You are browsing the archive for 2014 April 29.

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Audio: What Government is Doing to Our Money

April 29, 2014 in Economics

By Ryan McMaken

Interviewed by host Alan Butler, Jeff Deist discusses the Federal Reserve, the criminal political class, and how the collapse of the U.S. dollar is imminent.

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Source: MISES INSTITUTE

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Peikoff on Snowden

April 29, 2014 in Economics

By David Gordon

Leonard Peikoff, much to my surprise, has an excellent podcast on Edward Snowden.  He praises Snowden for revealing the vast amount of information the NSA collects about us. The government’s program is in essence totalitarian, and Peikoff aptly draws a parallel with Orwell’s 1984. To those who say that Snowden gave American secrets to Russia, Peikoff replies that even if this were true, Snowden is still a hero. Obama is a much greater threat to us than Putin. The information Snowden gave the American people about what the government is doing far outweighs in importance anything Putin may have learned from him about America.

Unfortunately, Peikoff  near the end  of the podcast reverts to form and calls for a nuclear attack on Iran; but at least he does not claim to derive the necessity of such an attack from “A is A”.

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Source: MISES INSTITUTE

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Rothbard, Lachmann, Kirzner, 1974

April 29, 2014 in Economics

By Peter G. Klein

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Richard Ebeling shares this great picture of Murray Rothbard, Ludwig Lachmann, and Israel Kirzner at the beginning of the South Royalton conference in 1974.

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Source: MISES INSTITUTE

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Ex-Pol Discovers Entrepreneurship is Hard

April 29, 2014 in Economics

By Jeff Deist

Today’s dose of schadenfreude comes courtesy of former pol David Bonior, who “represented” a US congressional district near Detroit for 26(!) years.  Mr. Bonior may be an ex-Congressman, but against all odds has chosen to remain in Washington DC during his retirement.  And it’s an active retirement, since he has poured some of his personal wealth into two different Capitol Hill restaurants.

Mr. Bonior is now shocked to discover that operating a restaurant, even in the imperial growth city of DC, can be difficult.  He is shocked to discover that simply obtaining a permit to open a restaurant in DC is difficult.  He is perhaps most shocked to discover his own dark side: he would like to make a return on his capital investment in the form of… profit!

He also would like to like to control labor costs, by paying the “tip wage” of $2.36 per hour.  Frankly, this does not sound like a living wage.

The Washington Post has the story.

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Source: MISES INSTITUTE

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Sen. Paul Introduces Stand with Israel Act of 2014

April 29, 2014 in Politics & Elections

Sen. Rand Paul today introduced the Stand with Israel Act of 2014. This legislation halts all U.S. aid to the Palestinian government until they agree to a ceasefire and recognize the right of Israel to exist. The bill, S. 2265, can be found HERE and below: ‘Today, I introduced legislation to make all future aid to the Palestinian government conditional upon the new unity government putting itself on the record recognizing the right of Israel to exist as a Jewish state and agreeing to a lasting peace.’ TEXT:’Prohibition on Foreign Assistance. (a) In General. Except as provided under subsection (b) and notwithstanding any other provision of law, no amounts may be obligated or expended to provide any direct United States assistance, loan guarantee, or debt relief to the Palestinian Authority, or any affiliated governing entity or leadership organization. (b) Exception. The prohibition under subsection (a) shall have no effect for a fiscal year if the President certifies to Congress during that fiscal year that the Palestinian Authority has –(1) Formally recognized the right of Israel to exist as a Jewish state;(2) Publicly recognized the state of Israel;(3) Renounced terrorism;(4) Purged all individuals with terrorist ties from security services;(4) Terminated funding of anti-American and anti-Israel incitement;(5) Publicly pledged to not engage in war with Israel; and(6) Honored previous diplomatic agreements.’ …read more

Source: RAND PAUL

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The Unbroken-Leg Fallacy

April 29, 2014 in Economics

By Robert Higgs

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In recent years, many people, at least in certain circles, have become familiar with Bastiat’s broken-window fallacy and have come to recognize that Keynesian macroeconomic policy amounts to little more than this fallacy writ large.

Perhaps even more important is what we might call the unbroken-leg fallacy. This is the presumption, which underlies all sorts of state intervention, both macroeconomic and microeconomic, in the market system, that the participants in markets are perfectly capable of acting more productively but, owing to various “market failures,” are not doing so on their own and require state action to repair the situation. The fallacy is that this reasoning completely ignores the countless ways in which the state’s own intrusions and engagements in the economic system in effect “break the legs” of private-sector actors by distorting prices (including interest rates), penalizing productive actions, and subsidizing destructive actions. Having invaded the economic order like the proverbial bull in a China shop, the state’s kingpins, functionaries, and intellectual bootlickers then have the chutzpah to blame “market failures” for the wreckage they themselves have created — an ever-changing hodgepodge of bad incentives, misdirected state efforts, and ominous fears about further unsettling state actions to come.

Owing to the built-in feedback that occurs in a genuinely free, profit-and-loss-based market system, people do not systematically err and fail in their multifaceted efforts to coordinate their own economic activities — unless, that is, the state runs amok, breaking their legs willy-nilly and crippling the operation of the price system. Economic analysis and policy-making that disregard this reality rest on a fallacious foundation.

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Source: MISES INSTITUTE

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Colorado Veterans Suffering From PTSD Denied Legal Marijuana in Colorado

April 29, 2014 in PERSONAL LIBERTY

By drosenfeld

Veterans With PTSD Who Use Legal Marijuana in Colorado Can Lose VA Medical Care and Benefits

Legislation to Add PTSD As Qualifying Condition for Medical Marijuana Rejected By Colorado Legislature

DENVER – Yesterday, a bill failed to pass the Colorado House State, Veterans, and Military Affairs committee that would have added post-traumatic stress disorder (PTSD) to the list of ‘debilitating medical conditions’ that qualify for a medical marijuana recommendation. This timely bill (HB14-1364) would have addressed a major gap in access to medical marijuana in Colorado for veterans and all those suffering from PTSD.

April 29, 2014

Drug Policy Alliance

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Source: DRUG POLICY

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Reforming the Government’s Housing Finance System without Fixing It

April 29, 2014 in Economics

By Mark A. Calabria, Ike Brannon

Mark A. Calabria and Ike Brannon

On Tuesday the Senate Banking Committee will be voting on legislation to reform our current system of government-sponsored enterprises (or GSEs) in the housing market and their role in helping to finance home mortgages, with the full Senate possibly voting as well later this year. And not a moment too soon: Some sort of reform is long overdue. Fannie Mae and Freddie Mac, the aforementioned GSEs got away with a multitude of sins before the financial crisis, most of which were excused because they were ostensibly done to further the dubious goal of increasing home ownership. Home ownership became the mother’s milk of the political class on both sides of the aisle.

These days few people pretend that increasing home ownership is an unambiguous good. The financial crisis and the trillion dollar deficits in its aftermath were the most obvious cost of this ruinous policy goal.

Government too often makes reforms to fix the last crisis while failing to think creatively about the potential risks that might trigger the next one.”

However, the legislative language that will be put to a vote tomorrow doesn’t extricate the government from the housing finance mess it created. By putting over $5 trillion of debt owned by Fannie Mae and Freddie Mac on the Treasury’s balance sheet, it opens the government up to another massive liability. In the event of another recession or housing downturn, the government may find itself just as exposed as it was in 2008.

First, a brief primer on Fannie and Freddie: they do not make home mortgages, but rather buy mortgages from banks, package them together, and then sell them to interested investors.

When done correctly it is a business that can be immensely profitable, especially when done by an entity that enjoys low borrowing costs because of the backing (whether implicit or explicit) of the federal government.

And it was very profitable for a long time for the two, but the pressure from shareholders to keep returning ever-growing profits (especially in the face of higher interest rates) and from Congress to do more to help low-income Americans buy homes eventually led to the two entities buying (and keeping) low-quality, high-yield mortgages and leveraging them up to goose their returns.

This strategy backfired spectacularly, and the two firms essentially went bust.

In the midst of the great recession the government put them into a conservatorship, assumed …read more

Source: OP-EDS

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Pardon Me, but Obama's Right on Clemency for Non-Violent Drug Offenders

April 29, 2014 in Economics

By Gene Healy

Gene Healy

Last week, leading conservatives raised the alarm about yet another terrifying instance of “presidential lawlessness” from Barack Obama. What is it this time? New revelations of dragnet spying? Targeting more American citizens with flying robot assassins? Nope: he’s going to let more nonviolent drug offenders out of prison.

On Wednesday, the Department of Justice announced new criteria for clemency petitions: they’ll prioritize applications of “non-violent, low-level offenders” who would have received “a substantially lower sentence” under current law; have served at least 10 years; lack “a significant criminal history”; and “have no history of violence” before or during imprisonment.

I’ve never before felt compelled to defend President Obama on a sweeping use of executive power, but he’s on firm legal ground here.”

“A gross abuse” of power, cries National Review’s Andy McCarthy, “making a mockery of his core constitutional duty to execute the laws.”

“This is lawlessness” Charles Krauthammer fumed on Fox News, “why can’t the president obey the Constitution?”

About that Constitution: Article II, section 2 gives the president “power to grant Reprieves and Pardons for Offences against the United States.”

“The benign prerogative of mercy,” the Supreme Court has said, “is unlimited except in cases of impeachment,” and “cannot be fettered by any legislative restrictions.”

I’ve never before felt compelled to defend President Obama on a sweeping use of executive power, but he’s on firm legal ground here — and, as even Krauthammer admits, the president has a point on the merits.

So what’s all the conservative caterwauling about? For McCarthy, the clemency initiative represents “the execution of Obama’s whims”: an illegitimate use of the pardon power by an administration that (allegedly) “does not like the federal narcotics laws.” Channelling the Constitution’s framers, Senator Jeff Sessions, R-Ala., tells us they’d be appalled by this “alarming abuse of the pardon power,” which they only intended “to be used on a limited, case-by-case basis.”

But Obama is hardly the first president whose policy preferences have informed his use of the power. Upon taking office, Thomas Jefferson freed political dissenters convicted under the Sedition Act, which he deemed a “nullity as absolute and palpable as if Congress had ordered us to fall down and worship a golden Image.” (It seems safe to say he didn’t like the law.) Woodrow Wilson, whose veto of the National Prohibition (Volstead) Act was overridden by Congress, issued hundreds of pardons for alcohol-related offenses during his …read more

Source: OP-EDS

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Fighting Inequality: Rule of Law Vs. Legal Plunder

April 29, 2014 in Economics

By James A. Dorn

James A. Dorn

The release of Thomas Piketty’s new book “Capital in the Twenty-First Century” by Harvard University Press has caused a rush of media attention for the 42-year-old professor who teaches at the Paris School of Economics.

He advocates a steeply progressive income tax with a top rate of 80% along with a wealth tax to reduce inequality, which he finds to be on the rise globally.

If his scheme were implemented, “legal plunder” (a term coined by the 19th century French liberal Frederic Bastiat) would undermine the rule of law, which is meant to safeguard persons and property, and turn the concept of justice on its head — from meaning the prevention of injustice to the use of force to dictate some politically favored distribution of income and wealth.

Piketty claims he is not a Marxist but rather a socialist with a belief in private property. Yet, the contradiction should be apparent: One cannot defend private property and at the same time call for a massive taking of property.

Following the policy prescriptions of Piketty and Shiller would not lead to social harmony and prosperity, but rather to injustice and the loss of liberty.”

Piketty reveals his preferences when he states: “Capitalism and markets should be the slave of democracy and not the opposite.”

In his view, property is not a natural right prior to the law; it is a creation of the state. Hence, the majority should be able to use the power of government/legislation to heavily tax the rich and near-rich. The purpose would be to rid the world of inequality. This is his moral imperative.

The likely result of this utopian scheme would be to drive creative people out of high-tax countries, slow economic growth, and make societies poorer in the long run.

More important, as the size and scope of government grew, there would be a consequent loss of personal and economic freedom. Rent-seeking, corruption and the demise of individual responsibility — as property rights were attenuated — would destroy the fabric of civil society.

The U.S. was designed as a government of limited powers, as a constitutional republic, whose primary function is to safeguard persons and property so that liberty and justice reign; it was not meant to be a redistributive state.

Piketty is by no means alone in his quest for greater income equality. Nobel laureate economist and Yale Professor Robert Shiller would use an indicator of …read more

Source: OP-EDS