Have you noticed how often government takes sides against the little guy?
Street vending has been a path out of poverty for Americans. And like other such paths (say, driving a taxi), this one is increasingly difficult to navigate. Why? Because entrenched interests don't like competition. So they lobby their powerful friends to erect high hurdles to upstarts. It's an old story.
Now, growing local governments are crushing street vendors.
The city of Atlanta, for example, has turned all street vending over to a monopoly contractor. In feudalist fashion, all existing vendors were told they must work for the monopoly or not vend at all.
"Vendors who used to paying $250 a year for their vending site must now hand over $500 to $1,600 every month for the privilege of working for the monopoly," wrote Bob Ewing in The Freeman. Ewing works for the Institute for Justice, the libertarian public-interest law firm that defends victims of anticompetitive regulation.
IJ has sued the city on behalf of two popular vendors.
In Hialeah, Fla., if you operate a flower stand too close to a flower store or if you're not constantly moving, you can be arrested.
Institute lawyer Elizabeth Foley says the regulations make "it virtually impossible to be an effective street vendor. You can't be within 300 feet of any place that sells the same or similar merchandise. That's absolutely ridiculous for the government to use its power to enact a law like that. ... These people are just trying to make an honest living, and the city is making it impossible to do so."
The law does seem designed to cripple street vending. "You have to be in constant motion, which is completely unsafe."
Raul Martinez, the mayor when the law passed, defended the rule. "You don't want to have everybody in the middle of the streets competing for space on the sidewalk without some sort of regulations. In the city of Hialeah, we're not overregulating anybody."
He says one purpose of the law is simple fairness: Street vendors don't pay property taxes. Brick-and-mortar stores must. "They also create jobs," Martinez said. "What we did back then is we got all the groups together and we came with an ordinance that was satisfactory to all of the parties at the time."
But they couldn't have gotten "all the groups" together because people who hadn't yet entered the business weren't included. How could they have been? No one knew who they would be. What the mayor did was get the established guys together. Such "fairness" regulation kills job growth and reduces consumer welfare because the entrenched interests write rules that cripple new competition.
Mayor Martinez argued that "you create an unfair advantage when you allow that vendor selling in the front of a flower shop to sell the same flowers that the flower shop sells, and to sell them at a much reduced price. That's unfair competition."
It's a fair point: Why open a brick-and-mortar store and pay property tax if you could save maybe $3,000 a year by selling from a cart?
"These are different types of business models," Foley replied. "A florist can offer professional arrangement. A florist can offer delivery. A florist has a bathroom. Air conditioning. A street vendor is out there on the street, and the way they compete is on price and convenience; you can drive up and get your flowers and go home quickly. There's nothing wrong with having two different types of business models competing near each other. It happens in America all the time.
"It's not legitimate for government to use its incredible power to make one business model have an unfair advantage over another."
As a libertarian, I'd say that the store owners' beef is with the local government that imposes the property tax, not the street vendor struggling to make a better life.
If government destroys all the paths out of poverty, the welfare state will look like the only way to help the poor.
Maybe, in addition to helping entrenched interests, that's the bureaucrats' goal.
Obama's Cloud-Based Transparency
At the dawn of his administration, President Obama opined: "A democracy requires accountability, and accountability requires transparency." Magical rays of white-hot sunlight emanated from his media-manufactured halo. And then bureaucratically engineered darkness settled over the land.
For three years, White House officials have rolled out countless executive orders and initiatives touting open government. Just this week, they unveiled plans to move federal archival records from a paper-based to an electronic system. But behind the scenes, Obama's lawyers systematically have stymied public information requests, carved out crater-sized disclosure loopholes, fought subpoenas on scandals from Fast and Furious to Solyndra, and made routine the holiday document dump.
The latest meeting of the Government Accountability and Transparency Board, attended by Vice President Joe Biden, was closed to the press two weeks ago.
The Justice Department stealthily attempted to sabotage the Freedom of Information Act last month with a regulation change that would have allowed federal agencies to legally and deliberately deceive the public about the existence of requested records. After a massive backlash, DOJ retreated and sheepishly admitted that the license-to-lie rule "falls short" of the Obama "commitment" to transparency. (Actually, it's the perfect embodiment of the administration's contempt.) The same DOJ, it should be noted, banned reporters from a FOIA training workshop in 2009.
In October, the Interior Department and Energy Department spurned attempts to gain information about the administration's $1.2 billion loan guarantee to Democrat-connected solar company SunPower. The deal, championed by powerful Democratic Rep. George Miller III, was approved hours before the program expired on Sept. 30. Miller took Interior Secretary Ken Salazar on a tour of the SunPower plant last year; Miller's son is a lobbyist for SunPower. Conservative newspaper Human Events and the nonprofit legal watchdog group Judicial Watch have now filed several pending FOIA requests.
In September, State Department officials refused to go on record during a briefing on its new global government transparency program. Earlier this spring, a ceremony to honor Obama's commitment to openness was closed to the media -- after which dutiful (sup)press secretary Jay Carney boasted that his boss "has demonstrated a commitment to transparency and openness that is greater than any administration has shown in the past."
As evidence of this historic openness, Obama flacks point to farces like last week's Thanksgiving-timed release of White House visitor logs -- which even left-wing good government activists have criticized for their incompleteness. As the Center for Public Integrity reported earlier this year, the logs (which disclosure advocates forced into the public eye after suing) "routinely omit or cloud key details about the identity of visitors, whom they met with and the nature of their visits. The logs even include the names of people who never showed up. These are critical gaps that raise doubts about the records' historical accuracy and utility in helping the public understand White House operations, from social events to meetings on key policy debates."
Occasional holiday document dumps have always been a mainstay in Washington. But the agents of Hope and Change have turned the ritual into a weekly punch line. If it's Friday, it's dump day. The plan worked. As of Tuesday, no mainstream news outlet had reported on the contents of the Black Friday document trove.
None showed interest in the nearly 60 visits from Robert B. Creamer, a convicted felon and tax cheat, left-wing Huffington Post agitator, husband of Illinois Democratic Rep. Jan Schakowsky and vocal champion of the Occupy Wall Street movement. According to the newly released records I reviewed, Creamer was at the White House five times in August 2011 meeting with various officials, including Jon Carson, Cecilia Munoz and Stephanie Cutter.
Nor has there been interest outside conservative blogs in the five White House visits by former Deputy Attorney General Gary Grindler, a key Fast and Furious scandal bureaucrat, in July and August 2011, or in the five visits from former Solyndra CEO Brian Harrison, including on Aug. 18, 2011, just before the tax-subsidized firm declared bankruptcy.
Nor did any journalism ethics mavens show any curiosity whatsoever about the Aug. 5, 2011, appearance of MSNBC host Rachel Maddow and her party of seven (names not identified) to visit "POTUS." Maddow made no mention of the visit on her August 5 show, which promoted the latest batch of White House stimulus proposals. According to the White House logs I reviewed, this was Maddow's fifth trip to 1600 Pennsylvania Ave. -- and the fourth to see the president personally.
Instead, as Newsbusters noted, a Washington Post political blogger was busy trolling Twitter for help digging up "outlandish/incorrect predictions from Newt Gingrich's past." And the only documents The New York Times is interested in crowd-sourcing are Sarah Palin's e-mails.
Team Obama's data whitewashers inside and outside the White House have given "cloud-based" a whole new meaning.
Brazil gets defense contract in return for lending Obama money
How dependent has the United States government under President Barack Obama become upon borrowing money from foreign sources to support its spending?
Would you believe the answer is: "enough to exclude a long-time U.S. manufacturer from consideration for a defense contract in favor of a foreign-based manufacturer, despite the U.S. manufacturer having invested considerable time and profits earned from their other products to develop a product that specifically satisfies the government's needs?" AINonline's Chris Pocock reports:
The U.S. Air Force has apparently chosen the Embraer Super Tucano to meet the Light Air Support (LAS) requirement. Hawker Beechcraft's AT-6 was the other contender. No official announcement has yet been made, but Hawker Beechcraft said it received a letter from the USAF that excluded the AT-6 from the hotly contested competition. The company is protesting the decision to the U.S. Government Accountability Office (GAO).
The LAS competition was designed to produce an alternative to jet combat aircraft for counter-insurgency operations. The Air Force planned to buy 15 aircraft for a training school at Eglin AFB, Fla., but had not confirmed plans to equip any of its own squadrons.
However, the U.S. was expected to supply or sell LAS aircraft to various countries, starting with 20 for Afghanistan. It was this potential that led Hawker Beechcraft and partners to spend “more than $100 million to meet the Air Force's specific requirements,” the company said.
Last month, Hawker Beechcraft completed weapons drop tests with the AT-6, a modification of the successful T-6 primary trainer on which all U.S. military pilots graduate.
Meanwhile, Embraer teamed with Sierra Nevada Corp to offer the EMB-314 Super Tucano, and said it would assemble the aircraft in a new facility at Jacksonville, Fla.
Manufacturing.net carries the Associated Press' article, which describes the size of the contract, as well as the Hawker Beechcraft's investment in its AT-6 program (emphasis ours):
WICHITA, Kan. (AP) -- The Air Force has notified Hawker Beechcraft Corp. that its Beechcraft AT-6 has been excluded from competition to build a light attack aircraft, a contract worth nearly $1 billion, the company said.
The company had hoped to its AT-6, an armed version of its T-6 trainer, would be chosen for the Light AirSupport Counter Insurgency aircraft for the Afghanistan National Army Corps. The chosen aircraft also would be used as a light attack armed reconnaissance aircraft for the U.S. Air Force.
The piston planes are designed for counterinsurgency, close air support, armed overwatch and homeland security, The Wichita Eagle reported (http://bit.ly/ud7FDM).
Hawker Beechcraft officials said in a news release that they were "confounded and troubled" by the Air Force's decision. The company said it is asking the Air Force for an explanation and will explore all options.
Hawker Beechcraft said it had been working with the Air Force for two years and had invested more than $100 million to meet the Air Force's requirements for the plane. It noted that the Beechcraft AT-6 had been found capable of meeting the requirements in a demonstration program led by the Air National Guard.
It's all the more remarkable because the U.S. company has been laying off its workers given the current economic climate.
By contrast, Hawker Beechcraft's competition for the defense contract, Brazil's Embraer, is under investigation by the SEC into possible corrupt practices. The Wall Street Journal's Paulo Winterstein reports:
Brazil's Embraer SA, the world's No. 4 aircraft maker, said Friday that an investigation by the U.S. Securities and Exchange Commission into possible corrupt practices shouldn't hurt the company's chances of selling planes to the U.S. military.
The company said Thursday that it was subpoenaed by the SEC, but Chief Executive Frederico Curado said Friday the investigation in itself shouldn't affect its ongoing bid to sell Super Tucano aircraft to the U.S. Air Force. Mr. Curado said he expects the government to announce a decision within "weeks" on a contract reportedly valued at $1.5 billion.
"This is a new process for us but as far as we understand it, the investigation won't have an impact," he said in a conference call with journalists. "Restrictions in dealings with the U.S. government would come only after a conviction."
Embraer said that the SEC and U.S. Justice Department are investigating possible breaches of the U.S. Foreign Corrupt Practices Act, which prohibits company officials from making payments to government officers to get or keep business. The company declined to give details beyond saying that the investigation is related to Embraer business dealings in three countries.
So how does the United States' federal government's need to borrow large amounts of money from foreign sources perhaps come into play in stacking the deck against of a mid-size U.S. manufacturer against the fourth-largest maker of aircraft in the world for a U.S. defense contract?
As the fifth largest major foreign holder of U.S. debt, one whose share of that debt has been growing consistently for several years, the Obama administration may well have made a strategic decision to favor Brazil's Embraer company as a reward for Brazil's growing ranking among all foreign holders of U.S. government-issued debt.
With a good portion of Embraer's Super Tucano aircraft being manufactured outside the United States, the move will increase the U.S.' trade deficit in goods and services with Brazil, which in turn, will be balanced by the U.S. government's "export" of U.S. Treasury securities to Brazil.
The move is strategic because developing Brazil as a major holder of U.S. government-issued debt would offset China's outsize influence over the United States given its status as the largest foreign holder of U.S. Treasury securities. Since China has previously flexed its muscles with respect to its interests through the markets for U.S. Treasuries, the Obama administration is likely seeking to reduce its potential influence.
That influence is substantial. Through the end of September 2011, the U.S. Treasury reports that China holds $1.15 trillion in U.S. government-issued securities directly, and another $109 billion indirectly through Hong Kong. Meanwhile, a very large portion of the United Kingdom's reported U.S. government debt holdings of $421.6 billion are actually controlled by Chinese interests. The figure currently recorded for the U.K. is largely a consequence of the nation's position as a major international banking center, which will be revised in several months time to reflect actual holdings by nation.
The bottom line is that if a comparatively small U.S. manufacturer of airplanes with a major investment in its future to develop an aircraft that can do what the U.S. government wants and can demonstrate that's the case needs to be pushed aside in favor of a foreign manufacturer with considerable ethical issues regarding its business practices, and if doing so will help it borrow more money to spend, then that's what the Obama administration will do.
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