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What happens when government interferes with economics and the market

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The irony here is that the values of most of the properties that will have a surcharge levied on them are much lower than the values of the properties along the coast that they are effectively subsidizing.

Last month I got a letter from the National Flood Insurance Processing Center, which informed me that, according to the Homeowner Flood Insurance Affordability Act of 2014, next year I will … have to pay a $25 surcharge on my flood insurance policy (and only because I actually live in my house – otherwise it would have been $250). Wait, affordability assumes that this act should be saving me money — but no such luck.

So what happened? You see, a flood is not covered by regular insurance, so the government is offering flood insurance through the National Flood Insurance Program (NFIP). But a government institution is not your normal insurance company, which is supposed to make money; this government insurance company does not really care about its accounting books. So as a result, it ended deep in red and was heavily sponsored by the taxpayers (to the level of billions of dollars, with a “b,” if someone is wondering).

Evidently the reason for that problem was that this insurance charged rates significantly lower than were required to cover the costs of restoring expensive properties along the East Coast that are subject to frequent flooding caused by hurricanes. (Of course, private flood insurance cannot compete with the government flood insurance that charges artificially reduced rates so that is really not an option.) So in 2012, Congress passed a law requiring the NFIP to charge the actuarial rates (determined by math and statistics rather than the old low ones) which would have, naturally, resulted in much higher premiums for high risk properties.

An ironic surcharge

But the government would not be the government if it did not try to interfere with economics, the market, common sense, and itself, so in 2014 it adopted a new law (with the Orwellian title mentioned above) delaying the rate increases. But in order to do that, this bill required me and other people in areas of low risk to pay a surcharge to cover the expenses associated with high risk areas. Of course, the irony here is that the values of most of the properties that will have a surcharge levied on them are much lower than the values of the properties along the coast that they are effectively subsidizing. So “affordability” in the name will apply to those enjoying the view of the Atlantic Ocean, not to me.

The case described above is just another example of what happens when government ventures into the market. And common sense dictates that it cannot be otherwise because government officials use other people’s money and, as a result, many of them do not care how that money is spent since it has no bearing on their own well-being. Sure, the government always claims that it takes care of the people (in the form of, preferably, “little guy,” “middle class” or “poor”), but those claims are irrelevant since the government cannot operate efficiently by its very nature.

All of the above does not mean that we do not need government (for sure, security shall be its top priority and obligation, even if achieved inefficiently, since there is no alternative) or that we do not need any government regulations. But we should all recognize that if we let government do something, we will have to pay for that more than necessary, the benefits may go to the wrong people, and it is quite possible that there are other (and better) ways of doing that. (By the way, contrary to any logic, liberals trust government with everything but national security even though that is the only area where we, the people, cannot really make our own opinions since we are not familiar with all classified information.)

Politics exacerbates problems

Unfortunately, politics makes the problems mentioned above much worse. Republicans accuse Democrats of giving people “free stuff,” and Democrats really do not try to counter that — arguing that rich people have to pay for that out of fairness. Sadly, Democratic slogans sound much more appealing than Republican ones since people like free stuff (and generally don’t mind when others get free stuff either so long as they do not have to pay for that). Increase the minimum wage because the business owners will pay for that. Give more in welfare/food stamps/SSI benefits because the rich will pay for that. Let everyone come to America because those people are taking jobs Americans don’t want (I wonder how many illegal immigrants made legal will still be doing that?) and businesses will pay for that. Provide subsidized health care to people because … no one will pay for that?

But I do not know of any parental advice book advocating giving kids stuff and not asking for anything in return because free stuff spoils them (most kids will like a teacher giving free B’s (pun intended) over the one requiring hard work to earn an A). Adults are not much different and many will prefer getting free stuff and having their minimal needs met by the government to working hard to get more. Self-reliance and hard work are the only way to advance, but Democratic policies, while sounding very appealing and drawing votes, are ruining the country. The “give a man a fish …” proverb is a true reflection of reality and human nature and those ignoring it do it at their (and our) peril. And a positive feedback of the cycle (people get free stuff and vote for those who will give more free stuff) is truly frightening.

When economics and human nature are disregarded

History shows how economics and human nature take revenge when disregarded. The Soviet Union (and other socialist countries) is an easy example: envy and taking money from the rich to give to the poor were the driving force of the revolution. Everyone ended up equally poor (except the party bosses), but the government could not provide even basic necessities (including toilet paper, which is also a rarity in today’s Venezuela) and “it’s better to do nothing for 100 rubles than to do something for 200 rubles” was a cornerstone of the approach to life for too many people.

On the other hand, France had to reduce the overbearing high tax rate after the economy suffered, and every Western European country relies on America for defense, thus saving money for welfare (and even in this form it falters — Greece and many other countries could not sustain themselves, and even Sweden is having problems now). And here in America, the labor participation rate is at its lowest in decades and the poverty level has not gotten lower since the mid-’60s (and, by the way, there is no correlation between poverty level and minimum wage).

So let’s be honest: Government serves an important purpose, but it has many shortcomings and is not designed to do certain things. And giving government responsibility and power to do a lot of those things will eventually backfire because most people are better served when they are left alone. Sure, that means that some people will have more (sometimes, much more) than others, but that is better than everyone having nothing. Yes, wealthy people should pay more for defense and police (some may argue that they have more to lose), but they should not pay to provide “free stuff” to those who can but don’t want to work. That is just not fair. 

Ilya Gutman is an immigrant from the Soviet Union who now lives and works in Marshall, Minnesota. 

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Comments (31)

  1. Submitted by Hiram Foster on 02/20/2015 - 05:33 am.

    The government doesn’t interfere with the economy, it’s part of the economy.

  2. Submitted by Paul Udstrand on 02/20/2015 - 10:07 am.

    What do you get without government “interference?”

    Somalia. Bangladesh. Give us one example of a modern successful economy that is completely free of government “interference.”

  3. Submitted by Dennis Tester on 02/20/2015 - 11:54 am.

    Government interference leads to government control

    And when governments attempt to control the economy for the good of the people, they end up controlling the people for the good of the economy.

  4. Submitted by Neal Rovick on 02/20/2015 - 12:00 pm.

    The purpose of insurance is to spread the risk over the pool that needs the coverage.

    Easy answer, just buy your insurance from a private insurer.

    Oops, maybe you can’t. Or maybe it’s far more expensive.

    Maybe you should move out of a flood plain or prepared to rebuild on your own dime.

    You have risk of flood, they have risk of flood.

    But hey, who do you think came up with the idea of delaying the increase?

    Your elected representative, but more likely, the rich people on the coast’s representatives.

    Democracy in action. Not capitalism, not socialism–democracy.

    Not capitalism, not socialism, but definitely a relationship between money and the political solution-an imperfect solution based on the desire of capitalists.

    Politicians doing what their constituency wants.

    Is that bad?

    Maybe you should work on reducing the influence of money on politics and work for logical solutions.

    What if the government said “move”. Would you? Would they on the coats? Because there will always come a flood, probably worsening with climate change.

    Oops, can’t think about that. Just pay the $ 25 and hope that science, actuarial principles and logic stay out of it.

  5. Submitted by Connie Sullivan on 02/20/2015 - 12:41 pm.

    Get over the Soviet Union

    The issue here is that the “free market” doesn’t want to have to insure any property that’s really at risk for floods. If expensive, right-on-the=shore structures are to be insured at all, the government will have to step in and arrange for a subsidy or two, so the insurance can be provided.

    Then, the whole model of an insurance “pool” kicks in. While you may resent having to be part of a pool when you own a home with flood insurance but the home isn’t worth much and you don’t want to pay for that insurance, really, you’re in “the pool” or you don’t get government insurance.

    Same thing with health care insurance. Millions of people risked bankruptcy–and the rest of us paying their hospital bills–because they didn’t want to pay for health care insurance. They didn’t want their good health to figure in “the insurance pool,” either. Now they’re forced to get and pay for insurance, and they squeal. Just like this guy, who is really not squealing against a Democratic, or even socialist, idea. He’s squealing against the whole idea of people putting themselves in a pool of insureds. Public or private. Sigh.

  6. Submitted by Ann Klefstad on 02/20/2015 - 12:57 pm.

    how to solve your $25 problem

    Just don’t get federally subsidized flood insurance, if the idea of shared risk really bugs you.

    Look, flood insurance is one of those things that can only be provided by the federal government because it is a sufficiently large distributor of the costs of risk, and because it doesn’t have to make a profit. Just like we need federal disaster relief, we need federal flood insurance.

  7. Submitted by Jay Willemssen on 02/20/2015 - 01:44 pm.

    Ideological theory versus vote tally actuality

    “Sadly, Democratic slogans sound much more appealing than Republican ones since people like free stuff” etc etc

    cf.

    The 2012 “free market” law, which you support, passed the House 402-18. Democrats voted for it 181-1. Republicans voted for it 221-17. So both parties overwhelmingly supported it, but its detractors were overwhelmingly Republican. It passed in the Democrat-controlled Senate by unanimous consent and was signed into law by our Democratic president.

    The 2014 “Orwellian/anti-free-market” law, which you decry, was sponsored by Republican Michael Grimm, passed 306-91 in the Republican House, with Republican “yea” votes outnumbering Republican “nay” votes by a 3:2 ratio. It passed in the Senate with enough Republican votes to make it veto-proof.

    Payments for Katrina alone constitute about 1/3 of all payments ever made by the NFIP since it started in 1978. Republican areas have disproportionately benefited from the program, both in absolute dollars relative to their affected populations.

    One can also ask what government actions, or lack of actions, whether in flood control or climate policy have contributed to the size of the payments for the largest payout events.

    Sources:
    https://www.congress.gov/bill/112th-congress/house-bill/5740/all-actions
    http://clerk.house.gov/evs/2012/roll262.xml
    https://www.congress.gov/bill/113th-congress/house-bill/3370/actions
    http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?&congress=113&session=2&vote=00078
    https://www.fema.gov/statistics-calendar-year/loss-dollars-paid-calendar-year

  8. Submitted by Dan Hintz on 02/20/2015 - 02:55 pm.

    Wow

    Props to everyone who came up with a response to this piece. I read it twice, and just had no idea where to ever start.

  9. Submitted by Hiram Foster on 02/20/2015 - 03:22 pm.

    Subsidies

    I think to some extent we subsidize southern states. I don’t have a problem with that. For one thing, I spend some time in the Florida Keys each year, and I really prefer they not be under water. But what does occasionally bug me is the lectures on the virtues of self reliance we receive from folks who are so dependent on aid and business from us.

  10. Submitted by chuck holtman on 02/20/2015 - 04:55 pm.

    Mr. Gutman’s got a hammer

    And flood insurance looks like a nail.

    The strongest opponent of the NFIP structure is the left, because it is a (continuing) transfer payment upward, it creates incentives to repetitively inflict social costs, and it subsidizes inappropriate development in extremely environmentally sensitive areas. It is not the result of “government,” it is the result of the stratification of wealth that Mr. Gutman treasures and that allows some to use “government” to extract rents from those with less power to write the laws. Perhaps Mr. Gutman is becoming a leftist.

  11. Submitted by Jay Willemssen on 02/20/2015 - 05:07 pm.

    Is building inspection a proper function of government?

    I’d like to hear the author’s perspective on this, seeing as “the government cannot operate efficiently by its very nature.”

    As I have never received a dollar from the government in terms of benefits or a paycheck, I’m not directly experienced in this matter.

  12. Submitted by jason myron on 02/20/2015 - 05:45 pm.

    Thanks, Ilya…

    Normally, I’d have to troll the comment sections at places like Powerline, Hotair and Redstate to find hard hitting analysis like this. Seriously, the “free stuff” meme is so 2012. Get some new material.

  13. Submitted by Ilya Gutman on 02/20/2015 - 07:45 pm.

    Nice to see people engaged…. with such animosity… Can we keep this civil, please?

    Of course, I knew that government got into this business because private insurances at that point pulled out. But why did it happen? Because it was expensive and enough people did not buy it to sustain profit for insurance companies. OK, if people did not buy it, they were free to carry the risk themselves so government should not have interfered. If I want to buy an electric car that flies and swims for under $10,000 and I can’t, it doesn’t mean that government should provide it for me for that price.

    I never said that government may or should pull out of economy completely so all those Somali/ Bangladesh examples are irrelevant. My point was that it should be minimized and we should understand that it is not a panacea to let government run everything as some people may think. And if we let (yes, we, the people, let government do things) government do something, we should honestly acknowledge all drawbacks and still look for alternatives.

    Mr. Hintz, please name factual errors in my piece – I would appreciate it. And no, I cannot see Russia from my front porch, but I know about Russia much more that most people who attempt to write about it and many who try to establish policies towards it. If Mrs. Clinton asked me about “reset” button, I would have spared her from embarrassment. The same is true about Bush – if he asked me about Putin’s eyes, I would have spared him as well. I also thought that we are trying to maintain a respectful discussion here rather than take cheap shots: Trust me, I have plenty of opportunities here to do just that but I try to resist them.

    Mr. Rovick, I do want to take money out of politics – if you read my piece about elections, that is exactly what I said. As for climate change – have you ever thought why no one ever talks about benefits of global warming – there must be some… And please note that this inquiry doesn’t question the science – just politics.

    Ms. Sullivan, I am fine with being part of the pool – I just don’t want this pool to give advantage to some people over others without justification – I am not the only one who has to pay this surcharge. Have you also noticed that lately insurance companies are trying to individualize premiums by giving discounts to good drivers, for example? And remember that in this case it is the richer people who get the advantage – how come you are OK with that?

    Mr. Willemssen, I never said I agree with Republicans all the time, have I? I am also glad you brought your last point because I could not address it in my piece for lack of space (I am also glad that you did some research to find a way to undermine me personally). Local governments are different from Federal government and, to lesser degree, from State governments. First of all, people who work for local governments actually use what local government provides; second, they pay (proportionally) much greater share of those services; third, local governments are much smaller; and finally, everyone can come in and look anyone in the eyes in a city hall or courthouse and that makes all the difference. Have you tried looking in the eyes of a person in Washington, DC lately? And yes, conducting building inspections is a proper government role as it falls under safety and security. By the way, here is another point I couldn’t make: large companies are as inefficient as big government… but that is up to their stakeholders; and for the government, stakeholders are we, the people.

    Mr. Foster, will you please clarify your statement? Or have I answered it with this comment?

    The ironic thing is that 200 years ago government did not provide any of the things that it provides now and it worked somehow. Interestingly, I am being assaulted now for merely suggesting that maybe government should provide a little bit less (I emphasized that governments has a very important role and is absolutely necessary)… One can only imagine what would happen if the government will be forced to provide less for lack of resources… and we can see how that has happened in Greece.

    It is also interesting that no one tried to argue with the logic of the second part of my piece…

  14. Submitted by Hiram Foster on 02/21/2015 - 11:56 am.

    Calrification

    We make it easier to live and work in coastal regions particularly in the south by subsidizing flood insurance. That can be viewed in a variety of different ways, including as an intervention in insurance markets, but when we consider any action from any perspective, we have to be careful not to ask the tail to wag the dog. Markets exist to make it easier to work and live. We must make sure that it’s those considerations which drive market activity, not the other way around.

  15. Submitted by Hiram Foster on 02/21/2015 - 12:24 pm.

    “The ironic thing is that 200 years ago government did not provide any of the things that it provides now and it worked somehow.”

    Two hundred years ago, the government was well on the way to a total collapse resulting in the worst war in American history.

  16. Submitted by Ilya Gutman on 02/21/2015 - 06:30 pm.

    Let’s talk about main points

    Mr. Galitz, what happened to all those people you described before government got into this? No one died, I suppose. And yes, insurance companies quit because people did not buy at a price offered by insurance to make a profit.

    Mr. Foster, I am afraid you are totally wrong thinking that market exists to make it easier to work and live. Market just exists, period. Just like oceans and people’s desires. I also wonder why we need to subsidize people living in coastal regions. As for irony, would you agree if I change 200 to 100?

    Again, ladies and gentlemen, let’s talk about the second part. Flood insurance story was just an introduction…

  17. Submitted by Hiram Foster on 02/22/2015 - 06:40 am.

    , I am afraid you are totally wrong thinking that market exists to make it easier to work and live. Market just exists, period.

    Well, no. Rocks just exist. Period. Markets exist people because people, need them, want them, and make the decision to create them. Markets exist, not because people have a lemming like urge to visit Byerly’s. Markets exist because people like to eat. And a market that doesn’t provide what people want either changes or becomes an ex market. Next time you go to New York, visit the New York Stock Exchange. It’s a nice building, but it did not emerge out of your ocean whole. Somebody built it. As you note they satisfy desires, but they are not themselves desires.

    This idea that we shouldn’t allow governments to do things because they affect markets becomes absurd very quickly. Pretty much everything we do affects markets. The invention of the internet revolutionized the markets. When the government decides to build a house or a school near a house, the market for that house. Is that a reason why we shouldn’t build those things?

  18. Submitted by Hiram Foster on 02/22/2015 - 07:07 am.

    Markets

    It’s become fashionable in certain circles to think of markets in mystical even god-like terms. The market will provide. Well, markets aren’t gods. Adam Smith was wrong. They aren’t invisible hand mystically guiding the universe. The hands at issue are real, attached to real people who have real brains which make decisions. Markets are tools that respond to our needs and desires, but hardly the only such tools. Like any tool, they must be tended, used carefully, and like any tool, they are effective for some uses more than others. Just as we don’t use a hammer when we need a screw driver, Markets work when selling a Mercedes Benz, not so well when providing health care, and that’s a problem because while not everyone needs a Mercedes, everyone needs health care.

  19. Submitted by Hiram Foster on 02/22/2015 - 08:23 am.

    Flood insurance story was just an introduction…

    About this I agree. We subsidize southern states in many different ways which affect all kinds of different markets. If the goal of our policy was to not to do things which affect markets, I am afraid we wouldn’t do much at all.

  20. Submitted by Ilya Gutman on 02/22/2015 - 09:19 am.

    I am surprised

    Mr. Foster, New York Stock Exchange building is not the market. The market was created when someone managed to pick a dozen extra apples or whatever grew where first people appeared and exchange it for a fish. And then someone grew up an extra bushel of grain and exchanged it for a necklace for his wife. And so on…. Yes the market exists because people want, except they don’t want the market (they do not care how it is called and what it is) but they want something they do not have. No one created the market – it did create itself out of people’s desires (and to eat was one of them).

    What you pointed out correctly is that the market that does not provide what people want corrects itself – that is the greatest strength of this natural phenomenon. By the way, it is similar to nature’s correcting itself after a hurricane or volcano eruption and when humans interfere it may make it worse – isn’t this what you believe about nature and climate? When governments tried to abandon the market or “correct” it to its likings, we get the Soviet Union and Venezuela…

    However, I never said that we should not allow government to do things because it interferes with the market. In fact everything we do – from buying coffee in the morning to turning on TV at night – interfere with the market (and you said it yourself); in fact it shapes the market. So government is just one, if a larger one, participant here.

    And yes, market works for healthcare, too. As with anything else, it means that some people cannot afford it even if they need it but the same can be said about many other things (food, cloth, etc.) By the way, I am not entirely against government helping people with health care – when it has money for that, of course.

    I was writing about a different thing – about government’s trying to substitute market and dictate to that – that is when problems start. But after that, and that was much more important, I was writing that government is ruining the market by interfering with people’s nature necessary for market to exist by providing free stuff thus killing desire to work for that. And if people do not work, we are all in huge trouble.

    So I am very surprised that people who jumped into accusing me immediately of everything now stay away from this discussion. Come on, we need these discussions… about issues, not characters!

  21. Submitted by Hiram Foster on 02/22/2015 - 12:48 pm.

    New York Stock Exchange building is not the market.

    Markets are places where things are bought and sold. They can be physical locations like the NYSE or your local Byerly’s or they can be virtual like ebay or NASDAQ.

    “What you pointed out correctly is that the market that does not provide what people want corrects itself – that is the greatest strength of this natural phenomenon.”

    Markets are often businesses. When they don’t provide what people want, they either change or go out of business. People like to say that markets “correct” themselves, but I think that’s a loose use of language. Prices change, and no price is more “correct:” than any other.

    ” By the way, it is similar to nature’s correcting itself after a hurricane or volcano eruption and when humans interfere it may make it worse – isn’t this what you believe about nature and climate?”

    Don’t know about the hurricane thing but people affect what happens in markets all the time. After all, markets, unlike hurricanes are entirely comprised of people. Some of those people are oligarchs, some are widows, some are orphans, some have a lot of power to influences, others have hardly any. If we banned people or institutions who have the power to influence markets, there would be no one in them to buy or sell stuff.

    ” As with anything else, it means that some people cannot afford it even if they need it but the same can be said about many other things (food, cloth, etc.) .”

    So what does happen to markets that don’t provide what people need? There used to be many more stock markets than there are today. I used to live a block away from a grocery store that’s no longer there. Again, markets are businesses and must satisfy their customers.

    “about government’s trying to substitute market and dictate to that – that is when problems start”

    I know, but that’s kind of an arbitrary way of looking at something. What government is really trying to do is to make it economically viable to live in coastal areas by spreading the risk. Whether that’s a good idea or a bad idea is debatable, but it’s not a market based choice. Rather, like many other choices we make in life, it’s something markets react to.

  22. Submitted by Ilya Gutman on 02/22/2015 - 02:49 pm.

    Market

    Mr. Foster, the market, as I referred to it, is a combination of all consumers, producers, stock exchanges, sales, etc. so all things you are listing are just subsets or elements of the market. Each individual elements may cease to exist and new elements may appear and prices change(and that is the way market corrects itself) but the market stays… until government gets heavily involved since government is the only force that is capable of destabilizing or finishing it. And if few people can’t afford certain things, that is not a failure of market but a part of it. But market, like nature, can correct small involvements but big ones will kill it. Look at Venezuela http://news.yahoo.com/venezuelans-long-waits-yield-soap-intelligence-agents-083808039.html.

    So please look at the whole picture. If a minimum wage is set at $10/hour, the market will be able to handle it by adjusting (with total negative results for society) other things; but of it is set at $50/hour, it may not. If some people stop working because they can get government benefits, it is OK, but if, at government encouragement (food stamp advertisement) expense, a lot of people stop working, we are doomed. And that is what I was writing about.

  23. Submitted by Hiram Foster on 02/22/2015 - 03:30 pm.

    “the market, as I referred to it, is a combination of all consumers, producers, stock exchanges, sales, etc. so all things you are listing are just subsets or elements of the market.”

    That’s the sort of mystical approach to thinking, the market as God approach that many people have. Well, government, comprised as it is of consumers producers, sellers and buyers and lots else is just another subset of market writ large, and not some sort of external entity influencing it, and sometimes like all the other participants, destabilizing it. As for forces capable of destabilizing markets, just a few years ago we barely survived an economic crisis created by a collection of private bankers. What is pressuring the economy now is the aging of the population, the causes of which have nothing to do with the government.

    .

  24. Submitted by Ilya Gutman on 02/23/2015 - 09:10 pm.

    What government can do

    Yes, I did say that government is a subset/element of the market… so long as it acts like one. But government, unlike other market elements, may create its own rules. For example, it can say that it will buy everything at half price no matter what. What’s worse, it can define a subset of consumers, other than itself, that would be buying at half price. Or it can set up minimum wage… or maximum wage for CEO’s. Or it can set up maximum price for bread and cars… I hope you see where I am going and where those things will take us… That is way more than destabilizing market – that is killing it… and when the market is dead, you can’t buy toilet paper. As for surviving banking crisis several years ago, the market would have survived that, just as it survived the Great Depression. And please note that toilet paper was still available at that time.

  25. Submitted by Hiram Foster on 02/24/2015 - 06:24 am.

    “For example, it can say that it will buy everything at half price no matter what. What’s worse, it can define a subset of consumers, other than itself, that would be buying at half price.”

    Are you against the power of government to make rules? Would you prefer a government that acts arbitrarily on an ad hoc basis? And is it not the case that whenever government enacts one of those rules or acts within the rules, it affects markets?

    Our government does seem to have some power to affect markets and it uses it occasionally. With respect to coastal regions it subsidizes them through subsidizing flood insurance. I go to Florida frequrently. I have noticed no disappearance of markets. There are stores all over the place. People buy and sell houses, some of them near the beach. Despite that oppressive market interference, Florida and it’s markets seem to be thriving.

  26. Submitted by Ilya Gutman on 02/24/2015 - 06:11 pm.

    Has been tried

    Government is by definition making rules. But there are areas where it should avoid making rules or try to minimize those rules. Because otherwise you and I are paying for those rules. And as you asked me if I am against the government making rules, I can ask you if you are for government making rules that regulate everything. So are you? And I can tell you that this has been tried and didn’t work.

    As for Florida, why should the government subsidize it at the expense of the Midwest?

  27. Submitted by Hiram Foster on 03/06/2015 - 06:11 am.

    Rule making

    Oh sure. Government should make rules wisely. Rules have their costs, but they have their cost savings as well. Market rules which prohibit the sale of tainted food cost food manufacturers money in that they have to throw such tainted food away, but they save the rest of us money in the form of hospital bills and funeral expenses.

    I am not in favor of rules regulating everything but I am in favor of governing well. The problem the author has is really that he is against the use of power because power may be abused. Well, yes of course it can, but the fact is, capable of being abused though it may be, anarchy is an extraordinarily unstable system of government, and power always exists, is always exercised by somebody. The trick is to make sure it’s used fairly and well.

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