According to its official website, the Federal Trade Commission's purpose is "to prevent unfair methods of competition in commerce as part of the battle to 'bust the trusts'", "police anticompetitive" and "unfair and deceptive acts or practices".   The Commission has a role in monitoring fraud in advertising and on the internet, adherence to labeling laws for clothing, and enforcing financial laws like the Truth in Lending Act, Consumer Leasing Act, Fair Debt Collection Practices Act, Telemarketing Sales Rule, and the all-important 900 Number Rule, among a host of other duties.  They claim to "deal with issues that touch the economic lives of most Americans".

The FTC does have some responsibilities that are at least arguably legitimate government functions; in a free market capitalist system, the government has a legitimate role in preventing fraud and coercion.  Of course, it can be a difficult decision to determine at what point a particular trade-related issue belongs more in a civil-type court situation, and where it crosses the line and becomes an issue for regulation and, ultimately, prosecution.  There's also a role for the private sector in policing itself, e.g., groups like Underwriters Laboratories.  But that's at least a valid debate, and in which intelligent people -- even free market-oriented people -- can disagree.

Unfortunately, government bureaucracies inherently expand their mission to include the mundane, no matter how lofty their intended mandate.  Such is the case with the FTC, as evidenced by their latest campaign to eradicate a serious issue of unfair competition in commerce and deceptive acts:  the FTC is pressuring Anheuser-Busch not to market Budweiser in cans modeled after college team colors.  Not using college symbols or mascots, just colors.  As reported in the Wall Street Journal, "Janet Evans, a senior FTC attorney who oversees alcohol advertising, says the federal agency has "grave concern" that the campaign could encourage underage and binge drinking on college campuses.  "This does not appear to be responsible activity...  We're looking at this closely," Ms. Evans says.

First of all, I can assure Ms. Evans and the FTC that college students aren't binging on alcohol because of the color of the can; make the cans pink, black, green, or chartreuse, and college students are going to drink beer.  The school color promotion might spur sales of the particular brand, but the sales will be by people who were buying beer anyway; those that buy the beers merely to get the cans as some sort of collectible would be saving the beer anyway.  Any person who's ever been to a college tailgate party would know this to be true. 

But there's a deeper point here than whether or not the color of beer cans can induce alcoholism, or even whether or not it is a valid government function to either promote or discourage the use of alcohol:  the lawyers at the FTC have enough time on their hands and sufficient budget to fret about the color of beer cans?  Seriously?

According to the FTC's "Performance and Accountability Report", the agencies appropriation from the government ("Net Program Costs") was approximately $126.2 million for fiscal year 2008 -- an increase of 119% year-over-year!  Now that's not the total budget -- the FTC collects revenue in the form of fees and such -- that's just the amount out of the general fund. 

I'm not sure how much the FTC's action against Budweiser is costing, but whatever the amount, I'm certain that you can't put a price on being safe from predatory beer can color practices.  Thank goodness the FTC is out there being "grave[ly] concern[ed]" on our behalf.  Perhaps we can toast their success soon... with beer poured from non-threatening generic white cans, we can hope.

In response to this column by Paul Krugman in Tuesday's Chronicle, I sent the following letter:

re:  "All the President's Zombies"

Paul Krugman may be a brilliant economist in terms of analyzing trade patterns, division of labor, and globalization, but he falls flat when it comes to individual liberty, free market economics, and "Reaganism".

First of all, in criticizing tax cuts and so-called "deregulation", Dr. Krugman is really suggesting that allowing individuals and families to keep more of their own money -- greater economic liberty -- is somehow harmful to the economy.  This is an idea that seems to contradict directly the very principles of self-determination and limited government on which this country was founded.

He further mischaracterizes the financial crisis of 2007-2009.  The subprime mortgage meltdown wasn't the result of some sort of free market failure; rather, banks over-lent to lower income borrowers as a direct result of incentives and directives provided by the government -- policies written by Congressmen like Senator Christopher Dodd of Connecticut, who were themselves getting sweetheart deals from mortgage brokers and trumpeted how their policies were expanding home ownership.  Yet Dr. Krugman advocates politicians having even more influence over the markets and over our own lives.

Every dollar spent by the government is a dollar that an individual or family can't spend on a new car, school supplies, food, tuition, or health insurance, or invest for retirement or a college fund.  Yet somehow, those that favor more freedom, liberty, and determination in the hands of the people rather than politicians is somehow a "zombie".  Personally, I fail to see what is frightening about freedom and liberty; much more terrifying is a government acquiring more power over the paycheck and the day-to-day lives of citizens.

Sincerely,
Dave Smith
Houston, TX

It wasn't that long ago that the so-called "Cash for Clunkers" program was being hailed by many as a rousing success (not, it should be noted, by this blog; see "Cash for the Clueless").  The program, under which a consumer could get up to a $4500 credit against the purchase of a new car by trading in an older, less fuel efficient one.  The initial phase of the program burned through its $1 billion appropriation in about a week, thus fueling a Congressional extension of another $2 billion.

The program had many fans; it was called "too successful" by AOL News and conservative commentator (and self-described beneficiary) Rich Galen, "phenomenally successful" by Congressman Bruce Braley (D-MI), "wildly successful" by Dashboard News and Marketwatch, and "widely successful" by ThinkProgress.   It was only considered "successful" without superlative by Reuters and CBS, but it was beyond House Speaker Nancy Pelosi's "wildest dreams".

Sound too good to be true?  Then you shouldn't be surprised that in practice, things that sound too good to be true.... are.  From the Associated Press comes an article that includes the following:

"Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday. ...the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made so far.

Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates...

From Mark Schienberg of the Greater New York Automobile Dealers Association:

"The program is a great program in the sense that it's creating a lot of floor traffic that a lot of dealers haven't seen in a long time...  But it's in the hands of this enormous bureaucracy and regulatory agency," he added. "If they don't get out of their own way, this program is going to be a huge failure."

Of course, the same people who can't administer a simple program like "Cash for Clunkers" can be trusted to efficiently and effectively administer our immense, complicated health care system, right?

In response to this editorial in the Chronicle, I sent the following letter:

re:  All too familiar

In your editorial decrying the actions of lobbyists "twisting arms on health care reform" and their impact on "who the winners and losers will be and why", you ignore the heart of the issue:  as long as the federal government wields its power to interfere in markets and dispense favors to special interests — to choose "winners and losers" — lobbyists will be lining up to ensure that their own corporations, unions, and advocacy groups are beneficiaries of the government largess.

The way to reduce the influence of big money lobbyists and special interests on the government is to lessen government intrusion on the marketplace. Special interests would have little incentive to spend millions lobbying a government that they knew wouldn't interfere on their behalf to protect them from competition in an open market based on free, voluntary exchange.

Sincerely,
Dave Smith
Houston, TX

Last summer, I attended the RightOnline conference in Austin, a project of a pro-liberty think-tank group called Americans for Prosperity (the second such conference was last week in Pittsburgh).  The purpose of RightOnline is to develop conservative, libertarian, and free market advocates and activists to counter the more well-organized left-leaning internet activists like those of DailyKos or the Huffington Post.  The conference featured speakers ranging from former Bogota, NJ Mayor (and 2009 New Jersey gubernatorial candidate) Steve Lonagan, to more well-known personalities such as Michelle Malkin, John Fund and Steve Moore of the Wall Street Journal, activist and author Grover Norquist (probably most famous for Americans for Tax Reform), then-Libertarian Presidential candidate (and former Republican Congressman) Bob Barr, and Barry Goldwater Jr.  The conference provided a great opportunity to hear from these various activists, commentators, journalists, and politicians, but it also provided time to mix and mingle with them on a one-on-one basis.

One highlight of the weekend occurred on the first day of the conference. I arrived early, and walked into the lobby to see the great Robert D. Novak seated on a couch in the lobby, reading a manuscript.  Novak was one of the keynote speakers for the event, and his speech was one I was especially looking forward to hearing.  I introduced myself to him as a fan of his work.  He spoke with me for about 10 minutes or so, answering questions about the current political climate.  I was curious as to what the manuscript was, so I made sure to check it out casually — it was a draft copy of what would later become a best seller — David Freddoso's The Case Against Barack Obama.  Then Novak informed me that he was sorry, but he had to go do a radio interview; however, if I wanted to sit in, I was welcome to join him.

In his writing, Novak was the master of the inside scoop.  In his memoirs, titled The Prince of Darkness (his nickname among his colleagues and those he covered), he talks about how his partner, Rowland Evans, and he had a goal of providing at least one piece of information in each column that had not been reported elsewhere.  The book itself is full of inside experiences — from riding with a recklessly-driving then-Senator John F. Kennedy through Washington, to helping a drunk then-Vice President Lyndon Johnson into a cab (and getting teased by LBJ in a press conference the next day, as if it were Novak who had been drunk instead), to his role in the now-famous Valerie Plame affair that resulted in the jailing of White House aide Scooter Libby and New York Times journalist Judith Miller.

Along the way, Novak became more widely known thanks to the advent of cable news, specifically CNN.  He often served as the "from the right" debater on CNN's "Crossfire" program, and the show "Capital Gang" was his creation.  On TV, in his three-piece suits and dour demeanor, the "Prince of Darkness" was on full display — as was hit wit, inside knowledge, and willingness to ask tough questions of people in power, regardless of party affiliation.

Novak was a self-described "conservative", and particularly an uncompromising Cold Warrior and proponent of Reagan-style "supply-side economics" — the idea that cutting taxes, particularly on investment and entrepreneurs, and reducing regulatory red tape unshackles the economy and promotes economic prosperity.  When the second Iraq War came, however, he expressed his reticence for what he saw as an unnecessary war.  His views became a sticking point at National Review, and he ended his association with the venerable magazine in the fallout.  Many of his trepidations about the war proved correct — prior to the change in strategy and leadership that resulted in the "surge", the war was going badly.

It was a pleasure getting to meet and speak with a giant in political journalism last summer.  I had no idea at the time it would be one of his last public appearances — he announced only a couple of weeks later that he had brain cancer, finding out after a car accident and erratic behavior caused by the tumor.  Considered an old-style "shoe leather" reporter, hitting the street to get the details of the story, he leaves big shoes to fill.  The Prince of Darkness will be missed.  Robert Novak, RIP.

In response to this article in the Chronicle about efforts to establish a "fat tax" on foods deemed unhealthy by the government, I sent the following letter:

re:  "A 'fat tax' for Texas?  Chew on it

In advocating a so-called "fat tax", Dr. Garson's ideas aren't just "obnoxious in Texas", they insult the very idea of individual liberty and self-determination.  While obesity and poor health choices are probably a drain on the economy, it simply isn't the purpose of a government nanny-state to coerce people into eating foods that politicians deem "healthy".

As a healthy, fit 37-year old, if I choose to drink a Coke or eat a candy bar, it shouldn't be the business of Dr. Garson, Texas, or the federal government.  But even if I weren't in good shape, do we really want the government making decisions for us about what to eat?  Would Dr. Garson also support efforts to mandate exercise?  How about government-mandated portion sizes?  It would certainly seem that once individual liberty is considered worthy of sacrifice in the name of fighting obesity, such "extreme measures" are certainly logical next steps.

I recommend that instead of using the power of government to force people into making the choices Dr. Garson wants them to make, he instead makes use of his First Amendment rights and attempts to persuade people to make those choices and leave the government to protecting our life, liberty, and property.  Chew on that idea — it's certainly more savory.

Sincerely,
Dave Smith

As Congress has recessed for the month of August, Representatives and Senators have been holding "town hall"-style meetings to discuss various issues, health care reform chief among them.  One Houston-area Congressman, Democrat Gene Green, has found the going especially difficult, resulting in the following post on his web site:

Town hall meetings are one of my favorite ways to communicate with constituents. I have held hundreds during my years of service in Congress and always welcomed everyone to attend. Unfortunately, due to a coordinated effort to disrupt our town hall meetings, we will be restricting further attendance to residents of the 29th Congressional District and verifying residency by requiring photo identification.

Note:  the emphasis is included in the original posting.

Now I don't dispute that Rep. Green has the right to restrict participation in his own "town hall" meetings.  If nothing else, there are venue-related safety restrictions on building occupancy.  If a particular citizen is being represented by a Congressman not holding "town hall" meetings, then it is a valid issue to discuss with that particular member of Congress (and perhaps even an issue for a campaign challenge).

However, in requiring a photo ID showing that a meeting participant is actually a member of Rep. Green's district, and not part of a "coordinated effort to disrupt", Mr. Green is violating his own principle.  Mr. Green was a co-sponsor of House Concurrent Resolution 247 in 2005, the title of which was:

Expressing the sense of Congress that a requirement that United States citizens obtain photo identification cards before being able to vote has not been shown to ensure ballot integrity and places an undue burden on the legitimate voting rights of citizens.

Ironic, isn't it?  Congressman Green has a greater fear of a "coordinated effort to disrupt" his meetings than he does one that would disrupt the actual vote, that he supports more stringent identification requirements for participation in a discussion of the issues than he does for participation in actual elections.

Do you suppose Mr. Green recognizes that irony?

The official White House Blog has established a new "snitch" line for people to rat on those scoundrels who are daring to try to thwart the effort by the President and Congressional Democrats to implement health care "reform":

There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care.  These rumors often travel just below the surface via chain emails or through casual conversation.  Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.

Well, I happen to have found some disinformation circulating around concerning the proposed healthcare "reform" plan, so I decided to take advantage of the "snitch line".  I'm guessing that my letter isn't what they had in mind, however:

re:  Misinformation About Proposed Healthcare Reform

Dear White House Rumormongering And Truth Telling (RATT) Service:

Thank you for the opportunity to report misinformation and rumormongering that has been circulating regarding the proposals by the President and Congressional Democrats to reform our healthcare system.  It is important that we ensure an intellectually-honest debate about how best to reform such a vital aspect of our economy.

Unfortunately, I am having to report President Barack Obama as a provider of misinformation.  As posted on the official White House Blog, "the President has consistently said that if you like your insurance plan, your doctor, or both, you will be able to keep them."   However, reading Section 102 of the current bill under consideration in the House of Representatives (HR3200, "America's Affordable Health Choices Act of 2009"), there is a limitation on new enrollment in health insurance offered by private companies, and limitations on any changes in "terms or conditions, including benefits and cost sharing" after the first day of "Y1" -- the calendar year in which this act becomes law.  Section 102 contradicts President Obama's promise of being able to keep one's current plan if the plan was started or changed any time in this year.

I also need to report your website, healthreform.gov .  This website promises health care reform that, among other things, would "Guarantee choice of doctors and health plans".  However, Section 122 defines the minimum requirements for any health care plan -- the "essential benefits package" -- that every plan would have to meet.  That's hardly "guarantee[d] choice".  This effectively means per Section 122(b)(9) that I would be forced to purchase a plan that includes "Maternity care", in spite of the physical impossibility of my ever becoming pregnant (I'm a man).  And by mandating other "essential" coverages, such as prescription drugs and substance abuse, for example, that precludes my own personal choice of, say, getting a high-deductible policy that doesn't cover day-to-day expenses but rather only protects against a "catastrophic" expense.

I recognize that the President's speeches and websites aren't really "below the surface", but thanks for the opportunity to turn in these obvious cases of rumormongering and misinformation.  I hope whoever is in charge of this service will properly chastise the President and correct the record accordingly.

Sincerely,
Dave Smith
Houston, TX

In only a week's time, the government's much ballyhooed "Cash for Clunkers" program (officially the "Car Allowance Rebate System"), has blown through a billion dollars and become the darling of the mainstream media, automobile corporations, and politicians.  It is credited with Ford's first sales increase in over two years (on a year-over-year basis), and in slowing the decline of government-owned GM and Chrysler.  It's supposed "success" has fueled Congress's desire to allow it to blow through another $2 billion of taxpayers' money.  The bill has the support of the groups across the spectrum of special interests -- AFL-CIO, the United Autoworkers, the U.S. Chambers of Commerce, and the National Association of Manufacturing -- and of politicians on both sides of the aisle.

So what's not to like about getting old, gas guzzling cars off the road, replaced by (ostensibly) safer, more environmentally-friendly vehicles?  Especially when doing so is "stimulating" the economy, providing demand for new automobiles?

The answer is multi-fold.  First of all, it is important to remember something about the very definition of economics -- the study of the allocation of scarce resources that have alternative uses is how economist Thomas Sowell puts it in his book Basic Economics.  If you have $10 in your pocket or $10 thousand, every dollar you spend on candy is not available to spend on gasoline for your car, or clothes, or your electric bill.    Likewise, every dollar a family spends on a new car is a dollar not being spent on food, health care, or clothing, or invested for retirement or a college fund, or put away in a savings account for a rainy day.

The automobile industry is very large and very visible, and has very vocal supporters -- unions, manufacturers, dealers, etc.  Plus, don't forget:  the government now owns majority stakes in two of our three largest auto makers (GM and Chrysler).  So now add the entire government to the mix as a stakeholder.  So offer a tax credit for the purchase of a new car (trading in a "clunker", defined in this case based on gas mileage, not actual physical condition), and watch the sale of new cars get "stimulated".  The purchase of new cars increases, satisfying the those vocal stakeholders -- but at what price?  It's easy to measure the increase in new car sales, but much harder to measure the decrease in the purchase of other goods and services, the money that individuals and families would have spent elsewhere if not buying a new car -- the "alternate uses" of the family's income.

Of course, for the government to spend money, it has to get it from somewhere -- either taxation, borrowing (which basically means future taxation), or by printing money.  In each case, nothing of value is created by the government, resources are just shifted from one part of the economy (present or future) to another, or the value of money already held by individuals and institutions is decreased.  Taking a slice of pizza from my plate and putting it on yours doesn't increase the total amount of pizza, it just merely changes who consumes it.  Tax credits like the "cash for clunkers" program distorts price signals and reallocates resources throughout the economy.  This, by definition, means a less efficient economy.

Lost in much analysis of the new car buying spree is the lesson learned in the recent subprime mortgage crisis:  when the government distorts the market by artificially created demand for something, people tend to borrow money that might not be able to pay it back.  We have seen a rash of mortgage foreclosures, as people took advantage of government incentives to purchase homes; thanks to "cash for clunkers", are we setting ourselves up for a rash of auto loan foreclosures as well?  Only time will tell.  One can be sure that if so, we can look for a government proposal to help people who "get behind" on their car payments -- another government bailout.

Finally, there's the usual nature of waste, fraud, and abuse endemic to any government program, particularly one initiated in a hurry.  The "CARS" program sets very specific criteria for what constitutes a "clunker" that is eligible for the tax credit; however, auto dealers have every incentive to qualify as many people as possible for the program and thus sell more new cars.  What will be the audit and enforcement process involved to ensure taxpayer money isn't spent on "credits" for unqualified "clunkers", or even on fictitious car sales?

A more comprehensive analysis shows that the "cash for clunkers" is no benefit to the overall economy, just another transfer of property to special interests, facilitated by the government and subject to fraud and inefficiency.  Congress should not reauthorize another round of billions in tax dollars for this program.

"... [The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint ...Judges of the supreme Court..."
~ The United States Constitution, Article II, Section 2

Thus does our Constitution define the process by which the President fills a vacancy on the Supreme Court -- no definition of what "advice and consent" actually entails, no qualifications listed for the judges themselves, no guidelines to which the Senators should adhere, no roadmap for the President to follow.

Over the years, the practice evolved that senators propose to the President various judges from the states they represent, the judges go before the Senate Judiciary Committee for hearings and a vote, then on to the floor of the Senate.  Typically, for Supreme Court Justices, extra care has been taken by the President, with the recent trend being appointments currently serving on an appellate court -- someone who has already faced Senate confirmation and passed the test.  In many cases, particularly recently, leeway has been given to the President's preferred nominee, with little real information coming forth in the Senate hearings, and the determination being made that while a particular Senator might disagree philosophically with the person in question, the nominee does at least have the requisite qualifications and experience and therefore gets the Senator's vote.

So we come to our current situation, with President Obama's pick of Appellate Judge Sonia Sotomayor to fill the Supreme Court vacancy being left by the retiring Justice David Souter.  Much has been made of Judge Sotomayor's controversial statements and opinions, particularly with regard to race and ethnicity and equal treatment under the law.  There's plenty of information available on that topic, so there's no need to delve into that here.  Rather, what I find interesting, is how various senators have reacted to the vote.

As mentioned above, there is no real Constitutional guidance on the practical application of "advice and consent".  President Clinton's appointment of Ruth Bader Ginsburg sailed through the Senate on a 96-3 vote, in spite of her leftist ideology; President George W. Bush's appointment of Samuel Alito's vote was the closest in a decade and a half at 58-42, with the "nay" votes coming based nearly entirely on ideology (with Senator John Kerry of Massachusetts attempting to deny a vote at all via filibuster).  A precedent has been set, particularly with the (ultimately failed) nomination of Robert Bork by President Reagan in 1987:  ideology is a valid reason for non-consent of a candidate for some senators; others seem to grant the President wider latitude, unless the nominee really makes an error or something comes up in the candidate's past.

So should ideology be a valid criterion for voting to send a President's nominee to the bench?  Elections do have consequences, but Senators are elected too.  Partisanship seems always to be chastised by the minority party, but we have two political parties for a reason, and intelligent people can disagree.  Because the Constitution leaves "advice and consent" undefined, I believe it is indeed valid to vote against a nominee based on ideology or judicial philosophy.

Ms. Sotomayor, barring an unforeseen doozy, will most certainly pass the Senate and become the next Associate Justice on the Supreme Court.  But, given her judicial philosophy as shown in her rulings and (to a lesser extent) her testimony, it is both Constitutionally justifiable and ideologically (and philosophically) necessary for any believer in limited government individual liberty to vote against her -- recognizing the consequences of such a vote.  Let us hope that her service is surprising to her supporters and her critics.