FREE MARKETS ARE NOT PRO-BUSINESS

READ THAT AGAIN: FREE MARKETS ARE NOT PRO-BUSINESS[i]

Heresy? Blasphemy? No, reality.

A central irony of a free-market economy is that everyone is in favor of competition, but nobody wants to have to compete. Free markets are pro-efficiency, not pro-business. Sometimes, and only sometimes, the government can do something better and cheaper.

Lawrence Lessig is a law professor, intellectual property expert and technology maven. In a post entitled “Crushing Competition” in Wired Magazine, May 2006[ii], Lessig addresses the corrupting influence of crony capitalism. He begins with some seemingly outrageous examples:

Imagine if tire manufacturers lobbied against filling potholes so they could sell more tires. Or if private emergency services got local agencies to cut funding for fire departments so people would end up calling private services first. And what if private schools pushed to reduce public school money so more families would flee the public system? Or what if taxicab companies managed to get a rail line placed just far enough from an airport to make public transportation prohibitively inconvenient?[iii]

Seem unbelievable. Let the author add one of his own. California imprisons more of its citizens than nearly every country on earth. California’s electorate, manipulated by politicans intent on keeping their jobs, has enacted harsh, long sentencing laws. The most well-know is the “Three Strikes” law. Three felonies and a schmuck draws a life sentence. Most agree that its arbitrary effect is harsh in more than a few cases and many would like the law repealed, or at least ameliorated. But not one bunch, the California prison guards union.

The California prison guard (euphemistically called “Corrections Officers”, as if they could “correct” or “fix” anything) union lobbied actively against changes to the “Three Strikes” law. Why, to keep their members in jobs.

Most people would laugh these screws out of the hearing room. But not politicians, who greedily suck down the contributions of these self-serving groups.

ONE WOMAN’S SPECIAL INTEREST IS ANOTHER WOMAN’S “COMMUNITY SERVICE” GROUP

Lessig’s article described a 2005 experiment in California. It launched a pilot program for people to file simple returns. California could do this because it already has the payroll tax information for most workers. For people electing these simple returns, California sent these people prepared returns that the only need sign and return. The program was successful and 95% of the people that filed the simple returns would do so again.

It was an effective program. The taxpayers saved time and effort and the returns were accurate. What’s not to like?

ENTER THE “SPURNED”

Most of the readers by now have figured out that the California tax preparation lobby began pressuring California lawmakers to drop the program. Okay, that is to be expected. But according to Lessig, the efforts are working:

But what is surprising is that their "arguments" are having an effect. In February, the California Republican caucus released a report highlighting its "concerns" about the program - for example, that an effort to make taxes more efficient "violates the proper role of government." Soon thereafter, a Republican state senator introduced a bill to stop the ReadyReturn program.

Here it is, the party that hawks itself as anti-government, claiming that a tremendously efficient government program that saves the government expense and the citizens money and effort is a “violat[ion] [of] the proper role of government”. This comical canard is a lie that even Attorney General Alberto Gonzalez could be envious of.

IF IT PLAYS IN SACREMENTO, THE PIGS OF K-STREET WILL COME TO THE WASHINGTON TROUGH

The Lessig article goes on to state that a funding bill passed by the U.S Senate prohibits the IRS from developing its own ”income tax electronic filing or preperation products or services.” And ironically, with the improvements to the IRS computer system, the IRS can now match up 1099s with all individual filers. So the IRS is damn close, if not already able, to send individuals preprepared tax returns that individuals could sign and return or click and e-file.

VULTURES FEED FROM CARCASES OF THE FAILED, NOT INEFFICIENCIES PROMOTED BY THE POWERFUL, IN THE DESERT OF THE REAL!

[i] http://www.wired.com/wired/archive/14.05/posts.html?pg=7
[ii] Wired, May 2006, p. 104.
[iii] http://www.wired.com/wired/archive/14.05/posts.html?pg=7