Quote of the day: value vs. fear

"Economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureucrat's tool is fear." ~ Ayn Rand

Where's the beer?

Anheuser-Busch objected to new bill .

Should brewers be able to purchase wholesale distributors in Ohio?

Shouldn't a free market allow anyone to purchase a distributorship in order to further distribute their products, especially beer?

Well, Ohio says no, according to a new law passed in a matter of hours two weeks ago.

Senate Bill 48 was introduced Feb. 20th and passed by the Senate on March 20th. It was sent to the House on March 21st.

On April 17th, the bill received a single hearing, a substitute bill was introduced and approved by the committee, then approved unanimously by the House and the Senate concurred. It was sent to the Governor on April 23rd.

On first examination, it looks like a good bill in that it sets up a two-tiered liquor licensing system that allows smaller brewers (making less than 31 million gallons a year) to sell directly to retail markets and bypass the wholesale distributors in the state.

It does a number of others things, but one aspect generated some controversy: it prohibits large brewers from owning a distributor.

And that was a problem for many, but especially Anheuser-Busch InBev which has numerous options to purchase, or determine the purchaser, of distributorships throughout the state.

So they objected to the terms of the bill - and the rapid process with which it was passed.

According to Rep. Jim Buchy, R-Greenville, the bill’s floor manager, "We want to maintain a good system that has worked so well so we don’t get into a noncompetitive situation. That’s what could happen here," he told the Columbus Dispatch.

Anheuser-Busch said they were not given any chance to comment upon the implications of the provision.

Interestingly, the Ohio Wholesale Wine and Beer Association, which is the direct beneficiary of the provision, has donated over $600,000 to various legislative and state campaigns in the past several years.

Anheuser-Busch's North American president, Luiz Edmond, met with Gov. John Kasich to see if he would veto the bill.

“This thing passed the House and the Senate unanimously,” Kasich said. “I’m not going to just veto something that has, basically, unanimous support across the board. I don’t see why I would do that," he told the Dispatch.

Scott Corbitt, Region Director for State Affairs at Anheuser-Busch, issued the following statement:

We have shared our concerns with legislators and Governor Kasich regarding the lack of transparency in the legislative process and that the legislation’s restrictions on competition and constraints on the free market will ultimately harm consumer choice. Positive assurances were given to us by policymakers to address the issues that could significantly impact our investments in the state. We are working to identify a solution that maintains consumer choice and the free market principles that make Ohio a great state to do business.

The Governor has until May 4th to sign or veto the bill, after which it will go into effect with or without his action.

Quotes of the Day - Milton Friedman

The following are quotes from Milton Friedman (1912-2006) Nobel Prize-winning economist:

"A major source of objection to a free economy is precisely that it ... gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself." 

"The proper role of government is exactly what John Stuart Mill said in the middle of the 19th century in On Liberty. The proper role of government is to prevent other people from harming an individual. Government, he said, never has any right to interfere with an individual for that individual's own good.  The case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from overeating. We all know that overeating causes more deaths than drugs do. If it's in principle OK for the government to say you must not consume drugs because they'll do you harm, why isn't it all right to say you must not eat too much because you'll do harm? Why isn't it all right to say you must not try to go in for skydiving because you're likely to die? Why isn't it all right to say, "Oh, skiing, that's no good, that's a very dangerous sport, you'll hurt yourself"? Where do you draw the line?"

"One of the great mistakes is to judge policies and programs by their intentions rather than their results."

"Spending by government currently amounts to about 45 percent of national income. By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist."   (We Have Socialism, Q.E.D. in The New York Times 31 December 1989)

  

Guest Post: Investment Best Left to Private Sector, Not Government

The following is a guest post by William O’Keefe, chief executive officer of the George C. Marshall Institute, and president of Solutions Consulting Inc.

Investment Best Left to Private Sector, Not Government

Al Gore’s self-aggrandizing claim that he “took the initiative in creating the Internet” has haunted him since he first uttered it during a 1999 interview. Newt Gingrich has taken a good deal of flack since claiming “helped lead the effort to defeat communism” late last year. It makes sense. In a society where people expect to be rewarded for their hard work and good ideas, the public generally abhors those who take credit where it’s not due. Self-promotion is what hucksters do.

For those reasons and others, politicians—especially those seeking reelection—should avoid engaging in unwarranted swagger. President Obama has not.

In his State of the Union address and campaign ads, Obama attempts to credit his administration with the recent boom in U.S. oil and gas production. Yet the facts don’t bear this out.

Obama has been more of an obstacle than an enabler to growth in America’s energy industry: straddling the fence over his support for development, targeting the sector for punitive tax hikes, and failing to issue a single new offshore permit in fiscal year 2011. So what are we to make of the President’s sudden embracing of traditional fuels and the more than 9 million workers whose jobs are supported by this industry? Why, election year politics, of course.

The President has already kicked off his swing state tour, traveling across the U.S. touting the need to create manufacturing jobs throughout 2012. Manufacturing is an important part of the Ohio economy, making this a politically savvy move to ensure his rhetoric resonates in the state. The manufacturing sector is the largest contributor to Ohio GDP at over 17 percent, and employs over 600,000 workers in the state. Nationally, the sector represents 11 percent of GDP.

But has the Obama administration really played the role in boosting manufacturing in the energy industry as he claims? In a word, no.

Private sector engineers invented hydraulic fracturing, the process responsible for the boom we’re witnessing in domestic natural gas production, back in 1947—over a decade before the President was even born. This innovation has enabled U.S. firms to unlock resources never before accessible and invest billions in our economy in the process. Far from encouraging this success, the President has singled out this sector for massive tax hikes—jeopardizing our already shaky position in the global energy market (not one U.S. company is in the top 15 largest energy companies worldwide).

In effect, by increasing taxes on U.S. companies, this desired policy would send more jobs and revenue abroad. This is a far cry from creating needed manufacturing jobs domestically. While domestic employment has been declining during the president’s tenure, employment in the oil industry has grown over 20%.

While gunning for oil and gas, the White House is playing favorites with the renewable lobby. Currently, about $11.3 billion taxpayer dollars are directed toward “green” energy annually. Despite decades of massive subsidization, the industry still accounts for only eight percent of U.S. energy demand. Heavily subsidized failures like the botched $500 million Solyndra loan are just the tip of the iceberg when it comes to government failures at picking winners and losers in the energy sector.

Ohio needs jobs, and that will require a plan to make our state and nation as a whole more attractive to investment and innovation. The President’s continued pursuit of job killing punitive tax hikes on manufacturers puts off investors and is contradictory to his campaign message touting the need for job creation. If Obama is serious about job creation, he must move to leave capital in the hands of proven private sector innovators, and stop trying to increase taxes to fund failed pet projects.

Quotes of the Day - Michigan

From a Wall Street Journal article on the disaster that is Michigan's finances: "Michigan's War on the Middle Class" by William McGurn (emphasis added).

Michigan today is not a struggling state like California or New Jersey or even Wisconsin. It is a basket case, with worse to come if things do not change quickly—especially in the relation of the public to the private sector.

"Many of the protesters seem to think the war is between rich and poor," says Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Michigan-based Mackinac Center. "But the real class war today is between government and the people who pay for it. And the government's been winning."

and this:

For every dreary statistic, Michigan has a real advantage: a large freshwater coastline, a farm sector that could be an even larger export industry, a rising health-care industry, energy reserves waiting to be tapped, and affordable communities. The point here is not that if you build it they will come. The point is if you get off their backs, they will come build it themselves.

David Littmann, an economist and colleague of Mr. LaFaive at Mackinac, says he's deeply skeptical of whether Mr. Snyder's reforms go far enough. But about Michigan's potential he has no doubts, if government would only let the market decide.

"If we created a climate where the risks and rewards were attractive to capital, we'd find entrepreneurs from all over the world finding their way to Michigan," he says. "They in turn would be a catalyst for other industries we can't even imagine now—and the kind of Michigan that could be even more dynamic than it was when the auto industry was at its peak."

If you don't understand the problem, your solutions make things worse

I don't know if you saw this, but if not, you need to! It's a graph comparing the private sector experience of presidential cabinet appointments since 1900 - and it shows that President Barack Obama's cabinet has significantly less business experience than his predecessors.

It's probably no surprise that Republican presidents drew heavily from the private sector, while just under 30% of President John F. Kennedy's cabinet had such experience. But Pres. Obama doesn't even reach 10% - and that lack of experience and understanding of what it takes to create jobs and wealth clearly shows in his policies and actions.

As this post on RedState.com explains:

This ignorance of what drives the private sector was proven by Barack Obama himself this week, at his so-called “Jobs Summit,” where the POTUS stated:

Despite the progress we’ve made, many businesses are still skittish about hiring. Some are still digging themselves out of the losses they incurred over the past year. Many have figured out how to squeeze more productivity out of fewer workers. And that cost-cutting has become embedded in their operations and in their culture. That may result in good profits, but it’s not translating into hiring and so that’s the question that we have to ask ourselves today: How do we get businesses to start hiring again?

Heaven forbid! Productivity? Profits? Does Mr. Obama believe that businesses exist to hire people? I’m sorry, sir, but it is ALL about the profits. Productivity, and in turn, profitability, is improved either by enabling a constant number of people to produce more, or by reducing the number of people and maintaining constant production. New hiring may improve producTION, but not necessarily producTIVITY. Obama’s ideology, like that of his staffies, is disconnected from the realities of a capitalistic economy. And the policies he supports are similarly disconnected.

And now we come to the by-product of the Administration’s disconnect on private sector economics. If the policies of Barack Obama are truly damaging to business, we would expect to see that demonstrated in the marketplace. And indeed we’ve seen it.

The author then details three strikes against the Obama administration, including comments and statements from various CEOs that prove the damage the policies are doing to our job market.

And now the President thinks that the only way to address the economy is to spend our way out of the problem - failing, again, to recognize that government spending is a primary part of the problem and that more spending won't make it better.

But what do you expect from someone who's never had a 'real' job, had to make a payroll, show a profit for shareholders or meet the demands of a market?

We've 'hired' a man to run an organization without acknowledging that he'd never run an organization before - and in fact didn't know how. Now we're dealing with the consequences of putting in charge someone who thinks the economic system which brought us so much prosperity is evil and needs to be destroyed. We should not be surprised that the outcome is less jobs, more government intrusion and control, more taxes for us and the end of our liberty as we know it.

***Side Note: Pres. Obama's statement above reminded me instantly of some students I once met.

As a commissioner, I attended the first and last class in a special program for high school students - students who were having so much trouble that this program was a sort of last resort. In the first class, they were asked why companies exist. Their answers were 'to give back to the community,' 'to give to charity,' and 'to give me a job.'

I was astounded by the basic lack of understanding that a company exists to make a profit for the owner/investors. Of course, these students with this attitude were not going to make good employees and, eventually, get ahead, because they had no understanding of the economic system and how being valuable to the bottom line would advance them.

Fortunately, by the end of the class, these students were highly impressive. They expressed and demonstrated an understanding of the free market system and how they could use that system to better themselves. They were able to greet me professionally and make a very good impression - something they would have thought was ridiculous at the start of the class.

I bring all this up because the problem starts in childhood when we do not teach the basics of how our free market works - and how it can help people achieve their goals.

Perhaps Pres. Obama should take the class.
***

The end of personal responsibility in America - from dependence to bondage

If I 'need' a new furnace, should I be able to go out and get one and then tell the seller that I really can't afford it so he should just give it to me - or not make me go into debt to pay for it?

If I 'need' a car, should I get a new one with state-of-the-art accessories and then tell the dealer that, because I have a low-paying job, I'm entitled to have it for what I can pay, despite the price, and not go into debt for it?

If I fail to convince the suppliers of these products that they should grant them to me based upon my need and not my ability to pay, should I turn to government to force, through law, my 'right' to a new furnace and/or the new car?

Of course not.

But so many people think that other 'services' should be treated this way, especially when it comes to the service of health care. A letter-writer in today's paper has a tragic sob story based upon her experience as a 'medical insurance biller.'

The author somehow believes that because you might 'need' a particular service, it should be provided at no cost - or at whatever cost you can pay - rather than at the cost of producing the product. She also seems to believe that individuals who provide a service should not expect payment for those services simply because the costs are too high for some to afford.

What she doesn't account for is the personal responsibility of the individual receiving such services. She doesn't address the fact that said person may not have pursued a higher paying job by getting more training or education. She doesn't address the fact that said person might have chosen to have children and pay those costs rather than save money for future expenses. She doesn't address whether or not said person has family who can (and probably should) help in such circumstances. She also doesn't address why a person should not be obligated, over time, to pay for services rendered, as if there is something bad about owing a debt to a person who has helped extend your life through the application of their knowledge.

No - she assumes that one individual's 'need' requires another individual's sacrifice - rather than assume a mutually beneficial exchange between the two. Her letter indicates she thinks that because a person cannot afford a product, they 'need,' government to step in and mandate it be provided. Which means she thinks you and I should pay for someone else to have something based upon her concept of what is right. (And she apparently misses the contradiction of why the receiver of services shouldn't have to pay but you and I should, despite our lack of involvement in the transaction.)

And why shouldn't she? Look at what people have come to expect of government - rather than of themselves: food, housing, child care, higher education, bus tokens, cars for transportation, refrigerators, help in finding a job, supplements, pensions (Social Security), and medical care...as well as a host of other things that enshrine in law personal preferences, like preventing your neighbors from planting trees because you don't like the location they pick.

What we are seeing is the end of personal responsibility in America - and with that comes the end of liberty.

We've become a nation where all things are 'rights' and must be granted by government, despite the fact that your 'right' to something necessarily infringes upon my 'right' to keep my own money and not to pay for you to have something - especially when I'm also paying for my 'right' to have the same thing and at the same time.

Everything these days seems to revolve around 'rights talk.' As George Will recently wrote:

If our vocabulary is composed exclusively of references to rights, aka entitlements, we are condemned to endless jostling among elbow-throwing individuals irritably determined to protect, or enlarge, the boundaries of their rights. Among such people, all political discourse tends to be distilled to what Mary Ann Glendon of Harvard Law School calls "rights talk."

Witness the inability of people nowadays to recommend this or that health care policy as merely wise or just. Each proposal must be invested with the dignity of a right. And since not all proposals are compatible, you have not merely differences of opinion but apocalyptic clashes of rights.

Rights talk is inherently aggressive, even imperial; it tends toward moral inflation and militates against accommodation. Rights talkers, with their inner monologues of pre-emptive resentments, work themselves into a simmering state of annoyed vigilance against any limits on their willfulness. To rights talkers, life -- always and everywhere -- is unbearably congested with insufferable people impertinently rights talking, and behaving, the way you and I of course have a real right to.

But this talk of 'rights' is even more insidious.

When everyone has a 'right' to the product of other's labor (and health services are a prime example), there is no private ownership of that labor. It is, at that point, government ownership of that labor - and the means of production, where government dictates what you must provide to others and at what costs and under what conditions. Even if you can choose which doctor to go to, that doctor must follow the government's laws of the exchange of his services for your payment, regardless of what the two of may agree to otherwise. Government's determination of your 'rights' to this type of service means that the doctor's liberty - and yours - no longer exist in the transaction.

That is certainly contrary to what our founders fought for and, in fact, exactly what they fought against in the struggle to form these United States. They firmly rejected the idea of 'rights' granted by governments or kings and embraced the idea that 'rights' are inherent, granted by God. As a result, governments are supposed to guarantee the protection of each person's rights - not create new ones in order to put government in control of their management.

And yet, we find many of our countrymen embracing such concepts and ideas when it comes to what they're 'entitled' to. When government provides, rather than protects, what we've always believed were 'rights granted by our Creator,' we have lost our liberty. And without our liberty, we are reduced to tyranny, with an ever-growing government constantly expanding its ability to determine what is and is not a 'right' and then graciously giving it to us - and, inevitably, taking credit for it during a re-election campaign.

Thankfully, there is also a letter writer (third letter down in the link above) who understands that health care is a benefit - not a right - and urges people to work to attain such benefits. Sadly, though, that opinion is not shared by enough people. It's too easy to allow government to provide, rather than work hard in order to provide for yourself.

And now that we find a majority of Americans receiving rather than contributing to the costs, we are truly at the stage we were warned of:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.

We are, I believe, already fully entrenched in dependence.

So what about bondage and tyranny?

Think about the fact that more of the average American's work effort goes to supporting governments (federal, state, local ... and all the related quasi-governmental agencies or property tax levies) than it does to supporting themselves and their families. I once heard a phrase: there is no greater form of tyranny than when government seizes your funds to pay for items that you would never pay for yourself.

Consider these quotes:

"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." ~ C. S. Lewis

"Government initiatives tend to fail because they lack competitive pricing mechanisms that measure effectiveness and value. This trend is getting worse as more and more authority moves away from local control toward higher levels of central control. Governments based on politically expedient special interest (instead of moral principle) tend to use our money and their version of how people should live, to dictate "feel-good" solutions. The truth is government does not have insider knowledge on what individuals need and how they will respond. The U. S. government has become nothing more than a massive tyranny of good intentions. God gave us freedom to choose. Why does government attempt to do what even God did not?" ~ Wes Alexander

Considering this, can bondage be right around the corner? Or are we already at that stage?

When that bondage arrives, it will not come with pronouncements and chains ... it will come wrapped in the guise of 'safety,' and 'greater good' and 'compassion' or 'saving the planet' or 'for the children' or any number of catch phrases designed to mask what is really happening - that government has become the master and we its slaves.

'No on Issue 5' press conference today

COAST, Coalition Opposed to Additional Spending and Taxes, will be in Toledo this morning for a press conference against Ohio Issue 5, the 'payday lending' law.

Jason Gloyd, chairman of the Cincinnati-based anti-tax group, will be at the Lucas County Courthouse property at 10 a.m. to urge citizens to reject the recently passed law because of the intrusive government intrusion into private lives that it contains.

The current ballot language for Issue 5 reads:

STATE ISSUE 5
Referendum – REFERENDUM ON LEGISLATION MAKING CHANGES TO CHECK CASHING LENDING, SOMETIMES KNOWN AS “PAYDAY LENDING,” FEES, INTEREST RATES AND PRACTICES

Substitute House Bill 545 (H.B. 545), which was passed by the Ohio legislature and signed into law by the Governor, substantially changed the law regulating how certain lenders in Ohio operate. Under the referendum, voters must decide whether Section 3 of H.B. 545 should go into effect.

Section 3 of H.B. 545 deletes the old provisions of the law regulating check cashing enders, sometimes known as “payday lenders,” in favor of the new provisions.

1. If a majority of Ohio voters approve Section 3 of H.B. 545, all short term enders, including check cashing lenders, would be subject to the following imitations:
• The maximum loan amount would be $500;
• Borrowers would have at least 30 days to repay the loan; and
• The maximum interest rate would be 28% annual percentage rate (APR) on all loans.

2. If a majority of Ohio voters reject Section 3 of H.B. 545, check cashing lenders ould be allowed to continue under previous law as follows:
• The maximum loan amount would continue to be $800;
• There would continue to be no minimum repayment period; and
• Check cashing lenders could continue to charge rates and fees, resulting in a total charge for a loan that substantially exceeds an equivalent APR of 28%.

A “YES” vote means you approve of Section 3 of H.B. 545, and want to limit the interest rate for short term loans to 28% APR and change short term lending laws.

A “NO” vote means you disapprove of Section 3 of H.B. 545 and want to permit check cashing lenders to continue to be able to offer short term loans as currently permitted.

A majority “YES” vote is required for Section 3 of H.B. 545 to be approved.

The interest rate that can be charged is the major component of the bill, but there are other provisions in H.B. 545 that give the government intrusive control over aspects of our lives - onerous "big brother" provisions are not even listed as part of the ballot language.

If Issue 5 passes, the state government will create a data base to keep track of who gets payday loans, how much is borrowed and when. Prior to giving out loans, the payday lenders must check the state's database to see if the recipient is 'eligible.'

Yes, that's right - the state gets to say whether or not you can have a loan.

How do they know if you're eligible? According to the law, you can only get four payday loans in a calendar year.

You can have two payday loans within a 90-day period of time, but if you try to get a third loan in that time frame, you are denied, until you take a 'financial literacy class.'

Yep - if you're taking out such loans you obviously need the government to educate your about financial issues...never mind that the individuals most in need of financial education are the very lawmakers who passed this bill.

You also can't get a loan if you already have loan with that lender - or if you have 'more than one outstanding loan,' if you've paid off your loan on the same day you're taking out a new one, or if you're planning to use the loan to pay off another payday loan.

And then the law restricts how much you can borrow:

If the loan would obligate the borrower to repay a total amount of more than $500 to licensees, or indebt the borrower, to licensees, for an amount that is more than 25% of the borrower's gross monthly salary not including bonus, overtime, or other such compensation, based on a payroll verification statement presented by the borrower;

Since when is it the role of the government to track what you borrow, when and how much? Since when is it the role of government to tell you how you can use the money you borrow? Since when is it the role of the government to decide whether or not you need or should take a class in finances? Since when did Ohioans think it was okay to grant government this kind of intrusion into our daily lives?

Even if you think payday lenders should be restricted by state law to certain interest rates, how can you possible approve of giving the government such authority over peoples' lives?

If Issue 5 passes, it will result in a loss of jobs in Ohio, and it's not just the ability to charge a higher interest rates. I don't think any business would approve or support the restrictions placed on the payday lenders when it comes to collecting what they're owed.

The government can charge the payday lenders for accessing the database - a fee that will probably be passed along to the borrowers. so that's another 'tax' on businesses.

Usually, when a business deposits a check and that check bounces, they'll put it through a second time. They may pursue court action, as well. But payday lenders, under this law, cannot do that.

The law prohibits lenders from re-depositing a bounced check unless they first get written permission from the borrower to do so. They also can't bring or threaten to bring court action against the borrower if their payment is refused or returned for insufficient funds. The only way they can pursue such action is if they can prove the borrowed intended to defraud the payday lender by closing their bank account, or giving false bank account information, in order to avoid payment.

If you're a business owner, would you agree to such terms being dictated by the government?

Many loans have pre-payment penalties. Payday lenders, however, would not be able to use such terms. Also, under the new law, they couldn't include a contract provision to automatically deduct funds from your account or bill your credit card for payment on an agreed-upon date. If they violate these restrictions - restrictions other businesses in Ohio are allowed to utilize - they're subject to criminal charges.

Any debt collectors hired to collect unpaid loans also have significant restrictions placed upon them. When people don't pay their bills, they often don't want to be 'found' by debt collectors. So if a collector calls another other than the borrower to gather information, they cannot reveal that they are calling because the borrower owes money.

If someone called my house looking for one of my relatives and wouldn't tell me why they're calling, I wouldn't give out any information - would you????

They also can't communicate by post card or include anything on an envelope that indicates the contents relate to a debt. And if you don't this debt collector to contact you, the law has provisions for that as well:

If a borrower provides written notification, to a licensee or a debt collector, that the borrower refuses to pay a debt or that the borrower wishes the debt collector to cease further communication with the borrower, the act prohibits the debt collector from communicating further with the borrower with respect to the debt, except:

(1) To advise the borrower that the debt collector's further efforts are being terminated;

(2) To notify the borrower that the debt collector or licensee may invoke specified remedies that are ordinarily invoked by such debt collector or licensee; or

(3) Where applicable, to notify the borrower that the debt collector or licensee intends to invoke a specified remedy. If such notice from the borrower is made by mail, notification is complete upon receipt.

Who would accept such a collection contract under these terms and conditions? It almost assures failure in the effort to get the loan repaid.

With such onerous restrictions on borrowers, lenders and the collections, would it make sense for these businesses to continue to operate? Many say no and are planning to close, laying off their employees, if the referendum passes.

Of course, credit unions are probably very happy about this law. Under the terms, they get subsidized by our tax dollars, through a linked deposit program, to give our short-term loans. This is intended to replace the 'option' payday lenders are currently providing, but the terms are not as conducive, requiring a loan that is at least 90 days in length.

This law is anti-business, anti-consumer and 'Orwellian' in its provisions. As I said earlier, even if you agree with the interest rate component, how can you possibly approve of giving the government this kind of control over decisions which should be yours - and yours alone?

We need to vote NO on Issue 5.

The free market works - when it's atually 'free'

From the Foundation for Economic Education's In Brief daily newsletter:

Economic Turmoil Easing
4/25/2008
"Financial markets are starting to function more normally, banks are raising billions of dollars in capital, and the latest economic figures, while weak, aren't much weaker than had been expected. Taken together, these signs of stability make for the calmest economic period the nation has experienced in months." (Washington Post, Friday)

But the politicians haven't yet had a chance to intervene and take the credit!

Quote of the Day

From the Patriot Post:

"I own myself the friend to a very free system of commerce, and hold it as a truth, that commercial shackles are generally unjust, oppressive and impolitic - it is also a truth, that if industry and labour are left to take their own course, they will generally be directed to those objects which are the most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out." ~ James Madison (speech to the Congress, 9 April 1789)

Can't help but wonder what he'd think of today's Congress and the current regulations placed upon all industries that require lawyers and accountants just to figure out...

The President's Health Care Proposal

By now, there's been a lot of discussion about Pres. Bush's proposal to allow a personal tax deduction for health care. But I'd like to ask a few questions:

* How many people with employer-sponsored health insurance actually know how much their employer spends on such coverage?
* How many people with employer-sponsored health insurance have coverage for things they don't need? If you're a young single man, do you really OB/GYN coverage? If you and your spouse are finished having children, do you need maternity, well-baby or child immunization coverage? If you're a healthy individual, do you need prescription coverage?
* If you had to select your coverage and pay for itself, would your employer plan be the one you choose?

In most cases, employers select a plan that meets the needs of most, if not all, their employees. This means that individuals are getting - and paying for - coverage they don't need and probably don't want. And with it being paid for by the employer, few have a good idea of just what such coverage is costing.

The President's proposal is an attempt to put the consumer in charge of selecting and paying for the coverage that fits their needs - with the same tax breaks companies have gotten for the cost. You don't let your employer select your car insurance, homeowners/renters insurance or life insurance, why do you want them to select something much more important like your health insurance?

Most insurance companies offer packages with the biggest difference being amount of deductible, out-of-pocket expenses and networks. A company with a diverse staff likes such packages because it meets their needs. But does it meet your individual needs? If consumers need variety in their packages and they're now in charge of making such choices and paying for them, insurance companies will respond to such demands and the health insurance field will change dramatically - hopefully for the better.

This is point of the proposal - to inject a sense of the free market into the system by allowing the actual consumer of services to select the ones they want and be responsible for paying for them and by allowing the insurance providers to tailor their products to the actual needs of the consumer.

I have no idea if this will work or if the concept will be butchered in Congress or by special interests as the proposal makes its way through the process. But, this is the first time in a long time that anyone has looked at letting the individual be in charge of such decisions - and its certainly worthy of discussion.

UPDATE: I wanted to share a column with you on this subject...Linda Chavez's "How to cure the health insurance crisis."