Thanksgiving Message 2024

My special thanks this year go to business, both large and small. Business is the mainstay of the free Capitalist economy. What amazes me is how innovative and productive business continues to be given how much the Capitalist—i.e. free—portion of the economy has shrunk under the weight of the massive, and still growing, regulatory welfare state. Add to that that business, especially the most successful, is the most persecuted minority in America today. It is under attack, not for its vices, but for its virtues. By whom? By egalitarians, who label their money-earning success as "greed." With all of the Woke claptrap about “oppressed” groups, business is somehow not among them. Yet business gets blamed for every societal ill, even as it manages to keep us all alive and somehow moving forward under the meager remnants of Capitalistic economic freedom—and still make a profit. So, here’s a shout out to American business: THANK YOU for your profit-seeking service. 

RELATED:

ARI: TURN #GIVINGTUESDAY INTO TRADING TUESDAY

ON THIS HOLIDAY, GIVE THANKS TO THE PRODUCERS

Why Did Mark Cuban Endorse Kamala Harris?

On the face of it, successful businessman and Shark Tank venture capitalist host Mark Cuban’s endorsement of Kamala Harris makes no sense. Her hatred of “Billionaires” is central to her worldview. More broadly, Harris is a central planning authoritarian. Her whole economic “vision” for America centers around control by the state. So what could Cuban be thinking? 

In this op-ed for The Washington Post, Jennifer Rubin tries to make a positive case for Mark Cuban’s endorsement of Kamala Harris:

Democrats, long hammered for being anti-business, have frequently looked for prominent business leaders to serve as validators.

Vice President Kamala Harris’s most effective advocate from the business world might be tech entrepreneur Mark Cuban, who became a household name as owner of the NBA’s Dallas Mavericks (he sold his majority stake late last year for $3.5 billion) and as a one of the hosts of the reality TV show “Shark Tank”.

Translation: It’s good campaign window dressing. But that surely can’t be Cuban’s purpose. So again I ask, Why? I don’t say he should endorse Donald Trump. Abstention is a valid alternative. 

But Harris is as anti-business as any Democrat, in my view. I don’t think Mark Cuban thinks otherwise. But he could remain neutral. So, what’s he thinking? I posted these comments, slightly edited for clarity:

It’s interesting that Jennifer doesn’t mention Cuban’s desire to be SEC chairman. In answer to a pointed interview question from Neil Cavuto on whether he would accept a cabinet job in a Harris Administration, Cuban immediately answered “SEC Chairman,” and why: 

“NEIL CAVUTO: But can I ask you, Mark, whether you would entertain the treasury secretary, or commerce secretary in a Harris Administration...

“MARK CUBAN: Head of the SEC, that's the job I would take. Maybe HHS, but somebody needs to replace [current SEC Chairman] Gary Gensler.”

Cuban did not equivocate. He labeled Gensler “awful” for his regulatory assault on the newly emerging Blockchain and AI industries, and business in general. 

I don’t doubt Cuban hates Trump, and everything he said about Trump [in the Cavuto interview]  is true. But I don't think Cuban is a fool. I think Cuban has accepted the likelihood that Harris will win. Forget his mushy praise. Cuban likely wants to have a chance to blunt her economic authoritarian instincts. The most likely reason for Cuban’s endorsement of Harris, especially given Harris’s proposed blame-the-victims price controls and proposed assault on his—and by extension of the principle, all Americans’—vast unrealized capital gains assets, is the old political advice, “Keep your friends close and your enemies closer.” 

Related Reading:

The reality of Kamala Harris' plan to tax unrealized capital gains by AXIOS

  My take

On the Candidates’ Disastrous Price Policies—and Harris’s Moral Obscenity

Joe Biden’s Despicable, Unjust Blame Game

Harris's Unchanged anti-American Values

KOSA Negates the Government’s Law Enforcement Responsibility

A bill known as the Kids Online Safety Act, or KOSA, passed the U.S. Senate by a 91 - 3 margin. It now [8/3/24] goes to the House of Representatives for consideration.

The bill is not what the title implies. It is much more . . . and much worse.

Reason’s Elizabeth Brown observes: 

The Kids Online Safety Act would have cataclysmic effects on free speech and privacy online.

"Bills like KOSA cynically hide censorship behind the mantle of child protection. Tell Sen. Schumer and other lawmakers to reject KOSA," urged the Freedom of the Press Foundation.

In a New York Times article, Senate Passes Child Online Safety Bill, Sending It to an Uncertain House Fate, Maya Miller reports

The centerpiece of the legislation would create a “duty of care” for social networking platforms that mandates they protect minors against mental health disorders and from abuse, sexual exploitation and other harms. Companies could be held liable for failing to filter out content or limit features that could lead to those adverse impacts. [My emphasis]

What content can anyone say does not fit with "could lead to adverse impacts? What would not  be included is such a vague mandate as “duty of care?”

A second measure included in the package would strengthen privacy protections for anyone under 17 and ban targeted advertising to children and teens. It would create an “eraser button” for parents and children, requiring companies to permit users to delete personal information.

Despite the lop-sided vote margin, the bill has notable critics.

The bill faces strong pushback from technology companies, who argue it would place unacceptable burdens on them to moderate content and verify users’ ages, and groups like the American Civil Liberties Union that contend it would restrict free speech. In the Senate, the measure generated narrow but intense opposition despite several rounds of redrafting to address such concerns.

Senator Rand Paul, Republican of Kentucky, recently called the bill “the Pandora’s box of unintended consequences,” arguing it would stifle First Amendment-protected speech. Other critics, such as Senator Ron Wyden, Democrat of Oregon, said they were worried that limiting children’s access to certain content on social media could further isolate vulnerable youths, including L.G.B.T.Q. young people who often rely on online communities for a sense of belonging and acceptance.

Count me among the opponents.

The Washington Post also reported on the passage of the bill (Senate passes landmark bills to protect kids online, raising pressure on House).

I posted this WAPO Comment:

Note what the Kids Online Safety Act (KOSA) does NOT do—hold the people who actually create and post the harmful content accountable. Instead of doing their duty to identify and prosecute the guilty, the politicians are going after the social media companies. If a crime is planned around a dinner in a restaurant; or committed using the Verizon phone network; or committed using the public roads, would it be right to charge that restaurant owner, Verizon, or the government for the wrong-doing? Yet that is the position that the social media companies, which are no different IN KIND, are being forced into with this horrifically misleading bill. 

Yes, KOSA is a threat to free speech and privacy, as the opponents argue. But it is also a massive abnegation by the political class in its primary function to identify criminal activity, make the necessary laws, and enforce the laws against the guilty while protecting the innocent.* In effect, the bill shifts that function from government, where it belongs, to private enterprise. Under the smokescreen of “kids safety,” KOSA is a massive inversion of the purpose of law and of justice: It evades the guilty and targets innocent third parties.

We should demand that the politicians do their jobs; go after the guilty, rather than take the easy, politically expedient course of making technology companies the scapegoats. 

* [I am indebted to Jon Hersey for pointing out this little-discussed aspect of this and similar laws targeting social media companies. Hersey wrote “Many of the bureaucrats and commentators behind these laws and initiatives against social-media companies share essentially the same tactic. They blame social-media companies for not doing what governments are supposed to do—protect individual rights—and then rationalize that this supposed failure is grounds for doing what governments are not supposed to do—violate individual rights.”]

Related Reading:

Social Media and the Future of Civil Society by Jon Hersey for The Objective Standard

Senate To Vote on Web Censorship Bill Disguised as Kids Safety by Elizabeth Brown for Reason

Linda Stamato’s Broad Attack on Our Intellectual Freedom

Censorship-By-Proxy is Real, and it's Here

The End of the Free Internet Is Near: The idea that the internet should enjoy minimal government oversight precisely because it was a technology that enabled open and free speech for everyone has been turned on its head. -- DECLAN MCCULLAGH for Reason

HATE: Why We Should Resist it With Free Speech, Not Censorship by Nadine Strossen

Review of Free Speech: A Global History from Socrates to Social Media by Michael Dahlen for The Objective Standard

A Lesson From 1930s Germany: Beware State Control of Social Media By Heidi Tworek for The Atlantic

Trump Joins Biden in War on the Average Person’s Newfound Power to be Heard

QUORA: ‘How did Reaganomics get the country back on track?’

 QUORA: ‘How did Reaganomics get the country back on track?’

I posted this answer:

It’s a bit simplistic to say Reaganomics got the country back on track. It’s largely true, but there's more to the story. Reaganomics was part of a larger trend toward freer markets and globalization of trade. Reagan’s policies can’t get all of the credit. But they deserve a lion’s share of the credit, because he accelerated the deregulation trend of the Carter Administration and his radical restructuring of income tax rates—cutting top rates from 70% to 39% and ultimately to 28%—refocused the economic incentives from stagnation to growth.* 

Reagan’s policies corresponded to an amazing resurgence in American economic power, which in turn corresponded to dramatic global economic improvements. Reagan would avoid taking credit, instead placing credit with “We the People''—the “men and women who raise our food, patrol our streets, man our mines and factories, teach our children, keep our homes, and heal us when we're sick -- professionals, industrialists, shopkeepers, clerks, cabbies, and truckdrivers.” The result was a predictable outcome of freer markets—the economy took off, with a job and innovation-filled expansion that many did not expect, except of course Reagan himself. Reagan understood that people working and trading for personal benefit is the fountainhead of economic prosperity, and that more freedom and minimal government obstructionism was all they needed.

Let’s examine the record.

As the economic expansion took hold, after the 1980 - 82 “double dip recession”—the third and fourth in 14 years— GDP growth surged 8% growth out of the box, and averaged 4% from 1983 through the end of the century (compare that to today’s “new normal” of 2% growth). And that powerful expansion was accompanied by a phenomenon that was thought impossible by the prevailing 1970s logic of Phillips Curve economics: The strong expansion was accompanied simultaneously by falling inflation (12.5% to 3,4%), falling interest rates (19% to 8%), and falling unemployment (10.8% to 3.9%). 

Thanks to Britain’s Margaret Thatcher and other world leaders, such as Red China’s Deng Xiaoping, the successor to madman Mao Zedong, free market-oriented policies spread around the world, igniting a surging global trend of prosperity. Global extreme poverty plummeted from more than 40% in 1980 to less than 10% today. At the same time, the share of the world population living middle class (or higher) lives has passed 50%. How much Reaganonmomics inspired the global free market trend, as opposed to following it, is a matter of debate. But either way, Reaganomics played a significant role in advancing it, not least of which by giving voice to free markets and individualism.

All of this astounding progress now faces multiple threats, especially the growing attacks on global free trade, the resurgence of central planning ideologies, and the Environmentalists' war on reliable energy, especially fossil fuels. But as to the question, How did Reaganomics get this country back on track? Simple. He recognized that “In this present [1970s] crisis, government is not the solution to our problem; government is the problem,” and pursued policies to reduce government interference and thus give private individuals more freedom and incentive to work, innovate, take risks, and trade for their own personal betterment.

* [I emphasize rate, rather than tax, cuts. Between 1983, when Reagan’s first round of tax rate cuts were fully implemented, and 1989, Reagan’s last year in office, individual federal income tax revenues rose 55% as the economy soared, rising every year in that period. A tax policy that leads to strong increases in federal income tax revenues can hardly be called a tax cut.] 

Related Reading:

There's a Hole in the Middle of Doughnut Economics by Steven Horwitz

"Trickle-Down Economics": Anti-Capitalists' Insulting Portrayal of the "Common Man"

Global Poverty Decline Denialism: An anti-market ideologue tortures the data at The Guardian. By Ronald Bailey for Reason

The Growth of the World’s Middle Class May Be the Greatest Story of Our Age

Did the New York Times Just Vindicate Reaganomics?

We now have a Biden Doctrine. It makes me nervous.

EXCERPTS:

First, it is a fundamentally pessimistic view of America’s recent history. Sullivan recalls the glory days of American economic power after 1945, but then notes that in “the last few decades” that strength has waned. He talks about the hollowing-out of the country’s industrial base, the export of American jobs and the atrophying of industries. We “stopped really focusing on building,” Sullivan said, as he summarized the subsidies, tariffs, bans and investments that are at the heart of Biden’s new approach.

Ironically, only a couple of weeks before Sullivan made his speech, the Economist had a cover story on “America’s astonishing economic record.” It begins with 1990 — often used as the start of the rot in the narrative of decline — and points out that despite the rise of huge new economies such as China and India, the United States’ share of global gross domestic product has stayed roughly the same since then: around 25 percent. During that same period, America’s share of the Group of Seven’s economic output increased substantially, from 40 percent to 58 percent. Today, eight of the world’s 10 biggest companies are American. In 1989, only four were American (and six were Japanese). As for building, during these decades, the United States created and built the information economy, surely one of the greatest transformations and advances in human history.

In 1990, the great fear in the United States was of being overtaken by Japan, then seen as the predatory economic power that was eating our lunch. But, as the Economist notes in the same edition, in 1990, the income per person in the United States was just 17 percent higher than in Japan; today it is a staggering 54 percent higher. Look at demographics or energy or leading technology companies, and everywhere you see the United States in a dominant position. Perhaps we got something right.

It's Time to Bury the "Trickle-Down" Myth

Capitalism: The Unknown Ideal—Ayn Rand

Three Cheers for "Trickle-Down!"

Related Listening:

Carter Trumps Reagan on Deregulation [CATO, 14 minutes]

Jennifer Rubin’s Orwellian ‘Understanding’ of a Free Market

George Orwell’s 1984 features a tyrannical government’s tool called doublethink, which inverts the meaning of concepts to enhance the government’s power to stifle freedom. One infamous example of this “Newspeak,” the fictional language of Oceania, 1984’s totalitarian superstate, is the slogan “Freedom is Slavery.”

Washington Post columnist Jennifer Rubin apparently has her own version of doublethink. In a recent column, Distinguished pol of the week: A champion of free markets the GOP should embrace, Rubin defended a proposed Federal Trade Commission rule legally banning private non-compete clauses in private contracts as a win for free markets:

Lina M. Khan, head of the Federal Trade Commission, is demonstrating a commitment to competitiveness and free markets that even Republicans should embrace. The most recent example: the FTC’s proposal this past week to do away with noncompete agreements.

Such agreements prevent workers from going to work for a competing employer for months or even years. As the FTC explained in a statement, this is a "widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” The release added: “By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans.”

The proposed rule is far-reaching. The FTC explains: “The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. It would also require employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.” [My emphasis]

It’s far-reaching, alright. These employment agreements are voluntary contracts between private employers and employees. A government ban is government coercion. It is tyranny. If the government can impose this rule, what feature of private contracts can’t it ban, or dictate, on vague justifications such as fighting “exploitation,” raising wages, advancing innovation, or supporting entrepreneurialism? Based on this “far-reaching” attack on freedom of contract and association, what limiting principle is left to reign in the government's control of private economic contracts?

As David McGarry writes for Reason in The FTC Wants To Outlaw Noncompete Clauses, but Does It Have the Authority?, “If it can survive legal challenges, the FTC's ban on noncompetes would have a massive impact on the rights of employers and workers.” [My emphasis]

Indeed—a negative impact, I would stress. Even worse, as McGarry points out, and as is announced in the FTC press release included in Rubin’s column, the rule would be retroactive, rescinding non-compete clauses in pre-existing contracts agreed to when noncompete clauses were legal. This is ex-post-facto law, a gift to any aspiring tyrant and a blatant violation of the U.S. Constitution. What can be more anti-free market than the ability of government regulators to declare all private contracts as subject to being made unlawful on the whim of any bureaucrat at any time in the future? Where is the rule of law that free markets depend upon for their very existence? The FTC rule does not, contrary to Rubin’s assertion, protect “a fundamental principle of free-market capitalism: the right to contract that both an employer and employee can agree to.” It is a trojan horse that destroys it.

True, non-compete clauses can be problematic. In one report, I read of a case where an employee was fired due to a recession. The non-compete agreement blocked him from some job opportunities offered by competitors, even though leaving his job was not his choice. But as McGarry pointed out, an employee could sue if he thinks the clause was abused. On the other hand, as McGarry and others have pointed out, without non-compete agreements, employees' opportunities to advance career-wise can be severely restricted, as without non-competes companies become more leery of sharing sensitive company information with employees they are not absolutely sure are strictly loyal, hampering advancements to higher-level job openings within the company. As McGarry points out,

Employers and employees weigh many kinds of benefits and drawbacks when considering whether to sign a contract—monetary and otherwise. Fully banning non compete clauses may help some, but will undoubtedly wreak unanticipated havoc on many others.

"With all due respect to the majority, I am dubious that three unelected technocrats have somehow hit upon the right way to think about non-competes, and that all the preceding legal minds to examine this issue have gotten it wrong," Wilson wrote [FTC Commissioner Christine Wilson is the lone dissenter on the new policy.]

But the bottom line is, these are private transactions. Private voluntary employment agreements that don’t involve fraud or criminal actions are none of the government’s business. 

Rubin might want to ask herself, “What does the ‘free’ in free market actually mean?” Contrary to Rubin’s doublethink, “free” does not mean an FTC ban on non-compete agreements. Put simply, it means the absence of government coercion in private economic transactions. It means to leave law-abiding, rights-respecting economic activity free of government coercion. The proposed FTC rule is the very essence of government coercion, and thus the very antithesis of a free market.  

Related Reading:

Gay Marriage, Freedom of Association, and Equal Protection of the Law

Gay Marriage: The Right to Voluntary Contract, Not to Coercive “Contract”

The Right to Discriminate is About Contract, Not Religion