Should You Need a Government License to Make an Honest Living?

It seems like in too many cases the answer has become yes. As the following Institute for Justice video will make clear there are far too many occupations that impose licensing requirements that really have nothing to do with public health and safety and everything to do with protecting the turf of incumbents. The video relates how in 1950 only 1 in 20 workers needed a license for any particular occupation. Now it's 1 in 3. The Institute looked at 102 low to mid-level occupations to see what barriers were thrown in front of people who might desire to make a living in those occupations.

In my state, Arizona, for example, to be able to cut and style hair it is necessary to get a license that requires 1,500 hours of instruction. Not usually one to look to federal government requirements as an example, the Federal Aviation Administration actually seems to have the right balance. To qualify for an Airline Transport Pilot's license, an ATP, the requirement is for a total minimum flight time of 1,500 hours. However, unlike the requirement of 1,500 hours to wield a pair of scissors and possibly do a bad haircut, the actual minimum legal requirement for instruction is roughly 55 to 75 hours spent with an instructor, depending on how you interpret Part 61 of the Federal Aviation Regulations (FAR). The rest is minimum logged time in various buckets; total flight time, cross country, night, instrument, etc. Most of the time is individual practice. You move on to various license levels by FAA check rides your instructor signs you off for when you are ready.

To require so much instruction time to cut hair and so little to gain a license to fly an airlplane that is potentially carrying  hundreds of people is ridiculous on its face. 

Now, with that in mind, here is the video.

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Will LightSquared be the Next Political Favoritism Scandal?

The Solyndra mess, involving $535 million in taxpayer guaranteed loans to a company that the Obama Administration favored and that just went bankrupt only a year after receiving the loan is dominating the headlines now. However, a new scandal may be brewing.

 

There’s a White House scandal involving favoritism towards a specific company high on President Obama’s political agenda — and it’s not Solyndra.

In this case, the company owner happens to be a big Democratic Party donor. And in the pursuit of giving preference to a specific company, the White House undercut a legendary four-star general and potentially undermined U.S. national security. Adding fuel to the explosive story: at one time President Obama was a personal investor, with $50,000 of his own money.

Are we starting to see a pattern here? Taxpayer funded largesse is being bestowed on politically favored companies whose heads and/or major investors just coincidentally happen to be major Democratic Party donors, whether the business is viable on its own or not, while established companies whose heads just coincidenatlly happen to favor Republicans (and are non-union)  are being raided by armed stormtroopers federal agents over the question of whether a certain kind of wood being used to manufacture guitars was obtained in compliance with the laws of another country.  Yet a competing company, which uses the same wood but just happens to be a union shop and whose head happens to donate money to Democrats is left alone. This doesn't look, feel or smell right.

The Obama investment in LightSquared is referred to in the past tense so he doesn't appear to be in a position to profit from any success the company might have, at least not directly. However, through campaign donations from the executives and investors in some of these companies he seems to be making out rather well indirectly.  

This kind of activity is the very definition of what crony capitalism is and these scandals, which seem to be multiplying and growing, is more worthy of some tinpot dictatorship than the once (and hopefully future) greatest country on Earth.

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Obamacare Conflict of Interest - Major Democrat Donor IT CEO Appointed to Health & Human Services Health Information Technology Policy Committee....

.... And her company stands to benefit from what it recommends. Andrew Breitbart's BigGovernment has the story:

The Washington Examiner’s Lachlan Markay broke news this week about the appointment of a major liberal donor, Judith Faulkner, CEO of Epic Systems Corporation, to the Health & Human Services Health Information Technology Policy Committee. Markay reports that Judy Faulkner was appointed to a stimulus-created board that is charged with disbursing billions of taxpayer dollars for health information technology adoption despite her opposition to the administration’s interoperability goals, which require that health records be shareable across platforms.

Faulkner and her company oppose the president’s vision for health IT, but Epic employees are massive Democratic donors. They’ve given nearly $300,000 to Democrats since 2006, according to the Center for Responsive Politics.

Faulkner is also the sole representative for the health IT industry on the committee, which has the power to set industry standards. Does anyone doubt that any adopted standards will work to the benefit of Epic Systems? This is a serious conflict of interest for Epic Systems and the Department of Health and Human Services. It is, however, a fairly predictable conflict of interest, highlighting one of the myriad objections to central planning known as regulatory capture. Simply put, regulatory capture is when government agencies work in the interest of specific commercial interests instead of their original charter, and is extremely common due to the fact that industry has the strongest incentive to assume control of the regulatory process. Given this, why should Americans trust any decision made by HHS on Health IT policy?

Sadly, this is not terribly surprising. Actually, with this corrupt an administration it's all too predictable.

Read the whole thing.

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The Frailty of Big Business

Johnathan Pearce at Samizdata notes some good observations by author Matt Ridley (The Rational Optimist: How Prosperity Evolves) about how businesses succeed or fail over time based on how well they serve their customers while no government agency, however incompetent, ever goes out of business.

Related: Also at Samizdata; Brian Mickelthwaite posts as Samizdata Quote of the Day, a quote from Professor Steven G. Horwitz on what can happen when corporations can co-opt government to rig the rules to favor themselves and reduce competiton, i.e., rent-seeking.

Read both of them.

Occupational Licensing and the Economic Damage It Has Done

The Institute for Justice, a libertarian public interest law firm, has produced a short YouTube video about the explosion in occupational licensing requirements since the 1950's when only 1 in 20 people needed government permission to make a living. Now it's 1 in 3. It isn't all just the government driving this though, it's industries using government to erect barriers to entry for potential competiors, i.e., rent-seeking behavior.  Anyway, here you go; five minutes well spent:

(Via Instapundit and Reason's Hit & Run)

Edward P. O'Driscoll: An Economy of Liars

The Cato Institute's Gerald P. O'Driscoll has an op-ed in today's Wall Street Journal entitled, "An Economy of Liars." It's a great summary of how crony capitalism, rent seeking and regulatory capture distort markets and end up stealing our wealth. I agree with the whole article, but this part is worth highlighting:

Classical liberals, whose modern counterparts are libertarians and small-government conservatives, believed that the state's duties should be limited (1) to provide for the national defense; (2) to protect persons and property against force and fraud; and (3) to provide public goods that markets cannot. That conception of government and its duties was articulated by the Declaration of Independence and embodied in the U.S. Constitution.

Modern liberals have greatly expanded the list of government functions, but, aside from totalitarian regimes, I know of no modern political movement that has shortened it. While protecting citizens against force, both at home and abroad, is the government's most basic function, protecting them against fraud is closely allied. By the use of force, a thief takes by arms what is not rightfully his; he who commits fraud takes secretly what is not rightfully his. It is the difference between a robber stealing brazenly on the street and a burglar stealing by stealth at night. The result is the same: the loss of property by its owner and the disordering of civil society. And government has failed miserably to perform this basic function.

Read the whole thing.

I've Just Cut My Last Tie to GE.

I just sold my GE stock. I'm a former employee of GE, or a refuGE as I sometimes like to call myself. I had a number of shares that I accumulated in my 401K while I was working there and subsequently moved to a Rollover IRA. Ever since Jeff Immelt took over the tiller from Jack Welsh, the stock has gone sideways or down and I believe the first commenter to this opinion piece at the Washington Examiner about the hiring of Linda Daschle as a lobbyist has summed up what GE has become quite well:

"GE has become the perfect example of a so called capitalistic company engaging in pure rent seeking. They want Congressional subsidies for things like wind mills and others of their product lines. "

The opinion piece details some of the other government entanglements:

General Electric, a top-20 source of funds for Obama in 2008, and owner of the Obama-friendly MSNBC, already has strong ties to Democrats, but the company has bolstered that relationship, according to recently filed federal lobbying registrations
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GE's transportation business has hired as a lobbyist Linda Hall Daschle, wife of Tom Daschle, the former Senate Democratic Leader and Obama's first pick to head the Department of Health and Human Services. Mrs. Daschle will lobby on issues including Amtrak, high-speed rail, and freight rail, the lobbying form says. Obama has declared support for added federal funding for high-speed rail.

GE is also a member of the U.S. Climate Action Partnership, which lobbies for restrictions on greenhouse gas emissions.

When Jack Welsh took over as CEO of GE back in 1980 he had a fairly simple philosophy for running the various GE businesses; you were either number one or number two or have a plan for getting there pretty quickly in whatever line of business you were in. Otherwise, you got out of that line of business. It was a focused, effective management philosophy and the market rewarded GE for it for many years with a healthy stock price. What should have been added to that basic formula is that you had to be number one or number two without government subsidies. If the business isn't meeting market share and return requirements without a government subsidy, it isn't a business a company should be in because government involvement distorts decision making. GE is becoming excessively entangled with government and I think the market has been reacting to that. As I don't see this situation changing any time soon, I finally decided that it's time to redeploy my capital elsewhere.

James V. DeLong: The Coming of the Fourth American Republic

Writing in The American, James V. DeLong lays out the thesis that the United States is about to enter what he calls the Fourth American Republic. American Republics last about 70 years. The first lasted from 1787 to the Civil War, the second from the end of the Civil War to the beginning of the New Deal and the third, which he calls the Special Interest State has lasted from then to now. He expects that it will collapse of its own weight in the not too distant future.

"The needs of the Special Interest State have also come to dominate electoral politics. Both parties have become alliances of special interests. The focus of conflict is on the fact that most people belong to more than one group, and so electoral contests focus on emphasizing one or another group identity. Only a small band of sort-of Republicans holds out—lonely free marketers reading the Wall Street Journal by flames kindled from
old issues of The Public Interest—regarded as amusingly quaint by the other players."

A little further on he continues:

"But it is more likely that the Special Interest State has reached a limit.

This may seem a dubious statement, at a time when the ideology of total government is at an acme, but it is not unusual for decadent political arrangements to blaze brightly before their end. Indeed, the total victory of the old arrangements may be crucial to bringing into being the forces that will overthrow it. In some ways, the grip of the aristocracy on 18th-century France tightened in the decades leading up to 1789, and the alliance-of-states idea could have lasted a while longer had the Confederacy not precipitated the crisis. So the utter triumph of the Special Interest State over the past 15 years, and particularly in the recent election, looks like the beginning of its end."

He goes on to make his case as to why the Special Interest State is going to have to give way to the Fourth Republic and though he isn't sure exactly what shape it will take, he is confident that it will be another democratic republic because it is just in our national DNA.

The article is both worrying (major change is always a little worrying because of all the unknowns involved) but also hopeful because he seems to take the view that whatever emerges will be better that what we have now.

Read the whole thing.

Atlas Shrugged - Maybe More Prophecy Than Fiction

Stephen Moore penned an op-ed in the Wall Street Journal yesterday, pointing out some eerie similarities between the events in Ayn Rand's classic Atlas Shrugged and our current economic/political situation. It's a long (1,000+ pages) book, in rather small type and can be heavy going at times, but it's worth reading. If you don't have the patience for that, at least go read the article. A sample:

"For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism."

and

"The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls." "

Reason TV on the Folly of Turning Food Into Fuel

Reason TV has a video out that touches on several points I've posted on before about corn-based ethanol. If you're a glutton for punishment you can go back and look at them here, here, here, here, here and here. Or you could watch the video:

Via Instapundit)

Warner-Lieberman Bill May Die - That's a Good Thing

I certainly hope this news is true. The Warner-Lieberman cap and trade bill for carbon is an economy killer that will raise energy prices and have no impact whatsoever on the climate. It will benefit a very few companies that have become very adept at rent-seeking.

"Businesses supporting Lieberman-Warner stand to profit from clean-energy or energy-efficiency iniatitives. GE, for instance, sells wind turbines, compact fluorescent lightbulbs, and energy-efficient locomotives and aircraft engines. Just this week, GE and the oil-field services firm Schlumberger announced plans to work together on clean-coal technology.

Utility companies Exelon, FPL Group, NRG Energy and PG&E Corp., which signed a letter supporting the bill, are developing nuclear energy, wind or solar power, or so-called clean-coal plants. They would gain as the costs of burning coal in conventional plans goes up. About 50% of electricity in the United States comes from burning coal."

They are merely trying to hobble their competitors at our expense. (Full disclosure: I am particularly upset with GE because I own stock in that company. I am what I call a refuGE, I used to work there). The media have completely bought into the faulty premise that carbon dioxide causes global warming, as evidenced by this passage from the article: " ...Companies would need permits to emit pollutants that cause global warming."

No one has even established correllation, let alone causation and global average temperature peaked a decade ago. In fact, this past Winter saw global cooling that wiped out all of the temperature gains of the last century. The most telling part of the article is this:

""I believe in cap and trade. I believe we ought to put a price on carbon," [Duke Energy CEO] Rogers says. But senators who want to auction permits, and then use the money for a variety of projects - ranging from deficit reduction to water projects to job training - threaten to turn the climate-change bill into the "ultimate in earmarking.""

Once again, this legislation is not about what's good for the Earth, or for the US economy. It's another opportunity for the Congress to pass a huge tax increase by the back door and acquire even more power by redistribution of the spoils to their favored constituencies (who are not likely to be the voters).

Update: More on correlation of CO2 and temperature here.