Does Government Actually Know Anything?

Sometimes you have to wonder about the mental capacities of government officials.

Businesses and individuals in Britain may soon have to give their encryption keys to the police or face imprisonment. The UK government has said it will bring in the new powers to address a rise in the use of encryption by criminals and terrorists.

So the British government is concerned that criminals and terrorists are using encryption for illicit purposes. Their solution? Make non-citizens hand over their encryption keys. Not only does this sound uniquely unenforcable, it won't do any good. People that are actually using encryption for illegal activities won't cooperate. It's much better to go to jail for failure to provide encryption keys than to go to jail for conspiracy to blow up Buckingham Palace.

Meanwhile the government and government employees all get to snoop around on private communications and files. I don't know about you, but that just doesn't sound very bright to me.

HatTip: SlashDot

Optimistic About Roberts

When Roberts was going through his confirmation hearings, I generally believed that he should (and ultimately would) be confirmed. However, in the back of my mind I feared that this would be a Justice that would side with the government more often than not.

While it is impossible to discern how a Justice will vote in future cases based on a few decisions, but his decision in the case Jones v. Flowers leaves me optimistic that my fears were for naught. The gist of the case, as I understand it, is the state sent Mr. Jones a number of notices that he was behind on taxes for his house and after he failed to respond, they sold it.

Mr. Jones, who did not live at the house at that time, claims to never have received the notices and objected that his house was sold. Chief Roberts, as well as four of the liberal Justices, agreed that the State should have taken greater steps to attempt to contact Mr. Jones and sided with the plantiff.

I certainly don't understand all of legal issues surrounding the case, but whenever an individual wins a case over government power I can't help feeling a bit relieved and this case is no different.

HatTip: IlliniPundit

Wal-Mart Under Attack - Again

The International Labor Rights Fund is suing Wal-Mart. Snore. Leftists group sues successful American company, I’m not even sure why its news anymore.

An American labor rights group filed a class-action lawsuit yesterday against Wal-Mart Stores Inc., alleging that suppliers in five countries violated workers' rights, including denying a minimum wage, requiring overtime and punishing union activity.
The suit, filed in California Superior Court in Los Angeles, accuses Wal-Mart of failing to enforce its standards for suppliers and, in some cases, observe local labor laws in China, Bangladesh, Swaziland, Nicaragua and Indonesia.

I’m not familiar with the laws involved, but I don’t understand how a company can be responsible for enforcing the compliance of its business partners. Most companies I know have a difficult time keeping track of everything in their own shop.

The suit is being filed in California, so anything is possible. However, that isn’t what got me blogging.

The International Labor Rights Fund, a District-based advocacy group, filed the suit on behalf of 15 foreign workers who claimed they were subjected to illegal working conditions, and four California grocery employees who claimed that Wal-Mart's cost-cutting measures resulted in lower wages and benefits.
…
The four California plaintiffs are employees of unionized grocery chains, such as Ralphs and Safeway Inc., that have cut wages and benefits to better compete with Wal-Mart. All four are members of the United Food and Commercial Workers Union, which is trying to organize Wal-Mart's 1.2 million U.S. employees.

Huh?

These guys are suing Wal-Mart because their employer doesn’t pay them enough? Let’s put aside the fact that they are union employees and are probably over paid anyway, under what twisted logic is this a tort? Perhaps I should sue KPMG since the only way that we can compete with them is by offering our services at a lower cost and therefore I get paid less.

I hate to break it to these guys, but you do not have a right to make whatever you want, when companies compete sometimes workers get squeezed. But I can tell you that if they were given the real choice making a bit less money and having your employer go out of business the choice would be easy.

I don’t understand how Wal-Mart gets a bum rap for providing products that people want at a low cost. Isn’t the left up in arms about Big Oil charging too much? Oh yeah, it’s not the money that matters, but the success. Being successful is immoral and therefore must be punished.

There Is A Train Barrelling Down The Third Rail

It’s frustrating when politicians don’t understand history. Couple that with ignorance of economics and you have one very flustered blogger.

In FDR's America, an America where more and more Americans were finding themselves on the losing end of a new economy with nothing to cushion their fall, our President believed that if we're willing to share even a small amount of life's risks and rewards with each other, then we'll all have the chance to make the most of our God-given potential.

The New Deal gave the laid-off worker a guarantee that he could count on unemployment insurance to put food on his family's table while he looked for a new job. It gave the young man who suffered a debilitating accident assurance that he could count on disability benefits to get him through the tough times. And Franklin Roosevelt's greatest legacy promised the couple who put in a lifetime of sacrifice and hard work that they could retire in comfort and dignity because of Social Security.

The Great Depression was brought upon the US through government arrogance that felt they could pull the strings of capitalism to “make it better.” If they had avoided that conceit Social Security would never have been necessary. Now we are saddled with a program that can’t succeed.

Also note that Obama mentions the minor parts of Social Security that not even libertarians are proposing to eliminate – unemployment insurance and disability benefits, nothing like clouding the debate with non-sequitors.

Now, let me be clear. There are serious problems with Social Security, and Democrats are absolutely united in the desire to strengthen the program and make it solvent for future generations. As I said in the press club, this isn't an issue we want to play politics on. We want to work together with Republicans on this, and I believe we can.

Says Obama as he plays politics on the issue. Let’s make one thing clear – you cannot make Social Security “solvent.” It pays out more money than it brings in so has a long term problem that we are creaping up on. You can’t get a return on an investment that is stuffed under the mattress, and since the money was never invested in real assets there is no return. The beneficiaries outnumber the active workers which leads to a short term problem since active workers will have to pay a larger percentage of their paychecks to support the current retirees.

Even the “moderate” solutions to Social Security aren’t even solutions, they just extend the inevitable. Increasing the retirement age will help for awhile, but only for awhile, the math just doesn’t work, you can’t tinker with the numbers and accidentally stumble onto a permanent solution, the program is broken. Raising taxes is a non-starter (I hope) the long term harm it would do to the economy just isn’t worth sending paychecks to millionaires.

The only solution is to scrap the program entirely or start means testing recipients. Both have drawbacks which I won’t go into here, but until politicians admit that you can’t fix Social Security they will never make any progress on the issue.

Warning: Political Speech Ahead

You have to be careful when politicians start talking, because much of what they say seems truthful, but when you actually look at the facts thy are typically half-truths at best. Senator Obama teaches us this lesson well with his latest populist diatribe.

It seems like every year, as soon as headlines start announcing "Pain at the pump" and Americans start emptying their wallets to fill up their tanks, politicians revert to their Rolodex of responses, from tax rebates and tax holidays to investigations into price gouging by oil companies.

None of these proposals would do any harm, and many will provide Americans some temporary relief at the pump.

Wouldn’t do any good either, tax breaks would be eliminated as the price of gas went up to reflect the true price reflected in current supply and demand. And if you feel that generating additional profits for Saudi Arabia and Iran are bad, then his assertion that no harm would come is certainly false as well.

We must start by producing cars that use less oil. The auto industry has not been asked to raise fuel economy standards in 17 years, and lately both Republicans and Democrats have stopped asking.

That simply isn’t true. Car manufacturers HAVE produced cars that have higher fuel economy standards, hasn’t Barack jumped on the politico bandwagon of driving to photo-ops with his hybrid? And its not just the hybrids that have better numbers, plain Jane small cars have better numbers as well, people just aren’t buying them. Senator Obama needs to get off his high horse and stop blaming Big Business for the ills that he sees, businesses can only do so much.

But auto executives are right when they say that transitioning to more fuel-efficient automobiles would be costly at a time of sagging profits and stiff competition, and that's precisely why the federal government shouldn't let the industry face these costs on their own.

We should strike a grand bargain with the Big Three automakers whereby the government picks up part of the tab for retiree health care costs -- a tab that ran almost $6.7 billion just last year -- in exchange for the car companies using that savings to invest in more fuel-efficient cars.

What a brilliant tactician, he picks up three huge constituencies in one fell swoop. Unions love healthcare and any action that protects their jobs, enviro-nuts love fuel-efficient cars and Big Business loves free money. What I don’t understand is why government funded health care for GM is OK when it’s a free hand-out, but when Wal-Mart employees get it when they are eligible for Medicare it suddenly is a big deal. And can someone please explain to me what retiree health care has to do with R&D? I just don’t see the connection.

Already, some cars on the road have the flexible-fuel tanks necessary for them to run on E85, a cheaper, cleaner blend of 85 percent ethanol and 15 percent gasoline. But millions upon millions of cars still don't have these tanks.
It's time for automakers to install those tanks in every single car they make, and it's time for the government to cover this small cost, which currently runs at just $100 per car.

It's also a time to start making E85 fueling stations more available to the public. Currently, only 681 out of 170,000 fueling stations in America offer E85 pumps. This is not acceptable. Every American should have the choice to fill up their car with E85 at any fueling station. And oil companies should stop standing in the way and join us in making this happen. If the big oil companies would devote just 1 percent of their first quarter profits this year to install E85 pumps, more than 7,000 service stations would be able to serve E85 to hungry motorists.

This is a prime example of a politician that doesn’t understand economics. When every car in America starts filling up with ethanol where is all this fuel going to come from? Even with the substantial subsidies given to ethanol producers the product is almost as expensive as gasoline, and the recent Congressional mandate to include more ethanol in all gas has caused the price to increase almost three-fold.

What also doesn’t make any sense is that we are, supposedly, trying to make our fuel supply less volatile – so the solution is to tie security to how well corn grows in Iowa? Talk to any farmer about floods, droughts, bugs, tornados or any other natural disaster and you will think twice about tying the cost of your daily commute to agriculture.

The solution is easy, undue the decades of restrictions on supply, ease the burdens of investment and the entrepreneurs will figure out a solution. Let government get in the way, and we will have $500 mouse traps and inventions that don’t work for problems that no one needs fixed.

It’s high time that we demand politicians attend a semester of Econ 101 before making their first trip to Washington, we could same millions of dollars in wasted time spent correcting their elementary mistakes.

Republicans Don't Understand Economic Either

According to Henry Hyde, eliminating tariffs on imported ethanol would have no effect on the price of gasoline, going so far as to say “I just don’t see an economic plus in it right now.”

I think what Hyde meant to say was “I just don’t see a political plus in it for me right now.” I’m often left wondering politicians are really this stupid, or if it is just advantageous for them to appear so.

HatTip: Cato@Liberty

Money For Nothing and Your Cash For Free

Amtrak, the favorite whipping boy of many libertarians, is getting some free money from Illinois.

State funding for Amtrak will double under the 2007 budget bill passed by the General Assembly last week, setting the stage for additional service between Chicago and St. Louis as well as parts of Downstate Illinois, officials said Tuesday.

…

The proposed service enhancements come as Amtrak ridership throughout the state continues to grow.
The new state budget approved by the General Assembly allows IDOT to increase its $12.1 million contract with Amtrak to $24 million next year. Amtrak spokesman Marc Magliari said that's the largest amount of assistance Amtrak has received from the state in 30 years.

If ridership is growing, wouldn’t Amtrak want to increase service in order to meet demand? The fact that Amtrak isn’t doing this of its own accord tells me that it isn’t necessary. Why does government continue to pay for services that people don’t want or need?

Illinois struggles to meet it’s current fiscal needs, including massive unfunded liabilities in its pensions, why on earth would it promise to give more money to Amtrak? Something is telling me that someone’s brother is involved in this…

Chicago Makes Bid for 2016 Olympics

Yep, Daley needs an excuse to waste spend more taxpayer money.

Experts say everything Chicago has in place already – including a public transportation system, existing sports venues, plenty of hotels, and two major airports make the city a strong contender.

Mayor Richard M. Daley has talked about preparing for such a large-scale event.

He said it would require “improving the CTA, improving mass transit; of course, infrastructure is the key dealing with economic development, and that is very important when you get another generation; young people looking at the Olympics in 2016.”

The plan would be to go to business and private donors to underwrite the games. Big building projects would include an athlete’s village, which could later become affordable housing, and an 80,000-seat stadium, which could be made smaller later.

Published reports suggest a host city’s budget could run as high as more than $4 billion.

I don’t want the Olympics in Chicago.

I don’t want massive stadiums that will sit idle after the games are done.

I don’t want “beautification” projects that will build or rebuild structures that make people “ooh” and “aah” at government’s ability to build useless things.

I don’t want millions of people to flood into the area for several weeks screwing up everything.

But most of all I don’t want government to spend billions of dollars for no practical purpose. Even with the special math that governments use to measure the success of projects (you know the kind that only counts the benefits, but none of the opportunity loss) Olympics rarely make any money. When you factor in the nepotism that is prevalent in Illinois, the odds become even longer.

If anyone can think of anyway I can get Chicago eliminated early in the process, I’d love to hear suggestions.

My Crystal Ball Knows All

Back in August of 2005 Hawaii decided it was going to flashback to the 70s and try playing with price caps to control the price of gasoline. Here is how I predicted it would play out:

So Hawaii is going to put price caps on the wholesale price of gasoline, so let's play out how this is going to work:
1. Supply is going to decrease. With an artificially set maximum price suppliers are going to be less excited about selling product to Hawaii and local refineries (if there are any) will have zero incentive to boost production.
2. As any red-blooded capitalist knows when supply goes down, price goes up.
3. Hawaiian citizens will be paying higher prices for their gasoline with price controls than without them

It’s almost a full year later, let’s check back in on how our nostalgic Hawaiians are doing.

One study by an economics professor showed the gas cap cost consumers 5 cents more per gallon. An analysis by the state Department of Business, Economic Development and Tourism estimated that island motorists paid $54.9 million more than they otherwise would have in the first five months under the cap. But research by cap supporter Rep. Marcus Oshiro indicated the limits saved drivers $33 million.

Two say worse, one says better, but the public perception is that it is worse, so the legislators are eliminating the caps for now. I guess they want to wait for a time when caps will cause long lines and general unrest before they bring them back again.

It really is amazing how well the crystal ball works when hack politicians decide they can control the market. I guess it would be too much to ask for them to finally get around to taking that Econ 101 class isn’t it?

HatTip: Hit and Run
More thoughts at Cafe Hayek
More of the same from Kip: He says that any college junior econ major could have predicted the outcome, I think he is over-estimating the difficulty here - I have never taken an econ class and I managed to figure it out.

Victory Over Terrorism One Man At A Time

If you ever wanted to know what victory over terrorism looks like, here it is:

I had thought that I would be sentenced to death based on the emotions and anger toward me for the deaths on September 11 but after reviewing the jury verdict [against a death sentence] and reading how the jurors set aside their emotions and disgust for me and focused on the law and the evidence that was presented during the trial, I came to understand that the jury process was more complex than I assumed...I now see that it is possible that I can receive a fair trial even with Americans as jurors...

Moussaoui was so convinced of the wickedness of the American system he had thought death was a foregone conclusion. After witnessing the jury process, something that does not exist in the Middle East, he is amazed that even someone like him – someone that loathes the US, can achieve justice.

I think he may just be a convert to the American Way. Our victory is going to be one person at a time, but if we stand by the American Way Of Life then victory is certain. If we fall victim to the seductive voices that promise to make us safer at the cost of our liberties then defeat will be slow and painful.