I was interviewed by CNN about the issues relating to Congressman Barton’s apology to BP. The network only used one of my quotes from the interview, and I was happy to see that I was not taken out of context (always a danger when you are taped in advance).
To augment my limited quote from the story, my main gripe with the $20 billion fund is that compensation claims should be part of the regular legal process and not the result of pressure from the White House. That being said, I won’t be too agitated about the fund – assuming that the money does not become a piggy bank for White House vote buying. On the broader issue of BP and the spill, protecting people from harm (either intentional harm, which is addressed by the criminal justice system, or unintentional harm, which should be addressed through the tort system) is one of the few legitimate functions of government.
One final comment. The CNN story, shortly after the 2:00 mark, makes it appear as if polling data shows the American people favor Obama’s approach. That is not the case. The polling data simply shows that people don’t think the spill is under control and that they think BP should pay all damages. That’s not contrary to Obama’s position, but neither is it contrary to the libertarian position.
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A new study from the Mercatus Center at George Mason University examines some of the academic research about the relationship between government spending and economic performance. Reinforcing many of the points I made in my theory and evidence videos, the GMU study finds that big government undermines growth:
Although the studies are not all consistent, historical evidence suggests an undesirable, long-run effect from government spending: it crowds out private-sector spending and uses money in unproductive ways. …Professor Emeritus of Law at George Mason University Gordon Tullock suggests that politicians and bureaucrats try to gain control of as much of the economy as possible.5 Moreover, demand for government resources by the private sector leads to misallocation of resources through “rent seeking”—the process by which industries and individuals lobby the government for money. Rather than spend money where it is most needed, legislators instead allocate money to favored groups. …A 1974 paper by Stanford’s Gavin Wright found that political attempts to maximize votes explained between 59 and 80 percent of the difference in per capita federal spending to the states during the Great Depression. …An NBER paper that analyzes a panel of OECD countries found that government spending also has a strong negative correlation with business investment. Conversely, when governments cut spending, there is a surge in private investment. …Additionally, in a study of 76 countries, the University of Vienna’s Dennis C. Mueller and George Mason University’s Thomas Stratmann found a statistically significant negative correlation between government size and economic growth.
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American taxpayers are not the only ones getting ripped off by lavish pay and perks for bureaucrats. The Daily Mail reports on a new study about public sector pay in the United Kingdom:
Public sector employees work nine years less than their private sector counterparts but are paid 30 per cent more, a bombshell report reveals today. Extraordinary research tells a tale of two Britains – a state sector awash with taxpayers’ cash while the rest of the economy struggles to stay afloat. Public sector workers enjoy better pay than those in the private sector, as well as better pensions, shorter hours, and earlier retirement. Over their lifetimes, those in the private sector work 23 per cent longer – equivalent to an extra nine years and ten weeks – than public sector employees. This is thanks to a combination of shorter hours, more time off and earlier retirement. The findings explode once and for all the old idea that public sector workers have better job security and gold-plated pensions because they have lower salaries. …The report, by centre-Right think tank Policy Exchange, also found that the chance of being made compulsorily redundant in the civil service is an astonishing 0.00007 per cent. Generous pension schemes in the state sector are now worth up to 15 per cent on top of salary, the report says, while public sector pay costs have soared by more than a third in real terms over the last seven years – three times faster than in the private sector. …etween 1997 and 2007 public sector productivity fell, while productivity in the private sector increased by nearly 28 per cent – leaving the former only two-thirds as productive as the latter. Between 2002 and 2009, the number working in the public sector increased nearly five times more quickly than numbers in the private sector.
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