You are browsing the archive for 2014 June 04.

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Rebuilding Mises.org

June 4, 2014 in Economics

By Mises Updates

For the Mises Institute, Mises.org is our calling card and our doorstep. It’s our single greatest tool for outreach. It connects us to the world, and connects the world to the scholarship of liberty.

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Source: MISES INSTITUTE

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Audio: Central Planning Fails

June 4, 2014 in Economics

By Ryan McMaken

Interviewed by host Alan Butler, Joe Salerno explains several ways in which government intervention in our economy is leading to destruction.

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Source: MISES INSTITUTE

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The Myth of a U.S. Manufacturing Decline

June 4, 2014 in Economics

By Daniel J. Ikenson

Daniel J. Ikenson

If what is meant by manufacturing “revival” is a sector that once again supports nearly 20 million jobs, as it did at its peak in 1979, or accounts for 28% of the U.S. economy, as it did at its peak in 1953, the answer is, thankfully, an emphatic “no.” If “revival,” however, is defined as continued growth in value-added output, revenues, foreign investment, research and development expenditures, capital investment, and productivity, the answer is a near-certain “yes.”

Many who opine about manufacturing seem to yearn for the past, but let’s hope the sector doesn’t backslide to 1979’s level of relative inefficiency, when the average U.S. worker produced $28,000 of value added annually—less than one-fourth as productive in real terms as today’s $170,000 annual per worker value added. Nor should we hope for the economy to be as dependent on manufacturing as it was in 1953. Though the real value of U.S. manufacturing output has increased more than sixfold since 1953, U.S. consumers spend twice as much on services than on goods, today, and 90% of the American workforce is employed outside manufacturing.

The term “revival” implies that U.S. manufacturing is on a downward trajectory. But the $2.1 trillion of U.S. manufacturing value added in 2013 was a new high—in real terms. Indeed, if U.S. manufacturing were its own country, it would be the world’s 10th largest economy, just after Russia and before India. Excluding cyclical recession years, U.S. manufacturing sets records almost every year with respect to value added, revenues, exports, imports, profits, and returns on capital. Yet the myth of manufacturing decline persists like a chronic medical condition.

As of 2013, nearly $1 trillion of foreign direct investment was parked in U.S. manufacturing, by far the number-one manufacturing investment destination world-wide. Clearly, the most successful foreign-headquartered companies see a future for U.S. manufacturing. Their revealed preferences for investing in America should count for more than the tales of woe spun by those who petition Washington for protectionist outcomes.

Daniel J. Ikenson is director of Cato’s Herbert A. Stiefel Center for Trade Policy Studies, where he coordinates and conducts research on international trade and investment policy.

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Source: OP-EDS

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Pope’s Right-Hand Man Joins Anti-Market Crusade

June 4, 2014 in Economics

By Ryan McMaken

220px-OscarKardinalRodriguez

The latest volley in war against free markets by clergymen continues with June 3rd’s speech by Cardinal Archbishop Maradiaga of Honduras.

I generally prefer to not get involved in disputes with clergy, but since the Pope and some of his Cardinals have decided to repeatedly declare war on the defenders of the Golden Rule and the exercise of free will known as libertarians, I have taken the time to fisk the Cardinal’s speech below.

Before we begin, let’s first define what libertarianism means. Historically known as classical liberalism, it is simply the position that it is immoral to employ violence to force one’s will on others. That is, it is immoral to steal and kill to obtain goods or services from other people. Libertarians also, to varying degrees, maintain that this same prohibition applies to states and that there is nothing magic that takes place when one becomes a government employee.  Therefore, a government job does not give one a right to use violence against others whether it be theft in the form of taxation or murder in the form of war.

Thus, when we see people like Maradiaga criticize “free markets” what they are really criticizing is freedom itself. Markets, after all, are nothing more than the phenomenon of persons freely exchanging goods and services. Markets are not an ideology or a sentient being or some sort of planned phenomenon. They are simply what naturally arise in any society in which persons exercise their free will. Markets can exist at any time in any place where freedom is allowed. Markets are not a new invention, and they are not the product of any particular ideology. Unfortunately, the history of humanity is mostly the history of potentates crushing the exercise of free will, and thus throughout history, we see the suppression of markets everywhere we look.

My comments appear [in bold with brackets.]

Cardinal Oscar Andres Rodríguez Maradiaga SDB,Archbishop of Tegucigalpa

The Catholic Case Against Libertarianism, Keynote. June 3rd. 2014

I would like to start quoting Michael Sean Winters’s recent article in NCR [i.e., the hard-core leftist publication The National Catholic Reporter]:

“Last week, the Holy Father addressed leaders of United Nations who called on him in Rome. He gave a short talk, which included these words calling for ‘the legitimate redistribution of economic benefits by the State.’ Then, America’s conservative chattering classes went ballistic. John Moody, executive vice president at Fox News and a former Vatican correspondent, might be expected from …read more

Source: MISES INSTITUTE

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Patients and Caregivers Rally Outside of Senator Skelos Office in Long Island to Demand Action on Medical Marijuana Bill

June 4, 2014 in PERSONAL LIBERTY

By drosenfeld

Senate Leadership is Holding Up a Vote on the Bill, Leaving Sick New Yorkers to Needlessly Suffer

Senate Refuses to Act on Bill Supported by More Than 80% of New York Voters and Thousands of New York Patients, Doctors & Caregivers

Rockville Centre, Long Island — Today, parents of children with epilepsy and patients living with multiple sclerosis and other serious, debilitating medical conditions will rally at the Rockville Centre LIRR station across from Senate Co-president Dean Skelos’ office to demand a vote on the Compassionate Care Act (S.4406-B/Savino and A.6357-B) in the New York Senate. The bill, which would create one of the nation’s most tightly regulated medical marijuana programs, would allow seriously ill patients access to a small amount of marijuana un

June 3, 2014

Drug Policy Alliance

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Source: DRUG POLICY

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The FTC Gives a “Quick Look” to a Merger

June 4, 2014 in Economics

By Joseph Salerno

150px-US-FederalTradeCommission-Seal.svg

The  fearless protectors of consumers at the Federal Trade Commission finally approved the takeover  of men’s clothier Jos. A. Bank by Men’s Wearhouse last week. According  to the terms of the agreement concluded way back  on March 11, Men’s Wearhouse will pay $65.00 per share and a total of $1.8 billion for its smaller rival.  The merger will result in the fourth largest men’s apparel retailer in the U.S. with combined annual sales of $3.5 billion and 1,700 stores nationwide.  The combined company will retain the two separate brands and store chains.  On the date the agreement was concluded, the stock prices of both companies rose, Men’s Wearhouse’s by 4.7% and Jos. A. Bank’s by 3.9%.  Bank’s stock price rose 56 % from October 2013, when merger talks began,  to the date of the merger agreement.  The  company is expected to realize $100-$150 million of cost savings annually over the  next three years.  This merger was a clear win-win for stockholders and consumers from the get-go

It was evidently not so clear to the FTC, however, which  began its expedited  “quick look” investigation of the agreement almost immediately and elicited testimony from executives from both companies in the first two weeks of April.  In closing its investigation and permitting the merger to proceed more than two months later on May 30, the FTC bureaucrats issued the following statement:

Despite limited competition from the Internet, the transaction is not likely to harm consumers because of significant competition from other sources. As in all transactions, FTC staff examined which product markets were likely to be affected and what the competitive landscape looks like in those markets. There were two such markets in this matter: (1) the retail sale of men’s suits and (2) tuxedo rentals. With respect to men’s suits, there are numerous competitors that sell suits across the range of prices of the suits the merging parties offer, including Macy’s, Kohl’s, JC Penney’s, Nordstrom, and Brooks Brothers, among others. The two firms also have different product assortments that reflect their different customer bases. Men’s Wearhouse, which sells branded and private-label suits, has a younger, trendier customer set, while Jos. A. Bank, which sells private-label suits only, has an older, more traditional customer base.

With respect to tuxedo rentals, Jos. A. Bank has been a small player in the market since its entry in 2010. Further, the parties compete with numerous local …read more

Source: MISES INSTITUTE

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Come As You Are

June 4, 2014 in Blogs

By Robin Koerner

I was a boring kid, more concerned with topping out in my next exam than with any sports team or rock band.

I think that was an early manifestation of a tendency I retain in my adult life and will likely take to my grave: a slight disdain for what everyone else thinks is great and, by implication, thinks that I should think is great. In other words, my precociousness as a child was an assertion of my individuality. Maturity as soft rebellion, if you will. In any youth culture, behaving like an adult is good a way to train as a future libertarian.

Although, as a kid, I mostly avoided pop music and sports (and still do), for some years, the music that I could guarantee to hear every day from my friends’ desks at school was Nirvana and Guns ‘N’ Roses. Those bands provided the sonic backdrop of my geography revision and math homework.

Whatever grunge was, I wasn’t. The school I went to was an old English manor house (check out the final scene of “If” — that was our dining hall) and I was being educated among many who would in a few years be wearing academic gowns in the hallowed halls of Cambridge and Oxford Universities. I ended up being one of them. I certainly couldn’t even imagine “dropping out” as a psychological possibility, let alone as something that could inform a culture. I mean, I wouldn’t even know how to drop out or hate myself, to borrow from one of Nirvana’s titles.

Bizarrely, I found myself last weekend sharing a stage with Nirvana’s bassist, Krist Novoselic, which, absent context, anyone who knew me when Nirvana was changing the musical world would say is just about the least likely thing that could ever happen to me.

The occasion was the annual conference of the Libertarian Party of Washington State. Krist was there in his capacity as Chairman of FairVote.org, an organization devoted to making our representation fairer and ensuring that every vote has the power to cause political change. Most votes in our current system are meaningless, as districts are gerrymandered to be immune to the vagaries of the ballot box and the elites of two parties make the rules to ensure that those who don’t make the rules also don’t …read more

Source: ROBIN KOERNER BLOG

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Cut Away: The U.S. Military Still Deters China

June 4, 2014 in Economics

By Benjamin H. Friedman

Benjamin H. Friedman

PunditsCongressional Republicans, and even allies have lately taken to worrying about U.S. military commitments in Asia. Their concern is that Pentagon budget cuts and distractions in Europe and the Middle-East undermine the U.S.’s ability or willingness to fight. So China might be emboldened to use its growing military for territorial aggression.

Those fears are misplaced. States on the receiving end of deterrent threats historically pay little attention to what the threatening state did elsewhere; they focus on its interests in their conflict and the military balance there. Because the United States and its Asian allies are not close to losing their military advantages over China and have as much reason now to fight as ever, U.S. defense cuts and foreign troubles do not endanger East Asia’s stability.

U.S. defense cuts and foreign troubles do not endanger East Asia’s stability.”

The Obama administration wants to spend $521 billion on “national defense” in fiscal year 2015, along with a supplemental request of $79 billion or so. If current spending caps remain the law, U.S. military spending, adjusting for inflation, will fall slightly in 2016, making it about 15 percent lower than 2010, the peak of the recent buildup, and then begin gradually rising. Still, non-war 2016 Pentagon spending would exceed U.S. Cold War averages and amount to roughly three times PLA spending, even adjusting for purchasing power differences. And the United States will devote a much bigger share of its wealth to military power.

Of course, total military spending reveals little about how combat between states would go. That depends mainly on the geography of combat and capabilities of the forces that can deploy to the fight. Those considerations show why the United States and its Asian allies will contain China for the foreseeable future. While a comprehensive review of the U.S.-China balance of power is impossible here, several points are revealing.

First, in the most likely war scenarios, the United States and an ally would be defending a coastline or island. Defending is easier than attacking, especially against invaders coming from the sea, as Chinese forces attacking Japan, defended islands, or Taiwan must. Dug-in forces on shore can withstand air attack and brutalize the ships or aircraft carrying landing forces.

Second, any U.S.-China war would occur in domains of relative U.S. strength: the air, the sea, and even space. Even if China <a target=_blank …read more

Source: OP-EDS

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“But Who Will Build the Roads?”

June 4, 2014 in Economics

By Per Bylund

solar-roadway-bike-path

As always, the market comes to the rescue through innovative entrepreneurship. And in this case, not only do these entrepreneurs promise to build roads – they will use the roads to generate electricity for sale on the market. So they solve two problems at once. Nay, three – the roads use part of the generated power to keep snow and ice off the surface, thereby making them safe even in cold weather. Wait, four – the roads can display lights to warn drivers of danger ahead such as wild animals.

The venture, called Solar Roadwaysis fully crowd-funded (closing in on double what they requested) but is looking to ”improve” existing government roads (which shouldn’t be all that hard) rather than lay their own. Too bad government doesn’t allow competition.

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Source: MISES INSTITUTE

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Italy’s Glimmer of Hope

June 4, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

The news coming out of last month’s elections for the European Parliament was deeply unsettling. Yes, voters delivered a well-deserved slapdown to the bureaucrats in Brussels. But they vented their dissatisfaction with the status quo by backing a motley array of nationalist, xenophobic, and outright fascist parties.

Often incorrectly lumped together as “right wing,” these parties are anything but pro-market, preferring a search for scapegoats — foreigners, immigrants, gays, Jews, Muslims, whoever — over reforms to the sclerotic European welfare state. For example, Marine Le Pen, leader of France’s National Front, believes there “are certain domains which are so vital to the well-being of citizens that they must at all costs be kept out of the private sector and the law of supply and demand” and supports government control of health care, education, transportation, and energy. In Denmark, the Danish People’s Party supports nationalized health care financed by taxation. In Hungary, the rabidly anti-Semitic Jobbik calls for the renationalization of strategically important companies. Greece’s neo-Nazi New Dawn opposes recent cuts in government spending and pensions.

Matteo Renzi has been reforming, and the European elections showed Italians are pleased.”

For many of these parties, their economic policies, which as mentioned above are often almost an afterthought compared with nationalist and anti-immigration sentiments, have very little regard for free markets, and are instead an amalgamation of welfarist, protectionist, and statist ideas.

One interesting and surprising potential bright spot, however, was in Italy, where the Democratic party of Prime Minister Matteo Renzi won nearly 41 percent of the vote, the largest percentage of any party across the entirety of Europe. What’s particularly noteworthy about this showing is that it comes despite the fact that Renzi has shown himself willing to challenge the country’s welfare state in ways that are virtually unprecedented for modern Italian politics.

Italy has long been one of the economic basket cases of Europe. Its debt, including future unfunded pension liabilities, well exceeds 365 percent of its GDP. Total government revenue approaches 48 percent of GDP, coupled with widespread tax evasion, while spending tops 50 percent. Rigid labor laws have led to an unemployment rate of 12.6 percent. Youth unemployment is almost 42 percent. And the country lost more than 1,000 jobs per day over the past year. The economy has shrunk by almost 3 percent since 2012.

In February, Renzi, who was then mayor of Florence, staged a …read more

Source: OP-EDS