I suppose it depends on whether the price of the individual item increased exponentially, or whether your quote was borderline to begin with.
I have a friend in the steel business, and he takes losses from time to time when the steel prices go up. It balances out when he makes extra money on a job where the steel prices fall unexpectedly. He learned not to get too hung up on guessing the price of steel just right, but it can make for some rough months when he's consistently losing money.
And yes, I've asked him about futures contracts and he just stared at me blankly. I don't know if I'm a moron or if he is. I think the problem is that he doesn't really know when a bid would be accepted in a tight enough window, and he can't afford to buy a futures contract for ever bid he submits. And it sounds like neither he nor his supplier were very familiar with them.
And then watch every single wealthy person transfer their entire fortune into a corporation that they are the CEO of, and that does nothing but spend money on travel, housing, and business entertainment for their CEO. Of course, that mostly already happens, since businesses can write off expenses against income that individuals can not.
Right, I would never propose this without also eliminating most deductions. Business travel would obviously be an expense. But travel on anything other than coach - the difference would be taxed as salary. Accommodations? Anything over the going rate for a hotel room would be taxed as salary. Company car? Non-business use taxed as salary. Basically make it impossible or very difficult to do exactly what you very rightly point out would be a problem. Of course, as you point out my solution wouldn't depend on this loophole closure since they already do this.:)
Better solution : Eliminate all other taxes, and just tax all bank transactions. No company is going to revert to paying people in cash (well, any more than they do now), you can't pay your credit card in cash, and as a bonus cash tips go back to really meaning something - tax free.
I forget the exact reason, but I read a paper that studied this and it had some pretty harsh repercussions. Perhaps it could be made workable. Collection would certainly be simple.
I just think that a more progressive tax up front would be better. Like a sales tax on all cars to be used for road construction and maintenance. Rich people buy more expensive cars, so they would pay more tax. People who drive more miles buy more cars, so they would pay more tax. You could even exempt cars that cost less than 2 or 3 thousand dollars. Base the tax on the Blue Book value, not the sales price. Exempt charities, resellers, and wrecking companies. This would also be easier to collect than a toll, since you already have the infrastructure in place to handle title transfers. Put tolls on the borders of your state to collect from people passing through who won't otherwise pay any use tax.
So if you are truly concerned about regressive taxes, then you must be in favor of tolls.
Well, sure - if you put together a combination of road tax increases and sales tax decreases that nets a more progressive tax system obviously I'd get on board. Unfortunately, I suspect that in most cases the sales tax would not be reduced so it would just be an additional burden.
So the store owner can have a gun to shoot shoplifters, but a musician can't have a gun to shoot pirates?
I imagine that prior to the invention of copyright law, a musician could have gone down to the next venue and shot up a rival performing his music, but I'm unaware that this ever happened. If it did happen, I'm pretty sure you will find that musician in question was jailed or executed.
On the other hand, I can show you numerous examples of people defending their real property with firearms. And in many cases, they had broad support from society at-large.
Shopkeepers could not make money selling things if we didnt have laws preventing theft.
Of course they could - they could defend the store themselves or hire someone to do it for them. This is what happens when there is a "failed state". You pay the warlord to protect you.
Banks couldnt make money off of loans if we didnt have laws making those loans enforceable.
That's half-true. Loans predate the government. I'll take your goat as collateral. But the modern US banking system is heavily dependent on government, with instruments that are arguably even more abstract than IP.
Im not clear where the difference here is, copyright laws make it possible to profit off of a creative work, which is the intent.
I'm not arguing about their intent.
Shall we not reform tax law because accountants and tax lawyers might lose their jobs?
Yes, I agree that tax reform needs to occur as well.
I didn't say that there are no other options, I said that entitlement reform needs to be part of any deficit reduction...
You make a jolly good attempt at stuffing words in my mouth, but the kinds of entitlement reform I would go after first are low-hanging fruit: retirees who don't need the Social Security but it does improve their quality of life... my grandmother called it her "cruise money". I loved my grandma, but the government didn't need to be giving her "cruise money". As for Medicaid, well for starters I'd let the government negotiate for prices on drugs... even Obama found 3/4 billion dollars of waste in Medicare. Paul Ryan agreed and used it in his budget - this stuff isn't remotely controversial.
I think you are right, we do need to reduce our defense expenditures as well and probably raise taxes.
AND reform entitlements.
Actually, my personal solution (should I become emperor): - Tax reform: eliminate the special rates for capital gains and dividends, eliminate corporate tax. Phase out almost all deductions and credits. Make the now simplified tax brackets progressive and adjust rates to keep overall revenue neutral. - Spending freeze: completely freeze spending at today's levels. Wait for economic growth to eliminate the deficit. If someone needs more money, it means a reduction somewhere else. Forward spending would capped at 5-year averages for revenue until most debt was retired. New debt can only be issued for capital projects.
They didn't "take the money and spend it on the general fund."
You are right, it was worse than that. They spent the money AND put the next generation in debt.
Should a trust fund just pile up its money and let it sit there, losing more and more value to inflation every year?
Yes, this is the argument that you all fell for. First of all, you should have questioned why Social Security needed a "trust fund" in the first place, after running so long without one. Second, there are some really good investments if the argument is persuasive enough: - A mix of commodities. Hell, even just straight gold. Inflation proof and government proof. - Annuities. Buy guaranteed payments for a fixed price. Spread the risk by using several different insurance companies and making certain regulations about how they can invest the money. The worst thing that can happen is the insurance companies fail, in which case you are right back where we are today, which is the tax payers are on the hook for the "fund". - Spend it and then pretend it was "invested". Oh wait, that's what you did.
Honestly, I'm not sure what you guys thought the trust fund would accomplish, besides pissing off the younger generation.
If there's still bacon on the shelves and selling, but you can't afford any, is there a shortage or not?
I think if the price made such a huge jump that your consumption goes from "frequently" to "zero" then you could probably justifiably call it a shortage. When the supply disruption is so large that the demand curve completely changes in character from a simple poly or linear line to something with an asymptote.
I work in manufacturing, so I tend to think of a shortage as when we can't get a part at any price.
Extremely short-term rationing can be acceptable (e.g. after a natural disaster), but producers need to know that the long term price will be allowed to float.
If it is charity we are after, then direct subsidy or introduction of an alternative is almost always going to be better in the long run.
But for some reason, suggest that the market should determine the price of freeway travel, and everybody goes nuts [greatergre...ington.org].
In most of the world, and in the US cities of New York and Washington, DC - the poor people live in the surrounding areas and need to commute in to the city center - or they need to commute to another suburb. They are tied very tightly to their car, yet public transit mostly sucks in the suburbs.
So unless you dramatically improve suburban public transit or come up with a way to let the poor live closer to the jobs, imposing a use tax on roads is highly regressive. We could probably figure out a way to mitigate this, but it is a problem.
I think "shortage" is when supply is exhausted. I work in manufacturing. When we have an order for 1000 machines, and we only have parts on hand to build 900 - that can be a "shortage". There are some parts with long lead times, where no amount of money will buy you another part. In other words, supply is exhausted. There are 100 machines worth of demand outstanding.
In reality, we can get a small trickle of supply by pilfering lab machines, test benches, and raiding the reconditioning department - but this is a small fraction of the normal supply and comes at a high "price" logistically. For the sake of an economic discussion, it is still a shortage.
The gasoline embargoes of the 70s were also a shortage. Price controls were in place, so gasoline demand was still high - but supply was obviously lower. There was a literal shortage, and no amount of money would fill the gap (without violating the price control laws). There were huge lines of cars with empty tanks - a very visual representation of unsatisfied demand.
This pork "shortage" has no gap in supply and demand. If you want pork, you can still buy pork. The price is higher, and obviously this will effect the poor more than the rich - but there is no shortage. Demand will lower to exactly match supply. There will be no lines, no unsatisfied demand.
People don't realize but for the first time in decades demand for gasoline in the US is actually down
A lot of this has to do with the price of natural gas. We have also improved fleet efficiency, increased the ethanol percentage in fuel, oh... and we decimated our economy.:)
But seriously, the natural gas phenomenon is so strong that US carbon emissions are even down 20% off of their peak.
Are Americans so obese that they can't live without cutting their bacon intake in half?
I just came back from the store where I purchased the largest chest freezer that they have. I intend to stockpile a month's worth of bacon for myself until the crisis recedes. My wife indicated that perhaps I should have also purchased a freezer for her.
It's not a direct subsidy, but it is a subsidy. Artists could not make money selling content if it were not for the government. The same effect could be achieved by taxing everyone who buys a music player and then redistributing the money according to popularity. This is how ASCAP works, for instance. That is more or less a direct subsidy - the government allows a private entitiy to levy a "tax" and then redistribute it to the songwriters. If you object to my use of the word subsidy, I'll refrain from using it and use a word you would prefer - it is immaterial to the discussion.
No, a songwriter does have something of value, it's just that, without copyright, he has something of low **MARKET** value.
I'm not really interested in getting THAT philosophical. Music is obviously important to humans in some non-financial way. Hell, we value it enough to have this crazy copyright system in place. But you can't eat music, you can't gas your car with it, and the only way to get people to pay for it directly (in certain formats) is to have the government enforce the "value" in monetary terms. Of course, it has always had financial value in non-subsidized formats. People paid to see Mozart live. People paid him substantial amounts to teach them how to play. He made a living. But he made very little on CDs:)
equivalent of a store owner trying to sell *valuable* products, but where all the customers find it so easy to steal stuff from the store that everything has a *market* value of zero
That would be a very short-term situation. Once the shop is emptied, the goods would be worth what they were (or even more) than when the looting started. An MP3 has very little, if any, intrinsic value - though again, in certain circumstances, people will pay for music naturally. A jukebox is a good example. People who steal music rather than pay $1 on iTunes will feed a dollar into a jukebox to hear a song once without even blinking.
Laws against shoplifting and enforcement raises the value of those products up near their proper value.
You have it backwards. Laws keep prices low, because the shop owner doesn't need to hire people to protect his goods. Can you imagine what it would cost to keep a store like Walmart protected in total anarchy? It wouldn't even be feasible. The cost of simple goods would skyrocket, if you could get them at all.
I think you could - just as legitimately - argue that shoplifting laws are a "government subsidy" for businesses.
I think it is commonly considered a basic function of government to keep the peace. If the government put a cop in stores to prevent shoplifting, I'd agree - but having a law on the books that makes it illegal to steal is pretty basic stuff, and it helps everyone who owns anything. The reason you need laws specific to shoplifting is to handle the special case of this public/private space. Anyway, it is hard to generalize since the laws are different everywhere; I'm sure there are jurisdictions where the laws do act as a subsidy.
You seem to have a negative connotation associated with "subsidy". I do not. I like it when a community revitalizes the downtown by dressing it up and lowering taxes and such - an obvious subsidy. I even like the basic premise of copyright law - though I think it should involve much shorter time periods and probably only involve commercial use.
Nothing is legal or illegal without a government. Once you have a government, you can make any rules that you want to. At some point, the people let our government make it illegal not to pay artists for the use of their work. Fair enough - but don't pretend that it is the natural state of things. Music predates US copyright law.
So what? Granted that is strategically better from an international relations point of view - but I don't see how that makes using debt to pay for recurrent expenses a good thing.
You are only talking about price, which is only half of the futures contract. The other half is supply. If I pay a little more for a guaranteed supply in the future, I don't really see how that is gambling.
Of course one CAN use futures contracts to gamble, just as one can use a stock to gamble. But they are also an essential tool for anyone who needs to plan for more than the immediate future.
You are extending the definition of gambling and then berating others.
Commodities markets are essential.
Let's use a "3rd-grade" example. I run the agency that salts the roads in the winter. I need to budget up-front for my salt supply, but the price of salt changes from day-to-day. How in the world do I budget? Is your answer: (a) Sign a contract with a salt supplier for a year's supply of salt at a pre-agreed-upon price, to be delivered as-needed to keep stores full. (b) Buy what you hope is a year's worth of salt all at once and spend money on a place to store it. (c) Guess at what salt might cost and put that number in your budget.
Most sensible 3rd graders would choose (a), especially if no one is willing to give you the extra capital for storage facilities required by (b). Choices (b) and (c) are closer to gambling than the futures contract you (hopefully) chose to sign in choice (a).
It would be sort of like if you refused to ever prosecute any store break-ins or shoplifting
No, it's nothing like that at all.
A store owner has a store full of stuff. If the government disappeared, he'd still have a store full of stuff. He might have to protect the stuff himself, or he may have to pay someone to protect it - but nevertheless, he has stuff. If someone shoplifts, he loses some finite amount of that stuff, and he no longer sells it.
A songwriter has a pretty tune. If the government disappeared, he'd still have a pretty tune. There is no way to protect this pretty tune - but it doesn't really matter because even if someone "steals" it, he can still hum the pretty tune. If he's lucky, his pretty tunes will turn the head of a patron of some sort and he might actually make some money. He could also make some money by performing the pretty song.
Short of a patron or a performance, the only reason a songwriter holds anything of value at all is because of a government subsidy. Taking away the subsidy has no moral hazard at all. If the system isn't working to the benefit of society in aggregate, then the system should be changed.
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I suppose it depends on whether the price of the individual item increased exponentially, or whether your quote was borderline to begin with.
I have a friend in the steel business, and he takes losses from time to time when the steel prices go up. It balances out when he makes extra money on a job where the steel prices fall unexpectedly. He learned not to get too hung up on guessing the price of steel just right, but it can make for some rough months when he's consistently losing money.
And yes, I've asked him about futures contracts and he just stared at me blankly. I don't know if I'm a moron or if he is. I think the problem is that he doesn't really know when a bid would be accepted in a tight enough window, and he can't afford to buy a futures contract for ever bid he submits. And it sounds like neither he nor his supplier were very familiar with them.
And then watch every single wealthy person transfer their entire fortune into a corporation that they are the CEO of, and that does nothing but spend money on travel, housing, and business entertainment for their CEO. Of course, that mostly already happens, since businesses can write off expenses against income that individuals can not.
Right, I would never propose this without also eliminating most deductions. Business travel would obviously be an expense. But travel on anything other than coach - the difference would be taxed as salary. Accommodations? Anything over the going rate for a hotel room would be taxed as salary. Company car? Non-business use taxed as salary. Basically make it impossible or very difficult to do exactly what you very rightly point out would be a problem. Of course, as you point out my solution wouldn't depend on this loophole closure since they already do this. :)
Better solution : Eliminate all other taxes, and just tax all bank transactions. No company is going to revert to paying people in cash (well, any more than they do now), you can't pay your credit card in cash, and as a bonus cash tips go back to really meaning something - tax free.
I forget the exact reason, but I read a paper that studied this and it had some pretty harsh repercussions. Perhaps it could be made workable. Collection would certainly be simple.
And the only way, if you don't want to wait in a huge line and go through airport-style security.
"Carny" is an ethnic group?
Sorry, but my PC meter is at full red right now...
I just think that a more progressive tax up front would be better. Like a sales tax on all cars to be used for road construction and maintenance. Rich people buy more expensive cars, so they would pay more tax. People who drive more miles buy more cars, so they would pay more tax. You could even exempt cars that cost less than 2 or 3 thousand dollars. Base the tax on the Blue Book value, not the sales price. Exempt charities, resellers, and wrecking companies. This would also be easier to collect than a toll, since you already have the infrastructure in place to handle title transfers. Put tolls on the borders of your state to collect from people passing through who won't otherwise pay any use tax.
So if you are truly concerned about regressive taxes, then you must be in favor of tolls.
Well, sure - if you put together a combination of road tax increases and sales tax decreases that nets a more progressive tax system obviously I'd get on board. Unfortunately, I suspect that in most cases the sales tax would not be reduced so it would just be an additional burden.
So the store owner can have a gun to shoot shoplifters, but a musician can't have a gun to shoot pirates?
I imagine that prior to the invention of copyright law, a musician could have gone down to the next venue and shot up a rival performing his music, but I'm unaware that this ever happened. If it did happen, I'm pretty sure you will find that musician in question was jailed or executed.
On the other hand, I can show you numerous examples of people defending their real property with firearms. And in many cases, they had broad support from society at-large.
Shopkeepers could not make money selling things if we didnt have laws preventing theft.
Of course they could - they could defend the store themselves or hire someone to do it for them. This is what happens when there is a "failed state". You pay the warlord to protect you.
Banks couldnt make money off of loans if we didnt have laws making those loans enforceable.
That's half-true. Loans predate the government. I'll take your goat as collateral. But the modern US banking system is heavily dependent on government, with instruments that are arguably even more abstract than IP.
Im not clear where the difference here is, copyright laws make it possible to profit off of a creative work, which is the intent.
I'm not arguing about their intent.
Shall we not reform tax law because accountants and tax lawyers might lose their jobs?
Agreed. But the politicians were stealing in the 80s, and I couldn't vote.
Bush and Obama are even worse, so we really need to change things or risk the same thing happening to the next generation.
Yes, I agree that tax reform needs to occur as well.
I didn't say that there are no other options, I said that entitlement reform needs to be part of any deficit reduction...
You make a jolly good attempt at stuffing words in my mouth, but the kinds of entitlement reform I would go after first are low-hanging fruit: retirees who don't need the Social Security but it does improve their quality of life... my grandmother called it her "cruise money". I loved my grandma, but the government didn't need to be giving her "cruise money". As for Medicaid, well for starters I'd let the government negotiate for prices on drugs... even Obama found 3/4 billion dollars of waste in Medicare. Paul Ryan agreed and used it in his budget - this stuff isn't remotely controversial.
I think you are right, we do need to reduce our defense expenditures as well and probably raise taxes.
AND reform entitlements.
Actually, my personal solution (should I become emperor):
- Tax reform: eliminate the special rates for capital gains and dividends, eliminate corporate tax. Phase out almost all deductions and credits. Make the now simplified tax brackets progressive and adjust rates to keep overall revenue neutral.
- Spending freeze: completely freeze spending at today's levels. Wait for economic growth to eliminate the deficit. If someone needs more money, it means a reduction somewhere else. Forward spending would capped at 5-year averages for revenue until most debt was retired. New debt can only be issued for capital projects.
They didn't "take the money and spend it on the general fund."
You are right, it was worse than that. They spent the money AND put the next generation in debt.
Should a trust fund just pile up its money and let it sit there, losing more and more value to inflation every year?
Yes, this is the argument that you all fell for. First of all, you should have questioned why Social Security needed a "trust fund" in the first place, after running so long without one. Second, there are some really good investments if the argument is persuasive enough:
- A mix of commodities. Hell, even just straight gold. Inflation proof and government proof.
- Annuities. Buy guaranteed payments for a fixed price. Spread the risk by using several different insurance companies and making certain regulations about how they can invest the money. The worst thing that can happen is the insurance companies fail, in which case you are right back where we are today, which is the tax payers are on the hook for the "fund".
- Spend it and then pretend it was "invested". Oh wait, that's what you did.
Honestly, I'm not sure what you guys thought the trust fund would accomplish, besides pissing off the younger generation.
If there's still bacon on the shelves and selling, but you can't afford any, is there a shortage or not?
I think if the price made such a huge jump that your consumption goes from "frequently" to "zero" then you could probably justifiably call it a shortage. When the supply disruption is so large that the demand curve completely changes in character from a simple poly or linear line to something with an asymptote.
I work in manufacturing, so I tend to think of a shortage as when we can't get a part at any price.
Extremely short-term rationing can be acceptable (e.g. after a natural disaster), but producers need to know that the long term price will be allowed to float.
If it is charity we are after, then direct subsidy or introduction of an alternative is almost always going to be better in the long run.
But for some reason, suggest that the market should determine the price of freeway travel, and everybody goes nuts [greatergre...ington.org].
In most of the world, and in the US cities of New York and Washington, DC - the poor people live in the surrounding areas and need to commute in to the city center - or they need to commute to another suburb. They are tied very tightly to their car, yet public transit mostly sucks in the suburbs.
So unless you dramatically improve suburban public transit or come up with a way to let the poor live closer to the jobs, imposing a use tax on roads is highly regressive. We could probably figure out a way to mitigate this, but it is a problem.
I think "shortage" is when supply is exhausted. I work in manufacturing. When we have an order for 1000 machines, and we only have parts on hand to build 900 - that can be a "shortage". There are some parts with long lead times, where no amount of money will buy you another part. In other words, supply is exhausted. There are 100 machines worth of demand outstanding.
In reality, we can get a small trickle of supply by pilfering lab machines, test benches, and raiding the reconditioning department - but this is a small fraction of the normal supply and comes at a high "price" logistically. For the sake of an economic discussion, it is still a shortage.
The gasoline embargoes of the 70s were also a shortage. Price controls were in place, so gasoline demand was still high - but supply was obviously lower. There was a literal shortage, and no amount of money would fill the gap (without violating the price control laws). There were huge lines of cars with empty tanks - a very visual representation of unsatisfied demand.
This pork "shortage" has no gap in supply and demand. If you want pork, you can still buy pork. The price is higher, and obviously this will effect the poor more than the rich - but there is no shortage. Demand will lower to exactly match supply. There will be no lines, no unsatisfied demand.
People don't realize but for the first time in decades demand for gasoline in the US is actually down
A lot of this has to do with the price of natural gas. We have also improved fleet efficiency, increased the ethanol percentage in fuel, oh... and we decimated our economy. :)
But seriously, the natural gas phenomenon is so strong that US carbon emissions are even down 20% off of their peak.
Right, but you are talking about once something hits an asymptote on the demand curve. We are talking about the linear-ish region here.
Are Americans so obese that they can't live without cutting their bacon intake in half?
I just came back from the store where I purchased the largest chest freezer that they have. I intend to stockpile a month's worth of bacon for myself until the crisis recedes. My wife indicated that perhaps I should have also purchased a freezer for her.
That's not at all what's happening.
It's not a direct subsidy, but it is a subsidy. Artists could not make money selling content if it were not for the government. The same effect could be achieved by taxing everyone who buys a music player and then redistributing the money according to popularity. This is how ASCAP works, for instance. That is more or less a direct subsidy - the government allows a private entitiy to levy a "tax" and then redistribute it to the songwriters. If you object to my use of the word subsidy, I'll refrain from using it and use a word you would prefer - it is immaterial to the discussion.
No, a songwriter does have something of value, it's just that, without copyright, he has something of low **MARKET** value.
I'm not really interested in getting THAT philosophical. Music is obviously important to humans in some non-financial way. Hell, we value it enough to have this crazy copyright system in place. But you can't eat music, you can't gas your car with it, and the only way to get people to pay for it directly (in certain formats) is to have the government enforce the "value" in monetary terms. Of course, it has always had financial value in non-subsidized formats. People paid to see Mozart live. People paid him substantial amounts to teach them how to play. He made a living. But he made very little on CDs :)
equivalent of a store owner trying to sell *valuable* products, but where all the customers find it so easy to steal stuff from the store that everything has a *market* value of zero
That would be a very short-term situation. Once the shop is emptied, the goods would be worth what they were (or even more) than when the looting started. An MP3 has very little, if any, intrinsic value - though again, in certain circumstances, people will pay for music naturally. A jukebox is a good example. People who steal music rather than pay $1 on iTunes will feed a dollar into a jukebox to hear a song once without even blinking.
Laws against shoplifting and enforcement raises the value of those products up near their proper value.
You have it backwards. Laws keep prices low, because the shop owner doesn't need to hire people to protect his goods. Can you imagine what it would cost to keep a store like Walmart protected in total anarchy? It wouldn't even be feasible. The cost of simple goods would skyrocket, if you could get them at all.
I think you could - just as legitimately - argue that shoplifting laws are a "government subsidy" for businesses.
I think it is commonly considered a basic function of government to keep the peace. If the government put a cop in stores to prevent shoplifting, I'd agree - but having a law on the books that makes it illegal to steal is pretty basic stuff, and it helps everyone who owns anything. The reason you need laws specific to shoplifting is to handle the special case of this public/private space. Anyway, it is hard to generalize since the laws are different everywhere; I'm sure there are jurisdictions where the laws do act as a subsidy.
You seem to have a negative connotation associated with "subsidy". I do not. I like it when a community revitalizes the downtown by dressing it up and lowering taxes and such - an obvious subsidy. I even like the basic premise of copyright law - though I think it should involve much shorter time periods and probably only involve commercial use.
Nothing is legal or illegal without a government. Once you have a government, you can make any rules that you want to. At some point, the people let our government make it illegal not to pay artists for the use of their work. Fair enough - but don't pretend that it is the natural state of things. Music predates US copyright law.
So what? Granted that is strategically better from an international relations point of view - but I don't see how that makes using debt to pay for recurrent expenses a good thing.
You are only talking about price, which is only half of the futures contract. The other half is supply. If I pay a little more for a guaranteed supply in the future, I don't really see how that is gambling.
Of course one CAN use futures contracts to gamble, just as one can use a stock to gamble. But they are also an essential tool for anyone who needs to plan for more than the immediate future.
You are extending the definition of gambling and then berating others.
Commodities markets are essential.
Let's use a "3rd-grade" example. I run the agency that salts the roads in the winter. I need to budget up-front for my salt supply, but the price of salt changes from day-to-day. How in the world do I budget? Is your answer:
(a) Sign a contract with a salt supplier for a year's supply of salt at a pre-agreed-upon price, to be delivered as-needed to keep stores full.
(b) Buy what you hope is a year's worth of salt all at once and spend money on a place to store it.
(c) Guess at what salt might cost and put that number in your budget.
Most sensible 3rd graders would choose (a), especially if no one is willing to give you the extra capital for storage facilities required by (b). Choices (b) and (c) are closer to gambling than the futures contract you (hopefully) chose to sign in choice (a).
It would be sort of like if you refused to ever prosecute any store break-ins or shoplifting
No, it's nothing like that at all.
A store owner has a store full of stuff. If the government disappeared, he'd still have a store full of stuff. He might have to protect the stuff himself, or he may have to pay someone to protect it - but nevertheless, he has stuff. If someone shoplifts, he loses some finite amount of that stuff, and he no longer sells it.
A songwriter has a pretty tune. If the government disappeared, he'd still have a pretty tune. There is no way to protect this pretty tune - but it doesn't really matter because even if someone "steals" it, he can still hum the pretty tune. If he's lucky, his pretty tunes will turn the head of a patron of some sort and he might actually make some money. He could also make some money by performing the pretty song.
Short of a patron or a performance, the only reason a songwriter holds anything of value at all is because of a government subsidy. Taking away the subsidy has no moral hazard at all. If the system isn't working to the benefit of society in aggregate, then the system should be changed.