You are browsing the archive for 2014 September 24.

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Five Libertarian Ideas #26 – NFL, Redbox, and ISIS

September 24, 2014 in Blogs

By Political Zach Foster

The Arab-Israeli conflict
As far as the Arab-Israeli conflict goes, international intervention is a lose-lose scenario. That guerrilla war’s been going on for almost 70 years. As a soldier I think the Israelis should slug it out with Hamas and erase the Gaza strip. As a constitutionalist I think they should make the Arabs full Israeli citizens guaranteed the rights thereof while also recognizing them as a protected minority. Furthermore, Israel should allow international companies to invest in the West Bank and create jobs for the Arabs. But other countries should stay the hell out. Let both sides stop killing and start trading. -9/11

Domestic violence is bad for business
I love seeing the backlash of sponsors withdrawing their support of the NFL or individual players amidst all the domestic violence scandals. The NFL doesn’t need government to regulate behavior. They’re finding out that hiring players who behave abhorrently is simply bad for business. -9/18

The Scotland referendum
[In response to the UK winning the vote:] William Wallace is rolling in his grave. -9/18

ISIS and the homeland
The more threats the Islamic State issues against my homeland and the people I love, the greater is my resolve not to be intimidated. Free people will not live in fear. As a matter of fact, I think I’ll go grill up some bacon just to spite them. -9/19

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Source: ZACH FOSTER RANTS

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German Bundesbank awards Carl Menger Prize

September 24, 2014 in Economics

By Jeff Deist

DB prize

Regardless of the merits or demerits of Mme Rey, Can you imagine the US Fed awarding a prize named for an Austrian economist?

French economist Hélène Rey has received the Carl Menger Prize for Economics, which this year was awarded for the first time. Andreas Dombret, member of the Executive Board of the Deutsche Bundesbank, presented her with the award, which carries prize money of €20,000, at the annual meeting of the Verein für Socialpolitik in Hamburg. “Hélène Rey’s research has substantially advanced the academic discussion; it has also found its way into the concrete work of central banks,” Mr Dombret said during the award ceremony. The job of economics, he continued, is to explain economic interrelationships and to use these explanations as a basis for making economic policy designed to increase public welfare.

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Source: MISES INSTITUTE

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Protectionist Politics at the WTO

September 24, 2014 in Economics

By Carmen Elena Dorobăț

Geneva_Ministerial_Conference_18-20_May_1998_(9305956531)

The WTO meets.

Amidst news of the prolonged worldwide recession, new air strikes, secession attempts, and climate change, international trade—which in 2008 went through its largest crisis in history—has been mostly out of the public eye.  Yet we’ve been told not to fear: the World Trade Organization, the foremost global body for promoting multilateral trade, remains watchful, and is optimistic that efforts for liberalization will bear fruit in the near future.

Sadly, the WTO’s hopes aren’t justified: the Doha Round of trade negotiations began in 2001, and even after thirteen years, success is nowhere in sight.

Seeking to address the liberalization concerns of WTO’s less-developed members, the Doha Development Round was supposed to culminate in 2005 with a new trade agreement. The envisioned deal concerned the reduction of trade barriers in commodities and services, as well as a new international framework for intellectual property rights. But soon after negotiations began, governments from developing countries—India, Brazil, China, and South Africa—and NGOs began to worry that international negotiations were an obstacle to the governmental protection of developing sectors and regulation of financial services. After the failure of the Cancún proceedings in 2004, trade scholars worried that Doha might not be completed by its original deadline, but kept the hope that negotiations would continue. However, trade talks came to a deadlock in 2006, 2009, and 2011, mainly due to differences in agricultural policies. The US and the EU even backed out of previous agreements to reduce export support and agricultural subsidies, arguing that they did not want to weaken their bargaining positions too early in the Round.

Attempts to reconcile disagreements among countries since then have been largely in vain. But in December 2013, new tailwinds seemed to push the Doha Round to more favorable shores. The Bali Ministerial Conference, which concluded with the signing of a package deal on trade customs collection and a post-Bali development agenda,  was touted to have “achieved what many believed was impossible”: bringing together the 160 WTO members for the first time in twelve years. But even though the Bali package does not have much to do with free trade—it facilitates  the collection, but not the reduction, of custom duties—the agreement still wasn’t signed by all members in July 2014. This time, India vetoed the ratification to gain more bargaining power for Prime Minister Modi’s program of domestic food subsidies. Reuters reported that …read more

Source: MISES INSTITUTE

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Piecemeal Sanctions Won't Deter Russia

September 24, 2014 in Economics

By Emma Ashford

Emma Ashford

Sometimes, Russia reminds me of my favorite childhood television show, Pinky and the Brain. At the start of each episode Pinky asks his companion Brain, the genetically engineered super-genius mouse, what they should do tonight, to which Brain invariably responds: “The same thing we do every night, Pinky — try to take over the world!” One imagines Vladimir Putin’s Security Council engaging in the same exercise. Putin responds: “We’ll do the same thing we do every night — provoke tensions in a small neighboring country, claim to be protecting ethnic Russians, and then initiate a covert land grab!” Cue theme music.

Joking aside, there is no denying the pattern in Russia’s relations with its neighbors. Trade barriers, ‘passportization’ of diaspora Russians, and support for separatists in states from Georgia to Ukraine have led to the re-ignition of a number of post-Soviet ‘frozen conflicts.’ This pattern obscures the fact that these conflicts are irrational; Russia rarely succeeds in changing the status quo, while sanctions undermine the Russian economy. The Kremlin itself seems detached from reality, blaming Western provocation and CIA spies for everything. But why is Russia’s foreign policy so erratic and belligerent? Can anything be done about it?

Western attention focuses almost exclusively on Vladimir Putin, who has captivated our imaginations as a strongman and ex-spook. But a focus on Putin’s personality alone ignores his ‘inner circle’ of unelected advisors, who feature heavily in Kremlin decision-making despite a lack of formal ministerial portfolio. The media’s focus on individuals is accurate in this regard: Institutions typically do not feature in the decision-making process, which is dominated by personalities, and bears little resemblance to Western democracies. Where strong foreign policy institutions would allow for measured debate and bureaucratic advice, personalities dominate Kremlin decisions.

Why is Russia’s foreign policy so erratic and belligerent? Can anything be done about it?”

Most of the decision-makers in the Ukrainian crisis belong to the group known as the Siloviki, former members of the security services who share a common worldview with Putin. They wield a vast amount of influence on foreign policy. Although the Siloviki do not possess a single worldview, they are generally nationalistic and supportive of Russia’s ‘return to greatness.’ As such, they perceive actions like NATO expansion as a threat to Russian interests, one worthy of drastic actions like supporting rebels or committing troops in Ukraine.

Personal perceptions are extremely influential in decision-making, with suspicion and hostility …read more

Source: OP-EDS

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The World’s Largest Subprime Debtor: The US Government

September 24, 2014 in Economics

By Ryan McMaken

debt2

Mises Daily Wednesday by David Howden:

After the 2008 financial crisis, banks were excoriated for lending sub-prime borrowers money. Now, in many ways, the US government is a huge sub-prime borrower itself, but when the day of reckoning comes, will anyone criticize the Federal Reserve for making the unsustainable debt-fueled spending spree possible?

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Source: MISES INSTITUTE

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Economists' Arguments against Obamacare Lawsuits Backfire

September 24, 2014 in Economics

By Jonathan H. Adler, Michael F. Cannon

Jonathan H. Adler and Michael F. Cannon

Three years ago, we blew the whistle on the government behavior now being challenged in multiple Obamacare lawsuits, including Halbig v. Burwell and King v. Burwell. We performed much of the legal analysis underpinning those challenges. So it amused us when economists Henry Aaron, David Cutler and Peter Orszag tried to defend the government and counsel against Supreme Court review of King, yet inadvertently undercut the government on both counts.

Contrary to their characterization, plaintiffs Halbig and King do not challenge the Patient Protection and Affordable Care Act, much less attempt to “repeal or invalidate” it. The plaintiffs claim the clear language of the act exempts them from the law’s mandates, yet the government is subjecting them to those taxes anyway. They are asking the government to follow Obamacare, not strike it.

Nor are these cases “a joke.” The plaintiffs won before one appellate court (Halbig) and lost before another (King). Even the latter court found “a literal reading of the statute undoubtedly accords more closely with [the plaintiffs’] position,” and the government’s position is “only slightly” stronger.

Agree or disagree, the need for final resolution of these cases is obvious and pressing.”

Nor is the statute “vague.” Obamacare lets the government pay some people’s insurance premiums, and impose its mandate taxes on certain employers and individuals, but only in states with a health-insurance exchange that, quoting the law, was “established by the State.” There is nothing vague about that language, which Congress used repeatedly and consistently. There is nothing in the statute inconsistent with it, or suggesting Congress understood it to mean anything other than what it says. The plaintiffs live among the 36 states that did not establish exchanges. They are exempt from those taxes.

Nor does the statute support a contrary interpretation “when read in its entirety.” Tellingly, the economists cite no statutory language authorizing the government to tax the plaintiffs. Nor do they offer contemporaneous statements from the law’s authors supporting their reinterpretation.

Nor is the claim that Congress intended to withhold subsidies in those 36 states “absurd.” Withholding federal subsidies in uncooperative states is how Congress sought to induce states to implement Obamacare’s other major coverage expansion, too. As enacted, the legislation threatened to withhold 12 times as much funding — and to deny health coverage to the poorest of the poor — in states that did not expand their …read more

Source: OP-EDS

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Murray Rothbard: His Life and Work

September 24, 2014 in Economics

By Ryan McMaken

Tom Woods discusses the life of Murray Rothbard with Lew Rockwell:

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Source: MISES INSTITUTE

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Zombie Spending

September 24, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

Aficionados of horror movies know that the monster is never really dead when you think it is. It may be down, but it will inevitably climb back from the dead at least one more time before the final credits. So it is with government programs. No matter how outdated, useless, wasteful, or redundant programs may be, they come as close to immortality as possible.

Recall that Washington is a town where a tax on long-distance telephone calls was enacted in 1898 to help pay for the Spanish-American War. That tax wasn’t repealed for good until 2006. Or consider wool and mohair subsidies. Congress passed this giveaway to farmers in 1954, having designated wool as a “strategic material” since it was used to make military uniforms. (No one is quite sure how mohair, which is largely used to upholster furniture, became part of the program, but that’s Washington.) In 1993 Congress noticed that military uniforms were actually made from synthetic fibers and began phasing out the subsidies. But by 2002, military necessities aside, the subsidies were back, and this year’s farm bill extends them until at least 2018, at a cost to taxpayers of $5 million. Likewise, the Rural Electrification Administration was created in 1935 to bring electricity to farm country. There aren’t many farms without electricity anymore, but the REA, now called the Rural Utilities Service, is still with us, spending almost $800 million last year.

Now we are seeing two more examples of programmatic immortality.

If you try to kill a government program, you’ll only make it mad.”

Example one is the “heat and eat” loophole in the food-stamp program. Under the complex rules for food-stamp eligibility, a family can qualify for higher benefits if it also receives benefits from the Low Income Heating Assistance Program (LIHEAP). Over the years, a number of states have discovered that they could extract extra federal food-stamp funding for their states by providing families with a nominal amount of LIHEAP funding, in some cases as little as one dollar.

Congressional Republicans sought to eliminate this loophole as part of the 2014 farm bill, but failed. They were able, however, to increase the eligibility threshold to require states to pay at least $20 in heating assistance before recipients could take advantage of the increased eligibility. It was expected that few states would continue trying to leverage the loophole once more of their …read more

Source: OP-EDS

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The Liberty to Leave

September 24, 2014 in Economics

By Doug Bandow

Doug Bandow

As the Scots debate independence, the British government has responded with every argument imaginable—except the threat to invade. Prime Minister David Cameron is no Abraham Lincoln.

So also it appears with Catalonia’s push for a referendum to secede from Spain, though the latter responded far less gently to Basque separatism in past years. No one threatened military action during Quebec’s lengthy flirtation with independence from Canada. The Czechoslovakian government peacefully, even cheerfully, bade farewell to Slovakia two decades ago.

Still, not everyone is willing to accept smaller territories going their own way. Yugoslavia broke up with an orgy of violence. Oddly, the United States supported every resulting independence bid, except those mounted by Serbs. The latter were expected to live under Muslim-Bosnian, Croatian, and Kosovar-Albanian majorities, irrespective of the rulers’ brutality. Washington even mounted a military campaign to break Kosovo off of Serbia, while reacting hysterically to similar Russian behavior toward Abkhazia and South Ossetia, which seceded from the country of Georgia. Washington responded equally badly to Crimea’s departure from Ukraine, though no one really knows the wishes of that majority-Russian land, since the official referendum was anything but fair.

Secession is a right, despite slavery’s blight and the Civil War.”

In international politics the only rule regarding secession is that you get to do it if you can either convince or force the other party to agree. And there is no consistency even within a country. Today it is hard to imagine Washington launching drone strikes or sending in the 82nd Airborne if Texas voters approved an ordinance of secession.

Yet the U.S. government waged war on its own people during the American Civil War. In fact, it really wasn’t a “civil war,” which typically involves two or more parties seeking to control the territorial whole. In this case, it was a conflict over coerced union. Should states be prevented from severing a political connection they no longer support?

The victors write the histories, it is said. And so it is with the fighting that tore America apart. The South, of course, was no beau ideal of civilization: Slavery was a hideous blight, but removing it is not why most northerners supported war. Lincoln himself originally promised not to interfere with slavery within the states and wrote, in an op-ed response to journalist Horace Greeley, “My paramount object in the struggle is to save the Union, and is not either to save or to destroy slavery.” Had …read more

Source: OP-EDS

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When It Comes to Student Loans, It's All Political

September 24, 2014 in Economics

By Neal McCluskey

Neal McCluskey

Writing in the Wall Street Journal last week, the American Enterprise Institute’s Andrew Kelly and Kevin James were almost certainly right: the fleeting return of Sen. Elizabeth Warren’s (D-MA) bill to furnish lower rates on existing student loans — both federal and private — was largely politically driven. Offering to lower interest on loans that borrowers freely accepted at higher rates, and have the cost eaten by the always great-for-abuse “rich,” reeks of mid-term election vote-grubbing. But let’s be honest: Doing anything other than calling for the phasing out of aid is probably also, to a large extent, political.

Federal student aid is almost certainly self-defeating, enabling rampant tuition inflation, massive noncompletion, wasteful campus extravagances, and dangerous credential inflation.”

As I’ve reiterated on numerous occasions, federal student aid is almost certainly self-defeating, enabling rampant tuition inflation, massive noncompletion, wasteful campus extravagances, and dangerous credential inflation. The response to this from more progressive types is usually that I’m wrong in my conclusions, or I’m too callous about the plight of lower-income Americans. From the right, the answer is usually that I’m pretty much correct in my assessment, but getting rid of aid is “politically impossible.” Many on the right then offer, as Kelly and James did, very marginal changes, like expanding Income-Based Repayment, and even possibly plussing-up grants for lower-income students.

The important point here is that both rejoinders are ultimately political in nature. Because the evidence of aid’s huge deleterious effects is too powerful to dismiss, as liberals often do, this strongly suggests that their response is intended to win politically by maintaining counterproductive but popular programs. The conservative response is politically defensive, refusing to engage wholeheartedly with reality because doing so is politically tough. Alas, neither side ultimately does the public any service, including the poor ,who are least able to tackle hyper-inflated costs. Both are allowing a federal aid system that is hugely damaging — not to mention unconstitutional — to continue on.

Neal McCluskey is the associate director of the Cato Institute’s Center for Educational Freedom.

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Source: OP-EDS