Rate Control is no different than Rent Control

Essentially everybody who actually understands economics agrees that rent control is bad for those seeking housing (or whatever “rent” is being controlled). That is: rent control is bad for the very people it is envisioned to help.

Payday lending, predatory lending, and other lending interest rate controls are no different than rent controls. By capping the rate that can be charged for whatever kind of loan is given, those seeking loans – for whatever reason – will suffer. They might not be able to get loans or perhaps they’ll be forced to pay in some non-traditional (non-regulated) fashion. It will happen. The market always finds a way to get the risk-reward profile approximately correct. (Because if it didn’t get the risk reward profile correct, the market for that good/service/whatever would not exist.) Capping prices (or restricting transactions entirely) causes some kind of black market.

So when the Times calls for capping rates as a way to help service members and poor people, what they’re doing is proposing a new system of rules that will make those people’s lives harder. One might put it differently: the Times wants service members and the poor to suffer.

-JD Cross

Who watches the watchmen?

In another apparent case of regulation and oversight not doing what they’re supposed to do, highway guardrails have come under scrutiny.

Part of the problem is this (it’s a problem inherent in large systems that cannot be avoided; which is why large systems should be avoided): many people in the regulatory agency decide to sign off on the use of these guardrails. Billions of dollars are spent. Then, a problem arises. Do those people, does the agency, want to admit it was wrong? No. Even if it wanted to admit it was wrong, does the agency have the financial capacity to correct or reverse the decision? Probably not. The problem is that large systems cannot correct bad behavior, assuming they even want to (which often they don’t).

-JD Cross

Occupational licensure is a dark business

George Will writes about a teeth whitening case that the Supreme Court will hear this week. Yes, it’s about teeth whitening. Yes, it’s important. Why? Because it’s really about the absurd and abused practice of occupational licensure. Occupational licensure, that would be the practice of a group of people banding together to create a government sanctioned monopoly. Oh, sorry for the redundancy, I meant, simply, a monopoly; as it is ONLY with government intervention that monopolies can exist in the first place.

Two teasers from Will’s article:

The [North Carolina State Board of Dental Examiners], whose members are elected by licensed dentists and dental hygienists, regulates the practice of dentistry in North Carolina. To the surprise of no one acquainted with human nature, the board wields its power for the benefit of fellow members of the cartel of licensed dental practitioners.

and my favorite:

North Carolina’s dental board says it should be presumed to act in the public interest.

Yes, because we all know that there is no way a “dental examiner” – a human – would ever act against the public interest. Just like politicians always act in the public interest. WHAT EVEN IS THE PUBLIC INTEREST?

-JD Cross

WaPo continues to shine a light on civil asset forfeiture

Kudos to the Washington Post for continuing to report on the travesty of justice known as civil asset forfeiture.

-JD Cross

Choosing not to have insurance

Intelligent sounding people making decisions that sound intelligent for them. Who’d a thunk it? Not our overlords in DC.

-JD Cross

The will of the people

Too often – dare I say, virtually all the time – contemporary citizens of free or mostly free (I use the word “free” in a casual and I believe well understood manner here) countries don’t understand what democracy is (and here I use the word “democracy” in a very specific, well-defined sense, one which will become clear momentarily). In fact, Wikipedia even highlights this confusion and destruction of the concept of democracy at the end of its second paragraph on the topic. Democracy is nothing more or less than a political system in which laws and/or representatives of the people are established or elected by people who have an equal right to participate. Essentially: one person, one vote. Note that historically, it has not even been the case that all people had an equal right to participate. In Ancient Greece, for example, the birthplace of democracy, only “elites” (however that was defined) could vote. There were a lot of revolutions in Ancient Greece and there was a lot of killing or marginalizing of one’s enemies when one group of elites wrested power from another.

In no contemporary country does democracy mean majority rule by individual citizens, which is, I believe, what most people today think it is. Even if everybody has the right to vote as is the case in, for example, the United States, there is still three part system of power sharing. At the Federal level, individual citizens cannot do anything. No, an individual acts through her Congressional representatives. Why don’t people understand this? Why doesn’t the President understand this?

Here’s George Will in an excerpt from a larger piece of his on the amelioration of Congress’ power and responsibility to keep the Executive branch of government in check (and, further, to exercise its proper power of authorizing war):

“…Obama spoke to the public, not to the public’s institutional embodiment, Congress…”

As Will points out, it is not the public to whom BO should be pleading his case; it is Congress.

Yes – Congress is the public’s Federal institutional embodiment. It’s not majority rule by the people. It’s: elect Congressional representatives who then go to DC and haggle (or, in the case of Will’s point, just roll over and let the Prez do what he wants).

The people do not have the power to authorize the President to go to war; Congress does.

In the US, and perhaps or perhaps not in other “free” places, the will of the people doesn’t matter; what matters is what Congresspeople get elected and what they choose to haggle about and what deals get made. Such is democracy.

-JD Cross

The Grave Injustice Known as Civil Asset Forfeiture

From the first two directors of the Federal version of “the initiative”, here is a piece in the WaPo that clearly explains why CAF is corrupt, immoral, and should be abolished.

It’s a tale of incentives, emergent order, unintended consequences, corruption, mission creep, abusing the law, … it’s actually quite similar to Evolve.

-JD Cross

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