More tolls, Let’s Privatize!

This from the Washington Times:

“Virginia currently has several toll systems set up, including the 14-mile Dulles Toll Road in Fairfax County, but Mr. Howell said more expansive efforts could lead to more state revenue and provide a potential replacement for the gas tax, which he referred to as a “dinosaur” funding source.

“We’re talking about leasing the concession to collect the tolls on those roads,” Mr. Howell said. “It can be a tough political argument to make, but it’s an argument worth making because it’s a sound political concept.

Public-private partnerships are becoming increasingly common as states grapple with a national infrastructure in need of repair: Florida is looking to lease a 78-mile toll road known as “Alligator Alley,” while Virginia itself has formed partnerships on projects like the Dulles Rail expansion and a $2 billion plan to install HOT lanes on the Capital Beltway.”

I say why stop there? Let’s privatize all of the roads. Many people complain about the quality of roads in America but nobody ever complains about the walking areas in shopping malls. When you walk from Macy’s to another store, you often do not encounter potholes or construction workers. Sure, you might say that cars put more of a wear and tear on roads than people on walkways.

But the fundamental truth is still there. The company who owns the mall has an incentive to keep problems from happening during working hours. They also have an incentive to make sure that they are always maintained. Of course, malls work differently and they do not have tolls. This is true but with today’s modern technologies it would be very easy to have speed passes that priced different times of the day. As we all know roads are a tragedy of the commons. This means that since is it free for anyone to use the road, everyone will use the road and slow traffic. If you made driver make economic decisions based upon prices in different parts of the day, you would have a more efficient outcome of traffic. I guarantee less congestion.

The rest is here.

~PCCapitalist

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Published in: on April 16, 2009 at 12:01 pm  Leave a Comment  
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Want to Prevent Piracy? Privatize the Ocean by Peter T. Leeson

The article of the day comes from the National Review Online:

Following the freeing of American ship captain Richard Phillips from a band of Somali pirates Sunday, commentators have turned their attention to what can be done to control and prevent future piracy. The solutions suggested so far are what you might expect: Hit the Somali pirates at home with overwhelming force; reestablish “law and order” in Somalia so that pirates can’t flourish; and, closely-related, focus on state building in Somalia so citizens have lucrative employments other than piracy to turn to.

One suggestion that isn’t being considered, but should be, is to privatize the seas — especially those off Somalia’s coast. As the old adage (at least among economists) goes, “What nobody owns, nobody takes care of.” This is as true for oceans as it is for anything else. Piracy is just one manifestation of nobody taking care of what nobody owns when that “what” is the sea.

Governments exercise a kind of de facto ownership over the waters off their coasts; states have jurisdiction over, and thus control, what goes on in within so many miles of their shores. But there’s no government in Somalia to control what goes in Somalia’s would-be territorial waters. And in any event, pirates have taken to plying their trade 200-plus miles off the coast — watery territories nobody owns.

Predictably, the absence of ownership of these waters means no one has had much incentive to prevent activities that destroy their value — activities such as piracy. The result is a kind of oceanic “tragedy of the commons” whereby, since no one has an incentive to devote the resources required to prevent piracy, piracy flourishes. In contrast, if these waters were privately owned, the owner would have a strong incentive to maximize the waters’ value since he would profit by doing so. That would mean suppressing and preventing pirates.

Rather than trying its hand at Somali state building, the international community should try auctioning off Somali’s coastal waters. According to some Somali pirates, greedy foreign corporations are exploiting valuable resources in these waters, which is allegedly why they’ve resorted to piracy (the large ransoms earned from pirating are a happy but unexpected byproduct of pursuing social justice, I suppose). If this is right, Somalia’s coastal waters should be able to fetch a handsome price. The international community can use the proceeds of the auction for humanitarian assistance in Somalia, or put it in a trust for Somalia’s future government, if one ever emerges. The “high seas” should be similarly sold. It’s not so important where the proceeds go. The important thing is that the un-owned becomes owned.

Establishing private property rights where they don’t currently exist is the solution to about 90 percent of world’s economic problems. Piracy is no exception.

Published in: on April 15, 2009 at 6:21 pm  Leave a Comment  
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What we need is a government recession!

Often times when our economy goes into a recession, the media and policymakers get obsessed with spending. Here is their argument: spending causes more money to flow into businesses, which flows into employees, and employees are consumers. All along the way the money multiplies. We seem to discourage savings. Many Conservatives and others come to me and they say their reason for not supporting the government fiscal “stimulus” is because most people will save the money anyways.

What is wrong with saving? If we save our money most of the times that means we put it in the bank. The bank then takes that money and loans it out to a business owner. That business owner may then hire someone new, thus doing the same thing as consumer spending, except without the massive amounts of debt. During a recession savings increase and spending decreases and many people see this as a bad thing, but at the same time they complain about the debt each person has. This simply does not make sense.

What we truly need is a government recession! One where the government saves more and spends less. This way they too can also not run up large amounts of debt. If the government slows spending, that means they require less taxes. If they take less in taxes, then more people will have more of their own money to spend. This is not even mentioning the loss due to the collection and transfer itself.

Debt is nothing but a future tax. Since the future taxpayers cannot vote, we have decided that they are now the target for us to spread the cost to. You think we have a bad recession, wait until you see the one years from now when our children and their children have very high percentage income tax.

The government is acting like a bad teenager who cannot control his money. He goes up spends it on things he shouldn’t and charges up credit cards like there is no tomorrow. What America needs to do is to take that money away from little Barry and show him how the money should be spent (because after all it is YOUR money).  We call that the Free Market!

Reversing America’s Culture of Debt By Ken Blackwell

Today’s article of the day come from RealClearPolitics:

America was built on individual opportunity. This is the core of the economic conservative agenda. The family unit is the core building block of American society. This is the heart of the social conservative agenda.

There is a key overlap here that many conservatives–and even their leaders–overlook. Living within your means and managing your finances to avoid long-term debt is part of building strong families, providing for your children and teaching them to provide for themselves. I recently attended a lecture given by Charles Murray at the Annual Meeting of the American Enterprise Institute (AEI), in which he said that the only four human institutions characterized by deep personal satisfaction are family, community, vocation and faith. Mr. Murray argues that the goal of social policy is to ensure that these institutions are robust and vital.

Many people have heard of Adam Smith’s most famous book, The Wealth of Nations, which helped lay the foundation for free market systems and classical economics. Fewer people have heard of another of Adam Smith’s books, The Theory of Moral Sentiments. He argues that humans possess a moral sense that causes us to approve certain actions while condemning others. The grandfather of modern economics believed that a sense of morality was necessary for a society to flourish. Both economic and social conservatives need to grasp the common ground here. Strong families are essential to strong economies, and financial management is a key family value. Recently, America has been moving from a culture of ownership to a culture of debt. (more…)

Deliberately Misplaced Blame by Sean Malone

The article of the day comes from Mises.org:

Let’s play a game. I have a not-so-famous quotation to share with you, and then you guess who said it:

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.

I’ll give you a hint; it was spoken by a sitting US president. Not quite enough? How about multiple-choice? Was the speaker

  1. Current president Barack Obama
  2. Overseer of the first-round, $700 billion bailout George W. Bush
  3. New Deal designer Franklin Delano Roosevelt
  4. “Hands-off” free-market supporter Herbert Hoover

Ponder that for a minute or two, and we’ll come back to the answer later on.

Geesh! Free-market, laissez-faire capitalism sure has been taking a beating in the press lately. The official story seems to be that everyone knows the financial crisis represents a failure of the capitalist system, and now only a “gigantic program of economic defense” will save us.

I suppose that would make plenty of sense, if only the details we’re being told day in and day out were actually true.

It’s rather amazing the lengths to which many of the people chronicling the economic crisis are willing to stretch the truth in order to ascribe blame to those they wish to be responsible, all the while ignoring those who actually are. One depressingly common tactic, seemingly en vogue at the moment, is to falsely claim that a person said or believed certain wrong-headed things in order to denigrate the person about whom one is making the claim. Examples abound, but the case du jour is Thom Hartmann’s traducement of laissez-faire’s “intellectual roots” in the Huffington Post:

The intellectual forefathers and mothers of the insane conservative economic policies that have brought us to where we are include Ludwig Von Mises, Friedrich Von Hayeck [sic], Milton Friedman, Alan Greenspan, Tom Freidman [sic], Robert Rubin, Larry Summers, and Ayn Rand.

Hartmann will likely get away with this slap-dash conflation of names, simply because the people he impugns are mostly dead and relatively unknown to the average reader. Hartmann isn’t alone either; it seems almost daily we read another set of distortions, myths, and outright lies trotted out by similarly minded writers.

The reality, quite unfortunately for Mr. Hartmann and friends, is that his claim is built on a wobbly foundation of misinformation. Why? (more…)

Stop the Outsourcing… to robots?

First, this from Wired.com:

Robots are stealing American jobs. In a 76,000-square-foot zone of the 832,000-square-foot Zappos warehouse in Shepherdsville, Kentucky, 72 robotic “drive units” organize and deliver shelves of goods—from argyle socks to handbags. People remain in charge (for now), because it takes human dexterity to pack items into a box for shipping. But the bots still have plenty to do, picking up the slack on boring tasks like shifting inventory.

The droids roll at 3 miles an hour, navigating via barcodes stuck to the floor and commands from a central server. And they’re buff, able to lift half a ton.”

and from Reuters:

” A vending machine that bakes fresh pizza in minutes for a few euros has got Italian chefs in a whirl before it hits the streets in the coming weeks.

The bright-red “Let’s Pizza” machine uses infra-red rays and technology developed at the University of Bologna to knead flour and water into dough, spread it with tomato sauce and a choice of topping, and cook it — all in less than three minutes.”

We better get Obama on this! How could we ever keep inefficient human in place of these robots that do not even work for wages. And you thought outsourcing to lower wages was bad. Okay, enough joking around. It is time to wake up, people. Businesses using low cost robots to replace humans is a good thing in the long run. In the short-term there will be problems because of employees having to retrain. This is the natural progression of society. We become more and more efficient. If you do not believe me, get off your computer because it destroys jobs. Then go get a feathered pen made by hand, some parchment also made by hand and write me a letter. That way the jobs lost to computers and emails will not suffer.

Technology has made us wealthy and to be against outsourcing is to be against technology.

~Marxsevelt

Published in: on April 6, 2009 at 12:38 pm  Comments (1)  
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Don’t endanger free markets, Czech president warns

The Article of the Day from Reuters:

NEW YORK, March 9 (Reuters) – Massive government spending and tighter regulation would prolong recession, Czech President Vaclav Klaus said on Monday, as he urged U.S. President Barack Obama not to endanger the free market economy in his response to the financial crisis.

In a speech at Columbia University in New York, Klaus, a former Czech prime minister who championed the free market after the fall of Communism 20 years ago, said he never expected to see such extensive government intervention again in his lifetime as he now sees around the world. “I am therefore convinced that fighting for freedom and free markets, something we always appreciated here in this country (the United States), remains the task of the day,” Klaus said. One of the world’s most vocal climate change skeptics, Klaus said he looked forward to working with Obama, who will attend an EU-U.S. summit in the Czech Republic in April on his first trip to Europe as U.S. president. The Czech Republic holds the EU presidency for the first half of 2009.

Klaus, whose position is largely ceremonial in the Czech political system, said he hoped Obama would show “an optimum mix of continuity and discontinuity” with the policies of his predecessor, George W. Bush. “I hope it will include not endangering the basic institutions of the market economy,” Klaus said, adding that his own country was resisting a trend towards massive government spending to stimulate growth. He said Czech banks were so far relatively unscathed by the financial crisis because they followed very cautious policies in the aftermath of the Asian financial crisis.

He cautioned against trying to solve economic problems by more government intervention. “The best thing to do right now would be to temporarily weaken, if not repeal,” business regulations on labor, the environment, social issues and health, he said. Klaus, who has written a book expressing doubts that climate change is man-made, was in New York to attend a conference of climate-change skeptics and he reiterated his view that “global warming alarmism” is a major problem. About 190 nations have agreed to work out a new U.N. climate treaty in December in Copenhagen to step up a fight against warming that the U.N. Climate Panel says will bring more heat waves, droughts, floods and rising seas.

~PCCapitalist

59% Still Believe Government Is the Problem

This from Rasmussen Reports:

“In early October, as the meltdown of the financial industry gained momentum following the collapse of Lehman Brothers, a Rasmussen Reports national telephone survey found that 59% of U.S. voters agreed with Ronald Reagan that “government is not the solution to our problem; government is the problem

Other survey data shows that 72% of voters believe a free market economy is better than one managed by the government. That’s little changed since December.

While voters prefer the free market in theory, they are clearly willing to support government intervention for specific projects. Most Americans favor a six-month moratorium on mortgage foreclosures. However, most are opposed to more bailouts.”

So what is the problem here? The problem is there is no major party between Democrats and Republicans that represent the majority view. These people may have been more likely to vote for Republicans because they were the limited government free market talking heads. Instead, they were faced with a chance that Barack Obama might turn into Bill Clinton or John McCain who may have turned into George W. Bush. In that case, most people would pick Clinton. It may be argued that Clinton rode some major bubbles, but he was able to control spending. Bush has created the most spending since FDR, but will go down in history as Herbert Hoover.

The rest is here.

~PCCapitalist

Where is today’s Richard Cobden?

Richard Cobden lived in Britain and was considered a leading figure against imperialism in his time. As Edward Stringham points out in a Freeman Magazine article “Commerce, Markets, and Peace: Richard Cobden’s Enduring Lessons,” we have a lot to learn from Mr. Cobden.

Cobden believed that military and markets were substitutes, as in the more military you have the less markets you have. He believed that a person who was pro-market should also be pro-peace. He saw that every dollar the government spent (more like billion or trillion today) was a dollar (billion or trillion) that is not spent in the private sector. This is a classic example of an Economic term called opportunity costs. Some would argue that its all money and it is coming out some way or other. This is where Public Choice theory comes about. There is a large difference between the government’s interest and private interests.

That is where his anti-imperialism beliefs came in. He stated that no productive citizen benefits from the British government’s activities around the world. He began to educate the business class that they were paying for all of the governments projects. This may look good for the government, but the average person receives very little benefit, if any at all. He used America as the comparison. At this time, he saw that America had a small military and little influence abroad, yet, it was booming economically.

He even took down the argument that the British needed a strong Navy in order to prevent those from stealing from trade. The world is too big to police and the ones that they left to guard their ports were the worst of the worst. When you did the cost-benefit analysis, you would find that most of the money was not being spent on guarding the trade routes. Cobden believed free trade would benefit commerce a lot more than military supremacy. He believed that these battles for land ended up increasing the chance of being attacked in the future thus raising every British citizens cost. Military action cannot spread liberty, it is using coersion to free people from coersion. Liberty requires enlightenment, which can come about only by means of education and persuasion, not military force.

So my question is, where is our Richard Cobden? We have a party of anti-markets and anti-war. We have a second party of supposed pro-markets and pro-war. This is where the massive spending has been derived. It has not been a debate of more spending versus less spending. It has been a battle between military spending versus welfare spending. As long as political parties stay where they are on these issues, will we ever get spending cuts?

~PCCapitalist

Published in: on February 18, 2009 at 2:48 pm  Leave a Comment  
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Cigarette to Small Cigar Substitution

This from USA Today:
“The surging popularity of small cigars, available in fruit and candy flavors, is prompting state and local governments to try to regulate and tax them like cigarettes.

Baltimore announced this month that, beginning in October, it will require single cigars retailing for less than $2.50 each to be sold in packs of five.

Last year, three states — Massachusetts, New Hampshire and Rhode Island — passed bills to tax small cigars at the same rate as cigarettes.

Small cigars, the fastest-growing segment of the tobacco market, are the same size as cigarettes but typically have a brown wrapper that contains tobacco.”

This is just economic agents (people) acting when taxes are imposed on them. Since Cigarettes are being taxed to high heaven people will in turn substitute a similar good. Politicians love to tax cigarettes because they can pretend they are doing it to reduce consumption all the while hitting the most inelastic demand curve. That is the one that is least effected by a price increase. Looks like they were wrong.

The rest is here.

~PCCapitalist

Published in: on January 27, 2009 at 12:40 pm  Comments (1)  
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