Red Clay Citizen

Case Study on Government involvement in "Private Enterprise"

Read this article from the Chicago Tribune about how current White House Chief of Staff Rahm Emanuel made a bunch of money for a short stay on the board of Freddie Mac.

This was front paged on Drudge.

Who Does Your Hair?

I'll do you one better, Francis.

The Hair Braider Licensure Act (H291).

Is there really a reason that government needs to be involved in this?  $10 a year so the government can know who is braiding hair?  Really?

Are your feet hurting?

If so, Senator Fletcher Hartsell (R- Cabarrus) wants to make it more expensive for you to make them feel better.

NC Government Stopping Job Growth

According to the Charlotte Business Journal, the NC Division of Health Services Regulation (why this agency even exists is a completely different topic) denied Gaston Regional Hospital's application to spend $21.9 million and create 100 new jobs to build a freestanding emergency room in Mount Holly.

Can anyone come up with one good reason why NC government should be telling a company that wants to expand and create new jobs that it isn't allowed to do so?

As our state battles near double-digit unemployment, this company wants to take a risk, spend $21.9 million on new construction, employ 100 additional people and the government is telling them "no."  Are you kidding me?  If this was a company relocating 100 jobs from another state, the Department of Commerce would be cutting them an eight-figure check in no time flat.  Yet here we have government standing in the way of organic job growth.  Unbelievable. 

We're not slouching towards socialism, folks.  We're already there.

More proof life goes on without politicians!

Headline from yesterday's Raleigh News & Observer: NC Governor Perdue on vacation. I hope Governor Perdue and her husband have a great vacation. While she is gone stores will open, people will go to work, schools (especially non-government ones) will teach, trash will get picked up etc, etc.

Many people think that their well being and happiness are dependent on the actions of government. Government is there to enforce the law and insure a level playing field. The individual politicians will come and go and we are often better off when they are gone. The quote attributed to either Judge Tucker or Mark Twain says it best, "No man’s life, liberty or property,are safe when the legislature is in session".

Even though Gov. Perdue is out of the country the legislature is still here and we need to be aware of what they are up to (Civitas will keep you informed!). Remember that for 8 years NC functioned OK without a governor. In a December 30, 2008 article Scott Mooneyham  wrote "...the revelations furthered criticism that Easley had too often been an absentee governor."

And Who Would Regulate the Regulators?

John Stossel has this piece explaining why more regulation is not the answer to the Bernard Madoff case (this argument applies, of course, pretty much to government regulation of any voluntary behavior).

The $50-billion investment scam allegedly pulled off by Wall Street insider Bernard Madoff has ignited predictable calls for more regulation.

The "massive fraud ... was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball," said President-elect Obama.

Notice the disconnect. Regulation failed, so we need more regulation. I see it differently. Regulation failed, so let's try free markets. That would be a change.

Of course, when a regulatory agency fails, the usual response is to make it bigger, not abolish it. Economist Robert Murphy notes, "In the private sector, when a firm fails, it ceases operations. The opposite happens in government. There is literally nothing a government agency could do that would make the talking heads on the Sunday shows ask, 'Should we just abolish this agency? Is it doing more harm than good?'

Yet another instance demonstrating how government growth is inevitable. When something fails, it is made bigger. By that criteria, we can reasonably conclude that there's been a lot of government failure in the last few generations.

So you think there is no waste in NC state spending?

If you believe that, I have a bridge I want to sell you. Don't take my word for it, here are the words of state Senator Tony Rand the Majority Leader of the NC Senate and one of the chief architects of the state budget:

“We’ve thrown money away in the past,” Rand said. “Now, we’re going to make sure we can justify every penny we spend.”

You can read the whole article in the Fayetteville Observer.

If you want to see what to do about the NC budget deficit read the recommendations by Civitas Analyst Brian Balfour. On the right are links to all of his reports.

Don't ever tell me there is no fat or waste in government budgets. This qoute should be etched in stone at the entrance to any building where politicians meet to spend your money!

Why is the Secret Service Poking Around in Beaufort County?

Reports are beginning to trickle out about an incident that occurred on November 20th near the Beaufort County town of Chocowinity.  According to news accounts and the local District Attorney, Seth Edwards, two agents of the U.S. Secret Service were conducting an investigation in the yard of Mrs. Louise Chandler, 78.

What happens when two strangers go poking around an eastern North Carolina widow woman's premises? 

That's right, her son comes to defend his momma, firearm in hand.  Mrs. Chandler was also armed and ready.  The whole thing got sorted out but left a bad taste amongst Beaufort County citizens.

The Secret Service must not have known much about Mrs. Chandler. Turns out, Mrs. Chandler has her own connections to law enforcement.  Her son-in-law is Beaufort County Sheriff Alan Jordan.

Confidential sources have told the Beaufort Observer that the investigation may center around a written threat against Barack Obama.

I am sure there is more to come on this.

Bailouts Don't "Save" Capitalism

In this short essay, Mises reminds us that the defenders of the current bailout-mania who claim such action is necessary to "save" capitalism couldn't be more wrong:

"The entrepreneurial function, the striving of entrepreneurs after profits, is the driving power in the market economy. Profit and loss are the devices by means of which the consumers exercise their supremacy on the market. The behavior of the consumers makes profits and losses appear and thereby shifts ownership of the means of production from the hands of the less efficient into those of the more efficient."

In other words, when the government subsidizes unprofitable companies (ie. failing banks and auto industry) they are propping up organizations that failed to serve society (consumers) in an efficient manner. This serves to shift power over the market out of the hands of the consumers and into the hands of the political elite. Moreover, these "zombie" corporations tie up scarce resources that could be employed in a more productive manner elsewhere.

Bailing out failing companies - even in the short run - doesn't "save" capitalism, it destroys the foundation upon which it is built (consumers and producers freely engaging in transactions with minimal interference in their decisions by the state). Entrepreneurial decision-making is further distorted by the government's tacit guarantee that if your company fails on a grand enough scale you too will be bailed out by taxpayers.

There is No Such Thing as Price Gouging

Roy Cooper should go the way of Mike Nifong for this.

1. It's not the government's gas station. Station owners should be able to charge anything they want.

2. Price reflects supply and demand. If the station owners kept the prices artificially low, they would have run out of gas more quickly. (This is, in fact, what happened under N.C.'s stupid "gouging" laws.)

3. If there had been cheaper alternatives nearby, then the price would have been wrong. That's what competition is.

4. Roy Cooper is trying to make his career on a couple of gas station owners who were trying rationally to determine an optimum gas price during a shortage.

5. Gas station owners worried about further shortages are acting reasonably in raising prices. Some gas is better than no gas. No gas, no customers. No customers, no business.

The Attorney General's office should be ashamed. They are acting as thieves on behalf of customers with silly, populist ideas on the way economics and the world works.
-Max Borders