The cost of living is going up, so the House of Representatives figures the cost of dying should go up as well. On Thursday, the House voted to extend the 45% estate tax permanently. The estate tax is applied to any Americans stupid enough to die with at least $3.5 million in assets ($7 million in the case of married couples). Whenever that happens the federal government swoops down like a vulture to pick over the deceased taxpayer’s carcass, thereby depriving the grieving widows and orphans who are left behind of almost half their inheritance. Doesn’t anyone care about the children?
Supporters of the death tax tell us that rifling through the coat pockets of the dearly departed and helping ourselves to whatever spare change we can find is actually a good thing. After all, if we just let people dispose of their own estates however they saw fit, they might do something crazy like donate the money to charity, or worse - bequeath it to their survivors. That kind of blatant respect for private property could turn our fair Republic into an aristocracy! You wouldn’t want that, would you?
Even I have to admit that this argument has a certain superficial appeal, particularly when one considers all the damage that has already been done by aristocrats like the Kennedys and the Bush family. But even though there may be some trust fund babies out there who wouldn’t do much good with their inheritance, there are certainly others who could do a lot of good with it. Either way it seems clear that the intended beneficiaries of these large estates will either do less bad or more good with the money than the Federal government could ever dream of doing, so I don’t really see why half of anyone’s estate should automatically wind up in IRS coffers.
Since I’m not yet convinced, Representative Steny Hoyer (D-Maryland) invokes the ghost of Theodore Roosevelt (R-New York) to further strengthen the argument. Apparently it was Teddy who first proposed the estate tax, claiming that “the man of great wealth owes a particular obligation to the State because he derives special advantages from the mere existence of government.”
I see. Now we’re getting somewhere. At the core of Roosevelt’s (and, by extension, Hoyer’s) argument is the idea that it’s not really the man of great wealth’s money in the first place. After all, he just worked a lifetime to create it. But the wealth actually belongs to the State, which graciously allowed the individual to enjoy it for lo those many years. When that individual passes away, however, whatever’s left of the property should revert to its “true” owner, the Federal government. And by a remarkable stroke of luck, the Federal government just happens to be staffed by people like Roosevelt and Hoyer. I guess that’s why you never hear them saying that the money should go to the United Way or Habitat for Humanity instead.
But I still have this nagging doubt that’s keeping me from supporting the death tax. Maybe there’s something wrong with me, but I’ve always felt that what someone earns belongs to him, not to me or anyone else. The amount in question is irrelevant. No matter how rich or how poor someone may be, what’s theirs is theirs. So I still have a hard time accepting the idea that taking someone else’s money just because they’re richer and deader than I is the right and proper thing to do.
These antiquated notions of right and wrong are completely beside the point for most supporters of the death tax, however. They simply tell me that I shouldn’t concern myself with such things because this particular tax only affects the richest of the rich. Ben Harris of the Tax Policy Center assures me that "very, very, very few people" pay estate taxes anyway. “It only hits about 2 out of every 1,000 estates, and these estates are the wealthiest of the wealthy. These are very high-income individuals who are affected by the estate tax."
So the argument is that since no one cares about the rights of rich people anyway, stealing from them is perfectly acceptable and I should just shut up and get with the program. After all, based on my portfolio’s performance there’s no chance this tax will affect my children when I’m gone. I’ve got mine, but there’s no harm in helping myself to 45% of someone else’s. They’re so rich they’ll never even notice it’s gone.
Whenever I hear this argument bandied about in support of yet another tax, I can’t help but recall the history of the income tax. When the present income tax was originally pitched to a gullible American public back in 1913, its supporters also claimed that only the wealthiest of the wealthy would ever have to pay it. It seems the majority has always been solidly in favor of foisting costs on the minority. Well, I’ve got two questions for you. One, do you pay income taxes? And two, are you the wealthiest of the wealthy?
That’s what I thought.
But even if the death tax somehow manages to avoid the kind of mission creep that has marked virtually every other government program known to man and remains a tax imposed strictly on the rich, how does that make it all right? Why is it that the wealthier you are, the less secure your property rights become?
I’m not the only one asking these kinds of questions. There were, much to my surprise, a few members in the House who had qualms about the extension of this particular tax (so few that they lost the vote, but let’s give credit where credit is due). Congressman and former judge Louie Gohmert (R-Texas) rose to oppose the bill, correctly observing that, “After someone dies, and someone comes in and steals from them, we consider that reprehensible, that's just despicable. But when the government comes in — because we have the power to pass laws and legalize theft — it's OK.”
He then added, "I have sentenced people personally to prison for doing that."
Well said, Congressman Gohmert. Now will you please issue an arrest warrant for Congress? They’re stealing billions from widows and orphans.
In June of this year, thousands of Iranians took to the streets to protest what they viewed as the fraudulent re-election of President Mahmoud Ahmadinejad. The protesters used cellular telephones and social networking sites to communicate news of the marches and of the violent reprisals by government security forces. The use of technology by the demonstrators was so widespread that the protest was quickly nicknamed “The Twitter Revolution.”
The US government, however, didn’t actually want us to know about any of this. In fact, multiple agencies within the executive branch have spent a great deal of time, money, and effort to ensure that the Iranian people were denied both cell phones and social networking services. Allow me to explain. The US Bureau of Industry and Security considers just about any encryption technology to be “dual-use.” A dual-use product has both civilian and military applications, and is therefore subject to a greater degree of government control than other consumer products. Cell phones and most software applications contain some degree of encryption and therefore fall under this category. BIS prohibits the transfer of encryption technology to any countries deemed to be state sponsors of terrorism, and Iran has long held a place of dishonor on that list.
In addition to BIS restrictions, other government agencies such as the Treasury Department’s Office of Foreign Assets Control (OFAC) maintain even broader sanctions against any number of countries. These sanctions vary in scope, but the most comprehensive OFAC programs ban facilitation of virtually any trade whatsoever by any US person, including companies and their subsidiaries. Again, Iran is subject to some of OFAC’s broadest controls.
These kinds of trade restrictions are extra-territorial in nature. The US government has claimed jurisdiction not only over the goods and activities of US persons operating within the borders of the United States, but also over transactions that may occur farther down the supply chain. For example, if a foreign customer buys a US product, that customer is also prohibited from selling or shipping the US item to a country the US government doesn’t like – even if the transaction is perfectly legal under the laws of the foreign country. Even products manufactured overseas by non-US persons may be subject to US control if those products are based on technology that the US government has deemed to be “American.”
The penalties for violating any of the confusing and sometimes conflicting rules can be severe, and they include fines, denial of export “privileges”, and imprisonment. Companies employ armies of lawyers and compliance specialists to ensure that they stay within the letter of the law. This is an unfortunate deadweight loss not only to the firm but also to society in general, because every dollar spent on regulatory compliance is a dollar not spent on bringing new goods and services to market. We are all made poorer as a result.
Yet despite all of the rules, regulations, threats, and penalties, Iranians still manage to get their hands on cell phones and Twitter. How is that possible? Maybe the rules would be more effective if, say, Motorola were the only company in the world that knew how to make a mobile phone. But unfortunately for the US government, times have changed. These days everyone is getting in on the wireless act. Finland, Sweden, Japan, China, and Korea all have their very own cell phone companies. Manufacturing takes place not only in the companies’ home countries, but also in Mexico, Brazil, Taiwan, India, and all points in between. Hell, even Venezuela is trying to make cell phones these days. It would seem that the toothpaste is out of the tube on this one, yet the US restrictions remain firmly in place.
The Iranian protests clearly demonstrate that attempts by the US government to control the transfer of ubiquitous consumer electronics like mobile phones and mass-market software like Twitter and Facebook have utterly failed to achieve their objectives. And in this case, I would argue that we’re all the better for it. Had the regulations actually done what they were intended to do, the Iranian people would not have been nearly as effective at communicating their outrage over a fraudulent election and their government’s vicious crackdown. In the “perfect world” envisioned by US regulatory agencies, no one outside of Iran might ever have known that the Iranian people were unhappy with their government. But who honestly believes that would be a better outcome? Surely both the Iranian people and the world at large have benefitted from the protesters’ ability to transmit important news instantaneously via these supposedly verboten technologies.
Of course, the trade restrictions imposed by Washington are not really aimed at foreign governments at all. They’re aimed at us, the American citizens. The idea is that by violating Americans’ right of free association they can effect some desired change in another country. The Cuban embargo is a great example of this. The US government prevents Americans from trading with Cubans. The US government prohibits Americans from traveling to Cuba. The US government will fine and imprison Americans, not Cubans, for violating these rules. As a result of these policies, foreign companies have access to the admittedly small and impoverished Cuban market while American firms are shut out completely. And yet the ostensible target of all these restrictions, the Castro dictatorship, rolls merrily along almost fifty years after the American embargo was first imposed. And the Castro boys get an added bonus out of all this – blame for the disastrous effects of their failed communist system can be shifted entirely to the US embargo while they remain secure in their places of power, and are even adored as “heroes” for standing up to American oppression.
As if that weren’t enough there are other, more mundane, consequences to these kinds of restrictions on peaceful trade. US companies are losing out to foreign competitors who can offer the same technology, but without all of the compliance restrictions that hang like an albatross around the neck of the American firm. Foreign companies have even modified their product designs to exclude US-made subcomponents just so they won’t have to deal with all the headaches that come with American products (similar headaches exist for foreign firms who wish to hire American workers, by the way).
These consequences are so obvious that even government bureaucrats are beginning to take notice. In a recent speech, Secretary of Commerce Gary Locke indicated that he is aware that the regulatory structure needs to be revamped in light of the new realities of global commerce. Only time will tell if he is able to make good on the promise to simplify and moderate the laws that put American firms at a competitive disadvantage and American citizens in legal jeopardy while serving no real national security purpose whatsoever. Seriously, does anyone really believe that Osama Bin Laden doesn’t have a cell phone? Knowing how things work in Washington, though, I don’t hold out much hope that change will be timely or effective.
That being said, I suppose we can take some encouragement from the lesson provided earlier this year by thousands of courageous Iranians who, armed with nothing but cellular telephones, took to the streets to protest an oppressive regime. The lesson is simply this: the one thing you can always count on in this life is government failure - and sometimes that’s a good thing.
"As the world recovers, we will face a temptation to replace the risk-and-reward model of the private sector with the blunt instruments of government spending and control. History shows that the greater threat to prosperity is not too little government involvement, but too much."
- George W. Bush, November 2009
At a fundraising event for his presidential library last week, former President George W. Bush warned that too much government intervention in the economy could hinder a recovery. He also expressed concern over what he sees as the Obama administration’s drift toward protectionism.
It’s nice to know that the former President is out there on the chicken dinner circuit defending limited government and free-market economics. It would have been nicer if he had done that from the Oval Office for those eight long years. Instead, while in office President Bush presided over record federal spending, massively increased the regulatory state, bailed out failing companies, levied protectionist tariffs on imported steel, helped fuel the real estate bubble, and signed into law a government prescription drug plan that represented the largest entitlement expansion since the creation of Medicare itself.
Now that former President Bush is safely out of power, however, he’s rediscovered the value of free market principles – the same free market principles he abandoned in order to "save the free market". Nice. Mr. Bush’s speech offers a shining example of a long-standing libertarian criticism of Republicans. Whenever they’re out of power, they talk like libertarians (on economic issues, anyway). But as soon as they’re back in power, they govern like Democrats.
This is not to say that Bush’s comments at the fundraiser were wrong. He’s quite correct that President Obama’s massive government intervention in the economy will have detrimental effects over the long run. But it takes an extraordinary degree of chutzpah for George W. Bush to level those criticisms at Obama given the fact that it was Bush who initiated many of the destructive policies he suddenly finds so troubling. One might argue that the current administration’s policies outstrip those of the Bush administration in their scope and degree, but it’s hard to identify any serious substantive differences between the two when it comes to the economy.
Indeed, it’s hard to find substantive policy differences between the Bush and Obama administrations on any of the major issues of the day. War? Although candidate Obama delivered talking points designed to curry favor with the anti-war left, as President (and Nobel Peace Prize winner) he’s extended the war in Iraq and is in the process of escalating the war in Afghanistan. Executive power? Again, candidate Obama criticized the Bush administration’s view of limitless executive power and privilege, but President Obama has discovered that he rather enjoys the power his predecessor worked so hard to expand.
There are quibbles between the two parties, to be sure. When Democrats want to spend a trillion dollars on this program or that, Republicans draw a line in the sand and steadfastly refuse to spend a penny over $700 billion. But both agree that “something” has to be done by government to address the alleged problem. When Republicans want to add 40,000 troops to the Afghan theater, Democrats may draw the line at only 30,000. But both agree that national security is enhanced by having troops stationed in more than 100 countries throughout the world and by involving the US government in the domestic affairs of other nations. A public option may be absolutely essential for Democrats, but it will be passed only over Republicans’ dead bodies. But both parties agree that the government should “fix” health care by controlling it further.
The differences that separate Republicans and Democrats are so insignificant that they might require an electron microscope to be noticed at all. I suppose that’s where the media comes in. The story is the same whether it comes from NPR or Fox News. We are all supposed to believe that the “soul of the nation” will be won or lost on the basis of these relatively minor policy spats. Perhaps this is to be expected now that the debate over the proper role of government is over. Both parties accept the idea that the government should be involved in every nook and cranny of human existence. The only argument that remains is which group can more effectively manage the machinery of intervention and control.
Former President Bush’s comments at Southern Methodist University last week illustrate just how ridiculous these petty squabbles between Republicans and Democrats really are, and they provide additional evidence (as if any were needed) that in the political sphere, one need not have the slightest degree of consistency when attacking the opposition. One may easily hurl stones from the safety of one’s own glass house because Americans have become so inured to the false dichotomies of left/right, Republican/Democrat, liberal/conservative that they believe these hairsplitting differences are all that is left to debate.
There is another approach, however. Instead of arguing over numbers (one trillion or two?), we could debate fundamental principles of just law and proper governance. But that would require the key players to have identifiable principles in the first place, which is obviously too much to ask from the likes of Bush or Obama. From what I can tell, only the libertarians are ready for that kind of discussion.
God save us from the compassion of politicians. Last year Nancy Pelosi gave the keynote address at the Families USA conference where she was quoted as saying, "I want to start by talking about something that we all agree on: that everybody in America has a right to quality health care. But what is it that this health care should look like? What are the principles that this approach should have?"
Following up on her flawed premise, last Saturday Speaker Pelosi said, "It is appropriate that the promise we made...will be manifested today. We will pass health care reform." Later that same evening, she followed through on her threat as the House passed H.R. 3962, the ‘‘Affordable Health Care for America Act.”
After looking through the bill, my first question is, “Affordable for whom?” This thing is just a 2,000-page tax hike.
Individuals who, for whatever reason, decide that they’d be better off not buying health insurance will be fined an additional 2.5% of their income. Small companies that, for whatever reason, decide that they either cannot or will not offer health insurance to their employees will be fined 8% over the amount of wages paid. Larger businesses are simply compelled to offer health insurance to their employees (in lieu of higher salaries), and will be denied the ability to “opt out.” And woe be to high-income Americans making $1,000,000 or more per year. They get fined an additional 5.4% just for being successful. Sort of makes you think twice about heading into the office those last few days of the year, doesn’t it?
But wait, there’s more. This bill even punishes inanimate objects. A 2.5% sales tax will be levied on medical devices. I find this clause particularly bizarre, even by Washington standards. If, as Ms. Pelosi has claimed, the goal of health care “reform” is to increase access for all Americans, then why would she want to make the products that are used to deliver health care more expensive?
Evidently Ms. Pelosi believes that price is no object – especially when we’re the ones paying it. At a time when the Federal debt is $12 trillion, the deficit is $1.42 trillion, and unfunded liabilities in Medicare and Social Security hover somewhere around the $100 trillion mark, our “leaders” in Washington think this would be the perfect time to launch the mother of all entitlement programs. But then again, President Obama has claimed that this will all be deficit-neutral. Yeah, right. Pull the other leg and it plays “Jingle Bells.”
Putting aside the outlandish spending for a moment, let’s tease out some of the allegedly unintended consequences that would result if the Senate were crazy enough to go along with this plan. One of the major complaints about the American health insurance system is that if you lose your job, you lose your health insurance as well. This is due to the fact that most of us purchase our health insurance through our employers. In a normal free-market environment, we would simply buy health insurance directly from an insurance company in the same way we purchase car, life, or homeowner’s insurance. Health care is not a normal free-market environment, however, and years ago government policy encouraged employers to offer health insurance as a fringe benefit. The government then reinforced this trend by offering tax deductions to employers who provide health insurance to their employees. This disparity in tax treatment makes an employer-sponsored plan much less expensive than a plan purchased by an individual, who does not receive such favorable tax treatment for health insurance plans paid for out of pocket. From what I can see in the bill, the Pelosi plan does nothing to remedy this disparity, which means that the “lose your job, lose your insurance” problem will continue.
So at a time when the official unemployment rate is 10.2% and effective un- and under-employment is around 17%, Nancy Pelosi wants to increase the operating costs for businesses, thus ensuring that they will be able to hire fewer people. Those who lose their jobs will have a much harder time finding another one. Depending on the circumstances, someone in this unhappy situation might want to economize by not purchasing health insurance, particularly once private health insurance premiums skyrocket even further because people have begun to flock to the “public option.” The public option will reduce the number of people in the risk pool for private insurers, which will drive their operating costs ever higher. But if someone does try to forego health insurance against Nancy Pelosi’s explicit demands, he’ll be fined an additional 2.5% on his now-greatly-reduced income. And if he refuses to pay the fee for this protection racket, he’ll be thrown in the slammer.
Here’s a little taste of what life in the land of the (formerly) free will be like under the tender mercies of the federal government: “Hon, I’ve got some good news and I’ve got some bad news. The bad news is the company is going out of business because they can’t afford the additional 8% tax the Feds have imposed, so I’ve been laid off. That means we’ve lost our health insurance, and as you know, that’s now a federal offense. Since we don’t have a paycheck anymore, we can’t afford to pay the 2.5% fine, so we’ll be spending the next few years in prison. The good news is that federal prisoners get free government health care.”
To me, that just sounds like the worst day ever.
I’ll be the first to admit that I’m a glass-half-empty kind of guy, a fact that will come as no surprise to regular readers. As such, it is very easy for me to fixate on freedoms lost while overlooking the ways in which the world in general (if not the United States in particular) is actually freer now than in the past.
Today marks the twentieth anniversary of the fall of the Berlin Wall, which for decades stood as a concrete (and barbed wire) symbol of the crushing tyranny of communism. Evidently East Germany was such a shining example of what governments can do if just given enough power that they had to shoot people who didn’t fully appreciate the benefits of living in that workers’ paradise.
Fortunately, economic reality eventually reasserted itself in such a way that even the communists had to admit that Mises had been right all along. With the Soviet Union breaking down like a Yugo hatchback, they finally realized that the whole charade wasn’t worth killing anyone else over. The Iron Curtain was lifted and passage from east to west was permitted for the first time in over a generation. Taking full advantage of this new freedom, East Germans immediately put their hammers and sickles to good use, destroying the barrier that had separated them from the wider world for far too long. The Berlin Wall was unceremoniously and quite literally relegated to the dustbin of history. Perhaps more than any other, this event marked the beginning of a new chapter of freedom for millions of people throughout the world as the Cold War finally came to an end.
The importance of this amazing episode in history should not be overlooked or forgotten, least of all by those of us who still adhere to basic principles of individual liberty. Although it’s important to defend freedom from its enemies even today, it’s also important to recognize that, at certain times and in certain places, others have had far greater obstacles to overcome – and on November 9, 1989, they succeeded.
The third-quarter GDP results were just announced, and they showed a 3.5% growth rate. This has prompted Ben Bernanke to declare that, no matter what the uninformed masses standing in the ever-growing unemployment lines might think, the recession is probably over. As if on cue, the media have been quick to parrot the Federal government’s claim that its interventions in the economy have saved us once again from capitalism. Even I might be inclined to believe that their optimism was genuine if it weren’t for the unmistakable note of desperation in their voices, but somewhere in the background you can hear them clapping their hands and chanting, “I do believe in Obama! I do believe in Bernanke! I do, I do, I do!”
Despite the strained enthusiasm and suspended disbelief filling the news cycle these days, the White House is trying to manage expectations ahead of the upcoming jobs report. It’s almost as if they understand that the GDP number erroneously considers government spending to be every bit as productive as private economic activity. Maybe they also realize that GDP is artificially inflated because it doesn’t include the cost of borrowing all the money that was needed to finance the government’s make-work “stimulus” programs and to incentivize purchases of everything from houses to golf carts.
All of these factors and more suggest that the 3.5% increase in GDP will have absolutely no positive effects whatsoever on the lives of most Americans, and even Obama knows it. The official jobless rate will continue its relentless push into double-digit territory. Since the Feds are dead-set against allowing the economy to liquidate bad debts and realign itself with actual consumer preferences, the outlook for employment will continue to be bleak in this country for the foreseeable future. People who are out of work might hope for change, but they’re in for a long wait unless they can find an industry with serious long-term growth potential.
The employment problem will be particularly acute for recent college graduates with little or no work experience. When researching schools and planning one’s major, the question is always “Where will the jobs be when I graduate?” For the students graduating in the near future, the answer is probably China. But given the fact that relatively few Americans speak Mandarin, incoming college students will need to plan their education very carefully in order to maximize their chances of landing jobs in the few remaining fields that are still hiring. Fortunately, we here at A Beginner’s Guide to Freedom have identified one sure-fire career path that virtually guarantees full employment, offers unlimited earnings potential, and doesn’t require relocating to Beijing. The premier job of the future is…professional rent-seeking.
Unfortunately, there aren’t any college-level degree programs that specialize in Professional Rent-Seeking yet. For now, those who are interested in this growing field may find suitable coursework in most Sociology or Political Science degrees. George Washington University seems to be a good place to start. I don’t know if the George Washington University College Democrats were getting college credit, but from what I gathered during a recent visit to D.C. they seem to have a pretty good rent-seeking internship program going.
For those readers who are unfamiliar with the term “rent-seeking,” don’t worry. It won’t last. Rent-seeking is all the rage these days, and may soon surpass baseball and monster truck rallies as the quintessential American pastime. Rent-seeking is an economics term that refers to the use of the political process to obtain certain financial advantages that can’t be achieved through voluntary free-market transactions. Other related terms include mercantilism, corporatism, and participatory fascism, but the important thing to remember here is that rent-seeking is a way for certain politically favored groups to get what they want without having to go through all the trouble of earning it honestly in the free market. Nevertheless, most rent-seekers will still use free-market terminology as cover - further distorting the true meaning of capitalism in most people’s minds.
Perhaps an example will help illustrate how rent-seeking works in practice. Let’s say I own a corner store. I could eke out a living selling the various and sundry products that are desired by my customers. In order to succeed, I will have to make sure that I carry the items they want, when they want them, and at the price they want to pay, while at the same time covering all of my operating costs. That’s the free market in action. Sure, it’s voluntary. And sure, it’s precisely that kind of activity that has increased the standard of living for mankind steadily over the years. But it’s really hard work. A much easier way for me to make money would be to find a politician who (for a price) will pass laws that protect my corner store from competition. That way I can safely raise my prices beyond what my customers would otherwise pay, thus increasing my earnings at their expense. An even better option (for me, anyway) would be some sort of law that would forcibly extract money from the community at large and funnel it to me whether they shop at my store or not. Maybe some sort of tariff imposed against any stores not located on my block. There are infinite variations, of course, but they’re all just forms of rent-seeking. And brother, I’m here to tell you that it’s the wave of the future!
The beauty of professional rent-seeking is that it’s both booming and bipartisan. Whether you’re a Republican or Democrat, you will easily be able to find a business in the formerly capitalist US economy that is looking for someone with your skills to help them navigate the ever-changing Washington landscape. For years and years companies operated under the rule that the customer was king, but those days are long gone. From now on the government bureaucrat is king, and companies will need some help adjusting to this new reality.
That’s where you, the professional rent-seeker, come in. Not only will you find any number of lucrative employment opportunities in this fast-paced and exciting career, but you’ll also discover that the job itself is both easy and enjoyable. After all, bringing a product to market is hard, but taking a Congressman to the Bahamas is easy.
To be perfectly honest, though, I can’t say that professional rent-seeking is all fun and games. If it were, they wouldn’t call it work. There are a few unpleasant aspects of the job that you’ll just have to get used to. The biggest negative, of course, is that the whole operation is highly unethical. At first, many professional rent-seekers experience a few qualms about fleecing their neighbors in order to line their own pockets. After a while, though, most rent-seekers become quite comfortable with the idea. Within just a few short weeks, they manage to convince themselves and the elected representatives they work with that fleecing one’s neighbors is actually a good thing, because it funnels money and jobs to the politically connected constituency that wouldn’t otherwise have them.
Another potential negative that the professional rent-seeker has to deal with involves some uncomfortable questions that are occasionally raised by the economically literate. These people are the bane of the professional rent-seeker’s existence, but fortunately their numbers are dwindling so it’s becoming less of a problem (but you should probably avoid taking any calls from John Stossel, just in case). And if you do happen to run into one of these unmutual libertarian types at some point in your career, just be sure to focus the conversation on the people who benefit from your larceny, and avoid at all costs any mention of all the other people whose money is taken from them by force to support those industries that are either unwilling or unable to support themselves. Senator Chuck Schumer (D-New York) is a master of this technique.
And from time to time the professional rent-seeker will have to deal with the tedious Congressional ethics probe. But this shouldn’t dissuade anyone from pursuing a career in rent-seeking. The results of those probes always come back negative, because Congress is immune to ethics.
And finally, you will be the subject of scorn by those who decry the influence of “lobbyists and special interests.” This can certainly be annoying, but this criticism completely misses the point. As long as those in government are able and willing to dictate winners and losers in the marketplace, market actors will always seek to influence those decisions. This is simply a matter of self-defense. And once those market actors have influenced the government to shield themselves from the worst effects of the regulatory state, it is simply a matter of time before they realize that the same regulatory structure can be molded into a competitive advantage at the expense of their competitors and everyone else. The only way to avoid this problem would be to limit the government’s power to dictate market outcomes, and no one (with the exception of a few reactionary elements who still cling to outdated notions of property rights and individual liberty) would ever seriously consider doing that.
So aside from these relatively minor drawbacks, most people find the world of rent-seeking to be quite rewarding and varied. Most major industries these days have a real need for people who can lobby politicians on their behalf to ensure that they get a bigger piece of everyone else’s pie. Let’s look at a few examples, industry by industry.
Healthcare
It goes without saying that healthcare represents the single largest opportunity for professional rent-seekers these days, and it will continue to offer lucrative employment for years to come. The Obama administration is determined to handcuff this industry with ever-increasing government regulations. This, of course, will simply exacerbate the problems that have been caused by all of the previous government interventions, thus ensuring that rent-seekers will always be in demand, no matter what part of the industry is involved. You can rent-seek for pharmaceutical companies, the American Medical Association, insurance companies, or for anyone else even remotely associated with socialized medicine. The sky’s the limit.
Environmentalism
After healthcare, environmentalism may represent the next-largest field for rent-seeking. Al Gore, the Bill Gates of rent-seeking, is a pioneer in this field, and it’s paid off for him in a big way. Al has convinced his buddies in Congress that they should funnel $560 million of your money to Mr. Gore’s company, whether you wanted whatever it is he’s selling or not. This, in part, allows Mr. Gore to live in a mansion that burns more fossil fuels in a month than you or I will burn in our lifetimes. The lesson here is clear – you can make a lot of green by forcing other people to go green.
Not everyone can be Al Gore, of course. Some professional rent-seekers may just have to settle for being the next T. Boone Pickens, who’s so convinced his windmills are the best thing since sliced bread and sunshine that he doesn’t want to risk the deal by trying to persuade others to invest voluntarily. He just wants government to take their land, thus forcing them to shoulder a considerable part of the cost of his project.
Financial Services
No shortage of opportunities here. In fact, the worse your financial services business is run the more money you can make through government bailouts. The only downside that I can see here is that your pay may be capped for PR purposes by some Washington czar, but on the whole it’s still a lot easier than working long hours trying to please your customers. The key for the professional rent-seeker in the financial sector is to convince some Senator that you’re too big to fail. Shouldn’t be too hard.
Manufacturing
Maybe you’re a steel-toed boots, lunch pail kind of guy. No problem. You, too, will find a wealth of opportunities for professional rent-seeking in the manufacturing sector. I’d suggest focusing on the UAW, Chrysler, or GM. And the steel industry’s rent-seeking roots stretch all the way back to the Lincoln administration.
Agriculture
Do you enjoy being outdoors, working with the land? No problem. The agricultural sector may be the longest-running rent-seeking game going. Farmers have been using Congress to reach into your pocket longer than anyone else, and as competitive pressure from foreign producers makes food more and more affordable, the professional rent-seeker’s services are needed now more than ever. If this is an area that interests you, you’ll find most of the opportunities around the offices of Congressmen from the Midwest, such as Charles Grassley (R-Iowa), who sees absolutely no downside to corn subsidies and ethanol mandates.
Sports
Are you a big sports fan? Then maybe you should consider a career in sports and entertainment rent-seeking. Here, you can hobnob with quarterbacks and major-league sluggers while you lobby local governments to steal other people’s land for your new multi-gazillion dollar stadium. Jerry Jones could be a useful mentor in this “arena.”
These days the government seems determined to choke the life right out of the private sector. This trend shows no sign of letting up, so it will become harder and harder to find honest work in the private sector. But professional rent-seekers will find their services are in ever-greater demand because, as P.J. O’Rourke once said, "When the legislature controls what is bought and sold the first thing that is bought and sold is legislators.”
Virology Meets Jurisprudence – Speaking from the floor of Congress this week, Rep. Sheila Jackson Lee of Houston said, “I listened to some challenge to the Constitution about the right to health care. I frankly believe that the Bill of Rights does embrace this concept because the Fifth Amendment suggests the question of due process. And one does not have due process under the Constitution if your neighbor can have health insurance and save his children from the scourge of H1N1, not losing their lives because they might have vulnerabilities as a child, and you cannot.” I don’t think there’s any doubt that the swine flu is a very serious problem for those who contract it, but to my knowledge the virus has not yet mutated into a strain that is capable of denying citizens due process. Until it does, we’ll continue to rely on Congress for that.
Dallas Police Can’t Even Protect Themselves From Thieves – Dallas SWAT was burglarized again this week. Thieves entered the unmarked SWAT SUV and then broke into a heavy-duty safe, taking weapons, body armor, uniforms and a badge. This is the third SWAT vehicle to be burglarized in six months.
Would You Spend $24,000 For A Clunker? – Back in August, Cato’s Chris Edwards suggested that the government’s Cash for Clunkers was the dumbest program ever – and that was based solely on the $4,500 incentive being offered. Edmunds.com now reports that the program cost $3 billion and only generated 125,000 incremental sales, putting the cost per clunker at $24,000. No word yet from Edmunds on whether the Cash for Golf Carts or Cash for Appliances programs were any more effective.
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