Free Markets, Free People

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Why protectionism equals crony capitalism

The invaluable Warren Meyer at Coyote blog (one of my all time favs) has a great article up on protectionism and why its something we should be avoiding.

President Obama used a lot of his state of the union address again teeing up what sounded to me like a new round of protectionism.  Protectionism is the worst form of crony capitalism, generally benefiting a handful of producers and their employee to the detriment of 300 million US consumers and any number of companies that use the protected product as an input.

The example he uses?  Sugar.  What industry does it protect and subsidize in the end?  The producers of high fructose corn syrup (HFCS).   And what does the government tell us about HFCS?

It’s bad for us.  Sugar would be preferable.

So why do we continue to use it in place of sugar?  Protectionism.  Look at the chart he includes:

 

sugar-500x400

The chart says it all.  With the tariff added, look at the average US cost of sugar vs. the world’s average cost.

As Meyer points out though, that’s not how this gets spun:

Food activists on the Left often point to the use of High Fructose Corn Syrup (HFCS) as one of those failures of capitalism, where rapacious capitalists make money serving an inferior product.  But HFCS resulted from a scramble by food and beverage companies to find some reasonable alternative to sugar as the government has driven up sugar prices through a crazy tariff system that benefits just a tiny handful of Americans, and costs everyone else money.

Yup, the usual, convenient and usually wrong whipping boy – “market failure”.

When a tariff is involved, you’ve just moved out of the realm of real capitalism and into the realm of crony capitalism.  This has nothing to do with markets failing.  This has to do with the usual – government intrusion using their monopoly power of force which then distorts a market and causes users of the product whose price they chose to artificially inflate with a tariff to seek lower cost alternatives.

Remember, the same government that is claiming HFCS isn’t good for you is the one that’s also made it impossible to use a product that it claims is better for you (in relative terms of course):

Meyer:

For the last 10 years or so, HFCS-42 has actually traded at a price higher than the world market price for sugar, but lower than the US price for sugar.   There is a lot complexity to prices, but this seems to imply that HFCS would not be nearly as attractive a substitute for sugar if US sugar tariffs did not exist (not to mention subsidies of corn which support HFCS).  This can also be seen in the fact that HFCS has not been used nearly so often as a sugar substitute in markets outside of the US, even by the same manufacturers (like Coke) that pioneered its use in the US.

Or, if markets had been left alone, all indications are we’d be using lower cost sugar right now.

Meanwhile the government protects and subsidizes an industry that makes a product it says is worse for you .

Make sense?

~McQ

Twitter: @McQandO


More Law vs. Constitutional Rights

Interesting case.  And I lean toward the side which says doing what is ordered amounts to self-incrimination which the 5th Amendment is designed to prevent.

American citizens can be ordered to decrypt their PGP-scrambled hard drives for police to peruse for incriminating files, a federal judge in Colorado ruled today in what could become a precedent-setting case.

Judge Robert Blackburn ordered a Peyton, Colo., woman to decrypt the hard drive of a Toshiba laptop computer no later than February 21–or face the consequences including contempt of court.

I’m not sure, in her case, what they’re looking for, not that it matters particularly.  We again have technology in the focus and its use being ruled on by the court.  The question is, does such an order violate the defendants right to refuse self-incrimination by unlocking data which has the possibility of incriminating her.

Today’s ruling from Blackburn sided with the U.S. Department of Justice, which argued, as CNET reported last summer, that Americans’ Fifth Amendment right to remain silent doesn’t apply to their encryption passphrases. Federal prosecutors, who did not immediately respond to a request for comment this afternoon, claimed in a brief that:

Public interests will be harmed absent requiring defendants to make available unencrypted contents in circumstances like these. Failing to compel Ms. Fricosu amounts to a concession to her and potential criminals (be it in child exploitation, national security, terrorism, financial crimes or drug trafficking cases) that encrypting all inculpatory digital evidence will serve to defeat the efforts of law enforcement officers to obtain such evidence through judicially authorized search warrants, and thus make their prosecution impossible.

I certainly understand the import of that claim.  And it is a valid point.  But is it something which over rides the protection of the 5th Amendment?  In my opinion, this is not at all as clear as the 4th Amendment case below.  I’m not sure, however, one explains away the fact that decryption may indeed incriminate the person required to do the decrypting. 

For instance:

[A] Vermont federal judge concluded that Sebastien Boucher, who a border guard claims had child porn on his Alienware laptop, did not have a Fifth Amendment right to keep the files encrypted. Boucher eventually complied and was convicted.

On the other hand:

In March 2010, a federal judge in Michigan ruled that Thomas Kirschner, facing charges of receiving child pornography, would not have to give up his password. That’s "protecting his invocation of his Fifth Amendment privilege against compelled self-incrimination," the court ruled (PDF).

The government argues:

Prosecutors tend to view PGP passphrases as akin to someone possessing a key to a safe filled with incriminating documents. That person can, in general, be legally compelled to hand over the key. Other examples include the U.S. Supreme Court saying that defendants can be forced to provide fingerprints, blood samples, or voice recordings.

The defense argues:

On the other hand are civil libertarians citing other Supreme Court cases that conclude Americans can’t be forced to give "compelled testimonial communications" and extending the legal shield of the Fifth Amendment to encryption passphrases. Courts already have ruled that that such protection extends to the contents of a defendant’s minds, the argument goes, so why shouldn’t a passphrase be shielded as well?

There you have it.

Opinions?

~McQ

Twitter: @McQandO


What part of the 4th Amendment does law enforcement not understand?

I don’t know about you, but this seems such a clear thing to me.  If law enforcement is going to put any sort of a tracking device on a citizen’s vehicle, they need to obtain a warrant first.  See 4th Amendment:

The Supreme Court on Monday ruled unanimously that the police violated the Constitution when they placed a Global Positioning System tracking device on a suspect’s car and monitored its movements for 28 days.

[…]

Walter Dellinger, a lawyer for the defendant in the case and a former acting United States solicitor general, said the decision was “a signal event in Fourth Amendment history.”

“Law enforcement is now on notice,” Mr. Dellinger said, “that almost any use of GPS electronic surveillance of a citizen’s movement will be legally questionable unless a warrant is obtained in advance.”

Specifically:

“We hold that the government’s installation of a GPS device on a target’s vehicle, and its use of that device to monitor the vehicle’s movements, constitutes a ‘search,’ ” Justice Antonin Scalia wrote for the majority. Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas and Sonia Sotomayor joined the majority opinion.

“It is important to be clear about what occurred in this case,” Justice Scalia went on. “The government physically occupied private property for the purpose of obtaining information. We have no doubt that such a physical intrusion would have been considered a ‘search’ within the meaning of the Fourth Amendment when it was adopted.”

The government, in this case, had put a GPS device on the target’s vehicle without a warrant, monitored it for 28 days and then used that information at his trial (he was convicted on cocaine trafficking charges and given a life sentence).

The reason I think this should have been a no-brainer for LEOs is the fact that the SCOTUS decision was unanimous. 

When the case was argued in November, a lawyer for the federal government said the number of times the federal authorities used GPS devices to track suspects was “in the low thousands annually.”

Vernon Herron, a former Maryland state trooper now on the staff of the University of Maryland’s Center for Health and Homeland Security, said state and local law enforcement officials used GPS and similar devices “all the time,” adding that “this type of technology is very useful for narcotics and terrorism investigations.”

Monday’s decision thus places a significant burden on widely used law enforcement surveillance techniques, though the authorities remain free to seek warrants from judges authorizing the surveillance.

Ok, get a freaking warrant first. 

What this decision does is uphold a Constitutional right that has been under assault for quite some times.   The “envelope stretching” that is not uncommon as new technology offers new methods of surveillance and monitoring.  The watchword for LEOs should be “when in doubt, get a warrant”.  And live by the document you’ve sworn to uphold and defend.

~McQ

Twitter: @McQandO


SOPA/PIPA dead … for now

But most attempts to limit freedom tend to be like zombies – even dead they tend to end up walking among us again at some future time.  But until then, good news:

House and Senate leaders abandoned plans to move on SOPA and PIPA on Friday — the surest sign yet that a wave of online protests have killed the controversial anti-piracy legislation for now and maybe forever.

SOPA sponsor Lamar Smith, the Republican chairman of the House Judiciary Committee, said his committee won’t take up the bill as planned next month — and that he’d have to “wait until there is wider agreement on a solution” before moving forward.

Apparently even within the halls of Congress, where given some of the decisions that are routinely made would make one question the amount of oxygen in the air, they appear to have figured this one out.  Oh, and it is an election year. [head slap]

But don’t get too excited … they’ll be back in some form or fashion.  Instead of doing the hard work necessary to create law that will protect intellectual property rights while not being overly broad and draconian, these zombies will simply change clothes, get new names and be back in another session.

Cynical?

Just watch.

~McQ

Twitter: @McQandO


The Health Care Czar speaks – “free” contraception for all!

Yes, Czar Kathleen (Sebelius, Czar Secretary of Health Care HHS and the final arbiter of all things ObamaCare) has declared that your insurer will now, without compensation or charge, do the following:

The Obama administration said Friday that health insurance plans must cover contraceptives for women without charge, and it rejected a broad exemption sought by the Roman Catholic Church for insurance provided to employees of Catholic hospitals, colleges and charities.

You may take a knee in thanks. Said Czar Kathleen:

“This rule will provide women with greater access to contraception by requiring coverage and by prohibiting cost-sharing,” Ms. Sebelius said.

Because, you know, the devices and services are delivered by magic fairies and don’t cost anyone anything.

No wonder Obama chose Disneyland as the venue for his speech yesterday.

The religious question aside, where in the world does this bunch get off deciding I have to pay for someone else’s contraception?

Because that’s what is going to happen … the bill, just like taxes to corporations, is going to find its way into my premium in some form or fashion (TANSTAAFL). 

The order is an administration interpretation of this:

The 2010 health care law says insurers must cover “preventive health services” and cannot charge for them.

“Preventive health services”.  Wow … how broadly can that be interpreted.  Well, broadly enough to include contraception as a “preventive health service” I suppose.

Which means, I assume, that the sky is the limit.  Creative interpretation is only limited by … not much, huh?

We have a czar.  She has an agenda.  She is the final, unaccountable “decider”.

What could possibly go wrong with that?

~McQ

Twitter: @McQandO


Eric Holder suddenly concerned about “illegal firearms”

Mr. Fast and Furious –, whose idiotic operation supposedly (and officially) designed to trace firearm flow in Mexico (there is a very strong case for a political gun control agenda actually driving the operation) has led to one and possibly two deaths of Border Patrolmen — is suddenly concerned about criminals and their access to “illegal firearms”:

The number of officers killed in the line of duty jumped 13 percent in 2011 compared with the year before — and U.S. Attorney General Eric Holder condemned the increase as “a devastating and unacceptable trend” that he blamed on illegal firearms.

The number of law enforcement officers killed in the line of duty rose to 173 this year, from 153 in 2010, the National Law Enforcement Officers Memorial Fund announced Wednesday. This year’s figure is 23 percent higher than 122 killed in the line of duty in 2009.

Yes, law enforcement is dangerous work.  Yes, I feel for the families of those officers slain.  This, however is not some sort of record year (see 2001) and in fact, in most years more officers are lost to traffic accidents than to “illegal firearms”. 

Additionally, I’m sure the Mexican law enforcement officers killed by the guns Holder’s department allowed to flow into their country find this concern of his particularly hollow.  Why it could even be considered … wait for it … racist.  I just throw that out there as an example of what some GOP AG would have been hit with by the left had he or she been so stupid as to run an operation like Fast and Furious.  Anyway:

Holder said “too many guns have fallen into the hands of those who are not legally permitted to possess them,” in explaining the increase.

Yes, Mr. Holder, that’s why they are called “criminals”.  In case you haven’t figured it out criminals are scofflaws. Like the criminals you supplied with guns and ammo in Mexico.

Criminals break the law.  So obviously passing laws making it a criminal offense for criminals to possess firearms doesn’t work, huh?  It also is a problem when you just hand them firearms as well.

But, as we’ve surmised,  Fast and Furious was supposed to set up a “better case” for more gun control, right?  And one can assume the stealth premise, soon to be obvious, is the way to keep criminals from getting illegal firearms is to more tightly control them.  That, of course, means more “gun control”, doesn’t it?

“This is a devastating and unacceptable trend. Each of these deaths is a tragic reminder of the threats that law enforcement officers face each day,” Holder in a statement. “I want to assure the family members and loved ones who have mourned the loss of these heroes that we are responding to this year’s increased violence with renewed vigilance and will do everything within our power — and use every tool at our disposal — to keep our police officers safe.”

You mean just like you did for Border Patrol Agent Brian Terry, Mr. Holder?

Incompetent political hack.

~McQ

Twitter: @McQandO


Government coercion, crony capitalism and freedom limiting laws — see light bulb ban

Reading a POLITICO article today, I found it pointed like a blazing neon sign to one of the persistent problems crony capitalism brings us each and every day.  And the result is less choice (i.e. freedom) and competition as industry and government team up to limit both.

This concerns the incandescent light bulb ban that was voted into existence by Congress and signed into law by President Bush.  It was all supposedly done for our own good (you know, that well worn path to hell paved with good intentions) – incandescent bulbs are considered “inefficient” and used more energy than the new, green bulb of choice that the government thinks you should use. 

Of course the government also knows that if left it up to you to choose, you most likely wouldn’t choose the bulb government prefers. 

So instead of letting you and the market decide, Congress decided to use its power of coercion to do that for you.  One less thing to worry your silly little head over prole.

And so the ban went into effect and the industry began to plan and change over.  Now, read this from the POLITICO story:

Big companies like General Electric, Philips and Osram Sylvania spent big bucks preparing for the standards, and the industry is fuming over the GOP bid to undercut them.

After spending four years and millions of dollars prepping for the new rules, businesses say pulling the plug now could cost them. The National Electrical Manufacturers Association has waged a lobbying campaign for more than a year to persuade the GOP to abandon the effort.

Manufacturers are worried that the rider will undermine companies’ investments and “allow potential bad actors to sell inefficient light bulbs in the United States without any fear of federal enforcement,” said Kyle Pitsor, the trade group’s vice president of government relations.

So, if industry wants these rules, why is the GOP grinding them to a halt? Republicans say they’re pro-choice when it comes to light bulbs.

Government intrudes and makes a decision that circumvents the market and removes your ability to choose.  Another example of picking winners and losers, something for which it has a dismal record.   And for 4 years the industry is forced to spend money it might not have spent to retool and prepare to abide by the bad law.   It certainly makes sense that they’d be quite put out at a change in that law now because while they’re not prepared to meet the demand for incandescent bulbs.  So they claim to “fear” that “bad actors” might sell “inefficient light bulbs” in the US if it is repealed.

Really?  Like the market wouldn’t weed out “bad actors” fairly quickly?  No, what manufacturers now want is government, who made the law, to protect their 4 year investment based on that law.   Funny how that works isn’t it?

This is about nothing more than industry petitioning government to protect the investment forced on industry by government.  And why does it feel it must be protected?  Because if it isn’t, the market will most likely reject the government’s preferred product, a product on which these manufacturers have the inside track for providing.  Jacob Sullum at Hit and Run lays it out:

"A host of more efficient products already line store shelves." The [NY] Times concedes that "many of the alternatives to incandescent bulbs are more expensive." In fact, all of them are, including compact fluorescent lamps (which cost about six times as much as standard incandescents), halogen bulbs (10 times), the new extra-efficient incandescents (ditto), and LEDs (80 times). Why pay so much more, especially when—as with CFLs, the cheapest alternative—performance may be inferior? Supposedly because you save enough on energy and replacement costs to justify the investment. If so, why not let bulb manufacturers make that case to consumers, who can then decide for themselves?

Why? Because you proles can’t be trusted to choose the right way, that’s why. That was the entire point about passing the law in the first place.  Lawmakers felt that the decision must be forced on the populace, because if left to the populace they’d most likely choose the “wrong” product because it fits their needs and wallet better than the government preferred one.

All of this based in the specious science that we’re causing global warming by burning fossil fuels.  And those fuels power these inefficient bulbs.  It is up to government to rectify the situation by forcefully limiting our choices by banning certain products via law with the ultimate aim of eventually banning fossil fuel altogether –  something that is cheap and which we have in abundance.   Of course, the means of banning fossil fuels will be much more subtle than just an outright ban.  Government will do its best to make it cost prohibitive to use such fuel.  It’s permatorium, the probable nixing of the Keystone XL pipeline and implementation of policies via EPA over-reach that will raise energy prices and cause energy poverty among a large portion of the population.

But remember, government knows best.

But this case is incredible in the fact that because of bad law,  you have industry in the position of asking the bad law be enforced.  If the ban on the incandescent bulb is lifted, the guarantee the law promised them for a high-margin return on their investment is in jeopardy.  Sullum picks up the absurd argument that follows that absurd situation:

Aren’t Republicans supposed to be pro-business? Sometimes they are actually pro-market instead, and this is one of those cases. A spokesman for Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, claims "the only people we are aware of who have opposed the bulb standards are some politicians and some conservative commentators." If legislators, regulators, environmentalists, and even the industry all agree this mandate is a good idea, why would consumers object? Maybe because the whole premise of the policy is that their choices do not matter because they are too stupid to know their own interests.

Bingo.

Whatever happened to the premise of freedom of choice?   Whatever happened to the idea that government was the servant, not the master?  Who was it that decided the government should be deciding what we use to light our homes, fuel our cars or any of a myriad of other things it has decided over the decades it should choose instead of you?

This is where it inevitably leads.  This is a case study in government over-reach and how it incrementally bleeds your freedoms away.  In my opinion all laws such as the ban on incandescent light bulbs is the modern version of the Intolerable Acts.

~McQ

Twitter: @McQandO


SCOTUS takes on ObamaCare–Bigger than Roe v Wade?

ObamaCare, as mentioned in a previous post, gets its Constitutional review by the Supreme Court today.  CATO’s Ilya Shapiro lays out the agenda:

This morning, as expected, the Supreme Court agreed to take up Obamacare.  What was unexpected — and unprecedented in modern times — is that it set aside five-and-a-half hours for the argument.  Here are the issues the Court will decide:

  1. Whether Congress has the power to enact the individual mandate. – 2 hours
  2. Whether the challenge to the individual mandate is barred by the Anti-Injunction Act. – 1 hour
  3. Whether and to what extent the individual mandate, if unconstitutional, is severable from the rest of the Act. – 90 minutes
  4. Whether the new conditions on all federal Medicaid funding (expanding eligibility, greater coverage, etc.) constitute an unconstitutional coercion of the states. – 1 hour

Those are critical questions.  They tend to define in four points, how threatened our rights are by this awful legislation.  Forget what it is about, consider to what level it intrudes and what, if found Constitutional, it portends.

If found Constitutional, you can take the actual Constitution, the one that no fair reading gives an inkling of support to such nonsense as ObamaCare, and cut it up for toilet paper.  It will be, officially, dead.

A decision that supports those 4 points (or even some of them) means the end of federalism and the final establishment of an all powerful national government which can (and will) run your life just about any way it wishes.   If it has the power to enact a mandate such as that called for in ObamaCare, it can mandate just about anything it wishes.  And, if the new conditions on all federal Medicaid funding stand, the states have no grounds to resist or refuse other federal intrusion.

In any event, the Supreme Court has now set the stage for the most significant case since Roe v. Wade.  Indeed, this litigation implicates the future of the Republic as Roe never did.  On both the individual-mandate and Medicaid-coercion issues, the Court will decide whether the Constitution’s structure — federalism and enumeration of powers — is judicially enforceable or whether Congress is the sole judge of its own authority.  In other words, do we have a government of laws or men?

If you’re devoted to freedom and liberty and opposed to intrusive and coercive government, you know how you want this to come out.

And it isn’t to the advantage of ObamaCare.

~McQ

Twitter: @McQandO


No Cojones — Jerry Brown blows off his responsibility to safeguard the rights of Californian’s

I have to say, the position CA governor Jerry Brown has taken on warrantless cell phone searches is a total abdication of his responsibility to the citizens of California:

California Gov. Jerry Brown is vetoing legislation requiring police to obtain a court warrant to search the mobile phones of suspects at the time of any arrest.

The Sunday veto means that when police arrest anybody in the Golden State, they may search that person’s mobile phone — which in the digital age likely means the contents of persons’ e-mail, call records, text messages, photos, banking activity, cloud-storage services, and even where the phone has traveled.

Brown’s excuse for vetoing it?

Brown’s veto message abdicated responsibility for protecting the rights of Californians and ignored calls from civil liberties groups and this publication to sign the bill — saying only that the issue is too complicated for him to make a decision about. He cites a recent California Supreme Court decision upholding the warrantless searches of people incident to an arrest. In his brief message, he also doesn’t say whether it’s a good idea or not.

Instead, he says the state Supreme Court’s decision is good enough, a decision the U.S. Supreme Court let stand last week.

“The courts are better suited to resolve the complex and case-specific issues relating to constitutional search-and-seizure protections,” the governor wrote.

What wonderful reasoning, huh? Jerry Brown would never have had a problem with Plessey v. Ferguson because, you know, the court’s decision would have been viewed by him as “good enough”.

Why not make them decide then while coming down on the side of the citizens who believe that device is something which shouldn’t have open access to government?   Why not approve the bill and make the court decide it is wrong and must be repealed.  Why not make the court justify such searches?  Why not come down on the side of privacy and against the invasion of privacy?

Isn’t that what government is supposed to do – protect the rights of its citizens from unlawful search and seizure?  Brown has decided it is up to the citizens to sue to stop such an invasion and not him.  So he’s going to side with those who believe that there is no inherent right to privacy when it comes to one’s cell phone and make the citizen’s of California seek protection in the courts.

Total abdication of responsibility by an elected official – something that has become more and more commonplace even though, in most cases, not as blatant.  This is an assault on the 4th Amendment and it is being aided and abetted by a sitting governor.

Radley Balko notes the abdication as well and references something one of his commenters pointed out:

Cell phones are also not simple “containers” to the extent that modern phones show both local data and vastly more data information stored in cloud services, often all integrated together seamlessly to the user. These law enforcement searches are actually retrieving information stored in “containers” elsewhere.

In other words, this gives them instant access to data for which they’d otherwise have to get a warrant. It allows police to go far beyond searching just the device itself.  It allows them access to records and data far removed from where the search is taking place without a warrant. 

Now, you tell me: how difficult, assuming probable cause exists, would it be for the police to hold the device, submit probable cause to a judge and obtain a warrant without losing any of the expected “evidence” the phone would provide?

And, how many of you believe, given this abdication by Brown, that police won’t take advantage of and use “traffic stops” to seized and search cell phones of those they suspect of other crimes?

Yeah, they’d never do that.

Isn’t it the job of a governor to err on the side of the citizen’s rights?

Governor Brown should be ashamed – mortified – at the abdication of his role as protector of the people of his state.   And the people of his state should do what is right and make sure that when the time comes, he’s given his walking papers.

~McQ

Twitter: @McQandO

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