You are browsing the archive for 2014 October 08.

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Art Alas and the war refugees

October 8, 2014 in Blogs

By Political Zach Foster

One of the things that sickened me most recently about the “Grand” Old Party was the way they spoke of the Central American child refugees, as if they were trash. Say what you want about adult immigrants who come here illegally, but the God I believe in will hold people accountable for the way they treated these children. Art Alas is a different kind of Republican.

Make no mistake, the Central American children are war refugees fleeing from a vicious criminal insurgency. The violence in Central America is an extension of the Mexican Drug War, which is actually a multi-sided civil war created in part by the Obama Administration’s policies and constant meddling in foreign affairs.

The Mexican drug lords are warlords ruling over large territories. The cartels are paramilitary insurgent armies mixing guerrilla warfare with crime and terrorism. The main culprits of violence in Central America are the transnational gangs MS-13 and M-18, or 18th Street. MS-13 are auxiliaries working/fighting for the Sinaloa Cartel while M-18 work/fight for the Zetas Cartel. Theirs is the violence the immigrant children are escaping.

Art, being a man of integrity, acted with leadership and compassion.
Art said,”We need to put politics aside and do something to help these kids. We need to help them NOW.” He organized a relief effort with Hearts for Humanity to gather vital supplies (food, toiletries, etc.) for these kids who are alone in a strange country, their fates completely out of their hands. Charity by choice!

It baffles me how members of Congress in both parties could be so eager to make war in the Middle East, yet they could so easily ignore child war refugees on our own doorstep. They may as well have turned their backs on Jesus in His final suffering.

Art believes that we need to secure our borders to keep criminals and …read more


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Central Banking Distorts Markets

October 8, 2014 in Economics

By John P. Cochran


In today’s Wall Street Journal, two Fed insiders Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, and John A. Weinberg, director of research of the Federal Reserve Bank of Richmond, effectively argue that central bank “actions that alter the allocation of credit … endanger the stability the Fed was designed to ensure.”  Their explicit targets for criticism are the Fed purchases of mortgage backed securities and other “actions in the recent crisis” that “bore little resemblance to the historical concept of a lender of last resort.” In my view they correctly recognize that while “these actions were intended to preserve the stability of the financial system, they may have actually promoted greater fragility.” They correctly assert “(w)hen the central bank buys private assets, it distorts markets”.

Lacker and Weinberg are late to the dance. Stanford economist John Taylor in 2009 coined the term “Mondustrial Policy” to criticize the Fed and Treasury response to the financial crisis. Taylor’s remarks are highlighted in a WSJ bolg post by Jon Hilsenrath. Hilsenrath reports that Taylor used this “unflattering term” to describe a policy environment that was “not a monetary framework. It is an intervention framework financed by money creation.”

Jeffrey Rogers Hummel in his important  “Ben Bernanke versus Milton Friedman: The Federal Reserve’s Emergence as the U.S. Economy’s Central Planner illustrates significant differences in “approaches to financial crisis” between the Bernanke/Yellen approach and a Friedman approach. In addition to exposing the theoretical foundation of the recent misguided and dangerous policy approach, Hummel provides a very detailed almost step by step use of this type of policy in response to the major events of the recent crisis. He summarizes, “those differences resulted in another Fed failure – not quite as serious as the one during the Great Depression, to be sure, yet serious enough – but they have also resulted in a dramatic transformation of the Fed’s role in the economy. Bernanke has so expanded the Fed’s discretionary actions beyond controlling the money stock that it has become a gigantic, financial central planner.”

Lacker and Weinberg see the major problem associated with this monetary central planning as “undermining central bank independence.”John Taylor sees the cause of the problem as the Fed failing to follow a rules based policy.  Research by Selgin, Lastrapes, and White (“Has the Fed Been a Failure?” points in another direction. Central banking per se …read more


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School Tax Credits Are Good for Parents, Taxpayers

October 8, 2014 in Economics

By Jason Bedrick

Jason Bedrick

Contrary to Bill Duncan’s claims in his recent op-ed (“Voucher law has no real help for low-income kids,” Sept. 19-Oct. 2 NHBR), last month’s unanimous New Hampshire Supreme Court decision to reject his lawsuit against New Hampshire’s educational choice law is a victory for Granite State families and taxpayers generally.

The law expands educational opportunity by granting tax credits to corporations worth 85 percent of their donations to nonprofit scholarship organizations. These nonprofits, like the Network for Educational Opportunity, help low- and middle-income parents pay tuition at a private school or an out-of-district public school, or cover certain homeschooling expenses.

Mr. Duncan contended that the law violates the New Hampshire constitution’s historically anti-Catholic “Blaine Amendment,” which bars the government from allocating public money to religious schools. A trial court judge partially agreed, upholding the law but limiting the scholarships to secular schools.

The state Supreme Court’s recent decision clears the way for expanding educational options for New Hampshire families.”

In August, the Supreme Court overturned the lower court’s ruling and threw out the challenge entirely, holding that Mr. Duncan and his petitioners had no standing because they failed to show “that some right of theirs has been prejudiced or impaired as a result of the program’s implementation.”

A few years ago, the U.S. Supreme Court rejected the standing of petitioners challenging a similar scholarship tax credit law in Arizona. The court ruled that tax credits, like tax deductions and tax exemptions, are not “public money” because the funds do not “come into the tax collector’s hands.”

No reasonable person believes that a church is “publicly funded” because donors who support it receive a charitable tax deduction, or even because the church receives a 100 percent property tax exemption. Likewise, the aid that families receive from scholarship organizations is not “public money” just because corporate donors received a partial tax credit.

Mr. Duncan stated that the choice law has “no legitimate public purpose.” Apparently he does not believe that expanding educational opportunity for low-income families, increasing parental satisfaction and improving student outcomes serves a “public purpose.”

In a survey of scholarship recipients last year, nearly 97 percent of families reported being satisfied with their chosen learning environment, including 90 percent who were “very satisfied.” Far from being “unaccountable,” as Mr. Duncan absurdly claimed, private schools are held directly accountable to parents, who can leave if they are not satisfied.

Moreover, more than two-thirds of …read more

Source: OP-EDS

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The Left's Legal War on Children

October 8, 2014 in Economics

By Jason Bedrick

Jason Bedrick

Nearly 60 years after Milton Friedman proposed a system of universal school choice in his seminal essay “The Role of Government in Education,” his vision is more popular than ever — and opponents of school choice are taking every measure to fight it.

In a recent survey by Education Next, half of those polled expressed support for universal school vouchers, and 60 percent favored giving tax credits for individual and corporate donations to scholarship organizations that help low- and middle-income families pay private-school tuition. Moreover, a recent Friedman Foundation survey found that support for school-choice tax-credit laws was highest among groups that traditionally vote for Democrats, including low-income Americans (67 percent), younger people (74 percent), blacks (72 percent), and Hispanics (80 percent).

That popularity has translated into political success. The number of private-school choice programs has more than tripled in the last decade, from 15 in 2004 to 51 programs in 24 states and Washington, D.C., today. In that time span, the number of students attending a private school with a voucher or tax-credit scholarship has grown from just under 100,000 to over 300,000.

Much of that growth has occurred in just the last few years. Since 2011, dubbed “The Year of School Choice” by the Wall Street Journal, states have adopted 24 new school-choice laws and expanded 33 existing choice programs. None have been legislatively repealed.

With school choice winning in state legislatures and the court of public opinion, opponents of choice have turned to the courts to stop them. Left-wing groups like the American Civil Liberties Union, Americans United for Separation of Church and State, the Southern Poverty Law Center, the teachers’ unions, and the Florida School Boards Association have filed a bevy of lawsuits in recent years to stem the school-choice tidal wave. Perversely, these organizations’ lawsuits would harm the very populations that they claim to want to help.

With school choice winning in state legislatures and the court of public opinion, opponents of choice have turned to the courts to stop them.”

There are currently active anti-school-choice lawsuits in Alabama, Colorado, Oklahoma, Louisiana, and North Carolina, plus two in Florida. Last month, a judge dismissed a third lawsuit by the Florida Education Association because it could not demonstrate harm and therefore lacked standing. Lower courts in Oklahoma and North Carolina recently struck down those states’ special-needs voucher and low-income voucher, respectively. Those decisions are being appealed.

Earlier …read more

Source: OP-EDS

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Venezuela’s Biggest Shortage

October 8, 2014 in Economics

By David Howden


Venezuela’s socialist government has beset the population with all sorts of terrible travesties, from high inflation to shortages of toilet paper. Now the country’s poor citizens have one more shortage to grapple with: breast implants.

Apparently the country’s restrictive currency controls have hindered physicians from buying approved implants. Unable to beautify themselves the way they want, women are resorting to barter to pay for their silicone. Of course, because of the vagaries of the black market they are forced to resort to, these ladies are not sure of what exactly is in their implants. On Craigslist, “sellers post pictures of black market implants of unknown origin sitting in sealed packages on kitchen tables, complete with stories of spouses who changed their minds and reassurances that the pouches remain sterile.”

At least one doctor has doubts as to the black market implants’ safety, claiming that the cheaper implants come with heightened risks:  “I’m not saying they’re not safe, but I’ve removed more than a few ruptured Chinese implants. I just don’t feel comfortable with them.”

Some may think this is not a big deal, or that these women shouldn’t be so vain as to concern themselves with such procedures. This largely misses the point. It’s not up to me to decide whether food or breast implants is more important, valuable, or a more egregious shortage to face. That’s for the individual to decide.

More than 85,000 breast implants were performed in the country last year – more than every country except the U.S., Brazil, Mexico and Germany, all countries with vastly larger populations. In beauty conscious Venezuela, these things matter.

Maybe protests over food shortages have been insufficient to get the government to liberalize its exchange rate policy, but let’s hope that the dearth of breast implants gives them one (or two) more reasons to rethink it.

(Cross posted at Mises Canada.)

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Rand Paul vs. Current Assaults on Monstrous ISIS

October 8, 2014 in Economics

By Nat Hentoff

Nat Hentoff

On Sept. 18, Rand Paul’s foreign policy address to the Senate ended with:

“ISIS is now a threat. Let’s get on with destroying them” (“Remarks Prepared for Delivery: Sen. Paul Delivers Foreign Policy Address,”, Sept. 18).

That should have been the first sentence of the speech, because until then he emphasized how chaotic the attempts to disable the expanding murderous regime of ISIS have been and how little we know about the rebels we are assisting:

“The idea that these rebels haven’t been armed before is ludicrous on its face. It is also ludicrous to believe that we know where all of the money, arms and ammunition will end up, or who will end up benefitting from these shipments …

“We don’t know for sure who the groups all are. Even when we think we do, loyalties shift and groups become amorphous, with alleged moderates lining up with jihadists.

“And finally, moderate groups have often sold their weapons or had them seized by the jihadist elements led by ISIS.”

Paul’s press release continues: “The German ambassador to the U.S. has fully admitted what our State Department tries to hide — that we can’t fully control the final destination of these arms.”

In this digital age, many Americans of both parties read speedily to cope with the torrent of news, views, debates, et al, and once they feel they grasp the overall message, they may not bother to finish the rest.

For those fast readers, the overall misapprehension of the bulk of Paul’s Senate address is that he is an isolationist in crucial foreign affairs — crises in which the U.S. should not intervene.

However, more careful readers of this revealing Senate address by Paul will find otherwise: “It’s not that I am against all intervention. I favor striking ISIS. I supported the decision to go to war with Afghanistan after our nation was attacked on 9/11. There are valid reasons for war. And importantly, there are ways to do it and ways not to do it.”

Early in his remarks, he explains his concerns with the methods used thus far in this particular intervention: “ISIS has grabbed up U.S., Saudi, Qatari weapons by the truckload, and we are now forced to fight against our own weapons … Reports show that the CIA, Saudi Arabia and Jordan have supplied roughly 600 tons of weapons to the militants in Syria in 2013 alone.”

He cites sources that show other …read more

Source: OP-EDS

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Beijing's New Charm Offensive

October 8, 2014 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

After years of pursuing hard-line policies toward many of its East Asian neighbors, China has shown signs in recent months of embracing a more conciliatory approach. One clear indicator was Beijing’s decision to withdraw a controversial oil drilling rig in disputed waters near the Vietnam coast. At the same time, Chinese officials adopted a decidedly less confrontational tone toward Hanoi regarding the broader territorial disputes between the two countries in the South China Sea. Instead of emphasizing China’s alleged historical and legal rights to widespread swaths in that body of water, Beijing stated that such bilateral controversies can and should be addressed through concerted diplomacy.

Hanoi is not the only recipient of such conciliatory gestures. Xi Jinping’s government has conducted a noticeable charm offensive toward South Korea. Just a few years ago, Beijing continued to support its communist North Korean ally without much criticism. That stance even included countenancing Pyongyang’s aggressive policy toward its southern neighbor—a point that became all too apparent in March 2010 when the Chinese government declined to condemn North Korea’s sinking of the South Korean naval vessel Cheonan. Frictions also surfaced in late 2013 after Beijing proclaimed an air defense identification zone between the Chinese mainland and both Japan and South Korea. Seoul joined with Washington and Tokyo in strongly condemning that move as an unacceptable attempt to interfere with air travel rights.

The general tone of China’s foreign policy is noticeably less strident and confrontational than it was just a year ago.”

China’s actions toward South Korea have been markedly different in 2014. Beijing has taken steps to distance its policies from those of Pyongyang, including issuing thinly veiled warnings to Kim Jong-un’s regime not to disturb the peace and stability of East Asia. Xi followed those steps with a summit visit to Seoul, in which he emphasized the mutual benefits of closer political and economic ties between China and South Korea. Highlighting the courtship of Seoul, Xi ostentatiously snubbed Kim Jong-un’s government by declining to stop in Pyongyang either before or after his journey to Seoul.

Beijing has even put out cautious feelers to India and Japan for better relations. Chinese officials recently stressed that there was no need for a crisis involving the long-disputed border with India—a flashpoint that exploded into a full-fledged war in 1962. Xi’s government also dialed back its confrontational policy toward Tokyo, stressing the importance of …read more

Source: OP-EDS

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The Minimum Wage Struggle: Bootleggers and Baptists

October 8, 2014 in Economics

By Adam Smith, Bruce Yandle

Adam Smith and Bruce Yandle

In recent weeks, minimum wage workers protesting their low-wage status have marched in the streets in more than 100 U.S. cities. For example, workers in Charleston SC blocked a main thoroughfare, insisting they be paid $15/hr and receive union membership.

Supported by President Obama, who is pushing to raise the current $7.25 per hour federal minimum to $10.10, other alert politicians are cheering the call for higher federal mandates. After all, if protesters can be converted to mid-term election voters, some now-discouraged office seekers may be successful in the November vote.

Indeed, everyone from politicians to clerical leaders to even fast food CEO’s have jumped on the minimum wage bandwagon. What accounts for this recent bout of mutual sympathy for the working poor? To answer this question, we turn briefly to our Bootlegger/Baptist theory, a theory that explains why politics can attract such strange bedfellows.

Bootlegger/Baptist theory therefore reminds us that properly crafted regulations can more than provide publicly popular goals but also eliminate competition, raise rivals costs, and attract patronage and revenues to favored groups.”

The theory is based on the old story of Baptists and bootleggers who both favor Sunday closing laws that shutter corner liquor stores. Enforcement of the law gives solace to the Baptists and income to the bootleggers who eliminate competition just one day a week. Bootlegger/Baptist theory therefore reminds us that properly crafted regulations can more than provide publicly popular goals but also eliminate competition, raise rivals costs, and attract patronage and revenues to favored groups.

So let’s take a closer look at our Bootlegger/Baptist groups in the context of the struggle for increasing the minimum wage. There in the amen corner are the Catholic bishops who in Senate testimony endorsed a higher wage: “Every time Congress or an Administration has suggested raising the minimum wage, the bishops have been supportive simply because it is consistent with our teaching and we see the effects first hand in the families of our parishioners and our own communities.” Joining the chorus, are the United Methodist Church and other protestant denominations. Indeed, it is impossible to find a religious organization that opposes paying higher wages to low-income workers.

But not all the pro-higher wage leaders wear clerical collars, even though they may at times employ righteous rhetoric. The AFL-CIO is a strong advocate for a higher minimum wage, though none of its …read more

Source: OP-EDS

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Land of the Free?

October 8, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

There was a time, not so long ago, when the United States was considered the world standard for economic freedom. Yes, there were countries out there, like Hong Kong and Singapore, that might have had lower taxes or fewer regulations. But the world could still speak confidently of the American free-enterprise system. No longer.

This week, a consortium of think tanks from almost 90 countries released their Economic Freedom of the World Report. The United States is no longer among the top ten countries when it comes to size of government, rule of law and property rights, soundness of the money supply, regulation, and free trade. We now rank twelfth, down from second as recently as 2000. For the record, we now trail Hong Kong, Singapore, New Zealand, Switzerland, Mauritius, the United Arab Emirates, Canada, Australia, Jordan, Chile, and Finland.

Our economic situation looks even darker when one examines the individual components that made up our overall ranking. Americans may be aghast at the big governments of Europe, but we actually rank 46th in the world using the so-called “chain-linked” rankings. Our government is not yet as big, relative to population, as France’s (ranked 113th) or Italy’s (115th), but we are headed in that direction if we don’t change our ways. Already we rank below Brazil and even Mexico.

By measures such as size of government, rule of law, and free trade, we’re out of the top ten.”

Nor are we a bastion of free trade; we now rank 29th worldwide. Of particular concern, the soundness of our money continues to erode. As recently as 2005, we were an unsurprising number one. Today, after years of quantitative easing, we’ve slipped to 38th.

Even more frightening, in 1980, when the report was first issued, the U.S. legal system and our respect for property rights were the world’s best. In 2000, we still ranked in the top ten. Today, we have fallen to 36th, trailing countries like Malaysia, Namibia, and Cyprus. That’s pretty poor company. Among the reasons cited for this precipitous decline are the increased use of eminent domain to seize private property for public use (and often for the benefit of powerful political interests), increased property seizures resulting from the wars on terrorism and drugs, and violation of the property rights of bondholders in the automakers’ bailout. Overall, the report concludes that the United States “experienced a …read more

Source: OP-EDS