Browsing the blog archives for February, 2014.

Who Decides?

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Discrimination against gays is a hot topic these days, whether it’s a bakery refusing to prepare a wedding cake for a same-sex couple or state legislators attempting to codify the rights of business owners to run their companies in accordance with their religious convictions. The political left and mainstream media are arguing that some individuals—homosexuals in this instance—have a right to demand services from other individuals in the name of “equal rights.” They’ve gone so far to label legislation that seeks to protect the right of businesses to decide who to do—or not to do—business as “anti-gay.”

They’re missing the point.

There’s a core Constitutional principle involved here. As Americans, we are free to say or print whatever we wish so long as it does not violate the rights of others. We are free to associate with whomever we choose and generally live our lives as we wish, again, as long as we don’t trample the rights of others. We do not, however, have a right to be heard when we speak or to force anyone to read what we publish. Others get to make those decisions.

I recognize that there are some close calls that challenge this basic principle. For example, is one’s drug use completely self-contained or should the state set restrictions because others will be affected by one’s abuse? This post does not seek to resolve such issues. My point is that the freedom to make business decisions in accordance with one’s personal moral convictions does not represent a close call.

As consumers, we cherish the right to shop wherever we want. For example, African-Americans are often implored to spend their money with “black-owned businesses” or shop “in their own communities.” Citizens in small towns are often encouraged to buy from locally owned businesses or purchase locally grown produce. Those of us who consider such factors when deciding where to shop are practicing discrimination. Whether or not others agree with the decisions, they are respected as individual choices.

But those on the other side of the transaction do not enjoy the same respect. Companies are told how to make hiring decisions, how much they have to pay, and what benefits they must offer. Catholic hospitals are told that they must include contraception as part of their health coverage. Private organizations cannot refuse to serve customers on the basis of race, color, religion or national origin. Now they are being told that they must transact business with individuals even when doing so violates their religious liberty.

If you think I’m overstating the issue, consider that the NFL threatened to move the 2015 Super Bowl out of Arizona if Governor Brewer signed SB-1062. Everyone seems to respect the NFL’s right to make such a decision. This is how individuals and corporations wield influence. I wouldn’t have agreed with the NFL, but I would have recognized it as their decision. I don’t have to watch the game if I don’t want to. That’s my decision.

I can understand some of the requirements placed on businesses, at least in context. Given that our laws once encouraged or required companies to discriminate against certain groups of individuals—namely Americans of African descent—one can argue that the Civil Rights Act was needed to shift society in the opposite direction. Nonetheless, anti-discrimination laws—no matter how well intended—are not the best way to address problems in a free, open, and informed society. They inevitably legalize and legitimize one form of discrimination in an attempt to mitigate another.

Consider the bakery example. If one bakery refuses to provide a wedding cake to a same-sex couple, this becomes a business opportunity for another bakery. The affected couple is free to share its experience with others, who are also free to factor this information into their future bakery decisions. In the end, each bakery is disciplined by the market and almost everyone gets they products and services they need.

It’s a shame that Governor Brewer didn’t sign SB-1062 and a greater shame such a bill became necessary in the first place. Anyone who refers to this type of legislation as anti-gay either doesn’t understand or is evading the real issue—liberty.

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Why the Venezuelan Government Pays Some Bonds But Not Others

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The socialist government in Venezuela is so short on foreign currency that it must decide which obligations to pay and which ones to forego. Caracas has been making payments to foreign bondholders on time, but hasn’t been paying the private companies that operate within the country. In fact, the government currently owes $14 billion to government partners and oil contractors, $9 billion to importers, and $4 billion to service companies. So why pay one group and not the other?

Foreign bondholders represent an ongoing source in capital for Venezuela. If payments to them are delayed, fewer investors will be willing to purchase the bonds and the government will have to offer higher returns in the future. In other words, Caracas MUST pay its debts to foreign bondholders or a key source of revenue will become more costly.

Firms operating within Venezuela are in desperate need of dollars and other currency they can spend abroad—not Venezuelan bolivares—but they don’t have much sway. Lacking a legitimate legal infrastructure and fearing a backlash from price controls to possible nationalization of their assets, local companies cannot fight back effectively. The government knows that these firms stand to lose a lot if they resist, so it takes advantage of the political situation and doesn’t pay.

This no-pay policy has already resulted in shortages and production slowdowns. Just recently, Toyota’s Venezuelan unit halted operations because it cannot get parts. President Nicolas Maduro did what Marxists always do in such circumstances. He accused Toyota of political motives and greed: “The only thing these little mangers want is dollars, dollars, and more dollars.”

There’s a lot we can learn from watching Venezuela. In this case, the lesson is about respect for private property. Free enterprise means that firms can make employ individuals and other resources as they choose. Enforceable contracts are essential; without them, bullies are free to rewrite the rules as they go along. Government is always the biggest bully because it has the power of force, and when it disrespects private property, firms and investors take note. They protect their assets as best they can, but pull back from development and further expansion. The result is a downward economic spiral.

Unlike Venezuela, the US has a vibrant, well-established economy based on a global currency. Our government need not make choices about which debt obligations to pay; it simply borrows more money. Nonetheless, the same bully tactic is at work in both nations. The list of examples is long but includes the President’s unilateral and frequent reinterpretation of Obamacare, the administration’s fixation with raising the minimum wage, and recent requirements that firms certify to the IRS that their workforce decisions are not based on health insurance mandates. All of these instances illustrate the same kind of disrespect for private property. And the President wonders why the economy just won’t move forward.

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Walmart Politics

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The National Labor Relations Board (NLRB) has accused Walmart of unfairly disciplining works who participated in recent demonstrations over the minimum wage and other working conditions. Wal-Mart is fighting the claim.

The Wagner Act of 1935 created the NLRB and granted workers the right to strike against their employers over pay, working conditions, and other job-related issues, but the demonstrations last year were really protests, not strikes. They were orchestrated by the SEIU and left-wing interests in an effort to influence public policy. Walmart did not recognize the demonstrations as “a strike” and warned workers that not showing up for work would be treated like any other absence.  Many were disciplined and some were even fired.

Wal-Mart is correct to fight the NLRB here. A strike is an employee-organized refusal to work in order to gain concessions from an employer. Actions that are organized and funded by outsiders or do not seek specific negotiations shouldn’t qualify as a strike. Legally, this is a battle over the definition of a strike. Politically, it’s a battle over the ability of deep-pocket leftist activists like George Soros to unduly influence the business practice of private firms by funding broad worker protests without recourse.

This fight illustrates an expanded progressive agenda. The right to strike was supposed to be about a balance of power between companies and workers. In recent years, an ever-expanding NLRB using tax dollars to fight on behalf of labor interests has tilted the balance in favor of workers. Now, Our Walmart and other activist groups want the right to jump in the fray as well. Make no mistake…the mid-term goal here is to unionize large, highly visible employers like Walmart, McDonald’s and Amazon, and control others through governmental mandates like higher minimum wages, protected leave, required health care, and the like.

While I certainly sympathize with Walmart on this issue, it’s ironic that the company just lowered its 2013 fourth quarter revenue and profit estimates in part because of deeper than expected cuts to Washington’s Supplemental Nutrition Assistance Program (SNAP). Walmart depends on welfare programs like SNAP, giving the firm a vested interested in maintaining big government. In other words, Walmart’s interests are best served through intrusive government in some areas and limited government in others. As true liberty-minded conservatives and libertarians, we should respect great companies but not accept their agendas without question.

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