You are browsing the archive for 2014 May 20.

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Gabriel Kolko (1932-2014)

May 20, 2014 in Economics

By Peter G. Klein

Gabriel Kolko, the influential New Left historian whose Railroads and Regulation (1965) and The Triumph of Conservatism (1963) offered a radical challenge to the prevailing, “public interest” account of business regulation, died yesterday. Murray Rothbard admired Kolko and helped popularize Kolko’s view that “progressive” regulations were nearly always the joint work of protectionist business leaders and self-aggrandizing politicians. As Rothbard wrote in “Left and Right”:

Orthodox historians have always treated the Progressive period (roughly 1900-1916) as a time when free-market capitalism was becoming increasingly “monopolistic”; in reaction to this reign of monopoly and big business, so the story runs, altruistic intellectuals and far-seeing politicians turned to intervention by the government to reform and regulate these evils. Kolko’s great work demonstrates that the reality was almost precisely the opposite of this myth. Despite the wave of mergers and trusts formed around the turn of the century, Kolko reveals, the forces of competition on the free market rapidly vitiated and dissolved these attempts at stabilizing and perpetuating the economic power of big business interests. It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market that business turned, increasingly after the 1900′s, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftish and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations.

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Source: MISES INSTITUTE

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Senate Health Committee Passes Comprehensive Bi-Partisan Medical Marijuana Bill

May 20, 2014 in PERSONAL LIBERTY

By drosenfeld

New York Takes Major Step Toward Becoming Medical Marijuana State

Patients and Families Cheer Step Forward, Call for Vote in Full Senate

Albany — Today, the New York State Senate Health Committee passed (S.4406-B/Savino) by a bipartisan vote of 9 – 8. This is the first time in years that the Senate has taken up the issue of medical marijuana. The bill, known as the Compassionate Care Act, would alleviate the suffering of thousands of seriously ill New Yorkers by allowing the use of marijuana to treat debilitating, life-threatening illnesses under a doctor’s supervision.

May 20, 2014

Drug Policy Alliance

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Source: DRUG POLICY

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Abolish the Fed and Let the Market Take Care of Fractional-Reserve Banking

May 20, 2014 in Economics

By Joseph Salerno

A very interesting post on the  bionic mosquito blog elaborates the insights of Hans Hoppe and myself into a persuasive argument that the only reason that modern fractional-reserve demand deposits are accepted as money today is because of the federal deposit insurance guarantee backed up by the Fed as the monopoly money issuer and bailer-outer-of-last-resort.

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Source: MISES INSTITUTE

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Entrepreneurship in the Quarterly Journal of Austrian Economics

May 20, 2014 in Economics

By Mark Thornton

Samuel Bostaph provides an excellent overview, analysis, and criticism of theories of entrepreneurship including Mises, Schumpeter, and Kirzner in this article.

Christopher Brown and Mark Thornton show that Richard Cantillon’s theory of entrepreneurship (adopted later by Knight and Mises) was crucial for his discovery of economic theory in this article.

ABSTRACT: Richard Cantillon is credited with the discovery of economic theory and was the first to fully consider the critical role of entrepreneurship in the economy. Cantillon described entrepreneurship as pervasive and he casted the entrepreneur with a pivotal role in the economy. Using a sample of models from Cantillon’s Essai, we provide evidence that his theory of
entrepreneurship was the fundamental tool by which he constructed economic theory and that absent his theory of entrepreneurship his theoretical constructions fail. We believe this discovery both highlights the importance of entrepreneurship and contributes to our understanding of the nature of economic theory.

The entire issue of the Quarterly Journal of Austrian Economics can be found here.

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Source: MISES INSTITUTE

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Simpson to Publish 2 Volumes on ABC Theory

May 20, 2014 in Economics

By Mark Thornton

Brian Simpson of National University provides a description of his two-volume book project on the Austrian Theory of the Business Cycle:
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Members of this list might be interested in the book I have recently completed. It’s a two-volume book on Austrian business cycle theory (ABCT). The main title is Money, Banking, and the Business Cycle. The subtitle for volume one is Integrating Theory and Practice. The subtitle for volume two is Remedies and Alternative Theories. The book provides a comprehensive presentation and defense of ABCT and a free monetary and banking system. Volume one was published in April and volume two is due out in July. The publisher is Palgrave Macmillan.
Each book contains two parts. Part one of volume one focuses on my exposition of ABCT. In addition to the traditional presentation that shows how manipulations of the supply of money and credit by the government cause changes in interest rates that generate the cycle, my presentation incorporates the effects of changes in the money supply on spending, business revenues, and profits and the rate of profit in the economy and the role these play in generating the cycle. I show how the responses of businessmen and entrepreneurs to changes in both interest rates and the rate of profit produce the cycle. In part one I also defend ABCT from criticisms, including the criticism based on so-called rational expectations, the claim that ABCT places too much emphasis on interest rates, and the claim that it misidentifies the relationship between interest rates, inflation, and/or investment. I defend the theory from other criticisms as well.
In part two, I apply the theory to U.S. history to illustrate the explanatory power of the theory. I use extensive data for the U.S. from 1900 to 2012 to show how the theory can be used to explain specific episodes of the cycle. I use interest rate data, the rate of profit, money supply data, the velocity of money, industrial production, GDP/GNP, gross national revenue (a more comprehensive measure of spending and output than GDP/GNP), and other data. As a part of this effort, I show how the data illustrate changes in the structure of production that ABCT predicts. I also demonstrate the explanatory power of the theory using the Mississippi Bubble in 18th century France.
Part one of …read more

Source: MISES INSTITUTE

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Boston Herald Op-Ed: Barron Not Qualified for Fed Bench

May 20, 2014 in Politics & Elections

Harvard Law professor David Barron is a former acting assistant attorney general in the Obama administration. While in President Obama’s Office of Legal Counsel he wrote memos justifying the extrajudicial killing of an American citizen abroad.

Last year, the president nominated Barron to a seat on the U.S. Court of Appeals for the First Circuit and a vote on his nomination is expected this week. I am going to fight this nomination, because I believe Barron has disqualified himself from serving as a federal judge.

I’ve read the Barron memos concerning the legal justification for killing an American citizen overseas without a trial or legal representation. While the president forbids me from discussing what is in the memos, I can tell you what is not in the memos.

There is no valid legal precedent to justify the killing of an American citizen not engaged in combat. In fact, one can surmise as much because the legal question at hand has never been adjudicated.

The courts have examined due process rights of individuals actually captured on a battlefield, but no court has ever reviewed whether an American citizen can be killed without legal representation or a trial. That is precisely why I cannot support placing professor Barron on the appellate court.

I would much rather appoint a lifetime federal judge with heroic qualities, one who had the courage to tell the president that there is no legal precedent or constitutional authority for killing an American citizen not engaged in combat and that the Supreme Court should decide the question in open court.

Some will say that Anwar al-Awlaki was evil and deserved to die. I don’t necessarily disagree with his punishment. I disagree with how the punishment was decided. American citizens not on a battlefield must be convicted before they are sentenced to death. Let me repeat that order for some who seem to have lost sight of our Constitution and basic human rights – you must try and convict someone before you punish them. For further explanation, please refer to the Fifth Amendment.

For those critics not alarmed by granting the right to kill without a trial, realize that the decision to kill is sometimes based on metadata. You know the innocuous business records the government grabs up and tells us not to be concerned with?

A former National Security Agency official was recently quoted as saying, ‘We kill people …read more

Source: RAND PAUL

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After Almost 13 Years, It's Time to End Congress' Blanket Authorization of Force

May 20, 2014 in Economics

By Gene Healy

Gene Healy

It may sound hard to believe, but Senate Majority Leader Harry Reid, D-Nev., isn’t always wrong — at least when he states the obvious: “9/11 is a long time ago,” he said Wednesday, “and it’s something that needs to be looked at again.”

Two imperial presidents in a row have treated that authorization like a permanent delegation of congressional war power to the president.”

The “it” is the post-9/11 Authorization for Use of Military Force resolution, or AUMF, adopted three days after the terror attacks, and now going on its lucky 13th year. It’s been in effect nearly twice as long as the Gulf of Tonkin resolution authorizing Vietnam, what was “America’s Longest War” — until the 21st century, that is.

On Sept. 14, 2001, Congress authorized the president to use “all necessary and appropriate force” against the perpetrators of the 9/11 attacks and those who “harbored” them. Two successive administrations have since turned the 60 words of the AUMF’s operative clause into what journalist Gregory Johnsen calls “the most dangerous sentence in U.S. history” — a writ for a war without temporal or spatial limits.

The last time the Senate held hearings on the AUMF, Sen. Lindsey Graham, R-S.C., asked the Pentagon’s civilian special operations chief, Michael Sheehan, “does [the president] have the authority to put boots on the ground in the Congo?” Answer: “Yes, sir, he does.”

Predictably, the hawkish Graham was totally okay with that. “The battlefield is wherever the enemy chooses to make it,” right? Right, said Sheehan: “from Boston to the [Federally Administered Tribal Areas of Pakistan].”

Asked how much longer the war on terrorism will last, Sheehan replied, “at least 10 to 20 years.” So presumably the AUMF can serve as the basis for Chelsea Clinton’s “kill list” in 2033, after she trounces George P. Bush.

Lyndon Johnson once compared the Gulf of Tonkin resolution to “Grandma’s nightshirt” because “it covers everything.” Even LBJ might have marveled at how the last two administrations have stretched the post-9/11 AUMF.

Under the theory that “the United States is a battlefield in the war on terror,” the Bush administration invoked it to justify warrantless wiretapping and military detention of American citizens on American soil. The Obama administration cites it as legal authority for the extrajudicial killing of Americans via remote-control.

The Senate Foreign Relations Committee will be taking another look at the AUMF this week. The hearing’s title, “Authorization For Use Of Military Force After …read more

Source: OP-EDS

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Today: Senate Health Committee to Vote on Compassionate Care Act – New York's Comprehensive Medical Marijuana Bill

May 20, 2014 in PERSONAL LIBERTY

By drosenfeld

Dozens of Patients, Caregivers, and Healthcare Providers from Across New York Come to Albany to Attend Hearing, Demand Passage of the Bill

Patients and Caregivers Available for Interviews

May 20, 2014

Drug Policy Alliance

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Source: DRUG POLICY

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Conservatives Support Higher Minimum Wage

May 20, 2014 in Economics

By Jeff Deist

Nixon

Let’s not kid ourselves: the so-called party of free markets and business supports minimum wage hikes, at least when put to a vote. Ramesh Ponnuru reminds us how GOP Senators voted on the issue back in 2007, and even offers a different approach for conservatives seeking to win the hearts and minds of working-class voters: forget wages, just subsidize low-income folks directly by expanding Nixon’s brainchild, the earned income tax credit.  Of course Milton Friedman also championed the concept of a negative income tax, a con that Hazlitt unraveled in Man vs. the Welfare State.

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Source: MISES INSTITUTE