You are browsing the archive for 2014 January 13.

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Patients, Families, Caregivers and Healthcare Providers Rally in Albany to Urge Senate and Governor Cuomo to Pass Comprehensive Medical Marijuana Legislation

January 13, 2014 in PERSONAL LIBERTY

By drosenfeld

Tuesday: Assembly Health Committee to Vote on “Compassionate Care Act”

Broad Coalition Unites Behind Comprehensive Bill

Albany — Today – the first full day of the 2014 New York State Senate session — dozens of patients, families, caregivers and healthcare providers gathered in Albany for a press conference and lobby day to call on the State Senate to pass and Governor Andrew Cuomo to sign the Compassionate Care Act — A.6357-A (Gottfried) / S.4406-A (Savino).

January 13, 2014

Drug Policy Alliance

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Source: DRUG POLICY

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Austrian Economics for Managers: Starts Thursday

January 13, 2014 in Economics

By Mises Updates

Are you preparing for a career in business management or already in one? Or are you interested in the topic as an academic, a student, or just as a libertarian? Then this online course with Peter Klein is just for you. Class starts Thursday!

Besides being a successful economist, Peter is also an experienced management scholar and teacher, with many years of experience teaching economics, business strategy, and entrepreneurship to MBA students and executives. He serves as Representative-at-Large for the Competitive Strategy Interest Group of the Strategic Management Society and has received research awards from the Strategic Management Society, the Academy of Management, and the European Management Association. He holds an adjunct professorship with the Department of Strategy and Management of the Norwegian School of Economics and teaches in the International Management Program of the University of Angers, France. He is a frequent management consultant and sits on the Board of Directors of a financial services company.

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Source: MISES INSTITUTE

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No Worries Over Employment?

January 13, 2014 in Economics

By Mark Thornton

The really bad employment report came out on Friday. The Conference Board issued its own Employment Trends Index (ETI) this morning. Their report was “positive” for December and 5 out of the last 6 months.

“Despite the disappointing job numbers for December, the improvement in the Employment Trends Index is signaling solid employment growth in the months ahead,” said Gad Levanon, Director of Macroeconomic Research at the Conference Board.

December’s increase was driven by increases in 6 of the 8 components of the ETI. From largest positive contributor smallest they are:

1. Number of Temporary Employees
2. Consumer Confidence Survey–People who say “Jobs are hard to find”
3. Job openings *
4. Industrial Production *
5. Real Manufacturing and Trade Sales *
6. % of firms with positions unable to fill right now (stayed the same)

The 2 negative components are:

1. Initial Claims for unemployment insurance
2. Ratio of involuntary part-time to all part time

Given that the ETI only increased by 3/100 of 1% it does not really represent much improvement at all. Given that the two top contributors to this increase in the ETI indicate that more people are being hired on a part time basis and that involuntary part time employment is increasing does not seem to me like a positive development indicating improvement in the job market. The next three positive contributors are all estimates based on previous months, not real numbers. The last “positive” component stayed the same as the previous month. The two negative components strike me as the two most important measures of health in the job market and they were both negative.

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Source: MISES INSTITUTE

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Ronald Coase, Murray Rothbard, and Walter Block on the Indian River

January 13, 2014 in Economics

By Mark Thornton

There is controversy on the Indian River in southeast Florida where fishermen are complaining about the fertilizer runoff from sugar farms. The fertilizer runoff leads to an overgrowth of algae in the Indian River lagoons and cuts down on the amount of fish that can be caught. Sugar subsidies provide large incentives to grown sugar inside the US and it also encourages sugar farmers to use more fertilizer than under free market conditions.

The author applies the ideas of Ronald Coase and Murry Rothbard to this controversy. The sugar farmers are imposing an externality on the fishermen. He argues that Coase’s solution is not correct and that Rothbard’s is correct. He then uses arguments by Walter Block to show that privatization of the river is the solution. Randall Holcombe and Gary North are also mentioned.

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Source: MISES INSTITUTE

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Downsizing the Federal Government

January 13, 2014 in Economics

The federal government is running massive budget deficits, spending too much, and heading toward a financial crisis. Without a change of direction in Washington, average working families will be faced with huge tax increases and a lower standard of living. The Cato Institute’s Downsizing the Federal Government project has produced a series of videos highlighting wasteful spending in the various government departments, and proposing cuts and reforms in those departments.

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Source: CATO HEADLINES

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Hydraulic Keynesianism Lives

January 13, 2014 in Economics

By Peter G. Klein

price stability

I believe it was Alan Coddington who coined the term “hydraulic Keynesianism” to describe the typical macroeconomics textbooks of the 1950s, “conceiving the economy at the aggregate level in terms of disembodied and homogeneous flows.” The term also has a great visual quality, bringing forth an image of the economy as a giant machine with pumps and tubes and dials and levers, carefully controlled by wise government planners. (Such a machine was actually built by Bill Phillips of Phillips Curve fame.)

Apparently the Atlanta Fed has produced an educational video, “Money as Communication,” solemnly explaining the vital role of the Federal Reserve System in maintaining price stability. Mike Shedlock provides an amusing point-by-point commentary on the video, which surely ranks among  the best of government propaganda films. I especially liked the image below, taken from the video, which neatly encapsulates the Fed’s view of its own role in the economic system.

The woman at the keyboard has the wrong hair color to be Janet Yellen, and the man in the middle has too much hair to be Ben Bernanke, but I’m sure the intended audience — schoolchildren and New York Times reporters — will get the idea.

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Source: MISES INSTITUTE

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How the Early Capitalists Saved Europe From Starvation

January 13, 2014 in Economics

By Mises Updates

Wojciech_Gerson_-_Gdańsk_in_the_XVII_century

[A selection from Economic Policy: Thoughts for Today and Tomorrow]

by Ludwig von Mises

Two hundred years ago, before the advent of capitalism, a man’s social status was fixed from the beginning to the end of his life; he inherited it from his ancestors, and it never changed. If he was born poor, he always remained poor, and if he was born rich-a lord or a duke-he kept his dukedom and the property that went with it for the rest of his life.

As for manufacturing, the primitive processing industries of those days existed almost exclusively for the benefit of the wealthy. Most of the people (ninety percent or more of the European population) worked the land and did not come in contact with the city-oriented processing industries. This rigid system of feudal society prevailed in the most developed areas of Europe for many hundreds of years.

However, as the rural population expanded, there developed a surplus of people on the land. For this surplus of population without inherited land or estates, there was not enough to do, nor was it possible for them to work in the processing industries; the kings of the cities denied them access. The numbers of these “outcasts” continued to grow, and still no one knew what to do with them. They were, in the full sense of the word, “proletarians,” outcasts whom the government could only put into the workhouse or the poorhouse. In some sections of Europe, especially in the Netherlands and in England, they became so numerous that, by the eighteenth century, they were a real menace to the preservation of the prevailing social system.

Today, in discussing similar conditions in places like India or other developing countries, we must not forget that, in eighteenth-century England, conditions were much worse. At that time, England had a population of six or seven million people, but of those six or seven million people, more than one million, probably two million, were simply poor outcasts for whom the existing social system made no provision. What to do with these outcasts was one of the great problems of eighteenth-century England.

Another great problem was the lack of raw materials. The British, very seriously, had to ask themselves this question: what are we going to do in the future, when our forests will no longer give us the wood we need for our industries and for heating our houses? For the …read more

Source: MISES INSTITUTE

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Obama Should Ignore Calls to Get More Deeply Involved in Iraq

January 13, 2014 in Economics

By Christopher A. Preble

Christopher A. Preble

With the Iraqi government struggling to put down an insurgency with suspected ties to al Qaeda, Sen. John McCain on Sunday urged President Obama to send retired Army General David Petraeus and former Ambassador Ryan Crocker to try to help. But such calls ignore the reality on the ground in Iraq, and here in the United States. U.S. involvement is unlikely to turn the tide against the insurgency, but risks drawing the country back into a war that Americans don’t want to fight.

Certainly, sending Crocker and Petraeus would be a far cry from boots on the ground, but the dynamic duo does not possess a magic elixir to fix Iraq’s broken politics. Even Petraeus’s former executive officer doubts that Americans could make much headway with Maliki. As retired Col. Peter Mansoor wrote last week, fighting al Qaeda in Iraq is Maliki’s problem, not America’s, and the United States should only support an Iraqi government that is “worth supporting.”

The past decade has revealed the war advocates’ ignorance of Iraqi politics.”

But, to paraphrase Donald Rumsfeld, you have to engage with the negotiating partner that you have, not the one that you wish you had. And that means dealing with Maliki.

Which is why McCain’s call for Petraeus and Crocker to return to Iraq is so misguided. Maliki ignored the two Americans at the height of the surge, and is likely to do so again. In March 2008, Maliki sent his forces on an ill-conceived assault in the southern city of Basra. U.S. troops were eventually dragged into an operation that Petraeus had opposed, but was unable to stop.

Petraeus and Crocker were similarly unable to convince Maliki to reconcile with the minority Sunni community and former Saddam Hussein loyalists in 2008 and 2009. Iraqi Sunnis had oppressed the majority Shiite population for decades, and there was little appetite among Maliki’s constituents to let bygones be bygones. Attitudes haven’t changed much in the ensuing half decade. Were Maliki to make concessions to his political opponents today, it would open him up to a challenge from within his governing coalition, only a few months before a new round of parliamentary elections.

Petraeus and Crocker couldn’t even convince Maliki to sign a Status of Forces Agreement (SOFA) with the United States. Such agreements are standard in nearly every place where U.S. troops are stationed, and afford crucial legal protections to America’s men and women …read more

Source: OP-EDS

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The Wolves of Wall Street Went off to Prison; So Why Not the Coyotes of Congress?

January 13, 2014 in Economics

By Richard W. Rahn

Richard W. Rahn

Are business people more corrupt than those in government? Hollywood loves to portray those in business as the baddies and those in government as the good guys. Exhibit A is the new movie, “The Wolf of Wall Street,” the largely true story of con man Jordan Belfort.

The shameless political class rivals Wall Street for corruption and expensive chicanery.”

Belfort and his cronies formed a firm to sell stock in startup and small companies they knew little or nothing about. In order to sell the stock, they would make claims about the companies that they thought the potential buyers wanted to hear, whether the statements were true or not. If a company had been called “Obamacare,” they probably would have said it will give you “better health insurance” at “lower cost” and “you will be able to keep your doctor.” Belfortand some of his cronies quite properly went to prison for a couple of years and had to pay large fines for fraud and misrepresentation. President Obama, Department of Health and Human Services Secretary Kathleen Sebelius, others in the administration and members of the House and Senate made equally false claims about Obamacare. Mrs. Sebelius has also been accused of giving “false and misleading” testimony before the House Oversight and Government Reform Committee, which may be a felony.

Belfort and the others in his firm were charged with cheating innocent people out of several hundred million dollars — which caused many great pain. Despite the misrepresentation, Obamacare only passed Congress by one vote. That misrepresentation is likely to eventually cost American citizens not hundreds of millions, as in the Belfort scam, but hundreds of billions of dollars, and much greater collective pain.

Bernie Madoff will be in prison for the rest of his life for running the biggest private Ponzi scheme on record, which cost his investors some tens of billions of dollars. A Ponzi investment or insurance scheme depends on the ability of the promoters to get new participants to join up, and their funds are then used to make payments to a group of others who receive far more than they contributed. The scam depends on the new participants being duped or coerced to pay far more than they are likely to get back. In the case of Obamacare, young, healthy people are being coerced into paying far higher insurance rates than they would have to spend for the same coverage in a real private insurance market.

Government scams are nothing new, …read more

Source: OP-EDS

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Immoral and Inefficient

January 13, 2014 in Economics

By Doug Bandow

Doug Bandow

Democratic politicians are desperate to make up for Obamacare’s disastrous roll-out. Thirteen states are increasing their minimums this year, and some Democrats believe raising the national minimum wage is a winning campaign issue for November.

It’s hard to predict the impact of new wage proposals on elections ten months hence, though polls suggest that two-thirds or more of Americans back an increase. But there’s no doubt that raising the minimum wage would reduce employment and slow economic growth. Worse, government wage-setting is immoral. It simply is unfair and wrong for politicians to posture as philanthropists while arbitrarily forcing other people to pay higher salaries.

Most of the debate over the minimum wage is practical. What is its impact on employment and price levels? And the answer is clear: the cost of higher wages will be borne in varying degrees by customers, workers, and investors. Exactly who loses how much will depend on conditions in the particular industry.

But as Nobel Laureate Milton Friedman observed, there ain’t no such thing as a free lunch. Arbitrarily raising the cost of labor — there is no principled basis for choosing any particular government minimum — will increase prices, reduce investor returns, and cut employment levels.

The latter will have the greatest impact on workers with the least education, experience, and skills, who tend to be young and minorities. So long as business is not charity, companies are not likely to pay more than employees can produce. Forcing up wages will not only reduce overall employment, but shift jobs toward higher-skilled workers who are more productive and thus warrant higher pay — which explains strong union support for ever higher minimums. The minimum wage also has encouraged mechanization, since it makes economic sense for companies to invest more in machines to spend less on labor.

In effect, the minimum wage is a tax on labor-intensive companies. In this way government penalizes firms that employ lower-skilled workers. Which inevitably means companies will hire fewer employees. Mark Wilson of Applied Economic Strategies explained in a Cato Institute study: “The main finding of economic theory and empirical research over the past 70 years is that minimum wage increases tend to reduce employment.”

Some advocates claim that hiking the minimum would help companies by, for instance, creating greater labor stability. Perhaps in some cases, but companies are free to discover that on their own. In fact, most already pay well beyond the legal …read more

Source: OP-EDS