In tomorrow’s episode of John Stossel’s new show on Fox Business, he will address the question, “Who is Wesley Mouch?” in speaking to the parallels between Atlas Shrugged and contemporary America. As one might expect, in my view it seems as if almost all businessmen (given their predilection towards using government to destroy markets to their own advantage) in one way or another embody the qualities of Wesley Mouch.
One exception who will be on Stossel’s program is John Allison, an executive at BB&T Bank, who staunchly opposed TARP, has repeatedly refused to use the law to plunder the property of others and as one might guess is an ardent Austrian-school libertarian. In a scene reminiscent of the smoke-filled rooms of Atlas Shrugged, Allison divulged at an NYU lecture this past fall that the Feds threatened to go in and audit any bank that wouldn’t take government funds, forcing healthy banks to comply so as to cover for the fact that the government was only propping up a select few sick ones (at the expense of the solvent I might add).
In response to Stossel’s call in the aforehyperlinked column for suggestions for a follow-up show on “crony capitalism,” I posted:
If you want to talk about crony capitalism, it may pay to have Burton Fulsom who wrote “The Myth of the Robber Barons” on the program. I think the key is to delineate between political entrepreneurs and market entrepreneurs, something which he does astutely in that book.
Political entrepreneurs seek to use government decrees to profit, largely by cartelization, monopoly advantages and other barriers to entry, while market entrepreneurs generally seek to win profits in the market by merit – by producing the best product at the cheapest price.
More generally, the Mouch problem lies in the fact that while initially businessmen extol the virtues of little regulation, low barriers to entry and minimal governmental interference generally, once they become successful, out of self-interest they support any and all legislation that will cement their position in the market. They support all of those things anathema to the free market that they had used to their advantage in the first place.
This is akin to the economic plight of America as a whole. While up until the early 20th century (though some libertarians will argue that it was really only up until the time of Lincoln), America functioned under a largely laissez-faire economy, with the wealth and progress generated by this economy, we forgot about the virtues that led to our success and rewarded those tending towards failure. We created a welfare state from the riches of a relatively free state, throwing under the bus the very principles that elevated to us to our position as a great nation.
No life, no liberty and no property. This is the message coming from Albany based upon Governor Paterson’s proposed budget. In order to weather the economic downturn, Mr. Patterson has prescribed the age-old cure of tax and spend, and while New York’s budget represents perhaps the most perverse and grossly irresponsible of any in the nation, it is nevertheless a sign of things to come across more prudent states over the next year. Patterson’s scheme more or less amounts to a “soak-the-middle-class,” effort, although in reality the ripple unintended consequences will without a doubt hurt everyone. As the venerable Post reports, the plan calls for:
* An “iTunes tax” of 4 percent on videos, music or pictures downloaded from the Internet.
* A 4 percent tax on taxi, limo and bus rides. That means a $10 cab ride would cost 40 cents more.
* A 4 percent entertainment tax on tickets to movies, concerts and sporting events. That would add nearly 50 cents to a $12 movie ticket or $1.80 to the cheapest $44.50 seat at a Knicks game.
* The tax on beer increases 24 cents per gallon, or more than double the current rate, which means about 30 cents a case.
* An 18 percent tax on nondiet soft drinks, which aims to reduce child obesity. A $1.50 can of Pepsi would then cost at least 25 cents more.
* A 4 percent tax on cable TV and satellite services, raising a $100 bill by $4.
* Hiking the cost of “personal” services – including haircuts, manicures, pedicures, massages and gym memberships – by 4 percent.
* A 4 percent sales tax on clothing and shoes under $500, except for two weeks out of the year.
* Elimination of the law that caps the state sales tax on gasoline at 8 cents per gallon.
* Boosting the average vehicle registration fee for drivers by $11, from $44 to $55. Fees for new or renewed licenses also would increase 25 percent, or increase from $50 to about $62 to renew a license over eight years.
In addition, all drivers would have to get new, “reflectorized” license plates at a fee of $25 each.
While officials believe this will help them generate the greatest “revenue” increase in the history of the state at $4.6 billion annually, the state’s budget will still increase by 1.1%. If there were ever a way to cripple a state, this is the way to do it. When a reasonable person gets into trouble economically, they cut back their expenditures. They must become fiscally responsible or ultimately declare bankruptcy. What is true for a man should be true for a state. But sometimes, in fact as we’ve seen most of the time it isn’t. That’s government for you.
What could they do if they wanted to get their fiscal act in order? Slash taxes across the board while privatizing each and every public service that is inefficient (presumably almost all of them) in order to bring the budget level to its bare minimum. Instead, it is clear that they are going to resort to legalized plunder, by taxing the citizens of the state on basic entertainment and sustenance. There is something morally wrong when a state is actively seeking things to tax, as it appears New York is. If the government has to look for ways to take your money from you, then clearly they are not serving as faithful stewards of the public good. They are legalizing theft. Bastiat says:
See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay … If such a law is not abolished immediately it will spread, multiply and develop into a system.
This perfectly characterizes our system of law — the spreading and multiplying of injustice. Were we to hold government to Bastiat’s standard, the one the Constitution seemingly ensured, we would see the inherent flaws in our laws; namely, that the vast majority of our laws benefit some at the expense of most and legalize plunder.
In the final analysis, my question is, what happens when New York has no income earners to tax anymore? This is the real risk that they and every other fiscally irresponsible state run. Moreover, what happens when a nation loses its income earners? Atlas Shrugged is just around the corner.