regulation – The Libertarian Republic https://thelibertarianrepublic.com "Rebellion to tyrants is obedience to God" -Benjamin Franklin Tue, 28 Jan 2020 17:11:53 +0000 en hourly 1 https://wordpress.org/?v=6.6.2 https://thelibertarianrepublic.com/wp-content/uploads/2014/04/TLR-logo-125x125.jpeg regulation – The Libertarian Republic https://thelibertarianrepublic.com 32 32 47483843 Don’t Give Missouri License to Beat a Dead Horse https://thelibertarianrepublic.com/dont-give-missouri-license-to-beat-a-dead-horse/ https://thelibertarianrepublic.com/dont-give-missouri-license-to-beat-a-dead-horse/#comments Tue, 28 Jan 2020 17:11:53 +0000 https://thelibertarianrepublic.com/?p=109241 My father loves to tell jokes. Most of them are horrendously stupid and not funny. To make matters worse, he loves to repeat them, much to my chagrin. Because of this, I became fond of the phrase, “don’t beat a dead horse”, to rebut any attempt he would make to...

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My father loves to tell jokes. Most of them are horrendously stupid and not funny. To make matters worse, he loves to repeat them, much to my chagrin. Because of this, I became fond of the phrase, “don’t beat a dead horse”, to rebut any attempt he would make to retell these terrible jokes. This would signal to him that the joke was not funny the first time and there was thus no need to repeat the joke. Unfortunately, he never learned this concept and continues telling these awful jokes to this day.

But this “beating a dead horse” is not unique to just my father and his joke-telling. Just as my father does not learn from his not-so-witty mistakes, the state of Missouri does not learn from theirs as well.

Repeatedly, the state meddles in what should be decided by the private sector, not learning that this intrusion brings more harm than good. The most recent occurrence of this was just announced a few days ago, with the state releasing the names of the businesses that received licenses to sell medical marijuana in Missouri. 

Over 900 applicants sought a license to sell medical marijuana in Missouri. To obtain a license, they were tasked with filling out a lengthy application that included writing responses to numerous questions regarding how they would impact the community and their plans for marketing among other valuable questions. These answers were then judged and scored by a third-party company that the Missouri Department of Health and Human Services delegated the process to.  

This is the first of many problems in the process. According to the Kansas City Star, to find a third party to judge the applications, Missouri “put out a call for bids for companies to score the medical marijuana applications, [but] it got no responses.” This should have been the first red flag that this process was a horrible idea.  Nonetheless, the state was undeterred and on its second call, received interest.

To judge the third party, Missouri instituted a scoring system that would rate the prospects. The highest possible score of this system was 218, but the highest scorer and ultimate winner of the job to judge the medical marijuana applications, a company called Wise Health Solutions, received a whopping 106! This is red flag number two because Missouri handed out the task of judging the applications to a company that received less than 50% on its scoring test.

This does not exactly inspire confidence in this third-party scorer and whatever confidence that the state of Missouri had in Wise Health Solutions should be erased after the licenses were released. Since those who qualified for medical marijuana licenses became public, numerous applicants and lawyers who were associated with the process have cited irregularities and inconsistencies within the scoring process. 

One notable instance of this was applicants provided the same answer to a question and received wildly different scores. Some applicants who applied for multiple licenses “copy and pasted their answers on basic questions. But those identical answers received wildly different scores”. This happened even though the Missouri scoring guide stated that the same answer should receive the exact same score. This is red flag number three, with Missouri blatantly disrespecting the rules that it set out for applicants to follow. 

But the abuses don’t end there. In addition to indiscriminately giving the same answer different scores, applicants also received zeros for lengthy responses to application questions. One applicant stated that she received zero points on a question even though she provided exactly what the questions asked. The Missouri Medical Cannabis Trade Association ascertained that about 67 percent of the application pool received a score of zero on a question about marketing plans. The Association that this was so egregiously bad that it had to have been an error in the process.

Another applicant had support from the Mayor and 297 out of the 300 people in the small town that he planned to build his dispensary. In addition to this support, he planned to use revenue from the dispensary to aid the local police force. But this got him nowhere on the question on the application about the economic impact on the local community as he scored poorly on it. This apparent lack of attention to the application process earns Missouri a fourth red flag.

Apparently, though, Missouri is blind to the faults of this process. State officials still claim that the process was “secure and legitimate”, even though it was obviously not. Disgruntled applicants and their lawyers have started to file lawsuits against the state, causing an unnecessary headache for the Department of Health and Senior Services (DHSS). The DHSS has already begun soliciting bids from attorneys who can defend the state in these lawsuits, which will be a misuse of taxpayer dollars.

But the underlying point remains: all of this could have been avoided if Missouri had left the task to the private sector. Hopefully, Missouri voters and legislators will learn their lesson so they will not repeat the same mistakes when recreational marijuana becomes legal.  I am not optimistic though. Missouri loves to beat a dead horse.

 

Image: Paul Sableman

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How Easy It Is to Become a Federal Criminal https://thelibertarianrepublic.com/how-easy-it-is-to-become-a-federal-criminal/ https://thelibertarianrepublic.com/how-easy-it-is-to-become-a-federal-criminal/#comments Tue, 25 Jun 2019 16:28:34 +0000 https://thelibertarianrepublic.com/?p=102649 By Alex Tabarrok Mike Chase, author of the excellent Twitter feed @CrimeADay, has now written the illustrated handbook, How to Become a Federal Criminal. In truth, a handbook wasn’t necessary because it is very easy to become a federal criminal. Criminal Law in Every Nook and Cranny of Life You...

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By Alex Tabarrok

Mike Chase, author of the excellent Twitter feed @CrimeADay, has now written the illustrated handbook, How to Become a Federal Criminal. In truth, a handbook wasn’t necessary because it is very easy to become a federal criminal.

You may know that you are required to report if you are traveling to or from the United States with $10,000 or more in cash. Don’t hop over the Canadian border to buy a used car, for example, or the Feds may confiscate your cash (millions of dollars are confiscated every year).

Did you also know that you can’t leave the United States with more than $5 in nickels? That’s a federal crime punishable by up to five years in prison. How about carrying a metal detector in a national park—up to six months in prison. And God forbid you should use your metal detector and find something more than 100 years old, that can put you away for up to a year. Also illegal in a national park? Making unreasonable gestures to a passing horse.

The expansion of federal criminal law into every nook and cranny of life can be amusing, but there is a darker side.

The feds also have unbelievably powerful tools at their disposal. They can subpoena your bank records, listen to your phone calls, indict you in a secret proceeding called a grand jury, and, if they think you lied to them, they can charge you for that alone. Then, if you can get a jury to find you guilty on just one charge, the judges is allowed to sentence you up to the statutory maximum based on things you were never charged with, or even things a jury acquitted you of, so long as the judge decides you probably did them.

(italics added).

Moreover, when anyone can be charged with a crime, the application of criminal law becomes discretionary and that discretion may be used to suppress the free exercise of other rights. Indeed, the recent Supreme Court case, Nieves v. Bartlett, makes it easier for the police to arrest people even if the reason for the arrest is retaliation for lawful behavior.

Slate: The First Amendment makes it unconstitutional for government officials to retaliate against you because they dislike your speech. At the same time, federal law gives you the right to sue state officials for compensation if they violate constitutional rights such as your right to free speech. But on Tuesday, the Supreme Court invented a rule that will often allow police officers to arrest people in retaliation for disfavored speech without liability.

….Because local laws are full of minor infractions, like “loitering,” that are frequently violated without incident, police will often have a pretext to arrest people engaged in speech the officers don’t like. By immunizing such abuse, Nieves may have devastating effects on demonstrators, press photographers, and anyone who wants to exercise their speech rights in public, like the right to film the police or verbally challenge officer misconduct. The power to arrest is a potent tool for suppressing speech because even if charges are later dropped, arrestees must undergo the ordeal—and dangers—of being booked and jailed, and they may have to disclose the arrest on future job and housing applications, among other ramifications.

This article is published with permission from Marginal Revolution.

Alex Tabarrok

Alex Tabarrok

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen.

This article was originally published on FEE.org. Read the original article.

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Creating a Fairness Doctrine for the Internet Is a Really Bad Idea https://thelibertarianrepublic.com/creating-a-fairness-doctrine-for-the-internet-is-a-really-bad-idea/ https://thelibertarianrepublic.com/creating-a-fairness-doctrine-for-the-internet-is-a-really-bad-idea/#comments Thu, 20 Jun 2019 20:01:27 +0000 https://thelibertarianrepublic.com/?p=102508 Critics of America’s online discourse have heightened their objections to what they see as viewpoint bias, hate-mongering, what Bill Clinton once called “the politics of personal destruction,” and questionable content curation by social media companies. Should Social Media Be Regulated? Now some are making calls to impose government regulations to...

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Critics of America’s online discourse have heightened their objections to what they see as viewpoint bias, hate-mongering, what Bill Clinton once called “the politics of personal destruction,” and questionable content curation by social media companies.

Now some are making calls to impose government regulations to “solve” the problems they see. A good example is April Glaser’s April 6 Slate piece, “Bring Back the Golden Age of Broadcast Regulation.”

She sees an analogy between radio and TV’s one-time role as crucial communications infrastructure and today’s social media platforms, concluding that what once justified “public interest” regulation of radio and TV now justifies imposing parallel regulation of social media sites.

She asserts that the history of earlier regulation, specifically the Fairness Doctrine, shows that new regulations would be “light-touch” because “For decades, radio and television followed regulations—hardly heavy-handed ones—meant to ensure they served the information needs of their audiences and did not actively harm political discourse.”

Unfortunately, Glaser’s core premise is far closer to the opposite of the truth than to the truth. Thomas Hazlitt’s recent book The Political Spectrum shows that at almost every possible margin, regulation of the broadcast spectrum created an ocean of partisan disasters. Similarly, Paul Matzko wrote of Glaser’s claim that “not a single part of that statement is correct.”

However, before looking at the incredibly unfair history of the Fairness Doctrine, it is worth spending a moment asking whether it is even possible, much less plausible, that government could even-handedly regulate the fairness of political discourse.

It is true that the Fairness Doctrine is attractively named. But that is because fair is a great weasel word.

Everyone thinks their positions are eminently fair, and no one wants to say they are against fairness. That is, fairness is in the eye of the beholder, favoring restrictions on others they disagree with but opposing restrictions they don’t want imposed on them.

Such mutually inconsistent views of fairness, cloaked by similarity of language, assures us that controls to be proposed to regulate political speech in the name of fairness will be highly political and unfair.

Consider just some of the problems with such “fairness” as applied to radio.

To begin with, there is no unambiguous way to measure what should count as sufficiently partisan to qualify opponents for equal time. It doesn’t seem that there is any greater ability to define the term to have a clear, legally useful meaning than Justice Potter Stewart’s inability to define pornography beyond “I know it when I see it.”

How much control is a station assumed to have over employees? Over those not its employees? Where is the line between objecting to an individual politician and an attack on a party?

If more than one person holds a position attacked, who, and how many, should get equal time? Given that the number of listeners varies greatly over time, does it have to be given at the same time of day? Should radio callers’ time be counted or just the host’s when it comes to how much “compensatory” time must be provided to those claiming unfair treatment?

Would those making the charge or those trying to rebut it bear the burden of proof? The result of these problems, and far more, was incredible government arbitrariness and intrusiveness, with huge costs (ranging from legal bills to potentially being forced to give away a great deal of airtime to the threat of losing one’s broadcast license) that stifled many voices until the Reagan administration ended it in 1987.

The implication that fairness only involves the two major parties is also highly objectionable. There are not just Republican views and Democrat views, with each group being homogenous, so that fairness only requires balancing one against the other. One Democrat could claim to deserve equal time for something another Democrat said, and similarly for Republicans. Far worse from my perspective is that I do not belong to either party, both of which frequently violate my views.

Many times the only difference between party positions is who will steal from whom, while I object to using the government to steal for anyone from anyone else. Isn’t it fair that I be given equal time whenever either party proposes to rob Peter to pay Paul (which Paul insists is fair, but Peter insists is unfair)? And if both Democrats and Republicans come up with “bipartisan” plans in such areas, shouldn’t I get double the time to respond to the two-against-one attack?

By further extending such a hot mess to social media platforms, even more problems would arise. What would be the appropriate compensatory policy? If someone tweeted an attack, should the victim get the same number of words to respond? The same number of tweets? As much “room” as they want? What policies to try to forestall such attacks would be adequate and fair (as restricting unpleasant topics could both deter “haters” and important investigative journalism)? Etc. Etc.

Such speculations turn us back to the history of “public use” regulations such as the Fairness Doctrine, which Glaser asserts were “light-touch” but were anything but.

I would recommend The Political Spectrum for a deep dive into this issue, though Matzko’s article offers a good shorter treatment, with a more extensive analysis that will be coming next year in his forthcoming The Radio Right, from Oxford University Press. But here, consider just a few brief examples of “light-touch” FCC regulation.

In the early 1940s, FDR pushed banning newspapers from owning radio stations as being in the “public interest” of preventing media consolidation, but the policy really aimed to keep FDR’s newspaper opponents from acquiring radio platforms to push back against his policies.

Things became much more abusive in the Kennedy/Johnson years. Independent radio stations had become more important by the 1960s, putting more critical voices on the air, particularly with regard to Kennedy’s Nuclear Test Ban Treaty. Organized from the offices of the president and attorney general, a front organization called the Citizens Committee for a Nuclear Test Ban Treaty was created to bring Fairness Doctrine complaints to demand response time against stations criticizing it. Fairness Doctrine rules were also “reformed” by the Cullman Doctrine, requiring stations to offer response time for free if an offended group said it could not afford to pay (i.e., always), sharply jacking up the price to them of offering criticism.

After Kennedy was assassinated, Fairness Doctrine abuses continued. During the 1964 presidential campaign, the DNC commissioned operatives—including a lawyer who had headed Fairness Doctrine enforcement—to coerce free LBJ airtime out of stations that aired Goldwater support. The leader later bragged of extracting over 1,700 free broadcasts and “inhibiting the political activity of these Right Wing broadcasts.”

Later, President Richard Nixon used such licensing leverage to kill the liberal “Smothers Brothers Comedy Hour” and to try to pressure the Washington Post to back off Watergate coverage.

In fact, the only administration whose Fairness Doctrine activity makes them look better—whose application of the Fairness Doctrine was consistent with fairness—was Ronald Reagan… because his administration killed it.

The history of the Fairness Doctrine, in addition to the myriad logical, measurement, and enforcement reasons it could not be fair in practice, shows that “light-touch” regulations under the Fairness Doctrine offer only foreboding prospects for social media regulation. It would unwisely double down on a policy of which Justice William Douglas once wrote,

The regime of federal supervision under the Fairness Doctrine is contrary to our constitutional mandate and reduces the [licensee] to a timid or submissive segment of the press whose measure of the public interest will now be echoes of the dominant political voice that emerges after every election.

Justice Douglas also concluded that

Restriction of free thought and free speech is the most dangerous of all subversions. It is the one un-American act that could most easily defeat us.

In fact, Fairness Doctrine restrictions in practice were closer to the Soviet ideal than America’s. As Lenin put it:

Why should a government…allow itself to be criticized …Why should any man be allowed to…disseminate pernicious opinions calculated to embarrass the government?

Any serious consideration of the realities surrounding the Fairness Doctrine makes it clear that extending government regulation to social media in a similar fashion would produce abusive, ham-handed results rather than benign, light-touch guardrails that help resolve societal issues. So “doing something” falls very short when it comes to predictable or demonstrable improvement. For my own part, however, I kind of like the idea of requiring that whenever someone advances the Fairness Doctrine as a model for social media regulation, they must call it the Vladimir Lenin Fairness Doctrine.

Gary M. Galles

Gary M. Galles

Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

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Bernie Sanders’ ‘Most Socialist Idea Yet’ https://thelibertarianrepublic.com/bernie-sanders-most-socialist-idea-yet/ https://thelibertarianrepublic.com/bernie-sanders-most-socialist-idea-yet/#comments Fri, 14 Jun 2019 17:58:40 +0000 https://thelibertarianrepublic.com/?p=102271 By William J. Luther Sen. Bernie Sanders recently announced that “his campaign is working on a plan to require large businesses to regularly contribute a portion of their stocks to a fund controlled by employees, which would pay out a regular dividend to the workers.” Such a plan would go further than the...

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By William J. Luther

Sen. Bernie Sanders recently announced that “his campaign is working on a plan to require large businesses to regularly contribute a portion of their stocks to a fund controlled by employees, which would pay out a regular dividend to the workers.”

Such a plan would go further than the bills he introduced on May 28 to encourage employee-owned businesses, which would “provide more than $45 million in funding to states to establish and expand employee ownership centers” and “create a U.S. Employee Ownership Bank to provide $500 million in low-interest rate loans and other financial assistance to help workers purchase businesses through an employee stock ownership plan or a worker-owned cooperative.” It would also go further than Hillary Clinton’s 2015 proposal, which aimed to boost profit-sharing through tax credits.

Many on the left have championed the idea of requiring employee ownership, while explicitly noting its Marxist roots. Writing for the New York Magazine’s Intelligencer, Eric Levitz favorably describes the Sanders plan as “worker ownership of the means of production.” At Jacobin, Michael McCarthy describes it as “a bold and exciting plan, one that fits together with a host of policy ideas we can broadly term ‘investment fund socialism.’” Indeed, Dylan Matthews at Vox says it is “Sanders’s most socialist idea yet.”

Let me be clear: I am not opposed to employee-owned businesses or profit-sharing arrangements. In some cases, those structures make sense. But requiring employee ownership or profit-sharing strikes me as a terrible way to address inequality — one that would leave many workers worse off.

The Sanders plan is still in the works, so I cannot address the particular aspects of the proposal. Instead, I will express my concern by considering a simple policy where firms are required to pay their employees partially in company stock.

The traditional Marxist view maintains that workers are exploited because they do not own the means of production and hence do not receive a share of the firm’s profits. To rectify the situation, Marxists have historically proposed collective ownership of the means of production, employee-owned businesses, or equity payments. All three policies aim to ensure that workers share in the firm’s profits.

In a market economy, firms and their employees reach an employment agreement where the firm provides a total payment, the components of which might take many forms (e.g., wages, 401(k) contributions, medical insurance premiums, etc.), in exchange for the employee’s services. For simplicity, let us assume that the firm and employee initially agree to a set of payments comprised exclusively of wages. (I will consider alternatives below.) What happens, then, if the government requires the firm to pay the employee partially in the form of company stock?

If the requirement does not boost the employee’s productivity, it will not affect the total payment the firm is willing to pay. It will merely affect the composition of the total payment. So, instead of receiving $50,000 per year in wages, the employee might receive $40,000 per year in wages and $10,000 per year in company stock. The firm’s financial outlay is the same. Hence, we need only consider how the employee values the company stock relative to wages.

Types of Assets

No one will deny that the company stock is an asset. But one should note that the stream of wages is an asset as well. And these assets are highly correlated. If the firm does well, the stock price will rise and the employee’s wage prospects will be good. She is likely to keep her job and might even be able to negotiate a raise. If the firm does poorly, the stock price will fall and the employee’s wage prospects will be bad. She might receive her wages with a delay, might be required to take a pay cut, or might lose her job entirely.

Hence, employees who hold their own company’s stock are over-exposed to their company. When times are good, their portfolio of assets (i.e., stock and wages) performs very well. When times are bad, their portfolio performs very poorly. It is an unnecessarily risky portfolio. If possible, such an employee would likely gain from diversifying their portfolio — that is, exchanging the company stock for some other asset that is not so highly correlated with their wages. Indeed, most financial advisers discourage clients from holding much of their own company’s stock for this very reason. To state the matter simply, one should not put all their eggs in one basket.

The benefits of diversification suggest a superior policy to requiring firms to pay their employees partially in company stock. Instead, the government might require firms to pay their employees partially in an exchange-traded fund (ETF) that tracks a broad basket of assets, like the S&P 500 or the Russell 3000. Such a policy would make the employees capital owners, as the Marxists want, without encouraging them to hold such an undiversified portfolio. But the logic of choosing an appropriate portfolio means we can do better still.

Employees come from many walks of life. Some are young. Others are old. Some have working spouses. Others have non-working spouses. Still others have no spouses at all. Differing circumstances often result in differences in the optimal portfolio allocation. The young, for example, might wish to hold higher-risk, higher-return assets than their older colleagues because they have more time to weather temporary market losses.

One-Size Does Not Fit All

If firms are required to take a one-size-fits-all approach, like paying employees partially with a total-market ETF, many employees will have to sell a portion of the ETF to acquire the assets required by their unique portfolio needs. That is costly. While highly traded ETFs are quite liquid, they are nonetheless less liquid than dollars. Hence, the average employee would probably be better served by being paid entirely in wages and then purchasing the stocks and bonds that make the most sense for their situation.

There are exceptions to the strong version of this argument, which I have laid out above. But the more general point — that requiring firms to pay their employees in company stock or total-market ETFs is likely to make many employees worse off — remains after these exceptions are considered.

Suppose, for example, that paying an employee partially (say, 10 percent) in company stock boosts the worker’s productivity by an amount that makes the reduction in diversification or the costs of reallocating the portfolio to avoid that diversification worthwhile. In that case, the firm will choose to pay the employee partially in company stock without any requirement from the government to do so.

If the government requires something less than the desired amount (say, 8 percent), the policy will have no effect. If the government requires something more than the desired amount (say, 12 percent), it will tend to make employees worse off by requiring them to liquidate the additional 2 percent of the income they receive as stocks in order to acquire assets that are more suitable given their desired portfolio.

Suppose, instead, that a firm can acquire stock more cheaply on the employee’s behalf, perhaps by buying in bulk, than the employee could on her own and, moreover, that the discount is sufficient to make any resulting costs of reallocating the portfolio worthwhile. In this case, as in the previous case, the firm will choose to pay the employee partially in stock without any requirement from the government to do so. Again, if the government requires something less than the desired amount, the policy will have no effect. If the government requires something more than the desired amount, it will tend to make employees worse off by requiring costly liquidations to achieve desired portfolios.

If modern Marxists want to increase the extent to which employees are capital owners without making those employees worse off, they should consider policies that (1) reduce the costs of accessing financial markets and (2) educate employees about the benefits of saving and investing. And, if inequality is still a problem after such policies are adopted, they should address the issue head-on in the least costly way possible: redistribution financed through broad-based taxation.

Efforts to change the composition of payments to employees, like those suggested by Sanders and championed by many on the left, are likely to leave the intended beneficiaries worse off. Such a policy means workers must choose between holding an under-diversified portfolio or incurring higher costs to achieve the appropriate mix of assets given their unique circumstances.

 

William J. Luther

William J. Luther is the Director of AIER’s Sound Money Project and an Assistant Professor of Economics at Florida Atlantic University. His research focuses primarily on questions of currency acceptance. He has published articles in leading scholarly journals, including Journal of Economic Behavior & Organization, Economic Inquiry, Journal of Institutional Economics, Public Choice, and Quarterly Review of Economics and Finance. His popular works have appeared in The Economist, Forbes, and U.S. News & World Report. He has been cited by major media outlets, including NPR, VICE News, Al Jazeera, The Christian Science Monitor, and New Scientist.

Luther earned his M.A. and Ph.D. in Economics at George Mason University and his B.A. in Economics at Capital University. He was an AIER Summer Fellowship Program participant in 2010 and 2011.

William J. Luther on Facebook.

This article is republished with permission from the American Institute for Economic Research.

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The 7 Worst Ideas for Regulation This Century https://thelibertarianrepublic.com/the-7-worst-ideas-for-regulation-this-century/ https://thelibertarianrepublic.com/the-7-worst-ideas-for-regulation-this-century/#comments Thu, 13 Jun 2019 18:30:16 +0000 https://thelibertarianrepublic.com/?p=102217 Many good things have happened both in the United States and worldwide this century. In the U.S., we have the lowest unemployment rate in half a century. Worldwide prosperity is growing so fast that the rate of extreme poverty fell by half between 1990 and 2015, five years ahead of...

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Many good things have happened both in the United States and worldwide this century. In the U.S., we have the lowest unemployment rate in half a century. Worldwide prosperity is growing so fast that the rate of extreme poverty fell by half between 1990 and 2015, five years ahead of the World Bank’s optimistic goal.

The bad news is that along with great economic performance has come a good bit of silly, one might even call it stupid, regulation and proposals for regulation. Here are my top seven for the United States, although I’m open to hearing about other, even stupider ones.

1.  Interest rate cap on credit cards.Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez want the federal government to cap interest rates charged by credit card companies at 15 percent. The likely results will be that people with no credit history or poor credit will have more difficulty getting credit cards and will, instead, resort to layaway plans, pawn shops, payday loans, and even loan sharks.

2.  Rent control.Oregon’s government recently passed a statewide rent-control law. It is hard to find an economist not currently living in a rent-controlled apartment who will defend rent control. Rent control creates shortages, reduces the incentive for landlords to maintain rental properties, and discourages construction of new apartments. It also reduces mobility, as people hang on to their rent-controlled apartments longer than otherwise.

3.  $15 minimum wage.Seattle already has it, and a recent study by economists at the University of Washington finds that the minimum wage increased wages by 3 percent but reduced work hours by 6 to 7 percent. Major Democratic politicians are pushing it at the federal level, where it would do even more harm, pricing unskilled workers out of the labor market and causing them hardship.

Notice that all three of the above are some version of price controls. One thing economists are surest of is that price controls that keep the price below the market price cause shortages and price controls that keep the price above the market price cause surpluses.

4.  Bans on plastic bags.In 2014, California’s legislature banned single-use plastic bags at large retail stores, and in 2016, voters, by a 52 to 48 percent vote, affirmed the decision. Plastic bags were great for carrying groceries: you could carry four or five bags at once that were full of groceries. Paper bags are less useful and take up more space in landfill. Also, for paper bags to have the same environmental “footprint” as plastic bags, they need to be used 3 times. For cloth bags to have the same footprint, they need to be used 131 times. How likely is that?

People worry about plastic bags ending up in the ocean, but that’s a problem more with Asia and Africa, not the United States. Moreover, the more-durable bags people use over and over are often less than sanitary.

5.  FDA requirements for testing of drugs that have been around for a century.Nitroglycerin has been available for 130 years as a treatment for some heart conditions. Nitroglycerin was officially grandfathered because the Food and Drug Administration never approved it; the FDA didn’t get its power over drugs until 1938 and 1962. But after Pfizer had its version of nitroglycerin, Nitrostat, approved, the FDA sent warning letters to Glenmark and Konec ordering them to cease marketing their unapproved nitroglycerin tablets. The FDA takes similar action against other producers of grandfathered drugs, even though millions of Americans successfully use those drugs.

6.  FDA ban on sale of flavored e-cigarettes to teenagers.The surge in teen vaping of flavored e-cigarettes has been accompanied by a decline in teen smoking of cigarettes. But the FDA has banned the sale of flavored e-cigarettes in stores that don’t have areas prohibiting people under age 18. That will make it harder for kids to get flavored e-cigarettes, which is the point of the regulations. Yet a British government study reports that vaping is only 5 percent as risky as smoking.

7.  Restrictions on food donations to homeless people.In 2018, the California legislature passed a law requiring that organizations feeding homeless people must use licensed state-approved kitchens. Would you be surprised to know that Deliverance San Diego, which had delivered about 110 hot meals to homeless San Diegans every day it operated, announced that it shut down because of those regulations?

In introductory economics, you learn the concept of a normal good. A normal good is one that people buy more of when their income rises. Could stupid policies be a normal good?

David R. Henderson

David R. Henderson, a research fellow with the Hoover Institution at Stanford University, is editor of The Concise Encyclopedia of Economics.

This article is republished with permission from the American Institute for Economic Research.

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Have a Cigar, the Government Hates it! [VIDEO] https://thelibertarianrepublic.com/have-a-cigar-the-government-hates-it-video/ https://thelibertarianrepublic.com/have-a-cigar-the-government-hates-it-video/#comments Fri, 07 Jun 2019 16:07:05 +0000 https://thelibertarianrepublic.com/?p=102060 It all started with a video I posted to my Twitter account on Saturday of my brother-in-law striking a match to light an El Credito cigar I smoked while wearing my Stetson cowboy hat and playing the theme music from “The Good, the Bad and the Ugly.” Something we did...

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It all started with a video I posted to my Twitter account on Saturday of my brother-in-law striking a match to light an El Credito cigar I smoked while wearing my Stetson cowboy hat and playing the theme music from “The Good, the Bad and the Ugly.” Something we did strictly for fun and a few laughs as I have been a fan of Clint Eastwood and western movies in general since childhood.

I captioned the video ” It’s no secret that I’m a big fan of Westerns and being a #ClintEastwood fan I had to get the same cigars he smoked in “The Man With No Name” trilogy. I enjoy cigars because I find them relaxing and because Leftists hate them.”

Many people realized the light-heartedness of my post while a few individuals (whom I suspect are likely socially Conservative authoritarian types) attempted to shame me for my hobby, insinuating that I am a Communist and a “typical millennial” who can’t think for himself and gives in to peer pressure. Usually, I would let things of this nature go, but the more I thought about it, the more I thought it would be appropriate to write a response in an article to show you that big government does indeed hate cigars.

I am currently a novice in the realm of cigar smoking, but it didn’t take me long to realize that, like everything else good in the world today, government has to stick its grubby paws into it. Don’t believe me? The website cigaraficionado.com has an extensive list of articles all about the government’s war on cigars. It’s interesting to note that the FDA launched its war on cigars with the “Tobacco Control Act” in spite of the fact that the same agency released a study that reached the conclusion that consuming one to two cigars a day “ while not completely safe, is neither associated with significantly increased risks for death from all causes, nor smoking-related cancers.”

The city of Beverley Hills California also recently voted to ban nearly all tobacco products by 2021 but exempts former governor and actor Arnold Schwarzenegger’s favorite cigar club. This is another prime example of how the elites want to control the average man with “illegal substance for me, but not for thee” laws.

I am not a medical doctor, so I will not officially make a medical claim that cigars are healthy and I’m not saying everyone should be religiously smoking stogies. However, I can’t stand the idea of anyone attempting to restrict my individual liberty by restricting the consumption of cigars, which I find relaxing. I do tend to agree with the opinion of Steven Crowder and Denis Prager that it may have some health benefits strictly because it helps some people to relax and de-stress which is overall beneficial to an individual’s health.

I highly recommend watching the video regardless of how you feel about smoking cigars because it’s very educational. I should also disclose that as a libertarian I strongly disagree with Mr. Prager on marijuana, but I appreciate that he is honest that his opinion on marijuana is purely anecdotal.

I have a strong feeling Richard Overton, who was once the oldest living WWII vet, would agree with Crowder and Prager on cigars; Overton, who passed away in December of 2018 at the age of 112, was once asked what were his secrets to a long and happy life. His answer?

God and cigars.

As a libertarian, I believe strongly in the principle of self-ownership, which dictates that I can put in my body what I choose. And I don’t see how my hobby is any business of government or anyone else. I see the government’s war on cigars as yet another assault on individual freedom which must not be allowed to continue. As I said before, it’s something I do because I find it relaxing. It’s a personal added pleasure that authoritarians hate it.

In response to all my haters, I say – Put that in your pipe and smoke it!

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Why a Free Society Cannot Transform Wishes into Rights https://thelibertarianrepublic.com/why-a-free-society-cannot-transform-wishes-into-rights/ https://thelibertarianrepublic.com/why-a-free-society-cannot-transform-wishes-into-rights/#comments Wed, 29 May 2019 16:09:26 +0000 https://thelibertarianrepublic.com/?p=101816 Any careful observer of American politics must be struck by the ever-expanding roster of things people have asserted rights to. But when such arguments are seriously considered, there is little to them beyond shared desires or wishes for certain things, which supposedly implies that there ought to be rights to...

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Any careful observer of American politics must be struck by the ever-expanding roster of things people have asserted rights to. But when such arguments are seriously considered, there is little to them beyond shared desires or wishes for certain things, which supposedly implies that there ought to be rights to them.

From there, it is but one further step to legislative, executive, or judicial attempts to create such rights, promoted as social improvements guaranteed by government.

This “ought implies is” argument about rights reverses the claim that “is implies ought,” which David Hume famously shot down. It ignores that in a world where scarcity is inescapable, our desires always outpace what is producible, which means that newly asserted rights may well be impossible delusions. Further, it ignores that making good on any particular newly created right must violate other’s existing rights to themselves and their efforts. And it, too, deserves rejection.

Few have thought as carefully about this confusion between wishes and rights as Leonard Read. His insights are particularly well developed in his “Doctor, Whoever You Are,” section in his 1969 Let Freedom Reign. In a world where turning one wish into a political right leads to still more attempts to use the same magic on another wish, and every such step further erodes liberty, Read’s views are worth serious consideration on their 50th anniversary.

“Now in vogue is a fearful combination of wishes and methods, as fanciful as Aladdin’s lamp…the transmutation of wishes into rights! Do you wish for better housing? Then better housing is a right. Do you wish for…higher returns for goods and services, shorter hours of labor, protection from competition? Then these are rights. Do you wish for free medical care? Then free medical care is a right!”

“And what is the nature of the jinni called upon to transmute wishes into rights?… government. It extorts from all, allocating the legalized loot to those who effectively make their wishes heard.”

“How do we go about healing this sickness? We must acquire an understanding that wishes, regardless of how numerous, do not constitute a right. I have no more right to your professional attention than you have a claim on me to wash your dishes. We are dealing with an absurdity.”

“We live and prosper by specialization and exchange…others tend to encourage me to specialize at what is of value to them, and I tend to encourage them to specialize at what is of value to me. This is how people in a free society exert their wishes. But note that these wishes do not carry with them any right on my part to command what others shall produce or any right to force on them the terms of exchange.”

“When the notion that a wish is a right is put into effect by police force—the only way it can be done—then specialization is no longer guided by consumer wishes nor are the terms of exchange…Other citizens are then forced to perform labor for which they receive absolutely nothing in return. Exchange is by coercion rather than by free choice.”

“The fact that many of us wish more medical attention than we can afford does not give us a right to your [physician] services or a right to force others to [finance them]…wishes to the contrary notwithstanding!”

Benjamin Franklin is said to have written, “If man could have half his wishes, he would double his troubles.” He was referring to the problems our wishes would cause ourselves. But we go far beyond causing ourselves problems whenever we try to transform our wishes into rights.

We cause all our fellow citizens problems because our efforts to create rights for ourselves must pick their pockets—assert our ownership of their resources rather than acknowledging their self-ownership—despite lacking moral or ethical justification. Leonard Read rightly recognized this as no different than looting enforced by a “might makes right” mentality.

If not for the corrupting lure of something for nothing, people would long ago have rejected the idea that wishes imply rights. But as ever-more goodies have been added to bait the lure, most Americans seem to have decided to stop thinking about the burdens borne as a result of these invented rights.

Our reasoning has been warped by a too-narrow view of our self-interest, which ignores what we can achieve jointly only by defending voluntary arrangements, which respect one another’s self-ownership. That makes it particularly important to revisit Leonard Read’s wisdom about wishes and rights, for otherwise our coveting will corrupt and punish us further and further.

Gary M. Galles
Gary M. Galles

Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.

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Sen. Hawley’s Moral Panic Over Social Media https://thelibertarianrepublic.com/mo-senators-moral-panic-over-social-media/ https://thelibertarianrepublic.com/mo-senators-moral-panic-over-social-media/#comments Tue, 28 May 2019 20:16:59 +0000 https://thelibertarianrepublic.com/?p=101803 In a hotly-worded USA Today op-ed last week, Senator Josh Hawley (R-Missouri) railed against social media sites Facebook, Instagram, and Twitter. He argued that, “social media wastes our time and resources,” and is “a field of little productive value” that have only “given us an addiction economy.” Sen. Hawley refers to these...

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In a hotly-worded USA Today op-ed last week, Senator Josh Hawley (R-Missouri) railed against social media sites Facebook, Instagram, and Twitter. He argued that, “social media wastes our time and resources,” and is “a field of little productive value” that have only “given us an addiction economy.” Sen. Hawley refers to these sites as “parasites” and blames them for a litany of social problems (including an unproven link to increased suicide), leading him to declare that, “we’d be better off if Facebook disappeared.”

As far as moral panics go, Sen. Hawley’s will go down as one for the ages. Politicians have always castigated new technologies, media platforms, and content for supposedly corrupting the youth of their generation. But Sen. Hawley’s inflammatory rhetoric and proposals are something we haven’t seen in quite some time.

He sounds like those fire-breathing politicians and pundits of the past century who vociferously protested everything from comic books to cable television, the waltz to the Walkman, and rock-and-roll to rap music. In order to save the youth of America, many past critics said, we must destroy the media or media platforms they are supposedly addicted to. That is exactly what Sen. Hawley would have us do to today’s leading media platforms because, in his opinion, they “do our country more harm than good.”

We have to hope that Sen. Hawley is no more successful than past critics and politicians who wanted to take these choices away from the public. Paternalistic politicians should not be dictating content choices for the rest of us or destroying technologies and platforms that millions of people benefit from.

Addiction Panics: We’ve Been Here Before

Ironically, Sen. Hawley isn’t even right about what the youth of America are apparently obsessed with. Most kids view Facebook and Twitter as places where old people hang out. My teenage kids laugh when I ask them those sites. Pew Research polling finds that many younger users are increasingly deleting Facebook (if they used it at all) or flocking to other platforms, such as Snapchat or YouTube.

But shouldn’t we be concerned with kids overusing social media more generally? Yes, of course we should—but that’s no reason to call for their outright elimination, as Sen. Hawley recommends. Such rhetoric is particularly concerning at a time when critics are proposing a “break up” of tech companies. Sen. Hawley sits on the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights. It is likely he and others will employ these arguments to fan the flames of regulatory intervention or antitrust action against at least Facebook.

Forcing social media sites to “disappear” or be broken up is one of the worst ways to deal with these concerns. It is always wise to mentor our youth and teach them how to achieve a balanced media diet. Many youths—and many adults—are probably overusing certain technologies (smartphones, in particular) and over-consuming some types of media. For those truly suffering from addiction, it is worth considering targeted strategies to address that problem. However, that is not what antitrust law is meant to address.

Moreover, concerns about addiction and distraction have popped up repeatedly during past moral panics and we should take such claims with a big grain of salt. Sociologist Frank Furedi has documented how, “inattention has served as a sublimated focus for apprehensions about moral authority” going back to at least the early 1700s. With each new form of media or means of communication, the older generation taps into the same “kids-these-days!” fears about how the younger generation has apparently lost the ability to concentrate or reason effectively.

For example, in the past century, critics said the same thing about radio and television broadcasting, comparing them to tobacco in terms of addiction and suggesting that media companies were “manipulating” us into listening or watching. Rock-and-roll and rap music got the same treatment, and similar panics about video games are still with us today.

Strangely, many elites, politicians, and parents forget that they, too, were once kids and that their generation was probably also considered hopelessly lost in the “vast wasteland” of whatever the popular technology or content of the day was. The Pessimists Archive podcast has documented dozens of examples of this reoccurring phenomenon. Each generation makes it through the panic du jour, only to turn around and start lambasting newer media or technologies that they worry might be rotting their kids to the core. While these panics come and go, the real danger is that they sometimes result in concrete policy actions that censor content or eliminate choices that the public enjoys. Such regulatory actions can also discourage the emergence of new choices.

Missed Opportunity, or Marvelous Achievement?

Sen. Hawley makes another audacious assertion in his essay when he suggests that social media has not provided any real benefit to American workers or consumers. He says the rise of the Digital Economy has “encouraged a generation of our brightest engineers to enter a field of little productive value,” which he regards as “an opportunity missed for the nation.”

This is an astonishing statement, made more troubling by Hawley’s claim that all these digital innovators could have done far more good by choosing other professions. “What marvels might these bright minds have produced,” Hawley asks, “had they been oriented toward the common good?”

Why is it that Sen. Hawley gets to decide which professions are in “the common good”? This logic is insulting to all those who make a living in these sectors, but there is a deeper hubris in Sen. Hawley’s argument that social media does not serve “the common good.” Had some benevolent philosopher kings in Washington stopped the digital economy from developing over the past quarter century, would all those tech workers really have chosen more noble-minded and worthwhile professions? Could he or others in Congress really have had the foresight to steer us in a better direction?

In reality, U.S. tech companies produce high-quality jobs and affordable, collaborative communications platforms that are popular across the globe. In response to Sen. Hawley’s screed, the Internet Association, which represents America’s leading digital technology companies, noted that, in Sen. Hawley’s home state of Missouri alone, the Internet supports 63,000 jobs at 3,400 companies and contributed $17 billion in GDP to the state’s economy. Presumably, Sen. Hawley would not want to see those benefits “disappear” along with the social media sites that helped give rise to them.

But the Internet and social media have an equally profound impact on the entire U.S. economy, adding over 9,000 jobs and nearly 570 businesses to each metropolitan statistical area. The Digital Economy is a great American success story that is the envy of the world, not something to be lamented and disparaged as Sen. Hawley has.

For someone who believes that Facebook is a “drug” and a “parasite,” it is curious how active Sen. Hawley is on Facebook, as well as on Twitter. If he really believes that “we’d be better off if Facebook disappeared,” then he should lead by example and get off the sites. But that is a decision he will have to make for himself. He should not, however, make it for the rest of us.

Adam Thierer

Adam Thierer is Research Fellow at the American Institute for Economic Research and a Senior Research Fellow at the Mercatus Center at George Mason University.

This article has been republished with permission from the American Institute for Economic Research.

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This Memorial Day, Lawmakers Seek to Protect Americans from Beach Umbrellas https://thelibertarianrepublic.com/this-memorial-day-lawmakers-seek-to-protect-americans-from-beach-umbrellas/ https://thelibertarianrepublic.com/this-memorial-day-lawmakers-seek-to-protect-americans-from-beach-umbrellas/#comments Sun, 26 May 2019 16:11:17 +0000 https://thelibertarianrepublic.com/?p=101769 By Ross Marchand As it happens on most every Memorial Day, the beaches are sure to soon be filled with families covered in sunscreen and lying under umbrellas—that is, unless federal regulators have their way. Senators Bob Menendez (D-NJ) and Mark Warner (D-VA) are calling on the Consumer Product Safety...

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By Ross Marchand

As it happens on most every Memorial Day, the beaches are sure to soon be filled with families covered in sunscreen and lying under umbrellas—that is, unless federal regulators have their way. Senators Bob Menendez (D-NJ) and Mark Warner (D-VA) are calling on the Consumer Product Safety Commission (CPSC) to recall umbrellas they feel are… dangerous. And the Food and Drug Administration (FDA) is considering broadening regulations of sunscreen that would propel prices even higher than they are now. It seems politicians really don’t know how to relax.

As families load up their cars to head to the beach, parents will inevitably remind children of the hazards that come along with the sand and sea. Kids should be careful not to step on broken glass or a family of crabs. Swimmers should be especially cautious about getting carried out in a riptide and unwittingly playing out the plot of Jaws.

For some reason, however, the prospect of a beach umbrella being untethered from the sand and impaling beachgoers is something that keeps lawmakers up at night. Sens. Menendez and Warner wrote to the CPSC that

a burst of wind can make these summer accessories harmful to those around them…Over the last several years, reports of horrific injuries resulting from beach umbrellas have splashed across the media.

They cite CPSC data showing around 3,000 injuries a year from umbrellas, though, they admit, there’s no way of telling what kind of umbrellas these are: patio or beach.

Regardless of where they occur, these umbrella-related injuries are negligible when considering the sheer number of people who use beach umbrellas every year. Even assuming that all of these injuries were at the beach, the chance of getting impaled by a flying umbrella is still probably lower than getting injured on the drive to the shore.

Even if the CPSC listened to these dull lawmakers pushing for duller regulations, it doesn’t mean the “problem” would go away. To rid umbrellas of their pointed ends would be to make them even more likely to become untethered, battering into unsuspecting guests.

If beach umbrellas become less reliable, at least loungers can rely on a strong grade of sunscreen to protect them against harmful rays—FDA permitting.

But even that could soon be limited. The agency proposed a rule in February that would update labeling requirements, including a notification “for sunscreens that have not been shown to help prevent skin cancer.” The FDA is also examining the safety of ingredients that go into products, requesting piles of data from the companies that produce sunscreen.

While examining safety is an integral part of the FDA’s mission, wading into effectiveness testing and labeling would repeat what the market already does but with significant added costs. Consumer Reports, for instance, has investigated dozens of sunscreens and loudly called out those that fail to live up to their SPF claims.

No company wants to be embarrassed by a Consumer Reports exposé, which is why the majority of sunscreens meet the claims on their labels. Every year, more sunscreens vie for the attention of reporters and popular magazines, leading to an increased pile of resources that inform consumers about which products are the most effective.

This Memorial Day, regulators across the federal government must resist calls to cordon off the beach in a thicket of needless red tape. Beach umbrellas and sunscreen give millions of vacationers peace of mind when venturing out onto the sand, and needless rules would just get in the way of a fun, safe time. Bureaucrats need to resist the riptide of ridiculous regulations and focus on some of the things that could actually use their attention.

This article was originally published on FEE.org. Read the original article.

Photo by Ralph Daily

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