Regulation tends to cost lower income people more
I know that’ll come as an absolute stunner, huh? Not really. Regulation costs money. It costs money for compliance enforcement, which comes from taxes, and it costs companies money for compliance in the form of higher costs – costs that are passed on to consumers.
So? So – from the Mercatus Center at George Mason University, find out:
Low-income households benefit the most when they act to reduce their exposure to the greatest risks they face, such as relatively common events and activities that cause illness, injury, and death, many of which can be traced to living in unsafe neighborhoods. In contrast, high-income households generally focus more on small risks—for example, tiny environmental risks that are far less likely to occur and generally affect fewer people at the expo- sure levels regulations address.
LOWER INCOME HOUSEHOLDS BEAR MORE OF THE COSTS OF REGULATION
Regulation focused on small risks delivers benefits to a limited group but spreads the costs across everyone. As a result, regulation effectively transfers money from low income households, who need to prevent larger risks, to high income households, who are concerned about small risks. Low income households are, in a sense, paying for the lifestyle preferences of the wealthy.
Such regulation increases consumer prices and lowers worker wages.
• Regulations act like a regressive sales tax, with middle and lower income households bearing much of the cost of rules that focus on the risk preferences of wealthier households, since they all pay the same, higher prices.
• Cost of regulation as a share of income is estimated to be as much as six to eight times higher for low-income households than for high-income households.
• [Diana] Thomas estimates that households can mitigate the same level of mortality risks privately for about one fifth of the cost of public risk-reduction strategies.
Well, imagine that, the laws of economics at work in a very predictable way. And, of course, completely opposite of the professed claim of the left to be on the side of the poor. Because it is that very group that continually push more and more regulation because, one assumes, they believe if some regulation is good, more has to be better. But, as a group, being mostly economically illiterate combined with unaccountable faith in government power, they end up with these sorts of ‘unintended consequences’ all of the time.
~McQ
Climate change is one of Obama’s “top three priorities” in second term
If you love ObamaCare, you’re sure to be thrilled with whatever comes out of this attempt to cash in on taxing thin air. Climate change is going to be a “priority” because it would be a new source of revenue, nothing more:
President Obama has identified climate change as one of his top three priorities in his second term after coming under fire from environmentalists for giving the issue short shrift during the campaign.
The president, in an interview for TIME’s Person of the Year award, said the economy, immigration, climate change and energy would be at the top of his agenda for the next four years.
The interview took place before the fatal shootings at Sandy Hook Elementary School in Newtown, Connecticut, an incident that had pushed gun control to a top spot on Obama’s agenda.
Obama said his daughters have influenced his thinking about the need to tackle climate change.
“[O]n an issue like climate change, for example, I think for this country and the world to ask some very tough questions about what are we leaving behind, that weighs on you. And not to mention the fact I think that generation is much more environmentally aware than previous generations,” he told TIME.
The comments continued a trend of Obama vowing to focus on climate without laying out details of his agenda.
You have to be stunned by the irony of his statements. The man has been “influenced” by indoctrinated children. Just as stunning is his statement about asking “tough questions about what we are leaving behind”. One has to wonder if he’s looked at the record debt he’s piling on which will have to be paid by future generation in their standard of living, taxes and productivity. Now he wants to add more cost to that future by involving government in regulating CO2.
That despite the fact, no inspite of the fact, that the science he’d base his “priority” upon has simply fallen apart.
The analysis of global combined land and ocean surface temperature in [the IPCC’s draft report] is inadequate for what it admits is seen as the prime statistic of global warming. It is highly selective in the references it quotes and in the use of time periods which obscures important, albeit inconvenient, aspects of the temperature data. It is poorly drafted, often making a strong assertion, and then somewhat later qualifying if not contradicting it by admitting its statistical insignificance.
Real science simply doesn’t agree with the alarmist creed established by Al Gore, the UN IPCC and the other prophets of doom:
We can now estimate, based on observations, how sensitive the temperature is to carbon dioxide. We do not need to rely heavily on unproven models. Comparing the trend in global temperature over the past 100-150 years with the change in “radiative forcing” (heating or cooling power) from carbon dioxide, aerosols and other sources, minus ocean heat uptake, can now give a good estimate of climate sensitivity. The conclusion – taking the best observational estimates of the change in decadal-average global temperature between 1871-80 and 2002-11, and of the corresponding changes in forcing and ocean heat uptake – is this: a doubling of CO2 will lead to a warming of 1.6-1.7C. This is much lower than the IPCC’s current best estimate, 3C.
But a politician has an inherent ability to sniff out potential revenue sources even when they’re just faintly carried by the wind.
The result of such policy and legislation will be even worse of an economic disaster than ObamaCare. The “solution” will cost us much more than the “problem” was ever worth in terms of GDP, jobs and economic progress.
However, Obama will then be able to report to his two daughters who’ve been feed the alarmist creed for years that he “did something”, even if that something was, as usual, with your money and has forced you to reprioritize your own life downward.
It is the nature of the beast – and unfortunately we continue to allow the beast to feed at will and seem to find it natural that the beast is involved in all aspects of our life. All we argue about is which group we’re going to sacrifice to the beast. This time it’s the “rich”.
Oh, and gun control is also a 2nd term “priority” – more on that later.
~McQ
A little good news: US will not ratify latest UN attempt at grabbing power over the Internet
Thankfully, the US has taken the proper position on this one:
The United States said Thursday that it will not sign a United Nations telecommunications treaty that U.S. technology companies warn would disrupt governance of the Internet and open the door to online censorship.
The U.K. and Canada also said they would not ratify the treaty after negotiations ended at a conference hosted by the U.N. International Telecommunications Union (ITU) in Dubai.
Kramer, who led the U.S. delegation during the conference, told reporters on a conference call that the U.S. could not sign the treaty because there were “too many issues here that were problematic for us.”
The treaty is intended to govern how telephone calls and other communications traffic are exchanged internationally. While it is not a legally binding document, Kramer said the U.S. opposed extending the scope of the treaty to include Internet governance and online content matters.
“The U.S. will continue to uphold and advance the multi-stakeholder model of the Internet,” Kramer told reporters.
The U.S. believed the treaty should not apply to Internet providers or private and government networks. Instead, U.S. delegates argued that only traditional telecommunications operators, such as AT&T and Verizon, should be subject to the updated rules.
Another attempted power grab by the UN and more importantly, something to provide a thin veneer of legality to all the 3rd world dictators attempts to control the net. Not that they won’t do that anyway, they just wanted it to be “legal”. So they will ratify this treaty.
“What is clear from the ITU meeting in Dubai is that many governments want to increase regulation and censorship of the Internet,” a Google spokesman said in a statement. “We stand with the countries who refuse to sign this treaty and also with the millions of voices who have joined us to support a free and open Web.”
Good.
~McQ
EPA on crash drive to end coal use as we know it – and the jobs that go with it
Apparently they fear an Obama loss:
President Obama’s Environmental Protection Agency has devoted an unprecedented number of bureaucrats to finalizing new anti-coal regulations that are set to be released at the end of November, according to a source inside the EPA.
More than 50 EPA staff are now crashing to finish greenhouse gas emission standards that would essentially ban all construction of new coal-fired power plants. Never before have so many EPA resources been devoted to a single regulation. The independent and non-partisan Manhattan Institute estimates that the EPA’s greenhouse gas coal regulation will cost the U.S. economy $700 billion.
More of that laser like focus on creating or saving jobs, huh?
One more in a veritable litany of reasons to get rid of this guy tomorrow.
~McQ
Americans down on more regulation of US businesses
Gallup has a poll out saying fewer and fewer Americans want more regulation of US businesses. That shouldn’t come as a surprise, really, given the current economic situation (I say that because it’s anyone’s guess how the population would feel if we were going great guns economically):
Americans say there is too much (47%) rather than too little (26%) government regulation of business and industry, with 24% saying the amount of regulation is about right. Americans have been most likely to say there is too much regulation of business over the last several years, but prior to 2006, Americans’ views on the issue of government regulation of business were more mixed.
Here’s what I found fascinating about this particular poll:
The collapse of Lehman Bros., the failure of the secondary mortgage market, and other business problems in 2008 and 2009 might have been expected to increase Americans’ desire for more government control of business and industry. But that was not the case. Americans’ views that there is too much government regulation in fact began to rise in 2009, perhaps in response to the new Obama administration and new business regulation policies such as Dodd-Frank, reaching an all-time high of 50% in 2011 before settling down slightly this year to 47%.
Now it is well disguised in there, but the bottom line is that Gallup is saying that the American public didn’t buy into the notion that the financial collapse was all the fault of “Big Money” or “Big Business”, despite the administration and politician’s best efforts to spin it that way. There’s obviously some fault to be found on the private side, but it appears the public also puts a lot of it on government and government policy. That’s encouraging.
Of course the unsurprising aspect of this poll was the breakdown of who didn’t think there was too much regulation of US businesses and, in fact, thought there ought to be more:
Another, in a long line of reasons I find the Democrats to be much more dangerous to our future freedom (at least at the moment) than the GOP.
~McQ
Twitter: McQandO
Facebook: QandO
Quote of the Day: Pro-market edition
From Professor Luigi Zingales:
“There is not a well-understood distinction between being pro-business and being pro-market. Businessmen like free markets until they get into a market; once they are in it they want to block entry to others. Pro-marketeers want free markets at all times. The more conservative pro-marketeers are fearful of criticising business, because they assume they will be seen as criticising the free market. But we need to stand up and criticise business when business is not helping the cause of free markets.”
We talk a lot about crony capitalism. Well what the good professor is talking about when he says that businessmen like free markets until they get in one and then they try to “block entry to others” is part of what we’re talking about.
One aspect of cronyism is where businesses attempt to use the power of government, if they can so influence it, to give their company sweetheart regulations, raise artificial barriers to entry and to otherwise impede competitors to the point that they have an advantage. I’d like to say advantage in the “market”, but the market, at that point, no longer exists as a free one. It is now a distorted market due to government cronyism.
That’s something that badly needs to stop. Whether at this point that’s even possible and if it is, how we’d actually go about it are some interesting questions to discuss.
However, the primary point is being pro-business does not necessarily being pro-market and it certainly doesn’t mean you are necessarily for free markets.
We need to change the way we discuss this. We nee to talk about free markets and roundly condemn any business that attempts to use the coercive power of government to it’s advantage in markets as well as condemning those in government who use its power for such things.
~McQ
Twitter: @McQandO
Facebook: QandO
Taxes, energy, health care and spending–what we should be talking about
Pete DuPont does a little analysis of what should be major issues in the upcoming election. They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:
• Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.
But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.
The economic impact shouldn’t be waved off. When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes. Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years. It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended. Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.
As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.
• Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.
This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke. Its priorities are completely backward, but purposefully so. To call what they are doing a “policy” is simply absurd. This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable. Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy. On the issue of energy, this administration gets an F-.
• Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.
The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.
Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway. That should tell most Americans what they really think of their opinion. It is a classic “we know what’s best for you” elitist move.
The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat. The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care. Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.
Finally:
• Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.
Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”. And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so.
Those are the things we ought to be talking about. Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel? How is this even news?).
These are where Obama’s skeleton’s are to be found. He’d prefer to keep this closet door firmly closed. The media, for the most part, seems content to help in that endeavor.
This election isn’t about anything but his administration’s abysmal record. Spending time talking anything else is simply a distraction. Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies. Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota. But it sure does distract from examining the previous administration’s record, doesn’t it?
~McQ
Twitter: @McQandO
The most underreported energy related story?
Did most of you know about this?
The U.S. Energy Information Administration’s (EIA) June energy report says that energy-related carbon dioxide fell to 5,473 million metric tons (MMT) in 2011.
That’s down from a high of 6,020 MMT in 2007, and only a little above 1995′s level of 5,314 MMT.
Better yet, emissions in the first quarter of 2012 fell at an even faster rate — down 7.5% from the first quarter of 2011 and 8.5% from the same time in 2010. If the rest of 2012 follows its first-quarter trend, we may see total energy-related carbon dioxide emissions drop to early-1990s levels.
Wow. Victory for the enviro crowd, yes? Regulation has succeeded, right? The government has turned the tide?
Nope. In fact it has nothing to do with the enviro crowd, government or regulation.
Two dirty words: Hydraulic fracking. Two more for good measure: Natural gas. And the dirtiest word of all: Markets.
Those three have combined, via a price point that has stimulated demand and made the conversion of coal plants economical to drive down emissions as they produce electricity more cheaply and efficiently. This trend began in 2007 and is now having a real effect:
Increasingly, power plants are turning to natural gas because it has become abundant, and therefore cheap. And though technology is improving our ability to reduce emissions from coal usage, natural gas is still a much cleaner source.
Natural gas, given the extensive finds and the exploitation, is much cheaper than coal now. In fact:
Indeed, natural gas has just passed an important milestone. As noted by John Hanger, energy expert and former secretary of the Pennsylvania Department of Environmental Protection: "As of April, gas tied coal at 32% of the electric power generation market, nearly ending coal’s 100-year reign on top of electricity markets."
That’s how it works in markets, or is supposed too. The fact that emissions are down is an actual side benefit of the process. And it is a process that has managed to work despite government and environmental groups like the Sierra Club’s interference or attempted interference in the process (the Sierra Club has declared war on natural gas and fracking after accepting millions in previous years from the natural gas industry).
It is a part of the creative destruction of the capitalist process. Coal will still have its uses, but just as it was replaced as a primary fuel for heating homes last century, it is now being replaced as a primary fuel for generating electricity for the same reason – there is a cheaper and more efficient fuel (which also happens to have fewer emissions) that is easier to produce and deliver than coal.
At some point coal producers will either have to reinvent themselves or find something else to do. And on the other side, opportunities will expand within the natural gas industry as more and more demand builds.
But shhhhh. Don’t want anyone knowing this all happened because of markets. Why that would hurt the argument that it requires government intrusion, regulation and the pressure of environmental groups to make things like this happen.
Can’t have that.
Forward.
~McQ
Twitter: @McQandO
ObamaCare: It just gets better and better
And, of course, I say that facetiously. As it stands now, it has fostered more government regulation, more bureaucrats and more intrusion in epic proportion:
"There’s already 13,000 pages of regulations, and they’re not even done yet," Rehberg said.
"It’s a delegation of extensive authority from Congress to the Department of Health and Human Services and a lot of boards and commissions and bureaus throughout the bureaucracy," Matt Spalding of the Heritage Foundation said. "We counted about 180 or so."
So, minimally (we all know they’re not nearly done) 13,000 new pages of regulation, 180+ boards, commissions and bureaus and, of course, scads of bureaucrats to fill them.
Then there are the new broad powers granted HHS and the IRS.
Yes, friends, that’s right, this is how you make health care less expensive and better, not to mention making government less intrusive.
Probably the funniest thing, in a sad and ironic way, is the fact that there are still millions of people out there who believe the propaganda that sold this crap sandwich to the public. Someone among them I’m sure will someday be able to explain how adding costly regulations and layers upon layers of bureaucracy somehow helps reduce the cost of health care delivery.
According to James Capretta of the Ethics and Public Policy Center, federal powers will include designing insurance plans, telling people where they can go for coverage and how much insurers are allowed to charge.
"Really, how doctors and hospitals are supposed to practice medicine," he said.
Wait, wasn’t one of the primary problems with the old system, per the Democrats, a problem of insurance companies telling doctors how to practice medicine?
See, solved by government, right?
In fact, one master has been replaced by another one, the newest master being the most inept, inefficient and corrupt of the two. And, of course, no one has yet explained how all of this is going to ensure people have better access to a doctor. Why? Because, quite simply, having insurance doesn’t guarantee care. And with the disincentives provided by massive increases in regulation (and the increase that will cost for compliance) and oversight via these board, commissions and bureaus, my guess is there will be fewer doctors in the future.
So prepare to enjoy the dawning of the age of ObamaCare and the attendant disappointment, shock and anger it will eventually engender among the public. There are some things that one shouldn’t mess with, and people’s health care is one of them.
Forward.
~McQ
Twitter: @McQandO
Nanny state update
It’s a bit of a mixed picture with both state and federal nannies doing their best to get the proles under control. The base premise, of course, is only government can save you from yourself since you’re too freakin’ dumb to handle it yourself. And since you’ve been so kind as to put these people in power they find it only fair that they exercise the power they’ve accumulated to ensure you live the life they deem best.
First a local example from NYC:
The New York City Board of Health showed support for limiting sizes of sugary drinks at a Tuesday meeting in Queens. They agreed to start the process to formalize the large-drink ban by agreeing to start a six-week public comment period.
At the meeting, some of the members of board said they should be considering other limits on high-calorie foods.
One member, Bruce Vladeck, thinks limiting the sizes for movie theater popcorn should be considered.
"The popcorn isn’t a whole lot better than the soda," Vladeck said.
Another board member thinks milk drinks should fall under the size limits.
"There are certainly milkshakes and milk-coffee beverages that have monstrous amounts of calories," said board member Dr. Joel Forman.
Ye gods. When government is given the okay to manage your health care, this is what you can expect to happen. Update on the drink ban – refills, according to Bloomberg, will be “ok”. Yeah, so what’s the purpose of the drink ban?
Moving on to a federal example of drink ban stupidity:
The vending machines are unplugged at a Utah high school after a violation of federal lunch rules. Davis High School was fined $15-thousand dollars for selling carbonated beverages during the lunch hour.
Vending machines in the hallways at Davis High School normally sell carbonated beverages and candy, but to receive federal nutrition funding, they can’t sell it during lunch. Students say it doesn’t make sense.
"Everyone goes out to lunch anyways and drinks them so it’s pretty dumb."
District officials say the policy can be confusing too. Chris Williams, the Davis School District Spokesperson, says there are definite rules about how, and when carbonated beverages can be sold. “It is challenging when you can buy a Coke before lunch, and consume it during lunch, but you can’t buy a coke during lunch."
It’s not just soda sales that are a problem; candy can be too, depending on what kind it is. Davis High School’s Principal, Dee Burton, says Snicker Bars are considered nutritional and legal, but other candy is not. "We are not allowed to sell anything that is carbonated or any candy that sticks to your teeth”
“Snickers” is considered “nutritional?” And you can buy carbonated drinks before and after lunch but not during? Oh, and the $15,000 fine? Any guess where that comes from? Yeah, Mr.Taxpayer – you.
Finally, the FDC is going after cigars:
Though the agency has yet to lay out its new regulations in detail, industry insiders speculate that it could ban flavored cigars, require ugly warning labels or graphic pictures on cigar boxes, bar customers from entering store humidors, or require that cigars be kept out of the reach of potential buyers, who typically handle and examine them before choosing which ones to buy.
“Banning that experience would be crippling,” says Gary Pesh, the owner of Old Virginia Tobacco in Richmond, Virginia, and executive officer of Cigar Rights of America. “Making a customer pick their brand of cigars from a black-and-white catalog — that destroys the way we’ve done business.”
Pesh says some speculate that the FDA would also bar shops from letting their products be visible to anyone outside the store.“That means I’d have to put blacked-out windows on my storefront,” he explains. “Like a porn shop or something.”
Well let’s be honest, among the zealots it is akin to a porn shop. Well, with one exception – they’d likely support the right of a porn shop to exist with much less regulation.
Real effect: if (and they say a number of times that they’re speculating) these sorts of regulations are indeed passed, then they will negatively impact jobs at a time that this economy can’t afford to lose more:
New FDA regulations could result in the immediate closing of many cigar shops, most of which employ only three to five people and operate with slim profit margins. About 85,000 people work in the premium-cigar industry — jobs that would be in jeopardy if the FDA’s regulatory power grab succeeds.
“To jeopardize 85,000 jobs in today’s economic times is absolutely unconscionable,” says Bill Spann, CEO of the International Premium Cigar and Pipe Retailers Association.
Pesh thinks small shops could also be hurt by user fees the FDA can charge to the businesses it regulates. “I’d have to pay to put me out of business,” he explains.
But that’s not the real problem. We’re talking about a voluntary transaction between consenting adults. Why is government involved in any other way but to prevent the use of force or fraud?
Freedom? Forget about it. Choice? Not if the FDA does this the right way.
There’s a bill in Congress right now to stop this overreach. By the way, has anyone noticed that instead of being involved in oversight of many agencies, Congress has been reduced to the role of reactive legislation to remove or prevent the most egregious examples of regulatory overreach?
Folks, freedom means the freedom to consume bad things if that is your desire as long as you doing so doesn’t violate the rights of others. What we see with these examples are attempts to violate that freedom of choice and use the power of government coercion to prevent you from making choices it deems harmful.
Not. The. Job. Of. Government. In. A. Free. Society.
Period.
Yet certainly the growing trend is to do more and more of that.
And in the case of the NYC soda ban, a good portion of the left is just fine with it.
It’s frightening.
~McQ
Twitter: @McQandO