Friday's interesting reads

"The Importance of the Colombia FTA" Andrew Roth at Club for Growth:

"Free trade agreements are a good idea for several reasons, one of which is because they reaffirm our natural right to trade freely with foreigners who want to do business with us. American consumers should have the right to buy Colombian flowers and coffee without government interference. Why aren't people pointing this out more often?"

I'm sorry, but I can't link to the specific post. This is the essence of what free trade is about. The benefits to the economy are great, but to me, this is why it's important. I personally draw the line on some social issues, such as drugs, but by and large, people should be free to buy what they want to buy from whomever they want to buy it from at whatever price those two parties mutually agree upon.

"Flying the Oberstar Skies" WSJ editorial:

"The regulators got the message and went into panic mode. As is wont with government bureaucracies like the FAA, it proceeded to swing the pendulum waaaay back in the other direction – and hasn't stopped. An industry-wide "audit" commenced, and FAA inspectors set about finding something – anything – awry with an aircraft to show Mr. Oberstar and other Congressional overseers that the agency was up to the job of enforcing federal maintenance requirements to the letter...

The carriers were already dealing with higher fuel prices and fewer ticket sales, not to mention investor uncertainty. This will only add to their woes. Meanwhile, air travelers face delays and cancellations while inspectors mull over minutiae like whether the retention clips used to bundle wires in the wheel well of a plane should face forward or backward...

The FAA fiasco gives us a glimpse of what the world would look like under this reregulatory assault. It would mean that every business misstep, no matter how rare, could potentially result in industry-wide repercussions. Congress would call for more rules and greater enforcement, in the name of "safety." And regulatory agencies would respond with overkill. The cost of doing business would rise, and consumers would pay for it in higher prices, less convenience or both."

Yes, I don't trust regulators. They become political tools of whichever congressman oversees them and they frequently just get in the way. As with everything, there are tradeoffs. I personally think most the airline safety precautions are excessive. I don't know that, of course, but I get the sense it's true. Imagine if they went through the same exercises for sporting events. I think someone could do a lot more damage there than in an airplane, especially considering the tens of thousands of people at football games on Saturday's. If lawmakers want regulators to go to the nth degree looking for things that will make an airplane unsafe, they will find it. They also have to realize the additional safety, however incremental, will come at a cost. I'm sure we're to the point to where, generally speaking, the next "unit" of safety costs a fair amount more than its benefit.

"The Tax Me More Act" WSJ editorial:

"California Republican John Campbell yesterday introduced in the House his "Put Your Money Where Your Mouth Is Act," which would amend the tax code to allow individuals to make voluntary donations to the federal government above their normal tax liability. The bill would place a new line on IRS tax forms to make this easy.

Mr. Campbell says he has heard the "cries" of those wealthy Americans – Mrs. Clinton, Warren Buffett, Barbra Streisand – who reject the lower tax rates passed in 2001 and 2003 and complain that they and their fellow rich don't pay enough. "It's a great injustice that citizens wishing to fulfill their dream of paying more taxes cannot simply check a box on their 1040 form to make a donation," he says. His bill would give liberals a chance to salve their consciences without having to raise taxes on millions of Americans who already feel overtaxed as it is."

Of course, very few people will do this voluntarily. The realize that the pain associated with handing over the additional $2000 isn't worth it, because, without everyone else chipping in, their money really won't help someone in a meaningful way. So, they've come up with a way to help the people they think need helping by requiring everyone to help via the tax code.

Maybe what we need is some kind of opt-in social safety net. If you want to contribute to the social safety net, as well as participate in its benefits if you need it, you can. No one would be forced. It'd be like buying social insurance. The problem, I suspect, is you'd have considerably more people want to receive than could be funded with those who contribute.

"Our Financial Bailout Culture" WSJ op-ed by Ethan Penner:

"The unstated premise is that, with better government oversight, we would not be suffering today's bear market and financial chaos. Of course, during the previous outsized boom, no one was calling up his congressman to complain that home values were appreciating too quickly. Meanwhile, they drained that appreciation regularly through refinancings to pay for vacations, new cars and other pleasantries, all of which created the prosperity for which politicians were pleased to take credit...

But as Mr. Bunning implied, isn't it the regulators' job to ensure that we don't end up here ever again? That is the dilemma of "moral hazard." Consequences not suffered from bad decisions lead to lessons not learned, which leads to bigger failings down the road.

And so we have the insidious modern trend to shirk responsibility and blame others for our missteps. This trend, this "victim mentality," is a path toward personal disaster...

Homeowners must learn that there are risks to using a home as an ATM. Investors who borrowed to flip condos must learn the downside of such risk. Individuals who steered money from insured bank deposits into uninsured money market accounts to pick up 1% more yield – like the institutional investors who purchased complex securities with little due diligence – need to know that in an efficient market, extra yield means extra risk. Those who played the derivatives market, focusing more on computer-driven pricing models and less on managing counterparty risk, must pay for that oversight. And, much as it is impolitic to say, people who took money from lenders and signed without considering how they'd repay those loans must also be held accountable.

In one of this year's primary debates, Ron Paul said it is not the president's job to run the economy. I'd add that it is not the government's job either. It is each and every citizen's job to manage our own affairs, make our own decisions, bear the fruits or painful consequences and learn our lessons.

The free market is the essence of our society's strength and is rooted in the Lincolnian precepts of accountability and responsibility. When decisions are made and actions taken (or not taken), there are consequences. These consequences are models for us to learn from and serve to stimulate social growth and advancement."