May
18
2024

Hayek Weeps

[Amazon Link]
(paid link)

Google's AI summarizes Hayek's views about the "price system":

[A] free price system is essential for communicating information and coordinating transactions.

Yeah, I suspected that. Cato has brought out a book edited by Ryan Bourne, our Amazon Product du Jour, that details the many ways government interferes with that communication. Bourne's contribution is a defense of a sliver of that price system, junk fees. They're unpopular! But: "Junk Fees" Typically Serve an Important Purpose.

Charging extra for specific preferences, such as a seat selection on a flight, enables lower basic prices, increasing access to no-frills options for lower-income customers, while allowing businesses to customize their services to individual customers’ preferences. Airlines unbundle in-flight food and checked bags, for example, leading to more profit opportunities and lower base fares. Yes, “price discrimination”—charging various customers different amounts for the same product—can sometimes be harmful to customers on net. But banning such unbundling when consumers put wildly different values on certain services can price out poorer consumers and compel others to pay for services they neither want nor need.

Likewise, overdraft fees from banks help disincentivize costly behavior. Banks incur costs and face heightened risks when customers overdraw their accounts. Overdraft charges help deter this behavior in a well-targeted way, by imposing charges on those customers whose accounts become overdrawn. Capping or constraining overdraft fees doesn’t eliminate these costs and risks; it just means someone else must be charged for them in a different way. Banning overdraft charges thus means higher prices for some other subset of a bank’s customers.

Pretty sensible, right? And yet…

Under the Biden administration, the government has launched an all‐​out “war on junk fees.” This “war” has covered fees charged by airlines, concert venues, and much more. It has even spread to financial services. For instance, Senator Sherrod Brown (D‑OH) has said, “Credit card late fees are the most costly and frequently applied junk fee.”

Yet the administration has been curiously silent on all of the fees charged by the government itself. From the Internal Revenue Service to local libraries, there is no shortage of fees charged by the government. To get a better sense of these fees, the table below features 101 different late fees charged by the government. Rather than jump to restrict the freedoms of the private Americans trying to operate businesses, the administration should take some time to reflect on its own activities.

That's from a blog post at Cato from Nicholas Anthony: 101 Late Fees Charged by the Government. I believe he might live in Southampton, NY, because numbers 89-101 of the tabulated gotcha-fees are exacted by that town's government on its citizenry.

For the record, the Portsmouth (NH) Public Library does not charge late fees. I'd imagine they get pretty naggy if you keep a book at home for more than a few days, though.

Also of note:

  • "Consumer Reports Jettisons Objectivity on       " has been a fill-in-the-blank headline for years. E. Calvin Beisner and David R. Legates do the honors at AIEr: ‘Consumer Reports’ Jettisons Objectivity on Climate Change.

    Consumer Reports. You probably have heard of it, as it has been around since 1936. Since then, it has offered valuable information to assess the safety and performance of many products and services, and has come to be widely trusted. So, you can understand why we were intrigued when it issued a blurb in one of its latest newsletters about…climate change. Wait…what?

    Consumer Reports maintains credibility by conducting its own evaluations based on its in-house testing laboratory and survey research center. It is lauded because its website and magazine accept no advertising, and it buys all the products it tests. As a non-profit organization, it has no shareholders to be beholden to. In summary, it is completely independent of the industries it investigates, so its evaluations are not affected by anyone or any product it reviews.

    In fact, I'd have to say that Beisner and Legates go too easy on CR in the above. Before I let my subscription lapse, I noticed that their "evaluations" were based more often on reports from their readers, filling out surveys. Also

    • Back in 2007, they were copacetic with government regulations for clothes washers that left your clothes dirty.
    • In 2008, I noticed they used marketing gimmicks that they would scorn corporations for using.
    • In 2009, they owned up that they'd misdirected their subscribers about low-phosphate dishwasher detergents.
    • They shilled dishonestly for Obamacare. (Also see William Jacobsen.)
    • In 2018 they took a similar anti-consumer stand, cheering for dishwasher regulations that made getting your dishes clean "more difficult, time-consuming and expensive."
    • And the same year, they came out with an obviously dishonest anti-consumer argument for stringent fuel economy standards.
    • And also that same year, I noticed they charged their paid subscribers extra for full access to information on their website that they didn't put in their magazine.
    • And in 2019, I noticed they went "full Orwell" with an article headline "Pushing for EV Choices". Which actually favored reducing consumers' choices by mandating a minimum quota for EVs as a fraction of total vehicles sold.
    • Also in 2019 they came out against tipping (and more or less advocated government abolish it.)

    So it is unsurprising news that Consumer Reports is taking a "climate change" stand that Joe Consumer will experience as higher costs and lousier products.

  • Speaking of anti-consumer moves… Here's something that an actual consumer advocacy organization would oppose, as reported by David Harsanyi: Biden's tariffs will make us pay more for cars we don't want, but are forced to buy.

    Not long ago, President Biden promised to transform the American auto industry — “first with carrots, now with sticks” is the analogy The Washington Post used.

    Now, I don’t know about you, but I’m not sure I’d trust the president to drive my car, much less dictate the future of industrial policy.

    Yet Biden implemented draconian emissions limits for all vehicles, ensuring that within nine years 67% of all new passenger cars and trucks will be electric.

    In the old days, a centralized state controlling manufacturing and commerce, production, prices, wages and conditions in our biggest sectors would be called “fascist.”

    Today, we simply refer to it as the Green New Deal.

    I find the one-sentence-per-paragraph style irritating (it's the New York Post), but Harsanyi makes sense.