Free Markets, Free People
The following statistics were released today on the state of the US Economy:
The trade deficit in December widened to –$48.8 billion as import growth outpaced export growth. The deficit was somewhat worse than expected.
The University of Michigan’s Consumer Survey Center reports consumer sentiment declined to 72.5 last month.
“Arab Spring” lurches on:
The country that witnessed the Arab world’s most sweeping revolution is foundering. So is its capital, where a semblance of normality has returned after the chaotic days of the fall of Tripoli last August. But no one would consider a city ordinary where militiamen tortured to death an urbane former diplomat two weeks ago, where hundreds of refugees deemed loyal to Col. Muammar el-Qaddafi waited hopelessly in a camp and where a government official acknowledged that “freedom is a problem.” Much about the scene on Wednesday was lamentable, perhaps because the discord was so commonplace.
This is the result of not knowing who we were supporting. Apparently we assumed that nothing could be worse than Gadaffi.
It may turn out that we were wrong.
“Where is the rule of law?” asked Ashraf al-Kiki, a vendor who had gone to a police station, the Tripoli Military Council and a militia from Zintan in pursuit of compensation after militiamen shot holes in his car. The scent of the kebab he grilled wafted over speakers playing the national anthem. “This is the rule of force, not the rule of law.”
Out of the frying pan and into the fire.
It’s hard to pretend that our intervention improved the lives of Libyans or significantly advanced their freedoms given the current situation.
Bashir Brebesh said the same was true for the militias in Tripoli. On Jan. 19, his 62-year-old father, Omar, a former Libyan diplomat in Paris, was called in for questioning by militiamen from Zintan. The next day, the family found his body at a hospital in Zintan. His nose was broken, as were his ribs. The nails had been pulled from his toes, they said. His skull was fractured, and his body bore signs of burns from cigarettes.
The militia told the family that the men responsible had been arrested, an assurance Mr. Brebesh said offered little consolation. “We feel we are alone,” he said.
“They’re putting themselves as the policeman, as the judge and as the executioner,” said Mr. Brebesh, 32, a neurology resident in Canada, who came home after learning of his father’s death. He inhaled deeply. “Did they not have enough dignity to just shoot him in the head?” he asked. “It’s so monstrous. Did they enjoy hearing him scream?”
The government has acknowledged the torture and detentions, but it admits that the police and Justice Ministry are not up to the task of stopping them. On Tuesday, it sent out a text message on cellphones, pleading for the militias to stop.
“People are turning up dead in detention at an alarming rate,” said Peter Bouckaert, the emergencies director at Human Rights Watch, who was compiling evidence in Libya last month. “If this was happening under any Arab dictatorship, there would be an outcry.”
Hard to call that success, isn’t it?
I don’t imagine anyone would argue that it is supposed to be like this, however, this is reality in one city in one state and I’d guess that its true in most places to one degree or another. The place in question? San Francisco, where a woman wanted to open a simple ice cream shop.
Ms. Pries said it took two years to open the restaurant, due largely to the city’s morass of permits, procedures and approvals required to start a small business. While waiting for permission to operate, she still had to pay rent and other costs, going deeper into debt each passing month without knowing for sure if she would ever be allowed to open.
“It’s just a huge risk,” she said, noting that the financing came from family and friends, not a bank. “At several points you wonder if you should just walk away and take the loss.”
Ms. Pries said she had to endure months of runaround and pay a lawyer to determine whether her location (a former grocery, vacant for years) was eligible to become a restaurant. There were permit fees of $20,000; a demand that she create a detailed map of all existing area businesses (the city didn’t have one); and an $11,000 charge just to turn on the water.
Imagine how many potential business owners would have said “the hell with it” and, if possible, gone elsewhere or shelved the idea completely? Had that happened in this case, had the woman in question not had the patience of Job and enough money to weather the 2 years in question, 14 full and part-time workers wouldn’t be employed there.
That’s the problem with stories like this – its hard to get a handle on how many businesses have been discouraged by such a permitting and regulation regime, but you have to assume they are plenty.
It should not take two years for a government to say “okay” to a business. Nor should there be exorbitant fees associated with it.
Thankfully San Francisco has begun to recognize the enormity of its problem and attempt to do something about it. A little thing called “reality”, in the guise of the headquarters for Twitter, has finally begun to bring some government officials around:
“The city has had the reputation of being a difficult place, and a hostile place, to do business,” said Mark Farrell, the city supervisor who has the most private-sector experience (he still operates a venture capital firm). “We’re changing the dialogue.”
According to Mr. Farrell, a critical shift occurred last year when supervisors approved a tax incentive to keep the headquarters of Twitter, the social network, in the city after the company threatened to move.
But he admitted that such actions were relatively easy compared with reforming the city’s entrenched bureaucracy. “To change the inner workings of government is a longer proposition,” he said.
Christina Olague, a former Planning Commission president who was recently appointed city supervisor, said that planning codes governing businesses had ballooned over the years to become hundreds of pages long. “It’s so convoluted,” she said. “It’s so difficult for these businesses to move ahead.”
But the byzantine, time consuming and costly regulatory process, for the most part, still remains. Check out this animated video which illustrates how absurd it can be.
As we’ve said any number of times here, if government wants to play a role in the economy and the economic recovery, perhaps the best role it can play is, for the most part, to get the hell out of the way.