Freedom Line Blog

A group calling itself the “Progressive Change Campaign Committee,” which sounds so 2008 and even employs the same font and shade of blue as Obama’s “Organizing for America” page, is attempting to portray a false consensus in favor of new federal Internet regulation.

The group trumpets its success in getting 95 Democratic House and Senate candidates to sign a pledge favoring Internet regulation via so-called “Net Neutrality.”  But notice an interesting thing about those 95 candidates.  Namely, not a single one is in a race labeled “Solid Democrat,” “Likely Democrat” or even “Lean Democrat” by the Cook Political Report.  Not one.  Of the 95, 79 are in races labeled “Solid Republican,” with 11 in either “Likely Republican” or “Lean Republican,” and only five in races even labeled “Toss Up” by Cook.

In other words, this pledge is a “Hail Mary” by desperate candidates and Internet regulation advocates.  It also reflects the fact that significant majorities of Americans surveyed oppose new Internet regulation by the federal government.  The last thing the Internet needs right now is for the federal government to turn it into the tech version of ObamaCare, and voters shouldn’t be deceived by this sort of silly season antic.

Dwight M. Jaffee, professor of finance and real estate at the University of California, Berkeley, points out in The Wall Street Journal that “Today 90% of the $14 trillion in outstanding residential mortgages is controlled by the Federal Housing Administration (FHA), the Department of Veterans Affairs, or Fannie Mae and Freddie Mac – with the latter two under government conservatorship.”

Ninety percent?  Wait a minute…  Doesn’t every dizzy big-government leftist from Barack Obama to Paul Krugman tell us that “deregulation” of the housing sector caused our economic difficulties?  The fact is that the housing finance market is one of the most regulated, not least regulated, sectors of the entire economy.  Thanks to Professor Jaffee, we are reminded of the sheer scale of that regulation, as well as the left’s efforts that fed the housing bubble.

According to a report entitled “The Impact of Regulatory Costs on Small Firms” just produced by Nicole V. Crain and W. Mark Crain for the Small Business Administration, the annual cost of federal regulations alone has reached $1.75 trillion.  That excludes the annual cost of taxes.  And that was as of 2008.

Combined, taxes and regulatory costs consumed a staggering 35% of America’s income in 2008, or $37,962 per household .  Alarmingly, that was the number before such new fiascoes as ObamaCare, “stimuli” and bailouts increased the burden.  Small businesses create most new jobs in America, but the authors highlight that regulatory costs hit them disproportionately hard relative to larger businesses (due primarily to economies of scale in dealing with regulatory compliance costs).  The authors found that businesses with fewer than 20 employees incur regulatory costs 42% greater than firms of between 20 and 499 employees, and 36% greater than firms with over 500 employees.  Per employee, small businesses face $10,585 in compliance costs versus $7,454 per employee for medium-sized firms, and $7,755 for larger firms.

As government gets bigger and bigger, the regulatory compliance costs only get more and more oppressive.  We needn’t search far to understand why the economy isn’t recovering and businesses aren’t hiring.

As a longtime fan of the video work done by our friends over at Reason, I have to admit astonishment at a video that surpasses even their usually high standards.

Check out the latest from the West Coast libertarians on how an expansive judicial interpretation of the Commerce Clause has become a blank check to Congress (skeptics take note: Erwin Chemerinsky, the UC-Irvine Law School dean featured here is not a liberal straw man dug up for the purposes of this video. He’s a highly regarded intellectual on the legal left — which ought to make his closing comments even more disturbing).

Unless you’re looking for it there isn’t much stateside coverage of the political revolution going on in Britain under the country’s Coalition Government.  The stories that to poke through, however, are well worth the read, as is this article in today’s Christian Science Monitor.  A sample:

The final sight – and this is the most difficult to see – is the coalition’s attempt to create a “big society,” or a bolstering of social groups, charities, and entrepreneurs to step in as government withdraws from much of its role. The best example of this altering of Britain’s social fabric are preparations to enlist 16-year-olds into national volunteer service.

The big society is Cameron’s vision, one that assumes people are ready to shed decades of dependency on London and step in to help others.

The concept could be almost as difficult as the biggest of the budget cuts, due in October, which will test the coalition’s finely woven political compromises. And will the private sector be ready to fill the holes left by the cuts.

So, the biggest gamble in the Coalition Government’s plan to reduce the size of England’s central bureaucracy isn’t the “austere” budget reductions or even the controversial referendum to change a century’s worth of election law.  It’s whether Prime Minister David Cameron’s “Big Society” program can inspire enough of the private sector to step into the social services breach created by the receding government.

American conservatives and libertarians have long said that private charity and other civil society institutions are much better at creating a social safety net.  With Britain’s budget forcing policy makers into decisions they would never dream of implementing in good economic times, now is the moment for limited government types to seize the opportunity to deliver a better, more efficient version of the social safety net.  Otherwise, liberals and socialists will be quick to remind voters of all the needs that went unaddressed when government grew “too small.”

… comes from a non-candidate. Sic Semper Tyrannis:

Whom do you trust with the future of broadband?  The same federal government that brought us public education, the Post Office and Amtrak?

Or the innovative technology companies that have made the Internet the most vibrant and transformative sector of our modern economy in an atmosphere relatively free from federal overregulation?  Public opinion is unequivocal – we trust technology enterprises, not the federal government.

That question nevertheless remains an important one, because Obama’s Federal Communications Commission (FCC) and its far-left cheerleaders continue their effort to impose “Net Neutrality” and set us on a path toward a federal regulatory takeover of the Internet.  On Thursday, the FCC will hold an open meeting to”consider possible legal frameworks for broadband Internet services,” which is code for its “Net Neutrality” takeover attempt.  On the heels of a unanimous Court of Appeals decision ruling that the FCC doesn’t possess authority to impose “Net Neutrality,” Chairman Genachowski switched to Plan B – simply reclassify Internet service under Depression-era regulations created for 1930s landline telephone service.  That scheme contradicts bipartisan consensus spanning both the Clinton and Bush administrations, which is why Democrats and Republicans in Congress sent letters to the FCC objecting to this maneuver.

If successful, the FCC’s backdoor scheme to impose “Net Neutrality” (a dishonest name if there ever was one) will undermine the freedom of technology companies to innovate and invest, which has been the basis of the Internet’s success thus far.  Instead of triggering broadband expansion, “Net Neutrality” will only invite years of litigation and acrimony if the FCC presses this agenda.

We simply cannot allow the FCC and federal bureaucracy to do to the Internet what it has done for public education in this country.

With Barack Obama’s presidency at one of its undeniable low points, the commander-in-chief’s booster club in the beltway media is tying itself in knots attempting to locate blame anywhere but Pennsylvania Avenue.

The last time we saw the press corps engaged in this sort of intellectual yoga it was to push the notion that Obama’s “failures” were rooted in communication — that he was making prime rib arguments to a country that could only digest apple sauce. This line of reasoning has reached its apogee with Jonathan Alter’s recent hagiography of Obama, “The Promise: President Obama, Year One”, which practically drools over the president’s intellect and regularly laments the country’s refusal to comprehend the profundity of his liberal vision quest.

Lately, a new form of hand-wringing is taking center stage. It’s exemplified by journalists like the Washington Post’s Greg Sargent, who writes on the Post’s Plum Line blog today:

… the Gulf oil spill may pose a serious threat to one of the most important aspects of Obama’s presidency: his effort to restore public confidence in government as competent, as a trustworthy agent of genuine and lasting reform.

Note Sargent’s peculiar phrasing, which frames the spill as a hurdle to Obama’s unified theory of government, not a refutation of it. Yet as Ron Fournier noted in an Associated Press column earlier this week:

While there were surely crises of faith during the Civil War, the Progressive Era and others times of tumult, the early 20th century was marked by a reflexive sense of trust in the nation’s institutions. Even as Franklin Roosevelt’s New Deal vastly expanded the government safety net, a new breed of private charities and social reformers didn’t bother waiting on government to help the poor, infirm and abused.

But things started to change in the mid-20th century, when polls showed a steady decline on the question of whether Americans trusted government in Washington to do what is right.

From 1958, when more than 70 percent said they trusted government most or all of the time, the trend line steadily drops until it hits the mid-20s in the post-Watergate era.

Looking at those figures closely, it’s hard to miss the trend. As American government ballooned during the 20th century, the public progressively lost faith in it. The decline starts when the expansion of the welfare state begins to showcase government incompetence and compounds when Watergate adds malevolence to the mix. Could it be that Americans don’t trust the government because it has appropriated responsibilities it can’t fulfill?

Consider the functions that all but the most staunch libertarians believe government should be responsible for: defending the nation, collecting taxes, developing infrastructure, securing the border, delivering the mail. In these areas, the government is intermittently competent at best, but benefits some from the fact that its inefficiency isn’t being spotlighted by private-sector competition. When it steps over the line into smothering civil society, the evidence of government waste and stupidity becomes nearly impossible to deny.

Does President Obama have a growing problem with Americans’ faith in government? Yes. But the culprit is not the fates conspiring against him. Rather it’s the root of so many of his problems: he’s beginning to suffer the wages of making promises it’s impossible for him to keep.

Thank goodness for people like Anne Meagher Northup, a commissioner on the federal Consumer Product Safety Commission (CPSC). Writing on her blog this week, Commissioner Northup provides an insider’s first-hand perspective on how big government bureaucracy suffocates small businesses unable to satisfy the sheer regulatory costs and testing burdens heaped upon such harmless everyday products as children’s toys.

What’s that you say?  You haven’t heard about the pandemic of American children suddenly dropping like flies after playing with their plastic dolls?

That hasn’t happened, of course.  But what has happened is the CPSC imposing unmanageable costs of testing and compliance upon small businesses.  To illustrate, Commissioner Northup discusses the example of a Kentucky doll maker who suddenly faces testing costs of $1500-$4500 per doll:

Last week we selected several more products to eliminate from our product offerings. The products are safe, do not violate any of the CPSIA standards and have been around for over 50 years, but they are too complicated and have too many different parts. Therefore they are too costly to have tested and retested over and over again to prove they are safe. I hope some small companies and some decent product selection can survive in this new world where all products are presumed to be guilty. The only survivors will be the ones that are safe and can also afford to prove they are safe.

The group of items that we decided to discontinue are several kinds of dolls that have lots of different colors and accessories and some plastic to test for phthalates. We would have an average about $1500/doll each time we had to test due to a batch change. If we order them 3 times per year it would be $4500/doll in testing costs to be certain that nothing had changed from any of the suppliers that provide the raw materials that make up the doll parts and/or colors and accessories. With 26 different types of dolls, that would come out to $117,000 per year we would spend on testing. Based upon our sales volume we would lose money every time we order the doll.”

Big government may not be doing much to reduce unemployment or stop destructive Ponzi schemes, but it’s certainly adept at crippling small businesses and removing harmless children’s toys from store shelves.

Remember the iconic 1978 movie Animal House?  In it, Kevin Bacon plays a tormented fraternity pledge stripped to his tightie-whitie underwear and forced to respond to each swat of the paddle by screaming, “Thank you, sir!  May I have another?”

In Obama’s new America, life apparently imitates Animal House.  Speaking at a partisan fundraiser, Obama once again descended into his petty trash-talking persona, saying that instead of protesting oversized government and tax burdens on April 15, Tea Party protesters should have been saying “thank you” to him.  That’s not a misprint – we should be thanking Obama for our current federal tax system. Here is the video:

obama-mocks-tea-partiers-you-would-think-theyd-be-saying-thank-you

No, Mr. President.  American taxpayers have already been stripped to their proverbial underwear, just like Kevin Bacon’s pledge.  We’re not going to respond with “thank you, sir, may I have another?”  No, we’re going to swat back come November.

Perhaps nothing symbolizes our nation’s sad state of political affairs than the fact that government-town Washington, D.C. thrives relative to other major American cities.

As noted by a recent Wall Street Journal report, home prices in the D.C. area rose 2% in 2009, compared to a 3% decline in 20 areas covered by the S&P/Case-Shiller Index.  The capital’s unemployment rate stands at 6.9% compared to 9.7% nationally, and restaurants have added workers in D.C. while other metropolitan areas bleed such jobs.  The reason?  Federal government employment in the area increased by over 20,000, whereas approximately 100,000 private-sector jobs were lost there.  Not only has our bloated federal government increased its employment rolls even as the rest of our society cuts back, but $78.5 billion in federal contract work and the flurry of bureaucratic activity brings domestic and foreign visitors to town.

Americans everywhere have had to trim their budgets and expectations during the downturn, but not the expanding federal government.  What sad, albeit fitting, symbolism.

The 2010 Census is quickly turning into an extended metaphor for everything that’s wrong with big government. There was a $2.5 million Super Bowl ad buy, a huge spending spree on make-work employees (instead of employing technology that would have been cheaper AND more effective), and — my favorite — a letter letting us know that we’d be receiving a letter.

The Census Bureau’s current “March to the Mailbox” ad may the biggest offense yet. In the 30-second spot, a suburban schlub touts filling out the census as the cure to every policy ill, from education to health care to transportation.

If only.

The census serves a legitimate purpose, but its ad campaign is egregious — and its assertion that more money is all it takes to solve social problems is (a) patently false and (b) a wildly inappropriate use for taxpayer funds. The Census Bureau needs to stay in its lane and save the rest of us some money.

Google stands as one of the leading cheerleaders of so-called “Net Neutrality,” that benign-sounding movement to expand government’s regulatory reach over the Internet.

“Net Neutrality” is a bureaucratic “solution” in search of a non-existent Internet problem, and it would stifle incentives for Internet service providers to innovate and expand networks.  Currently, Internet service providers invest $60 billion or more annually toward network buildout and advancement, which is critical in this age of ever-expanding web traffic.  Without that enormous service network investment and expansion, Internet bottlenecks will increase and technological evolution will slow.

But why should Google or other Net regulation proponents worry about its negative impact on consumers, Internet service providers and network expansion?  It’s much easier to remain a free rider on networks that other people have built, and sanctimoniously advocate federal regulations for others.

But a funny thing happened to Google when it attempted to test the waters itself in providing high-speed Internet service.  In a piece this week entitled “Tough Road for Google’s Network,” The Wall Street Journal reports how Google quickly discovered that building Internet service infrastructure isn’t quite as easy as it looks.  Last month, Google announced that it would build high-speed Internet connections for up to 500,000 people in America.  Just one month later, however, Google realizes that “building such a network is a giant construction problem, with the cost potentially surpassing $1 billion.”

According to Jim Baller, an attorney providing consulting services to Google, the experience has been sobering:

Beyond the cost issues and economic challenges in terms of what it takes to develop the infrastructure, to me one of the most significant barriers is that we don’t have a vision of what [ultra-high-speed Internet connections] will enable us to do.”

A Google spokesperson added:

We know that other companies have been in this business a long time.  We’re not pretending to have all the answers.”

Actually, Google did pretend to “have the answers” insofar as it advocated “Net Neutrality” regulations that would do to the Internet what the “Fairness Doctrine” would do to free speech.  Google quickly discovered how difficult life as an Internet service provider can be, and it needs to realize that “Net Neutrality” would only make it tougher.

Hopefully, Google’s experience will encourage it to reconsider its destructive position on “Net Neutrality.”  American consumers, tech sector employers and even Google itself will be better off for it.

Saturday marked the 99th anniversary of Ronald Reagan’s birth.  It was also the day on which “Snowmageddon” dumped two feet of snow on Washington, D.C., closing government agencies into this week.

Coincidence?  Or yet another win for the Gipper?

After all, Reagan once lamented the federal government’s counterproductive overactivity:

“We have all heard that if you build a better mousetrap, the world will beat a path to your door.  Today, if you build a better mousetrap, the government comes along with a better mouse.”

Well, let’s consider this a symbolic reverse birthday gift from President Reagan, since every day on which the federal government is shut down is a day on which it isn’t devising a better mouse to unleash on us all.

A new Rasmussen Reports poll out today shows that if the Tea Party movement was an organized political party it would poll second nationally (at 23%, 13 points behind the Democrats).  Many reports on the numbers play up the growing influence of this grassroots force on the right, but that may miss the bigger point: Republicans came in third in the poll, with only 18% supporting the GOP.

Read those numbers closely; with Republicans and Tea Partiers divided, Democrats win (a lesson learned in the congressional race in the New York 23rd).  Thus, if the right hopes to regain political traction it’s going to have to create a fusionist project between the mainstream GOP and the “mad as hell and not going to take it any more” Tea Party movement.

A possible prescription for this kind of Republican renaissance improbably shows up this week’s edition of Newsweek, courtesy of Howard Fineman, whose columns usually tend toward EZ-Bake liberalism.  However, in a piece entitled “Is There a Doctor in the House?”, Fineman perceptively notes that the GOP could do a lot worse than straightening its spine through Ron Paul’s example:

… The GOP needs to study Ron Paul, and learn. No one has better captured the sense of Main Street outrage over secret insider deals and Wall Street bonuses. No one has been more consistent about sticking to core conservative values—including the one that says the government shouldn’t spend more money than it takes in. If the GOP is going to appeal to independent voters, it has to confront its own corporate allies. “Republicans need to find a populist edge again,” says Craig Shirley, the author of Rendezvous With Destiny, a new account of Ronald Reagan’s 1980 campaign. “Reagan spoke to the guy who thought he was being screwed by big business, by big government, by the big media.” The good doctor, of all people, is showing Republicans the way. What they need is a candidate who embodies the spirit of Ron Paul. Just so long as it isn’t Ron Paul.

There’s a lot of sense in Fineman’s diagnostic (along with this, a sign of the apocalypse).  On foreign policy, Paul is still peddling ideas long ago discredited by Charles Lindbergh and Bob Taft.  But on the domestic side, his compass is truer than most of the GOP.  When the Republican Party isn’t rooted in notions of small government and individual liberty, it tends towards existential drift.  And we all know where that leads.