington D.C. metro, public transit, train

“Metro is dangling from a fiscal cliff,” hollers last Saturday’s Washington Post editorial headline. The “transit system faces a ‘death spiral’ starting next summer,” according to “the usually stolid pages of Metro’s financial projections.”

The Post informs that Metro’s “systemic budget problems have been compounded by pandemic-driven revenue shortfalls, inflation and the upcoming expiration of a federal bailout for transit systems.” 

Oh, what a cruel turn of events, Washington’s ill-mannered and unsafe transit system needs a bailout from local politicians . . . because the current financial bailout it receives from federal taxpayers is about to fizzle out. 

Life is tough. 

Metro has only about 70 percent of the funding it needs, so get ready for blood-curdling cries of “drastic service cuts”— until or “unless the region’s elected officials, along with Congress, devise a fix,” The Post tells us.

Hell of a way to run a railroad — not earning a profit. Constantly failing customers and just as regularly begging for more money from politicians who get that moolah from folks like me . . . who rarely if ever use the mass transit we are told is so essential to us. 

There’s a better way.

“Rail company Brightline began operating trains Friday from Miami to Orlando,” reports The Post, “using the fastest American trains outside the Northeast Corridor to become the first privately owned passenger operator to connect two major U.S. metropolitan areas in decades.

“The debut of the 235-mile, 3.5-hour ride completes a $6 billion private investment in Florida.”

With speeds “quicker than Amtrak’s” and fares “comparable to Amtrak’s and competitive with airfare,” Brightline chief executive Michael Reininger talks of “the beginning of a new industry and a blueprint for expanding rail in America.”

Two approaches. One uses my tax dollars and fails. The other uses private investment. 

And seems to be expanding.

Rather than complaining. And begging.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Slow Murder Is Still Murder

weather, climate change, government, power

Electricity providers must not beg the government to destroy them more slowly. 

“I’m not saying now’s the time to double down” on fossil fuels, pleads Lanny Nickel, chief operating officer of Southwest Power Pool, which helps provide electricity to 14 states. “I’m just saying now’s the time to slow down on the removal of [those] assets from our footprint.”

The assets Nickel means are oil, gas, coal.

Like others in the business of keeping the lights on, Nickel knows that if and when the percentage of fossil fuels in the utility industry “footprint” is coercively reduced to point oh one percent or whatever, wind and sunshine will not be taking up the slack. 

We’ll suffer, instead, from lots more brownouts and blackouts.

Nickel understands this. 

But begging regulators and politicians to go slower won’t discourage them. They’ll just gloat about how they’re making the utility executives sweat.

We should in fact be doubling down on fossil fuels, because these are the only always-reliable sources of electricity. 

Should solar and other sources of electricity become cheaper and more reliable, people won’t have to be compelled to increasingly turn to them. The transition would happen naturally, in the normal course of progress. 

And the notion that government will be able to fine-tune global weather if only we are forcibly deprived of our means of coping with the ups and downs of the weather is a willful delusion.

Electricity providers must not beg the government to destroy them more slowly, sure. But more importantly, the government should not be destroying them — and us — in the name of the religion of Climate Change at all.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets media and media people political economy too much government

Incredulity Doesn’t Cut It

dumpster fire, regulations, privatization

One of the objections people often make to the idea of private enterprise as a solution to government inefficiency is The Argument from Incredulity.

It’s not an argument at all, actually, just a harrumph and a guffaw: we cannot have free-market police, or fire suppression, or . . . garbage collection!

But of course all those things are successfully managed in the private sector.

No media outfit has a longer history of pointing this out than Reason magazine. So when the editors of Reason brought us Joe Lancaster’s “Government Waste Monopoly Pits Private Dumpster Business Against Garbage Bureaucrats,” yesterday, I hope they took a moment to revel in a little nostalgia. For this is the kind of story that made Reason what it is today, one of the best sources for retail political economy.

The tale tells of Steven Hedrick, an Arkansas man who put together a business renting out dumpsters — like you often see on construction sites, but smaller — which he would haul away after customers filled them. He built the business without ever going into debt, and then . . . came the government. 

“[I]n April 2022, the City Council in Holiday Island passed Ordinance 2022-004, which required all residents and businesses within the city to contract with the county sanitation authority, Carroll County Solid Waste (CCSW), for trash pickup and disposal services,” Reason informs us. “Anyone using private companies would have to switch, and anyone who did not have contracted trash service would have to sign up.”

And Hedrick’s little business must be . . . dumped.

What this is, at base? Sheer bigotry: preferring monopoly government to competitive private services.

For those of us who’ve been reading Reason for decades, it sports a familiar smell.

Just not a good odor, for the drive to monopolize everything stinks.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets too much government

Make Them Pay

California, Commiefornia, socialism, electricity

Thanks to renewable-energy mandates and other regulations, California muddles along with crippled power markets in which rolling blackouts are routine when demand for electricity is high and sun and wind are unavailable.

Apparently, this and other burdens on energy usage in the Brownout State are insufficient to fully immobilize everybody who relies on things that need to function. So the state’s utilities are preparing to also impose socialist billing on its customers.

Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison are proposing that the flat-rate component of power bills be based on income. Once regulators sign off, there is to be an ongoing transfer of wealth from richer to poorer.

The utilities aren’t acting independently. 

They’re obeying a legislative mandate.

In addition to a flat-rate component of utility bills that would be $15 for the poorest customers and $85 for the wealthiest customers, there would still be a component based on power consumption. So the impending looting of nonpoor customers could be worse.

The socialism isn’t full bore yet.

But I doubt that initial limits on this redistribution agenda would remain intact were the scheme implemented and to persist.

In addition to other objections, there is also the matter of how utilities will know their customers’ incomes. Will customers be required to report and prove these incomes? The central planners presumably regard this invasion of privacy as not worth fretting about. 

They’re too busy creating perfect equality . . . of brownouts.

This is Common Sense. I’m Paul Jacob.

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