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Saturday, November 20, 2010

Great Posts

Volokh has one on Gamesmanship Pays Better Than Entrepreneurship:
If you wanted to get rich, would you invest your energies in starting a business to sell an innovative new product or service, or would you move to Washington, D.C. and become a lobbyist?
Hah. It's a really good post with a link to an article with some substantive attempt to assess the differential.

But hey, we've seen this rising tide for some time. It's no coincidence that surveys of college and graduate school students has shown that most of them prefer to go into government in recent years. It's no coincidence that small businesses, who have by far the worst problem with medical insurance, got bent over the barrel with health care reform. For years they have been lobbying to get equal treatment with large businesses, and for years their lobbying has been defeated by lobbying from insurance companies.

Consider the capital alone. It's hard to raise capital now, the regulatory barriers to setting up any business which manufactures ANYTHING are large, thus the legal costs are huge, and you put that capital at risk. You need very little to go into the lobbying or dealing with regulation business. This is so bad for our country that until it is somewhat redressed our economic problems will continue.

Second great post - No Oil For Pacifists covers the Colorado register-to-lobby case. In detail, as you might expect. This is a very important issue, because just as businesses have difficulty starting due to regulation, average people have difficulty engaging in politics when politics becomes regulated by the state. Effectively, this is a back-door abrogation of First Amendment rights.

This is just my opinion, but I think we have reached the tipping point. We will either evolve a new philosophy of government or our society will tip over under the weight of this. Since I have made my living off dealing with regulation, I think my opinion has at least some weight. I believe banks ought to be regulated, but I have become skeptical of the current reform law. Even that is rolling over.

But read the posts, and see what you think. The average person wouldn't know about the laws in his or her own state until the average person needed to organize against a local political initiative. The average person doesn't know about business regulation, because most people don't directly deal with much of it. Up until now, our society has been ignorant of the growing mass weighing down the economy.

But now the EPA is going after farms and industrial boilers, and the stupid 1099 rule has pissed off every small businessman in the country, and TSA's crotch-groping is about to really hurt the airline industry in a very deep way. It's good for car manufacturers, but death to airlines.

Much of this stuff has just resolved to "Stupid" in the public's eyes. However the public still doesn't know just how stupid the official stupid has gotten. It's really stupid - and going along with the stupid is a very sure and certain way to make money, even if you are a scientist. Because believe me, everybody who studied paleoclimate already knew that the rainforests were hurt by cold (due to lack of precipitation) and prospered during the warm periods, but the "scientific consensus" had come to be that a very small rise in current temperatures would hurt the rainforests. So now a few brave souls are doing studies that confirm what everyone already knew before denying reality got you tons of grant money.


Perhaps someone needs to create a "Ruler Curve". It would be like the Laffer Curve but the x-axis would not go from 0% to 100%. It could instead go from 0 rules to infinite rules. I suspect the two curves would look somewhat similar.

Since our rulers add new rules faster than they remove old rules, perhaps I shall remain bearish for a bit longer. Say another 35 years or so. I figure there's no point being bearish once I'm dead and cremated.
The TSA mess will probably be used as an additional reason for spending massive amounts of money on "high-speed passenger rail." A few tends of billions of dollars later, someone will notice that railroads are by no means invulnerable to terrorism, either.
In Ayn Rand's "Atlas Shrugged," an unattractive character (Henry Rearden's mother) asserts that: All business is just dirty politics, and all politics is just dirty business.

This is by no means true in a properly-functioning capitalist society, but Barack Obama seems determined to make it true of the United States. See my post here.
There is little question the government continues to grow and acquire power. It is the nature of the beast. Unfortunately, the pace is accelerating. Who ever thought the Federal government would ban incandescent light bulbs (forcing a GE plant to shut down(. it is the same thing with the water volume on toilets.

During the California Senate contest, Boxer complained Fiorina outsourced job to foreign countries. I do not understand why Fiorina did not turn that around and tell Boxer people like her kept making up these insane regulations and laws that all but make it impossible to create jobs, start businesses, and compete in the world marketplace. The problem is Boxer, not Fiorina.

This has been weighing on my mind for some time now. Not in a theoretical sort of way, either. There's intangible benefits to doing your own manufacturing, at the early stages of a technology. It's hard to tell someone what you want built, if you don't already know how to build it yourself. But it's difficult to convince investors that manufacturing is going to give them any ROI. I'll pull up stakes and move where I need to, but I have to guess where the regulatory environment is going to be welcoming.

To manufacture, or not to manufacture? Aye, there's the rub.

Perhaps the TSA can setup checkpoints every 20 yards or so along the railroad tracks to search anyone who approaches? Surely that would help make the railways safe.


* Unemployment would plunge


* Reduced freedom
* Vastly increased national debt
* Unproductive use of resources
* Only protects railways

The last "CON" could be removed by expanding the checkpoints to all of America of course, which would further reduce unemployment.

In fact, there might be too many jobs and not enough workers.

The TSA Youth program could kick in at that point though.

For those just tuning in, I'm being snarky. I'd also like to think I'm being a patriot (and not the kind of patriot implied in the Patriot Act).


a person who regards himself or herself as a defender, esp. of individual rights, against presumed interference by the federal government.

As I read your post and the links, I kept nodding my head and saying, "YESSS!!"

The Endangered Species Act (ESA) is the most anti-business, anti-private property legislation ever passed in this coumtry. The use of it to create ever more regulations and to obstruct or prevent industries (particularly manufacturing, extractive, and agricultural) from starting or growing has been a real problem for our economy for many years. The problem has been somewhat masked by the tech boom, and, for a time, the housing bubble. However, it's really biting us now with the collapse of home building and debt contraction. Manufacturing has moved overseas, energy has become more expensive, and jobs in the extractive industries have declined. If we allowed exploring for our own oil, encouraged clean mining, and had fewer barriers to building new plants (manufacturing & nuclear power) our economy would be more resilient and offer more jobs with decent pay.

It is sensible to be careful efficient, and clean in our manufacturing and extractive industries. But the regulations we now have go way beyond sensible into the unreasonable, even the unattainable. And they want more!

Sorry to keep beating this dead horse on your blog. You specialty is mostly economics and I want to shout this message at anyone who will listen.
Thanks for the shout-out, M_O_M.

I find that many fail to distinguish between contributions to candidates, for which financial disclosure is the appropriate response, and un-coordinated speech about candidates or speech and advocacy about public issues, where financial disclosure would chill robust debate. The liberal advocacy group "People for the American Way" is an example, but that group links to numerous newspaper editors making the same mistake. Passage of the (misnamed) "DISCLOSE Act" in the lame-duck session would be exactly the governmental control of politics you properly label as back-door restrictions on speech.
You've missed two which have upset a lot of folks. First was the national registry of animals (I can't remember the exact title of this one), which would have required hobbyists to spend $35 for registering each and every chicken they own, while the big producers buy one license to cover everything. They had to make that one voluntary, after all the fuss. And now there's this: "http://www.govtrack.us/congress/bill.xpd?bill=s111-510&tab=summary" S.510 the "Food Safety Moderization Act". Note that this allows the FDA, at their discretion, to restrict food from entering an area. It gives the FDA new sweeping powers, without restrictions. People get upset, as they should, when you mess with the food supply.
Bad link on my part: http://www.govtrack.us/congress/bill.xpd?bill=s111-510&tab=summary
However the public still doesn't know just how stupid the official stupid has gotten.

You got that right. Just about all the people who were alive when Prohibition was enacted are now dead, and the support for Prohibition amongst the populace was well under 50%. It took a special kind of stupid to pass that, a special kind of stupid that also created the central bank.

It's no coincidence that when the special kind of stupid overtakes the country, the economy goes into the toilet afterwards.
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