We Can't Stop Government Growth

Can the Rampaging Leviathan Be Stopped or Slowed?
11/02/09 - Independent.org by Robert Higgs
Senior Fellow in Political Economy, and Editor of The Independent Review at The Independent Institute.

[edited] There are critical difficulties restraining the growth of government. Even when restraints on government are enacted into law, the government does not obey. So, constitutional amendments are worthless. The Constitution already contains the NinthThe enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. and TenthThe powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. Amendments. With those amendments and four bucks you can get a latté at Starbucks.

"Solutions” to the ongoing growth of government are a dime a dozen and utterly worthless in themselves. Every genuine solution must be implemented by enough people and money. Marshalling people and money will require ideological conversions on a substantial scale. These conversations themselves will require many people and much money, if such conversions are possible at all.

The troubling fact remains, that if any truly effective measures are approved to limit the government, the rulers would likely resort to whatever legal or illegal violence proved necessary to prevent those measures from taking effect.

If Ron PaulCongressman from Texas, noted for wanting a much smaller and limited government were miraculously elected president, he would not live to take office. Opponents of the government’s ongoing growth must bear in mind that we are dealing with violent, heavily armed, utterly unscrupulous people who, if pushed to the brink, will stop at nothing to retain their power and privileges.

We who abhor the continued growth of government cannot stop or slow it in the near term. But, we can take heartNot much of a comfort -ag from the knowledge that ultimately this criminal enterprise will attain such bloated size and scope that it will implode, as the Soviet Union and other overreaching systems have imploded.

Governments that grow without other limits find that their predation becomes greater than their prey can support. Thus, the government in this country and many others contain the seeds of their own destruction.

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Leading the People
08/2008 - EasyOpinions by Andrew Garland

My personal experience with radicals in college was scary. They don't mind threatening others, regardless of the academic setting or discussion.

[excerpt] He argued that only a radical change in government would bring about a better society. I disagreed. He said that I should join the demonstrations against the University to end the Vietnam war. I thought a sit-in demonstration against the University was misdirected. I suggested the he should demonstrate against the government; the University was not at war.

He said that his movement would become stronger, and eventually I would agree with him. I asked, what if I didn't agree with him, even later? He flashed anger and told me that if I didn't agree on my own, he would make me agree. I saw that as the end of the discussion.

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We Must Spend or We Are Going to DIE!
04/2009 - EasyOpinions by Andrew Garland   (satire, excerpt)

From: Ruling Class
To : Public
Re : We must tax and spend now, or we are all going to DIE!

We don't want to tax and spend (cough), but we must react to the crisis that we have identified. We are going to borrow, spend, and tax reluctantly to support our actions. The alternative is DEATH. No one wants that.

So what if you are poor in the future? At least you will be alive, and we will continue to guide you through supportive government to help you out of poverty. We will create and assign the jobs of the 21st century. Your children will pay most of the taxes, and we are training our children to have the public spirit that will allow them to rule wisely.

A Few Words About Policy

President Obama recently held a prime-time press conference to present his desire to reform healthcare in the U.S. He suggested passing the bill in Congress, and asked for questions. He talked for about an hour and answered about 12 questions.

There has been a flurry of activity discussing what he said, whether there was any new detail, and criticizing some of his examples and facts. This told us very little about what is proposed in this sweeping grant of power to the government.

The press and the country are entirely wrong about what press conferences are good for.

Policy On Paper

Obama should have already released a detailed "white paper" describing his summary and justification for his health care proposals. (And such a paper for his other policy recommendations.) We need proposed results, methods, justifications, comparative studies, past successes, funding sources, the works.

Laws are not written as a random collection of thoughts, although they often look that way. They start with policies and reasons on paper. Legislator's staffs follow those policies when creating the details in these 1000 page bills. The white papers must exist, but they are not being presented to the public.

We should examine, verify, and criticize the policy documents, and then compare these to the details in the bills. Starting with the bills is like trying to approve a new building by looking only at the blueprints, without the purpose, graphics, and site requirements.

This is the United States Government, of, for, and by the People. The public cannot participate in a government that runs on policies that are hidden. The press and public should be able to review these undelivered documents. The government should be proud to display its carefully researched and supported policies. We deserve this as a free people.

The absence of these policy papers is appalling. Instead of open and proud policy, we have closed, imperial government. Sadly, we are controlled by a tyranny if our government sees no reason to explain and justify its actions. Are they ashamed or afraid of what they propose?

Be Informed

A press conference is supposed to question the President on his knowledge of the policy already presented in detailed, written form. The press conference is for the President to announce and defend the policy. It is to reassure the public that he knows about what he is proposing.

Instead, we have a few questions and vague speeches about what we would all like in a perfect world, and about the power and money that Obama wants ahead of time to work on it.

It is a magician's trick, to treat press conferences as if they could communicate the needed information, for either support or criticism.

We must ask our government for the important things. Among them is always a clear explanation of what the law will be, and why. If we ask and are not answered, then the responsible politicians must be voted out.

Borrowing Costs Per Legislator

Consider borrowing $1 billion. This costs $40 million/year at 4%.

There are 535 congressmen and senators. That is $75,000 each per year, without paying back any of the principal loan.

This year, the US is borrowing about $2 trillion. The cost of this is $150 million per federal legislator, per year.

Let's just pay the legislators a few million more per year in salary, if they will stop borrowing money.

The Actual Role of Government

Michael Moore Gets It Wrong
07/11/09 - John Stossel

Everyone is greedy, it is how you organize things that matters.

Socialists
The government is a caring institution that has been taken hostage by big business. We can free it by making it big enough to resist these businesses. Then the government can give the citizens a fair and prosperous world.

Libertarians
The government is a regulatory oppressor with a big sign in neon "Buy your favors and loopholes here". The back room has a high cover charge, a gambling casino, and rooms for sleeping with legislators. The front room is musty, with slow service and dirty glasses. The cardboard sign reads "We will improve service after we raise our prices".

Capitalists
The simple ones just want to make and sell things. The sly ones see the government as an opportunity which they can't resist. They all have to find a way around the regulations, mostly by paying to stay in business.

Reformers
Everyone is a reformer. The front room is obviously bad, and there are many speeches about fixing it up. Winners go to the back room, where they go along to get along, and work on the problem of not being poor at the end of their elective careers.

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How do you see the government? Caring mother held hostage, or corrupt ruler selling favors?

Regulatory Costs

Take the pressure off
03/16/09 - WashingtonTimes by Wayne Crews

Lifting heavy regulation by government would be a big stimulus.

[edited] America now has the biggest government in world history. It will spend $3.55 trillion ($3,550 thousand million), before counting President Obama's ambitious "stimulus" agenda.

Renewable energy, carbon caps, internet neutrality, and universal health care will cost trillions more. There are also hidden regulatory costs these and other proposals will impose on American business and the people.

The Federal Office of Management and Budget seeks public comment on how “to improve the process and principles governing regulation.” We're glad they asked!

Nearly 70 agencies created 4,004 rules in 2008, and the Federal Register of regulations adds almost 80,000 pages annually. These regulations on business, health, safety, and environment cost an additional $1.2 trillion annually.

Deregulation would stimulate the economy. But, federal agencies rarely admit that rules are poorly targeted or too costly. For example, a 15 MPH speed limit would save lives. A benefit could be claimed, if you ignore the costs hidden in delays. Costly agency regulation isn't affordable anymore.

The recent Consumer Product Safety Improvement Act (CPSIA) regulates testing of items intended for use by children. This "zero tolerance" regulation is threatening to close 10,000+ small businesses that make children's goods such as quilts, toy blocks, and books.

Government vs The Market

Government, the Downturn, and Responsibility
03/01/09 - CafeHayek by Don Boudreaux

Mr. Nouriel Roubini is an economist, interviewed by the Wall Street Journal on Februry 21. He recommended nationlizing the banks because markets have failed to price and trade assets, due to excesses, greed, and irrational exuberance. Some readers responded in letters to the editor.

[edited] Mr. Roubini makes no mention whatsoever of the government interventionism that is largely the cause of our current crisis.

• Was the Federal Reserve's policy of holding interest rates below the real rate of interest and thereby causing a credit bubble and debt-fueled consumption a market failure?
• Or was the market failure that market participants did not read F.A. Hayek's "Monetary Theory and the Trade Cycle" and divine the peril that was not being signaled through the price mechanism?
• Or does Mr. Roubini consider it a market failure that lenders were coerced by the government to make mortgage loans that never would have been made based on market-driven underwriting standards?
• Is the failure of unqualified homebuyers to decline the cheap, no-down-payment loans that lenders were coerced to offer them another market failure?
• Was it market failure that lenders knew they would never have to suffer the consequences of reckless underwriting when they could dump their rotten portfolio on the taxpayers via the government-backed Fannie Mae and Freddie Mac?

The word "market" does not mean an old man in a turban who rubs his chin and suggests a price. It means all of the people with an interest in the problem, with intelligence and experience bought with thousands of hours of study and action.

These people are wiser and better than an academic economist who has spun theories and equations, claiming to understand what government-forced result is good for us all. But, the government pushes the self-interest of its politicians and favored interests, claiming that it knows best.

Politicians Like Thoreau

Thoreau Smacks Down Clinton
02/26/09 - Corner.NationalReview by Fred Schwarz
Via AdviceGoddess

Liberal politicans love the image of Thoreau, living by a quiet pond, loving nature. They forget that he was sitting there as a tax protest. Thoreau:

[edited] Yet this government never of itself furthered any enterprise, but by the alacrity with which it got out of its way. It does not keep the country free. It does not settle the West. It does not educate.

The character inherent in the American people has done all that has been accomplished; and it would have done somewhat more, if the government had not sometimes got in its way.

Trade and commerce, if they were not made of India-rubber, would never manage to bounce over the obstacles which legislators are continually putting in their way; and, if one were to judge these men wholly by the effects of their actions and not partly by their intentions, they would deserve to be classed and punished with those mischievous persons who put obstructions on the railroads.

Obama Challenges Us

Obama, Say Again?
02/25/09 - TheLipstickRepublican by Jamie

[edited] Then, Pres. Obama reached the part where he "challenged" every American to commit to at least one year of higher education, and I was brought up short. Who the bleeping bleep does he think he is, telling me I should seek more education?

It so happens that I want more education. But I want it for me, not to fulfill some "duty to my country." A politician from an earlier generation might have told me it was my duty to produce more children.

If this nation was founded on anything at all, it was founded on the right of individuals to chart the course of their lives.

The Solution Is Simple

Proving Reagan wrong
02/23/09 - BobKrumm.com by Bob Krumm

"Why are they doing all this when they have to know that it isn’t going to work?” was the question my wife asked about the stimulus package.

I answered: “It’s not about fixing the economy; it’s about proving Reagan wrong.” It’s about proving that an enlightened government is superior to a country led by tens of millions of individual sovereign decision makers.

A comment by Joe Y
An insight into the simple view that many people have of the world. An explanation why hope and change is so attractive. An evaluation of President Obama's abilities.

[edited] The oddest thing about this election, was the continual leitmotif of Obama’s genius, from people that should have known better. People like Obama, of which I know and am related to far too many, are unable to seriously consider that there is any job (oil company CEO, football coach, running the local post office) that they cannot do as well or better than the person currently in the role, should they ever exert the effort to do so. It’s not a matter of faith, as faith requires a conscious effort; rather, it is a prejudice in the true sense of the word.

They believe that the government is better at running the country, because the solution to the problem, whatever the problem, is just so obvious. From their point of view, for example, the comprehensive national medical database in the Stimulus Package is obviously a good idea.

The person I was talking to said “Only idiots, paranoids, and Republicans - to repeat myself - want to stop this.” She then gave the several well-known and excellent reasons for the database, concluding with “Who could be against that?”

I replied that no one could, but what about the hundreds of thousands of medical personnel who have potential access to the database? What about the innumerable terrifying stunts that hackers, and not just American hackers, have been able to pull off in attacks on supposedly invulnerable networks? What about people not reporting medical conditions because they don’t want a record of them? What about erroneous data being mistakenly entered? What about erroneous data being deliberately entered? Of course, that was just a start.

To her credit, she got what I was saying, particularly when I applied it to our respective teenage children. A few minutes consideration revealed many problems to answer the question “It’s so obvious! What could go wrong?”.

These considerations were foreign to her, not because she was stupid (quite the opposite), but out of a prejudice that she and people like her can see the solution to any problem. That is why they attack people who disagree with them as stupid, morons, and idiots.

There is one major exception to this attitude, which is in the person's area of knowledge. Then, they are as smart and good as advertised, but rarely anywhere else.

This brings us to the President. Obama is clearly a very bright man, as anyone who becomes president has to be. But, there are a lot of smart guys around. He gives a marvelous television performance of an intellectual, but I would be grateful for a link to any genuine evidence of such.

Like most Ivy leaguers, he’s a smart operator and a dedicated hustler obsessed with accomplishment. Like almost all Harvard men and women, he lacks an aptitude for self-doubt and humility, which people usually, and a bit unfairly, mistake for Harvard arrogance. He is superb at his chosen field; but that field is not being President, it is becoming President.

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Dunning-Kruger effect: The hubris of the incompetent
10/31/09 - Neo-Neocon

Quip: I could do that better than you, if I wanted to.

Wikipedia [edited]: The Dunning–Kruger effect is a bias in thinking. People may make bad choices, and be incompetent to realize it.

The unskilled overrate their own ability as above average. The highly-skilled underrate their abilities, often below the self-rating of the unskilled.

Actual competence may weaken self-confidence, because competent individuals wrongly assume that others are also competent. The incompetent misjudges himself, whereas the highly competent misjudges others.

Incompetent individuals:

• Tend to overestimate their own level of skill, and do not recognize their true inadequacy.
• Fail to recognize genuine skill in others.
• Can come to recognize and acknowledge their previous lack of skill, if they can be trained to substantially improve their own skill level.

Audacity to Do Nothing

The Audacity of Doing Nothing
02/11/09 - Blogs.Law.Harvard.edu by Philip Greenspun
(via Peter G. Klein)

Our prosperous society is built on predictible law and consequences. This is already a shining accomplishment in an uncertain world. It does no good to, in effect, suspend the law and take extraordinary actions because some people made bad bets, lost money, and have political influence. Changing the rules and using naked government power makes things much worse. It removes predictability and rewards the people who took outrageous risks.

See also Rewarding Bank Management for Failure

[edited] The "real money" investors didn't want to invest alongside the government. If the bank loses money, they fear the government will take 100% of the value left in the bank and leave private investors with nothing, including recent ones. This happened to recent investors in Fannie Mae.

The "real money" investors didn't want judges to modify contracts, as when bankruptcy judges reset mortgage payments at a lower level and reduce the principal owed. A central tenet of the U.S. Constitution is that people are free to make contracts.

A foreclosure is greatly preferable to these folks than a modification. In a foreclosure, the most senior investors get what they expected, their money back. The holders of the most junior tranches [last to be paid], which carried a higher return and were known to be high risk, would get nothing. This is also what they expected. If mortgages are modified by government action, it is unclear how the obligations among the various private parties should be adjusted.

One money manager scoffed at the idea that the markets had failed. "The markets are working fine, but they're giving people answers that they don't like, so people cry market failure." Stocks and bonds low? That's because investors are afraid of a prolonged depression and continued government interference.

A house in a jobless region of Michigan is worth almost nothing. A place with 50% of its former jobs only needs 50% of its houses.

The government is a lot bigger and more powerful now than in prior recessions. Rich companies and people can put some of their wealth into lobbying. They demand that the government prevent them from getting wiped out or at least slow the process.

Sins of a Treasury Secretary

Venial versus mortal sins in a Treasury Secretary
01/22/09 - PowerLineBlog by Paul Mirengoff and John Hinderaker

The Senate is holding confirmation hearings to make Timothy Geithner Secretary of the Treasury, to run the IRS and manage the spending of $800 billion dollars and more in "stimulus".

John Hinderaker:

[edited] Geithner failed to pay his self-employment taxes for four years. I find it remarkable that the Senate is willing to overlook that fact, even though:

• The IMF, his employer, told him that he needed to pay these taxes.
• The IMF gave him additional compensation specifically earmarked for paying those taxes.
• He signed a form stating that he would use this compensation to pay those taxes.
• He paid those taxes for 2003 and 2004 after he was audited by the IRS.
• He still did not pay those taxes for 2001 and 2002 because the statute of limitations had run out for those years, so he couldn't be prosecuted.
• He paid the tax for 2001 and 2002 when Obama's transition team discovered the facts.

A Republican with the same tax-scofflaw record would not have the chance of a snowball in Hell of being confirmed.

Paul Mirengoff:

[edited] The conventional wisdom that exalts Geithner says that former Secretary of the Treasury Lawrence Summers could run Treasury at least as well as Geithner.

Unfortunately, Summers committed an offense far graver than non-payment of taxes. He expressed politically incorrect views about why there are more men than women in high-end science and engineering positions.

Labels: S_Government, S_Stimulus

An Hystoricle Day

An Hystoricle Day
01/20/09 - DocsOnTheWeb by Shrodingers Cat

Cat sees our current political and economic situation unfolding as it did in 1930, and for the same reason: government manipulation of the economy on a massive scale. The government just won't stand back and let the people (free market) clean up the mess.

[edited] You see, history seems to be repeating itself, and it is like watching a train wreck, knowing beforehand it was going to happen but unable to stop it.

Hoover was a meddling Republican president who felt he "had to do something" to help the economy of 1929 and 30. He consulted key business leaders and came up with the brilliant ideas of keeping wages high at a time of declining prices and profits for companies, ensuring increased unemployment. He increased taxes (top rate went to 63 percent) increased government subsidies to industry and agriculture, and increased tariffs.

He said, "We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic". (Not my kind of fiscally responsible conservative) That quote sounds awfully familiar... Then came the great FDR (BHO)
(Read more)

The irony is that our problems have been created by a runaway government program to make big houses available to everyone, able to pay or not. The government agencies that did this are called Fannie Mae, Freddie Mac, and the bond ratings agencies.

They pretend to be "private companies" while operating with government guarantees, government appointed boards, government appointed executive officers, government political pressures, and government "oversight" that encouraged them to borrow as much money as the entire US debt at the time, and distort the housing finance markets.

Now, we are being sold government programs to "fix" the problems, maybe, by spending $1,000 billion at a time.

See "We Guarantee It".

The last part of the post reports a parable of politics, performed in a third grade classroom.

[edited] Jamie and Olivia were picked to run for the top spot. Both candidates were good kids. I thought Jamie might have an advantage because he got lots of parental support.

The day arrived for their speeches. Jamie had specific ideas about how to make our class a better place. He ended by promising to do his very best. Everyone applauded.

Olivia's speech was concise. "If you will vote for me, I will give you ice cream." She sat down. The class went wild. "Yes! Yes! We want ice cream." She surely could say more. She did not have to. A discussion followed. How did she plan to pay for the ice cream? She wasn't sure. Would her parents buy it or would the class pay for it? She didn't know. The class really didn't care. All they were thinking about was ice cream.

Jamie was forgotten. Olivia won by a landslide.
(Read more)

Tennessee Sludge Spill: Government Disaster

Tennessee Sludge Spill: Government Disaster 30 Times Worse than Exxon-Valdez
01/14/09 - BusinessAndMedia by Julia A. Seymour
TVA is responsible, but media ignore that it is run by the government.

[edited] The Tennesee Valley Authority (TVA) is a government agency created during the Great Depression, and the nation’s largest electric utility. Their earthen dam in the town of Kingston, TN held more than one billion gallons of thick, black coal sludge. This is coal ash mixed with water, enough to fill more than 550 [sic] Olympic-sized swimming pools. [I compute 1266 pools x 790K gals/pool via Wikipedia]

About December 22, 2008 the dam collapsed. Sludge spread out over hundreds of acres, fouling waterways, and burying homes while people were sleeping.

News reports portrayed the disaster as a failure of the coal industry, not of a government agency. Left-wing environmentalists called for more regulation of the utility industry, instead of blaming the government for failing to police itself.

TVA’s CEO Tom Kilgore admitted to the Senate Environment and Public Works Committee that “the most expensive solution wasn’t chosen … Obviously, that doesn’t look good for us.” That solution would have cost the TVA $25 million. The cleanup will cost $20 million, plus the settlement of lawsuits. [And, the dam will need to be rebuilt.]

Sen. Barbara Boxer, D-CA: “We didn’t really do much in the first two years looking at TVA”.

Shaka Mitchell of the Tennessee Center for Policy Research: “If there is one thing we can all learn from the disastrous toxic ash spill in Kingston, it’s that when government-run companies fail, no one is held accountable, but everyone pays.”

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Tennessee Gets a Lesson in Unaccountable Government
02/07/09 - WSJ Opinion by Scott Barker

The national media briefly gave some attention to the spill. In the Tennessee Valley, faith in government control of TVA may never recover. It was a wall of fly-ash sludge, a waste product of coal combustion from a nearby power plant. 300 acres were coated with debris in Swan Pond, a rural community about 35 miles west of Knoxville.

"I wouldn't have bought this land and built here if I knew this would happen," Mrs. Spurgeon told me after the disaster. "I guess you just trust government agencies."

Fly-ash contains arsenic, lead and beryllium, among other pollutants, so residents are worried about possible long-term effects to their health, water quality and property values.

TVA is trying to mitigate the damage by spending $1 million a day on the cleanup. But with several lawsuits in the works and a state investigation under way, nearly everyone is calling for the utility to be held accountable.

The problem is that it isn't really accountable to anyone. It is not scrutinized by shareholders and, unlike traditional government agencies, it is self-funded, so it doesn't have to justify itself to Congress to win annual appropriations.

Mencken's Timeless Insights

Mencken's timeless insights
12/26/08 - PittsburghLive by Donald J. Boudreaux
An excerpt from a great article.

[edited] If I could bring one person back to life for an evening of good food, stiff drink and sterling conversation, that person would be H.L. Mencken (1880-1956).

Mencken thought the typical politician is a "merchant of delusions," a "pumper-up of popular fears and rages. The politician is never to be trusted.

"What is a political campaign save a concerted effort to turn out a set of politicians who are admittedly bad and put in a set who are thought to be better?"

"If experience teaches us anything at all, it teaches us this: that a good politician, under democracy, is quite as unthinkable as an honest burglar. His very existence, indeed, is a standing subversion of the public good in every rational sense. He is not one who serves the common weal; he is simply one who preys upon the commonwealth."

"It is to the interest of all the rest of us to hold down his powers to an irreducible minimum and to reduce his compensation to nothing; it is to his interest to augment his powers at all hazards, and to make his compensation all the traffic will bear."

+ + +
The Political Manual: Adequate Compensation
As a politician, get paid what you are worth.