Over at the American Spectator, I explain why it won’t, but a deregulatory stimulus would. Main points:
-Anything that Washington giveth, it must first taketh away from somewhere else. The jobs bill is a zero-sum game.
-When government borrows more, less investment capital is left over for the productive sector.
-Taxes will have to be raised later to pay for today’s increased borrowing.
-Deregulation is a better approach. The biggest obstacles to job creation and economic growth are all in Washington.
Today’s American Spectator Online has a piece by CEI VP Wayne Crews and I on curbing Congressional abuse of unfunded mandates. If the term is new to you, unfunded mandates are basically an accounting gimmick that lets government understate how much it costs taxpayers:
rather than fund a new federal job training program through a Department of Labor appropriation, Congress could mandate that all Fortune 500 firms provide, and pay for, such training. The first appears on the federal budget, the second does not. For politicians, it’s the perfect scheme. The government can spend — or, rather, force other people to spend — as much as it wants without adding to the deficit.
Decency demands this trickery stop; fortunately, a bill from Rep. Virginia Foxx looks like it would do some good on that front.
A new Maryland law makes it illegal for manufacturers to set a minimum retail price for their products in sales contracts. The law is meant to increase competition. Unfortunately, it will have the opposite effect.
As Wayne Crews and I explain in the The American Spectator, it could prevent retailers from competing with each other on non-price grounds, such as customer service, product demonstrations, and advertising.
Some products, such as televisions or cars, have high information costs. Customers want to know a lot about these products before they commit to a purchase. They want to know what they’re getting. Try before they buy.
By forcing retailers to compete against each other to give customers more and better information and service, minimum price agreements can help consumers get what they want and boost sales at the same time.
Even though 4 Democratic Senators are so nervous about the electricity tax called cap-and-trade they are urging their leadership to drop it from the global warming bill, no-one should count on that happening yet. More Senators need to wake up to the significant problems cap-and-trade has, and there is no better example of those than the European version of the scheme. With that in mind, my colleague Roger Abbott and I have written a piece for the American Spectator today that outlines just two of the problems the Europeans have encountered. We conclude:
To sum up, the failure of the European ETS should give pause to Senators considering a similar system for the U.S. Cap-and-trade will not result in emissions cuts. It will, however, greatly enhance the power of the government to regulate the economy. And it will lead to higher energy costs, as the costs of trading permits add to utilities’ cost of doing business.
Given these facts, why the strong push for cap-and-trade? The sad fact is that both President Obama and the Democratic Congress are misleading the public. Alternative measures such as a carbon tax have not been considered precisely because their costs are transparent and obvious to the public. By contrast, cap-and-trade allows the President and Congress to claim credit for “taking action” on global warming without acknowledging the real costs that entails — costs which the public, when informed of the facts, is rightly unwilling to accept.
Feel free to send a copy of our piece to your Senator!
CEI Fellow in Regulatory Studies, Ryan Young, talks about the latest bill in Congress to regulate your carry-on habits. Find the article here.
Good stuff from Joseph Lawler at the American Spectator, defending Robert Samuelson from, err, Robert Samuelson. He concludes:
No reasonable observer of government activity would believe that it would engage in temporary interventionism. We saw this play out with the bailout: they asked for the power to do implement one very specificly defined measure, and ended up doing whatever they wanted. Why trust those same characters with any more policy tools, and why think they wouldn’t let the inflation genie out of the bottle?
Why indeed?
Oh, Happy Day! And it certainly is for all those who value freedom, responsibility and the true free market in which individuals are free to profit from their risks on the condition that they don’t stick the rest of us with their losses.
It’s not hyperbole to say the Republican and Democratic backbenchers who defied both parties’ leadership to defeat this $700 billion package of Wall Street socialism literally saved America. Whatever their reasons, this defeat (or rather victory for freedom), means that America is much less likely to turn into France, Venezuela, or the old Soviet Union, as this bailout/nationalization package would have set us on the road to becoming.
Several great speeches on the Right and Left were given. Democrats Brad Sherman of California and Earl Blumenauer of Oregon gave powerful speeches against corporate giveaways. And conservative leaders of the Republican Study Committee — such as Jeb Hensarling, Jeff Flake, Mike Pence, and of course Ron Paul — spoke about how government intervention was largely the cause of this predicament, but the bailout would doom arguments for the free market form here on out. The idea of the government making this kind of outlay to high-flying risk takers just didn’t jibe with members, and certainly not with the American people.
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Though the bill may have been defeated for the wrong reasons—like the lack of freebies, giveaways, and handouts that many on the left had hoped for—the defeat of the bailout bill in the House has brought stocks out of their decent. The Dow Jones is now climbing.
But how can this be? How could a bill that was designed to save our economy, our country, and the world be the cause of the Dow’s drop today? Easy, the bill was introducing such incredible uncertainty into the market that investors were panicking.
It could also be that Wall Street—despite the recent bank closings—is still smarter than Washington. The reactions of investors suggests they realize the bill may have done more harm than good.
For more on why a defeated bailout bill is a very good thing and why the world doesn’t need saving, read John Berlau in today’s American Spectator.
Stay tuned to OpenMarket for John Berlau’s reaction to the bailout bill’s defeat. Also, check out our Bailout Watch page at CEI.org.
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