Tag Archives: War on Commerce

Congressman Waxman (D – CA) sneaks anti-vitamin amendment into Wall Street reform bill

I think this illustrates the advantages of the libertarian (vs. socialist) solution to the problem we generally agree on, that food is often dangerous and unhealthy.

This article demonstrates how the government contributes to the problem. Yes many of my socialist-leaning friends call for increased government involvement to help solve it.

Of all the sneaky tactics practiced in Washington D.C., this recent action by Congressman Henry Waxman (D-CA) is one of the most insidious: While no one was looking, he injected amendment language into the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173) that would expand the powers of the FTC (not the FDA, but the FTC) to terrorize nutritional supplement companies by greatly expanding the power of the FTC to make its own laws that target dietary supplement companies.

This is a little-known secret about the FTC and the nutritional supplements business: The FTC routinely targets nutritional supplement companies that are merely telling the truth about their products. Some companies are threatened by merely linking to published scientific studies about their products.

For example, here’s an important article that describes how to FDA criminally extorts money out of supplement companies: www.naturalnews.com/024567_health_the_FDA_websites.html

The FTC does much the same thing. They target a particular company that’s having success in the natural products marketplace, then they accuse that company of “inferring” that their products have some health benefit. From there, the FTC demands that the company engage in paying a massive fine to the FTC, which the FTC calls “consumer redress” even though none of the money actually goes to the consumers.
(Read more from naturalnews.com)

Feel Sorry for BP?

After the British Petroleum–hired oil rig exploded last week, the environmentalists went nuts yet again, using the occasion to flail a private corporation and wail about the plight of the “ecosystem,” which somehow managed to survive and thrive after the Exxon debacle.

The comparison is complicated by how much worse this event is for BP. Eleven people died. BP market shares have been pummeled. So long as the leak persists, the company loses 5,000–10,000 barrels a day.

BP will be responsible for cleanup costs far exceeding the federal limit of $75 million on liability for damages. The public relations nightmare will last for a decade or more. In the end, the costs could reach $100 billion, nearly wrecking the company and many other businesses.

It should be obvious that BP is by far the leading victim, but I’ve yet to see a single expression of sadness for the company and its losses. Indeed, the words of disgust for BP are beyond belief. The DailyKos sums it up: “BP: Go f*** yourselves.” Obama’s press secretary, Robert Gibbs, said that the government intended to keep “its boot on BP’s neck.”

How about reality? The incident is a tragedy for BP and all the subcontractors involved. It will probably wreck the company, a company that has long provided the fuel that runs our cars, runs our industries, and keeps alive the very body of modern life. The idea that BP should be hated and denounced is preposterous; there is every reason to express great sadness for what has happened.

It is not as if BP profits by oil leaks, or that anyone reveled in the chance to dump its precious oil all over the ocean. BP gains nothing from this. Its own CEO has worked for years to try to prevent precisely this kind of accident from occurring, and done so not out of the desire to comply with regulations, but just because it is good business practice.

In contrast to those who are weeping, we might ask who is happy about the disaster:

1. the environmentalists, with their fear mongering and hatred of modern life, and
2. the government, which treats every capitalist producer as a bird to be plucked.

The environmentalists are thrilled because they get yet another chance to wail and moan about the plight of their beloved marshes and other allegedly sensitive land. The loss of fish and marine life is sad, but it is not as if it will not come back: after the Exxon Valdez disaster, the fishing was better than ever in just one year.

The main advantage to the environmentalists is their propaganda victory in having yet another chance to rail against the evils of oil producers and ocean drilling. If they have their way, oil prices would be double or triple, there would never be another refinery built, and all development of the oceans would stop in the name of “protecting” things that do human beings not one bit of good.

The core economic issue concerning the environment is really about liability. In a world of private property, if you soil someone else’s property, you bear the liability. But what about in a world in which government owns vast swaths, and the oceans are considered the commons of everyone? It becomes extremely difficult to assess damages to the environment at all.

There is also a profound problem with federal government limits on liability. That is central planning gone mad. The liability for environmental damage should be 100% at least. Such a system would match a company’s policies to the actual risk of doing damage. Lower limits would inspire companies to be less concerned about damage to others than they should be, in the same way that a company with a bailout guarantee faces a moral hazard to be less efficient than it would be in a free market.

But such a liability rule presumes ownership, so that owners themselves are in a position to enter into fair bargaining, and there can be some objective test. There is no objective test when the oceans are collectively owned and where huge amounts of territory are government owned.

And it is precisely the government and the Obama administration that gain from the incident. The regulators get yet another lease on life. They are already sending thousands of people to “save” the region. “Every American affected by this spill should know this: your government will do whatever it takes for as long as it takes to stop this crisis,” Obama said.

Are we really supposed to believe that government is better able to deal with this disaster than private industry?

Meanwhile, the Obama administration must be thrilled to have an old-fashioned change of subject, so that we don’t have to notice every single day that its economic stimulus has been an incredible flop, with unemployment higher today than a year ago and the depression still persisting. (Read more from mises.org)

See also:
Federal law may limit BP liability in oil spill A law passed in response to the 1989 Exxon Valdez spill in Alaska makes BP responsible for cleanup costs. But the law sets a $75 million limit on other kinds of damages. (Read more from news.yahoo.com)

San Francisco’s Unionized Garbage Monopoly squashes entrepreneur

Here in San Francisco picking up a garbage costs about $37/can per week.

A contractor I know got fed up, canceled his service as did his neighbor. They simply loaded both houses garbage into his truck, took it to the dump and paid the $40 to get rid of it. He charged his friend $10.

As a contractor he had to go to the dump all the time anyway. Pretty soon he had a small business, neighbors paying him $10 instead of $37, a difference of over $1400 per year or the price of a vacation or plasma TV for the family.

He sorted their garbage and turned in the recycling for more money. Normally the neighbors had to keep two cans, sort their garbage themselves and the Garbage monopoly took all the recycling fees anyway.

Pretty soon he hired a couple of neighborhood kids and his crew of 3 did both sides of residential streets at the same time. If you had an old monitor or TV, motor oil, or paint to get rid of he’d take that too, sometimes he’d charge you $5 + what the dump charged for the special item. Need an extra pickup? No problem. He’d work from 5am to 8am and he was earning $200 per day and his workers $75.

. . . .

When the local garbage company and its union found out about “Joe” they complained to the city. Within a year a law was passed stating that garbage service was now mandatory for all residents at the price the city’s monopoly charged, which was shortly raised. And Joe? For a while he still took our recyclables until he was fined $4000, even though he had our permission. It appears our household recyclables are owned by the Garbage company, not us, as it subsidizes our low cost of garbage service!
(Read more from globaleconomicanalysis.blogspot.com)

See also: Seattle Trash Collectors Make Average of $109,553 But Want More; 1,600 Apply to Haul Trash if Teamsters Strike

Governments target unpaid internships / in related news, college grads have no marketable skills

With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor. (Read more from nytimes.com)

All voluntary agreements between people should be legal. Government enforcers are pathological busy bodies trying to justify their generous tax-payer funded salaries.

Dear Rich People, The IRS Chief Announced A New, Globalized Effort To Go After You

Christian news organization CNSNews.com has the skinny on a speech from Douglas Shulman at the National Press Club on a new globalized effort to go after the networks of the rich.

“Through our new global high wealth operating unit we are taking a unified look at the entire web of business and economic entities controlled by high wealth individuals so we can better assess the risk such arrangements pose to tax compliance,” Shulman said at the National Press Club on Monday.

Shulman said the IRS is using “our robust and evolving enforcement program that ensures that everyone pays what they owe.”

This is the part that will really raise people’s hackles, perhaps even among the non-rich:

“This brings me to another important development–a game-changing trend–the globalization of tax administration,” said Shulman.

The black helicopters go global!

(Read more from businessinsider.com)

Wealth is not evil. In a free economy, the wealthy are the people who provide the things everybody else wants. Typical of government is to make war on the providers of society. I am reminded of the stories my family in Ukraine told me. They were persecuted because they had the knowledge, ability and work ethic to build and run a flaxseed oil mill.

More Americans Give Up Citizenship As IRS Gets Aggressive Overseas

The number of American citizens and green-card holders severing their ties with the U.S. soared in the latter part of 2009, amid looming U.S. tax increases and a more aggressive posture by the Internal Revenue Service towards Americans living overseas.

According to public records, just over 500 people worldwide renounced U.S. citizenship or permanent residency in the fourth quarter of 2009, the most recent period for which data are available. That is more people than have cut ties with the U.S. during all of 2007, and more than double the total expatriations in 2008.

An Ohio-born entrepreneur, now based in Switzerland, told Dow Jones he is considering turning in his U.S. passport. Mounting U.S. tax and reporting requirements are making potential business partners hesitate to do business with him, he said.

. . . .

The stock market plunge of late 2008 and early 2009 may also have played a role in the spike in expatriations. Since 2008, Americans with net worth greater than $2 million have had to pay an exit tax assessed on their assets. With gains reduced or wiped out by the market collapse, those seeking to give up their U.S. citizenship had an opportunity to do so with less exit tax required. (Read more from foxbusiness.com)

Disturbing new U.S. law aims to end individual foreign bank accounts

The name of the bill is the Hiring Incentives to Restore Employment Act (H.R. 2487) commonly known as the HIRE Act. This is the jobs incentive bill that was signed by the President on March 18th amid little fanfare.

Relatively small by Washington standards (“just” an $18 billion stimulus package) the bill was drafted to provide incentives to employers to hire more people but contains some very disturbing language concerning the ownership and transference of money to any overseas account. The truly galling part of the bill is that it attempts to require “foreign financial and non-financial institutions to withhold 30% of payments made to such institutions by U.S. individuals unless such institutions agree to disclose the identity of such individuals and report on the bank transactions”. Think about this – the U.S. government is attempting to strong arm foreign financial and non-financial institutions (think banks and law firms) to either withhold 30% of the transactions in a U.S. individual’s account (and presumably remit this to the U.S. Treasury) or disclose the account details to the U.S.. The language of the bill addresses both bank accounts and any foreign trusts (ie- Private Interest Foundations).

But what if a foreign, sovereign country has laws against the disclosure of this information? Well, the bill contemplates this as well. Here’s the actual language from the bill:

‘‘(F) in any case in which any foreign law would (but
for a waiver described in clause (i)) prevent the reporting
of any information referred to in this subsection or subsection
(c) with respect to any United States account maintained
by such institution—
‘‘(i) to attempt to obtain a valid and effective
waiver of such law from each holder of such account,
and
‘‘(ii) if a waiver described in clause (i) is not
obtained from each such holder within a reasonable
period of time, to close such account.” (my emphasis)

In other words, under this legislation, a U.S. citizen having an account with a foreign institution will be required to waive the privacy protection afforded by local law. If they fail to do this, the financial or non-financial institution is required to close the account. (Read more from primapanama.blogs.com)

Business Owners Pay for Layoffs

At Amazon Reptile Center Inc., owner Scott Solar is paying for the pink slips he issued.

After several years of growth, the company, which has two reptile pet stores in Montclair and Covina, Calif., ran headfirst into the recession. As employees left, they weren’t replaced, but recently the company decided to let go of three workers. In three years, the staff shrunk to five from 12. Now, like many owners, Mr. Solar will be paying a higher state unemployment insurance tax as a direct result of those layoffs.

State unemployment insurance taxes are paid throughout the year, as owners pay their other payroll taxes. States typically have a base unemployment tax, which owners will pay according to the size of their payroll. But as a company lays off employees, it develops a negative history or so-called “experience rating” that can boost that tax.

“We didn’t know there were repercussions, but we had to do it,” says Mr. Solar of his thin staff. “But now we’re going to be punished for keeping the business alive.”

Adding to the burden, a number of states are running out of funds to pay for their out-of-work populations. With jobless claims swelling and coffers depleting, at least 35 states are hiking unemployment tax rates this year, according to a survey by the National Association of State Workforce Agencies conducted late last year. (Read more from online.wsj.com)

Toyota vs. Government Motors

The media has been hyperventilating over safety concerns in Toyota vehicles, presumably for our sake. Now that the government owns and runs GM, I cannot take this news without suspicion.

Austrian Economist Patrick Barron said it best:

The U.S. government owns General Motors and now it gets to sit in judgement of GM’s most successful rival, punishing it and waging a public relations campaign to malign Toyota’s products. Sounds like another great way–in addition to the “Cash for Clunkers” program–for the government to provide a backdoor subsidy to its captive company and its union supporters.

***

Toyota’s Troubles Deepen
Toyota Motor Corp.’s quality crisis deepened Tuesday, as U.S. regulators accused the company of dragging its feet on fixing defective gas pedals and threatened civil penalties and further reviews of Toyota products.

The move means that Toyota’s efforts to address its biggest-ever safety and public-relations mess are far from over. Last week, the administration indicated it had no issues with how Toyota had responded to the sudden-acceleration reports, which led the company to recall about six million vehicles and have been linked to at least five fatalities.

“While Toyota is taking responsible action now, it unfortunately took an enormous effort to get to this point,” Secretary of Transportation Ray LaHood said Tuesday in a statement. “We’re not finished with Toyota and are continuing to review possible defects and monitor the implementation of the recalls.”

Mr. LaHood said Transportation Department officials flew to Japan in December to meet with Toyota executives and remind the company “about its legal obligations.”

Toyota woes mount as gov’t examines Prius brakes
Toyota faced mounting pressure Thursday as the government opened a probe of brake problems with the Prius, a crown jewel of its lineup. The beleaguered automaker said it was “too soon” to decide whether to add the hybrid to the millions of cars it has recalled.

. . . . The National Highway Traffic Safety Administration said it would assess the scope of the problem and the safety risk to about 37,000 cars that could be affected.