President Names Monopolist to Competitiveness Board

"Anyone who has observed how aspiring monopolist regularly seek and frequently obtain the assistance of the power of the state to make their control effective can have little doubt that there is nothing inevitable about this development [of central economic planning].~~~F.A Hayek, The Road to Serfdom 

President Obama just named GE CEO Jeff Immelt to the "President's Council on Jobs and Competitiveness."  Competitiveness is italicized for a reason--it is ironic Immelt would be named to any advisory board with such a word in its title.   This is like naming Willie Nelson to chair a national advisory board on tax compliance.

Immelt displays little knowledge and even less affinity of competing openly in the market economy; to the contrary, he specializes in lobbying the federal government to legislate competitors out of his way and monopolizing the market by having government mandate the energy mechanisms and technologies that only his company, GE, can provide to consumers.

Not really competitive now, is it?

In his invaluable book, The Big Ripoff, Tim Carney documents Immelt's record of attempting to corner the energy market through the coercive regulatory power of the federal government, all the while building GE's public image up to one of a progressive, environmentally-conscious company.

Starting in 2005, GE launched its "ecomagination" public relations campaign wherein Immelt insisted GE was committed to providing cleaner, greener energy.  That's nice, but his method of doing so was anything but "competitive."  As Carney illustrates,

"Ecomagination involves investing in certain fuels and technologies, and then working with government to make those fuels or technologies mandatory."

And where did GE and Immelt decide to launch the bold new Ecomagination?  New York, the economic and financial center of the free world?  No.  Silicon Valley, that global symbol of technical innovation? Nope.  Ecomagination launched on Pennsylvania Avenue in Washington DC somewhere between Congress and the White House, the very belly of the regulatory, wealth-destroying Leviathan that has for decades stood in the way of competitive wealth creation.

Immelt, on that occasion:

"Industry cannot solve the problems of the world alone, we need to work in concert with government." [Emphasis added.]

Again, Immelt really does seem interested in "competitiveness" now, does he?

Then there is that little thing called Cap and Trade.  GE is an enthusiastic supporter of and lobbyist for the bill which would levy one of the largest tax hikes in history and completely cartelize the energy market with GE and the federal government in effect fixing all prices and controlling the entire market.

Yea, not too much "competitiveness" in Cap and Trade.

Perchance Immelt has since turned from his desire to collude with government and make competition illegal.  Let's see what he had to say as late as 2008 in a letter to shareholders?:

"The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner." [Emphasis added.]

Well that's not good but wait a tick.  To be fair that was almost three years ago.  What did he have to say just yesterday about competitiveness after being named to the president's new board?:

"The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world." [Emphasis on monopolistic anti-competition verbiage added]

Think of Freedom of Religion and Speech, Then Keep Going

"Hence the familiar fact that the more the state 'plans,' the more difficult planning becomes for the individual."~~~F.A. Hayek  The Road to Serfdom
 
Most Americans dearly hold to their rights articulated in and protected by the First Amendment.  Put another way, few Americans would quietly abide the unwarranted government violation of the following:

• Not having a state-mandated religion
• Their right to freely worship or not worship God as they see fit without government intervention
• Speaking freely, with no state prevention or persecution thereof
• A free press, neither controlled nor manipulated by government
• The right to peacefully assemble
• The right to petition government for correction of government abuses

When it comes to our First Amendment "rights" we have little toleration for government meddling; this is a very good thing.  Our dogged adherence to these limitations on the power of government is almost like a political and cultural religion.  Here we are and there is government, and we correctly cry Thou Shall Not! at the appropriate times.

So why, then, don't we get all wrapped around the axle when government intrudes upon other very personal and private matters?  If we've so jealously fenced off our religion, speech, and press from the meddling of the state on the one hand, why are we so indifferent to state interference of our private, peaceful interactions on the other hand?

Every time government intervenes in "the market" it interferes and adversely affects you in an intimate way.  Why?  Because you are the market!  What else is "the market" but 300 million plus people making millions of decisions on a minute-by-minute basis and acting freely and cooperatively upon those decisions in pursuit of their respective self-interests?  This amazing process occurs successfully when people are free enough to make it all happen; conversely, every time government takes it upon itself to plan, manipulate, order, and coerce the market into prosperity the opposite of prosperity occurs---I give you the Soviet Union, Cuba, North Korea, and the United States during the Great Depression.

When government intervenes and places top-down decrees as to how goods are to be made, at what price transactions occur (like minimum wage laws), subsidies one producer and places other producers at a competitive disadvantage, bails out failing companies, and artificially affects the market forces and prices (which always go up--think of college tuition, health care services, and housing), the prices of goods and services have to match up to the actual costs involved and those costs go up.

And who pays for the increase in costs?  You, the consumer who is always on the receiving end of unnecessarily high costs reflected in prices and you, the taxpayer who has to fund the regulatory regime that continues to expand with the ever-expanding size of the federal government. 

If we were limited to the churches we could attend due to some government mandates would e sit by in quite acquiescence?  If government limited what we could say and when we could say it would we not be openly outraged?  If only we held all our liberties as dearly as we hold our right to free speech and freedom of religion. 

The federal government has the constitutional authority and responsibility to regulate interstate commerce but no authority, neither constitutional nor moral, to directly interfere with the workings of that commerce, that is, our free assembling cooperatively and freely in pursuit of our respective self-interests and---gasp!---profits.  Perhaps if such a restriction were included in the First Amendment and not Article 1 we'd jealously keep government out of our market affairs, too.

As they say in New Jersey, I'm not sayin,'  I'm just sayin'...

It's The Market, Not a "Sector"

"Human society is an association of persons for cooperative action."~~~Ludwig von Mises,  Liberalism: The Classical Tradition  

Talk of the "private sector" is just irksome.  When I hear it tossed around I wince, much when the phrases a whole nother, suposebly, or anywho crops up within earshot.  Fingernails down a chalkboard would be an euphonious melody if said fingernails were raking and slashing these phrases on the chalkboard, starting with "private sector." 

There is no such thing as a "private sector" of the economy.  The phrase implies the economy has parts and that private free enterprise is just one part of the overall economy.  Further implied is that the economy would be incomplete or unbalanced if "the private sector" was responsible for all economic activity.

Private enterprise and the market---you, me, and every other individual voluntarily participating as producers, consumers, and savers---is the economy.  The market is the sum total of the free actions of individuals who participate and contribute to its existence and movement.  Without individuals seeking their self interests there would be no market.  This is no mere sector of the economy. 

(Did one day, deep in the past, government authorities somewhere declare, "Let an economy come forth from nothingness, and we shall determine which sector will be private"?  Or did individuals, respectively seeking their own self interests and making mutually beneficial transactions voluntarily cooperate themselves, and thus their societies, out of hand-to-mouth existences?) 

Furthermore, when individuals voluntarily participate in the market, of which they are by definition a part, they can only contribute to the the economy.  By contrast, when government "participates" in the economy, it, by definition of being outside the market that is had nothing to do in creating, can only interfere with the operations and voluntary interactions of individuals, that is, the market.  And when it interferes, it does so using the force of law and regulative coercion, something individuals in the market cannot do, minus the legislative assistance of the government.  (Think of GE lobbyists stealthily working for Cap and Trade legislation.)

Basically, individuals create wealth, therefore economic activity.  Government confiscates, retards, and interferes with wealth creation, therefore creating uncertainty and instability in the economy.  These two mutually opposed entities cannot therefore constitute two sectors of the same enterprise.  There is the market and there is the government. 

Yes, government has a role in the economy, but that role is always from outside, hence its role is interference. How much interference is desirable, just, counterproductive, etc. is a matter for another time.  One might even say it is a matter for a whole nother Chalk Talk.

Video: Signs, Signs, Everywhere Signs (of Unconstitutional Government and Government-Mandated Monopolies)

The Federal Highway Administration is ordering, with the coercive arm of the federal government, all local governments to buy new street signs.   What's so important that the federal government had to force itself into local affairs?  Street signs should have mixed lettering, not just all CAPS.

Whew!  At least we can rest assured this coercive, unconstitutional, bureaucratic fiat is for high and good purposes.  (What's that old authoritarian maxim about the means and ends...)

Let's repeat this situation in different terms:  Local governments, funded by local taxpayers, have been ordered by an unelected bureaucratic wing of the central government to use local tax dollars to remove all existing street signs and replace said signs with new street signs.  (The term "federal government" will hereby be changed, by fiat of the author, to "central government" for the remainder of this post, for reasons that will be easily inferred by the reader.)   

Are local and city governments incapable of deciding for themselves which signs best suit their traffic conditions?  Put another way, is a categorical, one-size-fits-all federal government central government  edict going to work out best for every single local municipality across the country?

And what about that whole federalism thingy set up in the Constitution?  The federal government central government is allotted specific tasks it is constitutionally empowered to pursue.  Everything else, by default, falls to the state and local governments.  Skipping right over the state government and ordering local municipalities what to do and how to do it is an even broader, bolder slap to federalism than, say, arm-twisting state governments with federal highway funding. 

But wait!  It gets even worse.  Pick up at the 0:55 mark of the Fox News video below to hear about the private company that helped to fund the so-called research that went into this very important task of the central government that had to take place during a recession:


The 3M company that just happens to make the new-and-improved reflective material now mandated by the central government contributed to the research that revealed that every local government in the country just had to purchase and install new signs.  3M could deserve the good citizen award, one could suppose, for being so concerned about traffic safety they cut into their profit margin to help fund such research.  One big problem: 3M happens to make the reflective material that will be used in the manufacturing of all those signs that local governments are required by law to purchase.

As Dana Carvey's beloved Church Lady used to say, "Well isn't that conveeeeeenient?"

Side-stepping honest competition in an openly competitive market and using the force of government to corner the market and regulate out of business pesky little competitors is nothing new.  Ever since the federal government central government began interfering in the otherwise free and cooperative interactions of free individuals--the market--corporations have parlayed the regulative apparatus of the federal government central government to legally leverage for profits.  In other words, some corporations find it more convenient to use the coercive power of the federal government central government to make competition illegal and/or force the purchase of their products than compete openly by persuading consumers to freely purchase their goods.

As Tim Carney makes abundantly clear in his invaluable book, The Big Ripoff, the history of big government is the history of big business, and consumers and taxpayers have been paying a higher and higher price for the unholy alliance.

Who suffers in this anti-free market game?  We the People suffer, once as consumers paying artificially high prices for goods and a second time as taxpayers burdened with funding the bureaucracies and regulations that is at the heart of this mess.  And the bigger the federal government central government gets, the worse that problem.

If you have not read Carney's book, please buy a copy and do so.  There will soon be bright new street signs that show you the way to your local bookstore!

High Income Does Not Equal Being Wealthy

Leaving aside the impropriety of taxing rich Americans at a higher percentage, we should recall an important fact that is buried in all the claptrap going back and forth about the current tax rates.

That fact?: Income is not wealth.

Everyone who earns in one year more than whatever arbitrary demarcation line divides the "rich" from the proles is assumed to be wealthy.  (What is that number this week?  Last I heard it was inching up to $1 million a year.) This assumption leads to the next step of wanting to categorically tax these individuals' incomes as if they themselves are rich.

Yes, many "rich" people have high incomes, and many high income earners are "rich."  But many is never all.  High income earners and "the rich" is no exception.

The wealthiest safe-made people in America were not "rich" the first year they brought home $x or more.  Many people earning high incomes this year are not yet "rich" or are on their way down from being "rich" onto their way to being in the middle class. We just do not live in an economic caste system, all the bellicose class warfare bilge notwithstanding.

As Thomas Sowell points out in Intellectuals and Society, the Treasury Department (that bastion of people interested in abolishing the progressive income tax system) reported that among the highest income earners of 1996--the top 1/100 of 1%--a mere 25% remained "rich" by 2005.

This underlying assumption of this assumption holds that everyone getting hit with higher taxes has sooooo much loot lying around they can use their riches to buy, invest, and promote economic growth.  So tax, tax, tax away.  Wrong.  Tax high income earners who are not "rich" and you're confiscating out of their hands and the economy that much more possibility for real capital investment and growth.   

Again, we're leaving aside the debate over the propriety of progressively taxing some people more than others.  The above assumption is simply incorrect.  Moving along tax policy based on this assumption is simply not justifiable.  Using demagogue verbiage like "...the richest Americans" to push such tax policy is either a poorly thought out effort or just thinly veiled partisan chicanery.

The assumption articulated in the caption below is better grounded and more thought out than this high-income-equals-being-rich assumption.  And both are hilarious.

Video: Beware the Omnipotent Government

Below is a brief and worthwhile video of F.A. Hayek. Democratic forms of government require constitutional limitations of power.  The fact such governments are in some way democratically chosen does not do away with the need to limit their power.  Believing democracies need not be limited in their powers relegates voters to a a choice of masters, not a participation in their government.  

In The Constitution of Liberty Hayek deals extensively with the indespinsable need for democratic governments to observe the rule of law, not be the a law unto themselves.

Germ-o-Phobia and Liberty

"[E]veryone is a 'progressive' by their own lights."  Thomas Sowell, Intellectuals and Society

I'm a germ-o-phobe.   I also love liberty.  Enjoy the confluence.

Progress and the status quo are primarily antithetical of one another.  Primarily because the goal at which one wishes to inch along society might well be something worth preserving or, put another way, not progressing away from.

Example: C.S. Lewis reminds us that washing the bacteria from our hands is a way of maintaining a very important status quo, the status quo of clean hands that predate dirty hands.  Every time we wash our hands we are retarding the progress of bacterial growth, hoping to regress toward the clean hands we had at one point in time before we had to interact with all those other germ-toting agents of disease we call other people in the petri dish we call society.

But regressing bacteria on one's hands and, consequently, one's community is a very progressive thing to do to.  Only a regenerate, uncouth, backwards-looking reprobate would knowingly build up and spread around bacteria in society.   Taken to an extreme, such a person could be considered a purveyor of biological warfare.

That would definitely be regressive.

(Side note: For the love of Pete please wash your hands after using the restroom,  blowing your nose, or touching anything you would not put directly into your own mouth.  If you think it is none of my business to request so much, think how many other people will have to touch the same door knobs and dollar bills that you grace with your disgusting fingers.  Come on, it's not 1802 anymore.  Don't let Louis Pasteur's life's work be in vain...) 

As Thomas Sowell points out in Intellectuals and Society, everyone believes they are progressive.  We all have an ideal for society we think best.  For self-described "progressives" that ideal is a society whose organization is primarily controlled--that is, regulated--by the decisions and planning of an elite few.

The crescendo of such command-and-control of society in the United States occurred during the New Deal of the 1930s.  The extent to which elites in government controlled everything from the price of pressing suits to how many hogs would be slaughtered while millions wallowed in hunger is what was new about the New Deal.  These drastic power grabs were certainly a break from the status quo of a primarily free market and concomitantly American free society.  And we have never washed our hands of the overreaching legacies of the New Deal.

Taking the long (and sad) view of freedom in world history, however, we need to ask: Just how progressive was the New Deal?  In this light, is such government control of society ever really a step forward?  

"Progressive" for liberty-minded conservatives, libertarians, and constitutionalists is a progressing away from the New Deal center of politics whereby state-control of the direction of the economy and society is the default setting for government policy.  Free and responsible people cooperating peacefully is the best way to organize society.  It's work every time it has been tried.  As Milton Friendman remarked, distrust of the "private sector" or "the market" is nothing less than a distrust of freedom itself, and a distrust of people to be trusted with freedom.  That's terribly patronizing and elitist, in addition to being regressive.  

Considering how America has always been the world's freest society (the New Deal notwithstanding) diminishing liberty was a terribly regressive policy, then and now.  And since the redistributive, bureaucratic model has had its tentacles in D.C. for over seventy years, at this point in time it would be very progressive to move beyond its premises and (re)embrace freedom.

To return to Lewis' analogy, if we are going to wash our cultural and political hands we have a great deal of government bacteria to wash off.  Ever since the New Deal, such infringement of liberty has been caking up like so many layers of germs eating away at liberty.  Clean hands would be nice, but at this point I'd be happy with cleaner hands.

Now go was your hands, America, both literally and figuratively.

John Stossell on Friedman's Free To Choose

Here is a very good introduction of an excellent book, Friedmans' Free to Choose:

If I Had To Recommend One Book...(Video)

Repeat, had to.  My one recommendation for anyone interested in freedom, and both its friendly and hostile forces, would be Henry Hazlitt's Economics in One Lesson.  Hazlitt's conversation masterpiece is oncise, grounded in fundamental economic principles, illuminated with historical examples, void of arcane economist-speak and pointy-headed graphs (Sorry, economists.  You know it's true.), and crisply written.

Line one, chapter one: "Economics is haunted by more fallacies than any other study known to man."

Here is a good introduction to the book, Hazlitt, and the enduring impact of this brief book, compliments of the Ludwig von Mises Institute:

Not Playing By The Rules

I've continued reading Planning for Freedom: A Collection of Essays and Addresses.  Glancing down the table of contents one particular essay caught my attention: "Trends Can Change."  Written in 1951, I suspected the essay would have much to teach us about the current state of freedom in America.

It certainly does.

In the essay Mises quickly goes at one of the most tightly-held underlying dogmas of socialism and central planning devotees: "Man must submit to the irresistible power of historical destiny," so it is argued. 

And what, exactly, is that historical destiny, according to socialist apologists?  Societal organization is progressing toward being centrally planned through government coercion; no more chaotic, uncontrolled, profit-driven capitalism based on individual freedom.  (In The Road to Serfdom, Hayek makes a terrific point on this matter: "It is a revealing fact that few planners are content to say that central planning is desirable." [Emphasis added.])
 
That's the rule by which western society is supposed to obey.

Europe played by the rules and fell into socialism due to this fatalistic capitulation: "It is this mentality of passively accepting defeat that has made socialism triumph in many European countries and very soon may make it conquer in this country too."

But hold on a minute there, professor.  Some matters in America present difficult roadblocks to socialism.   For starters, a lot of Americans have an inherent distrust of "big government."  This does not spring up irrationally, contrary to reflexive progressive fantasies about gun and Bible-clinging.  Americans live in the world's most unique political experiment, a nation founded on ideas, the foremost being liberty and equality.  We have an entirely unique history built into our political genes.  Consequently, most Americans distrust government controlling anything, let alone everything.  We're still hung up on that whole freedom and Constitution thing.

We're not so eager to play by the rules.

Consider the Tea Party movement and the wide resistance to nationalized health care.  We've been taking to the streets to protest excessive government spending, debt, unreasonable entitlement programs, and government encroachment on liberty.  We don't play so nice: we protest against excessive government in our lives.

Now consider the recent protests in Europe.  They've taken to the streets to protest cuts in government spending and entitlement programs.  They play by the rules and protest in favor of excessive government in their lives.

To the chagrin of progressives, yesteryear and today, politically we're just not like Europe, nor do we want to be.

Mises closes his address with this admonishment: "The prevailing trend toward what Hilaire Belloc called the servile state will certainly not be reversed if nobody has the courage to attack its underlying dogmas." The "servile state" lies somewhere between outright socialism and capitalism, what Mises calls the third way of interventionism; it is no less hostile to freedom than socialism.  There is an entire liberty movement  attacking these dogmas, and that movement is not carrying pitchforks and torches.  We're carrying--and reading!--the Constitution, The Road to Serfdom, the Declaration, and a treasure trove of beacons of freedom. 

As Jonah Goldberg rightly put it, the rules have changed and something is afoot.  Either someone changed the rules or we are cheating by not playing by them.

Either case befits Americans.  We like our freedom too much to play by the rules.  We'll keep reading and keep cheating, thank you very much.

Wanting To Cheer For Government

What does the Red Stripe beer man and Ludwig von Mises have in common?



Freedom movements, their proponents, and many of their adherents are often labeled "anti-government," as if liberty-minded folks only want to boooo everything government does.  Sometimes all the rhetorical stops are pulled and the "anarchy" word appears, implying people interested in freedom want no government at all.

True, pro-freedom reformers are against the activities of government that exceed its properly-restrained and legitimate role in society.  But this is not an aversion against government as a whole; it could more properly be called "anti-illegitimate government" or "anti-big government."

A serious discussion is evaded if the context of the debate remains merely negative.  That is, we are not simply "anti" fill-in-the-blank; we are for the right kind of government.  By objecting to excessive and unconstitutional government we are of necessity arguing for returning government to its proper role.  We want a government that focuses on the activities that benefit freedom, property, and prosperity.

So, yes, Booooo to creepy excessive burdensome government.  But, Hooooray! to good government.

Mises analogizes the classical liberal view like this:

"If I am of the opinion that it is inexpedient to assign to the government the task of operating railroads, hotels, or mines, I am not an 'enemy of the state' any more than I can be called an enemy of sulphuric acid because I am of the opinion that, useful though it may be for many purposes, it is not suitable either for drinking or for washing one's hands."  From Liberalism: The Classical Tradition [Emphasis added.] 

We should look for every opportunity to stress the very important roles for government, roles indispensable to the preservation of freedom and prosperity.  Doing so highlights the ways in which government has far exceeded its proper place and threatens liberty, illustrates the reforms that are needed, and diffuses the silly notion that if one stands for liberty one necessarily opposes all government.

Protection of life, property, and property rights are actions only government can perform.  Free civilized society unquestionably require these protections.

What's more, a free competitive market cannot operate without certain functions of government.  No market can provide for itself the enforcement of liability laws and legal contracts.  Deterrence and punishment of force and fraud of are vital to allowing markets to remain free and competitive, and only government has the lawful coercive authority to exercise these protections.

And proper regulation of the market is a very good thing, so long as it does not exceed regulation and creep into the murky socialist realms of indirectly planning and directing economies, or protect failing companies from competition through bailouts, or establish monopolies through tariffs and by onerous regulations that stamp out pesky little competitors---all subjects of future Chalk Talks.

A desire and public demonstration for freedom, then, requires a healthy balance of opposing bad government and supporting good government.  We're boooooing but really want to hooooray!

Video: Free Market v/s Political Distribution

In this video clip from Freedom Watch, Judge Napolitano and Walter E. Williams discuss how the free market provides for the needs of society versus how government distributes provisions to society.



At the 5:18 mark the Judge summarizes the fundamental difference in how the market produces wealth and how government consumes wealth; how producers seeking profit must please the wants of the voluntarily consuming public and how government needs not care about the wishes of the public as it has the "bottomless pit" of tax payer funds at its disposal.

We would hasten to add that profits, in a free market uncorrupted by government-enforced monopolies formed through subsidies and burdensome regulations, are secured by pleasing consumers through voluntary cooperation and free exchange.  Government distribution of property occurs without the consent of the taxpayer.

Williams calls this the "morality of the market."

These points are also detailed in Ludwig von Mises' book The Anticapitalistic Mentality, wherein he explains that free market exchange (what we call capitalism) turned masses of serfs and slaves into the buying public for whom profit-seeking businesses seek to please.

Williams comments on the concept of one dollar one vote.  Mises calls the serfs-turned-consumers through freedom in the market the "sovereign consumer."  When the market is free to provide for the wants and needs of public, consumers vote every day millions of times a day with their dollars.

As opposed to politicians, profit seekers must be reelected every day.  With every transaction,the market pleases every consumer; every vote cast with a dollar brings to the consumer what the consumer desires.  Political elections yield to the general desires of the majority, leaving the minority's wishes unfulfilled.

Reducing freedom in the market equals disenfranchising the consumer.