Tag Archives: economics

Local Charity

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There doesn’t seem to be such a concept at PS 120 in Flushing, NY. The grade school held a carnival for its kindergarten through fifth grade classes, around 900 of its students were allowed to go—and an additional 100 were kept cooped up in the school’s auditorium, instead, with the shouts of fun from the carnival just outside plainly audible to them.

The price of attendance was $10, and those 100 were poor students whose parents couldn’t afford the $10; not having paid, those kids were barred from the carnival. Contributing to the thing is the fact that many of those parents are Chinese immigrants who, perhaps, missed the fact that a fee was charged. Let’s discount that, though; there did seem to be adequate notice of the fee.

The rationale for singling out some kids and denying them their fun at the carnival? Principle Joan Monroe, according to Frank Chow, president of the parents association, said,

It’s not fair to the kids’ parents who paid.

The purpose of the fund-raising carnival? Pre-K, kindergarten, and fifth-grade moving-up parties—it’s all for partying. The carnival made two-three thousand dollars in profit, which will make for some pretty rich grade school parties. The money isn’t even going toward school supplies, school equipment, or its physical plant, apparently. Just partying, with no lasting results.

Not fair to the ones who paid? Will the kids whose parents didn’t contribute to the graduation party money be barred from those graduation parties, too?

Never mind that $1,000 of those profits would have covered the kids whose parents didn’t, regardless of the reason, pay.

Fairness depends on how the payments and the purpose of the monies were advertised. And it would have been an interesting experiment: how much money would have been collected with a different purpose presented? Could all the kids have attended on the funds raised?

This is the sort of thing local charity is about.

Government Imperative to Regulate

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This time in the commercial space industry. There is a bill slowly wending its way through the House that would limit—or not—regulation of the nascent commercial space industry. This is a bill that would

…extend and update federal protection for commercial launches from some potential liability involving property damage or personal injuries and fatalities on the ground. The legislation [also would bar] the Federal Aviation Administration from closely regulating fledgling space-tourism ventures for up to 10 more years….

There’s a hint about the wrong mindset there. The hint is clarified by the bill’s supporters’ attitude. They [emphasis added]

want to extend until the end of 2025 a so-called “learning period” during which companies and regulators are supposed to analyze operational data and consider the best way to create a regulatory structure.

Based on what theory do they think the commercial space industry must, of necessity, be regulated? What, even, is their limiting principle on government regulation?

The answers to these questions are, respectively, none and none. There is no need to regulate something just because someone wants to do it. Americans are not so stupid that our every action needs a rule to permit or prohibit it or to guide it. The lack of limiting principle is demonstrated empirically by the steady growth (and explosive recently, as that growth has reached the sharp bend in a typical growth J-curve) in the size of our government and the amount of regulation it’s committing on us.

What these guys don’t get is that a free market is a very fine regulator, and one that is both fast acting and flexible in all of its controls. A space company shows itself too dangerous? It goes out of business for lack of customers. It has no customer service worthy of the name? It goes out of business for lack of customers. Customers are reluctant to fly from concerns about recompense? Sounds like a market niche for insurers. Some other problem or reluctance? The market will fill the void, and quickly; it’s what competition does.

All government regulation does is protect the regulated companies from that competition, a function which achieves far more efficient regulation far more efficiently and without need of taxpayer-paid bureaucrats adding to the cost of the service.

The Congressional mindset is another argument for limited government. If it’s small enough, it can better be forced to keep its hands to itself.

What’s in Your Food?

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It’s not PC to ask or to know, according to the World Trade Organization.

The World Trade Organization (WTO) just ruled that America’s popular country-of-origin labeling law (COOL) enacted in 2008 violates global trade standards because it erects a trade barrier to US meat imports from countries like Canada and Mexico.

Japanese customers don’t get to know that the beef they’re thinking about buying came from the US. Nor do PRC diners. Nor do American customers get to know that their beef is coming from Canada.

Such knowledge constitutes a trade barrier, don’t you know.

What’s next? WTO ruling that food labeling generally is illegal? After all, if the food is known to be not halal or kosher, Jews and Muslims might not buy the food. Trade barrier.

Featherbedding?

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To paraphrase a Democrat’s remark, never let a tragedy go to waste.

The union for Amtrak’s locomotive engineers urged the railroad on Tuesday to put a second crew member at the controls of trains on the busy Northeast Corridor, where a derailment killed eight people and injured more than 200 others.

Of course. Never mind that an existing technology, cheaper than adding an unneeded employee, should have been in place, and will be in place after this accident.

The featherbedding contained in this union urging is made manifest in the union’s own statement:

Amtrak hasn’t had a second crew member in the locomotive of its Northeast Corridor trains since Congress ended the requirement in the early 1980s, the union said.

How many accidents caused by the lack of a second crew member has Amtrak had over those 30 or so years?

“How Much Should a Currency Be Worth?”

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That’s the title of Ian Talley’s piece in a recent Wall Street Journal online edition. The question arises from the People’s Republic of China’s open manipulation of its currency through its control of the yuan’s exchange rate in the currency markets. The PRC executes this manipulation by limiting the range of values within which the yuan is permitted to trade in those markets.

The question gains currency (sorry) as Congress contemplates adding an anti-currency manipulation clause to the Trans-Pacific Partnership free trade pact or to the fast track trade bull currently in progress of a sort. But that’s currency manipulation from the other side of the matter: instead of a country manipulating its own currency, this clause says the currency must be manipulated according to our imperatives:

Some US lawmakers are channeling their constituents’ long-held grievances by pressing to incorporate enforceable currency provisions….

The problem from this side of the coin (sorry, again) centers on the determination of what is a “fair” value for a nation’s currency, who gets to make that determination, and on what grounds. The point of Talley’s article concerns the difficulty of making those determinations.

It’s really quite simple, though. There are only two ways to determine the value of a currency. One is that a currency is worth what the nation’s government says it’s worth. (This, incidentally, blows up the gold bug argument that the US should go back to a gold standard for the dollar, that being the only way to bring stability to our currency. But the gold would have the value our government says it has, and nothing else, as FDR demonstrated when he devalued the dollar against gold in the ’30s.)

The other way, the free market (and so most moral) way, is this: let the currency float; its value is what the market says it is, empirically, by what the participants in that free market—free men and woman, acting voluntarily according to their own wants and needs—are willing to exchange currency for.