Why the Cleveland Clinic won’t recommend medical marijuana for patients
Doctors at Ohio’s Cleveland Clinic will not recommend marijuana for medical use, according to Paul Terpeluk, DO, medical director of the clinic’s employee health services. Writing in the Kent (OH) Record-Courier, Dr. Terpeluk explains why.
“In the world of healthcare, a medication is a drug that has endured extensive clinical trials, public hearings and approval by the U.S. Food & Drug Administration,” he says. “Medications are tested for safety and efficacy. They are closely regulated, from production to distribution. They are accurately dosed, down to the milligram.
“Medical marijuana is none of those things,” he points out.
He says governments, regulators, medical researchers, and pharmaceutical companies should focus on isolating marijuana components to produce dose-specific medication and submit it to testing and regulatory processes.
He notes that in 2017, the National Institutes of Health supported 330 projects totaling almost $140 million on cannabinoid research. Marijuana contains more than 500 chemicals. Slightly more than 100 of those, called cannabinoids, are unique to the cannabis plant. Thus far, pharmaceutical companies have developed four cannabinoid medications and FDA has approved them:Marinol (dronabinol) is man-made THC in pill form,Syndros (dronabinol) is man-made THC in liquid form,Cesamet (nabilone) is a man-made product similar to THC in pill form, andEpidiolex (cannabidiol) is a purified extract of marijuana in oil form. “As a healthcare provider our goal is to help patients, to treat their conditions, to improve their quality of life, and to ease their suffering – within the bounds of scientific evidence,” Dr. Terpeluk concludes.
Effect of Marijuana Smoking on Pulmonary Disease in HIV-Infected and Uninfected Men
Published online prior to the publication of the December-January issue of EClinicalMedicine, this longitudinal study involved 1352 HIV-seropositive and 1352 HIV-seronegative men who have sex with men.
Eligible participants with self-reported marijuana and tobacco smoking had biannual study visits between 1996 and 2014. Researchers obtained pulmonary diagnoses from self-reports and medical records.
This study finds that “Among HIV-infected participants, recent marijuana smoking was associated with increased risk of infectious pulmonary diagnoses and chronic bronchitis independent of tobacco smoking and other risk factors for lung disease; . . . these risks were additive in participants smoking both substances. There was no association between marijuana smoking and pulmonary diagnoses in HIV-uninfected participants.”
Cannabis anonymous: Steamboat Springs therapist sees rise in marijuana addiction
A Steamboat Springs, Colorado, licensed counselor and certified addictions therapist, Gary Guerney, has been treating substance abuse problems in patients for more than 20 years. In the last year, he has been shocked by the number of people who are coming to him for help with their addiction to marijuana, a drug most thought was not addictive.
“In all my years, I’ve never seen this,” he says.
Initially, he favored legalizing marijuana for medical use, but now he’s not so sure. He worries about the drug’s impact on mental health and addiction.
Marijuana use has more than doubled in the past decade.
Colorado: Owners of Sweet Leaf dispensary chain sentenced to a year in prison for illegal marijuana distribution
A landmark case in the land of legal marijuana is getting widespread attention across the nation. Yes, pot is legal in Colorado, but no one can violate the Colorado Organized Crime Law by illegally selling and distributing marijuana even if they own licensed dispensaries.
The three owners of the Sweet Leaf dispensary chain pleaded guilty to violating this law. They were sentenced to one year in prison, to be followed by one year of parole, and one year of probation.
The owners admitted they knew that some customers were “looping,” a practice where someone buys the maximum amount of marijuana allowed and returns to the dispensary to buy the maximum amount again and again the same day. The maximum amount in Colorado is one ounce.
A Denver prosecutor told the judge that a year-long investigation by Denver police and an equally long investigation by a Denver grand jury resulted in the charges. The investigations produced evidence of loopers purchasing marijuana from Sweet Leaf dispensaries 30 to 40 times a day, leading to almost 2.5 tons of illegal marijuana going into the black market.
Sweet Leaf’s parent companies, Dynamic Growth Partner LLC and AJS Holdings LLC, also pleaded guilty and were fined $125,000 each.
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When I read the following recently I was struck by the parallel between the Democrats and the Media of our day, and the Pharisees and the Herodians of Christ’s day:
1 And he [Christ] entered again into the synagogue; and there was a man there which had a withered hand.
2 And they watched him, whether he would heal him on the sabbath day; that they might accuse him.
3 And he saith unto the man which had the withered hand, Stand forth.
4 And he saith unto them, Is it lawful to do good on the sabbath days, or to do evil? to save life, or to kill? But they held their peace.
5 And when he had looked round about on them with anger, being grieved for the hardness of their hearts, he saith unto the man, Stretch forth thine hand. And he stretched it out: and his hand was restored whole as the other.
6 And the Pharisees went forth, and straightway took counsel with the Herodians against him, how they might destroy him. (Mark 3: 1-6)
So are we getting this?
Christ had entered into the synagogue, on the Sabbath, and saw a man there with “a withered hand.” And the Pharisees were waiting, watching to see if he, Jesus, had the temerity to heal this man on the Sabbath…thereby profaning it in their debauched minds.
And He, of course, would do just that, but not before asking pointedly: “Is it lawful to do good on the sabbath days, or to do evil? to save life, or to kill?” Was the view of these religious zealots regarding “the Law” so warped that they actually considered it wrong (or “immoral”) to heal on the sabbath?
Clearly they did, as they “straightway took counsel with the Herodians…how they might destroy him.” And that reminded me of what the Media and the Democrats (with either the active or tacit support of Establishment Republicans) do to the President on a daily basis…no matter what his latest “crime” or offense.
The President is not a religious leader. That is not the point. The point is that his enemies – and he has rightly identified the Media as “the enemy of the People” (of those who elected him, at least) – takes “counsel…against him,” seeking “how they might destroy him” even when he is seeking to do good – or, at the very least, seeking to do the exact things that current and former Democrats – politicians and presidents – have either done or spoken strongly in favor of over the years. Now suddenly, these same things are “racist,” “immoral,” or a “symbol of hate.”
Dropping unemployment to a fifty-year low – including among Blacks and Hispanics, as well as women: BAD! Bringing back record numbers of manufacturing job openings, and more jobs overall than people looking for work: WRONG! Raising consumer confidence levels to near record highs: SELFISH!
Renegotiating major international trade deals to benefit American workers and consumers, while reducing federal spending by hundreds of millions of dollars, as well as boosting the expansion of the GDP to near 4% (the average annual expansion rate during Barack Obama’s two terms was just below 1.5%): UNFAIR!
Closing down our Southern Border to reduce the flow of illegal immigrants (which cost U.S. taxpayers an estimated $113 Billion a year), and doing all in his power to complete the construction of a wall (on our Southern Border) like some 65 nations (including the U.S.) have done. (There are 196 nations in the world, so one-third of them have walls.) IMMORAL!
Bringing together the leaders of North and South Korea for the first time in nearly 70 years, and extracting a commitment from North Korean President Kim Jong Un to “pursue ‘complete’ denuclearization” – with no mention of an increase in U.S. foreign aid to North Korea to date; pulling out of the Paris Climate Accord which was costing us “a vast fortune” (the effects of which were “quantitatively trivial”); and canceling Barack Obama’s disastrous Iranian nuclear deal: EVIL!
All of which tells us that the answer to the question with which we started – “Is it lawful [for the President] to do good…?” – is a resounding NO! according to the Media/Left in this country. So like the Pharisees of old, the new Sanhedrin in this country – the Global Elites – and their “Herodian” allies in the Deep State, while witnessing the President’s every effort to keep his campaign promises (as seen above) and fulfill his commitment “To Make America Great Again,” have continually sought ways that “they might destroy him.”
In the Meridian of Time, the cry went out with respect to the ‘King of the Jews’: “Let him be crucified! Let him be crucified!” Today, the equally-shrill cry on the part of the Democrats, the Deep State, a number of traitorous Republicans (Jeff Flake and Mitt Romney most notably), and virtually the entire Establishment Press regarding the man whom the People elected as their 45th President, Donald J. Trump, has been “Let him be investigated [until a crime can be found]!” and ultimately, “Let him be impeached!”
In either case, the lust for blood has been the same…and the alleged “crimes” equally absurd.
Since the cry of impeachment is ALL that those who watch the Establishment Media ever see or hear, it is up to the rest of us to speak out, and post the TRUTH on Social Media (assuming it won’t be blocked)! While this may seem like a small thing, in the end it is HUGE, as what is trending effectively tells the world what WE are thinking…or, at least, what those who are not afraid to speak are thinking! Have those of us who are Christians not all declared that had we been there in the crowd, on that dark day long ago, when Pilate asked the people what should be done with Jesus of Nazareth, WE would have cried out to save him? That we will never know…but do we remain silent now? Our President should not have to bear this, our burden, alone.
In speaking out we may not convince or sway the majority, but at least we may save ourselves, our family, and our friends. We ourselves are the only person whom any of us can control, but for each of us – and perhaps for the country and the world – that may just be enough!
https://drrichswier.com/wp-content/uploads/made-in-america-white-house-e1549064807357.jpg354640T. M. Ballantynehttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngT. M. Ballantyne2019-02-01 18:46:582019-02-01 18:55:08"Is it lawful [for the President] to do good...?"
Gordon Gekko missed the mark with his famous Wall Street monologue about American capitalism. It is not greed but economic growth that is, for lack of a better word, good. Growth is right. Growth works. Growth clarifies, cuts through, and captures the essence of the evolutionary spirit. Growth has marked the upward surge of mankind. And growth—you mark my words—will save that malfunctioning corporation called the USA.
This is probably pretty obvious to most Americans. Strong economic growth means more jobs and higher wages. Just take a look at the current expansion. It has only been moderate as goes the pace of growth, but it has been sustained. And month after month of a growing economy has brought down the unemployment rate to its lowest level since 1969, even as real wages continue to grow for all income levels. That’s especially true for working-class Americans. The 3.5 percent unemployment rate for Americans with only a high school diploma is the lowest since 2000. Indeed, despite all the debate about income inequality, earnings have been growing faster for those at the bottom than at the top.
Or look at it this way: In their research paper “Productivity and Pay: Is the link broken?” Harvard’s Anna Stansbury and Lawrence Summers find that higher productivity growth is associated with higher average and median compensation growth. The economists show that if productivity growth had been as fast from 1973 to 2016 as it was from 1949 to 1973—about twice as high—median and mean compensation would have been around 41 percent higher.
Yet a growing number of policymakers and pundits on the left and right are questioning the primacy of growth as the key objective of national economic policy. Democrats and progressives are focused on new policies to redistribute wealth, such as Medicare for all, a federal jobs guarantee, or a universal basic income. Meanwhile, Republicans and conservatives, grappling with a president who questions the value of free trade and immigration, have grown publicly skeptical of market capitalism. “The free market has been sorting it out for a while, and America has been losing,” said Vice President Mike Pence. And they have become skeptical of the core goal of increasing economic growth.
Leading the charge among the wonks is Oren Cass, a Manhattan Institute scholar and former policy director for the 2012 Mitt Romney presidential campaign. In his new book, The Once and Future Worker, Cass writes that although “economic growth and rising material living standards are laudable goals … they by no means guarantee the health of a labor market that will meet society’s long-term needs.”
The criticisms of growth skeptics range from the ahistorical to the utopian. Of course, a fast-rising tide of economic growth does not guarantee all boats will rise at the same pace or at a pace that society deems sufficient. “Guarantee,” after all, is a strong word. Depending on the strength one attributes to it, it’s possible nothing can “guarantee” the outcome that some growth critics want: all winners, no losers, no trade-offs, no disruption. But if by guarantee we don’t mean “ensure with ironclad certainty” but only “approximate more closely than any available alternative,” economic growth remains society’s best bet. Indeed, this very urge to undervalue growth’s benefits is the surest sign that growth in America has become a victim of its own success.
G.K. Chesterton famously noted how modern types of reformers see institutions or practices and think, “I don’t see the use of this; let us clear it away.” To which the wise reply, “If you don’t see the use of it, I certainly won’t let you clear it away.” Institutions and policies that endure decade after decade often serve a useful purpose even if that purpose isn’t immediately apparent, and we should be cautious before shrugging them off as unimportant. Our growth-oriented economic policy is a perfect example. It brings tremendous benefits, yet we now risk taking it for granted.
And what an odd time to question the benefits. The Obama administration was much derided for its apparently self-serving claim, made in the 2013 Economic Report of the President, “that in the 21st Century, real GDP growth in the United States is likely to be permanently slower than it was in earlier eras.” But it was a perfectly reasonable baseline forecast that continues to reflect the economic consensus from Wall Street to Washington. For instance: The Federal Reserve’s long-term, real GDP forecast stands at 1.8 percent, about half the average pace from 1947 to the start of the Great Recession. And even that reduced pace of growth seems a tad too optimistic for JP Morgan, which pegs the economy’s long-term growth potential at 1.5 percent.
Obstacles to Growth
There are good reasons why the experts seem so gloomy. The most important—and, perhaps, most inescapable—is demographics. The aging of the labor force, lower birth rates, and a slowing rate of immigration suggest a slowdown in the growth of the American labor force to around 0.5 percent annually going forward—as compared with roughly 2 percent in the 1960s and 1970s. The U.S. economy expanded at a 4.1 percent annual pace during the ’60s—a decade that today’s nationalist populists look back on with great nostalgia. But growth would have been less than 3 percent if the labor force had been growing as slowly back then as it is currently.
The other big obstacle to faster growth is weak productivity, which downshifted just before the Great Recession and has yet to rebound. For the American economy to grow as fast in the future as it has overall since World War II, output per worker will need to rise sharply. Indeed, that is a big goal of the 2017 Republican-pushed corporate tax cuts. They are supposed to increase business investment and eventually productivity growth. But there are no signs either is happening yet, much to the dismay of many conservative economists. The only other hope lies beyond Washington’s tinkering: The private sector continues to innovate. Maybe Silicon Valley will eventually come to the rescue, as innovation in areas such as artificial intelligence and robotics eventually spreads throughout the non-tech economy. The history of radical technological advances, such as electrification, suggest that it can take some time before businesses figure out how to effectively employ them.
The Tangible Benefits of Growth
It can be easy to dismiss all this talk of growth rates as the abstract muttering of economists far removed from the everyday concerns of the average American. As a corrective, George Mason economist Tyler Cowen poses a useful thought experiment in his latest book, Stubborn Attachments. Imagine we redo U.S. history, he says, “but assume the country’s economy had grown one percentage point less each year between 1870 and 1990. In that scenario, the United States of 1990 would be no richer than the Mexico of 1990.”
Michael Strain, my colleague at the American Enterprise Institute, makes a similar point when he writes:
Imagine the world in the year 1900. There was no air travel, no antibiotics, no iPhone, no Amazon Prime, no modern high school and no air conditioning. … Anyone who played down growth a century ago wouldn’t have known they were arguing against any of these things, because none of these growth-enabled features of modern life had been invented yet. But they would have been putting the existence of all these at risk by stifling, even marginally, the economic engine that allowed for their creation.
Sustained and solid growth is what makes these advances possible and is what separates the median American today from the median residents of the world’s developing economies. Sacrificing a tenth of a percentage point here and two-tenths there to, say, protect favored industries from foreign competition or levy punitive taxes on obscenely rich entrepreneurs may seem like a worthwhile tradeoff in the moment. But because of how growth compounds over time, in the long-term such trade-offs aren’t just unappealing but inexplicable. As the Nobel Laureate in economics Robert Lucas wrote, “Once one starts to think about [exponential growth], it is hard to think about anything else.” Marginally slowing down economic growth to achieve other policy goals might cause little harm to us, but it seems both less fair and less wise when the welfare of ensuing generations are accounted for. In Strain’s words, “What in the world of tomorrow doesn’t yet exist? We need growth in order to find the answer, both for ourselves, and for posterity.”
It is strange that intellectuals are dismissing the importance of economic growth at just the point when it is becoming harder to generate—and doubly weird after a long stretch of sluggish growth that has almost certainly played a role in the surge of populist politicians such as President Trump. And these populist leaders are pushing the sorts of policies that make a future of slow growth even more likely.
Trump looks back to the immediate decades after World War Two as the golden age of the American economy. His presidential campaign, for instance, made a point of promising the return of mass employment in the industrial-age industries of steel and coal. Cass, too, has pointed to those decades as an alternate model of economic growth. As he said during a recent think-tank event:
The period of time when productivity growth was really booming most in the American economy was a time when tax rates were much higher, immigration rates were much lower, there was virtually no international trade by the standards of the 1920s or today, and there was a much smaller or non-existent safety net. The idea that what we currently call the pro-growth agenda is actually what has aligned with high growth isn’t true.
That is a wrong-headed interpretation of economic history. While it is true that the so-called golden age era is known for fast economic and productivity growth, economists generally do not credit the lack of trade or immigration. Rather, notes the Congressional Budget Office in a review of research literature on the subject, “the golden age may be more accurately interpreted as the full final exploitation of an earlier burst of innovations through electrification, suburbanization, completion and increasing exploitation of the highway system, and production of consumer appliances.” In other words, huge technological advances in the 1920s and 1930s reaped benefits for decades.
Unfortunately, those productivity gains, along with American industrial superiority over its war-ravaged competitors, have created a myth about the postwar American economy—a myth that populists continue to spread. Yet Fortress America entered the 1970s ill-prepared for the inevitable global competition as the rest of the world’s advanced economies finally recovered.
Both Trump and Cass, therefore, have it backward. It wasn’t too much globalization and economic openness that undermined large swaths of the manufacturing economy, but too little. As Adrian Wooldridge of The Economist and former Federal Reserve Chairman Alan Greenspan write in Capitalism in America:
The 1970s was the decade when Americans finally had to grapple with the fact that it was losing its leadership in an ever widening range of industries. Though the best American companies such as General Electric and Pfizer powered ahead, a striking number treaded water. They had succeeded during the long postwar boom not because they had any particular merit, but because Europe and Japan were still recovering from World War Two and they collapsed at the first sniff of competition.
The last thing the American economy needs today is a reduction in competitive intensity, whether achieved by shielding industries with tariffs or keeping out the immigrants that help grow the workforce and provide expertise to key industries, especially technology. Nearly half of our “unicorn companies,” another name for U.S. startups worth over $1 billion dollars, were founded by immigrants. Immigrant scientists and entrepreneurs play a disproportionate role in driving the tech progress necessary for sustained productivity growth. Forty percent of Fortune 500 companies have a first- or second-generation immigrant founder. Immigrants may compete with other Americans, but they also employ them.
The Only Viable Solution
The critics of a growth-above-all approach might grant that no other national policy is better at generating material prosperity. But, they say, life requires more than mere materialism. We crave community, beauty, and a certain degree of stability. It is this objection that Harvard’s Benjamin Friedman sought to address in his 2006 book, The Moral Consequences of Economic Growth. True, capitalism and the creative destruction that drive it can disrupt traditional cultures or degrade the environment. And from the Old Testament to the present, men have fretted over usury’s effects on one’s soul (today we might say finance’s effects on one’s morals). But growth doesn’t only erode individual and societal morality. Besides improving material conditions, growth improves moral ones, as well.
Friedman notes how sustained growth “shapes the social, political and, ultimately, the moral character of a people” and “more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy.” Slow growth, on the other hand, leads to ugly consequences, especially if voters begin to feel it is inevitable. In times of stagnation, economic policy tilts toward dividing up a fixed pie rather than enlarging everyone’s share. It could mean a society that is less willing to entertain the benefits of international trade, more hostile toward immigration and immigrants, and more comfortable with regulating business.
In fact, “could” is putting it mildly. The tariffs, legislative efforts to reduce immigration, and frequent threats to regulate America’s most successful companies, such as Google and Amazon, already show some of the consequences of the sluggish recovery from the Great Recession—and this from what is supposed to be America’s pro-growth party.
Growth is, and remains, good. Growth is right, staving off a zero-sum politics defined more by group conflict than productive cooperation. Growth works, improving everyone’s standard of living, if not always equally, at least steadily. Growth clarifies, exposing business to competition, and prevents industrial calcification. Growth signifies the evolutionary and upward surge of mankind, evident in everything from modern medicine to interstellar space travel. And a policy geared toward increasing economic growth—pursued attentively and unapologetically—will save the United States of America. All other national economic strategies are but pale imitations.
James Pethokoukis is a columnist and blogger at the American Enterprise Institute. Previously, he was the Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.
RELATED VIDEO: Who Gets the Credit for the Booming Economy?
EDITORS NOTE: This FEE column with images is republished with permission. Image credit: Image by geralt on Pixabay.
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Editor’s Note: Lawmakers reached a temporary agreement with the president to reopen the government on Friday.
In our Principles of Microeconomics courses, we sometimes consider whether a firm should shut down some line of production. A firm shuts down when it ceases operations—when it closes down and stops its production. The firm stops spending money on everything except its fixed costs.
A federal government “shutdown” has a completely different meaning.
The Definition of a Government Shutdown
There has been much handwringing over the current government shutdown that began on December 22 of last year. The Treasury Department, with its Daily Treasury Statements, has provided us with details regarding federal spending through January 18. So we have the data on the first four weeks of the shutdown. Let’s try to determine the definition of a government shutdown.
In order to have some baseline for comparison, consider the budget for Fiscal Year (FY) 2018. The Treasury Department reports on all of the dollars withdrawn from federal accounts. In one sense, this is all federal spending. In FY 2018, withdrawals from federal accounts totaled $13,961.9 billion. That works out to a daily average of $38.3 billion.
In the first 28 days of the shutdown, the feds’ total withdrawals were $1,163 billion. That’s a daily average of $41.5 billion. If we define federal spending as the total withdrawals from federal accounts, then average daily spending during the shutdown is about 8.5 percent higher than it was in FY 2018.
The Debt Factor
However, the federal government is rolling over a large amount of its debt. It is issuing new government securities and using the funds from the sale of these securities to pay for previous securities that have come due. These withdrawals are under the line item Public Debt Cash Redemptions (PDCR). It’s analogous to a firm borrowing money to make the principal payments on its debt.
The bulk of federal spending is this type of spending. The spending number is so high because of this debt service.
Most everyone, all households and businesses, would classify loan payments as spending even if they financed the loan payments by borrowing money. However, most analysts, when they discuss federal spending, omit this debt service. They usually only include the other types of spending. So let’s take a look at that.
For the first four weeks of the shutdown, December 22, 2018, to January 18 of this year, withdrawals less PDCR totaled $338.5 billion for a daily average of a little more than $12 billion.
So by this measure of federal spending, the feds are spending on average 7.3 percent less per day during this shutdown than they did in FY 2018.
Regardless of your position on the shutdown, we should recognize the deceit involved in calling this a shutdown. Spending $12 billion per day is not a shutdown. Spending 7 percent less than you spent last year is not a shutdown.
Calling the current budget impasse a shutdown is just another example of the political corruption of our language.
Dr. Mark Brandly is a Fellow of the Mises Institute. He holds a PhD in economics from Auburn University, where he was a Mises Research Fellow specializing in the areas of Public Finance, International Economics, Natural Resource Economics, and Industrial Organization. He has published articles in The Wall Street Journal, The Journal of Commerce, Public Finance Review, The Quarterly Journal of Austrian Economics, The Free Market, various newspapers and websites.
EDITORS NOTE: This FEE column with images is republished with permission.
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Last week, 2ndVote released a new company score, Edgewell Personal Care, as an alternative to Gillette and parent company Procter & Gamble. Edgewell is the owner of the Schick and Edge shaving product brands and has remained Neutral (3) on all the issues 2ndVote scores.
Gillette makes an ad that shafts the company’s key audience, just to score a few virtue points with the social justice mob. They say they’re sparking conversation – but that’s what they call it when they tie you to a chair and shout accusations at you. Then ask you for your money.
But how enlightened is Gillette, really?
Look at these razors. The blue is for the males…the pink, females.
Talk about enforcing gender stereotypes.
Now, the cowardly media, scared of the social media mob, backs the ad.
Of course 2ndVote subscribers understand parent company Procter & Gamble’s (1.7 – Liberal) record of liberal activism means Gillette is not the best option for conservative shopping dollars. That is why our research team has been hard at work making sure we have the best information for finding alternative companies and discovering where Gillette’s competitors stand on the issues:
Please help us continue our work by taking the survey below on your shopping habits when it comes to your shaving products. Your input is valued, and helps us create content keeping you informed on why competitor companies like Harry’s Razors and Dollar Shave Club have also taken steps to advance the left’s agenda.
EDITORS NOTE: This 2ndVote column with images is republished with permission. The featured image is by Shutterstock.
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The government partial shutdown continues. There are approximately 800,000 non-essential personnel who have been furloughed due to the shutdown. The Washington Post chart below lists the percentage of individuals by department who have been furloughed.
A growing chorus of alarmist voices decries the rising economic inequality in the Western world, especially in the United States. Surprisingly enough, the same mainstream analysts complain about the anemic growth of labor productivity without seeing the correct link between the two.
[ … ]
For the United States, the failed economic policy is the exponential growth of government intervention in the economy in the 20th century, which stifled entrepreneurship and capital accumulation. This is obvious in the rise of both government spending that redistributes away economic resources from their originators and the amount of regulatory burden.
The U.S. Congress and previous presidents have allowed government intervention to expand exponentially.
President Trump recognized that it is government intervention at every level (the swamp) that harms economic growth. Regulations by tens of thousands of un-elected government bureaucrats have keep America from being great.
Given the current shutdown and the growing realization that its impact on individual Americans has been negligible, gives the Trump administration a golden opportunity to “trim the fat.”
Fewer government bureaucrats means greater productivity and income equality.
Two goals of Making America Great Again and Keeping America Great!
https://drrichswier.com/wp-content/uploads/joshua-j-cotten-1111201-unsplash-1-e1547991684389.jpg406640Dr. Rich Swierhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngDr. Rich Swier2019-01-20 08:42:092019-01-21 19:52:45How To Drain The Swamp: Fire All 'Non-Essential' Government Personnel
These foreigners ran a credit card skimming ring in the Tri-Cities, say police
Dozens of Tri-Citians were the victim of a highly sophisticated credit card scam that ended with the arrests of four Eastern Europeans.
Police say the alleged thieves weren’t caught until they had already siphoned $17,000 from accounts just after Christmas.
And there may be dozens more unknowing victims throughout Eastern Washington since police confiscated at least 268 gift cards, each one loaded with a separate account number, name and PIN number.
While the suspects were nabbed at Numerica Credit Union in Richland, court documents show they were operating out of hotels in Yakima County and driving rental cars from Seattle and Southern California.
Emil Kabirov, 21, Denis Legun, 24, Ana Onici, 22, and George Vasile, 35, appeared Friday in Benton County Superior Court.
Judge Joe Burrowes raised Kabirov’s bail to $500,000 — an amount typically reserved for defendants in murder, violent assault and certain child sex cases.
Bail is set at $100,000 each for Legun and Vasile with the stipulation that they surrender their passports before posting bond. If they don’t hand them over but want to be released, the bail amount increases to $500,000 on each.
The suspects may have used a skimming device attached to an ATM, gas pump or a card reader in a store to record legitimate transactions.
The stolen information, or metadata, is then downloaded from the device, providing scammers with account numbers and access PINs.
Often, that information is used to make counterfeit cards with blank gift cards so the thieves can use them like credit or debit cards at various ATMs to unlawfully withdraw money from those accounts.
Kabirov and Legun are identified as Russians, Vasile is Romanian, and Onica is from Moldova and all are ordered to appear in court in February. A fifth suspect got away.
Kudos to Ms. Kraemer!
So why can’t we have reporting like this more often—reporting that doesn’t shy away from telling the public when the crooks are immigrants of some sort!
However, I still have one question: which legal immigration program did this bunch use to get in to the US, or did they arrive illegally somehow? How can we ever reform immigration if we don’t know where the loopholes are that crooks like these creeps take advantage of?
Energy improvement does not depend on geography or race but on the right institutions. Sustainable energy—available, affordable, and reliable—requires private property rights, voluntary exchange, and the rule of law.
here are two energy futures for America. One is freedom and prosperity. The other is politics, conflict, and waste. As with other goods and services, energy’s availability and affordability will depend on whether natural incentives and economic law are respected or hampered by government policy.
The future of free-market energy is bright and open-ended. “It’s reasonable to expect the supply of energy to continue becoming more available and less scarce, forever,” Julian Simon wrote in his magnum opus, The Ultimate Resource II. “Discoveries, like resources, may well be infinite: the more we discover, the more we are able to discover.”
Resourceship, entrepreneurship applied to minerals, explains the seeming paradox of expanding depletable resources. Statistics confirmed Simon’s view, yet Malthusian critics belittled him as a naïve romantic. To which Simon responded: “I am not an optimist, I am a realist.”
Energy coordination and improvement do not depend on geography or race but on the right institutions. Sustainable energy—available, affordable, and reliable—requires private property rights, voluntary exchange, and the rule of law. Cultural and legal freedom unleash human ingenuity and problem-solving entrepreneurship, what Simon called the ultimate resource.
Philosopher Alex Epstein has reframed the energy-environmental debate in terms of human flourishing. Under this standard, consumer-chosen, taxpayer-neutral, dense, storable mineral energies are essential and moral.
Free-market energy is a process of improvement, not a state of perfection. There is always room for betterment as the good is no longer the best and as problems and setbacks occur. Profit/loss and legal consequences propel correction in a way that government intervention does not.
Problems spur improvement in ways that otherwise might not occur. “Material insufficiency and environmental problems have their benefits,” noted Julian Simon. “They focus the attention of individuals and communities, and constitute a set of challenges which can bring out the best in people.”
Government interventionism has plagued domestic energy markets in pronounced and subtle ways. Price and allocation controls during wartime and in the 1970s caused shortages of gasoline, fuel oil, natural gas, and other essential products. More subtly, tariffs, quotas, entry restrictions, efficiency edicts, punitive taxes, tax subsidies, forced access, profit guarantees, and other government intervention distort energy markets away from consumer demand.
Socialism has reversed resource abundance in nations around the world. Venezuela is today’s example and is not unlike Mexico’s plunge into nationalism a century ago. International statism is responsible for much of the price volatility experienced in global oil markets.
American citizens must be educated on the perils of politicized energy and corporate cronyism at all levels of government. Capitalist institutions need to be introduced in state-dominated oil regions. Subsoil mineral rights and infrastructure privatization are golden opportunities for wealth creation and wealth democratization around the world.
“The world’s problem is not too many people,” Julian Simon concluded, “but a lack of political and economic freedom.” He explained:
The extent to which the political-social-economic system provides personal freedom from government coercion is a crucial element in the economics of resources and population…. The key elements of such a framework are economic liberty, respect for property, and fair and sensible rules of the market that are enforced equally for all.
This message for 2019 will be the same a century hence. It is optimistic and realistic. And it points toward a continuing open-ended role for natural gas, coal, and oil as the master resource.
Let freely functioning supply meet demand, and let market demand meet supply. Banish alarmism, pessimism, and coercion—the very things that incite and define government intervention and socialism where markets can and should prevail.
Robert L. Bradley Jr. is the CEO and founder of the Institute for Energy Research.
EDITORS NOTE: This column by FEE with images is republished with permission.
https://drrichswier.com/wp-content/uploads/oil-rig-drill-engineer-equipment-extraction-1454193-pxherecom-e1547344117409.jpg372640Foundation for Economic Education (FEE)http://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngFoundation for Economic Education (FEE)2019-01-12 20:48:482019-01-12 20:51:03The Two Energy Futures Facing America
When I wrote my post welcoming readers to my new blog, I told you I was writing to attempt to balance the news because you will be bombarded by stories over the next two years about how immigrants (New Americans is the preferred word) financially and culturally benefit your community.
Someone has to do it—tell the rest of the story—and I’m hoping Frauds and Crookswill be a one-stop shop for cataloging stories about frauds and crimes that cost you and me both financially and from a security standpoint so that you can best decide where you stand on the issue of our time—migration.
We are in a tough battle because the Open Borders Left has joined with global giants to push more and more immigration down our throats.
I saw a story this morning from Bowling Green, KY, a huge refugee resettlement site that I wrote about often at Refugee Resettlement Watch.
It’s about how the Chamber of Commerce and local government are working with NAE and their Gateways for Growth initiative to improve employment prospects for the “New Americans” living there.
Thirteen Communities Across the United States Make a Commitment to Welcome New Americans
Launched in December 2015, the Gateways for Growth Challenge is a competitive opportunity for local communities to receive direct technical assistance from New American Economy and Welcoming America to develop multi-sector plans for welcoming and integrating immigrants.
Here are the locations awarded grants for 2019:
Bowling Green, Kentucky Cedar Rapids, Iowa Charlotte, North Carolina Flint, Michigan Grand Rapids, Michigan Lexington, Kentucky Lowell, Massachusetts Memphis, Tennessee Northern Kentucky Roanoke, Virginia San Antonio, Texas Toledo-Lucas County, Ohio Wayne County, Michigan
You know the grants themselves are really not that great, but they buy media because every location on this list will likely generate warm and fuzzy local media coverage just like the story at the Bowling Green Daily News.
Has Bowling Green already forgotten that it is the location where two Iraqi refugee terrorists were arrested only a few years ago? Has that news been swept under the rug? Sure looks like it.
Are you seeing news in a local paper or on local TV about one of the other twelve locations, if so, send me a link!
Update: Thanks to Robin here is the puff-piece from Lexington, KY local news
https://drrichswier.com/wp-content/uploads/welcoming-america-logo.jpg356640Ann Corcoranhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngAnn Corcoran2019-01-12 06:14:402019-01-12 06:14:42Is Your Community One of 13 Recognized for its Welcome to New Americans?
Left-wing media stalwarts such as Newsweek, Huffington Post, and Salon launched a barrage of fake news after I appeared on “Fox & Friends” recently to discuss new Agriculture Department rules tightening work requirement on food stamps.
Unfortunately, the now all-too-common disinformation campaigns from the left, distorting or simply lying about what our president says or does, or what conservative commentators like me say, just simply hurts our nation.
The oxygen of freedom is information. When citizens get fake news instead, they become slaves to the agendas being pushed by politically motivated media machines.
The Huffington Post headline read, “‘Fox & Friends’ Guest Says People On Food Stamps Watch Porn Instead of Working.”
You can imagine the mail I got from those outraged by my supposedly heartless remarks about our nation’s less fortunate.
But I didn’t say what the left-wing media foghorns reported in their headlines. As result, not only were many misled, but also they weren’t informed about what I did say about two major problems confronting our nation.
One, there are great inefficiencies in our food stamp program, which, at $65 billion in federal spending annually, is one of our largest federal welfare programs. And two, the nation has a major problem of millions of able-bodied prime-age males who have dropped out of the workforce.
The proposed rules from the Agriculture Department would tighten down on the latitude states have in providing waivers for existing work requirements for receiving food stamps.
Is this aimed at clamping down on the less fortunate and the needy? Certainly not, and I explicitly said so in the “Fox & Friends” interview. Twice I said the “crisis is not the poor.” It’s about “able-bodied, nonworking, mostly males.”
The Agriculture Department rule explicitly states that the target is “able-bodied adults without dependents between 18-49” and does not apply to the “elderly, disabled, or pregnant women.”
Estimates are that the total number that will be affected is 775,000. We’re talking about 2 percent of the 40 million people currently receiving food stamp benefits. With the average annual expenditure per person at $1,500, moving these able-bodied individuals into the workforce would save $1.2 billion in food stamp expenditures per year and add 775,000 productive citizens to the work force.
According to The Wall Street Journal, “Some seven to nine million food-stamp recipients capable of work report no income.”
American Enterprise Institute scholar Nicholas Eberstadt has written about our national crisis of prime working age, 25-55, nonworking men.
The labor force participation rate reported by the Bureau of Labor Statistics consists of those working or actively seeking work as a percentage of the population.
In 1965, as Eberstadt reports, the labor force participation rate of prime-age working males was 96.7 percent. Today, it is 89 percent. So almost 8 percent fewer men aged 25-55 are working or actively seeking work today compared with 1965.
Eberstadt calls this “an ever-growing army of jobless men no longer even looking for work—over 7 million between 25 and 55, the prime of working life.”
He notes that one defining characteristic of these millions of men who have dropped out of the workforce is an absence of family. They are either not married or if they have children, they don’t live with them.
What are these work dropouts doing?
They spend 800 more hours per year watching TV and movies than unemployed men, 1,200 more hours than working men, and 1,400 more hours than working women. Thirty-one percent admit to illegal drug use, compared with 8 percent of working men.
We have a huge problem that carries a great moral and economic cost to the nation.
But all this doesn’t interest the left-wing media. They’d rather just broadcast that I said the poor are “watching porn.”
https://drrichswier.com/wp-content/uploads/alexander-andrews-685140-unsplash-e1547240233970.jpg398640The Daily Signalhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngThe Daily Signal2019-01-11 15:57:382019-01-11 15:57:39The Problem Isn’t the Poor. It’s Young Men on Welfare Who Could Be Working.
Mainstream economists are overlooking a key connection.
A growing chorus of alarmist voices decries the rising economic inequality in the Western world, especially in the United States. Surprisingly enough, the same mainstream analysts complain about the anemic growth of labor productivity without seeing the correct link between the two.
Data shows a strong correlation between labor productivity and economic inequality (the two charts below). From the end of the Second World War until the mid-1970s, labor productivity grew at a robust rate of almost 3 percent per annum (p.a.), while income inequality declined. Afterward, both trends reversed—labor productivity slowed to below 2 percent growth p.a. on average and has almost stagnated since the Great Recession, while both wealth and income inequality expanded steadily.
The Role of Capital Accumulation in Economic Growth
What common factor could explain the two divergent trends that the mainstream analysts seem to overlook? In the 1940s, Mises was impressed by the ”miraculous” rise in the standards of living of American wage earners, which had been going on for more than two centuries. For him, the answer was straightforward: capital accumulation is the driving force behind both labor productivity and standards of living convergence.
Building on Mises’s work, Rothbard explained in detail what capital accumulation requires: (i) new capital investment that lengthens the structure of production and (ii) technological progress that overcomes the diminishing returns accompanying the increase in the supply of capital goods. However, Mises also warned that depletion of the capital stock would hamper capital accumulation and labor productivity. Unfortunately, mainstream analysts and the United States seem to have forgotten this valuable lesson.
In terms of technological progress, the US has maintained its world leadership during past decades. It ranks second in the world to Switzerland in terms of both innovation and business sophistication, spends more for Research & Innovation than the OECD or EU on average relative to GDP, and makes up the majority of the top 25 universities in the world. Moreover, it has issued the same amount of patents over the last three decades compared with the previous 150 years.
In terms of capital stock, the picture is completely different. According to estimates of the Bureau of Economic Analysis (BEA), the stock of private non-residential assets per worker has increased in real terms at about 1 percent p.a. from 1947 to 2009 and stagnated since the Great Recession (left chart below). However, BEA’s alleged sustained pace of capital growth seems hard to reconcile with the falling private investment and savings since the mid-1970s (right chart below).
In addition, the BEA methodology presents some serious shortcomings. Except for cars, BEA uses the “perpetual inventory method” to estimate fixed assets. According to it, the value of the capital stock is indirectly estimated as the sum of past investment flows minus the estimated depreciation. It means that all past investments are considered sound by default, which is certainly not the case nowadays when recurrent booms and busts cause significant volumes of malinvestments. Other question marks relate to the accurate estimation of depreciation rates in the face of rapid technological progress and the use of GDP deflators as their accuracy is unreliable, especially with regard to real estate investment.
All these considerations have led not only us but also the Federal Reserve Board (FRB) to suspect that BEA’s estimates of the US capital stock are overvalued. It is intriguing that the FRB adjusts the BEA estimates downward, especially with regard to real estate assets— “structures” in BEA’s jargon when it uses them as input for the calculation of the capital stock in manufacturing. As a result, there is a substantial difference between BEA and FRB estimates of the evolution of the volume of manufacturing capital stock from 1952 to 2016, in particular for the real estate component (left chart below). Therefore, we tried to recalculate the BEA estimate of the total stock of private non-residential capital per employee by extrapolating the difference between the two manufacturing indexes coming from BEA and FRB (right chart below).
The new results suggest that the real stock of capital per worker grew in a clear and sustained manner only until the end of the 1970s and fell afterward until the trough of the Great Recession. The recalculated capital stock is more consistent with the observed declines in investment and productivity since the mid-1970s and also confirms Mises’s prediction that wrong policies would lead to capital consumption.
Economic Consequences of Big Government
For the United States, the failed economic policy is the exponential growth of government intervention in the economy in the 20th century, which stifled entrepreneurship and capital accumulation. This is obvious in the rise of both government spending that redistributes away economic resources from their originators (left chart below) and the amount of regulatory burden (right chart below). Another key factor taking a toll on capital endowment is inflation, which gained traction following the de facto abolishment of the gold standard in 1971.
Most importantly, inflationary policies trigger boom-bust cycles via the artificial lowering of interest rates below their free-market level. In a recent article on the business cycle, Salerno emphasizes that “overconsumption” and “malinvestment” are the two salient marks of the boom—not “overinvestment,” as wrongly understood by some mainstream critics. It is no surprise that the capital stock per worker dropped during the business cycles that have occurred regularly since the 1970s and that culminated in the Great Recession. The illusion of the boom fuels not only capital consumption but also the polarization of wealth and incomes in the society. The fiduciary credit expansion fuels an increase in asset prices, most commonly on stock exchanges and in real estate (charts below).
Although starting from a limited number of transactions, all owners calculate their net worth with the newly inflated asset prices, boosting the value of household assets in excess of liabilities. As a result, the rich appear to get even richer in an economy on steroids. This explains why both the US national wealth has grown much faster than national income since the end of the 1970s (left chart below), and the number of wealthy people increased significantly (right chart below).
The rising inequality since the 1970s has been fueled by both the decline in labor productivity and monetary expansion inflating asset prices. Both are perverse effects of government interventionist policies, which led to a gradual erosion of the US capital stock per employee. This is the correct linkage between inequality and productivity as explained by Mises and other Austrian School economists.
People have different skills and preferences, so the free market does not lead to a complete equalization of incomes and wealth. Nevertheless, it does ensure the proper allocation of capital to increase labor productivity and satisfy the most urgent needs of consumers. As a result, the gap between the well-off and the poor is not only gradually diminishing but also gets less significant in terms of consumption. Eventually, the disadvantage of wealth inequality becomes mostly a psychological one. As long as the capitalist consumes only a fraction of his wealth and invests the rest into productive businesses, the real beneficiary of the increase in labor productivity is the poorer part of society.
Dr. Mihai Macovei is an associated researcher at the Ludwig von Mises Institute Romania and works for an international organization in Brussels, Belgium.
EDITORS NOTE: This column with images by FEE is republished with permission.
https://drrichswier.com/wp-content/uploads/econgrowth-e1547237696222.jpg370640Foundation for Economic Education (FEE)http://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngFoundation for Economic Education (FEE)2019-01-11 15:15:072019-01-11 15:50:35Slowing Productivity and Rising Inequality Have a Common Driver: Government Intervention
Some are, but maybe not your local friendly, helpful health professional!
A little over six months ago, then Attorney General Jeff Sessions announced a major federal crackdown on doctors, pharmacists and other health providers for fueling the opioid crisis and using your Medicare and Medicaid dollars to line their pockets.
Here is a bit of one story about Sessions’ announcement.
Federal agencies on Thursday announced charges in what Attorney General Jeff Sessions called “the largest health care fraud takedown in American history,” an investigation into over $2 billion in alleged fraud by doctors, pharmacists, and nurses.
Many of the allegations centered on illegitimate opioid prescriptions. The Justice Department charged 162 defendants, including 76 doctors, for their roles dispensing opioids and narcotics, the result of investigations spanning 30 state Medicaid programs and numerous enforcement agencies.
“Some of our most trusted medical officials, professionals, look at their patients, vulnerable people suffering from addiction, and they see dollar signs,” Sessions said.
The alleged fraud and false billings collectively accounted for 13 million illegal opioid dosages, the Justice Department said, and also included 23 pharmacists and 19 nurses.
The Department of Health and Human Services also announced that since July 2017, it has excluded over 2,700 individuals and 587 providers from Medicare and Medicaid “for conduct related to opioid diversion and abuse” — including 67 doctors, 402 nurses, and 40 pharmacy services.
From a Justice Department Press release in December, here.
The owner of a Miami, Florida-area pharmacy who caused Medicare to pay more than $8.4 million over a six-year period for prescription drugs that were never provided to beneficiaries was sentenced today to 87 months in prison.
Antonio Perez Jr., 48, of Miami Beach, Florida, was sentenced by U.S. District Judge Federico A. Moreno of the Southern District of Florida, who also ordered Perez to pay $8,415,824 in restitution and to forfeit the same amount. Perez was ordered to forfeit four Miami-area properties worth approximately $700,000 and multiple bank accounts totaling over $250,000. Perez previously pleaded guilty to one count of conspiracy to commit health care fraud.
During the course of the scheme, Medicare paid Valles Pharmacy Discount over $32 million, of which at least $8.4 million was for prescription drugs that Valles Pharmacy never purchased and never provided to Medicare beneficiaries, Perez admitted.
Also in December a federal jury found Pharmacist Tamar Tatarian, 39, of Pasadena, California guilty of a Medicare fraud scheme after she billed Medicare $1.3 million for drugs she never purchased or distributed.
You will be interested to see that she was one of those caught in Sessions’ big sweep earlier this year.
Tatarian, the owner of Akhtamar Pharmacy, will be sentenced next month.
Secret decoder ring at work! Tatarian must be Armenian. See the Legend of Akhtamar. My reference to Secret decoder ring comes from Ann Coulter’s ‘Adios America’ where she rightly points out that readers of news stories about crooks and criminals must search for clues about where the alleged perp might come from and how he/she got in to the country.
Exception! See yesterday’s postabout the Russians ripping off Washington staters! There the reporter actually says where those arrested were from.
https://drrichswier.com/wp-content/uploads/rawpixel-600792-unsplash-e1547078600198.jpg391640Ann Corcoranhttp://drrich.wpengine.com/wp-content/uploads/logo_264x69.pngAnn Corcoran2019-01-09 19:03:402019-01-09 19:03:41Is your Neighborhood Pharmacist a Crook?
For years, I’ve heard American leftists say Sweden is proof that socialism works, that it doesn’t have to turn out as badly as the Soviet Union or Cuba or Venezuela did.
But that’s not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.
“Sweden is not socialist—because the government doesn’t own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea,” says Norberg.
“We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that’s the period in Swedish history when our economy was going south.”
Per capita gross domestic product fell. Sweden’s growth fell behind other countries. Inflation increased.
Even socialistic Swedes complained about the high taxes.
Astrid Lindgren, author of the popular “Pippi Longstocking” children’s books, discovered that she was losing money by being popular. She had to pay a tax of 102 percent on any new book she sold.
“She wrote this angry essay about a witch who was mean and vicious—but not as vicious as the Swedish tax authorities,” says Norberg.
Yet even those high taxes did not bring in enough money to fund Sweden’s big welfare state.
“People couldn’t get the pension that they thought they depended on for the future,” recounts Norberg. “At that point the Swedish population just said, ‘Enough, we can’t do this.’”
Sweden then reduced government’s role.
They cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, and sold state-owned businesses like the maker of Absolut Vodka.
They also reduced pension promises “so that it wasn’t as unsustainable,” adds Norberg.
As a result, says Norberg, his “impoverished peasant nation developed into one of the world’s richest countries.”
He acknowledges that Sweden, in some areas, has a big government: “We do have a bigger welfare state than the U.S., higher taxes than the U.S., but in other areas, when it comes to free markets, when it comes to competition, when it comes to free trade, Sweden is actually more free market.”
Sweden’s free market is not burdened by the U.S.’s excessive regulations, special-interest subsidies, and crony bailouts. That allows it to fund Sweden’s big welfare programs.
“Today our taxes pay for pensions—you (in the U.S.) call it Social Security—for 18-month paid parental leave, government-paid childcare for working families,” says Norberg.
But Sweden’s government doesn’t run all those programs. “Having the government manage all of these things didn’t work well.”
So they privatized.
“We realized in Sweden that with these government monopolies, we don’t get the innovation that we get when we have competition,” says Norberg.
Sweden switched to a school voucher system. That allows parents to pick their kids’ school and forced schools to compete for the voucher money.
“One result that we’ve seen is not just that the private schools are better,” says Norberg, “but even public schools in the vicinity of private schools often improve, because they have to.”
Sweden also partially privatized its retirement system. In America, the Cato Institute proposed something similar. President George W. Bush supported the idea but didn’t explain it well. He dropped the idea when politicians complained that privatizing Social Security scared voters.
Swedes were frightened by the idea at first, too, says Norberg, “But when they realized that the alternative was that the whole pension system would collapse, they thought that this was much better than doing nothing.”
So Sweden supports its welfare state with private pensions, school choice, and fewer regulations, and in international economic freedom comparisons, Sweden often earns a higher ranking than the U.S.
Next time you hear Democratic Socialists talk about how socialist Sweden is, remind them that the big welfare state is funded by Swedes’ free-market practices, not their socialist ones.
Government is now taxing lap dances. What does it mean?
As anyone who’s ever stepped into a “gentlemen’s club” knows, lap dances can get pretty pricey. But owners of an Illinois strip joint believe the nearly $2 million tax bill they received for lap dance services provided is a bit much.
Court records show that proprietors of Polekatz Gentlemen’s Club, a strip club in Bridgeview, Illinois, a suburb of Chicago, are suing Cook County, alleging its revenue department is illegally demanding $1.7 million for lap dances under its “amusement tax.” That figure includes interest and penalties, according toThe Cook County Record.
What Are Amusement Taxes?
Some people may not be familiar with “amusement taxes,” which are relatively new.
In fact, in the late 1970s, when this writer was born, amusement taxes were almost non-existent, accounting for just $120 million in aggregate revenue among the 90,000 government units in the US. But as state and local governments grew (see below), so did their need to find tax revenues to sustain them.
By 1997, amusement tax revenue had increased more than tenfold to nearly $1.95 billion, according to the data website Statista. Less than a decade later, the figure had tripled to more than $6 billion nationwide (see graph below).
The Land of Lincoln has been perhaps the nation’s boldest pioneer on the amusement tax front. While Chicago’s 2015 ruling, which expanded the amusement tax to cover streaming services such as Netflix and Hulu (and has since landed on Playstation users), has captured most of the national headlines, local governments such as Cook County and the city of Bloomington have also found ways to tax fun.
In fact, this isn’t the first time Illinois has been accused of illegally taxing strip joints (which are natural targets for revenue-hungry public do-gooders) with an amusement tax.
More than a decade ago, the 1st District Appellate Court in Chicago said that Chicago and Cook County ran afoul of the law with their amusement tax on strip clubs. Lawmakers had exempted live performances from the tax but failed to include establishments offering nude dancing, prompting a three-judge panel to rule that the tax constituted “content-based regulations on speech.”
Illinois politicians and bureaucrats have learned a few things since then, however. The language of Cook County’s current law (and Chicago’s) is much more inclusive. Amusement is defined as follows:
Amusement means any exhibition, performance, presentation or show for entertainment purposes, including, but not limited to, any theatrical, dramatic, musical or spectacular performance, promotional show, motion picture show, flower, poultry or animal show, animal act, circus, rodeo, athletic contest, sport, game or similar exhibition, such as boxing, wrestling, skating, dancing, swimming, riding on animals or vehicles, baseball, basketball, softball, soccer, football, tennis, golf, hockey, track and field games, bowling, or billiard and pool games.
Unlike Cook County’s previous amusement tax, strip clubs do not appear to be unfairly or unlawfully targeted. Polekatz, located about a dozen miles southwest of the Chicago Loop, is simply one of hundreds of Cook County businesses designated an “amusement operator;” therefore, the club is unlikely to receive legal protection on free expression grounds.
Polekatz’s legal strategy appears to reflect this. According to the Cook County Record, Polekatz is not arguing that the amusement tax is unconstitutional. Rather, they say the nearly $1.7 million tax bill they received is “excessive.”
All Taxes Are Created Equal
To most people, the idea of taxing lap dances sounds as absurd as courts deciding if stripping is a form of artistic expression, as one New York strip club argued in 2012 in the hopes of getting a tax exemption. (In the end, after several years of litigation, a New York judge concluded that pole dancing is art; lap dances are not.)
Indeed, the idea of taxing amusement sounds a little strange to us. People are generally more comfortable with “sin” taxes, which tax naughty things like cigarettes and alcohol. But the truth is amusement taxes and sin taxes are equally awful. We give lawmakers too much credit if we assume they want or know what’s best for us.
If anything, the rise of amusement taxes illustrates an important truth: Government really doesn’t care what they tax. They’ll tax anything—work, play, or “sin”—if it sustains their ravenous appetite for spending, which is precisely the case with Illinois.
“America’s Most Messed up State”
The political and economic dysfunction in Illinois is well-chronicled.
That Illinois is on the verge of economic disaster is hardly a secret.
“We’re not Greece or Puerto Rico yet,” Adam Schuster, an economist with the Illinois Policy Institute, toldThe Weekly Standard in October. “We’re not functionally insolvent. But we’re right on the doorstep.”
But it’s not just the state government that’s a total mess. As City Journal recently reported, Chicago finds itself facing an incredible $28 billion pension gap, not to mention another $9 billion in outstanding debt owed to general-obligation bondholders.
The city’s plan? Borrow another $10 billion through a bond offering (despite the fact the city’s bonds are already rated as “junk.”)
The Power to Destroy
It’s no mystery why the people of Illinois find themselves in this mess. Lawmakers are making extravagant promises to give people things with other people’s money. Amusement taxes are just the latest and most convenient device to help them achieve this, though hardly sufficient.
Jonathan Miltimore is the Managing Editor of FEE.org. Serving previously as Director of Digital Media at Intellectual Takeout, Jon was responsible for daily editorial content, web strategy, and social media operations. Before that, he was the Senior Editor of The History Channel Magazine, Managing Editor at Scout.com, and general assignment reporter for the Panama City News Herald. Jon also served as an intern in the speechwriting department under George W. Bush.
EDITORS NOTE: This column with images by FEE is republished with permission. The featured Image by StockSnap on Pixabay.
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To take a look at how and where a minimal standard of welfare design has been implemented successfully, one need only look at the city-state of Singapore.
A common libertarian view when it comes to welfare is that the role of the state should simply be restricted to providing a safety net. Such a basic net would guard society’s most economically vulnerable against falling through the cracks. Milton Friedman proposed a negative income tax as a way of encouraging the poor to work their way out of poverty. In one of his most oft-quoted passages (for reasons of ideological axe-grinding, no doubt), F. A. Hayek similarly espoused such a view in The Road to Serfdom:
There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.
It is clear why this policy is consistent with a free-market-oriented philosophy: It understands that the wealth of nations are retarded when incentives to work are eroded by easily accessible state welfare. At the same time, it does not dogmatically apply the pure logic of economic efficiency within a political vacuum. This view forgoes any grand illusions about big modern governments possibly abolishing its bloated welfare state bureaucracy and realizes that real-world social problems like unemployment and homelessness can potentially spur democratic backlashes and lead to worse anti-market outcomes.
To take a look at how and where such a minimal standard of welfare design has been implemented successfully, one need only look at the city-state of Singapore. The Singapore welfare system is considered one of the most successful by first-world standards. World Bank data shows that Singapore’s government health expenditure in 2015 is only 4.3 percent of GDP, a small fraction in comparison to other first-world countries—16.9 percent in the US; 11 percent in France; 9.9 percent in the UK; 10.9 percent in Japan, and 7.1 percent in Korea—while achieving comparatively equal or better health outcomes of low infant mortality and higher life expectancies. While most of Europe, Scandinavia, and North America spend 30-40 percent of GDP on social welfare programs, Singapore spends less than half as much while maintaining similar levels of economic growth and a society relatively free of social problems.
An Emphasis on Self-Reliance
The first thing to know about Singapore’s welfare system is that qualifying for welfare is notoriously difficult by the standards of most of the developed Western world. The Singapore government’s position on welfare handouts is undergirded by a staunch economic philosophy of self-reliance and self-responsibility where the first lines of welfare should be derived from one’s individual savings, the family unit, and local communities before turning to the government. The state, in other words, should not act as a guarantor of means but merely a guardian of final recourse.
One of the most substantial organizational forms of welfare in Singapore are the state-guided self-help community groups that are structured along racial lines. They were formed to help tackle poverty alleviation for the lowest-income citizens by helping them through various schemes of general education to improve their economic opportunities. This welfare program started within the Malay community in 1981 and was deemed so successful by the end of the decade that the government gradually expanded it to form similar self-help organizations for the “under-performing” groups of the Chinese, Indian, and Eurasian races, too.
The Singapore government’s involvement in these community groups goes only as far as a general regulatory oversight. Unlike typical welfare states, funds for these welfare organizations are not mechanically funneled from a large taxpayer-funded pool into an ever-increasing bureaucracy. Instead, funding is derived from a mixture of government schemes that draw a token sum of one to two dollars from each citizen’s government savings account (in other words, crowdfunding), as well as encouraging optional charity from the general community.
Most importantly, the discretionary processes involved with allocating welfare to the low-income members are left to the community group leaders. This privatized form of welfare where key decision-making is carried out at a decentralized level has proved to be a far more economically efficient form of welfare.
This philosophy of self-reliance and responsibility is prominent not only in social welfare but is also replicated in the Singapore government’s approach to retirement savings, health care, education, and housing. For instance, the state’s preferred policy of ensuring individuals have sufficient resources for a rainy day is via the Central Provident Fund, a government-mandated savings account where a portion of one’s monthly salary is deducted and deposited into it. These funds can be used only for health expenses/insurance, the purchase of a home, or at the age of retirement, reflecting the government’s encouragement of self-reliance where you should “help yourself before asking others for help.”
By compelling Singaporeans to save, welfare in Singapore has traditionally been internalized first to the individual and the family/grassroots level. This forms the crux of the government’s “Many Helping Hands” social policy where the role of the family and immediate community in welfare provision is emphasized over government-funded programs. Such a form of privatized charity is neither new nor unique, as a wealth of research shows how mutual aid societies predated modern welfare states in the 20th-century United States and the 19th-centuryUnited Kingdom.
There is an important lesson to be drawn from the Singaporean case study. The success of the Singapore government’s approach to welfare stems from its decentralized design that revolves around communities at the grassroots level. This approach has worked well because it fundamentally overcomes critical knowledge problems that welfare programs have to deal with.
Remember that poverty alleviation is just that: alleviation. Softening economic hardship temporarily is entirely different from the goal of upliftingthe poor out of poverty. Welfare that is efficient must perform the former without encouraging dependency or destroying the incentive for the poor to work. Even if poverty is a collective problem for “society,” the knowledge required to solve individual cases of poverty is never collectively centralized in a state bureau. On the contrary, such knowledge is widely dispersed and would differ radically across different cultures, religions, communities, occupations, and individuals.
The causes of social poverty can stem from persisting cultural practices, personal habits, or other local institutional problems. Such contextual knowledge and incentives are rarely available to far-removed government welfare bureaus. It is easy to place the duty of welfare provision on an abstract entity we call the “government.” But it is often far more complex for state bureaucrats to allocate taxpayer-funded welfare efficiently, as seen by the trillions of wasted dollars that have failed to help the poor or the gargantuan costs wasted in merely administrative purposes in the US welfare state.
Effective welfare programs that are managed at a private, decentralized level are better equipped with the contextual knowledge required to cope with the existing environment. When decision-making is decentralized, the unique circumstances and life stories of each individual can be better assessed, thereby also offering a more robust safeguard against potentially opportunistic welfare recipients. Singapore’s hybrid private-public model of welfare provision offers useful lessons to those who believe that comprehensive welfare programs can be easily designed to eliminate poverty in a stroke. Such simplistic views stem from undeniably benevolent intentions. But poverty alleviation will be far better tackled through a market-based approach that recognizes the epistemological limits of policymakers, as Singapore’s decentralized approach has shown.
Donovan Choy is a Students For Liberty Charter Teams Member. You can learn more about the situation in Singapore by contacting him at email@example.com.
EDITORS NOTE: This column with images by FEE is republished with permission.
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