Socrates was taken aback when the Oracle of Delphi said there was none wiser than he. Not believing the Oracle, Socrates went on an exhaustive hunt for a person wiser than himself, but came up empty. Why? Because everyone he met thought that, because he knew his own craft really well, he knew everything really well.
From an economic perspective, it certainly is true that this new system is “disorganized” and “a disservice” and an “insult to our intelligence.” Those same words could be used to describe the welfare state, the EEOC, farm subsidies, the tax code, and just about everything else the government does.
But there’s one group of people who are laughing all the way to the bank, The lobbyists, consultants, fixers, and other denizens of the swamp are getting rich. Whether they’re preparing the applications, lobbying for the applications, or lobbying against the applications, they are getting big paychecks.
And the longer this sordid protectionist process continues, we will see a repeat of what happened with Obamacare as senior-level people in government move through the revolving door so they can get lucrative contracts to help clients manipulate the system (yes, Republicans can be just as sleazy as Democrats).
Washington wins and we lose.
- In both cases, government is limiting the freedom of buyers and sellers to engage in unfettered exchange.
- In both cases, the fiscal burden of government increases.
- In both cases, politicians misuse statistics to expand the size and scope of government.
Today, let’s add another item to that list.
- In both cases, the Washington swamp wins thanks to increased cronyism and corruption.
To see what I mean, let’s travel back in time to 2011. I wrote a column about Obamacare and cited some very persuasive arguments by Tim Carney that government-run healthcare (or, to be more accurate, expanded government control of healthcare) was creating a feeding frenzy for additional sleaze in Washington.
Congress imposes mandates on other entities, but gives bureaucrats the…
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Narcissism. Obsession with Victimhood. Identity and Class politics… “Now that’s a tragedy on a Shakespearean scale!”
One of the mistaken ideas of Marxism (collectivism philosophy) is that wealth accumulation in the hands of a few is inherent, and specific, to Capitalism. This fails to recognize that in any endeavor -regardless of who plans it or who participates – that success in that endeavor will always be disproportionately held by a few for reasons that have nothing to do with oppression or theft. This may help explain why the egalitarian promises of socialism & Communism never plays out as it is conceived.
“The disconnect between the intention and what emerges”
A conversation with Dr. Thomas Sowell about the folly of political initiatives to solve disparate impact. With predictable irony, these same interventions often exacerbate the same problems the were commissioned to fix.
And, in all sincerity, can anything more than the absence of plunder be required of the law? Can the law — which necessarily requires the use of force — rationally be used for anything except protecting the rights of everyone? I defy anyone to extend it beyond this purpose without perverting it and, consequently, turning might against right. This is the most fatal and most illogical social perversion that can possibly be imagined. It must be admitted that the true solution — so long searched for in the area of social relationships — is contained in these simple words: Law is organized justice.
Now this must be said: When justice is organized by law — that is, by force — this excludes the idea of using law (force) to organize any human activity whatever, whether it be labor, charity, agriculture, commerce, industry, education, art, or religion. The organizing by law of any one of these would inevitably destroy the essential organization — justice. For truly, how can we imagine force being used against the liberty of citizens without it also being used against justice, and thus acting against its proper purpose?
Here I encounter the most popular fallacy of our times. It is not considered sufficient that the law should be just; it must be philanthropic. Nor is it sufficient that the law should guarantee to every citizen the free and inoffensive use of his faculties for physical, intellectual, and moral self-improvement. Instead, it is demanded that the law should directly extend welfare, education, and morality throughout the nation.
This is the seductive lure of socialism. And I repeat again: These two uses of the law are in direct contradiction to each other. We must choose between them. A citizen cannot at the same time be free and not free.
Another explanation for stagnant wages is increasing market power for a dwindling number of corporations: the fewer corporations there are competing for labor, the more able they will be to negotiate down wages. In the book “The Captured Economy,” Niskanen Center scholar Brink Lindsey and Johns Hopkins professor Steven Teles argue that “regressive regulation”––or regulation supported by established corporate interests in order to drive out competitors––has contributed to this phenomenon. As regressive regulation limits the number of corporations, it means the fewer larger remaining corporations can bid down wages.
The progressive proposal for increasing wages in a labor market in which a few corporations have dominant market power is to raise the minimum wage. Unfortunately, minimum wage increases exacerbate the problem of the concentration of market power for big corporations. According to a Harvard study released this past April, minimum wage increases lead to smaller businesses closing down, hence hurting people trying to start enterprises and advantaging wealthier, more established players. Not to mention that the minimum wage hurts the poorest members of society trying to enter the labor market. Minimum wage hikes are not the way to increase low-income wages, but free marketers need to present their own remedies.
The solution to the high level of market power of a handful of companies is to empower small businesses to enter the market. And government regulation disproportionately harms small businesses: according to a Lafayette University study, the regulatory burden per worker is 28 percent higher for companies with fewer than 500 workers than for companies with more than 500 workers. Specific, targeted reform directed at regulations that have especially high fixed costs and create barriers to entry would go a long way in empowering workers and new entrepreneurs.
Occupational licensing laws are an excellent example of a regulation that depresses the wages of low-income people by imposing high fixed costs, and they have exploded over the past half-century. In 1950, only five percent of jobs were subject to licensing requirements. Now, that figure is closer to 30 percent. According to conservative think tank Goldwater Institute, occupational licensing requirements seriously depress low-income entrepreneurship, hence both holding more people in poverty and preventing the entry of new, small firms…Repealing these regulations would both directly increase the wages of low-income workers while also easing the process for firm entry into the market.
Furthermore, the Dodd-Frank Act is another package of regulations that has seriously weakened small businesses. The burden of the regulatory rules in Dodd-Frank has disproportionately hurt community banks, and while community banks only form 20 percent of all banking in the United States, they are responsible for 50 percent of small business loans. Therefore, as community banks die off––almost 20 percent of them have shuttered since Dodd-Frank’s implementation––would-be small business founders lose access to capital. This loss of access to capital perpetuates the problem of the shrinking number of businesses in the market as a whole. Therefore, repealing Dodd-Frank would enable for more firm entry and a more dynamic labor market, addressing the decline in business formation partially responsible for wage stagnation.
Increased competition in the labor market for workers is a viable solution to slow wage growth that conservatives must champion. Free marketers cannot afford to surrender the issue of wage stagnation to progressives championing more government intervention, and present their own liberty-minded solutions to raise the wages and living standards of low-income workers.
“It [Politically correct legislative coercion] is resentment, and the demand for power, disguising itself most reprehensibly as compassion; and its time for the mask of that to be taken off and things set straight…” – Jordan Peterson
Because, for man to be redeemed from revenge—that is for me the bridge to the highest hope, and a rainbow after long storms.
Otherwise, however, would the tarantulas have it. “Let it be very justice for the world to become full of the storms of our vengeance”—thus do they talk to one another.
“Vengeance will we use, and insult, against all who are not like us”—thus do the tarantula-hearts pledge themselves.
“And ‘Will to Equality’—that itself shall henceforth be the name of virtue; and against all that hath power will we raise an outcry!”
Ye preachers of equality, the tyrant-frenzy of impotence crieth thus in you for “equality”: your most secret tyrant-longings disguise themselves thus in virtue-words!
– Friedrich Nietzsche, Thus Spoke Zarathustra