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OpenMarket: Regulatory Reform

  • We Wouldn't Have Teaparties If It Wasn't For Rentseeking

    April 15, 2009
    Those who say we tried the free market and it failed should research the history of the Boston Tea Party a little.  We didn't even have a free market in the 18th century, a period referred to in British history as The Whig Supremacy.  Here's the background; and to prove that there is nothing new under the sun, it involves company rent-seeking, market distortion, bailouts and stealth taxes. As early as 1698, the English Parliament awarded the East India Company the monopoly on tea importation into England.  In return the Company paid Parliament a 25% ad valorem tax on the tea imported.  Now, at this stage the Company was not allowed to import tea to the American colonies, so it sold the tea it had imported into England on to other merchants, who sold it in the colonies.  So even at this stage, government was distorting the tea market, by granting a monopoly to a rent-seeking company in...
  • A National Anthem for April 15

    April 15, 2009
    As Tea Parties brew across the land today, I'm reminded of the infamous "Tax Poem" chain email, or, spam, if you like. Set to music it could make quite the anthem I suppose. THE TAX POEM Tax his land, Tax his bed, Tax the table At which he's fed. Tax his tractor, Tax his mule, Teach him taxes Are the rule. Tax his work, Tax his pay, He works for peanuts Anyway! Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he Tries to think. Tax his cigars, Tax his beers, If he cries Tax his tears. Tax his car, Tax his gas, Find other ways To tax his ass. Tax all he has Then let him know That you won't be done Till he has no dough. When he screams and hollers, Then tax him some more, Tax him till He's good and sore. Then tax his coffin, Tax his grave, Tax the sod in Which he's laid...
  • Broadband Stimulus Plan: Spend First, Ask Questions Later

    April 13, 2009
    There has been some noise in technology circles the last week over the FCC comment period or Notice of Inquiry (NOI) in regards to the broadband Internet portion of the American Recovery and Reinvestment Act otherwise known as "the stimulus." The NOI allows individuals, association groups, public policy organizations like CEI, and businesses to issue their comments, suggestions, advise—anything really—to the FCC.   This allows "the public" to describe how they feel like the funds should be spent and the best strategy to improve the state of broadband deployment in under-served an unserved areas. The comment period is intended to help formulate the National Broadband Strategy which is required to be completed one year from the recovery act being signed in to law.  This means that the strategy will come due around the 17th of February 2010. There is a major problem with the process...
  • Don't Change Interchange

    April 13, 2009
    Overstock.com President Jonathan E. Johnson recently penned an op-ed that appeared in The Washington Times last week in which he argued for government regulation of credit card interchange fees. I responded to his essay in a letter to the editor that ran in Sunday's Washington Times:
    Overstock.com President Jonathan E. Johnson III overlooks several important facts regarding credit card interchange fees ("Retailers, consumers squeezed," Opinion, Wednesday). Much of the $48 billion in interchange fees paid to credit card companies ends back in consumers' pockets in the form of credit card rewards. Frequent-flier miles, redeemable bonus points and cash-back programs are all...
  • Federal Budget Deficit Skyrockets; $163,000 More in Taxes

    April 10, 2009
    "The budget deficit increased by $192.3 billion in March, and is near $1 trillion just halfway through the budget year." It's going to get worse. The Obama Administration's proposed budgets would produce $9.3 trillion in red ink, more than double the $4.4 trillion in red ink that would have been produced by Bush's already huge budgets. Economist Michael J. Boskin estimates that Obama's plans will result in $163,000 in increased taxes in the future for the typical tax-paying family. Balanced budgets won't return even in the long run. Obama claims that a revived economy will eventually cut the deficit. But the Congressional Budget...
  • Jack Dreyfus, FDA Reform Pioneer

    April 10, 2009
    My colleague John Berlau wrote a nice obituary of mutual fund pioneer Jack Dreyfus that was published in Investor's Business Daily earlier this week. One thing John points out that few readers are likely to have known about Dreyfus is his long-time advocacy of more liberal FDA regulation of off-label drug promotion. FDA has the statutory authority to regulate promotional materials distributed by pharmaceutical companies about their products, and the agency imposes a near-total ban on distributing information about unapproved, or so-called off-label, uses. Once FDA approves a drug for any indication, doctors are free to prescribe it for any other use. The practice is so widespread that an estimated 60 percent of all...
  • Trojan Horse "Food Safety" Law

    April 9, 2009
    A misguided bill, the Food Safety Modernization Act of 2009, may shut down farmer's markets and "drive out of business local farmers and artisanal, small-scale producers of berries, herbs, cheese, and countless other wares, even when there is in fact nothing unsafe in their methods of production," warns Walter Olson at Overlawyered. Ignorance about the law's broad reach (and how it will be construed by the courts) has thwarted opposition to the bill, which will likely pass Congress. For example, a newspaper claims the bill "doesn't regulate home gardens." The newspaper probably assumed that was true...
  • Baptist-Bootlegger Alliance on Tobacco

    April 8, 2009
    In today's Washington Examiner, Tim Carney has an excellent column on how the bill to place tobacco under FDA regulation would reduce competition in the tobacco industry and enrich the biggest company -- Philip Morris -- at the expense of consumers and competitors alike. Although the bill is supported by leading anti-smoking groups (which indirectly receive money from Big Tobacco through the $246 billion Master Settlement Agreement), the bill's...
  • Rise of the Luddites

    April 7, 2009
    When it comes to things such as environmental policy, the Progressives have been rather successful at promoting their world view.  They realized that it would be futile to argue that property rights and human ingenuity could not solve anything - so they did not try (immediately) to socialize oil or other sub-surface minerals but they did succeed in derailing the evolutionary process by which institutions emerged to resolve emerging problems.  The economist Ronald Coase  noted this in an essay pointing out that the EMS (Emergency Medical Services) was well on its way to being homesteaded with rules for allowing multiple uses - and then the Feds created the Federal Communication Commission and the spectrum is still terribly managed to this day.   The environment is...
  • A Bounty on Your 401(K)

    April 6, 2009
    The Obama Administration's mortgage bailout for irresponsible borrowers (including wealthy borrowers with modest mortgage payments) provides a bounty for reckless sub-prime mortgage lenders like Countrywide to rip off your retirement plan. Countrywide sold its junky mortgages on Wall Street, where they ended up being owned by mutual funds that probably are in your 401(K). But it continued to service the mortgages and make money doing so.

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