It’s Not Fair!

Privatize the post office? We can’t do that. A first-class letter from Boston to New York City might cost only a nickel. But a letter from Boston to a rural town in Montana might cost a dollar. For rural residents this wouldn’t be fair.

Not fair, eh? Rural post offices have become such a cash drain that the postal service might have to close them down, leaving the residents with no service at all. They’d have to pay considerably more than a dollar a letter, if only in travel costs to reach an urban post office.

Fairness means paying according to the costs you incur as an individual. If you move from an urban to a rural area, you might save in housing costs. But you should expect to pay more for mailing costs.

U.S. postal employees are the world’s highest-paid unskilled workers. Let’s do away with the U.S. Postal Service and privatize the business. Nationally, the cost would fall, and the quality of service would undoubtedly improve.  

I Love Regulation, But . . .

Not by government.

Regulation should be undertaken by whoever stands to lose the most money when things go wrong. This would usually be insurance companies.

Say an investment company steals customer funds to cover its liabilities. (Sound familiar?) The company’s liability insurer, after a substantial deductible, would come up with the money. 

But with its money on the line, the insurance company would impose regulations and unpredictable audits in an effort to prevent the theft from occurring in the first place.

Would those regulations and audits be better than those being done now by the government?

Why of course they would. Because the insurance company, as mentioned, would stand to lose its own money. Government (and government workers) stand to lose no money of their own. They lose only other peoples’ money.  

And if the investment company, prior to the theft, chooses not to acquire liability insurance?

It would have precious few customers, certainly not wealthy ones. Most investment-company clients would insist that the company carry liability insurance.

Onward and Upward at the Fed

The original requirement of the Federal Reserve Bank was to maintain stable prices. But in the 1970s, Congress added the requirement that the Fed ensure maximum employment.

The original requirement of maintaining stable prices was just fine all by itself. In the long run, maintaining stable prices does ensure maximum employment. But when the second mandate was added specifically, the Federal Reserve took it upon itself to ensure maximum employment even in the short run.   

Big mistake. Since high unemployment is a political live wire, the Fed has expanded the money supply much too fast.

How does the Fed do this? It buys bonds and Treasuries and pays for them, in effect, by entering numbers in the bank accounts of the sellers. Those numbers represent new money which the sellers can spend as they please.

Since 2008, the Fed has been creating new money like there’s no tomorrow. For some years prior to 2008, the Fed held about $10 billion of Treasuries and bonds. But after 2008, the number surged, if can believe it, by 160 times, to $1,600 billion.

The results? Employment has not maximized; it has fallen. The rate of unemployment has not diminished; it has soared. And the gargantuan supply of new money has created the potential for disastrous inflation.

Nice job, guys. We’re going to try to find different work for you.

Two Wrongs Make a Right, Right?

Given that the federal government guarantees bank deposits, the feds now want to force banks to stop trading with their own money in financial markets, to prevent taxpayers from paying the tab when the banks lose.  

This would pile one use of force on top of another. The government wants to force banks to stop proprietary trading, to prevent people from being forced to make good on the government guarantees.

Here’s a better idea: Forget both policies. Repeal the government guarantees and treat bank proprietary trading as none of the government’s business.

The guarantee of bank deposits requires the government to regulate banks and conduct audits (whose ongoing costs add to the federal deficit). But dear old Uncle Sam does a miserable job of it. The 2008-2009 financial disasters developed right under the government’s nose.   

Bank audits should instead be paid for by prosperous people who would be concerned about their large deposits being safe.  

With the government guarantees repealed, banks would strive to reduce their investment risks as quickly as possible, for fear the privately-paid audits would induce their depositors to flee. The clean-ups would also benefit poor people, since they use the same banks as the wealthy but wouldn’t have to pay for the audits.

Two wrongs don’t make a right. Repeal the government guarantee of deposits and let the banks invest their own money in the manner their customers consider profitable but safe.  

Well, They Were Off a Little

Forty years ago, at a prestigious conference at the Smithsonian Institute, experts estimated known oil reserves at 455 billion barrels.

Funny thing happened on the way to our lights going out. Since 1972, the world has produced nearly 1 trillion barrels of oil. Current experts estimate known reserves to be 1.2 trillion barrels.

Even the current experts are wrong. Colorado and Wyoming can produce more than 1.2 trillion barrels all by their little lonesome.

Relax. The world contains oil enough for centuries.  

Insider-Trading Laws Have Unintended Consequences

New information about companies becomes available continually. Somebody benefits. The question is, who?

Insider-trading laws say that the person who first uncovers the news can’t profit by buying or selling the company’s stock. The person to whom he whispers the news? Nope, that guy can’t profit either. Until the information becomes public knowledge, which takes a while, the only people who can benefit are the ones in the brokerage industry who make the market in the stock. But those people are already prosperous.

Insider-trading laws favor the rich. Like most big-government policies, the actual results are opposite to the intended results. 

Examples of the War on Women by . . . Liberals

Our progressive tax system, favored by liberals, imposes higher tax rates against higher incomes. This hurts those women whose income piles on top of their husband’s income at high tax rates. A married woman keeps less of her income than a single person earning the same pay. The solution is a flat tax, which liberals oppose.

Women tend to move in and out of the work force. Few of them benefit from union-driven pension plans that reward long service. Liberals, in case you haven’t noticed, favor unions.

Some women on the job prefer “flex time,” which packs more hours into fewer days, giving them additional days off. This option is needed by mothers attempting to juggle work and family. Nope, the law prevents the flexibility. Liberals and their union buddies prefer to set the work arrangements, giving them the flexibility. Having power over other people’s lives is what they live for.