No, this won't be abused at all

The WSJ has an article about a new "stolen phones" database, that the major telecom vendors will use to keep from activating stolen phones. It's being created in cooperation with the Federal Government, apparently after the Major Cities Chiefs Association pressured the FCC to do something about stolen phones.

According to the article:

Thieves can sell pilfered devices to local merchants or street-corner middlemen—or hawk them on sites such as eBay.com, Amazon.com or Craigslist.org, where a used iPhone, for instance, can fetch several hundred dollars.

I don't see any way at all this could be abused or misused.

There's no way someone might sell a legitimate used phone, but have it reported as stolen just to be a jerk. Or there's no way that a spited significant other might report a phone as stolen to get back at their ex.

Registries don't work. They don't accomplish their initial purpose, and they merely serve as a vehicle to get further governmental intrusion into our lives. How big of a step is it from a stolen phone registry to a phone registry. Telecoms couldn't activate a phone, or provide service to it, unless it validated against the database.

After all, criminals and drug dealers use pay-as-you-go phones to conduct their business, so the tool must be intrinsically evil, right? And it has to be controlled by the government, right?

Any similarities to my thoughts on gun control and gun registries are not incidental AT ALL.

Well there's your problem, Sen. Kathy Stein, D-Lexington

The Cincinnati Enquirer has a blog post up about Kentucky legislators signing on to a brief in opposition to the constitutionality of the ACA.

I don't this lawmaker quite gets it.

Sen. Kathy Stein, D-Lexington, said the Republican lawmakers opposition to the reform could strike a blow at a health care law that benefits many in Kentucky, including families who can now keep their children on their workplace insurance plans until they reach 26 years old.

“It kind of makes me crazy when Kentucky legislators in particular rail against the federal government and what it does,” Stein said. “Don’t thy [sic] recognize that we’re not a donor state to the federal government? We receive. We get lots of money back, more than the taxes we send in. And until folks realize that, I don’t believe we can have an intelligent debate about it.”

(emphasis mine)

Yes, they do recognize that Kentucky is a recipient state. That means that we have effectively robbed other states to line our coffers. The Federal government is overspending revenues, which means we go more and more into debt every single day.

But because we are a recipient state, it's okay? Because we're doing better than the other guy, it's okay? Because other states have fewer funds to support their own residents, it's okay?

Well guess what, Senator Stein. I DON'T think it's okay that Kentucky is a recipient state. I DON'T think it's okay that because of programs like the ACA, the Federal government is spending money faster than it can rake it in. Something's got to give. We either get our fiscal house in order, or we'll soon see the local coal industry crater because it will be cheaper for everyone to burn their paper currency for heat.

The future of the Kentucky energy economy?

QOTD - Not Getting It edition

I was reading an article in the Denver Post this morning about how the Balanced Budget Amendment fell 23 votes short in the house yesterday.

It's full of the usual diatribes and complaints about how Congress can't afford to limit itself, how we have to be able to spend more than we collect in tax revenues each year.

But here's the quote that jumped out at me:

Democrats overwhelmingly opposed the proposal, arguing that such a requirement would force Congress to make devastating cuts to social programs.

 Um, well, yeah, that's sort-of the point now isn't it. We need to make cuts across the board, as we're spending roughly twice what we collect, and we now have a federal debt of over $15 TRILLION. Calling them "devastating" is just the usual verbal scare-mongering that is sadly used by members of both sides of the aisle. I remember when we would have to say "billion with a 'B'" to distinguish from "million with an 'M'". Sadly, the only time we hear the word 'billion' anymore, it's related to amounts that are usually prefaced with the word 'only'.

It brings to mind the old saw about government spending: A million here, a million there, and pretty soon we're talking about real money. Billions of dollars in spending are now part of the noise floor, and don't even make us raise our eyebrows.

It's like this, Congress. If you don't start making "devastating" cuts to the entire Federal budget, the impending economic collapse will aptly be described as devastating, and we won't even have to use scare quotes.

Ruling by Fiat, or Preparing to Fail, Again

President Obama is signing yet another executive order to implement by fiat what he cannot get Congress to implement via valid legislation.

This particular executive order concerns prescription drug shortages and the potentials for price gouging.

“The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging and threatens our health and safety,” an administration official says.

The order apparently directs the FDA to "take action" to help prevent drug shortages. Oh, and it expresses support for bipartisan legislation intended to do the same thing. One of those pieces of legislation is Senate Bill 296. What does this Herculean feat of legislative legerdemain accomplish? It "require[s] a prescription drug manufacturer to notify the Secretary of Health and Human Services (HHS) of a discontinuance, interruption, or other adjustment of the manufacture of the drug that would likely result in a shortage of such drug."


Are you kidding me? You've added a regulatory burden which can be used to bludgeon Big Pharma, and that's IT?!? What is HHS or the FDA going to do? Tell a drug company that they can't discontinue a drug line any longer? This is yet another case of picking winners and losers, and trying the failed Communist experiment of centralized management of industry.


You know what would work better? Remove some of the tariffs and import barriers and allow drugs to be imported from Canada.


Oh, wait, I forgot. Big Pharma went on a successful rent-seeking expedition and got the competition excluded from the marketplace.


So now we see the results of rent seeking and crony capitalism. Drugs are artificially scarce, they're too expensive, and now the government is going to stick its nose into a situation that will only be made worse by their intrusion.


Can we please get something approximating a free market back?

Are government loan guarantees a form of venture capitalism?

Megan Mcardle over at the Atlantic responds with a resounding NO!

This is one of the better analyses on this I've seen, and it addresses something that's been bugging me. If the technology is sufficiently ripe or exciting (whatever technology it might be), then why does the government have to guarantee the loans in the first place? As Mcardle says:

Now, maybe you think that there is some unpriced social return of these investments.  But then this has nothing to do with VCs, portfolios, or risk; it's a subsidy.  And loan guarantees are not a very good way to structure that subsidy.

Here's why: at the company level, there's no difference between an optimal market outcome, and an optimal social outcome (from the DOE's point of view); both investors and society benefit if more solar cells are sold.  If the solar cells are unlikely to be sold to many people, than the loan guarantee is not a good idea--it will not foster much environmental benefit.  If the solar cells are likely to be sold to many people, than the loan guarantee should not be needed; private investors should be easily found to back the manufacturing. 

I absolutely agree with that. This is yet another case of the government picking winners and losers in the market place. And it's not even picking winning and losing technologies. It's picking one particular company in a particular market segment.

If the government wants to subsidize a particular technology, there are other ways it can do (and has done) that. Think about energy efficient appliance credits, and the like. In those cases, the government is not picking a company, it's picking a technology or desired outcome. Efficiency standards were developed (whether or not you agree with them is another story; at least it was a relatively level playing field) and any company could manufacture a product that complied with those standards. Then, the consumer was allowed to choose (wow, that sounds suspiciously close to free-market principles) if they want to purchase a compliant product, and if so, from whom. Now, it's possible that the government tax subsidies would play a role in that decision-making process. Certainly, the companies hope it will, as much time as they spend advertising that particular benefit. But, it's also possible that other factors like 1) Will it fit in my laundry room? or 2) Can I afford the purchase price RIGHT NOW? or 3) Do I like its form and function? might be bigger drivers in the decision. Either way, the consumer gets to choose, and the government is merely trying to influence the decision through its legitimate taxing authority.

In the case of Solyndra and the other loan guarantee recipients, there is no element of free-market control in the process. The government is straight-up picking winners and losers, and losing out in the end when business plans the open market wouldn't touch with a 100-foot pole crash and burn.

Further, I think loan guarantees inject a measure of moral hazard into the process. Once the government has loaned money in the first place, it behooves it to continue to prop up that business. Also, the government is not receiving any sort of equity stake like a traditional VC would, so therefore has no control over what the company does with the money. It's almost like the government is more in a position of being the reinsurer, and on the hook for any losses.

I'll be honest. There is one place that I can think of where a loan guarantee process might make sense, and it's in terms of what Obama pitched as his "Infrastructure Bank". These are not revenue projects. They will make money for the construction firms and that's about it. Further, these are then essentially government to government loans, so Washington isn't really competing in, and mucking up, the market. However, there are also some huge issues with an Infrastructure Bank, and I'm still up in the air as to whether or not it's a good idea long-term.

However, loan guarantees to private companies because they put together a really cool presentation deck? Yeah, that needs to stop, yesterday.