Ending Government Control of Air Traffic Control is Long Overdue

On Monday, President Trump announced plans to privatize the out of date government controlled air traffic control system.  The intent of the plan is to spinoff the air traffic control system from the Federal Aviation Administration within three years and convert it to a non-profit company. The FAA currently spends more than $10 billion per year on air traffic control, which largely still uses radio and radar technology from the 1960’s.

Ending government control of anything is good, but it’s even more so when it comes to transportation barriers. While tax payers immediately save the $10 billion, the real savings will come to travelers in reduced costs and fees. The reason for this is because the market will always innovate because they have an incentive to; the government, on the other hand, has no incentive to innovate. This leads to inherent systemic inefficiencies and cost overruns. It is the nature of the state to always lag behind the market. That’s why the parasitic state has to use laws and regulations to influence and strangle the market into submission.

The downside here is that this reform, being written by the state, will allow the influence of the cronies dominate leading to a cartelization, not a genuine free market solution. Once that non-profit fails to produce, it gives the critics of capitalism ammunition. The fact that the “solution” was a mile away from free market capitalism doesn’t seem to matter. This process isn’t uncommon. Republicans have been doing damage to the free market like this for years.

President Trump’s plan is not a done deal yet as many Democrats and some Republicans oppose the plan, which has to get through Congress.

Overall, it is always best to phase out the state in any way possible. Hopefully this leads to a trend in eliminating state control over more and more areas of transportation. Next up should be the TSA.

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Arizona Governor Takes on Licensing Boards

In early February 2017, Juan Carlos Montesdeoca, an Arizona cosmetology student, got in hot water over an event he created that would give free haircuts to homeless people. The Arizona State Board of Cosmetology, which handles the licensing requirements for those in the industry, shut down the event and began an investigation, sparked by anonymous tips that he was giving haircuts without a license. This prompted Republican Arizona Governor Doug Ducey to come out and slam the licensing board for their ‘outrageous’ behavior and called on them to end their investigation. Specifically, Ducey said, “Any actions by your board on this issue, outside of applauding Mr. Montesdeoca’s efforts, are unnecessary and uncalled for.”

Last week, Gov. Ducey took his criticisms of Arizona’s overly onerous licensing boards to the next level with a new executive order. The order requires over two dozen licensing boards in Arizona to defend their licensing practices. Per the Governor’s office:

The governor’s executive order requires a number of state boards and commissions to review all requirements for each type of license that they issue—and then report these requirements accordingly. If the licensing requirements are found to be excessive (compared to the national average for that license), the board will have to justify the regulation in question, specifically citing potential harm to individuals in our state.

The licensing boards have until the end of June to return their findings to the Governor’s office.

Per the Institute for Justice, a libertarian think tank, Arizona has the second most onerous licensing requirements in the nation, behind only Louisiana. In Arizona, 64 separate occupations require “an average of 599 days—more than a year and a half—of training before granting permission to work.”

Like most government programs, licensing is sold to the public as a way that government protects consumers. What licensing really does is raise prices and reduce competition, a losing combination for consumers.  Licensing harms lower class and minority workers disproportionally, by requiring time and monetary investments from those least likely to be able to afford them.

This action by Gov. Ducey is a definite step in the right direction. The goal, of course, should be to end all occupational licensing, as well as any other government created barriers to entry. In the words of the Governor Ducey, “There is great value and purpose in work. Government should never stand in the way of someone’s efforts to start a new life or profession.”

The Myth of the Gender Wage Gap

Today is “Equal Pay Day”, a holiday of sorts contrived by feminists to push the oft-discredited, but widely believed, gender wage gap. If you haven’t heard of the gender wage gap before, it is the idea that women make 83 cents to every dollar that is made by a man (2015 numbers). On its face, this sounds like a horrendous miscarriage of justice.  Why are employers allowed to pay women less than men in the same job you may be wondering? The truth is: they aren’t. It’s been illegal for employers to pay female employees less than males for the same work for over 50 years.  If it’s true that employers are legally bound to pay similar positions held by men and women similarly, and it is, then why does this myth refuse to die?

Before we look at that question, let’s see where the “83 cents to every dollar” statistic comes from. The Pew Research Center analyzed data from the U.S. Census Bureau and U.S. Bureau of Labor Statistics. Specifically, they looked at all full and part-time workers’ median hourly earnings. By focusing on hourly earnings, as opposed to weekly earnings or some other measure, Pew can account for the difference in the number of hours worked. To come up with the “83 cents” statistic, Pew divides the total income earned by the total number of hours worked (median hourly earnings), for men and women, respectively. When the median hourly earnings are compared, women make 83 cents to every dollar made by a man.

It should be painfully obvious to anyone reading how deceptive this statistic is. It is based on aggregate numbers that fail to account for all kinds of crucial variables. Aggregate stats don’t consider differences in skills, education, time in the workforce, or even the profession between men and women. For example, men are overwhelmingly more likely to choose college majors with high annual incomes than women. It isn’t just the fact that men choose higher paid majors, women overwhelmingly tend to choose the lowest paying majors, like drama, dance and education. Also, women are more likely to exit the workforce due to childbirth and the raising of children.  Even if those women later come back into the workforce, the employment gap makes a sizable difference in total earnings. When these factors are accounted for, the gender wage gap shrinks from 17 cents to three to five cents. It is literally an apple to oranges comparison.

Yet, even with all the facts about the gender wage gap myth readily available, the clear majority of Americans believe the misleading headlines that women paid less than men for the same work. This leads us back to the original question: why does the gender wage gap myth refuse to die?

Quite simply, the left has too much to lose.  They see this issue as proof positive that capitalism and free markets are sexist and discriminatory. This gives them the right, no the duty, to push an agenda of heavy regulations to even the playing field. But if the disparity in wages can be explained by normal, everyday factors like differing skills or continuous time in the workforce, it can no longer be used to criticize capitalism and free markets for being inherently and institutionally sexist. That’s why anything that challenges the narrative is to be deemed “mansplaining“, otherwise ridiculed, or simply ignored.

If a company is knowingly using two sets of wage scales for male and female employees, then that company is in violation of the Equal Pay Act of 1963 and subject to fines and damages. If the wage gap is really caused by discrimination like the left claims, am I supposed to believe the government is just not enforcing the over half century old law? Give me a break.

Employment contracts are a voluntary arrangement for both the employer and employee. They are also fully negotiable. There is simply no role for the government to play in a libertarian anarchist society. If we are to have a government, though, the only legitimate role for government is to enforce employment contracts via the court system.

The Big Lie Upon Which ALL Government is Based

Yesterday was April 1st. April Fools Day. The day where people seek to play practical jokes on their family and friends. Not just on social media, either. Even large companies are joining in on the act. While many of these jokes are in good fun, there is a much more insidious trick being perpetrated. It’s a lie that’s been pushed onto humanity by elitists and intellectuals for the better part of history. It is the lie upon which ALL government, particularly democratic government, is founded.

According to a new article from Mike Adams, this big lie is “the idea that those who are in power will represent the interests of others who have no power.”

I know it sounds cynical. We are taught from a young age to instinctively trust and rely on the government. We learn that these great men and women always operate with the American people’s best interests in mind. These are, after all, selfless public servants. Even when politicians and bureaucrats design and enact policies that create disastrous consequences, we are told to not question their motives. Instead, we are told to blame “greedy businesses” or some other such boogeyman.

Adams demolishes this argument:

Somehow, we are led to believe, those who win elections are “serving their nation,” not leveraging power for their own selfish aims. Politicians even use this language themselves, claiming they are running for office in the hopes of “serving their country” but never serving their own insatiable appetite for power. Bureaucrats, as a rule of thumb, don’t serve their nations… they exploit national power to serve their own self interests.

Our dear leaders don’t just exploit the power they have, they are constantly seeking to expand it. Rothbard argued that the State is expansionist by nature. That is definitely being borne out in reality.  The size and scope of government enlarges year over year as automatic budget increases are baked into the legislation itself. Even now, as the U.S. national debt extends past the twenty trillion mark and our unfunded liabilities add tens of trillions more to it, no one seems to care about reining in the federal government.

Adams does offer several “radical reforms” that attempt to reverse this course, among which are term limits and instant runoff voting.

One idea is that taxpayers would get to decide where their tax dollars get spent. I like this idea from the perspective that it allows for individuals to be able to choose to fund the programs they support. If I could choose, for example, that not a single penny of my tax dollars goes to funding an immoral war, that’d be great. The problem here is two-fold: first, no individual has enough knowledge about enough subjects for this system to be very efficient and two, it takes for granted the coercive nature of taxation.

Another idea is to enact a lifelong ban on federal regulators working for private businesses in the industries they regulate. He argues that this would end the “revolving door of corruption” that exists when, for example, the FDA is made up of former and future Monsanto executives. That is clearly a huge problem, though I’m not necessarily comfortable with a lifelong ban on a person’s employment as the way to solve the issue. A better way to address this is to hold individuals in government to the same liability standards of private citizens.

The last idea he has is to eliminate the Congress and allow the American people to vote directly on proposed laws.  Adams rightly asserts that this idea is dangerous. He claims that the reason this idea couldn’t work is that for direct democracy to function, the system would require some sort of basic IQ or comprehension test in order to qualify to vote. These barriers would be vehemently opposed on the left because it would eliminate a large portion of their voter base.

It is true that the push to abolish the electoral college in the wake of Hillary Clinton’s presidential defeat show a clear desire on the left towards direct democracy. What I don’t see is any reason to expect that system would include the types of poll barriers envisioned by Adams. Much more likely is that the establishment, through their media propaganda and government schools, continue to indoctrinate the masses into supporting their destructive political agendas. Until more Americans understand that their elected representatives don’t have their best interests at heart and are only seeking to use political power to enrich themselves and their cronies, I don’t expect significant changes any time soon.

How the Government Undermines Job Creation

During the 2012 presidential campaign, President Obama caught some flak for a speech in which he claimed that businesses aren’t responsible for their own success. Using convoluted logic, Obama said that business owners ought instead thank the government, by way of the taxpayers, for developing the business environment that allows them to succeed.

Two years later, Hillary Clinton famously remarked, “Don’t let anybody tell you that it’s corporations and businesses that create jobs. You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly.” She later tried to walk back that claim, saying she meant to say ‘business tax breaks’ don’t create jobs.

Statements like these reveal a fundamental misunderstanding of the role of the entrepreneur in the economy, particularly the entrepreneur’s role in job creation. Moreover, these sentiments, shared by virtually the entire establishment regardless of political ideology, grossly overstate the effectiveness of the government’s interventions in the labor market. In fact, there’s a strong argument to be made that when economies grow and jobs are created it’s despite government intervention, not because of it.

So how does the government undermine job creation? For the answer, we look to an article from economist Walter Block. In it, Dr. Block outlines a number of specific government interventions and explains how they negatively impact the economy. Some of the interventions have been covered here before, like occupational licensing. Others, such as minimum wage laws, deserve their own post and will be covered more in depth in the future.

We will cover each issue point by point because they are all important and give us a better understanding of the depth of government involvement in the economy.

Minimum Wage

Most economists, Austrian or mainstream, believe that minimum wage laws reduce employment.  More specifically, these laws reduce the employment opportunities for young and unskilled workers. These are often the workers that minimum wage laws are designed to help.

Comparable Worth

Comparable worth legislation is when the government decides that one lower paid occupation has the same social ‘worth’ or ‘value’ as a higher paid occupation and artificially adjusts the wages to match of the lower to the higher. This causes unemployment in the artificially adjusted occupation by pricing many of the lower skilled workers out of the market.

Working Conditions

Many people applaud the government’s intentions when legislating for better working conditions. We instantly think of the plight of the coal miner working 18 hour days in dangerous conditions. What we don’t often hear of are the ridiculous regulations masquerading as improved working conditions, like having to keep a restroom at 68 degrees.

Unions

Per Dr. Block:

When the government forces businesses to hire only union workers, it discriminates against non-union workers, causing them to be at a severe disadvantage or permanently unemployed. Unions exist primarily to keep out competition. They are a state-protected cartel like any other.

Employment Protection, Payroll Taxes, and Unemployment Insurance

Employment protection laws are intended to shield employees from undue termination. Instead, they give employers incentive to not to take a chance on borderline employees. When you add in payroll tax and unemployment insurance burdens, the cost to employ individuals goes up, as does unemployment.

Licensing

Occupational licensing laws and other barriers to entry overwhelmingly affect minority and lower class entrepreneurs. Block cites the example of the Florida woman whose home-based soup kitchen  was shut down for being an unlicensed restaurant. As a result, many homeless in the area go hungry. This is not an isolated incident.

Peddling

Laws against peddling hurt low income start up entrepreneurs and those that buy their wares, people that also tend to be low income. Dr. Block references that the most vocal and influential supporters of anti-peddling laws are established businesses and department stores.

Child Labor

For a young person with no skills, working can provide some pocket money, a sense of personal satisfaction, and all too important discipline and responsibility that pay off in spades when they are ready to join the labor force. Sadly, government has killed those opportunities. Paper routes, lawn mowing, and even lemonade stands are all but outlawed for ambitious children. Essentially, young people are being robbed of the chance to gain real skills, putting them at a disadvantage later in life.

The Federal Reserve

Maybe most importantly, Dr. Block addresses how the Federal Reserve, along with the government creates unemployment.

By bringing about the business cycle, Federal Reserve money creation causes unemployment. Inflation not only raises prices, it also misallocates labor. During the boom phase of the trade cycle, businesses hire new workers, many of whom are pulled from other lines of work by the higher wages. The Fed subsidy to these capital industries lasts only until the bust. Workers are then laid off and displaced.

Government interventions in the economy vary in scope and purpose. One thing they all have in common is that they create distortions in the market. Minimum wage laws, for example, distort the labor market via the pricing mechanism. Licensing, anti-peddling, and others distort the market by creating barriers to entry for new entrepreneurs, thus protecting existing firms.  These aren’t the type of actions that create and protect jobs no matter what Barack Obama or Hillary Clinton say.

 

Ryan and Republicans Looking to Pick up Where Obamacare Left Off

It shouldn’t be a surprise to anyone paying attention that the Patient Protection and Affordable Care Act, aka Obamacare, is a disaster. With the exponentially rising premiums, collapsing exchanges, and reduction in the quality of care, it seems that all the criticisms of the bill, which was rammed through congress without a single Republican vote, have become reality. It’s getting so bad that even Democrats are starting to back awayfrom President Obama’s signature legislative victory.

Given the proof of Obamacare’s failure and eight years preparation, the stage should be set for President Trump and Republicans to make good on their promise to repeal and replace Obamacare with a free market approach to health care.

The problem is that House Speaker Paul Ryan’s (R-WI) partial-repeal/replacement bill fails on all fronts. In fact, if passed as-is, it may turn out to be worse than Obamacare.

Introduced earlier this month, the American Health Care Act, would repeal some aspects of Obamacare, while keep some of the more popular aspects of the law in place. It would also add additional new legislation. The idea of a partial repeal is being widely criticized from within the ranks of the GOP. Leading the opposition is the House Freedom Caucus, including Reps. Thomas Massie (R-KY) and Justin Amash (R-MI), as well as Sen. Rand Paul (R-KY), who has drafted his own replacement bill.

The preferred strategy of these critics has been a full repeal of Obamacare, followed by a separate replacement bill. This approach makes the most sense, as Sen. Paul makes clear in an interview with Breitbart, “I think from the very beginning combining repeal and replace in one bill makes it very hard because we have different ideas on replace. We are pretty much united on repeal, but we have different ideas on replace.”

Later in the same interview, Sen. Paul makes the objections to Ryan’s bill, which he dubbed Obamacare-Lite, crystal clear.

“So they [Ryan’s bill supporters] keep the subsidies, they keep the taxes, and then they keep the mandate. Then the fourth thing they do is they actually subsidize the insurance companies. Right now, insurance companies are losing money and Obamacare has this rescue thing called ‘risk corridors’ to bail out the insurance companies. Paul Ryan has got the same thing, he just calls it reinsurance and it’s $100 million worth. I predict that might not even be enough. So I don’t like any of it.”

The major reason health care is so expensive is due to the State’s constant interference in the health care market; interference to the point where even calling what we have a market seems ridiculous. American healthcare is a twisted system of State granted monopolies, subsidized demand, and artificially reduced supply. Not a winning trifecta.

Health care, as important as it is, is still a good to be bought and sold and medical services are very much like services in many other industries. The solution, of course, would be to fully unleash the power of the voluntary free market and get government out of the way. In 2009, Hans Hoppe published a “A Four Step Healthcare Solution“, in which he provides a short outline on the transition to a free market.

The free market isn’t a utopia and problems are going to exist in any system, but what the market does provide is the highest quality healthcare and lowest cost and does it without heavy handed government interference.

How the ADA Ends Up Handicapping Everyone

The American’s with Disabilities Act of 1990, ADA for short, was passed to prohibit discrimination against people with disabilities. To achieve this, the ADA expands on the anti-discrimination criteria provided by the Civil Rights Act of 1964. This includes forcing employers to provide ‘reasonable accommodations’ for disabled employees, as well as forcing businesses to to provide ‘public accommodations’ for disabled patrons.

Though public accommodation laws are usually well-intentioned, they are fundamentally antithetical to libertarianism.  Not only that, sometimes the practical issues that arise from ADA lawsuits become downright ridiculous.

Enter this story from the University of California, Berkeley. The University was generously offering more than 20,000 free video lectures, podcasts and other media on their website for everyone to study and enjoy. These videos are now going away as a result of an anti-discrimination complaint brought by two employees of Gallaudet University, a school for the deaf. The reason: the videos do not provide closed captioning and, therefore, are not accessible for everyone.

The Department of Justice agreed with Gallaudet and found UC Berkeley in violation of the ADA. Instead of spending the money to provide the required access, the University is limiting the content to students and staff only, beginning March 15.

As unfortunate as that is, I can’t say I’m surprised. Government regulations rarely result in the consequences that were originally intended. In fact, most regulations end up hurting the very people they are designed to help. Take, for example, licensing laws that restrict low income entrepreneurs from starting businesses, or taxes that target predominately low-income goods like cigarettes.

This problem here is that UC Berkeley is providing their own content for free online. They are under no obligation to provide these videos for free and they shouldn’t have to spend one cent to alter their content to be more widely accessible. End of story.

When problems exist in society, we should not have State thugs bullying people and institutions into submission through excessive regulations and legal threats. We need instead to allow voluntary, free market solutions to be put into practice. For instance, maybe Gallaudet could have worked in partnership with UC Berkeley to provide transcription services, or perhaps any number of third parties could use any number of technologies to allow easier access. Given the fact that Gallaudet is a deaf college, I could imagine a scenario that these services would even be provided for no charge.

Unfortunately, this is a story that ends all too predictably; the consequences of ADA regulations aren’t that the disabled are helped up, it’s that everyone ends up handicapped.