It’s Tuesday, November 8th, 2011….but before we begin, as a public service and in the spirit of bi-partisanship, The Daily Gouge interrupts its regularly scheduled programming so that Team Tick-Tock might offer this thought, courtesy of Townhall.com:

“If we all stop fighting for change, all of our progress could be erased one year from now”?!?  Only if we’re lucky!  Here’s hoping….and praying….for such a change.

Now, here’s The Gouge!

First up, in a move contributor Bill Meisen thought evoked George Costanza fleeing from the kitchen fire….

‘Occupy D.C.’ Goons Push Elderly Woman Down the Stairs

Occupy DC Protesters assaulted conservatives as they exited an Americans For Prosperity “Tribute to Ronald Reagan” dinner.

This elderly woman, 78 years old, rode 11 hrs on a bus from Detroit to attend the dinner. After the attack she was taken to hospital with multiple injuries, a bloody nose which developed after the fall, and a large knot on her head. After x-rays and a CAT scan, she was released the following morning with cuts and large bruises.

After inflicting injury on the elderly, three other members of the Rachel Corrie Club hurled themselves in front of an automobile as it passed through an intersection (yes, OWS; the driver had a green light!) adjacent to the convention center.  Hey, sometimes you’re the windshield; here’s hoping any future Occupy-whatevers seeking to emulate Ms. Corrie enjoy being the bug.

Meanwhile, as our next item, courtesy of Jeff Jacoby and Townhall.com, details, assuming OWS demonstrators could pull their heads out long to enough to look around, here’s a bit of government malfeasance worth their time and effort:

Medallion Madness

Here’s one for the Guinness World Records people: Two New York City taxi medallions were sold last month for $1 million apiece. That’s the highest price ever paid for the right to operate a car as a taxicab in The City That Never Sleeps. It’s also an expensive lesson in the harm caused to consumers and would-be entrepreneurs by over-regulation and the strangling of competition.

By law, every cab in New York has to have an official medallion — the numbered metal plate nailed to the hood — but the number of medallions is fixed at 13,237. When the city first issued taxi medallions in the 1930s, they cost $10 each. But before long the demand for taxi ownership had outstripped the limited supply of medallions. Since City Hall wasn’t issuing new ones, the only way to get a medallion was to buy one from an existing owner. Over time the value of those metal tags went through the stratosphere.

In the years after World War II, a New York City taxi medallion could be had for $2,500. By the mid-1970s the going price was $50,000. In 1985, when a medallion changed hands for $100,000, it made the front page of The New York Times. That sale was arranged by a “taxi financing specialist” named Nat Goldbetter, a one-time cabdriver who discovered he could make a better living arranging medallion sales on the secondary market. By coincidence, it was Goldbetter who arranged the sale of the million-dollar medallions last month, landing him again on Page 1. “Nobody ever thought the medallion would get to this point,” he marveled.

In a rational market, Goldbetter’s industry wouldn’t even exist. A taxi medallion, after all, has no intrinsic value — it is merely the government’s permission to use a car to transport passengers for a fee. Acquiring a medallion isn’t like acquiring a dental practice or some other going concern: It doesn’t come with a built-in customer base or first dibs on popular routes. It doesn’t include the price of gas or insurance, let alone a car. A medallion represents nothing but official approval to be in the cab business. No one has to invest a fortune to get the government’s OK to sell tacos or put out a newspaper or practice podiatry. Why should anyone have to invest a fortune — or hire a “taxi financing specialist” — to get the government’s OK to own a cab?

The medallion system is a classic illustration of what economists call “rent-seeking” — manipulating the political system to gain economic benefits without providing any additional value to society in exchange. Imposing caps on the number of taxis enriches existing owners with windfall profits. But by making the cost of cab ownership obscenely high, it prevents countless would-be cabbies from going into business for themselves. And by stifling competition, it drives fares through the roof while lowering the quality and availability of service.

New York isn’t alone in blighting its taxi market like this. In Boston, which also adopted a medallion system in the 1930s, the little metal plates now sell for $400,000 and cab fares for most rides are the highest of any big city in North America. (Sam Adams must be rolling over in his grave!) The number of cabs is limited to 1,825, which is why trying to get a taxi in the city’s outlying neighborhoodscan be so tough. Cabbies — most of whom can’t afford a medallion of their own and instead must pay stiff fees to lease somebody else’s — naturally gravitate to the most lucrative routes.

Even more obnoxious is the government-protected monopoly in Milwaukee, which in 1991 imposed a citywide cap of just 321 taxis, yielding a ratio of 1 taxi for every 1,850 residents. (By comparison, the ratio in Boston is about 1 to 340; in Washington, DC, where the number of cabs is not artificially limited, it’s 1 to 90.) The cost of a taxi permit has soared from $85 to $150,000, which is well above the price of an average Milwaukee house.

“In the classic story of entrepreneurship, someone starts a taxi business in order to save up enough money to buy a house,” says attorney Anthony Sanders. “In Milwaukee, you need to save up enough money to buy a house just to start a taxi business.” Sanders works for the Institute for Justice, a public interest law firm that litigates around the country in defense of the right of individuals to earn a n honest living. The institute, which successfully defended reforms that ended a taxi cartel in Minneapolis, recently filed a lawsuit challenging Milwaukee’s cap on taxi permits as unjust and unconstitutional.

Can you imagine City Hall trying to fix the number of shoe stores or web designers or CPAs allowed to operate in town? Arbitrary limits on the number of taxicabs should be considered just as ridiculous. The government has no right playing favorites, or crushing competition. The Institute for Justice describes itself as advocating for fairness and economic liberty; what it really seeks to protect is the American Dream. In Milwaukee today. In New York and Boston, perhaps, tomorrow.

Moving from the ridiculous to the just plain stupid, the WSJ offers its insight into The Obamao’s latest attempt to go….

Student Body Left

The President wants everyone in college on Uncle Sam’s dime.

As the default rate rises on federally backed student loans, President Obama has responded with a plan to make education lending even more expensive for taxpayers. That’s hard to do, but he’s determined.

In his first student-lending reform, which was rushed through the Senate as part of ObamaCare, Mr. Obama added $1 trillion to the federal balance sheet over the next decade by eliminating private lenders. Stage two, which he offered recently at the Denver campus of the University of Colorado, added easier repayment terms and debt forgiveness. Who says Uncle Sam is a scrooge?

Specifically, Mr. Obama wants to accelerate an “income-based repayment” option to forgive more student debt and limit monthly repayments for graduates earning low salaries. Thanks to the 2010 law, this change is already scheduled to take effect in 2014. But in Denver he said, “I’m here to announce that we’re going to speed things up. We’re going to make these changes work for students who are in college right now. We’re going to put them into effect not three years from now, not two years from now—we’re going to put them into effect next year.”

It’s good to be the King—even if it’s not legal. The 2010 law clearly states that the new repayment option is “for new borrowers on and after July 1, 2014.” GOP sources in the House and Senate tell us that the Administration can probably make these changes using the authority in a related program, but they doubt that the President can put them into effect next year.

That’s because such changes cannot be enacted by executive order. They fall into a regulatory category in which “negotiated rulemaking” is required, meaning the government must convene a panel to consider the proposals. Given the various requirements for rule-writing and allowing for public comment, Capitol Hill staff say there’s not enough time to put these rules in place by next school year.

Assuming the panel approves these rules eventually, they will cost taxpayers $575 million a year, according to the Congressional Budget Office’s scoring of the 2010 law. Once in effect, borrowers will not have to pay more than 10% of their “discretionary income” each year, regardless of how much they owe. The government defines discretionary income as the difference between the borrower’s adjusted gross income and 150% of the federal poverty line. If the money isn’t completely paid back in 20 years, the remaining debt will be forgiven.

That’s right. Wait 20 years and, presto, you’re student debt-free.

Remember, student loans from the government are available regardless of credit history or assets, so default rates are high and have been rising—to 8.8%, according to the most recent government data. Add the possibility that people can choose or end up in occupations that pay low salaries, and the taxpayer loses again. A student who finances an expensive education and then pursues a career with meager salaries could be sticking taxpayers with five- or even six-figure losses by year 20. The loan then becomes a very expensive grant.

It gets even more expensive for taxpayers when student borrowers take a “public service” job after graduation, thanks to a program that began in 2007. “Public servants” can get all of their remaining federal student-loan debt forgiven after only 10 years. This applies to government employees such as teachers and to workers at nonprofits (You know….like community organizers!)

It’s too early to know for sure how this will affect student-borrower behavior, but you can guess. Here we have the federal government offering significant financial incentives to encourage young people to choose what the late Irving Kristol called the politically active “helping professions” over wealth-creating businesses. Go to Georgetown, borrow $100,000 from Uncle Sam, join the Sierra Club, wait a decade and the loan becomes a free lunch.

The larger picture is that the President is pushing hard to turn college into one more new entitlement, regardless of cost or course of study. He said in Denver that “college isn’t just one of the best investments you can make in your future. It’s one of the best investments America can make in our future.”

So, he added, “we want you in school.” The only question is “how do we make sure you are burdened with less debt?” His answer (Just like every other Liberal policy or program ever created.) seems to be to give kids the money instead of loaning it to them. Along with his new plan to disguise grants as short-term debt, Mr. Obama also takes credit for doubling annual Pell grants since taking office to $36 billion.

Washington’s rising subsidies for college are a big reason that tuition keeps rising faster than inflation. Tuition and fees increased 4.5% at private colleges last year and 8.3% at public ones, according to the College Board’s latest data. Under Mr. Obama’s plan, taxpayers will provide the subsidies that allow colleges to raise their prices even higher.

And, just as with every other year since the Department of Education was formed under the Prevaricating Peanut Planter from Plains, diplomas that are increasingly worth less than the paper on which they’re printed.

Next up, today’s Money Quote, courtesy of the WSJ and one Jin Liqun, the supervising chairman of China’s sovereign wealth fund, who cast these pearls of wisdom to al-Jazeera television:

“If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society. I think the labor laws are outdated. The labor laws induce sloth, indolence, rather than hard-working. The incentive system is totally out of whack.

Why should, for instance, within [the] euro zone some member’s people have to work to 65, even longer, whereas in some other countries they are happily retiring at 55, languishing on the beach? This is unfair. The welfare system is good for any society to reduce the gap, to help those who happen to have disadvantages, to enjoy a good life, but a welfare society should not induce people not to work hard.“

The problem is, as Alexander Tytler noted, democracy (the worst form of government….except all the others) “cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury”.  Show us a welfare system that’s successfully induced people to work and we’ll start stroking the checks ourselves.

On the Lighter Side….

Magoo