Government Mandating Maximums and Minimums is Almost Always Awful

Natch

by Seton Motley, Contributing Author: Those of us who understand rudimentary economics – and/or those of us who have paid any attention at all to the last half century-plus – know the government mandating maximums and minimums is a ridiculously bad idea.

Republican President Richard Nixon imposed (wage and) price controls – maximums on what can be charged. How’d that go?

It was a part of Nixon government-mandating flurry that was subsequently dubbed “The Nixon Shock.” That doesn’t sound very good:“The centerpiece of the Nixon Shock was its controls on prices. In a market economy, freely fluctuating prices are the nervous system that coordinates supply and demand….The price controls did tame inflation temporarily, but it came roaring back within three years to double-digit levels and persisted through the 1970s because of loose monetary policy. A tight lid on a boiling tea pot can only contain the steam for a time before it explodes.

“The controls continued on gasoline, causing artificial shortages (as price controls usually do) symbolized by gas lines during the 1970s. Only when President Reagan finally lifted the controls on oil and gasoline in 1981 did the specter of short supplies finally disappear.”So government maximum mandates don’t work. How about government minimum mandates?

Minimum Wage Hikes Are Causing Businesses to Cut Jobs

Why Raising The Minimum Wage Kills Jobs

More Evidence That Increasing Minimum Wage Kills Jobs

The Evidence Is Piling Up That Higher Minimum Wages Kill Jobs

Because…duh. McDonald’s purchases labor like it purchases buns and burgers. If the price of purchase goes up – the number of purchases go down.

The avalanche of evidence is – government shouldn’t be arbitrarily imposing floors and ceilings. The marketplace should be setting the standards – based upon what We the Consumers want.

So too is it with Internet speed. In 2015, the Barack Obama Administration artificially, ridiculously raised the minimum speed for what the government says counts as “broadband” – to light years beyond what We the Consumers actually need for any and everything we do on the Web.

(Federal Communications Commission) FCC Raises Minimum Broadband Speed to 25 Mbps: “You may have thought you had a nice, zippy Internet connection at home, but if it’s less than 25 Mbps, you can’t describe it as ‘broadband’ anymore….

“(T)he Federal Communications Commission voted to change the definition of broadband Internet. Now, a connection must have a 25 Mbps download speed and 3 Mbps up to be classified as broadband. The previous benchmarks established in 2010, 4 Mbps down and 1 Mbps up, are now considered inadequate by the FCC.”

Get that colossal nonsense? Get this:

On the Web, nothing consumes more broadband than video. Whatever consumes the second greatest amount of broadband – isn’t even close to what video consumes.

In 2015, we were watching streamed HD movies…on our cellular phones, over wireless networks. Not wired – wireless. (Wired broadband – was and is faster still.) All of which is phenomenal private sector performance.

And bizarrely, the government parachuted in – and unilaterally sextupled-plus the mandated minimum for what it considers broadband.

What did the government mandating a sixfold increase in “broadband” – actually accomplish? For us – absolutely nothing. For government – quite a lot.

Every year, the FCC issues a “Broadband Progress Report.” In which the government (allegedly) assesses how the private sector is doing in deploying broadband.

And if the government determines that the private sector is failing to adequately deploy broadband – the government thereby grants itself permission to greatly increase its role in broadband deployment.

In 2015, the government six-fold-plus increased its definition of “broadband.” And in 2016, here are some of the very first sentences of its 2016 “Broadband Progress Report”:

“While the nation continues to make progress in broadband deployment, many Americans still lack access to advanced, high-quality voice, data, graphics and video offerings….Significant progress in broadband deployment has been made….However, the Commission finds that these advances are not enough to ensure that advanced telecommunications capability is being deployed to all Americans in a timely way.

“Key findings include the following:

• 10 percent of all Americans (34 million people) lack access to 25 Mbps/3 Mbps service.
• 39 percent of rural Americans (23 million people) lack access to 25 Mbps/3 Mbps.”

See what the government did there? Its new, ridiculously high, completely unnecessary mandated minimum – allows them to then ridiculously inflate the number of people who don’t have “broadband.” By their definition. Not by the definition of anyone who actually uses broadband.

What does their fake inflation get them?:“Section 706 of the Telecommunications Act of 1996 requires the FCC to report annually on whether advanced telecommunications capability ‘is being deployed to all Americans in a reasonable and timely fashion,’ and to take ‘immediate action’ if it is not.”Get that? Government gets to interlope – if government says it gets to interlope. How’s that going to end – always and forever?

Which also gets us fake news headlines like this:

US Fails its Annual Broadband Deployment Test at FCC

Thankfully, the Donald Trump Administration’s FCC is undoing the Obama FCC’s ridiculous mandated minimum – and thereby un-triggering the government’s self-appointment to unnecessarily impose itself upon the broadband marketplace.

The FCC isn’t even going back to the perfectly great speeds of 2015. They are more than doubling them – download upped from 4 Mbps to 10 Mbps.

Which gives the big-government-advocates the vapors. And which gets us fake news headlines like this:

Maybe Americans Don’t Need Fast Home Internet Service, FCC Suggests

We the Consumers find our broadband to be marvelous. As we, as reasonable people, would. (Let us not confuse upset with customer service – with upset with service performance. They are two entirely different things.) Until something comes along that requires more broadband than video – we’re really quite good.

But that can’t be satisfactory for government. Because we got here without government. So out came the fake minimum mandates. Which are now, thankfully, going away.

Because as is always the case with government minimum and maximum mandates – the results would have been simply, extraordinarily awful.
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Seton Motley is the President of Less Government and he contributes to ARRA News Service. Please feel free to follow him him on Twitter   /   Facebook.

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