Clarkson Energy Homes

Concentrated power is not rendered harmless by the good intentions of those who create it.

— Milton Friedman I think all too often we forget that people in power are ambitious and the person who reins in power to do some good now also reins in power for so many others to do so much bad tomorrow.

What is a “But” libertarian? It is a libertarian who uses a phrase like, “I am all for free markets, but … [inset some government planned economy].” “But” libertarians are not real libertarians. John Stossel was (and probably still is a “but” libertarian. He is all for small government except for pollution control. Never mind that the U.S. government is the single largest polluter in the world. They can fix it. They’re the government! If you see a free market economist telling a reporter about his plan to fix the economy and his plan does not include removing the power to regulate from all forms of government then he is not a free market economist after all. His plan controls the economy and he is advocating a controlled economy, not a free one. I am a free market advocate. My advocacy plan is that we should have no plan for the economy. Let the market participants, not government decide if more people should own their own homes or drive new cars or if private banks should be lending money or holding on to every dime. Defend the right of each citizen to trade without government interference or support. Set us free of your plan. Please stop helping us.

I found this great resource for Storm Shelters. The page illustrates the old web adage that content (and not form) is king. The frames version, for example, keeps removing the menu frame and resorting back to the frame-less version, which has no navigation. A very clunky interface that people are obviously willing to deal with to get this information. I read the storm shelter page with great interest. It has all the stuff I needed for my research into storm shelters and there is another page hidden away that has still more external resources about storm shelters. I don’t know if they are still working, but at least they existed at one time. So what does this have to do with economists? Well, close to the bottom of the page is this little story to illustrate another old adage: Let the buyer beware.

However, this is a good time to remind everyone that there are always “companies” that rush in after a disaster to take advantage of the victims of that disaster. It is sad but true. After Hurricane Andrew struck southern Florida, trucks crammed with jugs of tap water pulled into town, charging exhorbitant [sic] prices for something that, a day or so before, was not even considered valuable. After the ice storm struck Quebec, Canada in January, 1998, the same kind of thing happened. We heard of one person buying a whole truck-load of generators, then trying to peddle them to power-less Canadians at twice the price. There are companies that have products that can be “turned into” storm shelters. They have jumped into the shelter business, adapting these products somewhat. So go by the old adage, “Let the buyer beware!” If you have already decided that you are going to buy a shelter, ask the hard questions before you invest–because it really IS an investment.

The little amateur economist in me keeps pestering me about another old adage. People who excel in one field of study or research do not necessarily have more or better insight in another field which they have not studied or researched well. In this case, these storm shelter experts do not have any better insight into economics, which they have obviously not studied well. The owners of those “trucks crammed with jugs of tap water [that] pulled into town, charging [exorbitant] prices” were well compensated for their risk of negotiating washed out roads, looters and other disaster related dangers. Had they not pulled into town with their high priced water, the town would have had many truckloads less of much needed potable water. The incentive to provide cheaper water to survivors was not lessened by their arrival. The incentive to do better future disaster planning was instilled in the buyers of that high-priced water. The “person buying a whole truck-load of generators, then trying to peddle them to power-less Canadians at twice the price” provided a whole truckload of generators which might never had arrived at the site of the disaster had that person been forced to sell the generators for a more “reasonable” price. The incentive to provide cheaper power to survivors was not lessened by the arrival of that one truckload of generators. The incentive to do better future disaster planning was instilled in the buyers of that high-priced power. Note to self: Avoid supplying extra information about the reasons you are providing information on a web site. Stick to the subjects you know best.

Only government could pay $646,214 per government job and think it a bargain. That’s the estimated cost given by Alan Reynolds at CATO based on the math behind the latest Stimulus Bill. In a Wall Street Journal Reynolds said:

Mr. Zandi’s current estimates have government employment growing by 330,400 over two years as a result of the House bill (compared with 244,000 in Bernstein-Romer paper). Yet even that updated figure still amounts to only 8.3% of total jobs added, even though state and local governments are to receive 39% of the funds ($214.5 billion). Spending $214.5 billion to create or save 330,400 government jobs implies that taxpayers are being asked to spend $646,214 per job.

Given Alan Greenspan’s recent Congressional testimony, The Big Picture recently asked the following. Greenspan: Bad FOMC Chair, or the Worst FOMC chair? A better question would be: Why do we need a Fed Chairman in the first place? People on the news keep pointing at free market policies in a market of money which is extremely far from free. How it is that we have a free market when money is sold by a government cartel? The answer is that we don’t have a free market. In the U.S., free markets are unconstitutional. Alan Greenspan did not have free market policies. He had less regulated market policies which he named as free market policies. Less regulation in a mixed market is still not a free market. When we give government the power to regulate we wipe out any chance for free markets. I recall reading a story a few years ago which illustrated this. It was a story about a piece of regulation called the American Disabilities Act (ADA). Before the ADA there were several competing standards for accommodating disabled customers and employees. If you needed to build or refit facilities to accommodate the disabled you had to decide which standard you would follow. The problem was that government had the power to regulate. At any time the government could step in and pass regulation which forced everyone onto the same standard. If your company chose the wrong standard, you might stand to lose a lot of money in compliance costs. So, you had two choices. Wait for government to create standard or influence government to use the standard you want to implement (or you could do both). Just giving the government the power to regulate affects the market in ways we may not expect. It delays the actions of market place participants and may hurt the people needing the most help. It penalizes early adopters of standards. Small business has to sit on the sidelines while big business battles it out with government. With unlimited government the incentive for market participants is to wait for government to act. With the free market the incentive for market participants is to act sooner than competitors. No one is waiting for government to act. Customer demand rules the day. Some participants will adopt poor standards and some no standard at all, but no one will be waiting for government to step in.

Here’s some news. The price of oil is dropping as winter begins. Remember, it went up at the beginning of Summer. Boy, I’m glad that doesn’t happen every year!

Here’s another fine example of why government should never be given the power to tax. Gas station owners and attendants are getting just what they deserve for supporting government regulation over freedom. Government regulation doesn’t work. How many examples do we need before we start getting that? The anarcho-capitalist inside of me wants to say, “I told you so,” so bad it hurts.

Today, I only rent the land, but a few years ago, I used to rent mobile homes. I had one fellow who had a couple of kids and was squeaking by. Like most people, he tended to live paycheck-to-paycheck. I tried everything short of paying him to help him stay in my rental, but eventually had to evict him. During the last week or so of his stay, we were still trying to work things out and he said he was speaking with someone about something at lunch earlier that week. Now, I need you to picture how I lived at that time. I had gone to work for Wal-mart because my rentals were not pulling in enough money for me to live on and my savings were quickly dwindling. I live a pretty meager life. I don’t eat out. I don’t commute. I combine trips to save fuel. I only watch matinees at the cinema. I set up a community book exchange to lower my book costs. I drink a diet powdered drink to save money on food. Back when this was happening I didn’t even have cable TV. (more…)

Picture this. You are called in to a local court and asked by town officials about your earnings over the last year. It is revealed that you have had a really great year. Your pay went up and you were able to pay down your existing debt. You have a few skills that make your labor much in demand. Demand is so great that you will see a massive increase in pay this coming year.

Now, one of the idiot politicians asks, “Since you made so much money last year and since there is a shortage in alternatives to your work skills, why not work for less next year.” I’m willing to bet that you would probably want to ask the idiot politician what he or she was smoking and whether they were willing to share.

Let me make sure you understand what I am saying. You have a highly demanded skill, but there are alternatives for your customers. Unfortunately, all those alternatives are even more expensive than purchasing your skills. Your customers are hitting hard times and they need financial relief from your high prices.

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In real estate investing propaganda I often see terms like “50 cents on the dollar” or “buy property for half off.” This is bull shit, folks. Any product sold is worth exactly what the purchaser paid for it. A house which sells for $50,000 is not worth more than $50,000. We know that because it sold for $50,000, not for more than that.

Is is possible for a person to buy a house in the morning and sell it immediately for a profit. With a double closing I could do it in one trip to the closing company. Though it is a rare deal, it might be possible to buy a property for $50,000 and immediately turn around and sell it for $100,000 in one transaction.

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