Archive for October, 2008

I’m from the Government and I’m Here to Stop Hurting You

Posted by David Boaz

The Washington Post discusses the great new options for street food in downtown Washington–not just hot dogs but “po’ boys, pulled pork, gumbo, shawarma” and more. Sure sounds like the much-criticized D.C. government is really helping this time: The jump headline says, “With City’s Help, Vendors Break the Mold.” Author Tim Carman writes, “Both [new food] vendors still needed public assistance.” And “the city [has] been working with vendors to give hungry Washingtonians a taste of what they want.” All praise the D.C. government, font of good food.

But of course the city hasn’t produced the food. It hasn’t subsidized the vendors. It hasn’t put vendors together with investors. All it has done is to lift, in one part of the city, “regulations that have choked the life out of D.C.’s street food for decades.” There are licensing rules (and a moratorium on issuing any new licenses), prohibitions on hiring employees, cart size rules, regulations on where you can park a cart at night, and so on. So the “public assistance” the vendors received was to be exempted from some of the regulations, inside a 32-block demonstration zone.

It reminds me of the wisdom of Henry David Thoreau: “This government never furthered any enterprise but by the alacrity with which it got out of the way.”

The Roots of the Investment Banking Mess

Posted by Jim Harper

Mike Flynn at Reason has a dispassionate – and very readable – piece on the roots of the financial services mess, at which Congress proposes to throw $700 billion in taxpayer funds.

George Will Is on a Roll

Posted by David Boaz

Another great column from George Will today, on the House’s “vote against rashness.” With a conservative’s sense of history, he traces some of the policy choices that brought us to today’s crisis:

Suppose that in 1979 the government had not engineered the first bailout of Chrysler (it, Ford and GM are about to get $25 billion in subsidized loans). Might there have been a more sober approach to risk throughout corporate America?

Suppose there had never been implicit government backing of Fannie Mae and Freddie Mac. Better yet, suppose those two had never existed — there was homeownership before them, just not at a level that the government thought proper. Absent Fannie and Freddie — absent government manipulation of the housing market — would there have developed the excessive diversion of capital into the housing stock?

But really, if you haven’t been reading George Will this year–on the problems with both Obama and McCain, on the automobile bailout, on local government fiscal crises–go here. And to read what he says about his new book, go here (pdf)

Cynical Senate Vote

Posted by Chris Edwards

The Senate is scheduled to vote tonight on the Wall Street bailout package, which now includes a provision to relieve taxpayers of a scheduled $60 billion or so jump in annual alternative minimum tax payments.

House Majority Leader Steny Hoyer noted, “there’s no doubt in my mind that the Senate added this [AMT provision] because they thought that’s the only way they could get it passed.”

Thus, despite the outpouring of public opposition to the bailout, Congress is determined to rig the vote and grab the people’s money anyway it can. The Senate is essentially saying to the public: “We won’t impose a $60 billion tax hike on you next year if you let us bailout Wall Street. And don’t worry about the $700 billion, we’ll just tack that on to the $5 trillion in public debt that your children and grandchildren already owe.”

There are too many insider experts and economists driving this debate, and too little recognition inside the Beltway about the basic injustice of a bailout. As many callers to the talk shows are saying, the government wants to take $700 billion from average hard-working families who followed the rules and give it to people who made bad, irresponsible, and even disastrous decisions.

Many economists are saying: “Well, I’m usually against intervention and subsides, but this case is special.” But that’s what they always say. The hunt for supposed “market failures” is a full-time pursuit for many modern economists, and it’s mainly nonsense. Back in January the administration and many top-flight economists created a similar crisis atmosophere, inducing Congress to pass the ridiculous “stimulus” bill. What did that achieve other that putting us $150 billion further into debt?