The death of Apple cofounder Steve Jobs, who was well and justly eulogized in the national media, offers perspective on the meaning of the free market.\u00a0 Jobs became an icon of the free market by creating products that people bought because they wanted them.<\/p>\n
But many of today\u2019s most attractive opportunities to get rich are not in the free market at all, and this is noteworthy in the national debate on the future of tax policy and the economy.<\/p>\n
It\u2019s argued that taxes on the wealthy should not be increased because if they keep their money, they will, through the free market, create the jobs. \u00a0Since that is obviously not working, we are told that they are keeping their money parked on the sidelines only because because the regulatory environment is too uncertain to allow them to invest.\u00a0 Both major political parties are responsible for that.<\/p>\n
But much of today\u2019s wealth creation is not coming from the free market.<\/p>\n
This is true in New Mexico more than in most states, with our national laboratories and military bases, and the industries that serve them, underpinning so much of our economy.\u00a0 But that\u2019s just the beginning.<\/p>\n
Are you as sick as I am of those obnoxious TV ads for auto insurance?\u00a0 That looks like vigorous free market competition, except that the market exists only because state law requires all drivers to buy the insurance.\u00a0 Even if the law is unevenly enforced (yes, we know!), this market was made by government.<\/p>\n
Several lines of insurance are like that.\u00a0 Companies may be competing with each other, but they are selling to consumers who have little or no choice but to buy the product, and the product itself is highly regulated. \u00a0\u00a0\u00a0(I have previously written about New Mexico title insurance.)<\/p>\n
The recent \u201cpay to play\u201d scandal, involving several billion dollars in public investment funds, reminded us of how a few investment experts get rich advising government on investing taxpayer money.\u00a0\u00a0 Millions of dollars were paid to agents and marketers to steer New Mexico\u2019s state investment funds to favored firms. \u00a0\u00a0Aside from the scandal, the industry regards the size of the fees as legitimate reward for handling that much money \u2013 and that much money is commonly found in government funds or other regulated institutional funds.<\/p>\n
An oil man recently told me about an underreported aspect of New Mexico\u2019s notorious \u201cpit rule.\u201d\u00a0 The rule imposes new standards for how the \u201cpits\u201d created by oil drilling must be cleaned up.\u00a0\u00a0 Did you think the controversy was between the oil industry and environmentalists?\u00a0 Not quite, says my oil man friend.\u00a0 The oil industry\u2019s cost is the disposal industry\u2019s profit.\u00a0 Somebody\u2019s making money from that regulation.<\/p>\n
And we learned a few weeks ago that the company with the contract for \u00a0Albuquerque\u2019s \u201cred light camera\u201d program was also funding the publicity campaign to continue the program.<\/p>\n
Professional athletes, admired national symbols of individual achievement, play in taxpayer-funded fields and stadiums, with team owners forcing cities to compete for the most lucrative deals, in leagues protected from competition by anti-trust exemptions.\u00a0 New Mexico\u2019s investments in film industry infrastructure are threatened by more generous subsidies from other states. \u00a0Much of what is done in America these days in the name of entrepreneurism involves devising clever new ways to make money from opportunities created by government programs, government spending, or government regulations, from school milk programs to highway construction, scientific research and industrial safety.\u00a0 Not exactly the Steve Jobs model.<\/p>\n
This is not to denigrate the many business people who work hard to provide quality, cost-effectiveness products and services to government or to citizens because of government \u2013 or the value of those services themselves. \u00a0\u00a0But I wish that when we talk about tax and economic policy, we\u2019d restrain the pious platitudes about the virtues of the free market.<\/p>\n
Triple Spaced Again, \u00a9 New Mexico News Services 2011<\/p>\n","protected":false},"excerpt":{"rendered":"
The death of Apple cofounder Steve Jobs, who was well and justly eulogized in the national media, offers perspective on the meaning of the free market.\u00a0 Jobs became an icon of the free market by creating products that people bought … Continue reading