You are browsing the archive for 2014 May 21.

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Sen. Paul Appears on CNN's The Lead with Jake Tapper- May 21, 2014

May 21, 2014 in Politics & Elections

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Source: RAND PAUL

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Audio: Bob Murphy Refutes Thomas Piketty

May 21, 2014 in Economics

By Ryan McMaken

Interviewed by host Tom Woods, Bob Murphy demonstrates that the author of a book on capital doesn’t seem to know any capital theory.

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Source: MISES INSTITUTE

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Join Lew Rockwell and Jim Grant in NYC Tomorrow

May 21, 2014 in Economics

By Ryan McMaken

Please join Jim Grant, Lew Rockwell, Sean Fieler, Bob Hoye, and others at the Committee for Monetary Research & Education program and dinner in NYC Thursday, May 22, at 4:00 pm at the Union League Club.

If you can’t attend, you can witness an historic event with the first webcast of the CMRE dinner via a Google OnAir Hangout on Thursday.

More info here. 

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Source: MISES INSTITUTE

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Piketty on Inequality

May 21, 2014 in Economics

By Randall Holcombe

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The ultimate thesis in Thomas Piketty’s best-selling Capitalism in the Twenty-First Century is that the return on capital is higher than the growth in output and wages, so the owners of capital will see their wealth, and therefore, incomes, rise faster than those who earn the bulk of their incomes through labor. The distribution of wealth and income will become increasingly skewed to the benefit of the owners of capital.

Piketty recommends progressive taxes on income and capital as the remedy to the growing inequality he forecasts. He says (p. 471), “…the ideal policy for avoiding an endless inegalitarian spiral and regaining control over the dynamics of accumulation would be a global tax on capital.” The tax (p. 516) “…ought to be a progressive annual tax on individual wealth.”

Piketty makes clear that the purpose of the progressive taxes he recommends is not to provide funds to raise the incomes of those at the bottom, but rather to lower inequality by reducing the incomes of those at the top.

Recommending a progressive income tax with rates of 50-60% on incomes over $200,000 and a top marginal rate of 80% on incomes above $500,000-$1 million, he says (p. 513), “A rate of 80 percent applied to incomes above $500,000 or $1 million a year would not bring the government much in the way of revenue, because it would quickly fulfill its objective: to drastically reduce remuneration at this level…” Recommending a progressive tax on capital, Piketty (p. 518) says, “The primary purpose of the capital tax is not to finance the social state but to regulate capitalism.”

Piketty freely admits that the policies he recommends to reduce inequality would not do so by bringing up those at the bottom end but rather by bringing down those at the top.

When one looks at the remarkable accomplishments of capitalism, an economic system that is roughly 250 years old, among its top accomplishments is how much it has done to improve the standards of living of average citizens and the working class. The rich have always been very comfortable, and capitalism has brought a level of comfort to working-class people today that would have been unimaginable to even the most well-off people a century and a half ago.

Why should average citizens be concerned about the wealth of the very well-off if the system that makes them well-off produces prosperity for everyone? Evidence suggests that most people …read more

Source: MISES INSTITUTE

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No Taxation without Representation: How a Fundamental American Principle Is a Technicality to the New York Times

May 21, 2014 in Economics

By Trevor Burrus

Trevor Burrus

The New York Times has a predictably dismissive editorial about the latest challenges to Obamacare being argued in federal courts. One of those challenges is based on the Constitution’s Origination Clause, which requires that “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” Since the Affordable Care Act was entirely written in the Senate, the argument goes, the revenue raising provisions violate the Origination Clause, including Chief Justice John Roberts’s “tax” for not purchasing insurance.

As Randy Barnett writes over at the Volokh Conspiracy, everyone knows that the Affordable Care Act was passed via a sneaky subterfuge designed to get around the requirements of the Origination Clause. The Senate took a House bill giving tax credits to first-time home buyers, “amended” it to empty it of all content except for the bill number, and then filled it back up with the 2700 pages that would become the Affordable Care Act. By doing this the Senate purportedly “complied” with the Origination Clause.

The Origination Clause was included in the Constitution to ensure that the body that taxed the people, the House of Representatives, was also the most accountable to the people. It was so important to the Convention that its exclusion would have “unhinged the compromise,” in the words of George Mason of Virginia. It was also included because the Founders firmly believed that taxation was illegitimate unless it came from the people’s direct representatives.

Remember “no taxation without representation?”

The Clause may seem like a mere technicality, but for the Founders that “technicality” embodied principles that were important enough to fight a revolution against the most powerful army in the world.”

The Clause may seem like a mere technicality, but for the Founders that “technicality” embodied principles that were important enough to fight a revolution against the most powerful army in the world. Given that New York was always an enclave of British sympathizers, it’s not surprising that the Times has sided with the Tories.

During the Constitutional Convention, all or part of seven days, or 8 percent of the 89 total session days, were devoted to the Origination Clause. In James Madison’s notes on the Convention, which are famously incomplete, he devoted nearly 8000 words to debates over the Origination Clause.

The phrase “no taxation without representation” is often repeated but rarely understood. But when Parliament passed …read more

Source: OP-EDS

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Stanley Fischer Joins the Echo Chamber

May 21, 2014 in Economics

By Peter G. Klein

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The Senate has confirmed Stanley Fischer to the Federal Reserve Board of Governors, where he will soon become the Fed’s #2 official as Vice Chair. Fischer is an eminent mainstream macroeconomist and former Governor of the Bank of Israel (he was also chief economist at the World Bank and a top official of the IMF). His monetary policy views are largely indistinguishable from those of Ben Bernanke and Janet Yellen. He strongly favors the current Fed policy of keeping short-term interest rates near zero while gradually reducing the Fed’s bond purchases (“quantitative easing”). He is a bit more moderate than Bernanke and Yellen on so-called forward guidance, a euphemism for the Fed’s attempt to manipulate investors by announcing its supposed long-term plans in advance. But his overall understanding of how the economy works, the theories and models that lie behind his thinking, and his general policy views, are more or less the same as Bernanke’s and Yellen’s. (Not too surprising as he was Bernanke’s PhD supervisor at MIT.)

The Board of Governors, as described in official Fed publications, “supervises and regulates the operations of the Federal Reserve Banks, exercises broad responsibility in the nation’s payments system, and administers most of the nation’s laws regarding consumer credit protection.” (The Federal Open Market Committee, which conducts monetary policy, includes the Board plus the presidents of the regional Fed banks.) The Board performs these duties by conducting “thorough analysis of domestic and international financial and economic developments.” However, unlike effective governing boards at private institutions, diversity of opinion is not welcome on the Board of Governors.

A basic principle of good organizational governance is that board members should have a variety of backgrounds, areas of expertise, theoretical or philosophical perspectives, and experiences. The board as a whole can then analyze issues from different points of view, pooling complementary sets of knowledge and skills to get a balanced and holistic perspective on problems and their possible solutions. If the Fed is supposed to provide “scientific,” politically neutral analysis and administration, wouldn’t you expect some diversity on the Board?

Of course, I’m not expecting the Fed to appoint an Austrian economist as Governor. But there are a number of plausible, politically feasible candidates who would have provided balance to Yellen’s somewhat extreme views. John Taylor is the most obvious candidate, along with Glenn Hubbard or even Larry Summers. (OK, maybe Summers is too controversial, politically, …read more

Source: MISES INSTITUTE

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Breitbart Op-Ed: Do We Continue to Arm the Enemies of Israel and the U.S. in Syria?

May 21, 2014 in Politics & Elections

In September, the Obama Administration and many Republicans were pushing for the U.S. to intervene in Syria. I said no.

We did not have an articulable national security interest in that country, and it was also unclear if we had any discernible allies in that nation’s civil war.

Five months prior, my colleagues in the Senate Foreign Relations Committee voted overwhelmingly to arm the Syrian rebels who were opposing Bashar al-Assad. I warned that the weapons we gave extremists could be used against Christians in the region. I warned that weapons we gave to extremists in Syria could one day potentially be used against our ally Israel.

Almost a year ago to the day, I admonished the Committee for that vote. I told them, ‘This is an important moment. You will be funding, today, the allies of al-Qaeda.’

‘It’s an irony you cannot overcome,’ I added.

On Monday, the Washington Free Beacon’s Adam Kredo reported: ‘One of the militant Syrian rebel groups provided access to advanced U.S. missiles said that it is seeking ‘the return of all Syrian land occupied by Israel,’ a stance that could potentially complicate U.S. military support to the armed rebel group.’

Giving missiles, tanks, and other advanced weaponry to extremist groups who think portions of Israel belong to Syria is problematic to say the least.

But this turn of events should not surprise anyone.

Last September, Syrian rebels groups assaulted historic Christian villages, threatening to kill anyone who refused to convert to Islam. Last June, USA Today reported that Syrian rebel groups were pledging their loyalty to al-Qaeda. In January, Director of National Intelligence James Clapper said al-Qaeda affiliated Syrian rebel groups were planning to attack the U.S.

How many examples or lessons do we need to determine that arming the Syrian rebels is not in, and may in fact be against, our national interest?

As the Washington Free Beacon reported, ”This is precisely the problem we’ve faced in arming the Syrian opposition,’ said terrorism analyst Patrick Poole. ‘Despite repeated promises that we would only arm ‘vetted rebels’ there’s no confidence that anyone in the U.S. government has any idea who they’re dealing with or what their agenda might be.”

The Assad regime is a brutal dictatorship that is an affront to all humanity. But so are many of the groups opposing it. There is simply no U.S. ally in this tragic war.

Washington has …read more

Source: RAND PAUL

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Butler Shaffer on Kolko

May 21, 2014 in Economics

By Mises Updates

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Butler Shaffer writes:

Fifty-one years ago, I sat at my typewriter and wrote a very lengthy criticism (seemingly five or more pages) to a lawyer who had just published a book defending anti-trust cases. I gave him a no-holds-barred defense of the free market and a condemnation of those who (like him) wanted to restrain the market. I also sent a copy of the letter to Murray Rothbard – whom I had never met, but whose work I admired. A few days later, I received a response from Murray, suggesting that I might want to take a look at the just-published work of a revisionist economic historian, Gabriel Kolko. I immediately ordered the book – THE TRIUMPH OF CONSERVATISM – and, when it arrived, immediately read it. I later purchased and read his RAILROADS AND REGULATION book. His (and other’s) writings from the left, coupled with revisionists from the right, provided bipartisan encouragement to one who was beginning to learn that the entire political regulatory system was a corporate created and directed racket; that the attacks on the marketplace had their explanations in other than the Randian silliness about “America’s Persecuted Minority: Big Business.” Kolko’s death saddens me.

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Source: MISES INSTITUTE

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SENATE FLOOR: Sen. Rand Paul Opposes the Nomination of Barron- May 21, 2014

May 21, 2014 in Politics & Elections

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Source: RAND PAUL

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Sen. Paul Opposes the Nomination of Barron

May 21, 2014 in Politics & Elections

WASHINGTON, D.C. -Sen. Rand Paul today took to the Senate floor to oppose the nomination of Professor David Barron to a seat on the U.S. Court of Appeals for the First Circuit. Sen. Paul’s prepared floor remarks can be found below.

REMARKS PREPARED FOR DELIVERY:

I rise today in opposition to killing American citizens without trials.

I rise today to oppose the nomination of anyone who would argue that the President has the power to kill American citizens not involved in combat.

I rise today to say that there is no legal precedent for killing American citizens not directly involved in combat and that any nominee who rubber stamps and grants such power to a President is not worthy of being placed one step away from the Supreme Court.

It isn’t about seeing the Barron memos. It is about what they say. I believe the Barron memos disrespect the Bill of Rights.

The Bill of Rights isn’t so much for the American Idol winner.

The Bill of Rights isn’t so much for the Prom Queen or the High School quarterback.

The Bill of Rights is especially for the least popular among us.

The Bill of Rights is especially for minorities, whether you are a minority by virtue of the color of your skin or the shade of your ideology.

The Bill of Rights is especially for unpopular people and unpopular ideas and unpopular religions.

It is easy to argue for trials for Prom queens and American Idol winners. It is harder to argue for trials for traitors and those who wish harm on fellow Americans.

A mature freedom, though, defends the defenseless. Allows trials for the guilty. Protects even speech of the most despicable nature.

After 9/11, we all recoiled in horror at massacre of thousands of innocents. We fought a war to tell our enemies that we would not allow anyone to attack us.

As our soldiers returned from Afghanistan, I often ask them to explain in their own words what they fought for and to a soldier they explain that they fought to defend the constitution and the Bill of Rights.

It is a disservice to their sacrifice not to openly debate whether the Bill of Rights applies to American citizens not directly involved in combat.

Let me be perfectly clear, I am not referring to anyone on …read more

Source: RAND PAUL