One is domestic and the other is international. On the domestic front we’re again confronted with “good intentions” being horribly and oppressively executed via a bad law.
Wending its way through Congress right now is legislation called the “Stop Online Piracy Act” or SOPA. The intention is obviously laudable. As “piracy” is usually defined, i.e. the theft of copyrighted material, it is certainly a function of government to attempt stop and or prosecute theft.
The problem isn’t found in the intent of the law, as I said. It’s in how it would be executed – the regulations it must spawn to meet the law’s requirements.
Stephen DeMaura and David Segal write about the effect it would have on political campaigns (their particular focus), but it certainly doesn’t take much to translate that effect onto blogs and many other types of websites. Read through the scenario they outline that demonstrates a possible effect on a political campaign and then think blogs:
Here’s a plausible campaign scenario under SOPA. Imagine you are running for Congress in a competitive House district. You give a strong interview to a local morning news show and your campaign posts the clip on your website. When your opponent’s campaign sees the video, it decides to play hardball and sends a notice to your Internet service provider alerting them to what it deems “infringing content.” It doesn’t matter if the content is actually pirated. The ISP has five days to pull down your website and the offending clip or be sued. If you don’t take the video down, even if you believe that the content is protected under fair use, your website goes dark.
The ability of any entity to file an infringement notice is one of SOPA’s biggest problems. It creates an unprecedented “private right of action” that would allow a private party, without any involvement by a court, to effectively shut down a website. For a campaign, this would mean shouldering legal responsibility for all user-generated posts. As more issue-based and political campaigns utilize social media to spread their message and engage supporters, a site could be targeted not only for the campaign’s own posts but also for well-meaning comments from supporters.
It doesn’t take a particularly bright person to see how this sort of a law could be used in a broader sense to kill freedom of speech via frivolous attacks on a site’s content. If QandO embarks on a campaign against a particular politician, for instance, and uses content that it deems to be “fair use” (and may indeed be fair use in a legal sense as well), all it takes is one person anywhere, whether they have a real interest or standing in the case, to file a complaint about “infringing content” and we’re gone unless we remove it. Whether justified or not, the ISP is left in a position of having to enforce removal or face the cost of a lawsuit (whether a lawsuit is ever intended over the claim or not). They will obviously move to protect their interests and that means dropping the so-called offender like a hot rock.
It would effectively chill free speech.
As DeMaura and Segal note, there’s an alternative bill sponsored by Rep. Darrell Issa:
The Online Protection & Enforcement of Digital Trade Act would create a process for rights holders to protect their property that wouldn’t shut down entire sites over a small amount of copyrighted material. This legislation helps to solve copyright infringement while protecting the vitality of the U.S.-based Internet sector — an industry that has contributed 23 percent of the growth in world gross domestic product and has revolutionized the way we live.
Attack real on-line piracy? Yes. Do it with terrible law? No. SOPA should not see the legislative light of day.
Problem two? The UN and other countries around the world want to have the ability to more directly control more of the internet. Robert McDowell of the FCC lays it out:
The 193-member International Telecommunications Union (ITU), a U.N.agency, will meet in Dubai next December to renegotiate the 24-year-old treaty that deals with international oversight of the Internet. A growing number of countries are pushing greater governmental control and management of the Web’s availability, financial model and infrastructure.
They believe the current model is “dominated” by the U.S., and want to “take that control and power away,” Mr. McDowell said. China and Russia support the effort, but so do non-Western U.S. allies such as Brazil, South Africa and India.
“Thus far, those who are pushing for new intergovernmental powers over the Internet are far more energized and organized than those who favor the Internet freedom and prosperity,” he said.
The reason, of course, is fairly straight forward – cash and control:
While growth of the Internet has exploded under a minimal regulatory model over the past two decades, “significant government and civil society support is developing for a different policy outlook,” according to an analysis by lawyers David Gross and M. Ethan Lucarelli on the legal intelligence website www.lexology.com.
“Driven largely by the global financial troubles of recent years, together with persistent concerns about the implications of the growth of the Internet for national economies, social structures and cultures, some governments and others are now actively reconsidering the continuing viability of liberalization and competition-based policies,” they wrote.
So the plan, apparently, is to wrest control from the US via this treaty:
A bad treaty – which would need the support of only a bare majority of U.N.members to pass and which the United States could not veto – could bring “a whole parade of problems,” Mr. McDowell said.
The U.S. and other Western democracies would likely “opt out” of the treaty, he predicted, leading to a “Balkanization” of the global information network. Governments under the treaty would have greater authority to regulate rates and local access, and such critical emerging issues as cybersecurity and data privacy standards would be subject to international control.
Mr. McDowell said the treaty could open the door to allowing revenue-hungry national governments to charge Internet giants such as Google, Facebook and Amazon for their data traffic on a “per click” basis. The more website visitors those companies get, the more they pay.
And, as we’ve watched so many times, a vital and growing market would suffer government intrusion and probable decline:
In 1988, when the treaty was signed, fewer than 100,000 people used the Internet, Mr. McDowell said. Shortly after it was privatized in 1995, that number jumped to 16 million users. As of this year, it is up to 2 billion users, with another 500,000 joining every day.
“This phenomenal growth was the direct result of governments keeping their hands off the Internet sphere and relying instead on a private-sector, multi-stakeholder Internet governance model to keep it thriving,” he said.
Mr. McDowell attributed the massive growth of the Internet to freedom.
“So the whole point is, the more it migrated away from government control, the more it blossomed,” he said.
Freedom? Blossoming? Growth? Can’t have that. It must have government control and, by the way, contribute much more in revenue than it is now. Massive growth without significant contributions to government is just unacceptable in this day and time. And freedom? Anathema to the cult of government.
The servant has become the master and masters instinctively try to gather more and more power to themselves.
This is just another in a long line of examples. The result, of course, will be to cripple something that has been one of the few growth sectors in the global economy. Government greed and the belief of elites that they must control everything via government will eventually kill this proverbial golden goose. Instead of trying to enable more growth, they’re embarked on a campaign to limit and control any growth such that it provides increased revenue for government. Whether it is best for the citizens or economy of the countries so inclined is apparently irrelevant to the quest for more control and cash.
Freedom should be on the march, but instead, we continually see examples of it on the decline. The UN is one of the main culprits in that decline. It is a global organization in search of more power. Under the guise of global democracy, it is involved in killing freedom as it attempts to gather more and more power to itself. It is as obvious as the nose on your face that global governance is its ultimate goal. It can’t do that without exercising more control through willing members and generating more income from which it can demand a share.
To the control freaks and authoritarians out there, the internet is a horrifically dangerous thing. It provides much too much freedom for those they would control. Consequently they seek to wrest that control away. The UN is the perfect vehicle to provide the cover of legitimacy for such a power grab.
Again, here’s a treaty that has no business seeing the light of day. However, if I had to guess, it will pass. And freedom will take another giant step backward.
Brian Dimitrovic, writing in Forbes, is another who takes a shot at Obama’s speech in Kansas (this is almost becoming a series considering the number of people ripping the speech on its economic ignorance) and posits that it is an example of abysmally incorrect economic history. The most obvious reason for the rewriting of that history by President Obama is centered in his ideology. If the history doesn’t prove what he says, President Obama doesn’t have a case. Dimitrovic, using the actual history of the periods Obama cites, shows Obama’s grasp of the history of those eras is as poor as the ideology he touts. Here’s the passage from the speech that Dimitrovic cites. We’ve cited it in previous posts, but Dimitrovic’s demolition of the premise is important:
[T]oday, we are a richer nation and a stronger democracy because of what [Teddy Roosevelt] fought for in his last campaign [of 1912]: [including] political reform and a progressive income tax.
Now, just as there was in Teddy Roosevelt’s time, there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune….If we just cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger….
Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government….And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory.
Now there are lots of opinions about economics, but like it or not, facts are facts. Those facts are readily available to those who seek them. By the way, Dimitrovic is a Harvard PhD and an economic historian, so this is right in his wheelhouse.
First is his contention that Roosevelt’s “progressive” ideas are what essentially saved the nation. That the intrusion it represented was necessary. Dimitrovic pretty much says that’s nonsense. In fact, he says, what happened then may be the reason we’re suffering now.
Let’s look at the past as it actually was.
There is one major inflection point in U.S. economic history. Before this point, growth was high, at about 4% per year for a century. Also in this period, there was remarkable price stability and so little unemployment that the nation had to import tens of millions of workers from abroad.
After this point, growth was moderate, at about 3% per year for the long term, with variations in the form of major depressions and recessions and a 23-fold inflation which had no like in the previous epoch.
This inflection point was 1913 – the very year which the reforms TR plumped for in his last campaign, the income tax and the Federal Reserve, came into being. 1913 marks the one secular shift in American economic history toward lower growth and more economic unpleasantness in the form of unemployment, inflation, and serial recession.
Had this nation grown at the 4%-rate achieved in the pre-1913 period, we would be twice as well-off today. As for inequality, unemployment and inflation are scourges to the working class, but not so much to the rich, and these are 20th– and 21st– century innovations.
That’s the actual history coupled with the economy’s real performance. The economy here worked pretty darn well before 1913 and we saw consistent growth that continued to lift all boats. After 1913, not as much. An entire percentage point of growth was, on average, was lost. The only real and significant difference – income tax and the Federal Reserve. What does economic history show happened after this inflection point where government intruded significantly?
As Dimitrovic points out, “lower growth and more economic unpleasantness in the form of unemployment, inflation, and serial recession.” And again, this isn’t a claim that government has no role in the economy as Mr. Black and White would like to claim. This is to point out that what he is attempting to sell with his rhetoric and in support of his premise that it is capitalism that has failed (and thus government is the answer) has no basis in fact. In fact, it appears the opposite is probably true.
Dimitrovic then turns to the 20th and 21st centuries and their history:
Now about that 20th-century, the only reason its record came in even respectably is that at certain junctures, decided efforts were taken to withdraw the impress of the institutions of 1913, the Federal Reserve and the income tax.
He lists a number of facts that contradict Obama’s contentions about the market. In fact, as Dimitrovic says, it was decidedly anti-progressive ideas which saved the 20th Century, for example:
The President says, “It didn’t work when it was tried in the decade before the Great Depression.” These would be the years 1921-1929, when on account of a tax cut put together in 1921, the economy boomed at 4.8% per year as unemployment and inflation (the latter recently on a 100% run) both collapsed. How does a president, in a major, prepared speech make such an indefensible factual error?
Next: “It’s not what led to the incredible postwar booms of the ’50s and ’60s.” No? The trough of the recession at the end of World War II was 1947, when the Republican majority in Congress conspired to win a tax cut over President Truman’s veto. Result: a 6-year run of 4.8% growth.
Note the question Dimitrovic asks in the last sentence off the first example. This isn’t something that would be difficult to find for a research staff. These numbers and facts exist and are out there. But they don’t fit the ideology. You either have to assume they didn’t research the claims or that they rejected the facts because the were inconvenient to the premise. It is hard to believe the didn’t research the claims, isn’t it? They’re pretty definitive claims. One would assume, listening to a President of the United States, they’re anchored in fact. Obviously they’re not. The question is whether this is true economic historical ignorance or willful economic historical revisionism?
Dimitrovic also includes an example of where tax cuts were resisted, and the result, and where they were instituted afterward and that result. Again, the facts seem to refute the President’s premise:
In 1953, when recession came, President Eisenhower resisted calls for another tax cut, and recessions came again and again such that Eisenhower left office in 1960 with a record of 2.4% annual growth on his watch. John F. Kennedy followed, as every schoolchild should know, with another big tax cut. The great 1960s boom ensued, with 4.9% growth from 1961 to 1969.
Also interesting are the parties of the presidents. The numbers, however, aren’t controversial at all. This has been a fact with which almost all of those who’ve followed politics for any length of time and have been interested in the effect of tax cuts on our economy are familiar. These aren’t obscure, little known facts. But they certainly have been facts that one side of the ideological spectrum have tended to ignore when trying to spin more government and not less. That is precisely what President Obama’s object was in his Kansas speech.
The reason for Dimitrovic’s rebuttal of the contentions and claims made in the speech is fairly easy to discern:
Two years ago, I happened to publish a book, Econoclasts, canvassing all this history. I also happen to know that the White House library has a copy.
It also explains his disbelief in what was said:
I have to wonder what historical scholarship the president and his speechwriters are consulting as they come up with their strange counter-narrative of American economic history. I truly don’t know what the books could be.
After all, when the major library bibliographical service, Choice, reviewed Econoclasts, it said the book “fills a gaping hole in the literature.” Has there been some new revisionist history of the effects of tax cuts since 1913 that validates the president’s new narrative? If so, no one’s ever heard of it.
Then again, you can find the stuff the President reiterated in Kansas here and there in left wing redoubts, Berkeley, California and the like – on bumper stickers.
But not in the history of the actual eras in question. In fact, precisely the opposite of the claims made by the President seem to be true. Government intrusion is what has dampened our economic growth. You can see the percentage amounts for yourself. The cycles of recession, unemployment and inflation are a result of more government, not the failure of the market. In fact, per Dimitrovic’s examples, every contention made by the President, which Dimitrovic highlighted, are demonstrably wrong.
The reason for the claims is obvious, however. The ideology of market failure and the demand for more government requires that history, whether it is accurate or not.
We have an old word for that – propaganda. The dishonesty being employed ought to make the current purveyor of that propaganda ashamed of himself. But there is certainly no sign of that being the case.
As I mentioned in an earlier post, it is frightening to read the words by this President and it is hard not be appalled by the apparent economic ignorance they contain. We’ve remarked on it several times. In particular this statement is stunning in that regard:
Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper. Steel mills that needed 100—or 1,000 employees are now able to do the same work with 100 employees, so layoffs too often became permanent, not just a temporary part of the business cycle. And these changes didn’t just affect blue-collar workers. If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs and the Internet.
Richard Epstein of the Hoover Institution noticed it too. And in very blunt language, points the very same thing we’ve been talking about:
To anyone schooled in economics, these statements reveal a breathtaking ignorance about the sources of national prosperity. It is a good thing when plants can achieve the same output with less labor. Do we really want an America in which thousands of people work in dangerous occupations to turn molten lava into steel bars? Far better it is that fewer workers are doing those jobs. The jobs lost in that industry will be in part replaced by newer jobs created in the firms that build the equipment that make it possible to run steel mills at a lower cost and far lower risk of personal injury. The former workers can seek jobs in newer industries that will only expand by competing for labor.
And what about those ATM machines? Does the president really want people to have to queue up in banks to make deposits or withdraw cash in order to make a boom market for human tellers? Perhaps we should return to the days before automation, when phone calls were all connected by human operators. And why blast the Internet, which has created far more useful jobs than it has ever destroyed?
The painful ignorance that is revealed in these remarks augurs ill for the long-term recovery of America. With the president firmly determined to set himself against the tides of progress, innovation will be harder to come by. The levels of unemployment will continue to be high as the president works overtime to impose additional restrictions on the labor markets and more taxes at the top of the income distribution—both backhanded ways to reward innovation and growth.
The problem, therefore, with the president’s speech is not that it is demagogic in tone. The problem is that it is intellectually incoherent. As a matter of high principle, the president announces his fealty to markets. As a matter of practical politics, he denigrates and undermines them at every step. It is a frightening prospect to have a president who lives in a time warp that lets him believe that the failed policies of 1935 can lead this nation back from the brink. His chosen constituency, the middle class, should tremble at the prospect that his agenda might well set the course for the United States for the next four years.
Well said, but frightening. Take the time to read the rest of Epstein’s piece. It’s worth the read.
Glenn Reynolds has an article in the Washington Examiner about how he believes the higher education bubble is about to burst. Perhaps not imminently, but fairly soon. Why? Because the value of the product doesn’t match its rising cost.
Reynolds talks about the dilution of the worth of a bachelor’s degree even while the price has risen exponentially. Something’s got to give.
But there’s no real incentive for institutions of higher learning to back off the price. Why? Because government has chosen to subsidize those prices by taking over the student loan business.
Sound at all familiar?
With no penalty for raising the price, colleges and universities continue to do so knowing full well that whatever they stick the student with that requires a loan they will get upfront. And if the the student defaults, we, the taxpayers, get stuck with the bill.
One of the big complaints about the Wall Street bailout from both sides of the political isle had to so with “privatizing profits and socializing debt”. That’s precisely what the current government loan program does as well.
Reynolds makes the argument that colleges and universities should be on the hook for the debt. After all they’re the institutions providing the product. Tying the price of the product to the worth of the product is such an old fashioned concept isn’t it? Instead this new-fangled way of doing business has led to bubble after bubble which the uninformed then try to pin on “market failure”.
In fact it is a government takeover of a market. There is no competition, no incentive to revisit pricing, no reason to worry about default. Charge whatever you like, make an outrageous profit and if the loan fails, stick the taxpayers with the cost.
Nice crony capitalist system if you can arrange it, huh?
We all know exactly how it will end up … with a big “pop” and a bunch of surprised politicians asking “how could this have happened?’
And the first words out of most of their mouths?
And what does that usually mean?
More government intrusion and control.
Then the cycle repeats.
The fixation of government on “alternate fuels” and its use of taxpayer money to subsidize some of them is, at least in one case, having a very negative effect on markets. Again we have government market intrusion to hold responsible for rising food prices in an era of high unemployment and economic turmoil.
Again, this is Econ 101 stuff. For a government so full of experts who feel they have the right (based one assumes, in their superior intellect … or something) to decide what we should be using for fuel rather than letting markets decide, they sure have screwed this one up.
Corn is a major food crop. And, for the most part, markets have kept corn relatively cheap and plentiful. Enter government and the mandate that ethanol be produced and mixed with gasoline in an effort, one supposes, to reduce the amount of oil consumed.
The result, however, has been to drive up the price of corn and the price of other commodity foods instead.
Here’s how it works. The set up:
Powerful agribusiness interests collect a 45-cent-per-gallon tax credit to convert this food crop into ethanol, an unnecessary and sometimes harmful additive to gasoline. Another 54-cent-per-gallon tariff is imposed to keep Brazil’s sugar-cane-based ethanol from entering our shores. Nor does the folly end there. The Food and Energy Security Act of 2007 mandates a massive increase in the production of ethanol by 2022 even though there is no demand.
While there’s no demand, there’s plenty of your money to be had. And what do producers react too? Incentive. So what provides the best return on investment right now? Corn. Not for the consumer, but for the producer. So what do producers of other commodity foods do? They switch from growing wheat and soybeans to corn. The result is inevitable:
The lure of free government money reduces the amount of corn available for other uses, primarily as feed for animals. This has a cascade effect, increasing prices down the food chain and for crops unrelated to corn. Farmers might switch from growing, say, soybeans, to corn to get hold of the extra subsidy. That makes soybeans scarcer and drives up their cost. This year, the price of wheat has increased as farmers have switched to corn to take advantage of high corn prices. In either scenario, the price of food increases, and that’s the last thing we need right now.
When the price of feed grain increases, what do you suppose happens to the price of meat?
Want ethanol? Feel it is a necessary and good thing? Drop the mandate, drop the subsidy and drop the tariff. Let the market decide. If it actually does what its champions claim and actually provide an additive to gasoline that increases performance (a dubious claim at best) and lessens our dependence on oil, that ought to be an easy idea to sell.
The fact is, without the subsidy and the mandate, the market would most likely reject ethanol completely. And that would conflict with the ideologically driven agenda that our government has put in place – namely it has the responsibility to decide what we should or shouldn’t use to power our vehicles. Each administration has its own take on how this should be done but make no mistake, this has been something which has survived both Republican and Democratic administrations.
It is another, in a long line of examples, of government intrusion, market distortion and wasting taxpayer money for a product with no demand. It also has the effect of driving up prices in food in an era of high unemployment. It is a disastrous policy and the proof is in the distorted markets.
Time to end the whole program and rescind the foolish government mandate. The effect? Food prices would again react to market pressures instead of government mandates. And taxpayer money wouldn’t be used to distort those markets any longer.
Win win as I see it.
Well you have to ask yourself what you get for the money when you purchase anything don’t you? I mean isn’t that how you make buying decisions for the most part? You weigh the advantage the purchase makes in your life and you figure out whether or not parting with your money justifies the supposed benefits.
In the case of higher education in this country, it’s my guess we passed the point of diminishing returns eons ago. A college degree just isn’t what used to be a few decades ago, but it costs a hell of a lot more. Jack Kelly fills us in:
Tuition and fees at colleges and universities rose 439 percent between 1982 and 2007. Median family income rose just 147 percent during that period.
Median household income has fallen 6.7 percent since June 2009. The cost of attending the average public university rose 5.4 percent this year.
Student loan debt recently passed $1 trillion. It’s now more than credit card debt. The average graduate of a four-year college owes $27,000.
So you have a cost that has risen far and away faster than inflation and median family income for, well, no good reason that I know of.
Oh wait, I said “good reason”. There is a reason. Can you say “subsidy”? That coupled with the myth that a college degree … any college degree … is worth its weight in future gold. But it appears that gold may be fool’s gold.
I love this description of what many institutions of “higher learning” have become:
College students don’t get much for their money. Nearly half learn next to nothing in their first two years; a third learn almost nothing in four, according to a report authored principally by Prof. Richard Arum of New York University.
"Students who say that college has not prepared them for the real world are largely right," said Ann Neal, president of the American Council of Trustees and Alumni. "The fundamental problem here is not debt, but a broken educational system that no longer insists on excellence."
Or even adequacy. "A college degree nowadays doesn’t necessarily signal that its holder has any useful work skills," said Charlotte Allen of the Manhattan Institute.
"For decades our schools have abandoned the teaching of basic facts and foundational thinking skills, and replaced both with leftish received wisdom and stale mythologies, all the while they have anxiously monitored and puffed up students’ self esteem," said classics Prof. Bruce Thornton of California State University Fresno.
I agree totally with Ms. Neal. There is no insistence on excellence. That’s not true of every institution out there, obviously.
However a look at the various new degree programs provides a peek into the priorities of the schools. To broaden and accept as many students as they can to also broaden the revenue stream they’re provided. The unique offerings are most likely not made to produce anything meaningful in academia and certainly not in the real world, but they do attract a certain type of student to such a degree program that is fully willing to buy into the myth that somehow a degree in gender studies is going to be useful and are willing to pay the big bucks demanded (even if that means borrowing them).
And, of course, government subsidizes the purchase, so there’s certainly no reason for the school to back off such a useless program or lower it’s price to something roughly equivalent to its utility in the real world.
What happens? Precisely what you’d think would happen. Its much like the housing crisis. Loans are given to people who aren’t really capable of college work. They leave with nothing or some marginal degree and huge debt.
Others graduate to find there are no jobs for them. Roughly 60 percent of the increase in the number of college graduates since 1992 work in low-skill jobs, Prof. Richard Vedder of Ohio University discovered. In 2008, 318,000 waiters and waitresses had college degrees, as did 365,000 cashiers and 18,000 parking lot attendants.
Because degrees have been so diluted and their worth so compromised over the years, they’re less and less of a guarantee of a good job and better wages.
But because government subsidizes education and distorts the market, guess what?
And, according to a study by the American Enterprise Institution and the Heritage Foundation, teachers are paid $120 billion over market value.
There is fraud at every level of the education system, thanks mostly to politics, said Herbert London, professor emeritus at New York University. Teachers and professors go along to save their jobs.
"They simply cannot say that college isn’t for everyone … or that rigorous exit requirements at any level do not exist," he said. "Hence, there is the clarion call for more money."
Of course they can’t. The gravy train is just too rich to quit.
And, you also need to understand what is actually happening in colleges and universities across the nation to appreciate the full impact of this market intrusion by government. Colleges, as mentioned, no longer demand excellence. Instead, they spend an enormous amount of time and effort teaching what a college student should have mastered before ever showing up at a university:
We spend about $10,600 per pupil in public schools, 377 percent more, in inflation-adjusted dollars, than we spent in 1961. Yet among students who go to college, 75 percent require some remedial work.
If you managed to catch some of the protests in WI that included teachers and caught the spelling on some of their signs, the stats above wouldn’t particularly surprise you. We spend more on education today and and get even less than in the past. What you have to remember is that at every level it is either run by or subsidized by government.
Now at every level, we’re seeing the results of that sort of intrusion, aren’t we? A dismal record of extraordinarily expensive non-achievement. And nothing is going to change or improve in that regard as long as government stays in charge and subsidizes the growing bubble with your money.
But you’ll never hear that said, will you?
The other day, Michelle Bachman said:
“We will always have people in this country through hardship, through no fault of their own, who won’t be able to afford health care,” Bachmann said. “That’s just the way it is. But usually what we have are charitable organizations or hospitals who have enough left over so that they can pick up the cost for the indigent who can’t afford it.”
That initiated the usual reaction from the left:
Before the advent of Medicare and Medicaid, charities did provide health care to those in need. But to suggest that they can do the same today is to misunderstand the enormity of the health care crisis, as charities simply do not have the capacity to handle the demand. As the number of uninsured creeps up to 50 million, for any politician to argue that government should outsource the task of keeping Americans healthy to charities is like saying that people should be punished with death if they are unfortunate enough to be poor or are priced out of insurance due to a pre-existing health condition.
And that’s one of the more family friendly reactions.
But let’s look at it. First question, why is it that “charities simply do not have the capacity to handle the demand?” Any takers?
Is it because there are no established charitable programs in place anymore because government usurped the need for them with Medicare and Medicaid? Perhaps not wholly, but it certainly is one of the reasons. Charities, like any other organization, focus their giving where there is a need. And where no one else, usually, is helping. No need, no priority, no charity.
Secondly, you see the insidious conclusion that “the demand” that would strain the capacity of charities can only be met by … government, of course. Naturally there’s no way to really test that conclusion because government has destroyed the market for charitable health care giving.
So, as usual, government has helped create the problem (lack of charitable institutions focused on providing health care for poor) and now, according to the left, the government is the answer to the problem it created. It may not be something you traditionally consider a market (charitable giving in health care) but there’s no question that government intrusion into the health care market changed the dynamic completely.
And finally the unspoken premise: Health care is a human right. Sorry, but health isn’t even a “human right”. Obviously health care requires the labor of others. It requires their time and the abilities they’ve developed over the years. It is their property to dispose of as they will. But bottom line, health care requires the labor of others in order to fulfill this assumed right.
Clue: To be a right, the right must not violate the rights of others. It cannot take precedence or priority over someone’s right to decide how to use their property – i.e. their developed and marketable abilities. Period. That’s slavery. Here we see another twisting of a word that denotes a condition of freedom and liberty into one that demands virtual slavery from others.
You may or may not agree with Michelle Bachman’s statement. But, in reality it is the way a truly free country should work. Instead we seem to opt for “government is always the answer” (even when it is the entity that created the problem) and coercion is just fine for fulfilling utopian dreams.
Hard to call that “free” isn’t it?
One of the center pieces of the Obama administration’s recovery plan has been its green jobs program. It was touted by the President as an investment in the future. And he even managed to snooker Congress into including $38.6 of your dollars in a federal guaranteed loan program in the Stimulus bill – a version, in this case, of the government going into the venture capitalism business.
The results, as they say, are predictable:
A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show.
The program — designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans — has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies.
Half the money is gone and it has created 3,545 “new, permanent jobs”? You do the math – pretty high cost of job creating wouldn’t you say? Oh, and that number is actually down by 1,100 thanks to Solyndra.
So are green jobs, of the type to be found in alternative energy, the best way to approach easing unemployment? Not really, say some experts:
Obama’s efforts to create green jobs are lagging behind expectations at a time of persistently high unemployment. Many economists say that because alternative-energy projects are so expensive and slow to ramp up, they are not the most efficient way to stimulate the economy.
“There are good reasons to create green jobs, but they have more to do with green than with jobs,” Princeton University economics professor and former Federal Reserve vice chairman Alan Blinder has said.
Which is a nice way of saying this is more about political agendas than putting Americans to work, and unemployment is an excuse, not a reason, for pursuing this agenda. And the cost of that agenda has been pretty prohibitive with no real worthwhile results in the ostensible problem it was supposed help solve – unemployment.
Another example of government using your money to pick winners and losers and everyone coming out poorer in the bargain.
UPDATE: No, I didn’t see Dale’s post. My bad. I’ll leave mine, but now that Dale’s putting up a lot more stuff, I’m going to have to discipline myself to look first before I go popping something up (I use Live Writer, so unless I specifically look at the blog, I don’t see a list of what is up).
But not before sucking down over half a billion dollars in federal loan guarantees that will now be exercised.
Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. "
The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement.
This is what happens when government tries to pick winners and losers economically with absolutely no understanding of the market in which they intrude. What this clearly points out, unless there was true malfeasance by the company, is there is no market, at this time, for what they were selling. Either that, or they were truly incompetent.
This was a “if we build it they will buy” project that apparently either misrepresented the market or misunderstood it. Either way, it failed. And the Feds were apparently no more informed about the market potential of the product than the company. Result – over half a billion in loans guaranteed by the Federal government are now being called in. The taxpayer, as usual, is on the hook to pay off the mistake the government made.
One of the constant themes here is the government is way outside its charter when it engages in activities like this. It is an example of what those Tea Party lunatics mean when they talk about government intrusion and call for smaller government. Note, it has nothing to do with welfare reform or any other of the usual nonsense their opponents try to tag them with. It has to do with out-of-control government and out-of-control spending in areas where none of the founders ever even hinted at envisioning a Federal presence.
It’s a pity this has to be constantly pointed out to Tea Party critics bent on stereotyping members of that group as racists. But as usual, reality provides the perfect context and example to counter their baseless charges.
This is not what our government should be involved in, period. And certainly not with tax payers money, exclamation point!
If you don’t believe me, look at the California experience to this point. If there’s any state in the union more amenable to and focused on providing green jobs, it has to be the Golden State. Governor Jerry Brown pledged to create 500,000 of them by the end of the decade.
But as often the case when the central planners make their pledges, they are woefully ignorant of what the market wants. And so rarely does what they envision ever come to fruition. Green jobs in CA is a good example.
Remember Van Jones? Well, when Jones left the Obama cabinet as his “Green Jobs Czar” he landed in California and has been what the NY Times calls an “Oakland activist” apparently pushing for the creation of green jobs. And it’s not like California hasn’t tried. It has simply failed.
A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.
Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.
So a “stimulus” program that spent over $93 million dollars to create 538 jobs. Why so little in terms of takers? Well it seems the market wasn’t interested.
The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.
“Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”
You don’t say … the government didn’t have a clue at what the market potential of their boondoggle actually had, so they ended up spending $172,862 for each job. And you wonder where the money goes?
Job training programs intended for the clean economy have also failed to generate big numbers. The Economic Development Department in California reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one.
“The demand’s just not there to take this to scale,” said Fred Lucero, project manager atRichmond BUILD, which teaches students the basics of carpentry and electrical work in addition to specifically “green” trades like solar installation.
Richmond BUILD has found jobs for 159 of the 221 students who have entered its clean-energy program — but only 35 graduates are employed with solar and energy efficiency companies, with the balance doing more traditional building trades work. Mr. Lucero said he considered each placement a success because his primary mission was to steer residents of the city’s most violent neighborhoods away from a life of crime.
You see you can fund all the job training centers in the world and run umpthy-thousands through it. But if there is no market for the jobs, you end up spending a whole lot of money for nothing. Again, ignorance of the market and its demands means expensive mistakes. Of course Mr. Lucero thinks the program is a success – he got to spend free money, was employed and it didn’t cost him squat. It cost you.
At Asian Neighborhood Design, a 38-year old nonprofit in the South of Market neighborhood of San Francisco, training programs for green construction jobs have remained small because the number of available jobs is small. The group accepted just 16 of 200 applicants for the most recent 14-week cycle, making it harder to get into than the University of California. The group’s training director, Jamie Brewster, said he was able to find jobs for 10 trainees within two weeks of their completing the program.
Mr. Brewster said huge job losses in construction had made it nearly impossible to place large numbers of young people in the trades. Because green construction is a large component of the green economy, the moribund housing market and associated weakness in all types of building are clearly important factors in explaining the weak creation of green jobs.
Market timing is pretty important too, isn’t it? If you introduce a product into a market in the middle of a market downturn, chances are slim you are going to be successful. While it may all look good on paper and sound good in the conference room, the “buy” decision is still made in the market place, and in this case it is obvious that the market has no room for these workers. Something which should have been, well, obvious. In fact, there is precious little market for traditional construction jobs in a “moribund housing market”. Yet there they are spending money we don’t have on job skills that are simply not in demand.
Finally there’s this bit of word salad to feast upon:
Advocates and entrepreneurs also blame Washington for the slow growth. Mr. Jones cited the failure of so-called cap and trade legislation, which would have cut carbon pollution and increased the cost of using fossil fuel, making alternative energy more competitive. Congressional Republicans have staunchly opposed cap-and-trade.
Mr. Haji of the Cleantech Group agrees. “Having a market mechanism that helps drive these new technologies would have made a significant difference,” he said. “Without that, the industry muddles along.”
You have to admire someone who tries to cloak central planning jargon in “market speak”. Imposing a tax on thin air to drive, from above, a behavior government wants is not a “market mechanism”. And beside, California passed it’s own version of this “market mechanism” with AB 32 in 2006. How’s that working out?
This is how:
A SolFocus spokeswoman, Nancy Hartsoch, said the company was willing to pay a premium for the highly-skilled physicists, chemists and mechanical engineers who will work at the campus on Zanker Road, although the solar panels themselves will continue being made in China. Mayor Reed said he continued to hope that San Jose would attract manufacturing and assembly jobs, but Ms. Hartsoch said that was unlikely because “taxes and labor rates” were too high to merit investment in a factory in Northern California.
Irony … central planning fails in CA while jobs end up in increasingly capitalistic China. Again, ignorance of the market causes disappointing results. Somehow I feel this came as a surprise to Mayor Reed … after he’d spent whatever of your money he’d committed to this project.