There are good forms and bad forms of presumed government paternalism, as the disposition of one bill and the discussion about some different others filed this session in the Louisiana Legislature demonstrates.
State Rep. Steve Pylant’s HB
961 would force municipalities that receive more than half of their
revenues from speeding tickets to post signage on state roads around their
borders advertising the municipality is a “speed trap.” If they failed to do
so, money from these fines would head to the state. It passed
committee although with some dissent, albeit of the less than thoughtful
kind.
State Rep. Terry Landry
argued that to allow this would put a “stigma” on the municipality, and state
Rep. Barbara
Norton said it was a motorist decision to go too fast and thus there
appeared to be no reason for a municipality to have to pay extra for a sign. But
Pylant said if the main objective was to stop speeding, then that would be
accomplished by putting yet another warning out there, and additionally this
would have the salutary effect of impeding municipalities trying to finance
salaries and positions beyond any genuine need by squeezing out as much revenue
from non-residents (he claimed residents typically were let off with warnings)
as possible. For example, in Pylant’s backyard is Baskin,
estimated population 252, that nevertheless paid in fiscal year 2013
a part-time mayor over $12,000 a year and spent over $143,000 last year on
public safety on fine revenues of over $285,000 (down nearly $100,000 from the
previous, probably because they got wind that Pylant was going to move this
legislation), or 78 percent of its total revenue.
This is nothing more than
government finding every means possible to extract wealth from the people. And
if the bill meets both public safety needs and giving citizens the means by
which to fend off such aggressive governing that feeds the “three
felonies a day” mentality becoming more and more prevalent in government,
that’s a welcome check on government. Never forget that, because it holds
coercive power over individuals, that government itself must be regulated – by
other parts, other levels, and by constitutional rights – or else by its own
nature as it is run by
people and not angels, it becomes predatory.
By contrast, government should
not interfere with voluntary transactions among individuals that do not produce
harm greater to society than the sums of the liberties lost by individuals
through that interference, but which a
couple of bills filed do. HB
239 by state Rep. Ted James and SB
84 by state Sen. Ben Nevers would
impose strict regulations on the short-term lending industry, mirroring to some
degree those operative in some other states, on instruments colloquially known
as “payday loans.”
When James and others decry this
industry as insufficiently regulated, which they propose fixing such as by
capping annual interest on these small loans at 36 percent that is just a
fraction of what could be charged if the borrower strings out the process by
not repaying on time, using that word “predatory,” they demonstrate they don’t
know its proper definition as predation has no voluntary aspect to it. Nobody
compels someone to take out a payday loan, unlike government that can
expropriate property in tangible form or, more commonly, by confiscating wealth
from people. As previously
noted, payday lending largely is an industry where most customers have no
problem in paying back despite premium rates for some need they feel compelling
and where most customers are satisfied with the current state of regulation.
And not only would this increased
regulation cost jobs by forcing significant industry retrenchment, it would
disserve individuals who utilize the industry. Without it, many either face
bankruptcy or other adverse financial consequences, or they seek illegal
mechanisms to borrow that might put them into much greater danger than what
happens if they took out a legal loan. The vast majority of responsible
borrowers therefore are put into worse situations and probably few of the irresponsible
ones without legal access to appropriately risk-priced instruments would be discouraged
from trying to access such illegal instruments.
For the reason some people get
into an unvirtuous debt cycle is not because of the lenders, but because of
themselves. Many have poor credit records to begin with, which is why they
can’t get money legally elsewhere, and some don’t even have pressing bills to
pay. And lenders have every incentive to choose borrowers that they judge able
to pay, because it is self-defeating to have defaults, so they have little
incentive to risk assets on risky people in the hopes of trying to squeeze as
much from them as possible rather than have them default.
The over-regulation promised in
these bills in a practical sense will deprive some of a chance to make a living
and others a chance to access a service that may prevent much greater costs to
them in the future. In a philosophical sense, it assaults liberty by needlessly
depriving these people to engage in this voluntary exchange that both parties
feel benefits them, and dehumanizes those claimed to be protected by such laws
in their treatment of them as creatures incapable of taking responsibility for their
own decisions so they have to be “protected” from themselves. As such, it
creates an overbearing government yoke that, as opposed to its use under HB 961
that turns government power against itself to protect liberty, threatens
liberty.
Always useful to recall that
government unchained is far more prone to evil tendencies than business, and
thereby its activities merit closer scrutiny and control. Just as HB 961 needs
passage, HB 239 and SB 84 need defeat.
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