"Virtually Unregulated" Watch -- Episode 2

The search seedlings are sprouting nicely, so it is time for a second episode of "Virtually Unregulated" Watch, the continuing effort to see what's haunting the regulatory mindscape.  (In case you missed it, and you probably did, Episode 1 is here.)

"Virtually Unregulated" search at Google News--December 16, 2010--found the following subjects on the minds of virtual regulators:
1. Retailer restocking fees.  "[Sen. Chuck Schumer]...wants the FTC to determine if failing to disclose the restocking fee is a deceptive practice and to require retailers to prominently display that the fee will be charged."
2. Elder-care mediation (a voluntary service). "'Just about anyone can hang out a shingle and say they're an elder mediator,' said Penny Hommel, co-director of the nonprofit Center for Social Gerontology in Ann Arbor, Mich."
‎3. Long Island Power Authority. "LIPA operates virtually unregulated. The board of trustees is appointed by the governor and state legislative leaders, and the Public Service Commission has limited jurisdiction."
‎4. "AIG and other insurance companies" -- from a commenter on a brief story about Ben Bernanke
‎5. Hedge funds.  But, no call to arms here.  Clearly bucking the trend in usage of the phrase.
‎6. Advertising of "ultra-processed foods and drinks."  Article by "nutrition and public policy expert Marion Nestle" (no relation?) and brought to you by Cookie Crisp® cereal. Just kidding about that last part.
‎7. Fishing catches (looking back to a 1967 column as representing "the virtually unregulated days")
‎8. Agricultural Labor in Southern Florida. "In the world of agricultural industry, a world sustained by virtually unregulated labor, it is large corporations that decide both prices and working conditions."
9. "Credit companies"--again from a commenter. Article is about record debt-to-income ratio among Canadians.
‎10. "...the sprawling derivatives market, hedge funds and private equity, all dimly lit corners of the financial world..."  Never fear: "Proposed rules issued by the Commodity Futures Trading Commission and the Securities and Exchange Commission showed regulators stepping cautiously as they implement hundreds of new regulations mandated in July by Congress."
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That's it for VUW #2.  Watch this space for future snapshots of how this panic-inducing phrase is being bandied about.  Or, heck, run your own search.  It's a virtually freeish country.

Let's Play "Did You Know?"

Did you know that any money, apparently, in the pockets and bank accounts of ordinary people is a gift from government? Witness Rep. Elijah Cummings today on MSNBC, in response to a question about the tax compromise hashed out by President Obama and Republican legislators:

"We are concerned about the estate tax. We're concerned about a number of things. We're also concerned about whether we can, in fact, afford this. Keep in mind--we are about to give $68 billion, over the course of a year, to 39,000 families through this estate tax item. That's a problem." [bold added]

That's "give," as in GIFT.  Well, Ho Ho Ho to you, too, Representative Cummings!

Homeland Security What?

Homeland Security Seizes 70+ Websites for Copyright and Trademark Violations

Happy Thanksgiving

Don't Panic?

I'm not really sure how much wisdom, as opposed to humor, is embedded in this quote from [guess], but sometimes I think it's quite a lot:

This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn't the small, green pieces of paper which were unhappy.

Extra! It's Too Bad the Mid-Terms Are Big News

Today's mid-term election, like the 2008 election, is very Big News. Headline-spawning, anchor-hyperventilating, ratings-rescuing news. For months now, news outlets of all sorts have been dialing up the quantity and--well, the quantity of their coverage of races across the country. Every visible or audible move by candidates beyond inhaling and exhaling has been uploaded, scrutinized, interpreted, Tweeted and remixed. Reasonably well-dressed people have debated, scoffed at and walked out on each other on camera in the throes of election and political analysis. Commenters on innumerable web sites have ridiculed and dehumanized each other, the candidates and the reasonably well-dressed people.  Reporting, commentary and gnashing of tooth and tusk concerning election outcomes will be hard to avoid today, tonight, tomorrow, and so on.

And that's too bad. Like vultures circling, it's an indicator that something has gone wrong. In a better world, political elections would not be such big news. Oh, they would be news. They would be important. But, they would not have the bile-generating, fury-inducing power that they have in many modern democracies. You might object that of course elections should be big news.  They have a major impact on society and the lives of everyone in it!  And I would agree.  That is the problem.  More specifically, the fact that "major impact" barely begins to describe the effect elections have on people living in this land (and, indeed, on people living in distant lands) is the problem.  We are, most of us, made worse off by the fact that so much of our lives has become insinuated by the structures of government.  Permission to adapt to changing circumstances is often not forthcoming in such a society.  For, the contest between the civil and the political is a largely zero-sum one.  The growing scope for politics and its trappings (laws, regulations, etc.) means a shrinking scope for civil (i.e., voluntary) give and take.

But, it is this very growth in the scope of politics within our society that makes the outcome of elections all the more momentous--and therefore more newsworthy.  Given the potent power government wields over Americans and, as important, the future powers precedent seems to reserve, it is tragically rational for us to take a keen, perhaps manic, interest in the details of these periodic scrambles for political posts.  And so, it is quite appropriate for the news media to build entire sets around the coverage of said scrambles.  It's not every day that so much is decided about how we may or may not lawfully live our lives.

It's too bad the mid-term elections are Big News.  But, they are.

Default Folklore

If you have a nose for political economy, hold it. The murky doubt swirling around the Great Bailout is congealing into a hasty pudding of conventional wisdom--at least for the boosters of TB2F (Too Big To Fail), TARP, Inflationism, Do Somethingism, and etc. And, as long as nobody on the other side of that strategic, shrapnel-filled, yet strangely silent bluff bothers to lay out a rigorous, up-to-date refutation, those Liquidity Trappist Monks can scrawl the official history of the Great Obsession of '08 unhindered for the unwashed.

The apparent shortage of focused 2010 exposés by free market scholars on the multifarious costs and suspect benefits of TARP has been nagging at me for weeks--ever since the TARPorrists began crowing over reports that the shape-shifting program is going to end up costing little more than a used biography of John Kenneth Galbraith. But, more on this later.

A colleague of mine recently asserted that, at the height of the Paternalistic Panic of '08 (the Patroniziclysm?), while some experts may have opposed TARP, even they agreed we would go over a cliff without it. I decided to do some digging on that one. Here are some arguments made at the time. You may judge whether my TARP-defending friend is correct:

• At 5:50 here Peter Schiff says what he thinks "no bailout" would mean.

• Here's Cato's Dan Mitchell defending us from Stephen Moore.

• And here's a nearly admirable piece by Geoff Colvin.

• Finally, there was this piece by Steve Chapman in the reason. Excerpts:

George Kaufman, a finance professor at Loyola University Chicago, is skeptical... He notes that aside from inter-bank lending, the credit markets were functioning tolerably well at the height of the crisis. Rates on 30-year mortgages actually dropped last week.

...A group of 122 economists, including at least two Nobel laureates, signed a letter this week summarizing the danger: "If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted."

(Here's that letter.)

(TARP wasn't even used for what it was sold as. So, it's not surprising if its consequences don't match predictions.)

With so many weaknesses in the rationale for gigantic governmental rescues of private enterprise, one might anticipate that true defenders of free economies (not mere upside allies) would produce a glut of full-throated criticism of what TARP began and ended as. But, and I hope this is due to my own shabby job of searching, I have so far found few articles that qualify.  If you know of any, please post a link in the comments [if comments are disabled, send me a Tweet].

12/20/10 UPDATE: Forgot something.  See my own 9/29/08 post here.  It quoted this very interesting 9/26/08 WaPo article, which begins:

Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.

The industry is resilient despite the struggles of some members. Washington Mutual, a troubled Seattle savings and loan that was among the nation's largest mortgage lenders, yesterday was seized by the government and sold to J.P. Morgan Chase.

At the same time, many smaller banks said they were actually benefiting from the problems on Wall Street. Deposits are flowing in as customers flee riskier investments, and well-qualified borrowers are lining up for loans.

Feds Threaten Californians

The San Francisco Chronicle reports:

The Obama administration has denounced Proposition 19, which would legalize personal use of marijuana in California, and promises to 'vigorously enforce' the federal ban on possessing, growing or selling the drug if voters approve the ballot measure Nov. 2.

"Virtually Unregulated" Watch

A new feature here at Vox Politico...

The origin is straightforward: the past few years (at least) I have noticed that the phrase "virtually unregulated" has become a standard rhetorical alarm, often triggered while calling for--of course--new regulations on whatever realm of activity the speaker has targeted.

Research for this feature is also straightforward, but it's not because I'm lazy (not that I'm not lazy). No, the idea is to take an ether sample by which to assay the ambitions of bureaucrats, legislators, would-be politicians and, especially, cheerleaders for ever more government regulation.

Thus, the method for VUW will be to examine the top Google News results for the phrase "virtually unregulated"and report here the breakdown of topics and any other aspects that stand out. (Using Google News because plain vanilla Google results included some rather dated articles.) So, here we go.

"Virtually Unregulated" search at Google
October 15, 2010 results:
1. casualisation (I'd never heard of it either)
2. fishing and hunting...100+ years ago
3. communications (This one seems to use the key phrase in a non-fear-mongering way.)
4. tax sales (Another strange one.)
5. "rise of poker machines"
6. independent caregivers (in Mesa County, CO)
7. the service sector -- "Across the country, the service sector employs millions at shopping corridors, stadiums and tourist zones, locations that go virtually unregulated by labor laws or include special exemptions like the restaurant industry tip credit." [more]
8. immigration...in Sweden

It's an odd collection, yet one can glean from even this quick view of the data an interest in controlling how people earn a living, where they live and how they entertain themselves. No big surprises there, but we shall see what future samples of the Net add to this.

Ed vs. Claude Frédéric Bastiat

It can be only a pleasant dream, I guess, but wouldn't it be wonderful if Frederic Bastiat could travel 160 or so years forward in time, get a plane ticket to the U.S. and be a guest on The Ed Show (MSNBC) or on a similar forum where cheap labor is still seen as a terrible threat?

Ed: "Big business addiction to cheap labor, in my opinion, is un-American. They have no sense of economic patriotism any more and it seems to me that the U.S. Chamber of Commerce wants to protect American [sic] jobs in India and doesn't give a damn about jobs in Indiana."

Bastiat: "If man were a solitary animal, if he worked solely for himself, if he consumed directly the fruits of his labor—in short, if he did not engage in exchange—the theory of scarcity could never have been introduced into the world. It would be all too evident, in that case, that abundance would be advantageous for him, whatever its source, whether he owed it to his industriousness, to the ingenious tools and powerful machines that he had invented, to the fertility of the soil, to the liberality of Nature, ox even to a mysterious invasion of goods that the tide had carried from abroad and left on the shore. No solitary man would ever conclude that, in order to make sure that his own labor had something to occupy it, he should break the tools that save him labor, neutralize the fertility of the soil, or return to the sea the goods it may have brought him. He would easily understand that labor is not an end in itself, but a means, and that it would be absurd to reject the end for fear of doing injury to the means...But exchange hampers our view of so simple a truth." [Bold added.]

Import more of Frenchman Bastiat's economic wisdom for $0/hour here.

Please Select Oppression Type Here

Peter Schiff mentioned this on his video blog, so I decided to seek out the exact words of our president. They are:

"I think that America has a noble tradition of being healthily skeptical about government. That's in our DNA, right? (Applause.) I mean, we came in because the folks over on the other side of the Atlantic had been oppressing folks without giving them representation. And so we’ve always had a healthy skepticism about government. And I think that's a good thing."

(Emphasis added.)

Before It Was Banned...It Was Mandatory

It seems like a good time to mention that there has never been a period in U.S. history during which racial discrimination was neither mandatory nor illegal. And this is not an oblique reference to Affirmative Action or any type of "reverse" discrimination. Most Jim Crow laws were ended by the Civil Rights Act of 1964--effectively banning the same discriminatory practices that were heretofore mandated by law in some places.

A sampling of Jim Crow laws (1880's-1960's):

Buses: All passenger stations in this state operated by any motor transportation company shall have separate waiting rooms or space and separate ticket windows for the white and colored races. Alabama

Barbers: No colored barber shall serve as a barber [to] white women or girls. Georgia

Housing: Any person...who shall rent any part of any such building to a negro person or a negro family when such building is already in whole or in part in occupancy by a white person or white family, or vice versa when the building is in occupancy by a negro person or negro family, shall be guilty of a misdemeanor and on conviction thereof shall be punished by a fine of not less than twenty-five ($25.00) nor more than one hundred ($100.00) dollars or be imprisoned not less than 10, or more than 60 days, or both such fine and imprisonment in the discretion of the court. Louisiana

Lunch Counters: No persons, firms, or corporations, who or which furnish meals to passengers at station restaurants or station eating houses, in times limited by common carriers of said passengers, shall furnish said meals to white and colored passengers in the same room, or at the same table, or at the same counter. South Carolina

More examples here.

PR0Nzi Scheme

So that's why the SEC failed to bust Madoff. They were too, ahem, "busy."

Handy Reminder

Do what government representatives say and you (probably) won't get beat up.

Apply this tip to:
movement across borders
insider trading
wage rates
hiring criteria
international trade
drug use
income (tax)
health care

and many, many more! More every day!