Free to Choose

Massive new taxes and regulations on energy are inevitable in an Obama administration. Did you know that Carol Browner, the newly-appointed head of the Environmental Protection Agency (or “Energy czar), is a committee member of a group called Socialist International? See for yourself.

Going off Isaac’s last post, here is another thing to not be surprised about when it comes to government: waste. You may, however, get mad when you read Senator Tom Coburn’s (R-OK) latest oversight report on wasteful spending, “2008: Worst Waste of the Year.” Here are some examples of how the Federal government spends your hard-earned tax dollars:

• $188,000 for Lobster Institute in Maine, home of the “LobsterCam”
• $1 million for bike paths on Louisiana levees while levees await basic repairs
• $2.4 million for a retractable shade canopy at a park in West Virginia
• $24.6 million for the National Park Service’s 100th year birthday in 2016 - 8 years early
• $3.2 million on a blimp the Pentagon does not want
• $367,000 wasted by a Texas school board on items like an inflatable alligator and under-the-sea waterslide, among other things
• $5 million for a bridge to a zoo parking lot in St. Louis
• $9,000 for a non-functioning airplane-shaped gas station in Tennessee
• $300,000 for specialty potatoes for high-end restaurants

Another homegrown gem from the report:

• Renovating Old Tiger Baseball Stadium – Detroit ($4 million)

“In 2000, the Detroit Tigers baseball team moved out of Tiger Stadium after calling it home for eighty-eight years. Demolition of the stadium was well underway when the decision was made to stop, due to the efforts of the Old Tiger Stadium Conservancy, an organization formed to preserve the semi-demolished remains as a ‘public park, youth sports venue, and destination for baseball fans.’ Fortunately for the conservancy, taxpayers are now coming through in the bottom of the ninth with a $4 million federal grant to renovate the old stadium, in addition to several ‘federal tax credits.’ One city developer, noting that the value of the land would be greater if the stadium were cleared away, remarked, ‘To try to raise money to just hold on to a portion of an old stadium might not be easy.’”

[Cross posted at Fiscons.com]

Politicians in the U.S. that are pushing for a cap-and-trade regulatory regime intended to reduce carbon emissions should take notes on EUETS, the European Union’s poorly-designed and poorly-executed attempt at establishing a system of emissions trading. It would be misleading to say that implementing an efficient and cost-effective cap-and-trade system in the U.S. is a pipe dream. Such a phrase is far, far, too generous. Cap-and-trade is a disaster regardless of who implements it.

The International Herald Tribune has a lengthy article describing the current state of EUETS. In summary, it ain’t pretty, benefiting rent-seeking industries with powerful lobbying capabilities while raising energy costs. And not surprisingly, it hasn’t reduced emissions.

1. More corporate welfare and lobbying: if the EU is an any example, a cap-and-trade system will have the opposite effect of “cleaning up” Washington. It is basic logic: give the government the sole right to hand out anything, and you get an increase in corporate lobbying and handouts.

“After heavy lobbying by giant utilities and smokestack industries, who argued their competitiveness could be impaired, the EU all but scrapped the idea of selling permits. It gave them out for free, in such quantities that the market came close to collapsing because of a glut.”

2. Rent-seeking: some win, most lose.

“The benefits won by German industry were substantial. Under the German national plan, electricity companies were supposed to receive 3 percent fewer permits than they needed to cover their total emissions from 2005 to 2007. The aim was to encourage them to make technical improvements that would reduce emissions and help the country meet its commitment under the Kyoto treaty.

Instead, the companies got about 103 percent of their annual needs, according to the German Emissions Trading Authority, which oversees the system in Germany. That surplus could have been sold for about €290 million at the peak of the market.”

3. Higher energy prices: you pay more to heat your home, drive your car, and cook your food.

“Major power consumers in Germany began receiving bigger electricity bills shortly after the system officially started in 2005, amounting to increases of about 5 percent each year. The biggest effect was on heavy users of power in industries like steel that - unlike households - buy power wholesale at prices that are less regulated.

Those customers were enraged, and they asked the German cartel office to investigate.”

4. No reduction in emissions.

“‘Every investment we make is linked to climate protection,’ Frech said. Yet so far there are few signs the system is cutting emissions. The amount of CO2 emitted by plants and factories participating in the system rose marginally in 2006 and 2007, according to the European Environment Agency. (Neither it nor the European Commission made any forecast before the system started about how it would perform.)”

Lest we forget that government is necessarily based on theft, Walter Williams reminds us:

“Evil acts can be given an aura of moral legitimacy by noble-sounding
socialistic expressions such as spreading the wealth, income
redistribution or caring for the less fortunate. Let’s think about
socialism.

Imagine there’s an elderly widow down the street from you. She has
neither the strength to mow her lawn nor enough money to hire someone
to do it. Here’s my question to you, and I’m almost afraid of the
answer:

Would you support a government mandate that forces one of your
neighbors to mow the lady’s lawn each week? If he failed to follow the
government orders, would you approve of some kind of punishment ranging
from house arrest and fines to imprisonment?

In Favor Of Slavery

I’m hoping that the average American would condemn such a government
mandate because it would be a form of slavery, the forcible use of one
person to serve the purposes of another.

Would there be the same condemnation if instead of the government
forcing your neighbor to physically mow the widow’s lawn, the
government forced him to give the lady $40 of his weekly earnings? That
way the widow could hire someone to mow her lawn.

I’d say that there is little difference between the mandates. While
the mandate’s mechanism differs, it is nonetheless the forcible use of
one person to serve the purposes of another.

Probably most Americans would have a clearer conscience if all the
neighbors were forced to put money in a government pot and a government
agency would send the widow a weekly sum of $40 to hire someone to mow
her lawn.

This mechanism makes the particular victim invisible, but it still
boils down to one person being forcibly used to serve the purposes of
another. Putting the money into a government pot makes palatable such
acts that would otherwise be deemed morally offensive.

This is why socialism is evil. It employs evil means, coercion or
taking the property of one person, to accomplish good ends, helping
one’s fellow man.

Helping one’s fellow man in need, by reaching into one’s own
pockets, is a laudable and praiseworthy goal. Doing the same through
coercion and reaching into another’s pockets has no redeeming features
and is worthy of condemnation.

Some people might contend that we are a democracy where the majority
agrees to the forcible use of one person for the good of another. But
does a majority consensus confer morality to an act that would
otherwise be deemed immoral?

In other words, if a majority of the widow’s neighbors voted to force one neighbor to mow her law, would that make it moral?

I don’t believe any moral case can be made for the forcible use of
one person to serve the purposes of another. But that conclusion is not
nearly as important as the fact that so many of my fellow Americans
give wide support to using people. I would like to think it is because
they haven’t considered that more than $2 trillion of the over $3
trillion federal budget represents Americans using one another.

Madison Rejected

Of course, they might consider it compensatory justice. For example, one American might think:

“Farmers get Congress to use me to serve the needs of some farmers.
I’m going to get Congress to use someone else to serve my needs by
subsidizing my child’s college education.”

The bottom line is that we’ve become a nation of thieves, a value
rejected by our founders. James Madison, the father of our
Constitution, was horrified when Congress appropriated $15,000 to help
French refugees. He said, “I cannot undertake to lay my finger on that
article of the Constitution which granted a right to Congress of
expending, on objects of benevolence, the money of their constituents.”

Tragically, today’s Americans would run Madison out of town on a rail.”

Chris Edwards at the Cato Institute promotes Matthew Lesko, the man in the money suit, for a cabinet position in an Obama Administration. Here’s why:

“I picked up my local beer magazine, On Tap, and was surprised to see a front page story on Matthew Lesko, the government subsidies guy who famously wears a question mark jacket. The question marks indicate that all you folks out there can get on board the federal gravy train, and Lesko can show you how.

As president-elect Barack Obama is trying to fill out his cabinet posts, I realized that Lesko would be perfect. I’m thinking maybe secretary of commerce because Lesko’s approach to commerce is to get everybody hooked on federal handouts. That’s exactly the same as Obama!

Obama has refundable tax credits for everyone, he’s got goodies for federal unions, and he’s got subsidies for health care, toddlers and college students, homeowners, prescription drug users, energy companies, and on and on.

Once President Obama gets all those new subsidy programs through Congress, Lesko would be the perfect salesman to travel the country and pump up excitement over a new era of subsidy-fueled prosperity.

Mr. Lesko, all your years of hard work making late-night TV commercials may pay off big time! All the Obama administration would have to do is change www.lesko.com to www.lesko.gov and Americans could start cashing in.”

The whole post here: http://www.cato-at-liberty.org/2008/11/21/obama-the-question-mark-man/

I have been encouraging my members in the University of Michigan College Libertarians to write simple and to-the-point letters to the editor to our student newspaper on issues of liberty. Here is one example from today, in response to an editorial advocating for a $25 billion taxpayer-funded handout to the Big Three automakers:

“When it comes to spending other people’s money, the Daily is awfully generous. That was the case in its editorial yesterday about a bailout for the Big Three (Bailing out our future, 11/18/2008).

A taxpayer-funded bailout for the Big Three can’t be defended on moral grounds because it is wrong to rob Peter to pay Paul, regardless of how many skilled lobbyists Paul may have in Washington D.C. Nor can it be defended on practical grounds, since this would be a subsidy for the bloated and inefficient management practices that got automakers here in the first place. A bailout would “spread the wealth” from poor taxpayers to rich executives.

Bailouts also misallocate resources by placing capital in the hands of politicians rather than market forces. Supporting Congress’s use of a limitless credit card that will be charged to our children and grandchildren to bailout private companies is morally reprehensible and confusing public policy. It would make more sense to throw our money down a hole.”

So try it! Spend twenty minutes of your day writing to your paper with a pro-liberty message. You have a good chance of getting published and to reach tens of thousands of students that likely don’t hear a free-market perspective in the classroom. For more great examples, check out the excellent blog Cafe Hayek.

The Institute for Humane Studies (IHS) is now accepting applications for the 2008-2009 Charles Koch Summer Fellow Program. Here are the details from Scott Barton, director of the program:

“This program is an intensive ten-week paid summer internship program that offers free-market policy experience and professional training. The 2009 program offers two types of internships: policy internships in Washington, DC and policy positions at state-based think tanks. A $1,500 stipend, furnished housing (or a housing stipend for state-based fellows), career workshops, and travel reimbursement are provided.

This program is a great opportunity for students that you meet through your organization. Recent interns at your organization may be especially well-suited applicants for the Koch program. To help you spread the word to those who may be interested, I wanted to pass along one of the short advertisements that we typically use to promote this program in our e-newsletters. Additionally, you will find detailed information, including PDF flyers and brochures to download, on the program website at www.TheIHS.org/intern.”

I can personally vouch for this program having done it last summer. IHS really goes out of their way to provide for the fellows, something that you won’t find too often interning in DC. I highly recommend the Koch program.

Apply here.

The real tragedy of the ongoing financial crisis is not the $700 billion bailout, the moral hazard that will accompany it, or the fact that our children and grandchildren will have to pick up the tab for the irrational spending habits of politicians. Instead, it is the false notion that “deregulation” and capitalism are to blame for where we find ourselves today. The answer isn’t so simple. John Stossel has more:

“It’s deregulation’s fault!”

That’s the conventional explanation for the economic mess.

Barack Obama said, “This is a final verdict on the failed economic policies of the last eight years … that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us”.

Is deregulation is the culprit? It can’t be. There was no relevant deregulation in the last 25 years. Meanwhile, highly regulated institutions eagerly bought risky government-guaranteed mortgages, stimulating excessive housing construction and an unsustainable price bubble.

Deregulation wasn’t the problem, and reregulation isn’t the solution.

It’s intuitive to assume that regulation prevents problems, but it’s rarely true. First, how would regulators know what to do? Leaving aside the bias they might have and the brutal fact that regulation is physical force, how can a small group of people understand the workings of a market sufficiently to regulate sensibly? Markets, especially financial markets, are far more complicated than any mind can grasp. They consist of many millions of participants making countless decisions on the basis of unarticulated know-how and intuition. To attempt to regulate such activity requires knowledge no one can possess.

You can find the whole article here at Real Clear Politics.

A GAO report released today details government waste and fraud at the Indian Health Services (IHS). The report tells the all-too-familiar tale of lax oversight of government property, including theft and mismanagement, costing taxpayers $15.8 million from 2004 to 2007. The best excerpt:

“For example, IHS disposed over $700,000 worth of equipment because it was “infested with bat dung.”

HT: Leslie at Swine Line.

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You can’t make this stuff up. The European Union currently has 34 regulations on “marketing standards” for vegetables. From the Washington Post,

“Consider the Class I cucumber, which must be ‘practically straight (maximum height of the arc: 10 mm per 10 cm of the length of cucumber).’ Translation: A six-inch cucumber cannot bend more than six-tenths of an inch. Following 16 pages of regulations on apples (Class I must be at least 60mm, or 2 1/3 inches, in diameter) come 19 pages of amendments outlining the approved colors for more than 250 kinds.”

And my favorite quote, from Gerald Ioli, the owner of an “upscale produce stand”:

“It’s a choice for the customer,” Ioli said. “He has enough information on the label to make a decision about what he wants to buy. It’s real competition.”

Right.

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