Category Archives: Business

IRS Implications

I’m suspecting that a lot of Democrats are going to come to regret, sooner than later, making the IRS a central player in #ObamaCare.

[Update a few minutes later]

[Update a while later]\

OK, you wanted a link? Here‘s a link to several.

I like this:

Government investigators have found that the Internal Revenue Service scrutinized conservative groups for raising political concerns over government spending, debt and taxes or even for advocating making America a better place to live, according to new details likely to inflame a widening IRS controversy.

Emphasis mine.

How subversive. They are history’s monsters.

The Gas Can

How government wrecked it:

I’m pretty alert to such problems these days. Soap doesn’t work. Toilets don’t flush. Clothes washers don’t clean. Light bulbs don’t illuminate. Refrigerators break too soon. Paint discolors. Lawnmowers have to be hacked. It’s all caused by idiotic government regulations that are wrecking our lives one consumer product at a time, all in ways we hardly notice.

It’s like the barbarian invasions that wrecked Rome, taking away the gains we’ve made in bettering our lives. It’s the bureaucrats’ way of reminding market producers and consumers who is in charge.

At some point, in ways large and small, people will revolt.

Nobody Knows How to Make A Pencil

or a health-care system:

We treat technological progress as though it were a natural process, and we speak of Moore’s law — computers’ processing power doubles every two years — as though it were one of the laws of thermodynamics. But it is not an inevitable, natural process. It is the outcome of a particular social order.

Which reminds me of the Heinlein quote:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

Kevin’s new book just came out this week.

Hospital Costs

Why the huge variation? It’s because of the huge disconnect between the consumer and provider. When a third party pays, all transparency, and need for it, is lost. As Glenn writes:

You could do more for real cost control by requiring hospitals to publish fixed prices for most procedures than from any amount of bureaucratic fiddling — though such an approach would provide disappointingly few opportunities for graft.

When I got my hernia fixed last year, I didn’t just shop doctors, I shopped surgery facilities and even anesthesiologists. Because I was paying for it.

Where Are The Startups?

A lot of people, including me, have accused the administration (and the Congress, when Democrats were in charge) of waging a war on business, but it’s really a war on small business and startups:

…what’s to blame for this change? A lot of things, probably. One reason, I suspect, for a job market that looks more like Europe is a regulatory and legal environment that looks more like Europe’s. High regulatory loads — the product of ObamaCare and numerous other laws — systematically harm small businesses, which can’t afford the personnel needed for compliance, to the benefit of large corporations, which can.

Likewise, higher taxes reduce the rewards for success, making people less likely to invest their money (or time) into new businesses. And local regulatory bodies, too, make starting new businesses harder.

But I wonder if the biggest problem isn’t cultural. Since 2008, this country hasn’t celebrated achievement or entrepreneurialism. Instead, we’ve heard talk about the evils of the “1%” ” about the rapaciousness of capitalism, and the importance of spreading the wealth around. We’ve even heard that work in the public sector is somehow nobler than work in the private sector.

Countries where those attitudes prevail tend not to produce as much entrepreneurialism, so it’s perhaps no surprise that as those attitudes have gained ascendance among America’s political class and media elite, we’ve seen less entrepreneurialism here.

It doesn’t bode well for the future.

The End Is Near

…and it’s going to be awesome:

…government-dominated systems are inherently defective. Not because the people who run them aren’t smart and well-intentioned — though they are by no means universally smart and well-intentioned — but because it is the nature of political institutions to be insulated from the information-feedback that characterizes marketplace activity.

Simply put, when Coca-Cola introduces New Coke or McDonald’s introduces the McGratin Croquette (shrimp, mashed potatoes and deep-fried macaroni) and hordes of people don’t show up to buy them, those products go away, and if a company makes enough such unwanted products, it goes away, too. But if you live in The Bronx and your local elementary school is terrible, it does not go bankrupt, and you probably don’t have even 20 other options, though there are 900 kinds of shampoo on the shelves. There are many good ways to invest 12% of your income for retirement, but that’s harder to do when you first have to put 12% into a bad investment, Social Security.

The decline or dismantling of these programs will prevent us from pouring a great deal of good money into bad investments. Social Security, Medicare, Medicaid and related entitlements make up the largest part of federal spending; combine those with national defense and interest on the debt, and you are talking about nearly the entire federal budget — about 81%, with the rest of it comprising that piddling non-defense discretionary spending that President Obama goes on about.

But where we’re not going to be putting our money is not nearly as important as where we are going to be putting it: into productive enterprises, into the creation of actual goods and services in the real economy.

Here’s the new book, which comes out today.

Money Wasted On Advertising

…by New York State:

You can’t make major changes like these in a state like New York without attracting lots of free attention and publicity. Do the job well and you won’t have to spend a penny on publicity. If New York state became a genuine leader in business-friendly reform, headlines everywhere would blare the news out for free. Every sentient business leader in America would know that New York state was open for business again.

But other states have nothing to worry about. The corruptocrats in Albany and in the City aren’t going to change their ways any time soon.

African Goats

…and American exceptionalism:

American exceptionalism — to the extent it remains — is not the product of some sort of genetic superiority. The settlers who made something of Jamestown after Dale’s reforms were the same ones who were bowling in the streets instead of working when he arrived.

What is exceptional about America — at least, what’s been exceptional up to now — is the extent to which individuals were allowed to keep the fruits of their own labor instead of having them seized by people in power for their own purposes. The insight behind American exceptionalism is that people work harder and better for themselves, as free people, than they do as servants for some alleged communal good.

But maybe Shapiro’s right, and this insight isn’t as exceptional as I make out. After all, it’s also contained in a West African proverb, to the effect that “The goat owned in common dies of hunger.”

Human nature isn’t so different, whether you’re in 17th century North America, 19th century Africa or the 21st century United States.

What’s striking isn’t that human nature is the same, but that so many want to pretend that it’s not.

The primary project of the left, since Rousseau, has been about the denial of human nature or, if they conceded that it exists, to force it into a different Procrustean mold, and build the New Soviet Man. All in the name of fairness and compassion, of course.