Budget and Finance Archives - Page 29 of 49

PRAVDA: U.S. Taxpayers pay $3.5M to Study Lesbian Obesity

July 14, 2015/in Budget and Finance, Culture War, Must Read, Policy, Taxes, Waste, Fraud and Abuse/by Dr. Rich Swier

The U.S. Department of Health and Human Services has conducted a research to find out how the sexual orientation influences the body build.
The U.S. taxpayers have already paid $3.5 million for the ‘significant’ project, and it is to last till June 30.

“Sexual Orientation and Obesity: A Test of a Gendered Biopsychosocial Model,” seeks to determine why there is a disparity in the obesity rates between straight women and lesbian women and straight men and gay men.

According to the study, “It is now well-established that women of minority sexual orientation are disproportionately affected by the obesity epidemic, with nearly three-quarters of adult lesbians overweight or obese, compared to half of heterosexual women. In stark contrast, among men, heterosexual males have nearly double the risk of obesity compared to gay males.”

Meanwhile, the U.S. government debt is going to beat ‘records’ of WWII.

Read the full article here.

U.S. Taxpayers Spent $1 Billion to Fund Sharia in Afghanistan

July 12, 2015/in Budget and Finance, Featured, Policy, Religion, Taxes/by Jihad Watch

Would the situation really be worse than it is now if, instead of all this money spent on Sharia, the U.S. had stood up for its own values, and made it clear that money would only flow to those who stood for the freedom of speech, the freedom of conscience, and equality of rights of all people before the law?

“Watchdog: U.S. Taxpayers Funded Development of Sharia Law System in Afghanistan,” by Edwin Mora, Breitbart, July 8, 2015:

The U.S. government has spent more than $1 billion in American taxpayer funds on programs to develop the rule of law in Afghanistan, including efforts to improve a judicial system that incorporates Islamic Sharia law, reports a watchdog agency appointed by Congress.

According to the watchdog agency known as the Special Inspector General for Afghanistan Reconstruction (SIGAR), the Departments of Defense (DOD), Justice (DOJ), State (State), and the U.S. Agency for International Development (USAID) have spent more than $1 billion since 2003 on at least 66 completed and ongoing programs aimed at developing the rule of law in Afghanistan.

“This effort has focused on areas such as the judicial system, corrections system (detention centers and prisons), informal justice system, legislative reform, legal education, public outreach, and anticorruption efforts,” explains SIGAR.

Citing the U.S. Army’s Center for Law and Military Operations’ Rule of Law Handbook, John Sopko, SIGAR’s inspector general, reports that the legal system in Afghanistan consists of two separate judicial systems that coexist — a formal and an informal system, both of which incorporate Sharia law.

The formal system of law is “practiced by state authorities relying on a mixture between the civil law and elements of Islamic Sharia law,” notes Sopko in the report, while the informal legal system is “based on customary tribal law and local interpretations of Islamic Sharia law.”

“Experts we consulted describe a complex legal system in Afghanistan that incorporates hundreds of years of informal traditions, Islamic Sharia law, former Soviet judicial practices during the 1980s, and modern Western influence since the fall of the Taliban in 2001,” he adds.

A portion of the more than $1 billion spent on rule of law development efforts has been devoted to improving the formal and informal systems in Afghanistan that incorporate Sharia law.

SIGAR does note that “because DOD, DOJ, State, and USAID did not systematically measure and report on their programs’ achievements, it remains unclear what overall outcomes and impact have resulted from the expenditure of more than $1 billion to develop the rule of law in Afghanistan.”…

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What Greek “Austerity”? by Steve H. Hanke

July 10, 2015/in Budget and Finance, Commentary, Policy, Politics, Taxes/by Foundation for Economic Education (FEE)

Greek Prime Minister Alexis Tsipras

It’s hard to find anything written or spoken about Greece that doesn’t contain a great deal of hand-wringing about the alleged austerity — brutal fiscal austerity — that the Greek government has been forced to endure at the hands of the so-called troika (the European Central Bank, the European Commission, and the International Monetary Fund).

This is Alice in Wonderland economics. It supports my 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant.

The following chart contains the facts courtesy of Eurostat.

Social security spending as a percentage of GDP in Greece is clearly bloated relative to the average European Union country — even more so if you only consider the 16 countries that joined the EU after the Maastricht Treaty was signed in 1993.*

To bring the government in Athens into line with Europe, a serious diet would be necessary — much more serious than anything prescribed by the troika.

* Ed. note: The treaty created the EU and the euro and also obligated EU members to keep “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.” Ha!

Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore.

Capitalist Theory Is Better Than Socialist Reality by Sandy Ikeda

July 10, 2015/in Budget and Finance, Economy, Policy/by Foundation for Economic Education (FEE)

Tell someone on the left that crony capitalism is not the same as the free market and they’ll often respond that capitalism as it really exists is crony capitalism. They will say that there has never been an instance of capitalism in which government-sponsored or government-abetted cronyism didn’t play a substantial role — either through war, taxation, or slavery — in a market economy. As a result, the failings of crony capitalism — corruption, privilege, oppression, business cycles — are simply the failings of capitalism itself.

One correct response is to show that the less intervention there has been, the less corrupt, privileged, oppressive, and unstable the socioeconomic order also has been. Many would simply reiterate that, historically, laissez-faire capitalism has never existed, nor could it exist, without interventionism. They simply will not or cannot distinguish the free market from state capitalism, corporate capitalism, or other forms of the mixed economy.

Which is perhaps why some on the left have adopted the term “neoliberalism,” a perfectly good word that has come to represent an imbroglio of vaguely market-cum-corporativist views. They can’t imagine how markets could work without some form of state intervention holding it all together. And that’s probably because they reject what economist Peter Boettke calls “mainline economics,” or economics in the tradition of Adam Smith, Frédéric Bastiat, and Carl Menger, among others.

It’s frustrating, but there are two points I’d like to make. The first is that in our libertarian critiques of collectivism, we often make an argument that sounds similar to the one people on the left make. But, second, if libertarians are careful, they may be more justified in doing so.

What Is the Turnabout?

Most socialists today have abandoned their earlier claim that socialism generates greater material prosperity, but many on the left still insist that under a pure collectivist system, greater justice and equality would prevail. Socialism, in other words, is a far more humane socioeconomic order than capitalism.

How do libertarians respond to such a claim?

Sometimes we react with contempt or with disbelief that anyone could be so stupid or so evil or both as to argue such a thing. I hope no reader of theFreeman would react that way, although I’m afraid some do. Sometimes we react with slightly more civility by aiming our dismissive contempt not at the person but at the leftist ideas she holds. I will only say that we should take to heart what John Stuart Mill wrote in On Liberty about so-called bad ideas and opinions:

Every opinion which embodies somewhat of the portion of truth which the common opinion omits, ought to be considered precious, with whatever amount of error and confusion that truth may be blended.

There are other responses to the claim that socialism is more just and humane than capitalism, but I would like to focus on the one that I’ve often used: socialism in practice has always and everywhere tended to lead, to the degree that it is consistently applied, not to freedom and material well-being, but to tyranny and want. In other words, while socialism in theory may be all good things to all good people, the more government has practiced collectivism and central planning to achieve its goals of justice and equality, the farther it has fallen short of those goals. (And if you think countries such as Sweden are the exception, you might read my March 2013 Freeman article, “The New Swedish Model.”)

How is that different from the left’s position that legal privilege, oppression, and other problems are part and parcel of capitalism in practice? Each side seems to be arguing that the historical failings we’ve witnessed in each system are necessary to that system and not exceptions — features, not bugs.

A Possible Resolution

Clearly, the die-hard socialist and the die-hard libertarian argue from different fundamental principles. While there are many varieties of socialism, all are suspicious to a fairly high degree of private property, prices, and profit as the central ordering forces of society. Libertarians, too, are diverse, but I believe we all share strongly opposite views to those on the left on private property, prices, and profit as necessary (and for some libertarians, mistakenly I believe, sufficient) for a civil and prosperous society.

Socialists and indeed interventionists of all stripes also seem confident that the intentions of government authorities (especially those who have been elected) are virtuous enough and their knowledge reliable and complete enough to succeed in promoting the general welfare. In this, I think, it boils down to the underlying economics.

As a rule, libertarians use mainline economic theory to reach their conclusions about socialism and the perverse dynamics of interventionism. (There are, of course, ethical and philosophical approaches, as well.) And while interventionists and perhaps even some collectivists may believe that mainline economic theory does an okay job of framing some questions and of finding some answers to those questions, they also believe that mainline economics is far too limited to address a significant proportion of economic issues.

But the problem with such a view is that there’s no principled way to say in what circumstances mainline economics has failed. Sure, no theory of the economic system, mainline or otherwise, gets it right in every instance. We then have to look to historical evidence to clarify when, under what circumstances, and to what extent mainline economics holds up. And the historical evidence is indeed on the side of the libertarian interpretation of what collectivism and various degrees of central planning are, and of what laissez-faire capitalism is.

Indeed, the historical evidence overwhelmingly shows that social mobility, innovation, prosperity, per capita income, and per capita wealth are all tightly and positively correlated with economic freedom. And contrariwise, to the extent that economic freedom is lacking, social and economic stagnation, want, and shrinking civil rights have followed. (See, for example, the most recent publication of FreetheWorld.com.)

Someone might retort that correlation is not causation, and they would be right if there wasn’t a causal theory linking economic freedom with all those great things. But libertarians do have such a theory, and it’s called mainline economics.

Those on the left, however, don’t have a coherent theory of the mixed economy. Indeed, no such theory exists. There are several theories of so-called “market failure,” but they do not together constitute a coherent theory. What does exist is a critique of the mixed economy that is based on the realization that the ordering principle of the free market and the ordering principle of collectivist central planning are logically incompatible. One is based on open-ended entrepreneurial competition, the other on some form of constraining central planning. Interventionist approaches that attempt to combine them aren’t really systems at all. They are literally incoherent, and what makes them incoherent is the absence of a consistent ordering principle.

(My contribution to this volume [PDF] delves into this topic more deeply.)

Instead, what you’re left with, given the cognitive limits of the human mind and the spontaneous complexity of real-world systems, is expediency. Each problem is addressed not on the basis of principle, but in ad hoc fashion according to the prevailing interests of the moment. In the case of capitalism, while opportunism and cronyism do constantly pull in the direction of expediency, the force resisting that pull is entrepreneurial competition. That’s because cutting corners opens opportunities for one’s rivals to do a better job. Moreover, that competition operates more effectively to resist and absorb all forms of intervention, crony or otherwise, the less interventionist the system is.

So while the form of the critiques of the left and of libertarians may sound similar, they are vastly different in substance.

Sandy Ikeda

Sandy Ikeda is a professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism.

How to Outsource Your Compassion to the Government by Robert P. Murphy

July 2, 2015/in Budget and Finance, Commentary, Culture War, Economy/by Foundation for Economic Education (FEE)

I saw the mom and her two little kids camped out in the shopping center parking lot. She held a sign asking for help to feed them. I bought some oranges and bananas for them.

Imagine if someone from the government had swooped in to explain that my bag of fruit was hardly sufficient to feed the struggling family. What if the government then passed a law saying that if anybody decided to donate food (or cash) to people begging on the street or in a parking lot, the contribution had to be worth at least $15? Anybody caught giving, say, a $1 bill or a small bag of fruit would be fined heavily. Does that sound like “pro-homeless” legislation?

Try a different example: there are civic and church groups who will pick a weekend to go to a specific elderly widow’s house and help her put on a fresh coat of paint, clean up the yard, restock the pantry, and so on. Such one-off bursts of assistance obviously can’t fill the void for someone without an extended family or a generous pension. Shouldn’t the government pass legislation insisting that if you are going to donate time and goods to an elderly widow, you must do so in a way that allows her to live comfortably? Isn’t that a great “pro-widow” method for raising the living standards of the target demographic?

Or consider families who adopt children from war-torn regions. These actions, though seemingly noble, are clearly a drop in the bucket, with hundreds of thousands of orphans left behind. What if the government passed a law saying that US families were only allowed to adopt foreign children if they did so at least 15 kids at a time? Would activists agree that such a “pro-adoption” measure would increase the number of adoptions and be an unmitigated boon for foreign orphans?

Currently there are people who volunteer to teach adults how to read. But adult illiteracy is still a vexing problem in certain communities, so clearly these volunteer efforts have been inadequate to overcome the challenge. The obvious, pro-literacy way to fix things is to pass a law saying volunteers must give at least 15 hours of tutoring per week. If they are caught only teaching adults how to read for, say, 14 hours, then the volunteers will be heavily fined.

I’ll offer one final example. There are millions of people in the United States who do not have very marketable skills. There are a few thousand people who are willing to give them jobs. Wouldn’t it be a great benefit to these unskilled workers to pass a law saying that if you want to hire any of them, then you must pay at least $15 per hour of their labor? (If you get caught only paying, say, $14 per hour, then you get heavily fined.) What could possibly be a downside to such “pro-labor” legislation?

At this point, you surely recognize that I am being facetious. I am highlighting the absurdity of minimum wage legislation as an alleged “pro-labor” device. First and most obvious, by raising the hurdle to giving a job to unskilled workers, minimum wage legislation might perversely reduce employment among the very groups the government is supposedly helping.

This textbook claim about the danger of minimum wage laws is repeated by free-market economists so often that people have been lulled into complacency, especially in light of econometric studies that seem to show that minimum wage hikes do not have disastrous effects on employment. Yet, there is a strong prima facie case against the minimum wage in the analogous examples. Would advocates for the homeless, widows, adult illiterates, and other disadvantaged groups be so confident in the other hypothetical legislation I described above?

I designed my hypothetical examples to underscore another perversity in minimum wage legislation — and, more generally, all mandates placed on employers: it attacks the benefactors of the unskilled. Consider: there are millions of people who have trouble earning a living. Isn’t it perverse to burden those specific people who are doing the most to alleviate the problem? This is analogous to singling out volunteers doing at least something to battle adult illiteracy, making them bear the brunt of further efforts on this score, while allowing the rest of society to continue doing nothing to mitigate the problem.

To be sure, as both an Austrian economist and a libertarian, I consider it neither appropriate nor ethical for state officials to interfere with property rights in order to help unskilled workers. But if the government is going to “do something,” then it is particularly perverse to lay down the burden exclusively on the people who are already giving some money to unskilled workers. A more sensible approach would, say, give government subsidies to workers who were earning a bona fide paycheck in the market, or (better yet) would give targeted tax breaks to the unskilled workers that the government wanted to assist. Incidentally, this type of reasoning is why many economists — even progressives — are pushing the earned income tax credit as a much more efficient way to help poor workers than minimum wage mandates.

The minimum wage is a perverse tool with which to (allegedly) help unskilled workers. At best, it helps some unskilled workers while drastically hurting others — by making it impossible for them to find work at all. Beyond that, minimum wage legislation perversely places the entire (direct) burden of helping such workers on their employers, the one (tiny) group of people who are actually helping them solve the problem. The rest of society, which has done nothing whatsoever to help the unskilled workers have a higher standard of living, can pat themselves on the back for voting for certain politicians while continuing to do nothing whatsoever to help those who want to work.

Robert P. Murphy

Robert P. Murphy is senior economist with the Institute for Energy Research. He is author of Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015).

Political Borders Do Not Imply Economic Relevance by Donald J. Boudreaux

June 30, 2015/in Budget and Finance, Commentary/by Foundation for Economic Education (FEE)

Commenting on this recent post — a post that argues that there is no good economic reason for government to provide retraining or other benefits to workers who lose their jobs because their fellow citizens take advantage of enlarged opportunities to purchase imported goods and services — Zuying Gao writes:

Ricardo’s theory is probably going to work in the long run. But theory is theory, it works best when there is no other intentional disturbance. In the real world, the best outcome for the free trade won’t come out so easily. I think Lowenstein simply is on humane stance to use “victim”. In the short run, out of luck, failing keep up with the steps of technology, some people are no doubt to be suffering, which does not mean they deserve this and we should show no compassion towards them.

I join with Mr. Gao in calling for compassion for anyone who suffers misfortune (although one must always be careful to distinguish misfortune that is genuine from misfortune that is trumped-up).

Yet I dispute Mr. Gao’s premise that there is something unique or special about economic misfortune that stems from changes in patterns of economic activity that span political borders (rather than being confined within a nation’s political borders).

The very point of that post of mine — and, indeed, of the bulk of the economics of international trade from the time of Adam Smith forward — is that there is nothing unique about the economic consequences of changes in trade patterns that span across political borders.

Yes, Mr. Jones who loses his job because his fellow citizens choose to buy less of the steel he produces and more of the steel produced by someone in another country must endure an outcome that he’d prefer not to endure.

But this outcome is no different than if Mr. Jones lost his job because his fellow citizens switched much of their spending away from buying products made with domestically produced steel to, say, products made with domestically produced plastics. Whatever compassion one feels for Mr. Jones in the first scenario should be felt for him in the second scenario: no more and no less.

The reason is that from his perspective — as judged or measured by his disutility, suffering, anger, sadness, whatever you call it — the misfortune to him of his job loss is the same in both cases. Nothing special or unique attaches to job and profit losses (and gains) “caused” by changes in the pattern of international trade; these losses (and gains) differ in no relevant way from such losses (and gains) “caused” by changes in the pattern of economic activity that involve no international component.

The importance of this point should be self-evident, although I realize that it isn’t. People are easily mislead by the existence of political borders into imagining the existence of economic relevance that simply isn’t there. Any such supposed economic relevance is a delusion.

Rent-seekers in each domestic market, of course, have powerful incentives to embrace and to fortify these delusions, for the greater the number of people who are so deluded, the greater are the prospects for rent-seekers to win and to maintain government-granted special privileges — such as tariffs — to protect them from having to compete in markets as vigorously as they would have to compete without such privileges.

But the economics of the matter are crystal-clear: any such imagined economic relevance of political borders is a popular delusion. And one important role of the economist is to do all that he or she can to cure people of suffering this delusion. Any successes that economists have in this endeavor help to protect society from rent-seekers who shamelessly exploit the popular delusion that there’s something economically unique about international trade.

So whatever quantum of compassion or indifference someone wishes to bestow upon a worker who loses his or her job because consumers choose to reduce their rate of purchasing whatever it is he or she produces is a quantum of compassion or indifference that should be bestowed upon any worker who loses his or her job because consumers choose to reduce their rate of purchasing whatever it is he or she produces — whether these consumer choices involve buying more imports or not.

This post first appeared at Cafe Hayek — Where Orders Emerge.

Donald Boudreaux

Donald Boudreaux is a professor of economics at George Mason University, a former FEE president, and the author of Hypocrites and Half-Wits.

The European Union: Borders on the Brink of Breaking

June 26, 2015/in Budget and Finance, Must Read, National Security, Politics/by Henry Jackson Society

The borders of Europe are coming under severe strain. As we predicted here earlier this year, the migrant ‘crisis’ is no such thing. It is, rather, an ongoing situation of continent-wide turbulence with no foreseeable end. European ministers this week met to discuss the situation, but even they will find themselves unable to solve the problem.

Because the problem they face is that the drivers of the situation are far beyond their control. They are beyond any one politician or any one government. Indeed, they are also proving to be beyond the continent. Let us imagine for a moment that the civil war in Syria was able to be stopped by outside intervention from the EU. This would over time lessen the flow of refugees from Syria. But it would do nothing to prevent the human tide of asylum seekers and economic migrants heading towards Europe from Eritrea and sub-Saharan Africa.

What is the EU plan to deal with these situations? In truth, the EU is finding it difficult to control its external borders. So it is highly unlikely to achieve peace and stability across one continent (the Middle East) and prosperity to another (Africa). Until those things do occur, the pressure of mass movement of people towards the entry points of Europe will continue.

So what can be done? It is a very ominous sign that in recent days, weeks and months so many countries have gone increasingly unilateral. The Austrians have severely tightened their border with Italy because they do not trust the Italian authorities. Hundreds of migrants have piled up in a backlog at a border which is wholly closed to them. Hungary is planning a physical wall to go up on its border with Serbia. And at the French port of Calais there are desperate sights as migrants clamber onto vehicles bound for the UK. With other European countries refusing to share Italy’s burden, the Italians are threatening to give refugees travel permits that would effectively make them able to go anywhere. It is a grenade they have not yet thrown, but a grenade nonetheless.

The dream of the EU was that the borders of Europe would come down. But as the continent comes to terms with this latest crisis, it has not been able to stand together. The free movement of EU citizens within the EU is one thing. But the free movement of non-EU citizens within the EU threatens the cooperation of the whole enterprise. If Europe is to face up to this challenge it must first accept what it cannot do. And then swiftly move on to doing what it can.

FROM THE DIRECTOR’S DESK

I am writing this week’s column with one eye fixed on a TV screen outlining latest developments in France and Tunisia, where the scourge of Islamist terrorism has once again struck with a tragic beheading at a factory near Lyons this morning and one at a tourist resort in Sousse this afternoon.

Words cannot adequately describe the senseless brutality of these acts of terrorism. But they can go some way to explaining it and similar acts of violence carried out in the name of religion as can be seen through Rabbi Lord Jonathan Sacks’ masterful new book,Not in God’s Name: Confronting Religious Violence, which was the subject of a parliamentary discussion hosted by The Henry Jackson Society this week with its author.

Leaving aside the exemplary nature of Rabbi Sacks’ delivery of his central themes – which was described by the Member of Parliament hosting as the finest speech he had heard in his 18 years in the House of Commons – what came across clearly is the idea that while to deny that those who state they are acting on religious motives in committing violence are actually doing so is absurd, neither can it be said that there is an inherent relationship between religion and violence. As the author puts it: “there is a connection between religion and violence, but it is oblique, not direct.” Indeed, to take Rabbi Sacks’ argument further, as he does in the book, it is possible to see violence being carried out in the name of religion, but in reality it is being employed in pursuit of political, not religious objectives. Thus what ISIS and its adherents actually aspire to is temporal power in the form of a caliphate, even if this is dressed up in spiritual rhetoric.

This is an important factor to remember when considering events such as those witnessed today. We cannot deny the role of religion in terrorism, but we cannot consider religion just part of the problem and not also part of the solution. Arguably, it is only by Islam stripping away the political parts of its more extreme followers’ agendas from the religious ones of those of the moderate majority – as Christianity and Judaism did in their turn beforehand – that we will find the lasting way to meet the Islamist challenge.

Dr Alan Mendoza is Executive Director of The Henry Jackson Society

Follow Alan on Twitter: @AlanMendoza

Florida: Groupthink on the Sarasota County School Board

June 9, 2015/in Budget and Finance, Education, Featured, News, Policy/by Dr. Rich Swier

I am always fascinated by how politicians, once elected, don’t do what they promised in order to get elected. Rather they become part of “the system”. They become influenced by bureaucrats, forget they represent their constituents and pass laws, rules, and regulations which harm their very constituents. They in effect become group thinkers.

Groupthink is an oxymoron. You see it is not about thinking, rather it is about the group (collective). Wikipedia has this definition of Groupthink:

A psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

The Sarasota County School Board members, with one exception, suffers from groupthink. Because of this it has resulted in irrational or dysfunctional decision-making outcomes. One example is the misuse of tax dollars.

YourObserver.com staff in an op-ed stated:

It has been a month and a half, but many of you still will remember the cyclone that whirled about the Sarasota County School Board over its selection of a construction manager for the Suncoast Technical College’s North Port campus.

At the recommendation of Superintendent Lori White, the board voted 4-1 to bypass its selection committee and go with Willis Smith Construction.

The lone “no” vote came from Bridget Ziegler, the rookie board member who was elected last November.

The day after the vote, Ziegler, age 32, posted her rationale and comments on her Facebook page (see box).

Whoa.

At the April 21 School Board meeting, Ziegler’s fellow board members delivered to Ziegler what easily can be called a smackdown, chastising her for seven minutes for speaking out and not following the other members’ board protocol.

Talk about taking Ziegler to the woodshed. “Hey, missy, you need to learn a thing or two before you go spouting off.” That’s the way it comes across.

Among the disturbing comments came from board member Jane Goodwin: “I just hope in the future you’ll … consider that you have a loyalty to this board and … we represent the Sarasota County School Board …”

So what we have on the Sarasota County School Board is one thinker, Bridgette Ziegler, and four followers. The issue is that the Sarasota County School Board selected a vendor whose bid was $4.5 million higher than the lowest qualified vendor. The Sarasota Herald-Tribune’s Shelby Web reported, “The board voted 4-1 to follow Superintendent Lori White’s advice to hire Willis A. Smith instead of A.D. Morgan Corp., which had said it could do the job for about $4.5 million less.”

Does this not appear to be a dysfunctional decision? Aren’t the board members supposed to be good stewards of the people’s property (tax dollars)?

Why do we see politicians at every level become group thinkers?

Perhaps Frédéric Bastiat’s who penned the seminal work The Law said it best. He pointed out that the relationship between the rulers and the ruled becomes distorted, and a sense of systemic injustice pervades the culture. Bastiat observed this in horror in his time, and it’s a good description of what happened at the Sarasota County School Board:

The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense.

The collective must silence those who think – namely Bridgette Ziegler. However, I do not believe Ms. Ziegler will be silenced.

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Florida Voters Refused To Listen – Now They Have Been Taken Again!

June 8, 2015/in Budget and Finance, Environment, News, Politics, Taxes, Waste, Fraud and Abuse/by Diane Kepus

Many of us have done the research and then try to teach exactly what is happening with our lawmakers. Florida’s reputation for corruption and deceit is at the top of the charts. There is a great deal to be said regarding one party being in control for far too long – and that is certainly the case in Florida.

We have been lied to over education, environmental issues, Enterprise Florida, Charter School legislation, Public Private Partnerships and the list goes on.

Today we find out the Florida lawmakers have made very little progress in regard to budget negotiating sessions and their special session is almost over. Standing at the fore front of the disagreements between the Florida House and Senate are health care, education and the environment.

Now comes the truth – House members want to borrow nearly $300 million in bonds for projects related to Amendment 1, a referendum passed by the very voters we tried to educate before the last election showing the false statements being made in relationship to the environment. Legislators were contending they were going to use the money for conservation and environmental clean-up projects.

Voters didn’t listen to the warnings!

Sen. Alan Hayes, R-Umatilla doesn’t want to use any bonds in relationship to any Amendment 1 projects. “B-O-N-D is a four letter word” Hayes said.

House environmental budget chief Ben Albritton, R-Wauchula, withdrew bonding from the House’s latest offer Sunday, calling it an “olive branch.” “I cannot be any more clear: the House is very interested and supportive of bonding as (budget negotiations) go forward ,” Albritton said.

Now why would the legislators want to do this when Amendment 1 didn’t call for raising taxes one nickel; using bond money or borrowing any funds? Amendment 1 was merely about prioritizing, forcing the state to set aside a tiny percentage of its massive budget for clean water, fresh air and preserved land. (Specifically, we’re talking a third of existing doc-stamp taxes on real-estate, which equals about 1 percent of the state’s $77 billion budget.)

At least that is what the legislators wanted us to believe. Today, June 7, 2015 Scott Maxwell of the Orlando Sentinel did a marvelous job of exposing the Florida legislators and the massive shell games they continue to play:

Remember the Lottery? Florida Politicians May Try the Same Shell Game With the Environment!

by Scott Maxwell

Most Floridians are painfully familiar with the Florida Lottery shell game.

It was the political con of the century — one that involved tens of billions of dollars.

It started in 1986 when voters were told that, if they approved a lottery, the money would go to education.

We even called it “The Education Lottery.” That way, when you plunk down 10 bucks for a scratch-off, you’re not really gambling … you’re donating to a scholarly cause. How altruistic of you.

Well, folks started “donating” by the droves. A billion bucks. Then $10 billion. Then $20 billion … all of it supposed to improve our schools.

But Floridians didn’t notice much change in education. We still had one of the lowest-funded school systems in America. We still do.

In fact, 20 years after the lottery started, the Sentinel did an investigation and determined that education funding had actually dropped from 59 percent of the state budget in 1987 to 51 percent in 2007.

Yes, after the “Education Lottery” raised billions of dollars, the percentage actually went down.

How? Well, politicians played shell games.

Yes, they spent the lottery money on schools. But they took money they had previously spent on schools and started spending it on other things.

Admittedly, it was important things, like renovating the Legislature’s dining room, but it was other things, nonetheless.

Now, we may be doing the whole sick shell-game thing again … only this time with the environment.

Last fall, Florida voters approved Amendment 1 to demand that Florida spend more on the environment.

The amendment didn’t call for raising taxes one nickel. It was merely about prioritizing, forcing the state to set aside a tiny percentage of its massive budget for clean water, fresh air and preserved land. (Specifically, we’re talking a third of existing doc-stamp taxes on real-estate, which equals about 1 percent of the state’s $77 billion budget.)

It’s hard to overstate how overwhelming the support was. Amendment 1 passed with 75 percent. No statewide candidate got anything close to that.

But Legislators are once again playing shell games.

For instance, the House budget proposes spending $38 million of this money on existing payroll for the state’s park services and $40 million on existing forest service employees.

Gov. Rick Scott’s proposal included $17.5 million for a wastewater-treatment project in the Florida Keys.

The Senate has $10 million for salaries in the Environmental Protection division.

Were you able to keep your eye on the pea? Did you see the shells move?

Most of those endeavors aren’t new. None of them involve land preservation.

Environmental groups are crying foul. So are government watchdogs. The Florida Today newspaper in Melbourne took the rare step of running a front-page editorial last week demanding that lawmakers “Respect voters, Obey Constitution on Amendment 1.”

Many critics complain there isn’t enough money for Florida Forever land preservation — practically nothing ($8 million-$15 million) this year compared to the days when Jeb Bush was governor ($300 million).

I don’t think we should be buying land simply for buying’s sake. But I do think we need to honor the amendment.

That means protecting natural areas, restoring wetlands and cleaning up our water supplies. Fixing the Everglades, improving the Indian River Lagoon and providing recreational trails.

There is no shortage of worthy ways to spend money in a state where water is both polluted and scarce enough that we have restrictions.

The amendment’s title was clear: “Water and Land Conservation: Dedicates funds to acquire and restore Florida conservation and recreation lands.”

And this time, those pushing it were smart. They included a provision that said this money can’t be “comingled” with the general funds the state had already been using.

That means if legislators play shell games with this money, there may be grounds to sue them.

It needn’t come to that.

Lawmakers and Gov. Rick Scott are looking at a record budget. And they are free to spend 99 percent of it on education, roads, incentives, public safety, their own health-care plans — or whatever else they want.

They simply have to dedicate 1 percent to the environment.

It’s what voters wanted — and now what the constitution demands.

Scott Maxwell June 7, 2015 Orlando Sentinel smaxwell@orlandosentinel.com

I smell a lawsuit in relation to the use of the funds to be collected from the doc-stamp taxes on real-estate. The Florida legislators have proven to us numerous times they are not to be trusted and this reaches to Governor Scott’s office also.

The lies, deceit, manipulation and corruption have been on-going for far too many years. Time for them to have to answer to the people who not only pay their salaries, but put them in those seats in Tallahassee.

Collectivism in SW Florida

June 1, 2015/in Budget and Finance, Culture War, Environment, Featured, News, Taxes/by Dr. Rich Swier

Ayn Rand wrote a short nineteen page paper asking: What is the basic issue facing the world today? Rand, in her paper makes the case that, “The basic issue in the world today is between two principles: Individualism and Collectivism.” Rand defines these two principles as follows:

Individualism – Each man exists by his own right and for his own sake, not for the sake of the group.
Collectivism – Each man exists only by the permission of the group and for the sake of the group.

The idea of collectivism is alive and well not just in Washington, D.C. but also in SW Florida. Specifically, in the Englewood Water District, which has decided to forsake the individual and vote in favor of the collective. Government at every level has a propensity to expand, and with that expansion it takes power from the poor in the name of the “greater good”.

According to the Englewood Water District website:

A small group of members from the Englewood Chamber of Commerce formed a “water committee” in 1955 to look into the water “situation.” During the next 4 years they had the perseverance, determination, and dedication to make the Englewood Water District a reality. They fought the odds, and the obstacles, because they saw the need to develop a high-quality, clean water system that would provide for the present and future Englewood. As they moved forward in their efforts, they learned the water and sanitary system could be owned and managed by the people of Englewood and not an outside source. They realized not only would residents’ health conditions be jeopardized without a water and sanitary system, but also the Lemon Bay environment. [Emphasis added]

So what is it that this “water committee” is proposing that has residents of the V9C District of Englewood, FL and others so agitated? The Englewood Water District has decided that for the “greater good” a group of citizens living in the V9C District of Englewood who currently use septic tanks must now pay (read imposed tax) to hook up to the city sewer system, whether they want to or not. Data shows there is no threat to the existing water quality or health conditions of those living in Englewood.

The bottom line: The 314 families living in Englewood’s V9C District are being forced to do something that they do not want to do, nor need to do.

Kathy Bolam, member of the Board of the South Venice Civic Association and the Governmental Affairs Committee, at a Sarasota Board of County Commission meeting testified:

Government was formed by the people to protect our rights and defend us from enemies whether foreign or domestic. That’s why we are asking your voice to be added to ours, because Englewood Water District in a bill passed by the Florida legislature in 2004, called their Enabling Act took away all property rights from the people living in the V9C district. The people in this district never were told about this bill, didn’t get the chance to read it or respond. As a result the EWD board of Supervisors feel empowered to expand their sewer program whether there is a public health or environmental need and whether the people want it or can afford it.

The results of their program will result in several families losing their homes. The area is mostly made up of retirees on fixed incomes and working single mothers, and small families. Those who cannot make the full payment when invoiced of $8,666.94 will then have $834.99 added to their property tax bill for 15 years. If they do not pay those taxes, the tax lien will be sold, and they will lose their home. One lady’s current tax bill is less than $500.00 and she stated that after paying her mortgage, etc. she has barely enough money to eat. Instead of decreasing the amount of homeless people, this action by EWD will increase it. U.S. Senator Elizabeth Warren said in a speech on Jan 7, 2015 quote “Since 1980, guess how much of the growth in income the 90% got? Nothing. None. Zero. In fact, it’s worse than that. The average family not in the top 10% makes less money than a generation ago.” Close quote. People just cannot afford to pay for something, they don’t need and don’t want just because a government body assumes they have the authority and power.

According to the Florida Constitution at Article 1 Section 1, it states that “All political power is inherent in the people.” Therefore, the voice of the people supercedes the goals of the EWD Board of Supervisors. Therefore, we ask you to send a fax, e-mail to that Board requesting that they be true to their Oath of the U.S. Constitution and the Florida Constitution and not violate the “voice of the people.”

According to Bolam, “Jerry Paul who was the local state representative for this area will be at the meeting talking about funding. He was the state representative in 2004 and was responsible for the Enabling Act. He currently is a lobbyist (Capitol Energy Florida) for EWD and for Key Agency (EWD co-chair Mr. Fogo is financially connected to Key Agency). EWD renewed their insurance coverage with Key Agency.”

The Englewood Water District is moving forward and a final vote on taking the property of these families will occur on Thursday, June 4th, 2015 at 8:00 a.m. Citizens may call the Englewood Water District at 941-474-3217 to voice their opinions on this issue or attend the meeting at 201 Selma Ave, Englewood, FL.

Five Reasons to Move Out of the City Before Fall

May 31, 2015/in Budget and Finance, Commentary, Culture War, National Security, Policy, Religion/by Dr. Richard Ruhling, MD

1. Fear of loss, especially financial loss is considered by many as the greatest human motivator. You could lose your home and it’s contents by failure to act ahead of “economic collapse, 2015,”if the 36 million results on Google mean anything. When it comes to such events, a year early is better than a day late. So how do we protect ourselves?

Sell what you have. Putting it up for sale does not guarantee it will sell, but give it as low a price as you can get along with. I’ve lived to regret loss from two homes in which an offer was below what I invested—in one case I lost it all when the bank wouldn’t refinance an out-of-state balloon payment.

If September is approaching and you haven’t sold your property, consider refinancing or a bank loan for its equity, so that you’ll have cash to move and rent a place for the winter or longer. Alternatives might include buying a camper, van or even a small pickup with shell that would allow pad and sleeping bag in southern states.

It may be equally important to have family, friends or connections with someone who is rural where you plan to go. It could be a friend of a friend at church or someone you have exchanged emails with for some time and have talked by phone. You might consider a weekend drive to the area or a visit to a church in order to ask questions and share what’s on your mind to learn what you can.

Moving out of the city may mean the loss of job if you aren’t self-employed, but you might still be able to commute to work if the economy doesn’t crash as expected. If it does, you will probably lose your job anyway. So why not go on your terms, selling what you have in the city and taking what you need?

2. Health is wealth and living in the country is more conducive to health and true healthcare. Planting a garden involves a variety of practical exercise in the fresh air and sunlight with no need of a sweaty gym memberships, and the rewards of gardening also include nutrition, good mental attitudes and security v future food shortage. True healthcare is about what we eat and do (exercise), and how well we avoid MD’s and Rx drugs, a leading cause of illness and death.

3. Education. Move before fall and consider not registering your child in a public school. While “Goals 2000” admittedly dumbed them down, the agenda now is to strip our children of moral restraint and teaching that would handicap them in a depraved New World Order where “anything goes.”

Consider the dating question that teenage boys might ask, “Is it okay if I take off my pants?” or a recent student survey asking how many different forms of sex have they tried? Parents are sacrificing their children to the idol of “education,” falsely so-called as Israel did to pagan idols of surrounding nations. It was an abomination then it’s an Obama nation now.

4. Spiritual reasons for moving include Bible teachings. Cain, the first murderer also built the first city. The greatest personages throughout Bible history came from a rural settings. The law given by God to Moses says, “You shall teach them,” speaking of your children. Moses delivered a million plus from the bondage in Egypt that had many similarities to the US today, including our aborting infants, etc. The Exodus is included as an example for us at the end of the world, 1Corinthians 10:1,11. Cities are a focus of crime, sex, violence. Leave your TV behind when you take your necessities with you.

5. Freedom. You don’t have to be religious to appreciate this. Who needs a government telling you to buy mercury light bulbs because they use less electricity? (Never mind the huge risk if you break one.) Who needs a government that ignores 2nd Amendment rights that have protected its citizens against tyranny for hundreds of years, as it ignores countries like Switzerland where everyone is taught to use a gun, and they have far less crime than U.S. with “gun control” which is failing in Chicago, etc.

The Great Teacher who divided BC from AD warned his followers, “When you see the abomination (that early believers understood as military) “standing where it ought not, flee…” Mark 13:14. When Roman military came, those disciples fled and were spared the siege and death by Titus in 70 AD, but Christ’s warning were also about the end of the world, Matt 24:3,15.

So do we see military “standing where it ought not”? If you haven’t seen it yet on YouTube, type in JADE HELM, (HELM means Homeland Eradication of Local Militants), a euphemism for grab guns that are supposed to be legal according to the 2nd Amendment. If guns are outlawed, only the outlaws will have guns.

I am not saying we should shoot them at the door, but this government has been spying on us, monitoring our phone and internet, erecting FEMA camps for dissidents and has plans to re-educate you if you don’t want the coming global government. Free speech is going or gone along with freed of press and assembly. They have plans to even take your food if they think you have more than you need.

We can “thank” our leaders in Washington for selling out to a New World Order that’s also the pope’s agenda from the days of Lincoln when

3 December 1863. Pius’s “letter to Jefferson Davis was accompanied by an autographed picture of the pope” in which Pius IX addressed the Confederate President as “the “Honorable President of the Confederate States of America.” Robert E. Lee said he was “the only sovereign… in Europe who recognized our poor Confederacy.”
Roman Catholic U.S. Supreme Court Chief Justice Roger Taney said that black people “had no rights which the white man was bound to respect” in the Dred Scott case, 1857.
Lincoln was assassinated, probably by the same force as behind JF Kennedy’s assassination when he chose against the Vatican agenda for America, seen also in a revealing online source, The Godfathers.

In sharp contrast, those who are willingly sold out to a UN/papal agenda amaze us with the scandals they are able to survive and still hold leading positions:

This is not a condemnation of sincere Catholic Christians; it’s about where church leaders are taking us and by their silence or failure to address the issues, aiding. The Bible teaches if we see trouble we are to give a warning or God holds us accountable for their loss, Ezekiel 33:6. It’s wake-up time!

Summary: Do your homework! Type JADE HELM or Martial Law into YouTube and if you can see military, “standing where it ought not,” (Mark 13:14), put your place up for sale and get out before fall. Four verses later, Christ said to pray that your flight be not in the winter. That prayer is not likely to change God’s mind about what’s going to happen, but it could change your willingness and readiness.

Moving to the country is just the first step in survival and the second step is not a rapture to heaven. Please give Apocalypse 2015 a look on Amazon for Kindle, or a cheaper PDF at http://TheBridegroomComes.com right column. Another website with more information is http://IslamUSinProphecy.wordpress.com

Real Heroes: Ludwig Erhard — The Man Who Made Lemonade from Lemons by LAWRENCE W. REED

May 9, 2015/in Budget and Finance, Economy, Policy, Politics, Regulation/by Foundation for Economic Education (FEE)

How rare and refreshing it is for the powerful to understand the limitations of power, to actually repudiate its use and, in effect, give it back to the myriad individuals who make up society. George Washington was such a person. Cicero was another. So was Ludwig Erhard, who did more than any other man or woman to denazify the German economy after World War II. By doing so, he gave birth to a miraculous economic recovery.

“In my eyes,” Erhard confided in January 1962, “power is always dull, it is dangerous, it is brutal and ultimately even dumb.”

By every measure, Germany was a disaster in 1945 — defeated, devastated, divided, and demoralized — and not only because of the war. The Nazis, of course, were socialist (the name derives from National Socialist German Workers Party), so for more than a decade, the economy had been “planned” from the top. It was tormented with price controls, rationing, bureaucracy, inflation, cronyism, cartels, misdirection of resources, and government command of important industries. Producers made what the planners ordered them to. Service to the state was the highest value.

Thirty years earlier, a teenage Ludwig Erhard heard his father argue for classical-liberal values in discussions with fellow businessmen. A Bavarian clothing and dry goods entrepreneur, the elder Wilhelm actively opposed the kaiser’s increasing cartelization of the German economy. Erhard biographer Alfred C. Mierzejewski writes of Ludwig’s father,

While by no means wealthy, he became a member of the solid middle class that made its living through hard work and satisfying the burgeoning consumer demand of the period, rather than by lobbying for government subsidies or protection as many Junkers did to preserve their farms and many industrialists did to fend off foreign competition.

Young Ludwig resented the burdens that government imposed on honest and independent businessmen like his father. He developed a lifelong passion for free market competition because he understood what F.A. Hayek would express so well in the 1940s: “The more the state plans, the more difficult planning becomes for the individual.”

Severely wounded by an Allied artillery shell in Belgium in 1918, Ludwig’s liberal values were strengthened by his experience in the bloody and futile First World War. After the tumultuous hyperinflation that gripped Germany in the years after the war, he earned a PhD in economics, took charge of the family business, and eventually headed a marketing research institute, which gave him opportunities to write and speak about economic issues.

Hitler’s rise to power in the 1930s deeply disturbed Erhard. He refused to have anything to do with Nazism or the Nazi Party, even quietly supporting resistance to the regime as the years wore on. The Nazis saw to it that he lost his job in 1942, when he wrote a paper outlining his ideas for a free, postwar economy. He spent the next few years as a business consultant.

In 1947, Erhard achieved the chairmanship of an important monetary commission. It proved to be a vital stepping stone to the position of director of economics for the Bizonal Economic Council, a creation of the American and British occupying authorities. It was there that he could finally put his views into policy and transform his country in the process.

Erhard’s beliefs had by this time solidified into unalterable convictions. Currency must be sound and stable. Collectivism was deadly nonsense that choked the creative individual. Central planning was a ruse and a delusion. State enterprises could never be an acceptable substitute for the dynamism of competitive, entrepreneurial markets. Envy and wealth redistribution were evils.

“It is much easier to give everyone a bigger piece from an ever growing cake,” he said, “than to gain more from a struggle over the division of a small cake, because in such a process every advantage for one is a disadvantage for another.”

Erhard advocated a fair field and no favors. His prescription for recovery? The state would set the rules of the game and otherwise leave people alone to wrench the German economy out of its doldrums. The late economist William H. Peterson reveals what happened next:

In 1948, on a June Sunday, without the knowledge or approval of the Allied military occupation authorities (who were of course away from their offices), West German Economics Minister Ludwig Erhard unilaterally and bravely issued a decree wiping out rationing and wage-price controls and introducing a new hard currency, the Deutsche-mark. The decree was effective immediately. Said Erhard to the stunned German people: “Now your only ration coupon is the mark.”

The American, British, and French authorities, who had appointed Erhard to his post, were aghast. Some charged that he had exceeded his defined powers, that he should be removed. But the deed was done. Said U.S. Commanding General Lucius Clay: “Herr Erhard, my advisers tell me you’re making a terrible mistake.” “Don’t listen to them, General,” Erhard replied, “my advisers tell me the same thing.”

General Clay protested that Erhard had “altered” the Allied price-control program, but Erhard insisted he hadn’t altered price controls at all. He had simply “abolished” them. In the weeks and months to follow, he issued a blizzard of deregulatory orders. He slashed tariffs. He raised consumption taxes, but more than offset them with a 15 percent cut in income taxes. By removing disincentives to save, he prompted one of the highest saving rates of any Western industrialized country. West Germany was awash in capital and growth, while communist East Germany languished. Economist David Henderson writes that Erhard’s motto could have been: “Don’t just sit there;undo something.”

The results were stunning. As Robert A. Peterson writes,

Almost immediately, the German economy sprang to life. The unemployed went back to work, food reappeared on store shelves, and the legendary productivity of the German people was unleashed. Within two years, industrial output tripled. By the early 1960s, Germany was the third greatest economic power in the world. And all of this occurred while West Germany was assimilating hundreds of thousands of East German refugees.

It was a pace of growth that dwarfed that of European countries that received far more Marshall Plan aid than Germany ever did.

The term “German economic miracle” was widely used and understood as it happened in the 1950s before the eyes of the world, but Erhard himself never thought of it as such. In his 1958 book, Prosperity through Competition, he opined, “What has taken place in Germany … is anything but a miracle. It is the result of the honest efforts of a whole people who, in keeping with the principles of liberty, were given the opportunity of using personal initiative and human energy.”

The temptations of the welfare state in the 1960s derailed some of Erhard’s reforms. His three years as chancellor (1963–66) were less successful than his tenure as an economics minister. But his legacy was forged in that decade and a half after the war’s end. He forever answered the question, “What do you do with an economy in ruins?” with the simple, proven and definitive recipe: “Free it.”

For additional information, see:

David R. Henderson on the “German Economic Miracle”
Alfred C. Mierzejewski’s Ludwig Erhard: A Biography
Robert A. Peterson on “Origins of the German Economic Miracle”
Richard Ebeling on “The German Economic Miracle and the Social Market Economy”
William H. Peterson on “Will More Dollars Save the World?”

Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

EDITORS NOTE: Each week, Mr. Reed will relate the stories of people whose choices and actions make them heroes. See the table of contents for previous installments.

The Welfare State Needs Abolition, Not “Reform” by DOUG BANDOW

May 6, 2015/in Budget and Finance, Culture War, Featured, News, Policy, Taxes/by Foundation for Economic Education (FEE)

The United States is effectively bankrupt. Economist Laurence Kotlikoff figures the government faces unfunded liabilities in excess of $200 trillion. Making the programs run more efficiently would be helpful. But only transforming or eliminating such programs will save the republic.

The left likes to paint conservatives as radical destroyers of the welfare state. If only.

Instead, some on the right have made peace with expansive government. Particularly notable is the movement of “reform conservatism.” The so-called “reformicons,” notes Reason’s Shikha Dalmia, “have ended up with a mix of old and new liberal ideas that thoroughly scale back the right’s long-running commitment to free markets and limited government.”

The point is not that attempts to improve the functioning of bloated, inefficient programs are bad. But they are inadequate.

Yes, government costs too much. Government also does too much. And that cannot be remedied by lowering administrative costs, eliminating waste, improving delivery, or even reducing perverse incentives.

The worst “reform conservatism” idea is to manipulate the state to support a particular “conservative” vision. Dalmia points out that many reformicons want to use the welfare state to strengthen institutions which they favor.

For instance, “just as George W. Bush’s compassionate conservatism proffered a series of special tax incentives to prop up religious institutions, reformicons want targeted tax breaks to strengthen middle-class families. Some want to restrict immigration and trade, just like unions of yore.”

Utah Sen. Mike Lee, for instance, criticizes conservatives who “have abandoned words like ‘together,’ ‘compassion,’ and ‘community’.” Although he warned against overreliance on the state, he still wants to use it for his own ends, proposing greater flexibility in allowing workers to choose between comp time and overtime — by imposing such a provision on private collective bargaining agreements.

Reformicon intellectuals and politicians argue for an expanded Earned Income Tax Credit for singles and increased deductions for dependents and tax credits for parents who stay at home. Some want more taxes on the wealthy, new employee-oriented public transportation, a preference for borrowing over deficit reduction, subsidies for hiring the unemployed, and punishment for colleges whose students welsh on their educational loans.

Senators Lee and Marco Rubio and Lee have introduced the “Economic Growth and Family Fairness Tax Reform Plan.” It offers some corporate and individual tax reductions but raises the rates on most everyone by lowering tax thresholds. The bill also increases the child credit, even for the well-to-do.

Alas, this differs little from liberal social engineering.

As Dalmia puts it: “Broad-based, neutral tax cuts to stimulate growth are out, markets are optional tools, the welfare state is cool, redistributive social engineering is the way forward, and class warfare is in.”

Reformicons don’t so much disagree as argue that they can do better than liberals. For instance, Yuval Levin of National Affairs contended that his movement relies on “experimentation and evaluation [and] will keep those programs that work and dump those that fail.”

What motivates this approach? After Barack Obama’s victory, Levin explained, he and other conservative thinkers “were trying to figure out what the hell this new world looked like.” They hoped to apply “the Judeo-Christian moral tradition to critical issues of public policy.”

Of course, the Judeo-Christian moral tradition didn’t arise with a focus on public policy. Jesus spoke at length on the relationship of men to God and each other, but largely avoided politics. He never advocated coercively applying his teachings — that the federal government should force men to love God and their neighbors, as long as the enforcement was efficient, for instance.

But politics drives reform conservatism. Bloomberg’s Ramesh Ponnuru contended that it’s a matter of necessity: “Times change and people need to change if they are going to remain relevant.”

Henry Olsen of the Ethics and Public Policy Center made a fulsome pitch for conservatives to embrace social benefits for “their” voters. After all, “Many of those working-class voters are located precisely in the two places a Republican presidential candidate needs to carry to win the White House.”

He concluded: “American conservativism at its best embraces Reagan’s thought, combining a love of liberty with an overriding love of all people. In the present crisis, antigovernment fundamentalism threatens to place the two at odds with one another, to fatal effect for conservatism and for the country.”

Expressing interest in reformicon ideas are GOP presidential contenders Rubio, Jeb Bush, and former Texas Gov. Rick Perry. Indiana’s Mike Pence, another possible GOP candidate, recently expanded Medicaid, in a reform-oriented fashion.

Ohio’s Gov. John Kasich (yet another potential contender), grew Medicaid without reform — claiming God’s direction. However, there’s no evidence so far that technocratic “reform conservatism” is more politically attractive than simple conservatism.

Of course, no one should want policies that don’t work. But that doesn’t address the most important question: is the end itself justified? Efficient income redistribution doesn’t make the process morally right, only less wasteful on its way to being wrong.

And such measures can create new problems. For instance, author Amity Shlaes and Matthew Denhart of the Calvin Coolidge Presidential Foundation warn that the Rubio-Lee plan would generate resentment by pitting individuals against families.

It also would sacrifice opportunities to spur economic growth by emphasizing group privileges over rate reductions for all. The two worry: “If the self-styled party of enterprise does not emphasize the individual, no one will.”

Big issues are at stake. The current economic system isn’t working for all. Rubio asked the right question: “How can we get to the point where we’re creating more middle-income and higher-income jobs, and how do we help people acquire the skills they need?”

Social engineering, even conservative social engineering, is not the answer.

The starting point for job creation remains what it always has been, making it easier and less costly to create businesses and jobs. Children need alternatives to the public school monopoly. Yes, the family is under pressure, but the best Washington can do is to do no harm.

For most issues the principal answer will come outside of politics, as Lee recognized: “Collective action doesn’t only — or even usually — mean government action.”

Some reformicon ideas might make some conservatives appear more presentable to the public, but this approach will win few converts from committed statists. But reform conservatism fails to provide a coherent answer to the most important problems facing America.

Government is not just inefficient: it is doing the wrong things.

Doug Bandow

Doug Bandow is a senior fellow at the Cato Institute and the author of a number of books on economics and politics. He writes regularly on military non-interventionism.

3 Myths about Economic Intervention

May 5, 2015/in Budget and Finance, Economy, News, Policy, Regulation/by Foundation for Economic Education (FEE)

Whenever a social or economic problem arises, most people’s default position is that the government should “do something about it.” Indeed, most people think that if the government does nothing, nothing will get done. It’s crazy to think our elected officials should sit idly by. But when the government does intervene, things can go wrong.

Let’s explore the empirical evidence when it comes to the effectiveness of three popular government interventions.

Myth #1: Occupational licensing increases the quality and safety of services provided in the market.

Occupational licensing has been one of the most rapidly growing labor market institutions in the United States over the last few decades. According to the Brookings Institution (the most influential think tank in the world),

In the early 1950s less than 5 percent of US workers were required to have a license from a state government in order to perform their jobs legally. By 2008, the share of workers requiring a license to work was estimated to be almost 29 percent.

Nowadays it isn’t just highly skilled professionals who need a license; florists, truck drivers, and even hair stylists in many states find that they can’t practice their trade without first overcoming expensive and time-consuming barriers.

The primary justifications for occupational licensing are to guarantee a minimum level of safety and quality for the services sold in the market. However, there isn’t much evidence that occupational licensing actually achieves these goals. A paper published by the National Bureau of Economic Research found that more difficult requirements to earn a dental license lead to higher prices for consumers but not to superior dental outcomes.

Other research has found that more stringent licensing requirements for opticians, mortgage brokers, and teachers have no impact on the quality of the services provided, while at the same time increasing the cost of these services. Even the merit of medical licenses is questionable. “The link between [medical] licensing and service quality is tenuous at best,” according to one review of the evidence on medical licensure and service quality. Most importantly, in a recent paper published by the Brookings Institution, the author notes,

The evidence from the economics literature suggests that licensing has had an important influence on wage determination, benefits, employment, and prices in ways that impose net costs on society with little improvement to service quality, health, and safety … a reduction in licensing restrictions … would lead to employment growth in affected occupations and a reduction in prices.

That evidence paints a clear picture: Occupational licensure erects entry barriers that hinder a person’s ability to practice a given profession while providing no measurable benefits to consumers. Indeed, it imposes net costs on society through higher consumer prices and lower levels of employment than would likely have been the case otherwise.

According to the Brookings paper, “Standard economic models imply that the restrictions from occupational licensing can result in up to 2.85 million fewer jobs nationwide, with an annual cost to consumers of $203 billion.”

At the very least, state and local governments ought to seriously consider slowing the growth of licensing restrictions as a means to mitigate their growing economic costs.

Myth #2: Patent protection spurs innovation.

An innovative company invests a large amount of money in research and development for a new product. The company then proceeds to release that product to the market. Soon after, other companies start producing the same product, and this competition leads to a general price decline as well as customers buying from many companies rather than just one. As a result of this competition, the original innovator’s return on investment is close to 0 percent.

When innovators understand that they likely will not recoup their investments because of the competitive nature of the marketplace, they won’t bother innovating at all — so the established wisdom goes. To provide incentives for innovation, intellectual property advocates argue, the government must provide a temporary monopoly status for the creators of new products, thus increasing the price of the product. This temporary monopoly is supposed to promote innovation by increasing the incentive to innovate.

However, with monopoly protection comes political rent-seeking. Firms that hold government-granted monopolies seek to extend the length of their monopoly status. Similarly, firms who do not yet have monopoly status in the form of a patent attempt to obtain one.

Another problem with patents isn’t necessarily that they fail at providing an incentive to innovate; it’s that existing patents may hinder the subsequent innovation that would have been built on these patented products.

The net effect of patents on innovation seems to be neutral at best, and probably negative. According to a paper published in the Journal of Economic Perspectives,

Overall, the weight of the existing historical evidence suggests that patent policies, which grant strong intellectual property rights to early generations of inventors, may discourage innovation. On the contrary, policies that encourage the diffusion of ideas and modify patent laws to facilitate entry and encourage competition may be an effective mechanism to encourage innovation.

Similarly, the authors of a working paper published by the Federal Reserve Bank of St. Louis find that “there is no empirical evidence that [patents] serve to increase innovation and productivity, unless the latter is identified with the number of patents awarded — which, as evidence shows, has no correlation with measured productivity.”

Even if there are some industries (pharmaceuticals, perhaps) where government intervention can promote innovation, patent laws can heavily distort the direction of those innovations, subsidizing some consumers at the expense of the rest of us.

A paper by economists from Harvard, MIT, and the University of Chicago found that distortions in the US patent system cause the pharmaceutical industry to invest more in drug development for people who are late-stage cancer patients than for people who are in the early stages of cancer or for cancer prevention.

The Economist summarized the findings:

The patent system encourages [pharmaceutical companies] to pump out drugs aimed at those who have almost no chance of surviving the cancer anyway. This patent distortion costs the US economy around $89 billion a year in lost lives.

Distortions like these cast doubt on the belief that society can rely on government to produce efficient patent laws.

Myth #3: Antitrust laws benefit consumers.

Competition is vital to a thriving market economy. It increases productivity,increases the availability of consumer goods, and reduces consumer prices. Many people believe, therefore, that government intervention is necessary to ensure that large firms do not dominate entire markets of goods and services and end up exploiting consumers.

According to the conventional wisdom, 19th-century “robber barons” were monopolists who used such techniques as predatory pricing to drive out competitors and then charge obscene prices. Consequently, on behalf of the people, the government stepped up and passed antitrust legislation, most notably the Sherman Antitrust Act of 1890, which put an end to the rapacious monopolists.

But is this popular version of history accurate? That some firms dominate large shares of a given market does not necessarily imply that they are acting as monopolists (that is, restricting output and raising prices). Indeed, these firms often gained their market share by expanding output, lowering prices, and offering the best prices to consumers. In other words, they were so good that their competitors simply couldn’t keep up.

Historian Thomas E. Woods writes,

Mainstream economics identifies monopolists by their behavior: they earn premium profits by restricting output and raising prices. Was that behavior evident in the industries where monopoly was most frequently alleged to have existed? Economist Thomas DiLorenzo, in an important article in the International Review of Law and Economics, actually bothered to look. During the 1880s, when real GDP rose 24 percent, output in the industries alleged to have been monopolized for which data were available rose 175 percent in real terms. Prices in those industries, meanwhile, were generally falling, and much faster than the 7 percent decline for the economy as a whole. We’ve already discussed steel rails, which fell from $68 to $32 per ton during the 1880s; we might also note the price of zinc, which fell from $5.51 to $4.40 per pound (a 20 percent decline) and refined sugar, which fell from 9¢ to 7¢ per pound (22 percent). In fact, this pattern held true for all 17 supposedly monopolized industries, with the trivial exceptions of castor oil and matches.

In other words, the conventional wisdom justifying antitrust laws isn’t based on an accurate representation of economic history.

Still, it may be worth asking if antitrust policy in the United States has achieved the supposed goal of saving consumers from predatory monopolists. The answer appears to be no.

In a highly cited paper published in the Journal of Economic Perspectives, the authors assessed the evidence regarding the efficacy of federal antitrust policy and found that there was “no evidence that antitrust policy in the areas of monopolization, collusion, and mergers has provided much benefit to consumers.” Further: “in some instances … [anti-trust policy] may have lowered consumer welfare.”

That’s a pretty shocking conclusion given how casually most people accept the efficacy of anti-trust law. Instead of relying on government intervention to break up monopolies, perhaps the government should start dismantling the barriers it creates that inhibit competition in the first place. According to a paper by economists at the Federal Reserve Bank of Minneapolis, “Government policies themselves, such as tariffs and other forms of protection, are an important source of monopoly” that lead to “significant welfare losses.”

The solution to monopoly — and professional licensure, and the incentives of innovation — is less government intervention, not more.

Corey Iacono

Corey Iacono is a student at the University of Rhode Island majoring in pharmaceutical science and minoring in economics.

The Sweet, Sweet Privilege of the Maple Syrup Federation

May 2, 2015/in Budget and Finance, Economy, News, Policy/by Foundation for Economic Education (FEE)

“Quebec is the Saudi Arabia of maple syrup.”

That’s the money quote from an exposé on the provincial maple syrup cartel.

Quebec’s maple syrup “marketing board” first made big news in 2012 when the culprits of an $18 million maple syrup heist (really) from the Global Strategic Maple Syrup Reserve (really) were caught by provincial police. (See the whole story in a feature film, coming soon, starring Jason Segel — …really.) The board is making news again thanks to recent crackdowns on producers who want to sell syrup outside its control.

Quebec’s maple syrup is managed by the Federation of Maple Syrup Producers, a legal cartel that has been given special privileges under provincial law — including the power to enforce a monopoly in syrup sales — since 1966. All syrup goes through the Federation, which withholds enough from the market to keep the price high, takes a 12% cut of sales, and then (eventually) passes the remainder on to producers.

This month, the Federation stationed security guards in several sugar shacks to ensure that producers don’t sell their own syrup because some of them have begun to fight back.

In defiance of the rules, [Angèle] Grenier exported hundreds of barrels of maple syrup to New Brunswick from 2002 through 2014 — just so she could collect the money she earned.

Last year she knew she was being watched. Her brother and her neighbour each brought a tractor. In under an hour, with three tractors, the team loaded 40 barrels of syrup on a truck.

“All the children came and we did it quick, quick,” she says. The truck sped off down her dirt road.

The federation has now shut down Grenier’s exports.

Last month Justice Clément Sampson of Superior Court in Ste-Joseph-de-Beauce wrote an order permitting “a sheriff to penetrate into the sugar shack of [Grenier], without notice, at any time judged reasonable and as frequently as they judge appropriate … to verify the inventory of maple syrup, take photos and videos of the locale and the inventory, and put a mark, a seal, a tag or any other necessary identifying label on every maple syrup container.”’

Advocates for the syrup quota say it’s needed because prices aren’t enough to keep supply stable for a crop with a harvest that fluctuates from year to year. But if bad seasons are the danger, what syrup producers need is insurance (or futures markets). That could be accomplished simply and cheaply by setting aside money, rather than warehouses full of syrup guarded by state-of-the-art security to prevent Mission Impossible-esque heists.

The marketing board doesn’t protect producers from a bad harvest. It protects big producers from consumers — from you, me, and our dollars that could tempt sellers to compete with them outside the system.

The Federation estimates that only 75% of producers support its fixed prices, but it has the legal power to strong-arm the 25% who don’t. Dissenting producers don’t — can’t — have the same rights under the law if it’s to be enforced. Without equal rights under the law, there cannot be secure rights to property.

One rebellious seller remarks that since he defied the Federation, “They can come into my house anytime they want.” Perhaps that’s why producers in Ontario and New Brunswick, who still benefit from the price supports, have declined to join Quebec’s Federation.

How did this happen? Quebec producers sought legal privileges for themselves by organizing into the Federation. Now that that privilege exists, it’s been seized not only by maple syrup producers, but by a specific contingent who benefit most from it. Special powers, once created, benefit the especially powerful.

The good news is that prices still work. High prices have tempted others to enter the market, and as a result Quebec’s share of global production has fallen from 78% ten years ago to 69% today. If the trend continues, the cartel may become unstable — or it may try to convince (or, failing that, force) others to join in the racket.

In the end, it’s not just those who love maple syrup on a warm stack of flapjacks or that sweet, messy maple taffy who lose out when Big Syrup gets special privileges. Rather, it’s the people who want to act and innovate without permission. Innovation is the great enemy of the status quo, and those who benefit from that status quo, like the Syrup Federation, know this. Their message is clear: conform, syrup slingers, or find yourself in a sticky situation.

Janet Neilson

Janet Neilson is a founding member and program developer for the Institute for Liberal Studies and a contract researcher in Ottawa, Ontario, Canada.