Can’t our federal government spend money on anything that promotes the general welfare of citizens?

Here is what one of our founding fathers, James Madison, said about our Constitution and the ‘general welfare’ clause:

“With respect to the two words ‘general welfare’, I have always regarded them as qualified by the detail of powers connected to them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

We have gone far outside the Constitution with respect to both corporate/business welfare and social welfare.

As Walter Williams might say, most Americans and politicians have contempt for our Constitution. They very much have violated its clearly written provisions and think that is best. They think we should have a pure democracy where the majority gets whatever they want. (We have a republic with a constitution that protects the rights of minorities.)

If they really think the Constitution is wrong, the proper way to amend it is by getting three-fourths of the State Legislatures to agree. That may be hard. It is intended to limit the power of the federal government and leave other powers to the states or the people. As it should be.

The battle among the crony capitalists!

I read the report in The Des Moines Register about the questioning of Tom Vilsack by Joni Ernst during the Senate hearings on Vilsack’s nomination for Secretary of Agriculture.  (Vilsack nomination moves to full Senate” 2/3/2021)  President Biden has ordered the development of a plan to convert all federal, state, local and tribal vehicles, including Post Office vehicles, to “clean and zero-emission vehicles.”  Ernst asked Vilsack if he will direct the USDA to buy Tesla trucks that run on electricity or Ford vehicles that run on 85% ethanol.  Vilsack, like a good politician, said it’s not ” an either-or circumstance.”  It will be interesting to see how Vilsack balances the interests of farmers and biofuels producers with the interests of the zero-emissions vehicle and power producers.  One thing is for sure: lobbyists will be in high demand.

Governor Reynolds supports crony capitalists.

Governor Reynolds has proposed legislation to make, “…biofuels the clear choice for Iowa drivers…”, by mandating a minimum of 10% ethanol in all gasoline and 11% biodiesel in all diesel fuel sold in Iowa.  (See link to Register report below.)  If her proposal becomes law, it would make biofuels the clear choice – because then there would be no other choice.

This is a shining example of how government works when a law or regulation has concentrated benefits and dispersed costs.  Those who receive the concentrated benefits, (in this case farmers and biofuel producers), will lobby heavily to get their benefits, while the cost to any individual is so small that it doesn’t justify the time or money to lobby against the legislation.  Then, those who receive the benefits become dependent on them and continue to lobby to ensure that the benefits never come to an end. Don’t call it free-market capitalism.  It’s called crony capitalism.  

Link to Register report – printed 1/27/21:  https://www.desmoinesregister.com/story/money/agriculture/2021/01/26/kim-reynolds-plans-require-10-ethanol-11-biodiesel-iowa-fuel/4259109001/

Patents should be more restricted, not liberalized.

I disagree with Paul Michel and Matthew Dowd, (Wall Street Journal, 1/24/2020, link below), that our patent laws do not give adequate and clear protection to inventions.  Conversely, we have become too liberal in both what is allowed to be patented and the length of time that patents are granted.

They urge the reversal by Congress of the Supreme Court of rulings that prohibit the granting of patents for “abstract ideas” and “natural phenomena”.  Abstract ideas, like mathematical formulas, computer code, or simple ideas drawn on paper, and natural phenomena, like the discovery of particular DNA or naturally occurring chemical compounds, should not be patentable.

Originally, U.S. patents had a maximum life of 14 years, then 17 years, and then 20 years.  Companies that earn billions of dollars in profits every year on their patents are very willing to spend many millions of dollars to lobby congress to extend their monopolies.  Who spends money lobbying to reduce the term of patents?  Shouldn’t the term of monopoly protection granted depend in part on how much it costs to meet government regulations related to the invention?  For example, prescription drugs may deserve a long patent term because of the cost to meet government regulations.  But there is no logical reason why all patents should be granted for the same length of time.  (Design patents are granted for shorter periods, but why should they be granted at all?)

The concept of “intellectual property” is man-made.  Since time immemorial, humans have copied one another.  For millennia legally protected private property was limited to physical property which could only be possessed by one person at a time.  Ideas can be possessed by many people at the same time without infringing on the physical property of others and without the use of force.  Monopolies, including the exclusive use of inventions, were originally granted by Kings to favored subjects through the use of force.  Our government protects patents through the use of force.  Contrary to the Founder’s intent, some patents appear to slow innovation rather than encourage it.  The case can be made that no patents should be granted.  In this case, Congress should expand patent protection.

Link to Wall Street Journal opinion:

https://www.wsj.com/articles/americas-innovators-need-clear-patent-laws-11579824646

Open letter to our federal legislators – please try to balance costs and benefits during this pandemic!

An open letter to our federal representatives  (I emailed this to my three federal representatives:

As you consider how much the federal government should spend in response to the current pandemic, please consider the following:

One trillion dollars equals about $3,000 per person for every man, woman, and child in the U.S., or about $12,000 per family of four!  Please be careful not to spend our tax money on anything that is not needed and not directly caused by the pandemic.  Specifically, there should be no money spent on the following:

• Seniors and others on Medicare, disability, pensions, and other fixed incomes – they will continue to be paid.
• People who have had no reported W-2 earnings during the past year – since they have been getting by on unearned income
• People who have household earnings around or over $75,000 per year – they qualify for unemployment benefits.

Don’t give grants, but make low-interest rate loans available.  We can decide later whether or not to forgive any loans.  Don’t allow unrelated “riders” on any pandemic response bill.  For example, don’t’ forgive student loans, don’t add any permanent employer mandates such as child care, sick pay, paid family leave, etc.  Watch out for and deny other special-interest legislation trying to take advantage of this crisis.

Please try to balance costs versus benefits.  We have lived normally with the flu killing tens of thousands of U.S. citizens every year.  I am a senior – age 66 – and I don’t need any bailout.

Iowa needs to eliminate licensing laws and regulations that protect existing practitioners rather than their customers.

I agree with Valerie Stallbaumer in her letter to the editor in The Des Moines Register, (See link below), that the purpose of professional licensing requirements by government is to help protect the public from harm.   I disagree with her that it also is to guarantee quality. Safety issues are usually objective: we know pretty well what kind of things can hurt people.  Licensing should assure us that the licensed person knows and follows safe procedures.  But for many licensed professions, quality is subjective. If acupuncture is not effective for some people, what is the harm as long as they don’t get an infection?  The only reason I can think of why government would require a four-year program for acupuncturists is that acupuncturists and their schools lobbied for licensing to protect themselves against competition and to appear more professional.  Acupuncturists, physical therapists, tattoo artists, and ear piecers probably can learn proper safety procedures related to “needling” in just a few days.  We do need a complete review of licensing requirements and regulations in Iowa to eliminate those that prevent competition rather than protect people.

Link:  https://www.desmoinesregister.com/story/opinion/readers/2020/02/25/letters-favoring-iowa-lightning-bug-legislation/4819986002/

No end to subsidies for favored industries?

The $1 per gallon tax credit for biodiesel producers just passed the U.S. House and appears likely to become law.  The credit, which expired at the end of 2017, will be extended retroactively 2 years and forward for 3 years through 2022.  This tax credit started in 2005.  How long must the welfare continue?  Biodiesel producers are no different than most other businesses and industries in that they become dependent on subsidies and lobby heavily to prevent the subsidy from ever ending.  We need to pass laws that phase out all forms of energy subsidies, as well as subsidies given to other favored industries.  We need free-market capitalism, not crony capitalism.

Link to related Register report:  https://www.desmoinesregister.com/story/news/2019/12/17/spending-bill-includes-long-sought-biodiesel-tax-credit-renewal/2677476001/

Our federal legislators should oppose reauthorization of the Export-Import Bank

I urge our elected federal representatives to oppose the reauthorization of the Export-Import Bank.  (The Ex-Im Bank provides taxpayer guarantees to U.S. companies that export and sell products to international customers.  Authorization is set to expire on 9/30.)  This has been and continues to be a quintessential example of crony capitalism.  If a U.S. exporter has customers who find it difficult to find financing, the seller can always guarantee a loan and get a security position to get the asset back in a worst case.  If they still cannot get financing, the seller could provide direct financing.  In any case, our government should not guarantee such loan private companies.

I’m sure that small and large Iowa export companies are heavily lobbying for reauthorize the Bank.  I hope our representatives resist the pressure and vote against this bad policy where taxpayers are asked to take the risk and private companies reap the profits.

Bootleggers and Baptists – strange bedfellows.

During the time of alcohol prohibition, bootleggers and baptists were both opposed to repeal of the Eighteenth Amendment.  It’s an example of how, “politics makes strange bedfellows.”  Even though the two groups seemed to have completely opposite views about drinking alcohol, they both opposed the repeal of prohibition: The baptists for moral reasons, the bootleggers for financial reasons.

I read the report in The Des Moines Register about how scared the Iowa medical marijuana dispensaries are about losing money once the legalization of recreational marijuana in Illinois begins next January 1st.  (see link below)  It makes me wonder if Iowa might face a similar situation in the future. The governor and many other politicians oppose efforts to legalize the recreational use of marijuana for moral reasons.  I wonder if Iowa’s legal medical marijuana producers and sellers will oppose efforts to legalize recreational marijuana for financial reasons?

Link to Register report:   https://www.desmoinesregister.com/story/news/2019/07/09/marijuana-illinois-law-recreational-use-iowa-cannabis-department-of-public-safety-division-narcotics/1573867001/

Congress has the power to prohibit states from giving special incentives to specific businesses.

The Des Moines Register recently published an editorial that showed how out-of control Iowa and other states are in giving incentives to businesses to locate in their state.  To help reverse this situation, Congress should exercise its Constitutional power to “…regulate commerce… among the several states…” and should limit states’ ability to bribe companies to locate in their state.  States should be prohibited from giving custom incentives to specific businesses to locate in their state.  They should only be allowed to use schemes that provide uniform incentives to all companies that locate their business or otherwise create new jobs in that state.

Link to Register editorial:  https://www.desmoinesregister.com/story/opinion/editorials/2018/11/20/amazon-apple-corporate-iowa-workers-education-environment-bribing-business-workforce-jobs-money-tax/2061418002/