I very much suspect Obama partisans and Trump partisans won’t like this column, but the sad reality is that both Obamacare and Trump’s protectionism have a lot in common.
- In both cases, government is limiting the freedom of buyers and sellers to engage in unfettered exchange.
- In both cases, the fiscal burden of government increases.
- In both cases, politicians misuse statistics to expand the size and scope of government.
Today, let’s add another item to that list.
- In both cases, the Washington swamp wins thanks to increased cronyism and corruption.
To see what I mean, let’s travel back in time to 2011. I wrote a column about Obamacare and cited some very persuasive arguments by Tim Carney that government-run healthcare (or, to be more accurate, expanded government control of healthcare) was creating a feeding frenzy for additional sleaze in Washington.
Congress imposes mandates on other entities, but gives bureaucrats the power to waive those mandates. To get such a waiver, you hire the people who used to administer or who helped craft the policies. So who’s the net winner? The politicians and bureaucrats who craft policies and wield power, because this combination of massive government power and wide bureaucratic discretion creates huge demand for revolving-door lobbyists.
I then pointed out that the sordid process of Obamacare waivers was eerily similar to a passage in Atlas Shrugged.
Wesley Mouch…issued another directive, which ruled that people could get their bonds “defrozen” upon a plea of “essential need”: the government would purchase the bonds, if it found proof of the need satisfactory. …One was not supposed to speak about the men who…possessed needs which, miraculously, made thirty-three frozen cents melt into a whole dollar, or about a new profession practiced by bright young boys just out of college, who called themselves “defreezers” and offered their services “to help you draft your application in the proper modern terms.” The boys had friends in Washington.
Well, the same thing is happening again. Only this time, as reported by the New York Times, protectionism is the policy that is creating opportunities for swamp creatures to line their pockets.
The Trump administration granted seven companies the first set of exclusions from its metal tariffs this week and rejected requests from 11 other companies, as the Commerce Department began slowly responding to the 20,000 applications
that companies have filed for individual products. …several companies whose applications were denied faced objections from American steel makers. …companies that have applied for the exclusions criticized the exercise as both long and disorganized. “This is the most screwed-up process,” said Mark Mullen, president of Griggs Steel, a steel distributor in the Detroit area. “This is a disservice to our industry and the biggest insult to our intelligence that I have ever seen from the government.”
From an economic perspective, it certainly is true that this new system is “disorganized” and “a disservice” and an “insult to our intelligence.” Those same words could be used to describe the welfare state, the EEOC, farm subsidies, the tax code, and just about everything else the government does.
But there’s one group of people who are laughing all the way to the bank, The lobbyists, consultants, fixers, and other denizens of the swamp are getting rich. Whether they’re preparing the applications, lobbying for the applications, or lobbying against the applications, they are getting big paychecks.
And the longer this sordid protectionist process continues, we will see a repeat of what happened with Obamacare as senior-level people in government move through the revolving door so they can get lucrative contracts to help clients manipulate the system (yes, Republicans can be just as sleazy as Democrats).
Washington wins and we lose.
[…] This is true for trade policy. […]
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[…] applaud, assuming they are earned honestly (i.e., not the result of subsidies, industrial policy, protectionism, or other forms of […]
[…] assuming they are earned honestly (i.e., not the result of subsidies, industrial policy, protectionism, or other forms of cronyism). The second is how profits should be taxed, and that’s the focus of […]
[…] applaud, assuming they are earned honestly (i.e., not the result of subsidies, industrial policy, protectionism, or other forms of […]
[…] 3. Protectionism Corrupts Markets – Many people unfortunately equate capitalism with big business. This is very unfortunate because large companies…manipulate the political process in order to obtain unearned profits. Trade barriers…interfere with genuine free markets…they contribute to the perception that capitalism is merely a system for the benefit of the rich and powerful. […]
[…] It’s no secret that I’m a critic of Trump’s protectionism. He doesn’t understand the benefits of trade, misinterprets trade data, and – to coin a phrase – he’s “making cronyism great again.” […]
[…] other words, there are no winners in a protectionist battle. Except, of course, for the army of lobbyists who get fat contracts to manipulate the system. So the swamp wins, but the rest of us […]
[…] other words, there are no winners in a protectionist battle. Except, of course, for the army of lobbyists who get fat contracts to manipulate the system. So the swamp wins, but the rest of us […]
“Foreigners presently own about a third of America’s total public debt of more than $20 trillion. China owns about $1.1 trillion of this. The trouble is that the United States Treasury will need to borrow $1 trillion a year for the indefinite future. The US Federal Reserve has ended its program of public bond buying, and the US savings rate is extremely low; domestic buyers cannot absorb the $1 trillion annual requirement, and the US will have to borrow from foreigners. That is a long-term strategic vulnerability of which China is keenly aware, and which the United States appears not to have considered.”
“A tragedy in the making as the US confronts China”
By DAVID P. GOLDMAN JUNE 25, 2018
http://www.atimes.com/article/a-tragedy-in-the-making-as-the-us-confronts-china/
[…] International Liberty […]
Reblogged this on THE SOVEREIGN PATIENT.
when the chance comes… and it will… we have to be savvy enough to embrace the opportunity… I might point out that no one believed the likes of trump could get elected… the polls said no… why did it happen? there is a strong undercurrent of discontent in this nation… people of all political persuasions and races are tired of being lied to… the tea party movement…convention of states… black lives matter… all of these folks and organizations are fed up with Washington clap-trap… repealing the 17th would be a good start… but TERM LIMITS… one way or another must be part of any systemic reform… and a SPENDING CAP? if we don’t control spending… we have no long term future…
I’m not sure it was a virus, but upon reading this I had a case of “wannacry”. Dan, your words are unfortunately too true. Yes, you turn me into more of a libertarian every day.
And, no, V-max, term limits will never go over. The real answer is the repeal of the 17th amendment. Let the states appoint senators, and they are automatically term-limited. Plus, it gives the states a stronger say in what the feds can get away with. The founders understood this when they wrote it up that way. If some district wants to send the same guy to Washington forever, that’s their business. But I suspect that if the states were in better control, people would pay a little closer attention to elections.
so what’s the solution? more of the same? we know what we will get from the Marxist democrats and the rinos… it’s not a secrete… the only way to change the pattern of corruption and incompetence in Washington is to revoke their blank check with a SPENDING CAP and enact TERM LIMITS… less money = less government… I’ll bet Dr. Mitchell and some of his colleagues could devise a transitional formula to take us back to using say… 10% of our economic output for federal governance…. if we don’t send the professional politicians back to the private sector… none of this will end well… and we all know it…