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Posts Tagged ‘Regulation’

If I had to pick a government policy that would be most upsetting to our Founding Fathers, I’d be tempted to pick the income tax. Or maybe some useless agency, such as the Department of Housing and Urban Development.

After all, surely the Founders didn’t envision – or want – today’s Leviathan government in Washington.

But I also know I’m biased since I work on fiscal policy issues.

So upon further reflection, I think the policy that would be most horrifying to the Founding Fathers is so-called civil asset forfeiture, a.k.a., theft by government.

You may think I’m joking or exaggerating, but theft is the right word when you look at how citizens (such as the Dehko family and Lyndon McClellan) have had their bank accounts seized even though they were never even charged with a crime, much less ever committed a crime.

And now we have a new example that would have the Founders rolling in their graves, but also should get every decent person angry.

Reason has a report with the odious details.

…the Drug Enforcement Administration (DEA), is snatching the life savings of a young black male for the crime of being alone on a train. The man, Joseph Rivers, 22, was traveling from Michigan to Los Angeles by train with $18,000 in cash to pay for a music video. In Albuquerque, DEA agents boarded the train and started asking people questions. They got to Rivers, who told him he was going to shoot a music video and agreed to let them search his stuff.

Now put yourself in the mind of Mr. Rivers. You’re not committing a crime. You’re not in possession of any drugs or other illicit substances.

Agents ask to search your stuff as part of their snooping on the train and you figure being cooperative is the best way of allaying suspicion (regardless of whether the DEA used profiling).

And what’s your reward for being cooperative?

The Reason report then shares some very ugly passages from a story in the Albuquerque Journal.

Rivers was the only passenger singled out for a search by DEA agents – and the only black person on his portion of the train… In one of the bags, the agent found the cash, still in the Michigan bank envelope.

Mr. Rivers explained why he had the money, but it didn’t do any good.

“I even allowed him to call my mother, a military veteran and (hospital) coordinator, to corroborate my story,” Rivers said. “Even with all of this, the officers decided to take my money because he stated that he believed that the money was involved in some type of narcotic activity.” Rivers was left penniless.

Here’s perhaps the most disturbing part of the story is the way government bureaucrats openly admit that they can take money without any criminal charges, much less a conviction for any crime.

“We don’t have to prove that the person is guilty,” Waite said. “It’s that the money is presumed to be guilty.”

Just imagine how the Founding Fathers, if they were still around, would react to the statements of this bureaucrat?

Imagine what they would think of a policy that gave bureaucrats arbitrary powers to take money from citizens?

By the way, I’m not asking these rhetorical questions because I have some inside knowledge that Mr. Rivers is a stand-up guy. Maybe his story was fake and he actually was going to buy illegal drugs.

So what?

I’m tempted to point out at this point the foolishness of the Drug War, but that’s the point I want to make today. Heck, we can assume he had $18,000 because he intended to commit a real crime. Perhaps he was going to pay a hit man to kill someone.

At the risk of being repetitive, so what?

Our Constitution was set up to constrain the powers of government and protect citizens from abuse by government. We have a 4th Amendment to protect us from unreasonable search and seizure and we have the presumption of innocence so that we can’t be punished unless that’s the outcome of a proper legal proceeding.

Needless to say, allowing agents to steal money from train passengers is not what the Founding Fathers had in mind.

In a just society, there shouldn’t be shortcuts which trample people’s rights. Real police work should be used to amass evidence of real crimes, which then should be used in real courts where a jury can decide on guilt.

Let’s close with a few more passages from the Albuquerque story.

Rivers, 22, wasn’t detained and has not been charged with any crime since his money was taken last month. That doesn’t matter. Under a federal law enforcement tool called civil asset forfeiture, he need never be arrested or convicted of a crime for the government to take away his cash, cars or property – and keep it. Agencies like the DEA can confiscate money or property if they have a hunch, a suspicion, a notion that maybe, possibly, perhaps the items are connected with narcotics. Or something else illegal.Or maybe the fact that the person holding a bunch of cash is a young black man is good enough. …Meanwhile, Rivers is back in Michigan, dreaming, praying. “He’s handed this over to God,” his attorney said. Which seems infinitely safer than handing over anything further to government agents.

Amen.

I’ll make one final point.

In the absence of some evidence to the contrary, I’m not going to accuse the DEA agents of racial profiling. After all, government agents have stolen money from plenty of white people.

But I strongly suspect there was economic profiling. If Mr. Rivers was a 50-year old white guy in a business suit, the DEA probably wouldn’t have confiscated the money.

That doesn’t mean, by the way, that 50-year old white guys should rest easy. When government bureaucrats get away with stealing money from young people without power and connections, it’s probably just a matter of time before others get victimized as well.

Just keep in mind that slippery slopes are very slippery when government is involved.

P.S. Also keep in mind that asset forfeiture has become such an abusive nightmare that the first two heads of that division of the Justice Department now say the policy should be abolished.

P.P.S. I don’t know what’s riskier, riding trains while black or banking while Russian?

P.P.P.S. On a separate matter, the good people at the Competitive Enterprise Institute periodically measure the overall cost of regulation and red tape on the American economy. Their latest version of Ten Thousand Commandments was just released and it is very depressing reading.

Here are two charts (out of many) from the study. The first looks at the annual cost of federal rules.

The second chart looks at how the regulatory burden has grown over time.

As I said, very depressing. No wonder Santa Claus wasn’t happy with the end-of-year gifts he received last year from the Obama Administration.

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The Internet has made all of our lives better, in part because there’s been an accidental policy of benign neglect from Washington.

But that’s about to change.

Even though our economy already is burdened by record amounts of regulation and red tape, the FCC is pushing forward with a plan to turn the Internet into a moss-covered public utility.

This almost leaves me at a loss for words. It’s truly remarkable – in a bad way – that the bureaucrats at the Federal Communications Commission think that the Internet can be improved by a big dose of 1930s-era regulation and control.

My Cato colleague, Jim Harper, summarized the issue last month.

Do you want your Internet service provider to operate like the water company or the electric company?… the FCC has sought for years now to regulate broadband Internet service providers…like it used to regulate AT&T, with government mandated terms of service if not tariffs and price controls. This doesn’t fit the technical environment of the Internet, which allows for diverse business models. Companies that experiment with network management, pricing, internal subsidy, and so on can find the configurations that serve widely varying consumers and their differing Internet needs the best.

But the FCC apparently doesn’t like innovation, diversity, and experimentation and instead wants to impose centralized rules. And to justify its power grab, FCC regulators are reclassifying the Internet as “telecommunications carriers” rather than an “information service.”

Title II, which applies to “telecommunications carriers,” allows common carrier regulation of the type the FCC is trying to impose….This is so it can have more control over the business decisions made by Internet service providers. …”Net neutrality” is a good engineering principle, but it shouldn’t be a legal mandate. Technology and markets surpassed any need for command-and-control regulation in this area long ago. But regulators don’t give up power without a fight.

But maybe mockery is the best way to win this issue.

Here’s a new video from the folks at Protect Internet Freedom (the some people who put together the second video in this post).

If you’ve ever been at hold at the Department of Motor Vehicles or some other bureaucracy, this may cause uncomfortable and painful flashbacks.

And here’s another video, put together by Senator Cruz’s office.

Very well done, just like the humor Cruz’s office has deployed against Obamacare.

And speaking of humor, here are some new cartoons on the topic.

Though this next cartoon is my favorite because it so effectively captures my feelings.

The Internet has been a huge success, so why on earth would anybody think it will be better if a bunch of regulators can second-guess the free market?!?

If you want more cartoons on Internet regulation, here’s a collection that I shared last year.

P.S. Shifting to another topic, here’s a story that belongs in the category of “great moments in lobbying.”

Here are some excerpts from a story published by the Raleigh News and Observer.

Sex between lobbyists and government officials who are covered under North Carolina’s ethics laws does not constitute a gift that must be listed in disclosure reports, the State Ethics Commission said Friday. …The opinion was in a response to an inquiry from the Secretary of State’s lobbying compliance director, Joal H. Broun, in a letter on Dec. 15. …Broun’s request also wanted to know if that activity falls within the definition of “goodwill lobbying,” which is an indirect attempt to influence legislation or executive action, such as the building of relationships, according to state law, and is also considered lobbying.

I’m sure there are some serious points to be made, but I confess that my immediate reaction was to think about this cartoon.

Whether any “goodwill” is being created is a topic for another day.

That being said, you’ll be happy to know that actually procuring hookers is against the rules.

However, providing a prostitute to a legislator or other covered official would constitute a gift or item of value and would have to be reported on disclosure forms – which, of course, would also be evidence of a crime, the opinion says.

The good news is that this rule, if properly enforced, will protect a vulnerable group people from being morally corrupted.

But enough about the need to protect prostitutes from being contaminated by close proximity to politicians.

I want to close on a serious point. As I wrote the other day, the best way to reduce lobbying is to reduce the size and scope of government.

P.P.S. Actually, hookers and politicians have something in common.

P.P.P.S. If you liked my quip about protecting prostitutes from politicians, you’ll appreciate this Craig Ferguson joke.

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Last year, I shared some libertarian humor relating to Valentine’s Day.

This year, we’re going to be a bit more on the wonky side.

Using roses as an example, we’re going to explore how the invisible hand of the market produces amazing results.

Here’s a great new video from Marginal Revolution University. Narrated by Professor Alex Tabarrok of George Mason University’s economics department, it explains how consumers have amazing access to millions of roses even though (actually because) there’s no agency or department in charge of Valentine’s Day.

And here’s a related video from MRU elaborating on the role of the price system.

The moral of the story in these videos is that a free and unfettered market is far and away the best method of allocating resources.

And the flip side of that lesson is that you get very bad results when politicians replace the invisible hand of the market with the visible foot of government.

Here’s some of what I wrote, for instance, when discussing proposals to give politicians power over wage levels.

…what’s really at stake is whether we want resources to be allocated by market forces instead of political edicts. This should be a no-brainer. If we look at the failure of central planning in the Soviet Union and elsewhere, a fundamental problem was that government officials – even assuming intelligence and good intentions – did not have the knowledge needed to make decisions on prices. And in the absence of a functioning price system, resources get misallocated and growth suffers. So you can imagine the potential damage of giving politicians, bureaucrats, and courts the ability to act as central planners for the wage system.

And here are some excerpts from a post about the damaging impact of subsidies to higher education.

Interfering with the price system is an especially pernicious form of intervention. When functioning properly, prices enable the wants and needs of consumers to be properly channeled to producers and suppliers in a way that promotes prosperity and efficiency. Unfortunately, governments hinder this system with all sorts of misguided policies such as subsidies and price controls. One of the worst manifestations of this type of intervention is the system of third-party payer, which occurs when government policies artificially reduce the perceived prices of goods and services.

And I could cite lots of other examples on issues such as the minimum wage, health care, housing, and agriculture.

Simply stated, you get all sorts of perverse results when politicians interfere with prices.

And that means lower living standards over time as the economy operates less efficiently.

Especially if a government really goes overboard and tries to regulate and control the entire economy rather than “just” interfere with a few sectors. Let’s look at the case of Venezuela. I’ve already written about how first Chavez and now Maduro have turned that nation into an economic hellhole.

It’s so bad that even the establishment media are taking notice.

Here are some passages from Matt O’Brien’s Wonkblog column in the Washington Post.

Venezuela…has the largest oil reserves in the world. It should be rich. But it isn’t, and it’s getting even poorer now, because of economic mismanagement on a world-historical scale. The problem is simple: Venezuela’s government thinks it can have an economy by just pretending it does. That it can print as much money as it wants without stoking inflation by just saying it won’t. And that it can end shortages just by kicking people out of line. It’s a triumph of magical thinking that’s not much of one when it turns grocery-shopping into a days-long ordeal that may or may not actually turn up things like food or toilet paper.

The government is trying to paper over its incompetence by printing money.

…the Bolivarian regime is to blame. The trouble is that while it has tried to help the poor, which is commendable, it has also spent much more than it can afford, which is not. Indeed, Venezuela’s government is running a 14 percent of gross domestic product deficit right now, a fiscal hole so big that there’s only one way to fill it: the printing press. But…paying people with newly printed money only makes that money lose value, and prices go parabolic. It’s no wonder then that Venezuela’s inflation rate is officially 64 percent, is really something like 179 percent, and could get up to 1,000 percent, according to Bank of America, if Venezuela doesn’t change its byzantine currency controls. Venezuela’s government, in other words, is playing whac-a-mole with economic reality.

And there’s also a pervasive system of price controls.

Venezuela’s government wants to wish away the inflation it’s created, so it tells stores what prices they’re allowed to sell at. These bureaucrat-approved prices, however, are too low to be profitable, which is why the government has to give companies subsidies to make them worthwhile. Now when these price controls work, the result is shortages, and when they don’t, it’s even worse ones. …it’s not profitable for the unsubsidized companies to stock their shelves, and not profitable enough for the subsidized ones to do so, either.

In the ultimate triumph of big government, Venezuela is even imposing controls on rationing!

…shortages, which had already hit 30 percent of all goods before the central bank stopped keeping track last year, have gone from being a fact of life to the fact of life. …People have lined up for days to try to buy whatever they can, which isn’t much, from grocery stores that are even more empty than usual. The government has been forced to send the military in to these supermarkets to maintain some semblance of order, before it came up with an innovative new strategy for shortening the lines: kicking people out of them. Now they’re rationing spots in line, based on the last digit of people’s national ID cards.

But you won’t be surprised to learn that all the problems are the fault of the private sector.

It’s a man-made tragedy, and the men who made it won’t fix it. Maduro, for his part, blames the shortages on the “parasitic” private sector.

It goes without saying, of course, that Maduro and the rest of the political elite avoid the consequences of bad economic policy. They all enjoy luxurious lifestyles, financed at the expense of ordinary Venezuelans. Moreover, I’m sure that Maduro and his cronies all have big bank accounts in New York or London.

So I can understand why they like the current system.

I’m genuinely mystified, though, why there are still people who think statism is better than capitalism.

I guess it’s mostly naiveté, a triumph of good intentions over real-world results.

Even though most of these leftists presumably would go crazy if they had to live without the products made possible by capitalism.

Just as portrayed in this video. And this satirical image.

Those of us who reside in the real world, by contrast, already understand the difference between capitalism and statism.

P.S. Venezuela is an economic basket case, but that apparently means it ranks higher than the United States on the “happy planet index” put together by some clueless statists.

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I suspect that most Americans, if asked to list the biggest economic success story in the United States over the past few decades, would list high tech and the Internet.

And that would be a good answer. For those of us with a good bit of gray hair, it’s sometimes remarkable to think how much different the world is today with laptops, tablets, smart phones, and all sorts of other gadgets.

Gadgets with huge value, by the way. Ask yourself the question in this video. How much money would you need to give up the Internet for the rest of your life?

But if every dark cloud has a silver lining, then I guess silver clouds must have dark linings. And you won’t be surprised to learn that the dark lining for the Internet and high tech is big government.

More specifically, the Federal Communications Commission (FCC) wants to use a law from the 1930s as an excuse to seize authority to micro-manage this (at least so far) vibrant sector of our economy.

In a column for the Wall Street Journal, Gordon Crovitz writes about this regulatory power grab in Washington that could stifle the “permissionless innovation” of the Internet.

Last week Washington abandoned open innovation when the chairman of the Federal Communications Commission yielded to President Obama ’s demands and moved to regulate the freewheeling Internet under the same laws that applied to the Ma Bell monopoly.

So what does that mean?

Until now, anyone could launch new websites, apps and mobile devices without having to lobby a regulator for permission. That was thanks to a Clinton-era bipartisan consensus that the Internet shouldn’t be treated as a public utility. Congress and the White House under both parties kept the FCC from applying the hoary regulations that micromanaged the phone system, which would have frozen innovation online. Last week’s announcement from FCC Chairman Tom Wheeler rejects 20 years of open innovation by submitting the Internet to Title II of the Communications Act of 1934. Once Mr. Wheeler and the commission’s Democratic majority vote this month to apply Title II, the regulations will give them staggering control. Any Internet “charges” and “practices” that the bureaucrats find “unjust or unreasonable is declared to be unlawful.”

And it will open the door to cronyism as already-established companies and well-connected insiders work the system for their own advantage.

This is an open invitation to entrenched companies challenged by new technologies. The Internet has been a source of creative destruction, upending industries from music, movies and newspapers to retail, travel and banking. History teaches that companies threatened by competition will hire as many lawyers as necessary to get regulators to protect them.

And when I wrote the door will be open, it will be wide open.

In 2005, the U.S. Supreme Court warned that if the FCC treated the Internet as a telecommunications service, it “would subject to mandatory common carrier regulation all information service providers that use telecommunications as an input to provide information service to the public”—in other words, almost all websites and apps would be subject to regulation. …once regulators get power, they use it. And if there is any forbearance, there will be litigation from companies seeking to burden their competitors with regulation.

Here are some videos that help put the debate in context.

Let’s start with this Reason TV interview.

Next we have a humorous portrayal of Internet usage in a bureaucrat-governed world.

Sort of reminds me of this Obamacare OB/GYN video.

Last but not least, here’s a dry but very informative explanation of the “net neutrality” issue.

But perhaps all you need is this cartoon, which is from a bigger collection that can be enjoyed here.

Think about the big picture. Is there a sector of the economy that has become more efficient and inexpensive because of government?

Health care? Nope.

Higher education? Nope.

Banking? Nope.

Charity? Nope.

Manufacturing? Nope.

I could continue, but you get the idea.

P.S. If you want more bad news, the Obama White House wants to cede some authority over the Internet to the Keystone Cops at the United Nations.

P.P.S. And since we’re sharing bad news about the Internet, don’t forget that some politicians want a government-empowering, privacy-destroying scheme to let state politicians impose taxes on online sales that take place outside their borders.

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It’s time to correct a sin of omission.

In five-plus years of blogging, I haven’t given nearly enough attention to the wisdom of the late (and great) Milton Friedman.

Yes, I did say he was at the top of my list of great economists in a 2010 interview, and I’ve cited what he said about the correct goal of fiscal policy being smaller government rather than fiscal balance.

Moreover, I’ve quoted him many times (here, here, here, here, here, and here) to help explain why higher taxes simply lead to more government spending rather than deficit reduction.

But I’ve never once shared an interview of Friedman, which is a big oversight because of his incredible ability to advocate for economic liberty.

So let’s rectify this mistake. A reader emailed me this video, which purports to show Professor Friedman jousting with a young Michael Moore (yes, supposedly that Michael Moore, though I don’t know if it’s actually him).

But the identity of the questioner isn’t what’s important. Listen to Friedman explain the merits of cost-benefit analysis and consumer choice.

Amen. I love what he said about letting people make their own decisions about how much risk they wish to accept given relative prices.

If you want more Friedmanesque wisdom, I’ve also quoted him on issues ranging from immigration to “temporary” government programs, and from Swedish poverty to tax competition.

He also explained that there are four different ways of spending money, only one of which yields real efficiency (Jay Leno channeled some of Friedman’s wisdom when commenting on Obama shopping for Michelle)

And I’ve even noted that he helped guide the development of Economic Freedom of the World.

P.S. I do have one small disagreement with Milton Friedman. He supported the notion of a negative income tax/guaranteed annual income. His goal was noble, to replace the plethora of counterproductive welfare programs run from Washington, but I think a better approach is to get the federal government totally out of the business of income redistribution.

P.P.S. As I already stated, I don’t know if that was the (in)famous Michael Moore jousting with Friedman, but I can say that the Michael Moore of today is a big hypocrite when it comes to inequality.

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How thoughtful. The President gave the economy a special gift before jetting off to Hawaii.

The Obama administration is cramming like a college student trying to study for a final exam, publishing more than 1,200 new regulations in the last 15 days alone, according to data from Regulations.gov. Energy and environment rules are the biggest category, with 139 published by the federal government in the last 15 days… So far this year, the Obama administration has proposed or finalized  more than $200 billion in regulations when the coal ash rule’s costs are factored in, according to the American Action Forum.

Unfortunately, it appears there is no return policy for these gifts, even if many of them are actually lumps of coal.

So is there a way to quantify the cost of all this regulation, particularly when added to all the red tape that’s already been imposed?

The honest answer is that it’s very difficult. Do you measure only direct budgetary costs? What about compliance costs for the private sector. And how about the indirect costs of diminished productivity, not only in terms of economic performance but also the impact on longevity?

On the other side of the ledger, should there also be some calculation of benefits? A national 5-MPH speed limit would wreck the economy, to be sure, but it would save lives. How does this get measured, using cost-benefit analysis?

The bottom line is that the methodological issues when looking at regulatory burdens are significant, so take any numbers with a few grains of salt. With that caveat out of the way, here are some very large numbers to digest.

Americans spend 8.8 billion hours every year filling out government forms.

The economy-wide cost of regulation is now $1.75 trillion.

For every bureaucrat at a regulatory agency, 100 jobs are destroyed in the economy’s productive sector.

The Obama Administration added $236 billion of red tape in 2012 alone.

A World Bank study determined that moving from heavy regulation to light regulation “can increase a country’s average annual GDP per capita growth by 2.3 percentage points.”

And now we’re going to augment this disturbing list.

The Mercatus Center at George Mason University has a “RegData” page that allows a user to generate all sorts of information on regulatory burdens.

But I wasn’t focused on “micro” data on the regulations that affect different industries or the regulations promulgated by various bureaucracies.

I clicked on the data designed to capture the overall “macro” magnitude of red tape. And we have two types of information.

This first chart measures the numbers of words in the annual Code of Federal Regulations (which makes great reading if you’re suffering from insomnia).

The bottom line is that there’s been a 40 percent-plus increase in the number of words over the past 15 years.

To be sure, the number of words cranked out by regulatory bureaucracies is not a perfect measure of regulatory burdens.

The Pentagon, for instance, has 26 pages of regulation detailing how to bake brownies. That’s insanely stupid and probably makes brownie procurement four times more expensive than necessary.

But there are regulations with fewer pages (and fewer words) that are far more expensive to the overall economy. The IRS, for instance, imposed a regulation to force American banks to put foreign tax law above U.S. tax law regarding the reporting of bank deposit interest paid to nonresident foreigners with U.S. accounts. That regulation was less than five pages long, but could drive millions of dollars from the American financial system.

Now let’s look at the number of restrictions imposed by regulations. To be more specific, the Mercatus experts calculate the number of times that regulations use coercive words and phrases such as “shall” and “must not.”

The good news, if you’re grading on a curve, is that the use of coercive terminology has jumped by “only” 28 percent since 1997.

I guess you could say that bureaucrats are becoming loquacious faster than they’re becoming proscriptive.

Or if you’re a glass-half-empty person, you could say that they’re making us read more to learn how our freedoms are being curtailed.

Now let’s look at the regulatory burden imposed by one piece of legislation.

I’ve referred to the so-called Wall Street Reform and Consumer Protection Act as the Dodd-Frank Bailout Bill, but that really doesn’t capture the scope of the legislation. Robert Genetski has a column in Investor’s Business Daily that attempts to measure the law’s economic burden.

Our politicians have placed any number of barriers in the way of prosperity, and one of the most costly has been the Dodd-Frank financial reforms (DF). …The Government Accountability Office provided an original estimate of Dodd-Frank’s direct cost: $2.9 billion over the first five years. If that is accurate, it means the law will cost the taxpayers roughly $600 million annually, or $5 for each private-sector worker. The direct cost to taxpayers is only the beginning. Historical estimates show private-sector costs to comply with government regulations tend to be 36 times the direct cost to government. If Dodd-Frank is typical, the annual cost of compliance will be more like $22 billion, or $188 for each private-sector worker. Unfortunately, there are numerous indications the Dodd-Frank regulations are far from typical. …Dodd-Frank has a compliance cost of close to $120 billion annually, or just over $1,000 for each private-sector worker. As burdensome as that estimate sounds, it too likely understates Dodd-Frank’s compliance costs. …the Davis Polk law firm identified 398 explicit new regulations created by Dodd-Frank, making it at least 25 times more extensive and complex than Sarbanes-Oxley. If the costs of complying with Sarbanes-Oxley are the more reasonable gauge for those associated with Dodd-Frank, it could easily cost 25 times more than its predecessor, or $225 billion a year. This amounts to almost $2,000 for each private-sector worker.

Wow. I’m glad he ran out of space. The burden of the law got more expensive with each new paragraph.

Now let’s shift to a more uplifting story.

Back in the late 1970s, politicians actually deregulated the air cargo sector.

The folks at Mercatus highlight some of the benefits.

In the twenty years prior to deregulation, the CAB refused to certify the entry of any new cargo carriers or the expansion of existing ones into new routes and limited the size of plane allowed for air cargo hauls. Thus under this regime carriers such as FedEx, which was classified as an express (rather than cargo) service, could only use small planes even when larger ones were the more efficient choice. …Deregulation of the airline industry occurred in two stages: the first happened with the passage of Public Law 95-163 deregulating interstate air cargo transport in 1977; this was followed a year later by the Airline Deregulation Act of 1978 deregulating the air passenger industry. The effects of deregulation were dramatic. …Absent route restrictions, the air cargo industry began using hub-and-spoke models that made widespread overnight shipping possible. …Free from operational restrictions imposed by the CAB and the Interstate Commerce Commission (ICC), shippers increased reliability and provided a multitude of delivery speed, time, and method combinations. …Deregulation of air cargo was a key element in the emergence of modern supply chain management and allowed wider access to goods supplied by domestic and international sources. It also facilitated American trade to foreign markets. Efficiencies in widespread use of hub-and-spoke models for air cargo, by reducing total costs, enable more American products to reach foreign markets.

There’s also an accompanying video that is perfect for the season.

If air cargo regulation was the good and Dodd-Frank was the bad, I guess it’s now time for the ugly.

Here’s a video from Reason that satirizes the TSA for senseless rules on what can – and cannot – be carried onto a plane.

Just in case you think the video is unfair to the TSA, check out these horror stories.

P.S. Here’s what would happen if Noah tried to comply with current regulation when building an ark.

P.P.S. Meanwhile, there are reports that Santa Claus was arrested after a multi-bureaucracy investigation found that he violated a slew of federal rules.

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When people ask me why I mock government for being a slovenly, bloated, and malicious entity, I’m sometimes not sure what to say.

Do I give them examples of corrupt corporate welfare?

Do I share instances of government thuggery?

Do I direct them to preposterous examples of waste?

Do I show them details about an insanely complex tax code?

Do I enlighten them about sleazy insider behavior by the political elite?

The short answer is that I’m never sure what to say, which is why I oftentimes resort instead to utilitarian arguments in which I show that nations with smaller public sectors out-perform countries with larger levels of taxation, spending, regulation, and intervention.

I figure many people will probably never share my instinctive libertarian outrage about abusive government, but they presumably will be susceptible to the argument that it’s better to enjoy the prosperity of jurisdictions like Hong Kong and Singapore rather than suffer the stagnation of nations such as France and Greece.

And perhaps if I also share enough stories about foolish government policy, they’ll eventually realize that 2+2=4 and also decide to become libertarians (or at least small-government conservatives).

With that in mind, let’s look at three episodes of brain-addled government policy, one about taxes, one about spending, and the other about regulation.

For our tax story, let’s look at the so-called “Snooki tax.” Here are some excerpts from a column by Erik Telford published in The Hill.

…architects of the Affordable Care Act thought they found a winning funding formula. Create a “sin tax” on vanity businesses and use it to help pay for massive increase in government healthcare spending. Proposals to hit Botox sparked strong reaction from the dermatologist lobby, so legislators went to plan B–go after a weaker industry and tax tanning beds. …They called it the “Snooki Tax” after the oft-criticized reality TV star and tried to put a shallow celebrity face on a tax that would harm thousands of small businesses. The Congressional Joint Committee on Taxation crowed that the tax would raise $2.7 billion in nine years, all to offset the estimated $1 trillion price tag of the ACA. Each business would have to tack on a 10 percent excise tax on each tanning experience for every customer.

You won’t be surprised to learn that the JCT’s estimate was wrong and the tax isn’t collecting as much revenue as forecast.

But you might be shocked to learn that the levy is incredibly inefficient.

…roughly 19,000 “mom and pop” small businesses may have  been affected by the new tax — and those businesses likely spent an average of $74 an hour to comply with federal tax paperwork burdens… the taxes collected might not even pay for the efforts to reap them. Enforcement requires heavy investments in training and employee hours to catch businesses offering services “under the table.” An agent trying to audit a business that offers tanning must observe a business in operation, compare subjective observations about customer flow to the businesses’ bookkeeping, take into account “weak internal accounting systems,” then “request trial balance (if any), summary sheets, work papers and determine the audit trail either for manual or automated record keeping systems, for all transactions.”

I don’t know if the tanning tax is worse than the infamous German coffee tax, but it’s probably a close race.

Now let’s look at a report about wasteful government spending.

I’ve written that the federal government shouldn’t be in the disaster business since that’s a recipe for the blame-shifting, mis-management, and inefficiency we saw after Katrina.

But I realize some folks may think my approach is “too radical,” even though I think it’s common sense that affected communities are far more likely to effectively plan and respond to disasters rather than bureaucrats in Washington.

So let’s look at what happens when those bureaucrats make decisions. Here are some blurbs in a report from the National Center for Policy Analysis.

Houses that are built according to FEMA guidelines suffer more property damage during hurricanes than homes built prior to the guidelines, write Carolyn Dehring, professor at the University of Georgia Terry College of Business, and Martin Halek, senior lecturer at the University of Wisconsin’s School of Business, for the Cato Institute. The National Flood Insurance Program (NFIP) provides flood insurance to homeowners in communities participating in the program. Those communities are required to adopt the NFIP building code, which uses minimum building standards established by the Federal Emergency Management Agency (FEMA). …The study found that buildings in the A-Zone constructed after the NFIP code was implemented were much more likely to sustain damage, and have a greater extent of damage, than other structures in the area built prior to the NFIP code. Of buildings that were damaged, buildings constructed post-NFIP incurred 57 percent more damages than similarly situated property.

So federal regulations designed to “help” actually led to more damage. Go figure.

By the way, the costs weren’t borne by the actual property owners or even the local communities of states. Uncle Sugar (meaning you and me) picked up the tab.

NFIP has paid $3.7 billion in losses in Florida alone since 1978.

This is sort of the government’s version of biblical miracles. But instead of turning water into wine, Washington turns tax dollars into mud.

Now for our example of brainless regulation. The Hill reports that the bureaucracy is about to impose a big pile of red tape on the food industry.

The menu-labeling rule, due out any day, is expected to be one of the most expensive regulations to hit the food industry in recent years, business groups said. Not only does it take aim at restaurants, but, depending on its final language, the rule could also apply to grocery stores, convenience stores, gas stations and movie theaters that sell prepared food. The nation’s eateries are faced with the costly prospect of having to calculate the number of calories in the various meals they serve. “Not every steak is exactly the same,” says Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Industry. “The slightest variation in how I cut the steak and serve it can affect the nutritional content.”

This costly and intrusive bit of red tape is “a requirement of ObamaCare.” And like many other parts of that odious law, it imposes onerous burdens on the economy’s productive sector.

…restaurants and grocery stores are concerned they’ll be required to recount the number of calories in a meal every time they tinker with a recipe, which they say would be nearly impossible to do considering the endless number of food combinations they sell. At McDonald’s, for instance, a Big Mac is usually 550 calories, but it could be more for a customer who orders extra cheese. It’s even more complicated for pizza joints. Domino’s says there are 34 million potential combinations of its pizza that go well beyond a customer deciding between toppings like pepperoni and sausage. They also must factor in whether it’s a large, medium, or small pizza, deep dish or thin crust, and any extra ingredients. …Grocery stores are experiencing the same concerns, facing what they say is $1 billion in compliance costs in the first year alone. They say 95 percent of the food they sell — like breakfast cereal, potato chips, milk — already lists nutritional information including the number of calories. But the menu labeling requirements would target their delis, bakeries and any fresh fruit they slice up and put in containers to sell. …That could push many grocery stores to close up their delis and bakeries and stop offering fresh fruit.

Amazingly, some interest groups and politicians want the proposed regulation to be even more sweeping.

Wootan would also like to see movie theaters included in the menu labeling requirements. She seems to have support from the congressional authors of the menu labeling requirements, Sen. Tom Harkin (D-Iowa) and Rep. Rosa DeLauro (D-Conn.), who not only believe restaurants and grocery stores should be covered, but also movie houses, miniature golf courses, amusement parks and any other venue that serves prepared food. The two lawmakers have written numerous letters to the FDA saying they are disappointed with how “narrow” the rule is.

Heck, maybe they can assign a bureaucrat to every household in America and require calorie counts for every home-cooked meal as well.

Though I shouldn’t joke. Some statist will think I’m being serious and run with the idea.

Meanwhile, I’ll make a very simple prediction. If this regulation is implemented, it will have zero measurable impact on American waistlines.

So even if you believe in government coercion, this won’t work. And the types of coercion that would work – such as mandatory exercise and criminalizing carbs – are incompatible with a a free (or even semi-free) society.

Remember the message of this poster: If government is the answer, you’ve asked a very silly question. Or a misguided question. Or a dangerous question.

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