1. Liberals;

2. Conservatives;

3. Politicians;

4.  Federal imposition of economic and social policies on states;

5. The inflation tax;

6. The Alphabet Soup of Government Agencies (FTC, FHA, IRS, SEC, CPSC, DOJ, etc);

7. Entitlement Programs;

8. Anti-Vice Laws;

9. Regulatory takings;

10. Matching socks.

I have just finished reading No One Would Listen, the account by whistle-blower Harry Markopolous of his battle with the SEC to expose Bernie Madoff.

The charges that Markopolos levels at the SEC are textbook criticisms of government regulatory bodies: incompetence, lack of interest, capture by those regulated. The characterization of the SEC is savage.

Yet Markopolos does not conclude that regulation is a waste of time; he instead calls for “better” regulation.

Why does he think such a system exists?

Loyal reader Eric Morey has challenged me to find an actual or proposed New Jersey policy that libertarians might like; here is one possibility:

TRENTON — Gov. Chris Christie says he’ll wait for assessments from his attorney general and health commissioner before making any decisions on whether New Jersey should join other states in the lawsuit challenging health care reform.

I am not a legal scholar, so I cannot say with authority that Obamacare is unconstitutional, but it sure seems suspect to me.

A majority of Americans support ending Saturday mail deliveries to help the U.S. Postal Service solve its financial problems, but most oppose shuttering local branches, according to a new Washington Post poll.

The public support for moving to five-day deliveries may bolster a new proposal to end six-day deliveries to help the mail agency trim hundreds of billions of dollars in losses by 2020.

The elimination of Saturday delivery is at best a stop-gap measure. Competition from private carriers, both paper and electronic, will almost certainly doom the Post Office to bigger and bigger losses, regardless of Saturday service.

What’s the answer? On the one hand, end the Post office monopoly on delivery of first-class mail. This will hurt the Post Office but help customers by allowing competition.

On the other hand, unshackle the Post Office.  Eliminate the Congressional requirement that it serve low-density rural areas.  Allow it to fire its unionized workforce.

That is, make the Post Office a truly private company. If it survives  under those conditions, fine. If not, that’s fine too.

Jason Riley has a nice column in today’s WSJ about the interaction between welfare and immigration policies. He correctly notes that immigrants to the U.S. do not come mainly for the welfare benefits, but he worries this could change as welfare policies, like Obamacare, expand.

I share Riley’s opposition to Obamacare, as well as his support for legal immigration. My one disagreement is his endorsement of the Friedman view on the relation between the welfare state and immigration:

In countries such as France, Italy and the Netherlands, excessively generous public benefits have lured poor migrants who tend to be heavy users of welfare and less likely than natives to join the work force. Milton Friedman famously remarked, “you can’t have free immigration and a welfare state.” There is a tipping point, even if the U.S. has yet to reach it.

Riley and Friedman may be right, but my hunch is that they have the sequencing backwards: we should liberalize immigration because it will restrain the welfare state. The European examples that Riley cites might seem to argue against this view, but these countries still restrict immigration significantly.  My claim is that major expansions in legal immigration would cause substantially diminished support for generous welfare spending.

Imagine that a bi-partisan budget commission recommended two changes to Social Security:

1. a cut in the benefit schedule that reduces the present value of benefit payments by 50%.

2. an increase in tax rates that raises the present value of revenue collections by 25%.

How should libertarians react?

My guess is that most would say the benefit reduction is good and the tax increase is bad. They would not feel comfortable endorsing the package, however, and would argue for the benefit reduction without the tax increase.

This position is understandable; the tax increase, by improving Social Security’s solvency, could make it harder to cut benefits even more in future.

Yet absent a compromise, benefits may not get cut at all. Perhaps at some point a national debt crisis will generate major benefit cuts without tax increases, but history provides little hope for that approach.

An additional consideration, moreover, is that the distinction between Social Security taxes and other taxes is an accounting gimmick. If Social Security tax revenues are not sufficent to pay promised benefits, Congress will use other tax revenues. Under this view, a benefit cut combined with a tax increase is actually just a benefit cut; the tax increase has (implicitly) already occurred.

This implies that libertarians and others worried about the U.S. fiscal outlook might reasonably support budget compromises that both reduce expenditure and raise taxes, so long as the expenditure reduction is larger than the tax increase.

The qualification, of course, is that real-world budget compromises are typically complex and laden with accounting gimmickry; small and ephemeral expenditure reductions are a Trojan horse for big tax increases. In this case the libertarian response is clear.

But if a compromise genuinely shrinks the net liabilities of Social Security, or any entitlement program, then libertarians should not dismiss it out of hand.

Bumper sticker seen today in Natick, MA:

Voldemort Votes Republican

And you thought only Republicans get overwrought about the other party.

This video hits all the right issues about legalization.

Philip K. Howard on fixing our schools:

Public school failure can be traced directly to the technique of reform: centralized legal dictates. A steady accretion of law since the 1960s has smothered personality and individual responsibility in schools. There’s no oxygen left for educators to build healthy school cultures. …

Law is brilliantly ineffective as a management tool. It is too rigid and doesn’t account for the need to adjust to particular circumstances.

Read the whole thing; lots of good stuff.

REDWAY, Calif. (AP) – The smell of pot hung heavy in the air as men with dreadlocks and gray beards contemplated a nightmarish possibility in this legendary region of outlaw marijuana growers: legal weed.

If California legalizes marijuana, they say, it will drive down the price of their crop and damage not just their livelihoods but the entire economy along the state’s rugged northern coast.

So, if legalizing marijuana is bad for the economy, then prohibiting a good that is currently legal should be good for the economy. And to get the biggest bang for the buck, we should prohibit something that everybody wants.

I guess that means we should outlaw food.