April 27, 2013 § Leave a Comment
This video comes from an April 22 address given by Senator Mike Lee, of Utah, at the Heritage Foundation. At nearly 24 minutes, it is pretty long, and he spends most of the time looking at his podium. However, the content of the speech provides one of the best expressions of the conservative cause that I’ve ever seen. Whatever your political position, this is worth your time. I’ve provided the text for convenience.
Thank you very much, Matt.
I also of course want to offer my best wishes to you all as the Heritage Foundation embarks on an exciting new era. And I also just want to make clear that when I spent my first year in the Senate joking that Jim DeMint should run for president… this isn’t what I had in mind.
You know, the thing that makes Jim DeMint a great leader is the same thing that has always made people like Matt Spaulding and the Heritage Foundation itself so valuable. That is, your shared insistence on making the positive case for conservatism: what conservatives are for.
In Washington, it is common for both parties to succumb to easy negativity. Republicans and Democrats stand opposed to each other, obviously, and outspoken partisanship gets the headlines. This negativity is unappealing on both sides. That helps explain why the federal government is increasingly held in such low regard by the American people.
But for the Left, the defensive crouch at least makes sense. Liberalism’s main purpose today is to defend its past gains from conservative reform. But negativity on the Right, to my mind, makes no sense at all.
The Left has created this false narrative that liberals are for things, and conservatives are againstthings. When we concede this narrative, even just implicitly, we concede the debate… before it even begins. And yet too many of us – elected conservatives especially – do it anyway. We take the bait. A liberal proposes an idea, we explain why it won’t work, and we think we’ve won the debate. But even if we do, we reinforce that false narrative… winning battles while losing the war.
This must be frustrating to the scholars of the Heritage Foundation, who work every day producing new ideas for conservatives to be for. But it should be even more frustrating to the conservatives around the country that we elected conservatives all serve. After all, they know what they’re for: why don’t we? Perhaps it’s because it’s so easy in Washington to forget.
In Washington, we debate public policy so persistently that we can lose sight of the fact that policies are means, not ends. We say we are for lower taxes, or less regulation, or spending restraint. But those are just policies we advocate. They’re not what we’re really for. What we’re really for are the good things those policies will yield to the American people.
What we’re really for is the kind of society those policies would allow the American people to create, together. Together. If there is one idea too often missing from our debate today that’s it: together.
In the last few years, we conservatives seem to have abandoned words like “together,” “compassion,” and “community”… as if their only possible meanings were as a secret code for statism. This is a mistake. Collective action doesn’t only – or even usually - mean government action.
Conservatives cannot surrender the idea of community to the Left, when it is the vitality of ourcommunities upon which our entire philosophy depends. Nor can we allow one politician’s occasional conflation of “compassion” and “bigger government” to discourage us from emphasizing the moral core of our worldview.
Conservatism is ultimately not about the bills we want to pass, but the nation we want to be. If conservatives want the American people to support our agenda for the government, we have to do a better job of showing them our vision for society. And re-connecting our agenda to it.
We need to remind the American people – and perhaps, too, the Republican Party itself – that the true and proper end of political subsidiarity is social solidarity.
Ours has never been a vision of isolated, atomized loners. It is a vision of husbands and wives; parents and children; neighbors and neighborhoods; volunteers and congregations; bosses and employees; businesses and customers; clubs, teams, groups, associations… and friends.
The essence of human freedom, of civilization itself, is cooperation. This is something conservatives should celebrate. It’s what conservatism is all about. Freedom doesn’t mean “you’re on your own.” It means “we’re all in this together.”
Our vision of American freedom is of two separate but mutually reinforcing institutions: a free enterprise economy and a voluntary civil society. History has shown both of these organic systems to be extremely efficient at delivering goods and services. But these two systems are not good because they work. They work because they are good.
Together, they work for everyone because they impel everyone… to work together. They harness individuals’ self-interest to the common good of the community, and ultimately the nation. They work because in a free market economy and voluntary civil society, whatever your career or your cause, your success depends on your service. The only way to look out for yourself is to look out for those around you. The only way to get ahead is to help other people do the same.
What, exactly, are all those supposedly cut-throat, exploitive businessmen and women competing for? To figure out the best way to help the most people. That’s what the free market does. It rewards people for putting their God-given talents and their own exertions in the service of their neighbors. Whatever money they earn is the wealth they create, value they add to other people’s lives.
No matter who you are or what you’re after, the first question anyone in a free market must ask him or herself is: how can I help? What problems need to be solved? What can I do to improve other people’s lives?
The free market does not allow anyone to take; it impels everyone to give.
The same process works in our voluntary civil society. Conservatives’ commitment to civil society begins, of course, with the family, and the paramount, indispensable institution of marriage. But it doesn’t end there. Just as individuals depend on free enterprise to protect them from economic oppression, familiesdepend on mediating institutions to protect them from social isolation.
That is where the social entrepreneurs of our civil society come in. Just like for-profit businesses, non-profit religious, civic, cultural, and charitable institutions also succeed only to the extent that they serve the needs of the community around them.
Forced to compete for voluntary donations, the most successful mediating institutions in a free civil society are at least as innovative and efficient as profitable companies. If someone wants to make the world a better place, a free civil society requires that he or she do it well.
Social entrepreneurs know that only the best soup kitchens, the best community theater companies, and the best youth soccer leagues – and for that matter, the best conservative think tanks – will survive.
So they serve. They serve their donors by spending their resources wisely. They serve their communities by making them better places to live. And they serve their beneficiaries, by meeting needs together better than they can meet them alone.
Freedom doesn’t divide us. Big government does. It’s big government that turns citizens into supplicants, capitalists into cronies, and cooperative communities into competing special interests.
Freedom, by contrast, unites us. It pulls us together, and aligns our interests. It draws us out of ourselves and into the lives of our friends, neighbors, and even perfect strangers. It draws us upward, toward the best version of ourselves.
The free market and civil society are not things more Americans need protection from. They’re things more Americans need access to.
Liberals scoff at all this. They attack free enterprise as a failed theory that privileges the rich, exploits the poor, and threatens the middle class.
But our own history proves the opposite. Free enterprise is the only economic system that does not privilege the rich. Instead it incentivizes them put their wealth to productive use serving other people… or eventually lose it all.
Free enterprise is the greatest weapon against poverty ever conceived by man. If the free market exploits the poor, how do liberals explain how the richest nation in human history mostly descends from immigrants who originally came here with nothing?
Nor does free enterprise threaten the middle class. Free enterprise is what created the middle class in the first place. The free market created the wealth that liberated millions of American families from subsistence farming, opening up opportunities for the pursuit of happiness never known before or since in government-directed economies.
Progressives are equally dismissive of our voluntary civil society. They simply do not trust free individuals and organic communities to look out for each other, or solve problems without supervision.
They think only government – only they – possess the moral enlightenment to do that. To be blunt, elite progressives in Washington don’t really believe in communities at all. No, they believein community organizers. Self-anointed strangers, preferably ones with Ivy League degrees, fashionable ideological grievances, and a political agenda to redress those grievances. For progressives believe the only valid purpose of “community” is to accomplish the agenda of the state.
But we know from our own lives that the true purpose of our communities is instead to accomplisheverything else. To enliven our days. To ennoble our children. To strengthen our families. To unite our neighborhoods. To pursue our happiness, and protect our freedom to do so.
This vision of America conservatives seek is not an Ayn Rand novel. It’s a Norman Rockwell painting, or a Frank Capra movie: a society of “plain, ordinary kindness, and a little looking out for the other fellow, too.”
The great obstacle to realizing this vision today is government dysfunction. This is where our vision must inform our agenda. What reforms will make it easier for entrepreneurs to start new businesses? For young couples to get married and start new families? And for individuals everywhere to come together to bring to life flourishing new partnerships and communities?
What should government do – and just as important, not do – to allow the free market to create new economic opportunity and to allow civil society to create new social capital? We conservatives are not against government. The free market and civil society depend on a just, transparent, and accountable government to enforce the rule of law.
What we are against are two pervasive problems that grow on government like mold on perfectly good bread: corruption and inefficiency. It is government corruption and inefficiency that today stand between the American people and the economy and society they deserve.
To combat those pathologies, a new conservative reform agenda should center around three basic principles: equality, diversity, and sustainability.
The first and most important of these principles is equality. The only way for the free market and civil society to function… to tie personal success to interpersonal service… to align the interests of the strong and the weak… is to have everyone play by the same rules.
Defying this principle is how our government has always corrupted itself, our free market, and our civil society. In the past, the problem was political discrimination that held the dis-connected down. Today, government’s specialty is dispensing political privileges to prop the well-connected up.
In either case, the corruption is the same: official inequality … twisting the law to deem some people “more equal than others”… making it harder for some to succeed even when they serve, and harder for others to fail even when they don’t. And so we have corporate welfare: big businesses receiving direct and indirect subsidies that smaller companies don’t. We have un-civil society: politicians funding large, well-connected non-profit institutions based on political favoritism rather than merit.
We have venture SOCIALISM: politicians funneling taxpayer money to politically correct businesses that cannot attract real investors. We have regulatory capture: industry leaders influencing the rules governing their sectors to protect their interests and hamstringing innovative challengers.
The first step in a true conservative reform agenda must be to end this kind of preferential policymaking. Beyond simply being the right thing to do, it is a pre-requisite for earning the moral authority and political credibility to do anything else.
Why should the American people trust our ideas about middle-class entitlements… when we’re still propping up big banks? Why should they trust us to fix the tax code while we use their tax dollars to create artificial markets for uncompetitive industries? Why should they trust our vision of a free civil society when we give special privileges to supposed non-profits like Planned Parenthood, public broadcasting, agricultural check-off programs, and the Export-Import Bank?
And perhaps most important, why should Americans trust us at all, when too often, we don’t really trust them? When we vote for major legislation… negotiated in secret… without debating it… without evenreading it… deliberately excluding the American people from their own government?
To conservatives, equality needs to mean equality for everyone.
The second principle to guide our agenda is diversity. Or, as you might have heard it called elsewhere: “federalism.” The biggest reason the federal government makes too many mistakes is that it makes too many decisions. Most of these are decisions the federal government doesn’t have to make – and therefore shouldn’t.
Every state in the union has a functioning, constitutional government. And just as important, each state has a unique political and cultural history, with unique traditions, values, and priorities.
Progressives today are fundamentally intolerant of this diversity. They insist on imposing their values on everyone. To them, the fifty states are just another so-called “community” to be “organized,” brought to heel by their betters in Washington.
This flies in the face of the Founders and the Constitution, of course. But it also flies in the face of common sense and experience. The usurpation of state authority is why our national politics is so dysfunctional and rancorous. We expect one institution – the federal government – to set policies that govern the lives of 300 million people, spread across a continent. Of course it’s going to get most of it wrong.
That’s why successful organizations in the free market and civil society are moving in the opposite direction. While government consolidates, businesses delegate and decentralize. While Washington insists it knows everything, effective organizations increasingly rely on diffuse social networks and customizable problem solving.
We should not be surprised that as Washington has assumed greater control over transportation, education, labor, welfare, health care, home mortgage lending, and so much else… all of those increasingly centralized systems are failing.
Conservatives should seize this opportunity not to impose our ideas on these systems, but to crowd-source the solutions to the states. Let the unique perspectives and values of each state craft its own policies, and see what works and what doesn’t.
If Vermont’s pursuit of happiness leads it to want more government, and Utah’s less, who are politicians from the other 48 states to tell them they can’t have it? Would we tolerate this kind of official intolerance in any other part of American life?
A Pew study just last week found that Americans trust their state governments twice as much as the federal government, and their local governments even more. This shouldn’t be a surprise – it should be a hint. State and local governments are more responsive, representative, and accountable than Washington, D.C. It’s time to make them more powerful, too.
In the past, conservatives given federal power have been tempted to overuse it. We must resist this temptation. If we want to be a diverse movement, we must be a tolerant movement.
The price of allowing conservative states to be conservative is allowing liberal states to be liberal. Call it subsidiarity. Call it federalism. Call it constitutionalism. But we must make this fundamental principle of pluralistic diversity a pillar of our agenda.
And that brings us to our third guiding principle.
Once we eliminate policy privilege and restore policy diversity, we can start ensuring policy sustainability. Once the federal government stops doing things it shouldn’t, it can start doing the things it should, better.
That means national defense and intelligence, federal law enforcement and the courts, immigration, intellectual property, and even the senior entitlement programs whose fiscal outlook threatens our future solvency and very survival.
Once we clear unessential policies from the books, federal politicians will no longer be able to hide: from the public, or their constitutional responsibilities. Congress will be forced to work together to reform the problems government has created in our health care system.
We can fundamentally reform and modernize our regulatory system. We will be forced to rescue our senior entitlement programs from bankruptcy. And we can reform our tax system to eliminate the corporate code’s bias in favor of big businesses over small businesses… and the individual code’s bias against saving, investing, and especially against parents, our ultimate investor class.
That is how we turn the federal government’s unsustainable liabilities into sustainable assets.
The bottom line of all of this is that conservatives in that building need to start doing what conservatives in this building already do: think long and hard about what we believe, why we believe it, and most of all, remember to put first things first.
For conservatives, the first thing is not our agenda of political subsidiarity – it’s our vision of social solidarity. It is a vision of society as an interwoven and interdependent network of individuals, families, communities, businesses, churches, formal and informal groups working together to meet each other’s needs and enrich each other’s lives.
It is of a free market economy that grants everyone a “fair chance and an unfettered start in the race of life.” It is of a voluntary civil society that strengthens our communities, protects the vulnerable, and minds the gaps to make sure no one gets left behind. And it is of a just, tolerant, and sustainable federal government that protects and complements free enterprise and civil society, rather than presuming to replace them.
This vision will not realize itself. The Left, the inertia of the status quo, and the entire economy of this city stand arrayed against it. Realizing it will sometimes require conservatives to take on entrenched interests, pet policies, and political third-rails. Many of these will be interests traditionally aligned with – and financially generous to – the establishments of both parties.
And sometimes, it will require us to stand up for those no one else will: the unborn child in the womb, the poor student in the failing school, the reformed father languishing in prison, the single mom trapped in poverty, and the splintering neighborhoods that desperately need them all.
But if we believe this vision is worth the American people being for, it’s worth elected conservatives fighting for. What we are fighting for is not just individual freedom, but the strong, vibrant communities free individuals form. The freedom to earn a good living, and build a good life: that is what conservatives are for.
Thank you very much.
April 5, 2013 § Leave a Comment
In case you missed it, read my post at Values and Capitalism on 3D printing HERE. Moral of the story: creation always outpaces consumption. Hollywood commonly depicts humanity as a virus that constantly feeds on resources until they are used up. People say we must cut back in order to survive. It’s not a new idea, but it is a debunked one. We are limited only by our lack of imagination and faith in the creative power of human beings.
January 29, 2013 § 1 Comment
Co-Founder and Co-CEO of Whole Foods, John Mackey, wrote an excellent book on what he calls “Conscious Capitalism.” I wrote up a book review at ValuesAndCapitalism.com, which received notice by The Mercatus Center, the Marketplace Institute, and The Transom, among others. Go read the review here. Then buy the book.
September 26, 2012 § Leave a Comment
One of president Obama’s favorite rhetorical tools is to use the term “investment” when discussing his economic philosophy. Common examples include “infrastructure, education, green jobs and basic research.” He calls these “investments” as he makes the case for more government spending (aka higher taxes and bigger government). Mr. President, I don’t think that word means what you think it means.
“Investment” without a greater return is just an expense. Pumping $500 million into a solar power company like Solyndra is not an investment if the company goes bankrupt. Billions spent on “Cash for Clunkers” is not an investment if it takes money from the private sector, turns thousands of decent used cars into scrap metal, then helps people buy new cars that have to be subsidized in order to make them cost-effective in the first place. I could go on and on.
Government spending is ineffective for a very simple reason: it is easy to waste other people’s money. The private sector is much better at putting money to work because of the reverse: investors demand results if they are going to put their money on the line. Those results (returns) represent added value, and multiplied a million times over we get economic growth. And Romney gets this.
Mitt Romney is an investor in the true sense. It was once his vocation, but today he hires experts to manage his personal investment portfolio. Romney’s 2011 tax forms—released Friday—show that the vast majority of his annual income is based on investment returns. These “capital gains” are taxed at a lower rate than regular income—maximum 15 percent for long-term capital gains—because the government has already taxed corporations that gain. Because of this redundancy, many countries have no capital gains taxes at all.
Romney’s tax report included the following details:
- He paid $1.94 million to the government in 2011 (14.1% of income)
- He gave over $4 million to charity (almost 30% of income)
- He has faithfully paid all taxes legally required for at least the last 20 years
- His average tax rate was 20% over that 20 year period
- He claimed fewer deductions than he could have in 2011, therefore paying more than legally required
Looking at these numbers, it is hard not to conclude that Mitt Romney, though very wealthy, is a law-abiding and quite generous individual. But somehow the media flipped this into something negative. They emphasize his large income, and the fact that he reduced his claimed deductions in order to stay consistent with previous statements about never paying less than 13 percent.
If the news media were objective, they would have spent their time explaining why Mitt pays such a low rate, rather than criticize him for it. They’d show that his income is fair, his taxes are too high, and his charitable giving is substantial. But this would run against the narrative that the Obama campaign and many in the media have built up about Romney. It would suggest that they have been dishonest in painting him as a greedy, out of touch Wall Street mogul that doesn’t care about the plebeians.
Romney is a very successful businessman, investor and governor who has amassed enormous wealth due to his ability to bring real value to others. The only thing he can be faulted for is being a stiff speaker, and not knowing how to play the media’s games.
Obama hardly has a case for his reelection, but that doesn’t seem to have mattered. He is a master campaigner. If Obama wins this election, he will do so on the basis of illusion and class resentment. It is bad enough that this could determine an election, but my real concern is what it says about our culture. If we no longer understand how to grow our economy, and how to effectively invest our resources; if we look down upon business and wealth, while praising Hollywood and hip-hop stars; if we vote on the basis of rhetoric instead of principle, we are doomed. Democracy has given history its best, and failed.
April 12, 2012 § Leave a Comment
A discussion has been ongoing at Values and Capitalism over the relationship between Christianity and libertarianism. Does the libertarian emphasis on individualism and license jive with Christian values of brotherhood and morality? And does conservatism offer a different answer? This morning’s post examines these questions and more >> click here to read the blog.
April 3, 2012 § Leave a Comment
Too often we pay critical attention to national policy debates and miss the ones going on under our noses. Many Houstonians are unaware that on March 20, the City Council considered and thankfully postponed new regulations on feeding the homeless which would have made it much more difficult for local charities and generous individuals to meet the needs of the city’s poor. Community members pushed back and a revised version of the ordinance will be considered today, April 3—more on that in a moment.
It began the same way as most other regulations: government declares an obligation to protect and provide for citizens at all cost and proposes new legislation to better manage an otherwise “uncoordinated” and “unjust” private sector. After the storm clears we are with a little less freedom, government has a little more power, and those who need help get a lot less of it.
The initial regulation required any person or organization that wants to feed “those in need” at an off-property location to register with the City and get approval from a health officer. Furthermore, in order to retain a permit they would have to comply with a new plethora of regulations, the breaking of which could cost $50 to $2,000 per day. Here is a sampling of the regulations for anyone engaging in “charitable feeding activities”:
- Get the location approved by a health officer on the basis of stringent personnel, equipment, facility and procedural standards, as well as whether or not the location “is consistent with the need to provide such service in and meets the needs of the adjacent community”
- Involve at least one person who is certified through a city-sponsored food training class, and one person who has a valid food service manager’s certification
- Avoid preparing or storing food in a private residence
- Throw away all food that has not been temperature controlled for four or more hours
- Provide a hand-washing facility with free flowing water and soap (if serving non-packaged food)
- Collect all wastewater from washing hands and equipment into an approved container until properly disposed of in a manner that is consistent with federal, state and local regulations
- Keep the feeding area clean and litter-free
Some may read this list and think some of it is pretty reasonable. After all, it is mostly about basic safety standards, and what is the government for if not to protect innocent citizens? But we have to evaluate our options and think through the unintended consequences of these requirements.
THE LIKELY EFFECTS
Under these rules, it would take much more time, resources and money to give away food. People would have to plan longer in advance, find suitable locations, get them approved, make sure they have all the right equipment, find certified food servers and jump through numerous hoops to make sure the “I”s are dotted and the “T”s are crossed. Such inflexible top-down restrictions would make it difficult for all but the largest and most organized charities to feed the poor. Mayor Parker is worried about sanitation, but are the homeless more concerned about getting ill than going hungry? The bigger question: should they be allowed to evaluate risks and make that decision themselves?
“Are the homeless more concerned about getting ill than going hungry? The bigger question: should they be allowed to evaluate risks and make that decision themselves?”
She is also worried about waste, though these standards would result in far more good food being tossed into the trash. Those party leftovers that no one wants to take home… don’t even think about doing something as unlawful as giving them to a homeless person. This was one of the more egregious aspects of the ordinance, which has now been addressed. The revised ordinance states that those who are feeding 5 or fewer people are excluded, and the regulations are now essentially voluntary.
However, the law may still be detrimental to feeding the needy in Houston. One piece of the legislation that is still fully intact is the requirement than any person or organization engaging in charitable feeding beyond their own property must acquire written permission to do so. At first glance, this seems sensible—people shouldn’t be setting up operations on someone else’s property without approval. But to extract the potential problems, we should look at how this plays out with the two general classifications of property: public and private.
People are able to do anything they want on their own property, provided it does not conflict with other ordinances, but we do not have rights to the private property of others. I have no problem with protecting the rights of residential and commercial property owners. Yet, I am not certain that acquiring written permission is necessary—we already have statutes to protect private property and trespassers can be prosecuted in case of a problem. By adding a requirement for specific written permission, I fear that this just adds needless hassles and puts well-meaning citizens at risk of expensive fines. It will discourage people from giving out food at all.
Public property is a trickier animal, and the one that gives me the most concern. Some opponents have argued that we should be able to do what we want on public property, but that is nonsensical. Public property belongs—in theory—to all of us, but we appoint public officials to manage it. You cannot walk into the White House and make yourself at home because your taxes pay for it. The City Council has a right to say what can and cannot be done on public streets, parks, et cetera.
My concern stems from the “written permission” clause. If I wanted to take food downtown, or to a public park—where the homeless are—I have to first seek written permission. That causes a problem itself, but the bigger issue is what the City will require of me before they are willing to grant such permission. If they intend to enforce the standards listed for “recognized” food providers, it will be difficult for anyone other than large, well-funded and well-organized groups to meet those standards.
Here, we have moved from a question of “rights” to a question of “wisdom.” Yes, it is perfectly within the rights of the City Council to regulate what happens on public land, but by forcing charitable individuals and organizations to accommodate the new ordinance is going to result in a dramatic decrease in this kind of charitable activity. The community still has good reason to push back against this move.
SAME PROBLEMS, DIFFERENT ISSUES
Though I am glad to see groups from across the ideological and religious spectrum coming together against this ordinance, I wish that the same views would be applied to things such as healthcare, education and energy. In a sense they are vastly different issues. These are goods that are sold as commodities, while this regulation is about charity. But though the fuel may be different, the engines run the same way.
Ultimately, this is about getting goods to the people who want them in the most efficient and effective way possible. Whether or not payment is involved is only a matter of incentive. Whether we are trying to reach the hungry, the uneducated, the sick or the freezing, regulations frequently get in the way of delivering the goods. For large businesses, burdensome regulations result in layoffs, price hikes, wage cuts and slower growth. But small businesses—some of which are barely getting off the ground—struggle even to survive. This means fewer opportunities for entrepreneurs and low-wage workers, and less competition in the marketplace.
Flexibility, fewer barriers, low costs and high rewards are the ingredients to a booming business (or non-profit). Most regulations counter all of these. Sometimes regulations are needed, and can even help smooth out barriers and increase overall productivity. But Annise Parker’s proposal only makes private activity more difficult and, like so many welfare regulations, transfers control of charitable decisions from the individual to the political.
I fear that, if this passes, people will begin looking to large organizations to handle these charitable activities. Perhaps they will eventually look to the city itself. Taking care of those in need is a very personal right and responsibility that should never be subsumed by political officers. Let friends and neighbors teach their children, let churches build hospitals, let companies explore and innovate, and let us be Good Samaritans in our own way.
The City Council will be considering the revised ordinance on April 3, 2012. Individuals who would like to address the Council during this meeting should call 832-393-1100 and ask to speak about the amendment to Chapter 20.
November 15, 2011 § Leave a Comment
October 20, 2011 § Leave a Comment
In my latest post for Values & Capitalism, I offer my take on the Occupy [insert location] protests.
There is some legitimacy in the anger of the protestors. Recent years seem to have lacked ethical leadership in both the private and public sector, leading to a wrecked economy and fewer opportunities for the average American. Conservatives would do well to be outspoken against dishonest and unjust business practices, and serious about accountability and social responsibility. The “Occupiers” miss the mark, however, when they their solutions involve greater government oversight and wealth redistribution.
If what OWS wants is more opportunity for the 99%, the savior is the enemy—free markets and smaller government is the only way.
October 3, 2011 § 4 Comments
Several months ago I recall getting a letter from my bank, informing me that as a result of the Durbin Amendment to the “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010“ passed last year by the Democrat “supermajority,” I would no longer be getting rewards points for using my debit card. I looked up the amendment—which limits how much banks can charge other companies for debit transactions—and said to myself, “Wow, that’s really going to mess up their revenue system… I wonder what they’ll start charging for to make up for it.” When a bill has something like “consumer protection” in the name, duck.
The signs of change are surfacing: Bank of America will now be charging customers for using their debit card. Actually, the signs have been evident for months in the poor performance of big bank stocks. No one wants to invest in companies that have their revenue streams cut off by a cantankerous Illinois Senator. The new fees are causing customers to flee and protestors to get out their craft supplies.
Yesterday I watched both CNN and FOX News cover the story. The CNN coverage made a very brief mention of the regulation, which can be paraphrased as “the government isn’t letting banks ripoff merchants anymore, so their going to rip you off instead.” The FOX coverage went into more detail, and at fault in this version was the government, not B of A.
This chain of events offers a great example of policymaking in America today. Let’s examine the steps:
First, the housing bubble burst, and because it was tied to all sorts of other investments, the whole market crashed.
Next, a debate sprung out across the country over the cause of the collapse—whether it was greedy bankers, decades of poor housing legislation, or both. The media pushed more of the second explanation, and democrats in Congress rushed to save the world from corporate greed. Dick Durbin tacks on what he believes is a fair restriction on a certain bank fee, which has nothing to do with the Dodd-Frank legislation.
Then, financial markets freeze up, the economy slows back down, and banks start charging customers for things that were previously free.
Now, consumers are angry and sending in complaint letters to… the banks.
I can’t help but see government regulations as the root of the problem here, but most people are blaming the very companies that are trying to take care of their customers. And YES, that is what they do… that is what all successful companies do in order to stay in business. That’s common sense, though it would be easy to forget when listening to the president explain his agenda by making villains of anyone with authority in business.
So who do I blame in this? I blame the sad state of economic education in America. Too many people lack a core understanding of the relationship between producers and consumers, and it’s the fault of both teachers and parents. I don’t blame politicians—they’re just doing what their constituents elected them for. And I certainly don’t blame businesses, who require profit to grow. The sad thing is that unintended consequences like this are abundant in our society, and they are entirely avoidable.
Americans need a conversation on economic decision-making, from the household to the board room to the legislature. Hopefully, that’s exactly what we’ve headed into, which is why the GOP presidential nominee absolutely must be someone who can articulate the principles of a free economy and the damage done by an overreaching government.
August 26, 2011 § 1 Comment
Which is better at serving the poor: food stamps or corporate jets? Read my take at Common Sense Concept’s Two Cents blog. [http://www.commonsenseconcept.com/extravagance-benevolence/]
Also, check out the video below, which discusses the findings of a recent study by the Heritage Foundation (I mention it in the post).