Stringing up Gibson; tales of the American Nomenklatura

View 702 Friday, November 25, 2011

I will be all day Saturday at LOSCON, and I am trying to catch up on stuff today.

Today’s Wall Street Journal has “Stringing up Gibson” by Kimberly Strossel (link) which details just what happens when you put the Nomenklatura in charge by giving them regulatory laws or expanding regulatory power. The 2008 expansion of the century old Lacey Act was intended to produce this result although I expect many of those who voted for it did not know that.

On a sweltering day in August, federal agents raided the Tennessee factories of the storied Gibson Guitar Corp. The suggestion was that Gibson had violated the Lacey Act—a federal law designed to protect wildlife—by importing certain India ebony. The company has vehemently denied that suggestion and has yet to be charged. It is instead living in a state of harassed legal limbo.

Which, let’s be clear, is exactly what its persecutors had planned all along. The untold story of Gibson is this: It was set up.

Most of the press coverage has implied that the company is the unfortunate victim of a well-meaning, if complicated, law. Stories note, in passing, that the Lacey Act was "expanded" in 2008, and that this has had "unintended consequences." Given Washington’s reputation for ill-considered bills, this might make sense.

Only not in this case. The story here is about how a toxic alliance of ideological activists and trade protectionists deliberately set about creating a vague law, one designed to make an example out of companies (like Gibson) and thus chill imports—even legal ones.

When you hand your affairs over to the Nomenklatura you can expect these results. (Nomenklatura or New Class. They ruled the USSR and its provinces.  We have created them in America and we are rapidly handing more power to them.)

Freedom is not free. Free men are not equal. Equal men are not free. Why do we always act as if we have forgotten that?

Adam Smith told us that whenever two capitalists get together, their conversation turns to scheming on how they can get the government to restrict entry into their business, and thus reduce competition. The usual method is to introduce regulations that make it impossible to start a competitive business on a shoe string. Over time those schemes create a Nomenklatura that governs all, and makes lobbying more important than productivity or ingenuity.

The biggest result of the legal harassments of Microsoft was to convert the Microsoft District of Columbia office from a sales organization to a lobby. More lobbyists mean more revenue for the Nomenklatura, more parties for the staff, more campaign donations for the Members of Congress and the Senators. Even “good” lobbyists (i.e. ones advocating policies we approve of) raise the cost of doing business. This results in more regulation, which results in higher to prohibitive startup costs in any industry which can get the attention of the Nomenklatura (and you can always get that attention if your lobby budget is large enough), which results in reduced competitiveness, more pay for “compliance officers” who produce nothing, higher costs for the affected trade, and higher costs for the consumer. Eventually that drives jobs overseas, so the lobbyists then turn to restricting imports.

One of the simplest ways to end the Depression we are entering is to abolish many of the Federal regulatory agencies and give those powers to the states. Of course we won’t do anything like that. The lobbyists won’t let us.

Salve, Sclave.

I posted this Thursday. This is a repeat:

I will give you one fact to ponder over the weekend.

Some Teachers Unions have pointed out that the average grade and high school performances in Wisconsin, which has teachers unions, are higher than the corresponding averages in Texas, which is a right to work state. This is true. The average student performance in Wisconsin is higher than the average student performance in Texas.

It is also true that the average black student performance in Texas is higher than black student performance in Wisconsin. The average Hispanic student performance in Texas is higher than the average Hispanic student performance in Wisconsin. The average white (non-Latino) student performance in Texas is higher than the average white (non-Latino) student performance in Wisconsin. The three classes are collectively exhaustive.

These facts are true, and they are not contradictory although they may appear to be. We’ll talk more about this next week, but if you are moved to comment I’m listening.

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