Atlantic Sentinel

Category: Free Market Fundamentalist

Free Market Fundamentalist is an Atlantic Sentinel blog with an exaggerated faith in laissez-faire capitalism.

  • Everyone Thinks the Netherlands’ Rental Reforms Are Nuts

    Amsterdam Netherlands
    Muntplein in Amsterdam, the Netherlands, March 27, 2021 (Unsplash/Ruben Hanssen)

    The Netherlands is becoming a case study in how not to regulate rents. An expansion of rent control is driving investors and landlords to despair. Appeals by banks, pension funds, the International Monetary Fund (IMF) and Organization for Economic Cooperation and Development (OECD) are falling on deaf ears in The Hague.

    The European Commission is the latest international body to urge the Dutch government to reconsider. In its annual policy recommendations to member states, it cautions the Netherlands that its “policies regarding the private rental market risk undermining its development.”

    [T]he private rental market is relatively small, which results in a limited supply of affordable and available alternatives to buying a house. The lack of affordable rental housing also undermines labor mobility.

    There are 440,000 job openings. 360,000 Dutch people are still unemployed. A shortage of affordable housing, especially in major cities, is a factor. The average waiting time for a nonprofit social-housing apartment in Amsterdam is thirteen years. Yet the government would make it less lucrative to rent out homes for profit. (more…)

  • Dutch Government Mistakes Reagan’s Warning for Advice

    Ronald Reagan
    American president Ronald Reagan at Rancho Del Cielo in California, August 31, 1985 (Ronald Reagan Presidential Library)

    Ronald Reagan once quipped about government’s view of the economy: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

    For the American president, it was a cautionary tale. In the newspaper Trouw, I argue the Dutch government seems to have mistaken it for advice. (more…)

  • Dutch Labor Reforms Will Do Little to Encourage Hiring

    Karien van Gennip
    Dutch labor minister Karien van Gennip in The Hague (ANP/Laurens van Putten)

    Instead of making it easier for companies to hire workers on a permanent basis, the Dutch government is banning various types of temp work and making freelancers more expensive.

    Labor minister Karien van Gennip argues:

    Too many workers with a flexible contract or who are self-employed don’t have … security. At the same time, especially small business owners are reluctant to hire people on a permanent basis. This needs to change.

    Yet she is doing little to reduce risks for entrepreneurs while taking abundant steps to give workers more “security”. (more…)

  • Abolish the NHS

    St Thomas Hospital London England
    St Thomas’ Hospital in London, England, January 31, 2019 (iStock/Ray Lipscombe)

    Ambulance workers and nurses are planning to strike in England and Wales on Monday in what could become the largest walkout in the National Health Service’s history.

    Emergency care will still be provided, but planned operations and outpatient services are being postponed.

    Unions says nurses and paramedics are overworked and underpaid. They are demanding a 5 percent increase in wages over inflation, which is 14 percent. The governments of England and Wales have given an average of 4.75 percent with a guaranteed minimum income of £1,400 per month.

    Health workers deserve a raise, but this won’t solve the NHS’s many other problems. At some point Britain has to accept the NHS is the problem. (more…)

  • Dutch to Ease, After Tightening, Building Rules

    Hugo de Jonge
    Dutch housing minister Hugo de Jonge visits a building site in Rijswijk, January 14, 2022 (BZK)

    The Dutch government wants to make it easier to build new homes — after it made it harder.

    Housing minister Hugo de Jonge, a Christian Democrat in a coalition of four parties that includes my own, told parliament he wants to defeat NIMBYism with four proposals:

    We owe it to all those looking for a house to do whatever we can to speed up home construction.

    I wish he had thought of that a year ago, when he started the job. (more…)

  • How Government Creates Shortages of Doctors

    Westmaas Netherlands doctors office
    Patients wait to see a general practitioner in Westmaas, the Netherlands (LHV)

    Rural France is running out of doctors. Politico Europe reports that 7 out of 68 million French citizens don’t have a referring general practitioner. 30 percent live in a region where access to physicians is poor.

    France is not alone. Small towns in the Netherlands and the United States are also medically underserved.

    Partly the shortage is due to young doctors and nurses preferring to live and work in cities, much like young professionals in general.

    Higher-than-usual burnout rates during the pandemic exacerbated the shortage.

    But government policy also plays a role. All three countries for years kept the supply of doctors low while demand for health care, as a result of longevity and advances in medicine, went up. (more…)

  • Responding to American Protectionism Has Downsides for Europe

    Joe Biden Emmanuel Macron
    American president Joe Biden greets French president Emmanuel Macron during the opening session of the United Nations Climate Change Conference in Glasgow, Scotland, November 1, 2021 (White House/Adam Schultz)

    Europe has no good options to respond to American subsidies for green energy and electric cars.

    Politicians are right to worry that the tax breaks and buy-American provisions of the Inflation Reduction Act, coupled with high energy prices due to the war in Ukraine, could convince European companies to make the jump across the Atlantic.

    But duplicating American protectionism would make things worse. (more…)

  • Rent Control Keeps Failing. Countries Keep Trying

    Madrid Spain
    The sun rises over the Gran Vía of Madrid, Spain (Unsplash/Arw Zero)

    So politicians understand how prices work after all.

    Spain, Germany and the Netherlands are capping prices of electricity and heating for consumers. Energy providers are still paying high prices for oil and record prices for natural gas due to Russia’s war in Ukraine, so governments will make up the difference.

    The price energy providers charge is based on their costs plus a profit. If they can’t pass higher costs on to consumers, they would either have to cut their own costs, for example by laying off staff; scale up, which isn’t easy in Europe’s heavily regulated energy market; or fail.

    Somehow that logic is lost on many when it comes to housing. The same three countries have capped, or are capping, rents, but there is no compensation for landlords. Nor for developers, who can sell fewer rental apartments.

    Landlords make up the difference by underinvesting in maintenance. Developments simply don’t happen.

    Which are then used as arguments for even more regulation. (more…)

  • Dutch Child Care Would Pay Price for Government’s Failure

    Amsterdam Netherlands daycare center
    Daycare center in Amsterdam, the Netherlands (Klein & Co)

    Dutch child-care providers would pay the price for the government’s failed child-care policy.

    The last Dutch government resigned over a scandal in child-care benefits. Thousands of parents were wrongly accused of fraud.

    The current government, a coalition of the same four parties (including my own), would replace the benefits to parents with subsidies to child-care providers. Child care would be almost entirely subsidized with parents paying just 4 percent of the costs.

    Industry groups expect an increase in demand while the sector is already understaffed.

    Experts fear a loss in competition and innovation. All but the most expensive child-care providers would be forced to standardize their programs and their rates in order to qualify for subsidies. (more…)

  • Biden Would Repeat Dutch Mistakes in Regulating Freelancers

    Joe Biden
    Then-former American vice president Joe Biden gives a speech in Des Moines, Iowa, January 4, 2020 (Phil Roeder)

    President Joe Biden would make the same mistake as the Netherlands in regulating independent work.

    In 2015, the European country required employers to put freelancers on an open-ended contract after two years of work.

    In an attempt to bring more workers into regular employment, a coalition government of the center-left Labor Party and center-right liberals also made it costlier and more time-consuming for companies to fire employees, and it increased severance pay.

    The reforms didn’t cause a shift from freelancing to salaried employment. They did destroy some 77,000 — mostly part-time — jobs in child care, hospitality, nursing and other industries, according to an analysis by ABN Amro bank.

    After Labor lost the election in 2017, the liberals formed a government with center parties and repealed the reforms. They made it cheaper for companies to hire, and easier to fire, employees. Freelancers were allowed three contracts per employer every three years.

    Employment rose. There are more Dutch people in work than ever before. Almost every industry, from construction to schools to the national railway, struggles to fill vacancies. (more…)

  • Manchin’s Permitting Reforms Don’t Go Far Enough

    Wasco Oregon wind turbines
    Wind turbines outside Wasco, Oregon, July 1, 2019 (Unsplash/Dan Meyers)

    West Virginia Democrat Joe Manchin, the most conservative in the Senate, has proposed to make it easier to build energy plants and infrastructure.

    Manchin was promised permitting reforms for supporting the Inflation Reduction Act; really a health-care and green-energy spending plan.

    But other Democrats are skeptical, arguing Manchin’s Energy Independence and Security Act would benefit fossil fuels and nuclear power in addition to renewables. Republicans don’t think the reforms go far enough.

    Which would normally suggest to me Manchin had found the right balance, but in this case the right has the better of the argument. (If you agree America must massively expand clean energy, which unfortunately few Republicans do.) (more…)

  • Overregulation Makes Child Care More Expensive in DC

    Washington DC
    View of Washington DC with the United States Capitol in the distance, February 17, 2015 (Matt Popovich)

    Child-care workers without a college education will have to give up their profession in Washington DC.

    Regulations that were meant to go into effect in 2020, applying to all daycare centers and some home-based child-care businesses, were challenged by two child-care workers and a parent, but a federal court ruled for the district this week. Reason has the story.

    The two workers, Altagracia Sanchez and Dale Sorcher, have 49 years of child-care experience between them. Both have Bachelor’s degrees — but not in early-childhood education, making them ineligible under DC’s new rules. (more…)

  • Democrats Taxed and Regulated, Now Subsidize, Chips and Energy

    Joe Biden Nancy Pelosi
    American president Joe Biden and Democratic House speaker Nancy Pelosi in the Capitol in Washington DC, October 28, 2021 (White House/Adam Schultz)

    Ronald Reagan summarized government’s view of the economy: “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”

    Economists now call this cost-disease socialism: first restrict supply, then subsidize the costs. The United States does this with everything from health care (examples here) to housing (although Joe Biden’s reforms go in the right direction).

    Democrats are making the same mistake with their technology and climate laws.

    There is plenty to like about the CHIPS and Science Act and the (albeit misleadingly-named) Inflation Reduction Act. The first doubles government funding of research into 6G communications, advanced manufacturing, artificial intelligence and other breakthrough technologies; the latter creates a 15-percent minimum tax on the largest corporations, lowers annual out-of-pocket drug payments for Medicare patients from $7,050 to $2,000 beginning in 2025 and will allow Medicare to negotiate some drug prices starting in 2026.

    But both laws also spend billions of dollars in subsidies and tax credits to prop up technologies and industries that could have been deregulated instead. (more…)

  • Dutch Government Created Housing Shortage, Blames Market

    Almere Netherlands
    Homes in Almere, the Netherlands, October 17, 2020 (Unsplash/Daria Nepriakhina)

    Few countries regulate housing more tightly than the Netherlands, yet politicians keep blaming “the market” when there isn’t enough (affordable) housing.

    Housing minister Hugo de Jonge recently told Trouw that, “For too long, we believed the market would solve the problems on its own.”

    In an op-ed for the same newspaper, I argue the opposite is true: government won’t leave the housing market alone. (more…)

  • To Fight Inflation, Liberalize Trade

    Seattle Washington port
    Port of Seattle, Washington, June 15, 2021 (iStock/Mark Hatfield)

    There’s not much elected politicians can do about high inflation. They might have inadvertently caused it with massive COVID-19 rescue and recovery programs, which saved businesses and jobs but also put money in the hands of consumers at a time when supply chains were strained. When producers can’t meet demand, prices rise.

    Central banks have the strongest tools to fight inflation, but there is something governments can do: cut tariffs and regulatory barriers to trade. More and cheaper imports would reduce costs for consumers. (more…)