Do you Agree with JB?

Here is a provocative article from JB. While his point is well made, I am not as bothered by the Minnesota law as he is. I suppose the reason is that I am not as giddy on free trade. Nonetheless, JB's article is definately worth the read. Please let JB know what you think in the comment section.

As some of you may have heard, the State Legislature has passed a law that mandates all US flags, sold in MN , must be made in the USA.

I appreciate the inherent sense of Patriotism in the new law, but I also think the law is uterly ridiculous. Why is America one of the greatest powers in the World? Because its also the greatest Economic power in the world. Free trade and open markets are cornerstones in the American economy. And it is also a conservative principle to let the market regulate itself.

I do agree that in specific cases governments must step in and regulate markets (after all I work for a big 4 CPA firm where existing and new US regulations create more work and revenue for my company). But let me reiterate that while regulation may be necessary for stability, and consumer confidence, over-regulation can do great damage to an economy. As an economic conservative, I think there should only be just enough regulation in any market to keep it safe and stable. After all this is what has made America the economic power that it is.

Now getting back to the flag issue, while the new law appears to be patriotic I think it goes against everything this country and this economy is about. If Sam's Hardware can make more profit by selling flags made in Korea then that is more profit that will be injected into the American economy. Now yes some American flag makers will benefit from this law, but think of all the flag sellers who operated on border towns with Iowa, Wisconsin, and the Dakotas. Minnesotans will be leaving the state to buy their flags across the a border. This harms the MN economy and MN based proprietors.

This law also demonstrate how increased regulation can cut short all the moral and humanitarian good that Capitalism accomplishes. Cheap flags from Mexico benefits Mexicans and Americans and thus raises both countries standard of living. This new law harms the economies of both countries.

So in an effort to look patriotic on the 4th of July, the democratic legislature in MN passed a law that will only harm its own economy. Further this law violates the economic principles that has made America one of the best places to do business.

In the last few months, several news periodicasl have reported that London (not New York) is now the Financial capital of the world. How did this happen? Well blame it partly on the increased regulation imposed on public companies, in 2004, in response to the flurry of high-profile corporate fraud cases.

My opinion: It is more intrinsically American to fly a flag made in Taiwan than in America on the 4th of July (If that flag can be purchased in America for less than the American manufactured flags).