Big Government Is Big Business

Radley Balko puts together a couple of interesting tidbits. First, you've got this, from Chris Edwards at the Cato Institute, showing that the number of federal subsidy programs has increased by about 25% since 2000. (Edwards notes the irony that there are now 1,776 such programs.)

And then Balko points to this from the Washington Post: an article about how lobbying is a big growth industry. Apparently, the number of lobbyists has nearly doubled since the year 2000, and they are raking in the bucks.

Balko uses this as an excuse to take a shot at Bush and the Republican Congress, and lord knows they deserve it. But, as I noted before in talking about agriculture regulations, the problem isn't bad people in power, or at least isn't just bad people. The problem is structural. The United States has a 13 trillion dollar economy. The federal government spends about 20% of that, and its policies greatly affect the other 80%. Try this experiement someday, if you can get Bill Gates to fund it for you: fill garbage cans with $100 bills and randomly leave them in Central Park. I suspect you won't have to wait long before people start hanging around in the park, trying to be there for your next money drop.

The same is true of the federal government. They have so much money to toss around and their rules and regulations have so much impact on the rest that people would be stupid not to hire lobbyists and influence peddlers. Want to get rid of it? Fine -- reduce the size and scope of the federal government. But, people being people, it's too much to expect that they won't respond to the incentives generated by a massive, intrusive, federal regulatory/welfare state.

Government Largesse: Some Strings Attached

Radley Balko links to this article about the Supreme Court's refusal to review a challenge to a San Diego program in which government officials searched the homes of welfare applicants. People were free to refuse to be searched -- but if they did, they couldn't get benefits. As Mr. Balko points out, the notion that applying for government benefits constitutes consent to a search is pretty broad:

I suspect the law-and-order response to the policy in San Diego would be something along the lines of "if they can’t prove they’re clean, they don’t deserve my tax dollars." Of course, if everyone who received any sort of government assistance had to consent to a search of their home, the Fourth Amendment would be pretty much null(er). For example, I’d guess there’d be quite a bit more outrage if these fishing expeditions/searches were being done on the homes of, say, middle class kids applying for government-subsidized student loans instead of low-income people applying for welfare.

There might be more outrage, but of course many of the same justifications for searching the homes of welfare recipients might apply to student loan recipients. In any case, this practice points to one of the often-unappreciated costs of the massive welfare state: it inevitably leads to increased government monitoring of the beneficiaries of welfare programs. And of course as people become accustomed to searches of all sorts, the willingness to object or resist declines.

The power to do something for you is also the power to do something to you.

Why (This) Libertarian Hates Unions

Why do some libertarians hate unions? Megan McArdle says that liberals believe that libertarians hate unions because "they raise wages and improve working conditions for their workers at the expense of profits." Citing this article on tollbooths and the adoption of technology like the EZ-Pass, Megan says that the "the central problem with unions, to the extent that there is a problem, is not that they demand higher wages, but that they reflexively oppose productivity enhancing change." And she cites a couple of examples -- the dockworkers' strike and the Big Three autoworkers who sit around being paid to do nothing.

Megan is right that one problem with unions is that they tend to oppose productivity-enhancing innovation, and this is indeed a good reason to hate unions. But, from a libertarian perspective, the central problem with unions is that they depend on the coercive power of the state. Property rights and freedom of contract are fundamental rights. Under current law, if 51% of the workers at company X vote to join a union, the employer is legally required to contract with that union. (The Democrats want to change this to require compulsory contracting if 51% of the workers can be persuaded or intimidated into signing a card.) The employer cannot refuse to contract with that group, contract individually with the other 49%, offer payment to workers in exchange for an agreement not to join a union, or seek employees willing to give a better deal. Every private sector union contract in force today exists in part because a people with guns say "bargain with them, or else."

Under libertarian rules, workers would, of course, be free to form unions or join existing ones. They would be free to seek a favorable contract from their employer. By the same token, the employer would be allowed to bargain individually with people who chose not to join a union, to refuse to bargain with the union, or to offer contracts which forbade unionization. I am not a big fan of unions, but that is largely because, under current rules, they have the heavy hand of the state behind them.

Porkbusting

Glenn Reynolds links this Examiner report about Senate Republicans who still support pork projects, even those designed to help Democrats. Sixteen Republican Senators wouldn't even vote to kill three Harlem projects inserted by Charlie Rangel and named for him.

I am as offended by this sort of pork as anybody. If Bill Gates wants to fund a building and have it named after himself, great. But it is outrageous that members of Congress get to use taxpayer money to name projects after themselves. If Charlie Rangel or Robert Byrd or any other politician wants to name a project after himself, he ought to damn well pony up the cash out of his own pocket. Not mine.

Glenn Reynolds says our politicians "lack essential self-discipline." Perhaps so, but I am suspicious of the claim that we'd be in better shape if only we had "better people" in office. That's always the claim about socialism -- if only they had been better, more virtuous people, socialism would work. No it wouldn't -- socialism will fail no matter how virtuous the officials. We have the politicians we have, and they are responding to the incentives offered them.

Let me propose a different culprit: United States Constitution, Amendment XVI. The income tax amendment. Once the federal government got easy access to all of our pockets, it was inevitable that politicians would take money from the citizens and use that money to try to get reelected. Pork barrel spending is the inevitable consequence of the sort of government we have. And until people decide they don't need or want this kind of big government, we're stuck with it.

The Psychohistorians Are Coming

Reihan, blogging for Ross Douthat, links to this article about a guy named Bueno de Mesquita who uses game theory to make predictions that out-predict the CIA. Now, this may not seem like much of a feat, but apparently he's got a pretty good record:

To verify the accuracy of his model, the CIA set up a kind of forecasting face-off that pit predictions from his model against those of Langley’s more traditional in-house intelligence analysts and area specialists. “We tested Bueno de Mesquita’s model on scores of issues that were conducted in real time—that is, the forecasts were made before the events actually happened,” says Stanley Feder, a former high-level CIA analyst. “We found the model to be accurate 90 percent of the time,” he wrote. Another study evaluating Bueno de Mesquita’s real-time forecasts of 21 policy decisions in the European community concluded that “the probability that the predicted outcome was what indeed occurred was an astounding 97 percent.” What’s more, Bueno de Mesquita’s forecasts were much more detailed than those of the more traditional analysts. “The real issue is the specificity of the accuracy,” says Feder. “We found that DI (Directorate of National Intelligence) analyses, even when they were right, were vague compared to the model’s forecasts. To use an archery metaphor, if you hit the target, that’s great. But if you hit the bull’s eye—that’s amazing.”

This is way cool -- not for the first time, I wish I was better at math. He uses lots of math and game theory for his predictions, and for some reason he absolutely drives many of his critics bonkers.

So am I the only one who is reminded of Asimov's pyschohistorians?

UPDATE: Some skeptical points in the comments to Reihan's post. I agree that in order to really assess this guy, you'd need a database of predictions in advance, which you could then check against other methods, or just random chance. But I still like the coolness of it all.

ALL The Planes Are Late

I've been known to post a missive or two about bad customer service, and particularly about how U.S. Airways customer service really sucks. Now James Fallows links to this Patrick Smith's latest Salon "Ask the Pilot" column about why that plane is always late. According to Smith the answer is simple: the airport doesn't have enough slots to accomodate the number of takeoffs and landings at peak times. In particular, he thinks that regional jets are the big villain:

It's an airline scheduling issue, plain and simple. Carriers have created this mess through a self-defeating insistence that frequency of flights is the ultimate key to success. Over the past several years, they have portioned capacity onto smaller and smaller planes making more and more departures. The results of this strategy can be seen on any afternoon at airports such as JFK, Newark, LaGuardia and Washington National, where small regional jets (RJs) account for up to half of all takeoffs and landings. It is not the total volume of passengers slowing things down, it's the inefficient way they are divvied up. In some places, 50 percent of the traffic is carrying a quarter of the people.


How bad does it get? Two weeks ago I was working a flight from Europe to JFK. We landed shortly after 5 p.m. -- several minutes ahead of schedule, ironically -- only to spend the next two hours -- two hours -- taxiing from the end of the runway to our parking position. Our assigned gate was open and available the entire time, but the airport had become a spaghetti snarl of planes. Taxiways were blocked; aprons, clogged. It was literally gridlock -- with scores of 50- and 70-seat RJs jockeying for space with A340s and 747s.

Fair enough -- he's a pilot, and he can see and make sense out of what he sees outside his own window.

If you are like me (fat chance) your market-oriented libertarian instincts kick in: the obvious choice is simply to charge more for takeoffs and landings during peak periods. Yet Smith rejects this obvious solution:

So-called peak-period pricing is a popular and controversial idea, akin to levying heavy tolls on automobile drivers as a way of reducing downtown traffic jams. In cities like London, apparently, such disincentives have met with success. But jetliners are not cars, and airlines are not private motorists. The result would be higher fares with a minimal effect on congestion. Speaking last week to the Senate Subcommittee on Aviation Operations, Safety, and Security, Zane Rowe, a vice president at Continental, said that peak-period pricing "will do nothing more than reduce service to small communities, reduce job growth and raise fares for commercial passengers." Rowe is partly right. The bit about small communities is certainly an eyebrow-raiser, now that RJs operate on mainline trunk routes as much as they fly to minor cities. (Out of New York, they service such "small communities" as Chicago, Miami and Dallas.) He's correct, however, about costs being passed along to fliers. With average ticket prices as low as they are, it'd be relatively easy for airlines to pass along a modest rise to customers. You already pay extra to fly at the choicest times (even if your flights don't actually leave or arrive when they're supposed to). You'd probably pay more. For the scheme to encourage any measurable consolidation, fees would need to be fairly radical, which is to say very expensive, and I don't foresee that happening. The airlines are too strong, regulators too timid. Instead, the probable result: pricier tickets, same delays.

This can't be right. Basic economics tells us that if the price goes up, the amount demanded will go down. You cannot have pricier tickets and no reduction at all in the commodity being priced. At the margin, some travelers will shift to less-popular times. "Pricier tickets, same delays" is simply not a possible outcome.

Now, if they set the price for peak hour departure too low, then it won't have much of an impact, and so we will have pricier tickets and only slightly reduced delays. But if the congestion fee is that modest, well, ticket prices won't go up that much, either.

Besides, having government set the fee for a particular time is a clumsy and stupid way of going about implementing a congestion-fee system. The obvious solution is to figure out how many takeoffs and landings an airport can accomodate during a particular period and then auction off the rights to prime slots. Instead, Smith prefers a command-and-control solution:

If you ask me, the only hope is for carriers to consolidate departures and wean themselves away from their berserk obsession with regional jets. They can do this voluntarily, or the government can force them to by imposing caps. For example: At Kennedy, no aircraft with fewer than 100 seats shall be allowed to take off or land between 5 p.m. and 10 p.m. Or, during that same time frame, each carrier serving the airport must reduce its schedule by a certain prorated percentage that reflects its share of total passengers.

I'm quite certain this man knows more than I do about flying an airplane, or even about the mechanics of how airports work, but it's goofy to think that government-imposed caps will work better than a price system. If nothing else, he claims that government won't set the price high enough because of the strength of airlines and weakness of regulators. Then why, pray tell, does he imagine that government will set the cap correctly? And if he bans planes with fewer than 100 seats, doesn't he just create an incentive to produce airplanes with exactly 101 seats?

For the life of me, I just don't understand the appeal of command-and-control regulations, when market-based solutions are obviously superior.

UPDATE: Reading the comments, I must say, great minds think alike:

Surely the simplest and market friendly solution would be to cap the number of slots at the most congested airports and conduct an open auction for the right to use the slot. This would give the larger airliners an advantage in that their per seat slot cost would be lower than commuter and executive jets and would have the extra advantage of raising funds for the upgrade of traffic control systems.

Alas, this insightful commenter was anonymous, but whoever it was, he or she got it exactly right.

Are UAW Auto Workers Nuts?

Insty links to this report that General Motors workers are now officially on strike.

Are they crazy? Do they want to drive General Motors into bankruptcy? What are they thinking? The American automobile industry is in deep, deep trouble, and the workers go on strike. I am utterly speechless at this lunacy. (See The Hutch Report for similar thoughts.)

Reputation in the Internet Era

Back during the height of the internet boom, lots of folks were talking about how much the internet changes things. That's been tamped down a bit, but it really has been an important innovation, in a lot of ways. Small stuff: I no longer own a phone book, for example. When I want to look up a phone number, I go on the Web to do it.

One area where, I think, businesses may still be behind the curve is in the way that their reputation can take big hits when they do a bad job with customers. It's not just word-of-mouth any more -- it's word-of-mouth plus word-of-blog, review site, etc. I still get hits on my U.S. Airways Customer Service -- SUCKS post, for example. Google "Dell Hell," and Jeff Jarvis's page will be one of your top hits. My view that Charlie Palmer Steak has good food and lousy service is available for viewing.

It used to be that a restaurant could feel pretty safe in serving rotten food, and then making inadequate recompense to the disgruntled diner. Oh, it could be a secret shopper or incognito restaurant critic, but the chances are it's just some guy. You might lose one customer, or get bad word-of-mouth -- and word-of-mouth is important to restaurants. But the scope of the damage will be limited. Now, however, there's a lot more room damage.

Witness this post back in May, by Stephen Dubner at the Freakonomics blog (via Ian Ayres at Balkanization and then this more recent post at Dubner's blog). Sure, Dubner is a real, live journalist, but he's also a blogger. And, like bloggers, he has the freedom to write about what he feels like. In this case, a restaurant called French Roast served him rotten chicken. When he sent it back, they fought him on it. And then they gave him little recompense -- a few measly bucks off. The manager though she'd gotten him out of there, meek and mild-mannered. And she was right -- he didn't put up a fight.

He wrote about it on his blog. And now it's there, fore all to find, whether through search engine or just following some random links, as I did. And the worst part is, most of the other reviews I've read online look pretty positive. It was probably just a fluke, albeit one that really shouldn't have happened. But fixing it right would probably have been less damaging than incurring the reputational cost associated with getting hammered by a reasonably well-read blogger.

Maybe Communism Really Is Dead

Guest-blogging over at Andrew Sullivan's, Bruce Bartlett (whose book on Bush I quite enjoyed), links to an appraisal of the economic thinking at the Kos Kids Konvention by his "old college chum" Max Sawicky, leftist economist at the union-funded "Economic Policy Institute:"

What sort of economic policy was flogged at Yearly Kos? I'd like to know. It didn't look promising for what any knowledgable person would call progressive policy.

Speakers included Austan Goolsbee, an eminent, very smart professor at the University of Chicago who advises Obama. I would say AG is not a person of the left, no disrespect intended. They also had Hale Stewart, a.k.a. "Bondad," a Kos front-age regular, who is in financial services. HS is a fine fellow, also not much on the left. Then there was Gene Sperling, former Clinton/Rubin economics apparatchnik. Robert Shapiro, former Clinton DoC appointee and DLC/PPI honcho. Some French dude I never heard of.

I find myself agreeing (again) with Bruce Bartlett here:

Max's point is that these guys may be liberal by conventional political definitions, but they are hardly men of the left. He finds this dispiriting; I find it reassuring.

Since there is about a 94% chance that the next President Of The United States of America will be a Democrat, it is indeed reassuring that he or she won't be advised by a true Person of the Left.

There is a good reason for that. What does it mean to be a "Person of the Left"?

The left had its run from 1850 until about, say, 1991. While there were all sorts of differences among leftists, some of which might even matter to a person not immersed in the intricacies of leftist politics, I think it's fair to say that the political Left had two core elements. The first was a radical critique of capitalism and the market economy. They thought that Capitalism was Evil with a capital E -- it made the poor worse off, led to exploitation and a whole host of other evils. Just to be clear, they didn't think that the market economy had imperfections or a few little problems -- they thought it was rotten to the core.

The second element was that they had something to replace capitalism with. Details varied -- greatly! -- but it was some form of socialism. So the idea was that we should have a full-bore centrally-planned economy or live in communitarian villages, or have some form of left-anarchy. Something different than an economy based on private property and market exchnages. This, we were told, would make us all better off. (Well, except for the kulaks, and they got what they deserved anyway.) And, just to be clear, ridiculous as it now seems, one of the key claims was that socialism would do a better job of delivering the goods than capitalism. When Khruschev and Nixon faced off in the impromptu kitchen debate, Kruschev didn't say "we will be poorer but happier." No, he said they would surpass the United States and wave goodbye.

In 1935, a serious, intelligent, rational, informed, humane individual could believe these things. That's simply not possible today. The market economy delivers the goods. Attempts to replace it with Something Radically Better have uniformly failed. Socialism proved itself to be one of the Worst Ideas Ever, responsible for the death of somewhere between 50 and 150 million people in the 20th Century.

Yes, there are a few holdouts who still believe in the radical critique of capitalism and who yearn to replace it with something radically better -- aging hippies, red-diaper babies who cannot admit their parents were evil, black-clad anarchists depressed from Seattle's cloudy weather, morally retarded British science fiction writers, Women's Studies professors at elite universities, and the like. But they are the intellectual equivalents of those Japanese troops hiding out on isolated islands who don't realize the war is long-lost. No longer able to plausibly argue that socialism will do a better job of producing the goods, today's leftist are stuck arguing things like "you have too many choices in the grocery store and that makes you unhappy." Yeah, that's sure going to be winner among those working classes.

Unlike Aggrieved People's Studies professors, economists have to have some passing contact with reality. It is therefore not particularly surprising that even those who advise Democrats have realized that an economy based upon private property and market exchange is basically a Good Thing.

The does not mean, of course, that all questions have been decided. Reasonable people can still disagree about the size and scope of proper regulations governing the market, the size and scope of any government interventions designed to help those less well-off, and the like. I suspect that all of the advisors for Democratic presidential candidates favor more government regulation than I do. But they aren't "people of the left" in the sense that they seek to throw out capitalism and replace it with Something Better. And, like Bruce Bartlett, I think that's a good thing.

Three Cheers For Norman Borlaug

Insty links to this Huffpo article by Gregg Easterbrook about Norman Bourlaug, who just received the Congressional Gold Medal. Bourlag is an agricultural scientist whose work led to the "green revolution." The number of people whom he saved is certainly in the hundreds of millions; it might even be as many as a billion. As Easterbrook says:

Born 1914 in Cresco, Iowa, Borlaug has saved more lives than anyone else who has ever lived. A plant breeder, in the 1940s he moved to Mexico to study how to adopt high-yield crops to feed impoverished nations. Through the 1940s and 1950s, Borlaug developed high-yield wheat strains, then patiently taught the new science of Green Revolution agriculture to poor farmers of Mexico and nations to its south. When famine struck India and Pakistan in the mid-1960s, Borlaug and a team of Mexican assistants raced to the Subcontinent and, often working within sight of artillery flashes from the Indo-Pakistani War of 1965, sowed the first high-yield cereal crop in that region; in a decade, India's food production increased sevenfold, saving the Subcontinent from predicted Malthusian catastrophes. Borlaug moved on to working in South America. Every nation his green thumb touched has known dramatic food production increases plus falling fertility rates (as the transition from subsistence to high-tech farm production makes knowledge more important than brawn), higher girls' education rates (as girls and young women become seen as carriers of knowledge rather than water) and rising living standards for average people. Last fall, Borlaug crowned his magnificent career by persuading the Ford, Rockefeller and Bill & Melinda Gates foundations to begin a major push for high-yield farming in Africa, the one place the Green Revolution has not reached.

Now, it's not quite true, as Easterbrook would have it, that Professor Borlaug is unknown -- he's received the Nobel Peace Prize and the Congressional Gold Medal after all, as well as plenty of other accolades. I knew who he was, and it would seem that the folks at the Ford, Rockefeller, and Gates Foundations do too. But Easterbrook is right that an award to the greatest living American -- or quite possibly the greatest human ever to live -- is more newsworthy than, say, the paternity of Anna Nicole Smith's baby.

Some of Easterbrook's Huffpo commenters seem happy to hear about Professor Borlaug. Others, well, they take the opportunity to rant about Evil Biotech and how America is to blame for all the ills of the world.

Take That, Sicko

Betsy Newmark links to this page which contains photographs of the real Cuban medical system -- you know, the one that Michael Moore didn't see. Take a look -- if you have a strong stomach.

Brad DeLong -- no right-winger, but an economist with a commitment to a mixed economy with genuine market elements -- takes lefties to task with this post on Cuba (later reposted here). As DeLong points out, when Castro took over, Cuba was a developed country -- comparable to many countries in Western Europe. Today it's a middling awful Third World country. With what is likely the best possible implementation of communism and a planned economy, Castro has managed to knock his country down an entire tier.

And if you read DeLong's post, be sure to check out the comments. A few sensible ones, but mostly lame-ass excuses of the blame-America-first sort and a few pathetic attempts to say "they're not that bad, really -- look at their health care and education system!" Want to take bets on how accurate those widely-touted numbers turn out to be when the communist government falls? And, ten years later, the leftists will be saying "we weren't really supporters of Cuba. Not us!"

Literary Leftists

Via Normblog, this article by Terry Eagleton lamenting the decline of the British socialist writer. Eagleton makes a bit of an exception for the execrable Harold Pinter, but even he isn't totally safe from Eagleton's scorn: he characterizes Pinter as a "champagne socialist" and he admits that Pinter's political work is "artistically dreary." So he's a hypocrite and a boring writer, but his heart is in the right place. All is forgiven!

But at least according to Eagleton, British socialist writers are an endangered species, at least compared with prior epochs:

The uniqueness of the situation is worth underlining. When Britain emerged as an industrial capitalist state, it had Shelley to urge the cause of the poor, Blake to dream of a communist utopia, and Byron to scourge the corruptions of the ruling class. The great Victorian poet Arthur Hugh Clough was known as Comrade Clough for his unabashed support of the revolutionaries of 1848. One of the most revered voices of Victorian England, Thomas Carlyle, denounced a social order in which the cash nexus was all that held individuals together.

Carlyle was also an enthusiastic supporter of slavery, but I suppose Eagleton doesn't much care about something like that. In the 20th Century, the Eagleton pantheon includes literary leftists like H.G. Wells and George Bernard Shaw. And he gives a nod to Brecht and Sartre, despite the fact that, like many leftist intellectuals of their era, they looked the other way at Stalin's atrocities. (Some leftist literary figures will still apologize for Stalin, if they get riled up enough.) So supporters of slavery and mass murder are fine by Eagleton, so long as they are sufficiently anti-capitalist.

But now, well, while most literary types still lean left, they just don't stack up to the old guys.
Eagleton is particularly peeved at Christopher Hitchens and Salman Rushdie, because both of have been outspoken enemies of political Islam. (In Rushdie's case, I suppose it might have something to do with the fatwah. Serious death threats tend to concentrate the mind.) Rushdie's knighthood really sticks in Eagleton's craw.

Fat Man on Keyboard makes an incisive comparison, from the perspective of the democratic left:

So what have these writers done to upset the eminent critic? Exactly what Orwell did; take a morally consistent line against totalitarianism. This is from Orwell’s essay, Why I Write; ‘Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism, as 1 understand it’. Note that these terms are not mutually exclusive but complementary. For Eagleton, opposition to the totalitarianism of our day automatically excludes anyone as being considered as a partisan of the democratic left.

Fair enough, from Fat Man's perspective. I suspect that, despite their current renegade status, both Hitchens and Rushdie would consider themselves to be men of the left, despite their current apostasy. (Unlike, say, David Horowtiz, who has made his break with the left explicit.)

And yet, while I admire Orwell immensely, he was wrong about the whole democratic socialism thing. During the early stages of the Industrial Revolution, the literary figures like Blake and Byron and even Carlyle can be excused for their error. Clearly, the political economists like John Stuart Mill who fought for things like free trade and private property, and, oh, incidentally for the abolution of slavery were the good guys in that debate. But the Industrial Revolution was indeed a new thing and the gains from it were not initially distributed as widely as one might have preferred. So yeah, you can see how people could be skeptical of the whole capitalism thing.

Likewise, in the immediate post-depression postwar era, a guy like George Orwell can be excused for thinking that some form of socialism was both inevitable and desirable. Don't get me wrong -- he was wrong and people like Hayek and Ayn Rand were right. But one can criticize Orwell's commitment to socialism while recognizing his other virtues. And, unlike people like Brecht and Sartre, he was never an apologist for Stalin.

But today it is simply not possible for a humane, intelligent, informed, compassionate individual to be an advocate of mass full-bore socialism. One can legitimately argue as to whether a mixed economy with significant market elements would be preferable to Laissez-faire free market capitalism. But the central lesson of the 20th century is that markets work. Both the empirical and theoretical evidence is now in, and the radical critics of capitalism were just plain wrong about nearly everything. To the extent that Orwell shared the widely-accepted critique of capitalism, he was wrong.

Perhaps Eagleton is right: perhaps the radical literary critic of the free market is indeed a dying breed. Let us hope so.

Iconoclast Confused. Please Explain.

The House of Representatives just passed a bill which would ban "price gouging." According to the L.A. Times summary:

The legislation would give federal authorities the power during presidentially declared energy emergencies to investigate and prosecute anyone selling fuel at a price that is "unconscionably excessive" or "indicates the seller is taking unfair advantage unusual market conditions."

Forget for a second the absurdity of trying to define "unconscionably excessive," or what it means to take "unfair advantage of unusual market conditions." There was a country that tried this experiment in having the government, rather than markets, set prices. It was called The Soviet Union, and it collapsed in disarray. And, oh yeah, we tried having the government limit gas prices -- the result was long gas lines, back in the seventies.

This is four star populist economic idiocy of the worst sort. It's the kind of thing that makes you scratch your head and say "have they learned NOTHING?" And hey, my lefty blogger friends, call out your own party in this one. I challenge you. Worse, in the long run, it's political idiocy as well -- the folks who fall hardest for this sort of populist business-bashing are already Democrats. Right now, the Republicans have done everything in their power to alienate libertarians and small-government conservatives. So, shouldn't the Democrats be trying to convince this group -- a group that is seriously in play -- that, while they might regulate a little more and provide a few more goodies, they won't, you know. do anything massively stupid?

But forget all that.

Here's my question: aren't the Democrats the ones constantly telling us about Greenhouse effect, and how we have to consume much, much less in the fossil fuel department? One rather obvious way to reduce fossil fuel use is to raise prices. So, shouldn't price-gouging be a GOOD thing? Don't we want to encourage it, so as to give consumers to use less gasoline?

As greens, they ought to be cheering the price-gouging on, demanding more of it. "Go Big Oil, Raise those prices!" ought to be their cheer.

Meanwhile, as the Democrats make populist noises about Big Oil and price-gouging, a dozen states, including such right-wing havens as Minnesota, Wisconsin, New York and Michigan have minimum gas prices. Wisconsin's minimum price law, which requires that gas station owners sell gasoline for 9.2% over the wholesale price, has recently gotten a fair amount of attention because of a noteworthy case: Raj Bhandari, a Wisconsin gas station owner, was notified by state authorities that his two-cent-a-gallon gasoline discount for the elderly and those who support youth sports was illegal under Wisconsin law. Now, personally I don't hold with senior-citizen discounts -- I think that seniors should pay more -- but I also think that businesses ought to be able to charge whatever they want.

In these twelve states, you have laws requiring price-gouging. So, if the Democrats are all hot-and-bothered about price-gouging and want to do something to really help, why not pass a federal law preempting state minimum-price laws? Then they could go home and brag about how they had helped people -- and also get rid of a pernicious bit of government regulation at the state level.

How many Democrats have opposed such laws anyway?