One Size Kills All

From Citizens for Health I learned that there is a new health-related bill that poses yet another significant threat to our lives, The Dietary Supplement Safety Act of 2010 (S. 3002). If passed this bill could financially destroy brands of supplementation and cause others to be prohibited by law, decrease the effectiveness of some products by prohibiting certain ingredients, make it more difficult to find useful information by requiring the companies to document non-essential information, and increase prices by imposing new operating costs. A nutritional company named Life Extension offers some very insightful anecdotal evidence about how the FDA abused its authority in the 80's by forcibly taking their supplements:

I was in a Walgreens last week picking up some pictures, when a recorded voice came on to the store’s speaker system announcing the heart healthy benefits of fish oil and CoQ10.

This brought a flashback to the year 1987 when FDA agents stormed Life Extension’s premises and seized these supplements, along with a brochure that described how they could help protect against heart attack.

Accompanied by armed US marshals, I vividly recall FDA agents ridiculing me about the concept that fish oil had any relationship to cardiac disorders. The sad fact in this story is the millions of heart attacks suffered by Americans because the FDA had the power for so long to censor the truth about omega-3 supplements. [Underlines changed to italics.]

Read it all.

This reminds me of John David Lewis' article about little dictators, about how laws like the one above create people who act like miniature dictators since they have the means to exercise government coercion and thus can enact their whims at will. If the above bill becomes law, not only will we suffer the practical consequences I listed but many more little dictators will also be born and unleashed into the world, causing further suffering.

And aside from all of the above, this also allows us to see the consequences of a moral-economic principle: the suffering that is caused when it is believed to be morally proper for the government to force everyone in the nation to comply with the judgment of a few bureaucrats.

In one of my earliest essays, The Sisyphean Judgment of Politicians, I detailed why politicians are doomed to failure as a matter of principle when they try to force their judgments on their constituents. Most essentially we must remember that politicians are specialized in the enactment and enforcement of law, not in nutritional study, environmental science, economic policies, and so on. Since they are not properly specialized for the tasks they undertake it follows that they cannot be expected to make specialized decisions properly. When a bureaucrat does make a practical decision in these fields we can view it literally as a matter of luck, as the odds heavily favor that they're taking on more than their skills can handle.

Because of our bureaucrats' lack of specialization and their forcing their judgment upon everyone, everyone suffers as a result when their judgment happens to be wrong. As Life Extension pointed out, millions of people may have suffered from heart disease because the bureaucrats in the FDA had the power to seize omega-3 supplements, thereby forcibly preventing consenting costumers from purchasing a product that would preserve their health, maybe even save their life. In a free economy the situation would be different: the failure of one man would serve as knowledge for other men on what not to do, and the totality of the nation would not have to suffer for the misjudgment of a few.

The danger of blanket judgments will only increase if the above act is passed, as the consequences of giving the FDA more power will be to make supplements more expensive, less effective, and less available nation-wide. The justification for the bill is that it will help make it so that only safe supplements will be available, but do we really want to the entire nation to be follow only a single standard of safety chosen by a few bureaucrats? We must reject this on moral and practical grounds, that we have a right to cooperate with each other as we deem profitable, without coercive interference, and that no politician can properly make the decisions for us.

Wesley Mouch with your Paycheck?

Another disturbing proposal is upon us. Legislators are actually entertaining the notion of dictating the pay of all employees of companies that have received government funding.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

Of course, this is but only a logical development, as would be known by anyone familiar with the nature of government intervention and money in general. When we spend money, we want to know where it is going and, if we are smart, will not finance activities we do not approve of. When the government starts paying for the operation of a business or industry the politicians involved will sooner or later act as if it were their money that had been spent, and will be suggesting, or forcing, courses of action.

What is their standard of how people should be paid?

In addition, the bill gives Geithner the authority to decide what pay is "unreasonable" or "excessive." And it directs the Treasury Department to come up with a method to evaluate "the performance of the individual executive or employee to whom the payment relates."

And how will he decide what is "unreasonable" or "excessive"? And by what process will the Treasury Department come up with method to evaluation performance? Will it be based on sound economic principles of how employers keep their employees, or by the popular opinion of voters?

This will be particularly harmful to our economy, especially at a time like this, since the government does not work from the motivation of profit as a business does. I predict that, if Geithner is granted these powers, he will take a look at some sheets and decide that everyone is being overpaid. In a free economy, the proper amount of payment is according to the economic worth of the work or the abilities of the person; in the government, the arbitrary ideas of politicians as influenced by the smiles and approval of potential voters.

Worst yet, what is to stop this from expanding even further beyond businesses that received government funds? As I argued in The Sisyphean Judgment of Politicians, any attempt by politicians to run the economy is doomed to failure as Sisyphus is doomed to have the boulder roll down the mountain, so we have a vicious circle of government creating crises and trying to cure those crises with more government.

If this continues unabated by principled thinking or cultural change, Timothy Geithner may soon be cutting your own paycheck.