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Stop Those Who Would Stop Uber
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Blog, Commentary and Articles - Economics and Financial Services
Written by Sheldon Richman   
Tuesday, 11 November 2014
Stop Those Who Would Stop Uber
by Sheldon Richman
 
The nerve of some people! Imagine coming to a city and doing business without first asking permission from local officials!
 
That’s what Uber has done in cities all over the United States and Europe, and it’s created quite a storm among politicians and licensed taxi drivers, who have held up traffic in, among other places, Boston, London, and Paris just to stamp their feet at the high-tech competition.
 
What is Uber? It's an innovator, and you know what means. It disturbs the regulatory landscape where protected firms have long settled in safely and comfortably. Suddenly, the advantage of being an “in” flies out the window. No wonder the regulation-spawned monopolies are upset.
 
To be more specific, Uber (and its competitor, Lyft) is a company whose smartphone app efficiently matches riders and drivers. When Uber enters a market, it carefully recruits and certifies local drivers. Then, using the app, people who need a ride can quickly find drivers to get them where they want to go. Customers are told fares in advance and how long they’ll wait to be picked up. After the trip, driver and rider are asked to evaluate each other.
 
Sounds wonderful, doesn’t it? You’re probably thinking “yes” -- unless you’re a licensed cab driver, a politician, a regulator, or a progressive. (Recent progressive headlines include “Of Course Uber Should Be Regulated” [Slate] and “Why Uber Must Be Stopped” [Salon].) They’re all going bananas.
 
Clearly the welcome wagon rolls out of sight when innovators come to town. In Paris, the government tried to mandate a 15-minute delay between ordering a ride and receiving a pickup. Fortunately, a court said no. The commonwealth of Virginia has told Uber to “Halt!,” while Austin and Miami have (figuratively) posted “Uber Stay Out!” signs.
 
The only losers from thwarting Uber are riders, who must suffer the inefficiency and backwardness of the local monopoly, and would-be drivers who can’t break into the business because of that protectionist, interest-ridden system. Did you know New York City had fewer taxi licenses (medallions) in 2012 than in the late 1930s?
 
What happened in Little Rock, Arkansas, is typical. Uber came to town to recruit drivers, so the city’s board of directors frantically began discussing what kind of regulations they should enact. Uber says it's not a transportation company and should not be subject to the regulations governing taxis. Uber maintains no fleet of vehicles and employs no drivers. It merely helps drivers and riders find each other. But the discussion of regulations went on. Then Uber did something guaranteed to upset any government and its favored interests: it started doing business.
 
A member of the board of directors quickly let it be known that he would seek an injunction. It’s called “injunctive relief,” but who would be relieved? I’ve already indicated the answer: no one who deserves to be.
 
The statewide newspaper, the Arkansas Democrat-Gazette, assumed the voice of the ruling elite when it reported that Uber “began operating in the city without approval.… The company is known for moving into cities across the nation without complying with transportation codes that are in place.”
 
Regarding Uber’s decision to proceed without waiting for the government to act, the newspaper reported, “Ward 4 Director Brad Cazort, who had a role in negotiating terms with Uber, said the company's sudden start without following city guidelines meant they should no longer have input in the drafting of Little Rock's regulations.”
 
That’ll show them. You won’t play ball with us? Fine, we’ll regulate you without your input.
 
What is the world coming to when any company can come to a city and arrogantly do business without asking permission, in essence, of those against whom it would compete? Does the new kid in town think this is America or something? Oh. Never mind.
 
Americans live under the delusion that enterprise here is both private and free. It may be nominally private, but it’s anything but free. Unfortunately, most people don’t know what freedom is. So they are unfazed when they hear that before you can do anything of a commercial nature, you need government permission.
 
You were taught monopolies are bad, right? Apparently not government-created monopolies.
 
Land of the free? In your dreams.
 
Sheldon Richman is vice president editor at The Future of Freedom Foundation in Fairfax, Va. (www.fff.org ).
 
Election 2014: The Good News and Bad
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Blog, Commentary and Articles - Politics
Written by Sheldon Richman   
Thursday, 06 November 2014
Election 2014: The Good News and Bad
by Sheldon Richman
 
The 2014 midterm election delivered both good news and bad. The good news is that the losers lost. The bad news is that the winners won.
 
Journalist Mike Barnicle says he’s never seen an election in which the people feel so distant from the government. I wish his diagnosis were right, but I suspect it is not. True, voter turnout likely set no records for a midterm, but this doesn’t indicate alienation as much as disgust with the particular cast of incumbents. Who wouldn’t be disgusted?
 
Despite what the voters may think, however, this isn’t really about personality and character. It’s about the limits of human nature. No oneis qualified to govern us, considering how “govern” is defined today. The national, state, and local governments attempt to manage all aspects of our lives. In various ways, they undertake to “get the economy moving” and keep it “humming.” On top of that, the national government maintains a global empire in the service of which the national-security apparatus presumes to manage foreign societies.
 
Even if doing these things were morally proper—which it assuredly is not—it would be beyond the capability of human beings. No person or group could possibly possess the knowledge that would be required to manage a society—this one or one in a foreign land. Any “leader” who presents himself as fit for that job is a poser. No one is qualified to do what politicians today aspire to do.
 
That goes for Republicans as well as Democrats. Republicans talk about shrinking government, but don’t believe it. They certainly have no intention of shrinking the American empire, much less dismantling it. Quite the contrary. And while they talk about freeing the economy, that usually means removing restrictions on privileged economic interests without also eliminating the privileges. Republicans give the free market a bad name, because too often their policies amount to unabashed corporatism. But, then, the Democrats are no different. Both parties have a vested interest in the essential status quo, whatever their differences at the margin.
 
The election season is when we most often hear hosannas to democracy. Every public figure, including supposedly hardboiled news people, urges us to vote. “Every vote counts,” they say.
 
Balderdash.
 
As the late Gordon Tullock explains, “It’s more likely that you’ll get killed driving to the polling booth, than it is that your vote will change the outcome of the election.” Think about the elections you voted in. Not one would have turned out differently had you done something else that day.
 
Since no one vote is decisive, most people have no incentive to invest time and money acquiring the knowledge necessary to act responsibly on election day. (The responsible thing could be to stay home.) Government at all levels imposes burdens on our economic activities—the so-called economy is just people and their pursuits. How many voters study economics so they can competently judge what candidates promise to do? And how many study moral philosophy to better decide whether existing and promised policies are moral or immoral? The great American social critic H.L. Mencken said, “Every election is a sort of advance auction sale of stolen goods.” How would we decide if he is right or wrong?
 
To really become an informed voter, you would have to do nothing but study these and other subjects. But since your one vote won’t be decisive, why would you take time away from your family, friends, work, and voluntary community activities, where your choices aredecisive?
 
You wouldn’t, and you don’t.
 
Moreover, the costs and benefits associated with electing the candidates you vote for are dispersed among the multitude, so even if your choice wins, your share is minuscule.
 
Thus your vote has virtually no personal material consequences and no influence on the outcome. So remaining ignorant and voting your biases and feelings turns out to be the rational thing to do.
 
In other words, voting rewards irresponsibility. That’s just one problem with democracy.
 
In the end, democratic representation—the opiate of the masses—is just a way to stop us from complaining. The people in Washington aren’t our representatives. They are our rulers.
 
But fear not. The alternative isn’t dictatorship. It’s individual freedom, responsibility, contract, and voluntary mutual aid.
 
Sheldon Richman is vice president editor at The Future of Freedom Foundation in Fairfax, Va. (www.fff.org ).
 
Separate Economy and the State
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Blog, Commentary and Articles - Economics and Financial Services
Written by Jacob G. Hornberger   
Monday, 03 November 2014
Separate Economy and the State
by Jacob G. Hornberger
 
For centuries, governments established, controlled, regulated, and subsidized religious activity. Then some people began asking a revolutionary question: Why not separate religious activity and the state in such a way that the state would be barred from involving itself in any religious activity whatsoever?
 
The question shook the world. Having been born and raised under systems in which the government played a heavy role in religious activity, many people simply couldn’t imagine life any other way. The idea of separating church and state was initially considered ridiculous.
 
Gradually, however, the idea gained sway and ultimately gripped the hearts and minds of the American people. That’s why the First Amendment to the U.S. Constitution prohibits Congress from involving itself in religious affairs.
 
For centuries, governments have also managed, controlled, regulated, and subsidized economic activity. So here’s another revolutionary question: Why not separate economy and the state the way our ancestors separated church and state?
 
Here is a constitutional amendment I propose: “No law shall be enacted respecting the regulation of commerce or abridging the free exercise thereof.” It could be called the Freedom of Commerce Amendment or the Economic Liberty Amendment.
 
That would mean that whenever Congress passed a law regulating economic activity, the aggrieved party could go into either state court or federal court and have it declared unconstitutional under the Economic Liberty Amendment of the Constitution.
 
No longer would people have to concern themselves with an endless slew of economic regulations coming out of Congress. Everyone would know that regulation of economic activity would be as unconstitutional as regulation of religious activity.
 
Isn’t that what America’s heritage of “free enterprise” is supposed to be all about? The term “free enterprise” doesn’t mean “less-regulated enterprise.” It means enterprise that is free from government regulation.
 
What would the separation of economy and state mean as a practical matter? It would mean that people would be free to engage in any economic enterprise without licenses, permits, restrictions, or other government controls. It would mean that the federal government would lack the power to manage, regulate, control, or subsidize economic activity. It would mean that people would be free to engage in mutually beneficial economic transactions with anyone in the world without governmental interference.
In fact, here are two more proposed constitutional amendments to consider:
  • The federal income tax is hereby abolished, along with the Internal Revenue Service.
  • No program or law shall be enacted respecting the establishment or regulation of welfare or charity or infringing the free exercise thereof.
Those two amendments would ensure that as people freely engage in economic enterprise under the Economic Liberty Amendment, they would be free to keep the fruits of their earnings and decide for themselves what to do with it. No more mandated charity in any form.
 
Aren’t economic liberty, free enterprise, free markets, private property, and private charity what genuine freedom is all about? Indeed, isn’t that what economic prosperity is all about — the ability of people to improve their economic status in life through trade and capital accumulation?
 
Modern-day Americans are, of course, free to continue the economic system under which they have been born and raised — a system of government-managed and government-controlled economic activity, income taxation, and mandated charity. That is what people have done for centuries with respect to both economic activity and religious activity.
 
But there is another option. Rather than accept what has gone on for centuries, modern-day Americans can lift their vision to a higher level, just as our ancestors did with respect to religion. They have the opportunity to separate economy and the state, just as our ancestors separated religion and the state.
 
What better way to lead the world out of the statist economic morass in which it has been mired for centuries?
 
Jacob G. Hornberger is president of The Future of Freedom Foundation in Fairfax, Va. (www.fff.org ).
 
Obama Still Does a Good Imitation of Bush
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Blog, Commentary and Articles - Foreign Policy, Military and War
Written by Sheldon Richman   
Friday, 31 October 2014
Obama Still Does a Good Imitation of Bush
by Sheldon Richman
 
We really should be used to this by now. After almost six years in office, President Obama is far more like George W. Bush in national-security matters than he led the American people to believe.
 
For example, the New York Times’ Charlie Savage reports that Obama has yet to decide whether the international ban on torture applies to U.S. government conduct outside the United States. Savage writes that,
When the Bush administration revealed in 2005 that it was secretly interpreting a treaty ban on “cruel, inhuman or degrading treatment” as not applying to C.I.A. and military prisons overseas, Barack Obama, then a newly elected Democratic senator from Illinois, joined in a bipartisan protest.
 
Mr. Obama supported legislation to make it clear that American officials were legally barred from using cruelty anywhere in the world. And in a Senate speech, he said enacting such a statute “acknowledges and confirms existing obligations” under the treaty, the United Nations Convention Against Torture.
Unfortunately, when Obama became president he did not follow through. “And now,” Savage writes,
President Obama’s legal team is debating whether to back away from his earlier view. It is considering reaffirming the Bush administration’s position that the treaty imposes no legal obligation on the United States to bar cruelty outside its borders, according to officials who discussed the deliberations on the condition of anonymity.
Obama has to formulate a position by next month, when his representatives will appear before the UN’s Committee against Torture for the first time.
 
“State Department lawyers are said to be pushing to officially abandon the Bush-era interpretation,” Savage reports. However, this view is not unanimous within the government.
 
Savage notes that Obama “forbade [all] cruel interrogations” by executive order in 2009, but Jeffrey Kaye reported earlier this year in theGuardian that this claim is misleading:
The United States Army Field Manual (AFM) on interrogation has been sold to the American public and the world as a replacement for the brutal torture tactics used by the CIA and the Department of Defense during the Bush/Cheney administration.
 
On 22 January 2009, President Obama released an executive order stating that any individual held by any US government agency “shall not be subjected to any interrogation technique or approach, or any treatment related to interrogation, that is not authorized by and listed in Army Field Manual 2 22.3.”
 
But a close reading of Department of Defense documents and investigations by numerous human rights agencies have shown that the current Army Field Manual itself uses techniques that are abusive and can even amount to torture.
“Disturbingly,” Kaye continued,
the latest version of the AFM mimicked the Bush administration in separating out “war on terror” prisoners as not subject to the same protections and rights as regular prisoners of war. Military authorities then added an appendix to the AFM that included techniques that could only be used on such “detainees,” i.e., prisoners without POW status.
 
Labeled Appendix M, and propounding an additional, special “technique” called “Separation”, human rights and legal group have recognized that Appendix M includes numerous abusive techniques, including use of solitary confinement, sleep deprivation and sensory deprivation.
“Numerous human rights groups,” Kaye continued, “have called for the elimination of Appendix M and/or the rewriting of the entire Army Field Manual itself.”
But rather than scrapping Appendix M, the administration may now be on the verge of declaring that U.S. government harsh conduct toward prisoners detained outside the United States, such as Guantanamo Bay, Cuba, is not covered by the Treaty Against Torture.
“Military and intelligence lawyers,” Savage writes,
are said to oppose accepting that the treaty imposes legal obligations on the United States’ actions abroad. They say they need more time to study whether it would have operational impacts. They have also raised concerns that current or future wartime detainees abroad might invoke the treaty to sue American officials with claims of torture, although courts have repeatedly thrown out lawsuits brought by detainees held as terrorism suspects.
Administration officials told Savage that regardless of the treaty interpretation, Obama’s position is unmistakable. But Appendix M shows that this is not the case.
Anyone who voted for Obama thinking his foreign policy would be different from Bush’s should have learned a hard lesson.
 
Sheldon Richman is vice president and editor at The Future of Freedom Foundation in Fairfax, Va. (www.fff.org ).
 
Abolish the Income Tax and IRS
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Blog, Commentary and Articles - Economics and Financial Services
Written by Sheldon Richman   
Tuesday, 28 October 2014
Abolish the Income Tax and IRS
by Sheldon Richman
 
For some time now we’ve lived with the scourge of civil asset forfeiture, under which the police can seize a person’s property on the mere suspicion it was used in a crime and without having to charge the owner with an offense. Since the authorities have no burden to prove guilt beyond a reasonable doubt, the burden of proving innocence falls on the hapless citizen who wishes to recover his property.
 
Amazingly, people describe as free a society that features this outrage.
 
Now it comes to light that the Internal Revenue Service does something similar. The New York Times reports that the IRS seizes bank accounts of people whose only offense is routinely to make deposits of less than $10,000. If you do this enough times, the IRS may suspect you are trying to avoid the requirement that deposits of $10,000 or more be reported by the bank. The IRS keeps the money, but the depositors need not be charged with a crime.
 
You read that right. The government demands notification whenever a bank customer deposits $10,000 or more. If you are merely suspected of avoiding that requirement, it can cost you big time.
 
Welcome to the land of the free.
 
“Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash,” the Times’ Shaila Dewan writes, “the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.”
 
Dewan tells the story of a restaurateur who learned this the hard way:
For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.
 
The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.
“Who takes your money before they prove that you’ve done anything wrong with it?” Hinders asks. “The federal government does,” the article replies.
 
Three brothers who own a company had $447,000 seized under this power, while a man saving for his daughters’ education lost $66,000. He settled and got all but $21,000 back.
When the Times asked the IRS about this, the agency “announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by ‘exceptional circumstances.’”
 
We should not be comforted. First, it took a query from the country’s most prominent newspaper before the IRS said a word. And second, why should we trust the IRS? The next time a seizure is exposed, an IRS official can plead “exceptional circumstances.”
 
How long will Americans quietly suffer such outrages? They seem to have no idea that the country was founded by colonists who were sick of arbitrary rule by tyrants who saw them as mere subjects to be looted and humiliated.
 
In the past, when advocates of big government called for an income tax, opponents warned that the government would become “inquisitorial.” How right they were. The tax rationalized the creation of the inquisitorial Internal Revenue Service, which to carry out its nefarious work must have access to all of our personal financial information. Nothing can escape its view if it is to do its job.
 
That’s the mandate Congress has given the IRS, and that’s why it does the ugly things it does. Congress could stop it by repealing some laws. But don’t hold your breath.
 
All taxation is robbery, but the income tax is the most egregious form of all because of this invasion of privacy. Modest reforms will not be enough. Only uprooting the tax system and abolishing the evil IRS will do.
 
Sheldon Richman is vice president and editor at The Future of Freedom Foundation in Fairfax, Va. (www.fff.org ).
 
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