Articles are available for reprint as long as the author is acknowledged: Domenick J. Maglio Ph.D.

Friday, August 11, 2006

Business is Easier to do in America: Keeping the Bureaucrats at Bay

Carol straps her toddler into the car seat and tells her seven-year-old son to put on his seat belt and off she goes to begin her business for the day. First stop is back to school clothing for her son’s first day at school. Then to the bank for her husband’s business deposits, grocery shipping and lunch with a friend before returning home for the toddler’s nap. The completion of these tasks is predicated on an effective pace of doing business. This expectation of quick service is a reality in America but it is not in most of the world. Americans are a busy goal oriented people because we can get things done.

America makes it relatively easy to do business. It only takes a little time visiting other countries to understand why we are fortunate to be Americans. Everything is much easier to accomplish in the states. But even here it is becoming more difficult. Government regulation is becoming a nuisance creeping into many aspects of our lives. Although it is minimal in comparison to the structural obstacles faced by most other nations, we still must remain vigilant or we will corrode our entrepreneurial spirit.

An acquaintance of mine in Sicily has waited several years to obtain a license to do tourist excursions. So far he has not been able to enter the profession even though he has the knowledge, skill and resources to compete in the field. He is locked out on the whim of local bureaucrats. He told me he has to wait for bureaucrats to decide when and how many additional licenses to allow. The people who are chosen for the license are often chosen by who they know not what they know.

Our local, state and federal governments have not been able to directly limit occupational licenses to stifle business and encourage graft. As long as we complete the requirements somewhat based on merit and pay the fee we can enter a particular career.

In many other societies government bureaucrats have the arbitrary power to determine what is good for the state. Micromanaging the economy has historically been shown to be inefficient leading to a stagnant society.

America has enjoyed economic freedom creating a dynamic nation. We get quick, efficient service almost anytime of the day. There is no two- hour siesta or formal and informal holiday of just closing the shop without notice for whatever reasons. Banking is a 5-15 minute process not half a day. Shopping for almost anything is at the consumer’s convenience not the business owner’s. Small business owners understand that meeting the customer’s needs leads to a successful enterprise.

We still enjoy driving or flying from place to place with minimal delay. Renting a car is a quick process with a clear and established means of determining the price. There is no need to take time to scrutinize the charges to keep the price that was agreed upon.

Our infrastructure is developed for making business easier and more efficient rather than appeasing local special interests. There are plenty of parking areas available for customers to park and do business. Our streets are sufficiently wide, clearly marked and without double parked cars. Streets usually go in both directions or if one-way do not end abruptly with a “do not enter” sign forcing the driver to make a quick decision to go right or left not knowing how to proceed in the right direction.

Anyone interested in purchasing a new or used home can find real estate sales people to assist them on every corner. Builders are ready and willing to meet a customer’s every desire and demand for a price. Loans are readily available to people with little savings or even poor credit records.

Any child who wants an education can get an excellent one if willing to pay the price. Even a person who chooses not to compete in formal learning can reach the American dream through hard work. There is no better evidence than the millions of immigrants who have achieved the American dream through their efforts.

In America we have the freedom to enter any career as long as we meet minimal requirements. The process is open to all. The decision is not up to a centralized bureau but the initiative of the person.

We as a people will lose our spirit if we do not resist the tentacles of government dictating the way we do business. Bureaucratic minions decreeing more regulation will not only sap our vitality but narrow our vision of what can be. We must not allow large multinational corporations to use their power through Washington lobbyists to rig the rules making small businessmen unable to do business.

Freedom for small businessmen to compete is the lubricant that keeps our economy humming. Business without governmental interference creates fertile ground for American ingenuity and overall optimism. This makes us especially blessed in the eyes of the world.

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Wednesday, August 02, 2006

The Supply and Demand Hoax

Someone sneezes in Crete or North Korea shoots off a missile that self-destructs in 45 seconds or China increases its imports of building material: the inevitable result is the skyrocketing price of crude oil.

The price of gas steadily increases although it rarely goes down. Straight-faced politicians tell us it is simply a result of the “Law of Supply and Demand”. In 2006 this reasoning is a pathetic attempt at placating us while anyone connected with the oil industry rakes in the dollars.

In an ideal world, according to Adam Smith, as the supply of a commodity goes up, the price comes down to attract more buyers and as the supply goes down the price goes up. As individuals realize the great potential for making a profit they are motivated to increase the supply. This greater supply causes the price to go down. These are the forces of supply and demand.

Our economy has progressively moved away from allowing these free market forces to operate. We are living in a regulated world. The modern oil market is anything but free. It is not being shaped by competitive forces. It is being manipulated.

The following are blatant examples of interference with the laws of supply and demand. Our government has been hijacked by special interests ranging from speculators, to environmentalists, oil producing nations and politicians. This has created an oil policy that does not serve the general public but does serve the special interests and the politicians who are trying to be re-elected These self-serving influences are anything but free in shaping the market. The result has been the following:

Denying the opportunity to explore for oil.

Limiting the number of refineries that has remained constant for the past 30 years.

Arbitrarily creating the need for all kinds of artificial blends of oil. This has made the process more complex and more expensive.

Dictating the amount of oil pumped internationally through a cartel of producers (OPEC) for their perceived national interests.

Speculating is done through a circus like process to increase the price of oil. By buying up all the available oil groups of investors essentially corner the market. This allows them to set the price. They have a vested interest in emphasizing every negative event worldwide and ignoring positive ones to insure a substantial profit.

The following is a comprehensive plan to unleash the forces of the free market by reversing the power of the government, OPEC and environmentalists.

Government should not only allow but encourage the drilling for oil in Anwar and offshore USA. This will increase our supply of oil. It is lunacy to have Cuba drill for oil in association with China just miles from Key West while American entrepreneurs are unable to tap these resources. The environmentalists were stunned into silence when there were no catastrophic oil spills affecting coastal areas associated with off-shore drilling during the violent hurricanes of the past several years

All forms of energy conservation and new sources of energy should be made a priority. Solar, nuclear and wind power should be encouraged through tax breaks especially when less technologically advanced countries such as Turkey and Greece currently have extensive solar and wind power programs.

Laws restricting the building of refineries should be removed. Instead tax incentives should be used to motivate entrepreneurs to begin construction. This will prevent oil companies from making exurbanite profit margins

Fuel blends should have a minimal national standard. Any state that wants to up their standard and the price could do this on a state-by-state basis. Environmentalists can pay higher prices for whatever blend they choose.

These steps should be taken to increase the supply as well as decrease the demand for oil. This will quiet the whining of political hacks that are disguising nonsensical failed policy behind the mask of false economic law.

As Americans we pride ourselves on our freedom to do business while keeping the government’s sticky fingers out of our pockets. Our strong opposition from both the right and left of the political spectrum to the eminent domain Supreme Court decision put all segments of governments: local, state and federal, on notice to back off from destroying our right to private property. Our reaction was loud and clear.

We need to do the same with these ridiculous laws governing our energy policy. We need to raise our voices to pressure our government to unleash the forces of competition.

We have been free too long and are too sophisticated to swallow the hogwash fed to us by our leaders. Our current politicians in their pandering to special interest groups to get re-elected seem to have forgotten the interest of the people and the good of the country.


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