We're Paying For All Those Free Lunches

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This year's edition of the Heritage Foundation's Index of Economic Freedom is pretty depressing for… well, anyone who likes economic freedom. And for USAians,…

Especially notable is the continuing decline within the “mostly free” category of the United States, whose score plummeted to 70.6, its lowest level ever in the 29-year history of the Index. The U.S. is now the world’s 25th freest economy. The major causative factor in the erosion of America’s economic freedom is excessive government spending, which has resulted in mounting deficit and debt burdens.

The USA's score not only puts it in the mediocre "Mostly Free" category, it's even mediocre within that category.

The 24 countries out-freedoming us: Singapore, Switzerland, Ireland, Taiwan, New Zealand, Estonia, Luxembourg, Netherlands, Denmark, Sweden, Finland, Norway, Australia, Germany, South Korea, Canada, Latvia, Cyprus, Iceland, Lithuania, Czech Republic, Chile, Austria, and United Arab Emirates.

Are you seriously telling me that we can't beat Canada on this?

Briefly noted:

  • Robert Tracinski is not a Ron fan: DeSantis Grooms a Cheap Import From Hungary: Orbánism.

    Florida Gov. Ron DeSantis is raising Republican hopes of finding a “sane Trump”—a less erratic standard-bearer for a Trumpist agenda. But there has been some interesting debate over whether this is better or worse.

    Last year, former Republican Congressman David Jolly declared DeSantis “more dangerous” because: “He’s more savvy. He’s more coy. And he doesn’t have the pitfalls that Donald Trump does.”

    Tracinski notes the ominous parallels between DeSantis's bullying actions in Florida and Orbán's in Hungary. (Which, by the way, is #54 on the Heritage Index cited above, hardly a good role model.)

    Some commenters on Tracinski's article make the "but Democrats are worse" argument. Point taken, and Tracinski notes that he's pointed out donkey travesties in the past.

    But are we really moving toward a country where we support politicians because they promise to to exert vast and arbitrary powers against the citizens we don't like?

    That's pretty damn disgusting, even for a member of the Church of Costello.

  • It's apparently a done deal, but Michael Ryall and Siri Terjesen explain Why the Government Shouldn’t Have Bailed Out Silicon Valley Bank’s Depositors.

    With fitting irony, Silicon Valley Bank (SVB) was founded about 40 years ago over a poker game. As it grew from those humble origins, SVB became a fixture in the Silicon Valley finance ecosystem, with loans extended to 44 percent of all venture-capital-backed tech and health-care companies.

    Then, last Friday, SVB was shut down by the FDIC following an 87 percent crash in its stock. With tedious predictability, the immediate reaction of many of the world’s elites to SVB’s collapse was to call for a government bailout. Since then, we have been told that the government will not bail out stock- and bond-holders. Instead, the only bailout will be for SVB’s biggest depositors: those whose deposits exceed the $250,000 threshold covered by FDIC deposit insurance. Further, we have been assured, not a single penny of this bailout will be borne by taxpayers. Rather, the funds will come from the Deposit Insurance Fund (DIF), which is stocked by quarterly fees assessed on financial institutions.

    There are several problems with this narrative. First, the biggest venture-capital depositors already took their money out of SVB during the run that caused the bank’s collapse. Second, the DIF fees the government levies on banks impose a cost that, ultimately, gets passed on to those banks’ customers. And finally, SVB’s depositors are mainly the portfolio companies of VC firms, meaning the main purpose of the bailout is to keep the VC firms whole.

    I'm not one of those tar-and-feather pitchfork populists, but I hear and understand their long-standing gripes about "privatizing profits and socializing losses."

  • Our fair state makes an appearance in Jacob Grier's Reason article: Massachusetts' Tobacco Ban Went as Badly as You'd Expect.

    In November 2019, Massachusetts became the first state in the U.S. to ban the sale of all flavored tobacco and nicotine products, including flavored electronic cigarettes and menthol cigarettes. Four additional states have since imposed flavor bans on some products and similar policies are under consideration in many other jurisdictions. Such bans are popular among legislators and anti-smoking groups, but the latest data from Massachusetts highlight the ban's unintended consequences. The state's experiment in prohibition has led to thriving illicit markets, challenges for law enforcement, and prosecution of sellers.

    Skipping down…

    The Massachusetts Department of Revenue reports conducting more than 300 seizures in FY 2022, compared to 170 in 2021 and just 10 in 2020. Many of these involve substantial amounts of products and missed tax revenue. For example, a single search warrant yielded "a large quantity of untaxed ENDS ["electronic nicotine delivery systems"] products, [other tobacco products], and Newport Menthol cigarettes affixed with New Hampshire excise tax stamps" representing an estimated $940,000 in unpaid excise taxes.

    Also noting Grier's article is Andrew Cline at the Josiah Bartlett Center for Public Policy:

    It’s fun to point out how New Hampshire benefits from this bad law. But as Grier notes, eventually people will go to prison simply for selling cigarettes that taste different than regular cigarettes. Ruining people’s lives in a misguided effort to control a product you have no hope of controlling is not funny.

    Well, (as I keep pointing out) it's funny in the Mel Brooks sense: "Tragedy is when I cut my finger. Comedy is when you fall into an open sewer and die."

  • And finally, an epigrammatic note from David Boaz: Who Said TANSTAAFL First? Milton Friedman? Robert Heinlein? Well…

    The website Quote Investigator dug deeper, and found a 1938 newspaper article titled “Economics in Eight Words.” It was a fable of a king who demanded that his economic advisers give him a “short and simple text” on economics. As they presented him with massive tomes, he repeatedly executed some and demanded that the others come back with the short text he had asked for. Finally there was just one elderly economist left, who said to the king,

    “Sire, in eight words I will reveal to you all the wisdom that I have distilled through all these years from all the writings of all the economists who once practiced their science in your kingdom. Here is my text:

    “There ain’t no such thing as free lunch.”

    That seems to be the first time the phrase was used specifically as an economic principle. The fable was unsigned, but Quote Investigator found evidence that it was likely written by Walter Morrow, editor‐in‐chief of The Southwestern Group of Scripps‐Howard Newspapers. And now, perhaps for the first time, the 1938 article is published online at Libertarianism.org.

    I've linked to the Quote Investigator site 42 previous times over the years, but I never managed to link to that one. Consider that to be fixed, thanks to Boaz.

Last Modified 2024-01-14 4:29 AM EDT