What’s Really Happening

by Don Boudreaux on December 1, 2011

in Crony Capitalism, Other People's Money, Politics

Here’s the opening sentence of a new Congressional Quarterly report (HT Andy Roth):

House Democrats are pushing new legislation that would aim to steer more federal dollars toward American manufacturers by extending “Buy America” requirements for infrastructure projects utilizing federal tax dollars.

In other words,

House Democrats are pushing new legislation that would aim to steer more federal dollars force American taxpayers to pay more than necessary by granting special privileges toward- and, hence, artificially inflating the profits of – American manufacturers by extending “Buy America” requirements for infrastructure projects utilizing federal tax dollars.

Or somewhat more compactly:

House Democrats are pushing new legislation that would aim to steer more federal dollars toward American manufacturers by extending “Buy America” requirements for infrastructure projects utilizing federal tax dollars artificially and unnecessarily raise the cost of infrastructure projects.

Be Sociable, Share!

Comments

comments

62 comments    Share Share    Print    Email

{ 62 comments }

Jon Murphy December 1, 2011 at 2:18 pm

I like to give people the benefit of the doubt, so I’ve a question: Do politicians support measures like these through some fundamental misunderstanding of economics or are they willingly participating in cronyism?

James Strong December 1, 2011 at 2:23 pm

Never attribute to malice that which can be adequately explained by stupidity is the rule I follow.

That’s not to say that corrupt politicians do not exist, there must be at least some politicians that willingly participate in cronyism, but I’d bet that most of them do so unconsciously.

Greg Webb December 1, 2011 at 2:23 pm

Both.

Greg Webb December 1, 2011 at 2:31 pm

Jon, politicians mostly want to get elected, and, for them, perception is reality. So, if the politician thinks that “Buy American” will bring in more votes than it will cost, the politician will sacrifice his or her principles and vote in favor of idiotic legislation in order to improve his or her chances to win the next election.

Jon Murphy December 1, 2011 at 2:48 pm

Yeah, I know Greg. Maybe it’s just because I am young and still idealistic, but I’d like to believe, one day, something will get through to people and we can reverse this trend of protectionism and this “us vs them” mindset we seem to have.

Greg Webb December 1, 2011 at 3:25 pm

Jon, never forget the first rule of economics when evaluating politicians: People keep the things that they love the best for the people that they love the most — themselves. Politicians love power.

Fred December 1, 2011 at 3:08 pm

That’s assuming the politician has principles to sacrifice.

Seth December 1, 2011 at 3:18 pm

Their principle usually is to get elected. That’s the principle they will rarely sacrifice.

Dan Phillips December 1, 2011 at 5:05 pm

Here’s a quote from an old Chad Mitchell Trio folksong:

Q: Should I wrie a letter to my congressman?

A: Each congressman has two ends, a sitting end and a thinking end. Ane since his whole success depends upon his seat, why bother friend?

Jon Murphy December 1, 2011 at 5:06 pm

That is hilarious. I approve.

Rick Hull December 1, 2011 at 2:42 pm

Check out Lawrence Lessig’s new book *Republic, Lost* for more insight regarding the influence of money on our legislators.

Jon Murphy December 1, 2011 at 2:49 pm

Thanks, Rick, I’ll add it to my list.

vance armor December 4, 2011 at 7:34 pm

What Lawrence Lessig and the “get money out of politics” crowd do not understand is that the problem is not so much the money in politics but rather the politics in money. I say, “Get the politics out of money,” then we will see that the money will get out of politics.

cmprostreet December 1, 2011 at 3:21 pm

Given the amount of power politicians have and seek, actions like this are immoral regardless of whether they stem from malice or ignorance.

Darren December 1, 2011 at 3:31 pm

I think it’s considered a win/win if they can do something that has the appearance of usefulness while simultaneously paying off their constituencies/contributors.

John T. Kennedy December 1, 2011 at 4:32 pm

Cronyism, obviously.

Nuke Nemesis December 1, 2011 at 4:50 pm

I vote for ignorance.

vikingvista December 1, 2011 at 5:53 pm

They are acting rationally in their own self-interests.

Dan J December 3, 2011 at 1:07 am

Yes they are. But, while it is impossible to ever fully restrain men from seeking advantages, even to point of some who would infringe on the natural rights of other men…… We can only keep redeploying a newer version of societal written rules built with the purposes of trying to restrain the instinctive nature of man, as is with all creatures, to be dominate.

vikingvista December 3, 2011 at 1:23 am

They are rational. The irrational ones are those of the rest of us who reason that we should hand them the gun so as to protect us from them.

Dan J December 3, 2011 at 1:36 am

Is it hopeless? Even in regional, however big or small, emergent orders, someone or some group will seek to subjugate and create chaos of that order. However unified the order may be in circling their wagons, eventually, someone or some group will exploit a weakness and gain control. There is always a bigger fish.

Dan J December 3, 2011 at 1:43 am

But, this most recent attempt at societal order, which is failing, slowly in contrast to how history books portray history…. Chapter one : Roman History. Chapter two: Medieval times.
In this most recent societal order, constitutional republic, great human advancements were made, Thanks to a freer market and human ingenuity being allowed to prosper.

vikingvista December 3, 2011 at 2:00 am

“someone or some group will seek to subjugate”

That doesn’t mean the rest of us should assist them in doing so.

vikingvista December 3, 2011 at 2:07 am

“constitutional republic”

Did you know that Australia, New Zealand, Canada, Singapore, Hong Kong, and Ireland all rank higher than the USA in the Heritage Foundation’s index of economic freedom? None of them had to undergo a bloody revolution (well, Ireland somewhat).

It may have seemed like a good idea at the time, but the American Revolution accomplished nothing–hell, may have been a set back–to free markets and individual liberty. A waste of heroes’ blood, so to speak.

Still, I think it is safe to say there was some innovation for humanity. But it appears you need to look to Britain for it, not the USA.

Dan J December 3, 2011 at 3:08 pm

Can’t disagree with ya, except to say that I think US was instrumental in those nations successes or in their not being subjugated by another…
Not a ‘setback’…… Hard to make that case as the Kings orders were to punish liberty and markets in Colonies thru taxations and embargoes.

vikingvista December 3, 2011 at 4:22 pm

Hard to make that case? But I just made that case. How are those other former British colonies worse off than the US for having maintained loyalty to the Crown?

Dan J December 3, 2011 at 4:37 pm

U said set-back. And, I think US freer markets were instrumental in Canada’s development.
For instance, we don’t know how markets would have developed without US freer markets or a construct of a republic.

vikingvista December 3, 2011 at 6:52 pm

“U said set-back.”

Well, they are at the bottom of the list of colonies on the IoEF. It’s hard to argue that they would’ve been even lower if they had instead followed the loyalist example of the other colonies.

“And, I think US freer markets were instrumental in Canada’s development.”

Why? And why do you think a loyalist America would’ve had less free markets than we do now? It isn’t true of the other colonies.

“For instance, we don’t know how markets would have developed without US freer markets or a construct of a republic.”

Except that US markets are NOT freer than those of the other colonies. At least not according to the Heritage Foundation.

What do you think America would’ve looked like if there had not been a revolution? North Korea? Why do you not think it would’ve looked more like all those other British colonies that did not have a revolution?

Dan J December 3, 2011 at 11:49 pm

The development of these nations, of many nations around the world are and have been greatly influenced by others. The Mid-east dictators and authoritarians were put in place by Europe. Canada’s recent (past 10-15 yrs)fondness for adapting some market solutions to servicing medical needs in wake of their issues with GOVT directed medical care could very well be attributed to some successes in US medical care and it’s more market oriented system (still not free.. Heavily regulated… And should Obamacare stand, due to be disaster
in making).
Australia could have very well been named a new Japanese name if not for US. And, so on…… We got help, they got help…… Yadda, yadda….
US stays under British monarchy, and without a US free of a king, does US become economic engine of world, does Canada become who she is today? If so, then why fight Obama Marxism? In just as many years, void of Obama, or greater statism, or less statism, the world will reach the same destiny regardless of anything that occurs… Regardless …. All pointless….. Let’s not waste time and energy…. I am saying Canada’s current status could very well be due to the US growing the way it did.

Dan J December 4, 2011 at 2:32 am

Also, I would tend to give heritage foundation more weight in their opinions or their means in formulating these rankings, but WHO would have had us believe that rankings of avg. Lifespan of individuals put us far below that of many other nations, without revealing how each nation calculated such a stat. Or, how infant mortality rates in the US are far greater per capita than Euro nations, yet do not mention how each nation qualifies a death.
Univ. Of Maryland did a study finding Fox viewers to wholly more misinformed than MSNBC and others, yet upon further details I learn they cast judgements on answers that were not based on facts but opinion and invalidated the whole findings.

Point? I have not studied the foundations findings and any
critiques to formulate an opinion as to accuracy. But, I accept the premise.
Nonetheless, I cannot accept at this time that by changing the time line and events, assuming US never took the course that it did, that the World would look the same as it does today or that even men like Hayek and Friedman are able to continue their work and lending their voice. Maybe they do, maybe they do not. Maybe, they simply do so from elsewhere…….

vikingvista December 4, 2011 at 4:06 am

Dan,

I ask you again, what do you think American would’ve looked like without the Revolution? You think it would still be 13 sparsely populated British colonies with mostly farmers, and everyone wearing 18th century garb? You think the industrial revolution that swept Britain would’ve ignored America? You think the attraction that led people of Europe even prior to the Revolution to journey across the sea for a new life would’ve died out because of a few Royal taxes that were laughably trivial compared to what we must suffer today? You think men like Franklin, Jefferson, and Hancock would’ve been immune to the British Enlightenment?

Unlikely. The character of the people of this land, the English legal and philosophical heritage, and likely the population size and mix, would’ve been very much the same. The difference would’ve been government institutions similar to Australia or Canada, more colorful money, and a lot more visits by the Queen. As such, it would’ve been every bit the threat to British antagonists–like Germany and Japan, that it was in reality.

The difference, if the outcome of other British colonies is any indication, is that America would be even freer than it is today.

It might’ve been different. The Americans might’ve achieved something better. But political leaders lost their way very early on. They successfully deposed a grand Monopoly, but within a few short years, imposed a brand new one. Were it not for the British commercial tradition–seen in it’s other former colonies as well–I doubt liberty would’ve lasted here for as long as it did.

Dan J December 4, 2011 at 11:15 am

I don’t know how it would have looked. Possibly, Britain would have been stronger in defending and fighting Hitler. Possibly, not. I cannot say.
As for still looking like 13 colonies with farmers and such….. Thanks for the insult. Could you help me with the equation of ’2+2′? I can’t quite get it.

Nikolai Luzhin, Best Western Provinces December 1, 2011 at 2:42 pm

Don just wants to exploit foreign workers for ‘the cause’

The Other Eric December 1, 2011 at 2:59 pm

Worthless attack, empty of ideas. Try again.

Jon Murphy December 1, 2011 at 3:02 pm

Dude, just let him go. He’s not worth your time or effort. He argues just to argue. He has no ideology, no original thoughts, no substance (therefore, according to Descartes, he does not exist). All he does is argue the opposite position of whatever point you take. Hell, I got him to argue that effective regulation is impossible and a limited government is the key to economic success simply by stating the opposite point. Seriously, don’t spend another second of time with this douche.

The Other Eric December 1, 2011 at 3:11 pm

True enough. And thanks for the Cartesian connection; Always worth remembering.

Jon Murphy December 1, 2011 at 3:13 pm

There’s not much you can do with a degree in Philosophy, but there are always metaphors :-P

Greg Webb December 1, 2011 at 3:23 pm

“He has no ideology, no original thoughts, no substance (therefore, according to Descartes, he does not exist).:

Excellent analysis! :)

Randy December 1, 2011 at 3:48 pm

Good one :)

The Other Eric December 1, 2011 at 3:07 pm

Nik, intellectually you are a half-empty shot glass shouting at the surf of a sunlit sea.

(And you will not understand the metaphor.)

Rick Hull December 1, 2011 at 3:48 pm

I doubt you are responding to the “real” Nik. Note: Best Western Provinces. I LOL’d

Marcus December 2, 2011 at 8:28 am

Because foreign worker would be better off if we didn’t trade with them?

Greg December 1, 2011 at 2:58 pm

If US gov really does buy the cheapest options (or god forbid, allow the market to do things like toll roads and truly competitive transport market) then the US gov will be able to lower taxes because it will simply not need as much money. this will then stimulate the economy in a natural way.

the problem is that no agency or middle-ranking bureaucrat will want to cut his budget, never mind his whole department,

Invisible Backhand December 1, 2011 at 3:14 pm

Thanks for listening to “Completely One Sided Arguments” with Don Boudreaux.

Mesa Econoguy December 3, 2011 at 1:17 am

Computerized clinic
For superior cynics
Who dance to a synthetic band

In their own image
Their world is fashioned
No wonder Krugman doesn’t understand

Methinks1776 December 1, 2011 at 4:13 pm

This legislation feels incomplete to me. Where’s the requirement to mix cement by hand to create jobs?

Jon Murphy December 1, 2011 at 4:24 pm

I’m sure it’s in there somewhere, Methinks.

Nuke Nemesis December 1, 2011 at 4:52 pm

We all know ATMs cause higher unemployment, according to Obama. Maybe we should outlaw those, outlaw direct dial and bring back the long-distance telephone operator and, just in time for Christmas, do away with UPC codes and cash register scanners as well.

Jon Murphy December 1, 2011 at 4:53 pm

Not to mention those self-checkout lines at the grocery store. And self-service gas stations.

Methinks1776 December 1, 2011 at 8:47 pm

Yes, gentlemen, we all agree. Congress is just too chickenshit to go the distance in elevating the mood of our animal spirits by employing corrosive tricks and deadly illusions..

Don Boudreaux December 1, 2011 at 9:03 pm

:-)

Nuke Nemesis December 2, 2011 at 9:43 am

Ditto

Nuke Nemesis December 1, 2011 at 4:49 pm

We already have the prevailing wage laws, which is making the reconstruction of Joplin, MO (from this summer’s extensive tornado damage) very expensive. It seems the federally-mandated prevailing wage is actually much higher than the local prevailing wage.

Is this unintended? No. It’s intended to support union labor.

Jon Murphy December 1, 2011 at 4:53 pm

That almost seems to be adding insult to injury, no?

vidyohs December 1, 2011 at 6:52 pm

Why not make it even more plain.

House Democrats are pushing new legislation that wouldscrew all Americans regardless of politics, religion, race, creed, sex, or taste in beer.

Greg Webb December 1, 2011 at 9:57 pm

:)

Methinks1776 December 1, 2011 at 10:02 pm

What Greg Webb said!

Dan Phillips December 2, 2011 at 8:07 am

Why are you limiting it to Democrats?

vidyohs December 2, 2011 at 11:58 pm

Cuz Don did in the original.
Thank you very much.
:-)

Chucklehead December 2, 2011 at 12:29 am

Well done professor. Now if you were the editor of the WaPo you could school DC.

Michael E. Marotta December 2, 2011 at 9:45 am

Velocity is distance over time. The advantage to a community currency such as Ithaca Time Dollars or Traverse City Bay Bucks is that your productive work returns to you from the productive work of a neighbor much sooner and with less loss of value.

Apparently, it is possible to “buy 100% American” and be cost effective. I have long been an advocate of international trade and not very sympathetic to the loss of factory jobs in America for all the reasons known to Austrians here on Carpe Diem, Unbroken Window, etc. I think my credentials are in place. However, a conservative friend of mine sent me this ABC News Story. It is hard to argue with.
Made in American

vikingvista December 3, 2011 at 7:02 pm

“your productive work returns to you from the productive work of a neighbor much sooner and with less loss of value.”

Why is that an advantage? And if it truly were desirable, what makes you think a less localized currency would in any way keep people from achieving it, as opposed to merely enabling those who do NOT desire it from more easily acquiring more distant goods?

A restricted local currency is restricting. It doesn’t enable anything. It instead reduces options.

Previous post:

Next post: