Laissez Faire Links: The Idiocracy of Bureaucracy
Today’s set of links focus on government intrusion and waste. Whether trying to snuff out global corporations altogether via nationalization, wasting tax-payer money on grandiose renovations of bureaucratic headquarters, or political punditry calling corporations unpatriotic because they won’t pay for the renovations of bureaucratic headquarters, these links demonstrate the idiocracy of bureaucracy.
- As if government has not become intrusive enough, Richard Eskow at Salon actually called for the nationalization of Google and Amazon. In the “You didn’t build that” egalitarian logic fashioned by Obama, Eskow states: “Big Tech was created with publicly developed technology. No matter how they spin it, these corporations were not created in garages or by inventive entrepreneurs. The core technology behind them is the Internet, a publicly funded platform for which they pay no users’ fee. In fact, they do everything they can to avoid paying their taxes.” Yes folks, you read that right. A policy analyst from the Campaign for America’s Future (more irony in that title) openly called for the government takeover of two of the largest global companies. As if the government could run Amazon.com better than healthcare.gov.
- As for corporate “tax-dodging,” here is another piece over at Reason worthy of mention regarding what the Left is calling “Inversion,” whereby corporations relocate for lower tax rates. The Left calls this unpatriotic, and Sloan saddles the corporation with the task of lifting inefficient government out of the trench when he states,
“And I define ‘fiduciary duty’ as the obligation to produce the best long-term results for shareholders, not ‘get the stock price up today’. Undermining the finances of the federal government by inverting helps undermine our economy. And that’s a bad thing, in the long run, for companies that do business in America.”
Since when should the vitality of federal coffers be of concern to corporate executives. When the federal government has such a heavy hand in the economy that its fiscal concerns bleed into those of private corporations, the free market becomes shackled with all the inefficiencies of government. And this is what smart business recognizes and seeks to remedy when moving overseas.
- Inefficiencies abound, Daniel Mitchell over at Cato shares another example of government waste, although this one has a particular tinge of irony that one cannot fail to acknowledge. According to the Daily Signal, costs of renovating rented office space for the new Consumer Financial Protection Bureau (ushered into law by Dodd-Frank) is about $590/sq. ft., more than either the Bellagio Hotel and Casino or the Trump World Tower. This renovation alone will cost tax payers $215 million. So much for protecting consumers! Parasitic public sector waste will quickly eat any costs saved by consumers from any apparent predatory behavior.
Waste and bureaucratic inefficiencies are exactly what healthy and rational corporations seek to avoid, not to mention the prospect of nationalization. Why is it surprising that U.S. companies seek lower tax rates overseas when ours are nearly 35%? This is the rational choice, a practice on which successful corporations build, thereby securing growth and a brighter future for everyone. Idiotic calls for nationalization and government waste discourage business creation and sap vitality from the markets because they threaten freedom of contract and property rights while saddling corporations with external costs and the mounting inefficiencies of growing bureaucracy.
What would a proper government shutdown look like? Why will President Obama need to delay his mandate provision? Can a woman be charged with homicide for aborting her baby? Did capitalism cause the 2008 financial crisis?
- Ari Armstrong over at The Objective Standard talks about a government shutdown that would be welcomed. His brief piece Toward a Shutdown to Celebrate makes the point that most government functions are superfluous, and there are many. Beneath the umbrella of laissez-faire capitalism, the proper function of government is strictly limited to protector of individual rights. He states, “In order to protect rights, the government needs to run an effective military, police force, court system, and the aspects of government necessary to support them. Those, and nothing else, are the essential functions of government.”
- Forbes contributor Scott Gottlieb discusses problems the new government healthcare exchanges are having out of the gate. Why President Obama Will Have To Delay His Health Insurance Mandate makes the case that technical problems with the virtual exchange rollout will necessitate a delay in the requirement for those uninsured to purchase coverage. His prognosis is not optimistic: “The Administration started building these systems late, and rushed them online, without perfecting these networks. Working them out now, in real time, is going to take months, and maybe a year.” With that large of a delay, the Obama Administration will have to backpedal on its threat to penalize the uninsured.
- Just a little more from our friends at The Objective Standard tells us about a possible Colorado ballot measure that would effectively criminalize any and all abortions, even in cases of rape and incest. The measure would go further though. In addition to calling for “homicide prosecutions for killing the unborn,” the “Brady Amendment” violates a women’s moral right to choose how she lives and what is best for her and her body.
- Did Capitalism Cause the Financial Crisis? This is a short, but invaluable video regarding the common myth that capitalism failed, resulting in the 2008 financial meltdown. Yaron Brook, Director of the Ayn Rand Institute, states that this is erroneous because a true system of laissez-faire capitalism did not exist prior to 2008. What did exist was a degree of government intervention that distorted the market, leading to bubbles in asset prices that never would have existed under natural market forces. It is no coincidence that the three most highly regulated industries – housing, banking, and mortgages – were those that failed. Pay particular attention to his comments on the Federal Reserve system. For more information, see my discussions of the Federal Reserve.
Ryan Swift highlights the often overlooked, yet strikingly poignant, data that stares all Americans in the face. Below is a visual prepared by Mr. Swift showing that over the past year, the dollar’s decline has inversely matched rising oil prices. This is not a coincidence and the data actually make sense when one considers that our economy requires both a currency and oil. While currency serves to circulate goods throughout the economy, oil facilitates their production. It makes sense then that the two would be inversely related. The more goods we produce, the more oil is required and the higher its cost. Likewise, a higher quantity of goods require more currency to move them. The problem, however, lies in the fact that consumer demand is still very low while the Fed is printing money in record volumes. As more dollars flood the economy, the value of each will naturally fall because production has not yet increased sufficiently.
Click for Swift’s Article →
What this means is a double-punch to the American pocket-book. As oil climbs, prices for all other goods rise as transportation and production costs increase. In other words, higher prices for crude is akin to inflationary pressures all its own. Add the Fed’s so-called “needed” QE2 (and talk of QE3) and one sees the printing press running at overtime to devalue the dollar further. The overall result is a lag in production and a delayed recovery for the economy as a whole. As oil surpassed $113 a barrel on Friday, Time reported a fall in annualized GDP growth from 3.1% in the fourth quarter 2010 to a meager 1.8% in the first quarter this year. Moreover, rising oil prices are likely a result of unrest in the Middle East and OPEC’s mysterious tendency to cut supply while demand clearly indicates the opposite response. This last factor, Swift points out specifically along with Obama’s declaratory announcement to go after speculators responsible for inflationary pressures. What Obama will not do – and what the mainstream media still refuses to recognize – is to reign in the Federal Reserve System’s QE policies that are responsible for nearly $2 trillion dollars of inflationary pressures. So once again, we see the mainstream media attacking the usual foe – the market itself – thereby initiating a call for more government intervention. One may wonder then, at what point will government meddling in the economy effectively push us beyond the point of no return. Or are we already there? M9EZ497NU9QH