Regulatory Mishaps

Firm Exit Now Exceeds Firm Entry. That’s a Problem.

For the first time in US history, the rate of firm exit exceeds the rate of firm entry. The new trend represents a shift in our economic structure towards entrenched industries instead of “creative destruction” – or the process by which more productive firms drive out less productive ones through competition. Our economy becomes less competitive when entrepreneurial growth slows. (more…)

Government does not “Approve” Capitalism

Detractors of capitalism often blame the market for government. I mean, it couldn’t be any more obvious here. The government (FDA) “approved” a product (cigarettes), which is now sold in a highly regulated market. It must be capitalism’s fault. You know, how leftists claim that “deregulation” has been a problem, and then go blame capitalism for regulations.

It really doesn’t make any sense how they’ve reached this conclusion. Somehow, deregulation equals regulation. More FDA should fix that. (more…)

Volkswagen’s Emissions Scandal Shows EPA Incompetency and Failure of Standards

Volkswagen was recently ousted for purposefully cheating US emissions test on their clean diesel cars. They manipulated results using a computerized sensor that altered emissions during tests. As you might expect, many pundits are immediately blaming the market and capitalism. If anything, the VW scandal points to a failure of government and success of market forces. (more…)

Here’s Why Salads Cost More Than Burgers

Misleading Claim: “An unhealthy hamburger costs $1, but a healthy salad costs $5. Greedy capitalists are making our kids fat!”

Reality: Producers do not sell goods at arbitrary prices based on profitability or the desire to make people fat. In fact, prices are carefully calculated by consumer value/demand and external factors, such as subsidies. We can debunk this claim with thought experiments and an analysis of the U.S. farm price support programs. (more…)

Uber is Good for Everyone Except Unions

Uber frequently makes headlines as they fight protectionist bureaucrats around the world. In France, there is now a ban on UberPop, the low cost service similar to UberX. Despite international aggression from government, Uber growth has been unprecedented. Their success is all part of the new “sharing economy”, which should be a buzz word for the French socialists. (more…)

The Environment Needs a Free Market; Not the EPA

In short time, the Environmental Protection Agency will release new standards for chemical plants and refineries to measure volatile organic compounds in their flares. The new regulations come in response to a past lawsuit that claims the EPA failed to enforce existing regulations under the Clean Air Act. This comes as no surprise because government is inherently motivated to fail. How else will they claim they need more funding? (more…)

The IRS is Useless. Shut it Down.

“When a private enterprise fails, it is shutdown – unless it receives a subsidy to keep it going. When a government enterprise fails, it is expanded. I challenge you to find an exception.” – Milton Friedman

IRS commissioner John Koskinen came out and said what we already knew: the bureaucracy service is terrible. So terrible, in fact, that they are no longer taking 60% of incoming calls, which is down from 53%. In typical central planner fashion, Koskinen blames underfunding and paints a horror story of $2 billion in tax losses if the compliance division goes underfunded. (more…)