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Friday, September 4, 2009

John Stossel has set himself apart from the majority of the U.S. press corp - by raising the standards by which he performs his job. In analyzing the government's cash-for-clunkers plan, Stossel states:

It wasn't. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt's teaching in his classic, "Economics in One Lesson":

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

If you weren't struck with an intense bolt of joy upon reading this, perhaps you should peruse more of this blog (or check out books in the Libertarian Reading List). The article is so good, it deserves to be quoted a little more:
Let's start at the beginning. The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

That isn't all. Those car buyers were either going to trade in their used cars soon or they weren't. If they were, Cash for Clunkers simply moved up the schedule. The stimulation of the auto industry occurred earlier. Big deal. But if buyers planned to keep their cars longer, the program imposed costs that are less visible. Without the government incentive to buy cars, consumers would have bought other things -- computers, washing machines, televisions. The manufacturers and sellers of those products didn't get to make those sales. Why should the auto industry get privileges at the expense of others?

Then there are the mechanics who would have serviced those used cars. They've lost business. Some will be laid off. Nor should we forget low-income people who depend on the used-car market for their transportation. The cheap cars they would have bought were destroyed.

Of course, politics is all about the immediate and the visible, so not only will politicians completely ignore this legitimate analysis (except for a few Republicans - but they also support plans with immediate and visible effects when they're in the majority), but they are expanding the program to appliances.

That's right, and just in case you thought purchasing a new microwave and selling the old one at a yard sale, the federal government is cracking down on yard sales!

The campaign is called "Resale Roundup," and it targets any product that has been recalled by its manufacturer. According to the Kansas City Star:
The commission's Internet surveillance unit is monitoring Craigslist and other "top auction and reselling sites" for recalled goods.
If this commission has no better use for its resources, then it does not have a legitimate reason to exist.

Posted by Eleutherian

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