Coyote Blog

This is just staggering ignorance from a prominent US Congressman

"I think the answer is no," [MN representative Keith] Ellison said when asked if he believes regulations kill jobs. "And here is why: When we talked about increasing fuel efficiency standards, the industry responded, and they need engineers and designers and manufacturers, and they need actually more people to help respond to the new requirement."

"I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine. I understand what you mean, because if anything adds a cost to a business, you could assume that that will diminish that business’s ability to hire. But I don’t think that’s actually right. I think what businesses want is customers and what — if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet," the Congressman said.

There is a lot about economics we still do not understand, but one thing we are pretty certain about is that shifting labor and investment from productive to unproductive activities destroys wealth and reduces economic growth.  Of course, since much of the press is at least as ignorant on economic fundamentals, they just nod sagely.

I am sympathetic to the OWS hatred for bailouts and crony capitalism, but struggle to understand how they intend to fix the consequences of the exercise of government power in the private world with yet more exercise of government power in the private world.

Apropos of very little, I found this bit from Matt Taibi funny (emphasis added)

1. Break up the monopolies. The so-called "Too Big to Fail" financial companies – now sometimes called by the more accurate term "Systemically Dangerous Institutions" – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled

I am pretty sure that, by definition, a single industry cannot have 20 monopolies.

Though I share the same concern, my solution is to just let them fail.  Right now, the cost of capital for these large companies is lower than the cost of capital for smaller companies because, even though many of them have far worse balance sheets than smaller banks, investors feel they have too big to fail protection.  Let a few fail and have the cost of capital shoot up for larger companies and you can be pretty damn sure they market itself will break up these companies.

In some ways it reminds me of the market premium given in the 1960's to multi-industry conglomerates like ITT.  When the capital markets made their cost of capital low, everyone tried to copy their conglomerate strategies.  When these strategies started failing and companies like RJ Reynolds found their diversification into shipping and shower curtains was a business disaster, capital dried up for these Frankenstein monsters and most of them were broken up.  All without a hint of government intervention, either to save them or kill them.

Its telling that no one on the Left or with OWS who gives this advice for financial institutions takes their own advice with, say, auto companies.  GM should have failed and likely been broken up as well.

Had Obama been around 10 years earlier with his green jobs program, Enron might never have gone bust - it could have just gotten DOE loans

This is a pretty interesting interview with Eric Schmidt of Google.  I am running out the door and don't have time to excerpt it, but in short, Schmidt is quite critical of the ability of government to intelligently regulate technology.

His solution is telling.  There is nothing here about reducing the power and scope of government, despite his clear and concise description of its consistent structural failures.  His solution:  more power for my guys.  That way, when Washington plays its game of sacrificing the less connected in favor of the well connected, we will do OK.

I am working on this concept for my next Forbes column vis a vis the Occupy Wall Street movement.  The OWS folks seem incoherent to us, because, in short, they complain about people having unfair power over them and then their solution is ... to give other people more power.   I have reconciled this in my mind with a cold war analogy.  Everyone accepts the arms race as a fact, and so the only way to survive is to have more nukes than the other guy.  The only way to deal with power, is to get more power for my side.

Frankly, its time for disarmament.  As a retailer, I get irritated with credit card processors, but I understood when Congress was considering regulation of interchange fees that giving the Feds the power to set credit card terms, rather than the banks, was not going to make things any easier, just shift the costs from more to less favored constituencies (and consumers are always the least favored constituency).

More later as I sort this out in my head.

I am amazed that the US equity market can fall for the same load of BS over and over again

Stocks finished with strong gains amid optimism about plans to recapitalize euro-zone banks.

Two thoughts

1. There is simply no source of money (and will) anywhere large enough to fill in the European debt hole.  Heck, there isn't enough money and will to fix Greece, and that is a small percentage of the problem
2. Even if the current hole could nominally be recapitalized, it would be virtually meaningless because the no one in Europe is fessing up to anywhere near the total extent of the problem.

Countries are going to start to default in Europe, and I don't see any way around it.  The Euro isn't toast but its going to have a lot fewer members in 3 years.  And speaking of bad news, I don't see any way to avoid a massive Chinese bubble burst in the next 3 years either.

I have always defended private unions on the ground that workers have a freedom of association just as much as anyone else.  I think the government has tilted the playing field in the union's favor too much, but I will leave that aside for today.  I will also leave aside the problem of public unions, where there is no one really representing the taxpayer on the other side of the table in negotiations (many politicians in union states owe their jobs to union support).

Leave all of that aside.  The economic problem with unions tends to be that they are such a conservative (little c) force in an economy that needs dynamism to grow and expand wealth.  Here is a great example:

The University of California last week tentatively agreed to a deal with UC-AFT that included a new provision barring the system and its campuses from creating online courses or programs that would result in “a change to a term or condition of employment” of any lecturer without first dealing with the union.

Bob Samuels, the president of the union, says this effectively gives the union veto power over any online initiative that might endangers the jobs or work lives of its members. “We feel that we could stop almost any online program through this contract,” Samuels told Inside Higher Ed.

I have said for a long time that negotiations for pay and benefits (in private unions) tend to be the least problematic union activity (different story in public unions, where the relationship to management is not adversarial).  Longer term, union imposed work rules and restrictions tend to be much more costly.  The reason I think is that corporate executives can easily value the difference between various pay and benefits packages, but have a hard time valuing flexibility and dynamism.  If union rules cut off potential future as-yet-unknown growth and cost reduction efforts, the cost of these rules can be huge but equally they can be almost impossible to value (more like options pricing than straight cost-benefit).

From my Forbes post today, the following letter:

From:  The Consumers and Small Businesses of China

To:   The United States Senate

Re:  Currency Exchange Rate Oversight Reform Act of 2011

Dear Senators:

Thanks!  For years, our government has pursued a currency and trade policy that has subsidized your American consumers at the expense of our own here in China, and while we are unsure exactly why you would want to end this arrangement (we presume due to powerful lobby by your large manufacturers), we are happy that you are doing so....

A low yuan makes Chinese products cheap for Americans but makes imports relatively dear for Chinese.  So-called "dumping" represents an even clearer direct subsidy of American consumers over their Chinese counterparts.  And limiting foreign exchange re-investments to low-yield government bonds has acted as a direct subsidy of American taxpayers and the American government, saddling China with extraordinarily low yields and creating inflationary pressures.

Every single step China takes to promote exports is in effect a transfer of wealth from Chinese citizens to Americans, and we are tired of it.

Read it all.

Do you remember back in the late 70's, when the economy sucked, and no private entity would fund new technologies like computer startups Apple and Microsoft, so the government had to step in to provide the needed investment?  Yeah, neither do I.

[source] In some very real ways, the Apple II computer changed the course of my life from being a lawyer to an engineer.  If for nothing else, I owe Mr. Jobs a lot.  Though I have never been a huge fan of the MacIntosh computers (a true power user would never tolerate a computer "for the rest of us"), I have come back around to the Apple family of late, first with the marvelous iPod and later with the iPad, still the greatest piece of gear I have ever owned.

Mr. Jobs got rich off of people like me, but far from resenting it, I feel like he was under paid.  My consumer surplus from many of the products he helped create dwarfs what I paid for them.  He made me wealthier and happier, and the world loses a lot with his passing.

From my own state of Arizona (emphasis added)

A group of small-business proponents is asking the Legislature to guarantee startup money for Arizona enterprises.

The backers of a so-called Arizona Fund of Funds made their pitch to a handful of lawmakers Monday, saying businesses need government help to start hiring again.

That help should come in the form of tax credits, said John Kowalski, who is promoting the idea through the Arizona Growth Foundation, a group of venture capitalists working to bring more investment to the state.

The credits would be a safety net to encourage venture capitalists to invest in a pool of money that would be distributed to emerging businesses, said Kowalski, a former executive with the Arizona Small Business Association....

The government's role is to serve as a guarantor, through the tax credits, in case the investments don't yield the projected results.

While this is being sold as something for small business, what it looks like to me is just more of the same socialization of bankers' losses that helped get us into this financial mess.  I suppose this "profits are mine if it makes money, losses are the governments if it loses money" never grows old for investment bankers and VC's, but why is anyone taking this seriously anymore?

Apparently Obama is claiming:

“[Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’”

The irony is that if you grade the equivalent mpg of electric cars by the methodology outlined by Chu's own energy department, the number would be about a third of that.  Only by the EPA's flawed methodology do we get equivalent MPG's for electric cars anywhere near 130.

I wrote about this whole sordid mess of inflated MPG numbers for electric cars here.

From the Hill, the ghost of Hawley-Smoot returns

 The Senate voted Monday to advance legislation pressuring the Chinese government to stop undervaluing its currency, a practice most economists agree is giving the country an unfair trade advantage and is costing the U.S. jobs.

The Senate voted 79-19 to end debate on a motion to proceed to the bill, the Currency Exchange Rate Oversight Reform Act of 2011. While the vote does not mean the bill has passed, the strong show of support suggests it could well be approved in the upper chamber by the week’s end. Passage through the House is less clear, however, and GOP leaders have given no indication they will move forward with it.

Senate Democratic leadership, responsible for bringing the legislation to the Senate floor, heralded it as a way to create jobs and right a long-standing trade imbalance with China.

“China is by far the biggest exploiter of predatory currency practices,” Sen. Charles Schumer (D-N.Y.) said Monday. “[T]hese currency policies artificially raise the price of U.S. exports and suppress the price of imports into the United States, undermining the economic health of American manufacturers and their ability to compete at home and around the globe.”

This is a great example of how a group, in this case the Democratic Party, can say they are against corporate welfare, but in fact be 100% behind it simply by changing the terms used.

Look at the sentence in bold.  Another way to write this would be "we want a law to help a few visible and influential manufacturers who most compete with China, but hurts consumers (ie every single American) and every business that uses imported raw materials.

Protectionism like this is corporate welfare for a few large manufacturers.  I find it amazing the reporter can say that "most economists agree" an undervalued Chinese currency is costing us jobs.  My sense is that most economists don't agree with this statement.  All this law will do is unilaterally increase consumer prices and raw material costs, and I know few economists who think this is stimulative.

A cheap yuan is a direct subsidy of American consumers by the Chinese, and I am not sure why we shouldn't let it continue as long as they are dumb enough to keep doing it.

I have been warning you, its coming.  When government pays the health care bills, they can then use that as an excuse to micro-regulate our every behavior.  Because its no longer an individual choice, it affects public costs.

“Denmark finds every sort of way to increase our taxes,” said Alisa Clausen, a South Jutland resident. “Why should the government decide how much fat we eat? They also want to increase the tobacco price very significantly. In theory this is good — it makes unhealthy items expensive so that we do not consume as much or any and that way the health system doesn’t use a lot of money on patients who become sick from overuse of fat and tobacco.  However, these taxes take on a big brother feeling.  We should not be punished by taxes on items the government decides we should not use.”

As an aside, given that Scandinavians tend to have among the world's highest tolerances for taxes, when they get fed up, it must be getting bad.

That is the sound of the printing presses running 24/7.  Because that appears to be how we are funding all of Obama's spending right now (source)

When folks say they are not worried about the deficit, because folks still seem eager to buy our debt (as evidenced by the low interest rates) note that the general public has been a net seller of US debt the first 2 quarters of 2011.  In fact, the only buyer has been Uncle Sam himself, buying up the debt with newly minted cash (or electrons, really).

One other interesting issue, the Fed seems to have been soaking up the money supply in the early days of the recession, before the high-profile business and financial failures really got things moving downward.

I simply cannot believe that the President of the US just ordered an American citizen killed, without trial or due process, and the country just yawns.  And in some cases, cheered.  Are we really going to make the Fifth Amendment, along with the Fourth, the Ninth, and the Tenth, another "just kidding" passage?  Its amazing that the same kids that marched  against Nixon's abuse of power have decided this is perfectly OK.

I suppose I expect Republicans to pile on for this kind of security-state garbage, but an awful lot of Democrats are sitting on their hands as well, just because it was their guy in the Oval office pulling the trigger.  Kudos to a few souls on the left like Glenn Greenwald and Kevin Drum who, however subdued in comparison to their reaction had it been Bush, called out their party's leader for this bit of horror.  Greenwald makes the point to fellow Lefties - how would you feel if Rick Perry or Michelle Bachman had this power?

This latter is a good test I ask folks all the time.  Those who advocate for statist powers generally imagine folks like themselves wielding these powers.  But how realistic is that in a Democracy where power shifts every 8-10 years or so?  I ask folks all the time to picture their worst political enemy, and then imagine that person with the power they advocate.

Well, I finished Reamde this weekend.   It was only OK.  It is a straight up modern adventure book, like perhaps a Vince Flynn novel, chasing terrorists around the globe.  I enjoy Stephenson for his big, sometimes outrageous ideas, his witty prose, and his love affair with the geek culture.  Except for the latter, none of this is in evidence in this book.  It is certainly a more popularly accessible book, but that is certainly not what I want from Stephenson.

Cryptonomicon and Snow Crash are among my favorite novels.  One of the reason I liked them were for the prose he brought to bear on even (or especially) trivial topics.  His long passages on eating Cap'n Crunch or getting wisdom teeth removed in Cryptonomicon are classics.   I got very little of this kind of thrill in Reamde, made worse by the fact that there were just too many main characters, none of whom were very well developed for me.

At some points, this book held my attention, and at some points it dragged.  The book in some ways is almost the same structure as a comedic farce -- a whole bunch of characters who are dragged along by events into increasingly unlikely circumstances.   There is no looming event or goal that drives the narrative in a, say, Clancy novel.  Its just a lot of falling into one mess after another.   Its also a bit unseriousness - it feels like the teens in Scooby Doo chasing terrorists.  (One problem is that Stephenson's bad guys are too likable - they are always smart and ironic gentlemanly - so its hard to get as worked up about heading them off as one might in a classic thriller).

Some playwright or critic once wrote (sorry, can't remember the name) that if you put a gun out on the stage in Act 1, someone better use it in Act 3.  (OK, it was Chekov, though why he said "gun" rather than "phaser" is beyond me).  In this book, Stephenson leaves guns unused all over the stage.  In particular, Stephenson comes up with one of his patented interesting-crazy ideas of using an MMRPG to crowd-source security analysis.  I felt sure that in the manhunts that followed, that particular gun would be picked up and used to help drive to the climax, but we never hear of it again.  In fact, we learn a lot of interesting things about this game in the book, which seems to be absolutely central to the plot, but in the end turns out to be entirely peripheral, an early macguffin to kick start the plot.

Another example is the HUGE amounts of the book go to talking about an interesting social realignment happening in the game, to absolutely no end.  OK, so characters have abandoned the good and evil alignments put in by the game masters for a new emergent faction division.  I thought sure we would see some kind of real-world parallel to this happening in the book, or some insight drawn from this that helps solve the real world problem.  Nothing.

Overall, a disappointing book I would not have finished had it not been by Stephenson.

Postscript:  If you become interested in the dynamics of the MMRPG in the book, where there are no character levels (only a skill system) and money and money making is central to the the game, the closest analog I have ever seen is not a fantasy game but EVE Online, a space-based game (also, to a lesser extent, Star Wars Galaxies as well, but that is now defunct).  EVE Online probably has the most interesting economy of any MMRPG I have played and I know they employ an economist who sometimes writes articles about his work.

On November 2, 2011, I am hosting a conference in Scottsdale, Arizona on how public agencies can keep parks open through private recreation management partnerships.

For thirty years, the US Forest Service has seen radically declining recreation budgets, with far greater reductions than places like California is facing, but has not had to close parks and has kept most of their recreation areas well-maintained.

Their innovation was to take advantage of the substantially lower costs of private operators to run their campgrounds and picnic areas.

For the last couple of years, it has frustrated me to no end to watch states like California and Arizona -- really almost every state in the country -- let some parks accumulate deferred maintenance while other are closed when it simply is not necessary.

The event flyer is here, which hopefully you can also forward as an email from the link at the bottom.  If you know anyone in public recreation or in the your state's legislature who is interested in recreation issues, please point them to this site where they can learn about and register for this conference.  We have gotten some sponsorships such that government employees can attend for free, and the rooms in the hotel, a fabulous resort in Scottsdale, can be had for just $105 per night.

Faced with serious questions after the Solyndra failure as to their ability to make intelligent investments, the government is reacting by.... accelerating the approval of other green energy loans.  Again, the difference with the private sector is not that the private sector makes no mistakes, but there is real accountability for those mistakes which lead to changes in behavior.

While nominally about the Gibson Guitar raid, this article is actually a great primer on abusive prosecutorial tactics businesses are increasingly facing

Prosecutors who are looking for an easy “win” know that businesses roll over. A public raid on its offices, or an indictment of its officers, can destroy a business’s reputation and viability. That makes the owners easy to intimidate into a plea bargain.

If they choose to fight, they face the full wrath and fury of the feds. In the Gibson raids, the SWAT teams were deployed even though Gibson had offered its full cooperation to investigators. Such raids are increasingly used to intimidate citizens under suspicion. The orchid importer, a 65-year-old with Parkinson’s, was shoved against a wall by armed officers in flak jackets, frisked, and forced into a chair without explanation while his home was searched

The government also attempts to get low-level employees to “finger” their bosses. For example, the feds threatened Gibson employees with long prison sentences. This is not a search for truth, but an immoral attempt at extortion to win convictions. Investigators examine the lives of “little fish” and use minor, unrelated violations (smoking a joint, or exaggerating income on a loan application) to pressure them to back the government’s case against their employers. Mobsters have experience with threats like this, but a secretary or an accountant is scared to death by the threat of prosecution.

A favorite ploy of prosecutors in these cases is to charge defendants with false statements based on their answers to the investigators. The sentence for this can be five years in prison. No recording is made of the interviews — in fact, the feds prohibit taping the interviews — and the agents are not stenographers. They cannot possibly recall the exact wording of the questions and the answers. Yet after the interview, they will produce a “transcript” replete with quotes throughout. And if a witness says he did not actually say what the agent put in quotes, it is the witness’s word against a fine, upstanding federal agent’s. Staring at a five-year sentence will get most people to say whatever the government wants them to.

The feds also pile up charges. According to Juszkiewicz, the Justice Department warned Gibson that each instance of shipping a guitar from its facility would bring an added charge of obstruction of justice. Prosecutors routinely add extra counts to stack potential prison sentences higher. For instance, faxing invoices for the wood would be charged as wire fraud. Depositing the check for the sale of the guitars would be money laundering. The CEO’s telling the press he is innocent would bring charges of fraud or stock manipulation. The intent is to threaten such long sentences that the targets plead guilty rather than risk decades in prison.

Prosecutors further tighten the screws by seizing the assets of the company, a tactic once used against pirates and drug lords but now routinely used to prosecute white-collar crimes. The federal agents seized six guitars and several pallets of ebony during their initial 2009 raid against Gibson. Federal law allows assets to be seized not just from convicted criminals, but also from those never charged. Owners must prove that the forfeited property was obtained legally; otherwise, the government can keep it. That gives the government incredible leverage, because without the seized inventory and bank accounts, the business will most likely go under. How can Gibson make guitars if the wood is being held by the government? How can it service customers when the government took its computers as evidence? How can it pay lawyers when its bank accounts were seized? Asset forfeitures bring to mind a similar twist on the law uttered by the Queen of Hearts in Alice in Wonderland: “Sentence first, verdict afterwards.”

Bruce Krasting at Zero Hedge has been on the case of the Federal Financing Bank.  I am still unclear if the agency is actually providing the cash or just the guarantee, but it was the one rolling out the Solyndra loan (under DOE auspices, I suppose).

In July, it was still sending cash of some sort to Solyndra - it may be that this was just a drawdown of money under its original loan commitment, or it may be new money.  A couple of things you can see are:

• A heck of a lot of money was still going out the door to solar programs, likely with no oversight
• Ford, the supposedly bailout-free company, sure seems to be gobbling up a lot of government guaranteed loans for something.
• We were lending to Solyndra at 0.89% interest.

We have reached the point that one only needs to mention "radiation" and people go nuts with fear, no matter what the context or concentration (witness all the morons buying Iodine tables in the US after the Japanese nuclear accident).

There are folks today who are trying to do the same thing in the world of First Amendment rights, making any mention of violence, no matter in what context, the cause of a major league freakout.

Witness this story you have probably seen already, about the professor in Wisconsin who had a Mal Reynolds (Firefly) poster that had a quote from one of the show's episodes:

You don't know me, son, so let me explain this to you once: If I ever kill you, you'll be awake. You'll be facing me. And you'll be armed.

To call this a threat is absurd.  In fact, in its original context, it was an anti-threat.  It was a statement of old-fashioned honor by a character who lived in a violent world.  And of course it is freaking fiction, and has no more relevance as a threat to real-life visitors to the professors offices than a picture of the Governator saying "I'll be back."

Not to mention the fact that such actions against speech are seldom enforced in a content-neutral sort of way.  One wonders how many Che Gueverra (a real life killer) posters the university tolerates, or how many "well-behaved women seldom make history" (arguably encouraging women to break the law) bumper stickers can be found in the parking lot.  The professor also had a poster taken down that explicitly advocates against violence, and had that poster taken down as well.  One wonders how many similar posters with eye-catching graphics one might find around campus advocating against violence against women or violence in Darfur.

From the Goldwater Institute, on the amount of money we in Phoenix are paying in taxes to support union management costs

Phoenix taxpayers spend millions of dollars to pay full salary and benefits for city employees to work exclusively for labor unions, a Goldwater Institute investigation found.

Collective bargaining agreements with seven labor organizations require the city to pay union officers and provide members with thousands of additional hours to conduct union business instead of doing their government jobs.

The total cost to Phoenix taxpayers is about $3.7 million per year, based on payroll records supplied by the city. In all, more than 73,000 hours of annual release time for city workers to conduct union business at taxpayers’ expense are permitted in the agreements.

The top officials in all of the unions have regular jobs with the city. But buried in the labor agreements are a series of provisions for those employees to be released from their regular duties to perform union work.

For top officers, the typical amount of annual release time is 2,080 hours, a full year of work based on 52 weeks at 40 hours each. They continue to draw full pay and benefits, just as if they were showing up for their regular jobs. But they are released from their regular duties to conduct undefined union business.

Union officials say the time is a good investment that leads to a more productive workforce. Critics say it amounts to an illegal gift of taxpayer money.

The "more productive workforce" line is just hilarious.  99.9% of the this work very likely is against the best interests of taxpayers, either raising future salaries or enforcing productivity-killing work rules or preventing the termination of incompetent employees.

I understand that there are similar provisions in some private union contracts, but if I was a shareholder in these companies I would be outraged about those as well.  As it turns out, private companies that have these deals tend to be among the most dysfunctional and uncompetitive in the country (e.g. GM).

What's particularly ugly about this is that it is so reminiscent of a number of Soprano's episodes, with the mafia guys all sitting around in no-work and no-show jobs at taxpayer expense.

Don Boudreaux asks:

Here’s a quick question for anyone who takes seriously politicians’ pronouncements about what particular industries are “vital” or are “of the future” or are “crucial to meeting consumers’ needs”: Why do virtually none of these politicians, when they leave office, found their own non-political firms? Why do virtually none of these politicians, when they leave office, found their own non-political firms – firms that specialize neither in granting clients access to incumbent politicians nor in projects that depend upon getting subsidies or other favors from those same politicians?

This question occurred to me a few days ago upon hearing that former president Bill Clinton was off somewhere talking about something to some group concerned about some issue.  His career now is to make lots of money as a sort of high-brow social healer – to emit platitudes, attend state funerals, and (pardon my switch of imagery) be a show-pony for politically correct causes.  The post-Oval Office careers of every other recent president – to the extent that they haven’t simply retired to the golf course or the study – have been largely the same, with the groups and causes served by their attentions differing only as one former president’s political affiliations differ from those of another former president.

One guy comes to mind who had a sniff of the White House and then went on to run his own business:  George McGovern.  And though its just a small Inn that will never be even a blip on the economic radar screen, it has driven McGovern dangerously close to being a libertarian.  Actually, that might be a misnomer.  He probably is still a liberal, but from the days when liberals actually cared about individual freedom and saw aggregations of power in the government to be at least as scary as those in the private world.  Take this for example:

Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior. Much paternalist scrutiny has recently centered on personal economics...

Since leaving office I've written about public policy from a new perspective: outside looking in. I've come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.

Why do we think we are helping adult consumers by taking away their options? We don't take away cars because we don't like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don't operate mindlessly in trying to smooth out every theoretical wrinkle in life.

The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.

The only other place I have heard this recently on the Left was, perhaps not coincidentally, from that other child of 60's liberal politics, Jerry Brown

To the Members of the California State Senate:

I am returning Senate Bill 105 without my signature.

This measure would impose criminal penalties on a child under the age of 18 and his or her parents if the child skis or snowboards without a helmet.

While I appreciate the value of wearing a ski helmet, I am concerned about the continuing and seemingly inexorable transfer of authority from parents to the state. Not every human problem deserves a law.

I believe parents have the ability and responsibility to make good choices for their children.

Sincerely,
Edmund J. Brown

Postscript:  The answer to Don's question is one of two.  Either a)  They are not up to it.  And/or b) There is a hell of a lot more wealth that can be captured through the exercise of government power than through private enterprise.

Ken at Popehat has a great series on spotting and reporting scams.  I have tried to make a habit of reporting on this blog about scams I have encountered, and some of my most Googled posts are where I posted scans of scam letters I have received.  I hope other bloggers will do the same.  I have benefited any number of times from Googling a suspicious letter or company and finding bloggers who have already posted warnings or information.

I was going to leave this topic behind, but I just couldn't resist after Krugman's bit of snark on the topic.   Please see my new Forbes column here.  One bit, actually off topic from the rest of the article, that I added as a postscript:

Perhaps the worst Administration decision of the entire Solyndra affair has yet to receive adequate scrutiny.  Just 6 months before Solyndra failed, the Administration allowed Argonaut, the largest shareholder, to grab the senior debtor position from the US taxpayer in exchange for $75 million in new financing.  The Administration’s argument was the loan was needed to buy time, but buy time for what?  Solyndra’s relative cost position was getting worse, and it was experiencing a huge loss on every unit sold.  No one involved has been able to say what the company was counting on to save it in the 6 months this loan bought it, except perhaps the opportunity to cajole another half billion out of the US taxpayer.

But the loan did accomplish two things.  First, it gave Solyndra time to sell every liquid asset it owned that might have been of value to…. Argonaut.  And once this bit of self-dealing was complete and the company was cleaned out, the bankruptcy process could be entirely controlled by Argonaut such that it will likely end up with all the assets, most important of which seems to be a $500 million dollar tax loss carryforward.  If Argonaut can take advantage of these tax shelters, it will end up costing the US taxpayer an additional $150 million or so.

In short, the taxpayer got rolled.  Again.

Update:  Marc Morano:

 'When we had (Gulf) oil spill, we immediately had moratorium on off shore drilling. The oil industry was demonized & literally shut down'

'But after the green energy debacle, they are being feted and rewarded -- $9 billion more is being sent out to 14 more companies...Solar power is less than 1% of our electricity, yet this is being feted'