Saturday, March 15, 2008

I'd sugarcoat this truth but it costs too much

Subsidies are bad, m'kay?

Imagine this scene: The U.S. Congress is about to pass a bill that will offer cheap loans to American oil companies. The government will loan them $150 for every barrel of oil they produce, with the oil itself serving as collateral. This guarantees that oil will always sell for at least $150 per barrel, because the companies can surrender their oil to Uncle Sam at that price instead of selling it for less. Meanwhile, a system of tariffs will prevent foreign companies from selling oil at prices that can compete with $150 per barrel.

Sounds like a bad idea, doesn’t it? This would force taxpayers to put billions at risk for a program that makes their gasoline more expensive. It would also drive up prices for other goods and services that contain or require the use of oil or gasoline. Oil companies would be the only beneficiaries — at our expense, they would be rolling in dough.

So if this is a bad idea for oil, why is it a good idea for sugar? This is precisely the program currently in place, and Congress is poised to reauthorize it before it expires March 15.

If someone knows the state of this legislation, please let me know.

The Rise of American Incompetence
We used to be the world's most skillful entrepreneurs and managers. Now we're laughingstocks. What happened?

Hard to argue with the article's gist. Let me throw my two cents in: For decades now state and federal laws, rules and taxes have been hampering private individuals and enterprises. The Law and the Tax Code used to make a certain degree of sense. One didn't need a lawyer just to comply with the law in normal operation of business. Today, much of American productivity, effort, labor and talent is expended servicing the arcane and arbitrary legal system encompasing tort law, tax law and regulatory law.

You can thank Congress.

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