Category: Government

Farmer Ed Wiederstein Opposes Farm Subsidies

Opposing government subsidies to one’s own group is a good way to make enemies. Few have the guts or principles to do so. So it is worth pausing to salute farmer Ed Wiederstein:

. . . Ed Wiederstein of Audubon, Iowa, said direct payments reduce motivation for farmers to be self-sufficient and often give money to people who don’t need it.
“Do I deserve money from the government to, supposedly, support me any more than the Ace Hardware man in downtown Audubon, or the feed store, the local newspaper, the local flower shop or the funeral home?” Wiederstein said. “Is what they do really any less important than what I do?
“There are a lot of farmers with a million-dollar net worth receiving thousands of dollars of support. Somehow, that picture just doesn’t look right.”
Rep. Jerry Moran, R-Kan., called Wiederstein an “outside thinker.”
Peterson told Wiederstein, “If you were up in western Minnesota, you might run into some trouble right now.”
A number of people said there should be less reliance on price guarantees and more on entrepreneurship and the creativity of American farm families.

For the full story, see:
“Farm subsidies, imports debated at Ag Committee meeting.” Omaha World-Herald (Monday, March 6, 2006): 8B.

Enron’s Kenneth Rice in Omaha on 9/11/01


Kenneth Rice exiting a Houston federal courthouse on Thursday, Feb. 16, 2006. Source of image: the online version of the Omaha World-Herald article cited below.
A lot of people remember what they were doing when the first jet crashed into the twin towers on 9/11/01. I was listening to a presentation on the potential of broadband given by Kenneth Rice, at a forum sponsored by Creighton University. A day or two earlier, Creighton had presented Rice with a distinguished alumnus award. I don’t remember much detail about Rice’s presentation, but remember thinking that he gave a clear and informative analysis of the potential and risks of the broadband business.

(p. 1D) HOUSTON (AP) – Kenneth Rice, former chief of Enron Corp.’s struggling broadband unit, testified Thursday that his boss, Jeffrey Skilling, directed him to paint a rosy, misleading picture for the Enron board of directors that was in line with false statements Rice said he already made to financial analysts in 2001.
But Rice, the former CEO of Enron Broadband Services, said in his third day on the stand at the fraud and conspiracy trial of Skilling and founder Kenneth Lay that he had no documents and “only my recollection” to back up a conversation he had with Skilling, Enron’s chief executive, as he prepared for a May 2001 meeting of the company’s board.
“What I took from meeting with Mr. Skilling was he wanted me to put a presentation together that was more consistent with the analyst conference and less direct on some of the challenges we were facing at EBS,” Rice said.
In January 2001, Rice told Wall Street analysts who influenced the company’s stock price that the business was well positioned for strong long-term financial performance. In reality, however, Enron’s broadband unit was spending $100 million per quarter and generating little revenue and business, he said.

For the full story, see:
“Skilling said paint rosy picture, Rice says.” Omaha World-Herald (Friday, February 17, 2006): 1D.

Harry Browne Sought Freedom in an Unfree World


Source of book image: Amazon.com.
Harry Browne died Wednesday, on March 1, 2006, of Lou Gehrig’s disease.
Every semester I mention Browne to students in most of my classes. I tell them of his bestseller, How I Found Freedom in an Unfree World.
I have not read the book for many years. My memory is that Browne tells of how he was unhappy in a high-paying investment career because he did not like having to report to the job on set days, at set times, and to take orders he sometimes did not agree with, from bosses he did not always respect.
He did not feel free, and he he felt that being unfree was making him unhappy. So he quit, his job, divorced his wife, and headed west to write best-selling self-help books.
I tell my students that we don’t have to go as far as Browne did in order to sympathize with his wishing he was not constrained by the firm that had employed him. So I ask my students: given the appeal of Browne’s sentiments, why do we have firms? Why don’t we all just become independent contractors?
The answer, I tell them, is to be found in Ronald Coase’s article “The Theory of the Firm,” in which Coase suggests that firms reduce the transaction costs of team production activities.
I also mention, though, that developments in information technology and the internet, are reducing the transactions costs of creating production teams on a project-by-project basis, and hence are increasing the feasibility of more and more of us becoming independent contractors, or at least working for small firms.
In this regard, I refer them to an article co-authored by Brynjolfsson that argues that IT has differentailly benefitted the small firm, and I refer them to Daniel Pink’s Free Agent Nation. I also mention web sites like guru.com that make it possible for those who want to work as free-agents to find firms that want to hire them on a project-by-project basis. I tell them about the movie industry, that already pretty much assembles teams on a project-by-project basis.
The world may never be the way Harry Browne wanted it to be. But it may be possible to come closer to Browne’s vision, than Browne’s detractors imagined.
Besides his book Harry Browne served the cause of freedom in other ways as well, running for President in 1996 and 2000 on the Libertarian Party ticket.
I do not completely share Browne’s views: sometimes he seems to treat personal commitments too cavalierly. But he wrote well, he stimulated thought, and he sought to make the world a better place. Harry Browne, rest in peace.

Owlish Evidence: More on Why Crichton is Right

Environmentalists have hypothesized that there is a link between harvesting old-growth forests and declines in owl populations. But there is reason to believe that the hypothesis may be false, and apparently environmentalists and the federal government do not have much interest in testing it:

. . . , we know little about the relationship between harvesting and owl populations. One such study — privately funded — infers an inverse relationship between harvesting and owls. In other words, in areas where some harvesting has occurred, owl numbers are increasing a bit, or at least holding their own, while numbers are declining in areas where no harvesting has occurred.
This news will come as no surprise to Oregon, Washington and California timberland owners who are legally required to provide habitat for owls. Their actively managed lands are home to the highest reproductive rates ever recorded for spotted owls. Why is this?
One possible answer is that the anecdotal evidence on which the listing decision was based is incomplete. No one denies the presence of owls in old-growth forests, but what about the owls that are prospering in managed forests and in forests where little old growth remains? Could it be that spotted owls are more resourceful than we think?
We don’t know — and the reason we don’t know is that 16 years ago federal scientists chose to politicize their hypothesis rather than test it rigorously, to flatly reject critiques from biometricians who questioned the statistical validity of the evidence on which the listing decision was based, and to declare with by-god certainty that once the old-growth harvest stopped owl populations would begin to recover.

For the full story, see:
JIM PETERSEN. “RULE OF LAW; Owl Be Damned.” The Wall Street Journal (Sat., February 18, 2006): A9.

EU Legislation to Protect the Incompetent


The source for the book cover image is: Amazon.com.
The brief book description on Amazon. com:

Bad is the new good. In the not too distant future the European Union enacts its most far reaching human rights legislation ever. The incompetent have been persecuted for too long. After all it’s not their fault they can’t do it right, is it? So it is made illegal to sack or otherwise discriminate against anyone for being incompetent. And now a murder has been committed and our possibly incompetent detective must find out who the murderer is. As long as he can find directions to get him through the mean streets.

Rob Grant. Incompetence. Orion Pub Co., 2003. ISBN: 0575074191

Who Decides Treatment When Medicine is Socialized?

Ann Marie Rogers at High Court in London on Wed., Feb. 15, 2006. Image source: online version of NYT article quoted and cited below.

(p. A6) LONDON, Feb. 15 — When her local health service refused to treat her breast cancer with the drug Herceptin, 54-year-old Ann Marie Rogers sued. But on Wednesday, a High Court judge ruled against her.
In his decision the judge, David Bean, said that although he sympathized with Ms. Rogers’s predicament, the health service in Swindon, where she lives, had been justified in withholding the drug.
“The question for me is whether Swindon’s policy is irrational and thus unlawful,” Justice Bean wrote. “I cannot say it is.”
The ruling has potentially serious implications for patients across the taxpayer-financed National Health Service.
Despite health officials’ contention that decisions about treatment are based solely on clinical effectiveness, critics contend that with drugs growing ever more expensive, cost has become an increasingly important factor. They also say patients are at the mercy of the so-called postcode lottery, in which treatments are available in some postal zones but not others.

For the full story, see:
SARAH LYALL. “British Clinic Is Allowed to Deny Medicine; Decision on Cost Has Broad Impact.” The New York Times (Thurs., February 16, 2006): A6.

Protecting the “Dots”

Is it the free market, or big government, that is most likely to treat individual human beings as expendible “dots”?

One of the best conspiracy movies ever made is the perfect British classic, “The Third Man.” In the most haunting scene, the villain, played adroitly by Orson Welles, takes Joseph Cotten, the good guy, up in a Ferris wheel. The villain, named Harry Lime, has been selling adulterated penicillin in postwar Vienna, making a fortune and causing children to become paralyzed and die.
Mr. Cotten’s character, a pulp fiction writer named Holly Martins, asks him how he could do such an evil thing for money. The two men are at the top of the Ferris wheel, and the people below them look like tiny dots. Mr. Welles’s villain looks down and says, “Tell me, would you really feel any pity if one of those dots stopped moving forever? If I offered you £20,000 for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare?”

BEN STEIN. “Everybody’s Business; When You Fly in First Class, It’s Easy to Forget the Dots.” The New York Times, Section 3 (Sunday, January 29, 2006): 3.

Missing the Boat: More on Why Africa Is Poor

Source of photo: online version of the NYT article cited below.

KHARTOUM, Sudan, Jan. 30 — Sudan’s government pulled out all the stops for the heads of state who swept into town for the African Union summit conference last week. Streets were scrubbed and welcome signs erected. Elegant new villas, outfitted with fancy linen and china, were put up along the Nile.

And then there was the fancy presidential yacht that was supposed to ferry the dignitaries up and down the river for evening soirees. Much like Sudan’s hopes of assuming the chairmanship of the African Union at the conference, though, the boat never materialized.
Even after the presidents had come and gone, the yacht was nowhere to be found. It was not on the White Nile, which flows northward from Lake Victoria. Nor was it on the Blue Nile, which swoops into Khartoum from Ethiopia.
But Ibrahim Khalfalla never lost sight of the hulking craft, which has two decks and is 118 feet long and 32 feet wide. He was the man charged with getting the boat from Slovenia, where it was built for an estimated $4.5 million, to Sudan, where President Omar Hassan al-Bashir planned to inaugurate it. And although he missed his deadline, Mr. Khalfalla said he did the best he could under the circumstances.
“This is difficult, so difficult,” he said, as the huge tractor-trailer that had been carrying the boat from Port Sudan to Khartoum by road inched close to its destination the other day. “You don’t know how difficult.”
It was actually rather easy to see how challenging a job this was. Even with the boat a mere 200 feet from the water’s edge, serious obstacles remained, like the building that the precious cargo struck while Mr. Khalfalla motioned wildly at the man behind the wheel of the truck.
As the yacht scraped against a brick wall, onlookers let out a groan. Soon workers were atop the boat, prying away bricks.
. . .
But even before the craft hit the water, it was taking on criticism from those who viewed it as an extravagant symbol of just how far removed the government is from the people.
Disparaged in newspapers as “Bashir’s boat” and a “million-dollar toy,” the craft, with its sophisticated satellite technology, elaborate presidential suite and dining facilities for 76 guests, left critics unimpressed.
The Juba Post, saying the government had “missed the boat,” called on officials to donate it to the Red Cross as a floating hospital ship. “Children scrounge for food in Khartoum North,” the paper said, not far from “the president’s expensive shipwreck.”
Another newspaper, The Khartoum Monitor, lamented that the government was using barges to take people displaced from the long war in the south back to their homes while the government imported a luxurious vessel for partying.

For the full story, see:
MARC LACEY. “Khartoum Journal: Sudan Leader Waits, and Waits, for His Ship to Come In.” The New York Times (Tues., January 31, 2006): A4.
(Note: ellipsis added.)

YachtStuck.jpg Source of photo: online version of the NYT article cited above.

French “regard the open economy with horror”

The French still regard the open economy with horror. A recent poll suggests that, while two-thirds of the population accepted that reform was necessary, they also wanted to keep the advantages of the present system — a short working week, early retirement for many, and almost invincible job protection. After years of assiduous propaganda, they believe that anything else will lead directly to the horrors of the United States: uninsured people dying of untreated diseases in the streets and, above all, riots.
The case of the state monopoly, EDF (Electricité de France) is instructive, and explains why any reform is so politically difficult. Employees of this vast organization work 32 hours per week; their meals are subsidized to the tune of 50%, their electricity and gas bills by 90%; they can retire at 55; they have the right to holidays at a fifth of their market value, and on average work the equivalent of eight months per year; and when their mother-in-law dies, they can take three days’ paid leave to celebrate. These are not all their privileges, only some; so it is hardly surprising that when the government proposed the privatization of EDF, they went on strike. (The government caved in.) They did so in the name of “the defense of public service” — and the French call the Anglo-Saxons hypocrites!
When a certain critical mass of such subsidy and special privilege for important sectors of the economy is reached, reform becomes impossible without explosion. The government has created an economic monster that it cannot tame, and that is now its master. In any case, periodic explosion has long been the means by which French society has undertaken major political and economic change. In the meantime, repression will become more necessary. For the moment, the banlieues are quiet: That is to say, only 100 cars a night are burned, and life elsewhere continues in its very pleasant way. But there is an underlying anxiety (the French take more tranquillizers than any other nation). No one believes that we have heard the last of les jeunes and of profound economic troubles. The last episode was but a very minor eruption of the social volcano. Every Frenchman believes that the question of a major eruption is not if, but when.

For the full commentary, see:
THEODORE DALRYMPLE. “An Update From France . . . (Remember Those Riots?).” The Wall Street Journal (Sat., February 11, 2006): A8.

Hayek Was Right: Free Speech is Fragile, When Property Can be Seized


For those who doubt the central message of Hayek’s The Road to Serfdom, something to ponder:

 

(p. 351) The Sandinistas called coffee farmers who cooperated with them "patriotic producers." Anyone who questioned their politics or policies was labeled a capitalist parasite. Throughout most of the 1980s, any farms that did not produce sufficiently, or whose owners were too vocal, were confiscated by the government.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.