Government regulation gone wild!

The U.S. Department of Labor (DOL) is investigating the Johnston and Grimes fire departments, according to a report today, 9/23/2013, the Des Moines Register.  The DOL is looking for wage and hour violations.  The two cities share a fire chief, and some of each city’s full time firefighters also work for the other city’s fire department on a “paid on call” basis. The Register quoted the fire chief as saying, “It’s a common practice among firefighters in the Des Moines area to work paid on-call hours for another department to make more money.”  The DOL is looking into the possibility that these firefighters should be considered under labor laws as working for a single employer and get paid overtime for excess hours.

Unless the fire chief is somehow forcing the fire fighters to work the extra hours, which has not been suggested, then there should be no question about the legality of the situation and the DOL should butt out.  This is simply a case of Cities doing their best to share services and keep costs down for taxpayers, and giving firefighters the freedom to earn extra money.  Let’s hope the DOL doesn’t screw this up.

Ethanol credit speculation – for dummies

Speculators are being blamed for increases in ethanol RIN credits!  Renewable Identification Number (RIN) credits are issued to manufacturers for every gallon of ethanol that they blend into gasoline.  All manufacturers are required to meet targets for blending ethanol into their gasoline – in order to meet national Renewable Fuels Standards.  If they fail to meet their targets, they have to pay substantial penalties.  Some manufacturers exceed their targets so they have excess credits that they are allowed to sell.  Others fail to meet their targets and either have to purchase credits from other manufacturers or pay the penalties.  If, for the entire market, it appears there will be a shortage then the price of the credits will go up.  If it were possible for a few speculators to “corner the market”, then they might be able to hold out for higher prices.  But, the there were truly a shortage, then manufacturers who have excess credits could just as easily do the same.  In either case, this puts pressure on manufacturers to blend more ethanol.  If there is a shortage of ethanol, then the price of ethanol should rise.  If the price of ethanol rises than ethanol producers will try to increase their production to capture more profit.  In any case, the credits are doing what they are supposed to do: reward manufacturers who blend excess gallons and penalize those who blend less than their target.  If the entire market is below the target, then there will be incentives to produce more ethanol.  Speculators help the market to work as it was intended.  The real problem here is the entire Renewable Fuel Standards that uses force, in the form of money penalties, to make everyone use more ethanol than they would in a voluntary market.  This is a classic case of unintended consequences that occurs when people discover, as Friedrich Hayek wrote, “…how little they know about what they imagine they can design.”

Don’t mandate rear-view cameras!

It is very sad every time we read about a child being hurt or killed when a driver accidentally runs over the child while backing up.  (See The Des Moines Register – 4/11/2013 – “Rear-view cameras could have saved tot, Iowan says”)  So, it is understandable why parents who have experienced this tragedy would lobby Congress to require all new cars to have a rear-view camera.  Unfortunately, rear-view cameras would not prevent most of these accidents.  I have had a rear-view camera for several years and, like most people, I look at it when I know there is something behind me – for example when parallel parking.  Otherwise, when I am backing up, I am also looking at side view mirrors and both left and right to see if there is any other traffic or obstacles   If we must require all new cars to have a backup accident prevention device,then it should be a device with a sensor that sounds an alarm if it detects something near the back of the car.

Right To Work – amendment proposal is bad.

Both current Iowa law and the proposed “right to work” amendment to the Iowa Constitution prohibit a private business owner from voluntarily agreeing to hire only union members.

In a free society that respects private property rights and freedom of association, business owners should be free to choose whether or not to bargain with anyone or group about any terms of employment.  Government should not get involved either for or against the employer or the employees except to stop either party from using force or fraud against the other.  If an employer wants to hire only union members and bargain with a single group, then government should not prohibit it.  In that case, individuals who don’t want to join the union can simply refuse to work for that employer.

Just as an employer should be free to agree to hire only people who are members of a union, an employer should also be free to not bargain with any individual or group, including unions, regardless of what employees or union members might vote for.  Unless the parties agree by voluntary contract to the contrary, employees should be free to strike, quit, protest, organize boycotts, etc., and employers should be free to fire, lock-out, hire replacements, etc. – as long as neither party uses force.

The whole issue of whether “union certification votes” should be by secret ballot or by a written card check method should not exist.  There should be no law to force employers to bargain with unions, even if 100% of the employees vote for it.  All employment relationships and contracts should be entered into voluntarily by both parties.  The only proper role for government in private business relationships is to stop the use force or fraud against, and to resolve disputes.

In the special case of government as the employer, there should be no requirement that employees join a union, and there should be no requirement that a government bargain with any union.  Government is paid for by all taxpayers under threat of force.  Therefore, government, as an employer, should not discriminate in its employment practices except on the basis of job requirements or job performance.

The proposed amendment to the Iowa Constitution should die, and current Iowa law should be changed to reflect the voluntary nature of any employment relationship.

Don’t regulate swipe fees.

Congress has no proper business getting involved in regulating credit card swipe fees.  Contrary to the editorial in the Des Moines Register by Bill Leichsenring, the market is not broken (“Congress must rein in credit card swipe fees” 11/27/2012″ – see link below).  There is a great deal of competition to process merchant credit card transactions.  I am a retail business owner who pays thousands of dollars in credit card swipe fees each year.  We receive solicitations all the time from companies that would like to process our credit card transactions and try to lower our fees.  Fees do vary widely, but they are not as low as Mr. Leichsenring reports they are in Europe.  If our government is doing anything to prevent European banks from competing in the U.S., or to prevent competition in the credit card market, those things should be stopped.  Otherwise, we should not be asking government to step in and use its force to lower prices that we think are too high.  No business is required to accept credit cards.  They do it voluntarily because they think it will improve their profits.  If businesses don’t want to pay the credit card fees, they don’t have to accept them.  They could accept only cash or checks.  They could offer their own direct charge accounts.  They could even look into offering newer alternatives like Paypal or Dwolla.  When it comes to free market capitalism, most businesses want it for everyone else.  In their own businesses, they want crony capitalism or mercantilism – where government protects them against competition, bails them out when they lose money, but lets them keep the profits.

Link to Register article: http://www.desmoinesregister.com/article/20121127/OPINION01/311270075/Iowa-View-Congress-must-rein-in-credit-card-swipe-fees?Opinion&nclick_check=1

Don’t require BS for RNs.

Iowa should not require registered nurses (RNs) to have a bachelor’s (4-year) degree in order to get a license to practice.  Currently, Iowa law allows people to become RNs if they complete an associates (2-year) degree and pass a uniform exam.   As the Des Moines Register reported, opponents of the bachelor’s degree requirement argue that bachelor’s degree programs have not proven to result in better care.  (“Bachelor’s for nurses considered” 1/414/2012 – see link below.)
The Education Standards Of Practice Committee of the Iowa Board of Nursing is charged as follows: Review options and develop a proposal to submit to the Iowa Board of Nursing for the Associate Degree prepared nurse to educationally transition to a Baccalaureate in Nursing Degree as a license renewal requirement.  Why was the committee not charged to investigate whether or not there are public safety problems with the current requirement, and, if any are found, whether or not requiring a bachelor’s degree would solve such problems?  We do know that such a requirement would significantly increase the cost of becoming an RN for many people.  That would likely result in fewer RNs and higher health care costs (and higher wages for RNs with bachelor’s degrees and more students in four-year colleges of nursing).
Of the 16 appointed committee members, 11 are RNs with a bachelors or higher degree, 3 are not nurses – representing consumers, community colleges, and four-year colleges, and 2 are nurses who appear to not have bachelor’s degrees.  (See link to committee list below.)  So, 12 of 16 appear to have a vested interest in making the bachelor’s degree a requirement.
The only purpose for government licensing of any profession should be public safety.  More often than we would like, politically favored groups with vested interests ask to be licensed (or regulated) by government in order to to reduce  competition and increase their own wages or profits.  Since the committee meeting reported by the Register was not open to the public, we should presume it was because those with vested interests in making a bachelor’s degree a requirement did not want their comments heard.
The Register reported that there will be public hearing on this issue after the next closed committee meeting on December 13th.  Let’s hope the public hearing is packed with people who care about both public safety and the freedom to practice a profession without unneeded government licensing regulations.
Link to committee list and charge by the Board of Nursing:  http://www.state.ia.us/nursing/images/pdf/EdStand%20of%20Prac%20Committe.pdf

Global warming and government.

It appears that our Earth is warming more quickly and is likely due, in part, to human action.  Our climate has always changed and will always continue to change.  The key question is: “What is the role of government?”  I don’t think it is to try to stop climate change.  Government has a proper role in regulating pollution of our common environment.  But our air and water have never been perfectly clean.  As our society has become more affluent, we have done much to clean up our environment.  We still have work to do.
Government’s proper role is to help us adapt to the changes.  Increasing the availability and lowering the cost of energy will improve our lives and our health more than government efforts to reduce carbon emissions to try to slow global warming.   Taxing energy not only makes it less affordable, but Increasing the flow of money to Washington also has its own negative consequences.
We will be best able to adapt to climate changes if we are economically prosperous.  People are more prosperous when energy costs are lower.  Energy costs are lower when there is a truly free market in energy.  Government policies that force us to be “energy independent” raise energy costs.  Government should not prohibit free international trade in energy.  We should stop subsidizing all forms of energy – treat them all equally.  Government should regulate incrementally to continue to reduce pollution, but not make major changes that dramatically increase the cost of energy or that increase the flow of money to Washington.

Iowans don’t live in poverty.

Contrary to the picture painted by the recent series of articles in the Des Moines Register, very few Iowans actually live in poverty.  What we have is families who whose incomes, before counting any welfare benefits received, are below government established guidelines for poverty.  We measure “food insecurity” because very few Iowans are actually go without food for any extended period of time.  Taxpayers provide food stamps, Medicaid health insurance, subsidized housing, and much more.  Charitable organizations provide food banks, clothing, shelters and much more. For children, taxpayers also provide pre-school, meals before, during and after school, subsidized child care, and much more.
We clearly have an effective and extensive safety net.  The relatively few who fall through the cracks either don’t know about the benefits or won’t ask for help.  It appears quite clear that we do not need to spend more taxpayer money to expand welfare benefits.  It’s actually hard to imagine that spending for welfare programs cannot be reduced.  There has been much anecdotal evidence of fraud and abuse in our welfare programs by both recipients and providers.
Today, the best way to help the poor is by having a vibrant, growing economy with enough jobs for those who are willing to work, not by expanding welfare benefits.  To encourage a growing economy, we need for our government to stop regulating businesses in areas not related to employee and public safety or pollution of our environment.  Government should not mandate pay levels or benefits.  Government should not provide corporate welfare (subsidies) to artificially prop up favored industries.  Just as with individual welfare, corporate welfare breeds competitive weakness and dependency on government.

Patents gone wild!

Patents are government enforced monopolies that are granted to encourage innovation.   There is no natural property right in “intellectual property” (IP).  Natural property rights exist in physical things.  If you create or obtain property by peaceful and honest means, then you have a natural right to keep and defend that property against those who would use force or fraud to take your property from you.  Governments are created to help protect those rights.

Throughout most of human history there has been no recognition of  patents.    Anyone could copy a good idea from anyone else.  Only Kings or other dictators bestowed monopolies to favored groups and used force to stop those who infringed on the monopoly.  The inventor of the first wheel had a natural property right in that specific wheel.  Other people who made similar copies for themselves did not take anything away from the original creator.  Why should force be allowed to stop someone from copying from someone else?  Do the ends justify the mean?  Isn’t it immoral to use force to stop a peaceful person from doing something that does no harm to others?

It is wrong to assume that people would not be inventive if they had no patent protection.  They might be more inventive and more creative.  Do a thought experiment:  What would happen if there were no patents?  Might there not be more and faster invention?  As much as possible, inventors would try to keep their manufacturing processes secret.  But keeping such secrets would be very difficult, if not impossible in many cases.  Inventors would also try to use contracts to prevent people from copying their inventions.  Contracts would give them some protection, but only against those who are party to the contracts.

Patents are supposed to be granted only for original inventions that are not obvious.  In the recent case between Apple and Samsung, one of the patents which Apple successfully defended was the “look and feel” of the IPhone, including the rounded corners and the “bounce-back” screen.  Mercedes Benz has a new TV ad where they tout that they have over 80,000 patents.  (See: http://www.youtube.com/watch?v=yc6CejduPP0)  Is that a good thing?  Today, it is becoming very difficult to create anything technical without infringing on someone else’s patent.  What government gives, government can take away.  Until we get rid of patents, our government should get much more conservative about what types of inventions get patent protection and about how much time the patent is granted for.

In the case of drugs and medical devices, I would feel much better about our government providing for our “general welfare” by funding medical research if no patents were allowed if taxpayer money is used in anyway to fund the development.  Inventions based on taxpayer funded medical and technological research, or based on research done at public universities should not be patentable, either by the States or the universities.  They should be left in the public domain for the benefit of all citizens.

AFL-CIO president is wrong.

The letter to the editor in the Des Moines Register on July 4, 2012 by Mark Cooper, president of the South Central Iowa AFL-CIO,  makes clear that he refuses to recognize the laws of economics and want government to tip the balance in his favor.  He bemoaned, “The closure of more than 50,000 manufacturing facilities, the loss of nearly 6 million manufacturing jobs, and chronic trade deficits are all signs of our diminished industrial and innovative capability.”  In fact, over the past 30 years manufacturing output has more than doubled after adjusting for inflation.  U.S. manufacturers are very innovative and have increased capability.  Innovation and improvements in technology have allowed higher output with fewer jobs – especially fewer unskilled jobs.  It used to be that an honest, hard working person with few skills could get a job in a factory that paid well.  Over time, machines have been developed to do the strenuous, repetitive and dangerous tasks.  It is specifically innovation, not international trade and low wages in foreign countries, that has caused most of the job losses in manufacturing.

International free trade does put downward pressure on wages, but it also has the benefit or lowering the prices we pay for many products and services.  There have been real losses in jobs and manufacturing since the recession started in 2008, but the recession was caused by a government abetted speculative bubble in the housing market, not international trade.  Minimum wage laws price out of the market those with the least skills, and at the same time tends to keep prices high when they otherwise might fall.  What exactly would be wrong if wages fell 25% but prices fell by 50%.  Unfortunately, our government has a vested interest in making sure that we have inflation in our economy.  They are working very hard to push up the prices of houses, which probably has the biggest negative effect on relative poor people who don’t have a home but would like to buy one.

Philosophically, people should be free to peacefully and voluntarily exchange their labor and their property without interference by government.  When government gets started in regulating trade, those with the most political power will get protection and everyone else will pay higher prices.