Category Archives: Econ

Hi-hi, ho-ho, the anti-drug war has to go

Iconic conservative the late Milton Friedman on that very point.

Today is the 46th anniversary of America’s War on DrugsOtherwise Peaceful Americans Who Voluntarily Choose To Ingest or Sell Intoxicants Currently Proscribed by the Government, Which Will Put Users or Sellers in Cages if Caught, see today’s previous post on CDhere. To bring awareness to this immoral, failed, costly, and shameful war on the American people, here’s some commentary below from Nobel economist Milton Friedman.

It includes his “pessimistic view of America’s future if we continue moving in the direction of socialism.” Which is a connection many do not realize.

Why economics a dismal science

You try and you try but still can’t be sure.

However greatly our theories and techniques of investigation [using economic models and testing them through statistical trials] assist us to interpret the observed facts, they give little help in ascertaining all those particulars which enter into the determination of the complex patterns, and which we would have to know to achieve complete explanation, or precise predictions.

Which is where the free market comes in, millions  of buyers and sellers and their “complex patterns,” which no  man or woman or gang of eight or ten or a thousand can explain completely or predict precisely.

We have here a case of understanding what Pope Francis says better than he does

The author is a British academic with a keen interest in economic inequality:

Martin O’Neill is a senior lecturer in politics at the University of York and a co-editor of “Property-Owning Democracy: Rawls and Beyond” (paperback edition, Wiley-Blackwell, 2014). He is currently a research fellow at the Institute for New Economic Thinking, working on a project about the significance of inequality.

He sees Francis embracing not only “radical green” but hard-left economic solutions:

Pope Francis’ new encyclical [Laudato Si,
June 18] is making headlines mainly because of the tough line it takes on climate change, and its message to Catholics and others that they must embrace radical green solutions to society’s problems.

But the Pope’s ecological message is only part of his radical political agenda. Just as significant as his environmental message is a parallel progressive economic agenda that fundamentally rejects deregulated free-market capitalism.

The Pope has a bracing message for Christians and other “people of good will”: that the time has come to move beyond right-wing economics, and to embrace a different kind of economic system.

The papal explainers who play Francis’s radicalism down in favor of his mainly giving spiritual more or less generic advice should tell this fellow how wrong he is.

On the other hand, there’s this other annoying aspect: where is this deregulated capitalism Francis and this radical professor are talking about? Not in this country, where regulations are a constant bone of contention.

Encouraging stuff here: a plan to bring out the best in people

Bring Back the Jack Kemp GOP – WSJ.

Some 30 years ago, an influential congressman named Jack Kemp gave a call to Bob Woodson, and in doing so became a Republican model for empowerment politics and minority outreach.

A high-profile group of conservatives is staging a revival, looking to finally engage the modern left on the politics of the poor. Republican presidential candidates, pay attention. . . . 

Yes. The negative overwhelms. The positive, here stressed, is what counts. (Not to denigrate well-timed and -placed rebuttal, which has always to be with us.)

From destruction economic benefits? Not on your tintype.

Break something, pay to have it fixed, fixer uses fee to buy things, etc.? Not quite.

The Broken Window Fallacy and “Blessings” of Destruction in the Real World

  • Mises Daily July 14 2015
JULY 15, 2015

TAGS Booms and BustsHistory of the Austrian School of EconomicsPhilosophy and Methodology

In the early nineteenth century, Bastiat posed the story of a young man who throws a brick through the window of a baker’s shop. We’re told that this may have a bright side — that the baker must now pay a glazier to fix the window, who will then use that income to spend elsewhere, creating a ripple effect that benefits many.

Such thinking is reminiscent of what would later be used to justify the logic behind the Keynesian multiplier. Keynes would later write in the General Theory, “Pyramid building, earthquakes, even wars may serve to increase wealth.”

The Opportunity Cost of Fixing Things

As many readers already know, such logic fails to take into account the opportunity cost of the broken window. Had the window not been broken, the baker wouldn’t have paid the glazier, but maybe he would’ve spent the money on a pair of shoes instead. The shoemaker would then have income to spend elsewhere, and the same multiplier would take place — but society would be better off by exactly one window.

A ban that bombed

Who’d a-thunk it? Unintended consequences from a bottled water ban on a college campus? – AEI | Carpe Diem Blog » AEIdeas.

. The bottled water ban did not reduce the number of bottles entering the waste stream from the university campus, the ultimate goal of the ban. With the removal of bottled water, consumers increased their consumption of less healthy bottled beverages.

Gosh. You try and try to make things better, and then what? (Sigh)

Costs more to hire people, fewer are hired . . .

Donald J. Boudreaux, economics prof at George Mason U., answering letter writer who objected to his holding that raising minimum wage hurts low-wage people:

. . . let me test your instincts with a question posed by the economist Mark Perry: Do you believe that imposing a tax on employers for every low-skilled worker that they hire would not reduce the number of low-skilled workers hired?

Do you believe that requiring employers to pay a tax of $2.85 per hour for every low-skilled worker on their payrolls would not prompt employers over time to employ fewer such workers?

Do you suppose that firms are so inattentive to their bottom lines or so unable to figure out how to operate profitably with fewer worker that such a tax – which would be about $5,700 annually for each and every low-skilled worker employed full-time – would not reduce low-skilled workers’ employment options?

If you do believe all this, it explains your support for a mandated minimum wage, he says, as do I.

Wages of socialism

You sigh, the song begins, you speak and I hear violins
It’s magic.
— Sammy Cahn and Jule Styne

Like the alleged living wage, which if mandated by government magically adds to prosperity, as we hear from our socialist friends and neighbors, who have unswerving belief in the power of government to save the world.

He can who thinks he can. The little engine that could. Socialists, democratic or the other kind — think Soviet, think National as in Germany in the ’30s and ’40s, think autocracies all over the world who run the banner of gummint uber alles.

These living-wage people need a new name. C’mon, reinvent yourselves. The red flag don’t fly hereabouts. We are too bourgeois, for all our flirting with pie in the sky before we die.

Such as Illinois Democrats spending, borrowing, spending some more, and look where we are now, will you? Heading up that old creek sans paddle in a cast-iron canoe. Not there quite yet. Give us time.

As for that mandated wage — telling employers what to pay employees, or else, or else what? After that, what? Tell them how to price their goods? Prix fixe for all!

That’s mandated wage all over, a fixed price. There’s a labor market, out of which can be priced hordes of people not worth the price. Wages are competitive or not, right? We can price ourselves or be priced out of that market.

Socialist policies do that. Want to know about democracy in the workplace, and anywhere else you look? It’s the will of the people. When they say free market, that’s what they have in mind: lots of people vote on what to pay for things and that vote prevails. It’s their money.

So when there’s something to sell, a man’s time for instance, democracy calls for open bidding, not a state directive. Free market, unhindered by government interference.

No price-fixing.

How Wisconsin did it

The miracle explained.

Einstein et al. on income taxation

From Liberty Tree, which sends three a day if you subscribe:

“The hardest thing in the world to understand is the income tax.”

— Albert Einstein
(1879-1955) Physicist and Professor, Nobel Prize 1921
http://quotes.liberty-tree.ca/quote_blog/Albert.Einstein.Quote.D09E


“If Congress sees fit to impose a capitation, or other direct tax, it must be laid in proportion to the census; if Congress determines to impose duties, imposts, and excises, they must be uniform throughout the United States. These are not strictly limitations of power. They are rules prescribing the mode in which it shall be exercised. … This review shows that personal property, contracts, occupations, and the like have never been regarded by Congress as proper subjects of direct tax.”
— Salmon P. Chase
(1808-1873) U.S. Senator from Ohio, 23rd Governor of Ohio, U.S. Treasury Secretary under President Abraham Lincoln, 6th Chief Justice of the United States Supreme Court
Source: As Chief Justice delivering the opinion of the Court in Veazie Bank v. Fenno, 76 U.S. 8 Wallace 533 (1869)
http://supreme.justia.com/cases/federal/us/75/533/case.html
http://quotes.liberty-tree.ca/quote_blog/Salmon.Chase.Quote.4F3A


“The people of the various provinces are strictly forbidden to have in their possession any swords, bows, spears, firearms, or other types of arms. The possession of these elements makes difficult the collection of taxes and dues, and tends to permit uprising. Therefore, the heads of provinces, official agents, and deputies are ordered to collect all the weapons mentioned above and turn them over to the government.”
— Toyotomi Hideyoshi
(1536-1598) Japanese Chancellor of the Realm, preeminent daimyo, warrior, general and politician of the Sengoku period
http://quotes.liberty-tree.ca/quote_blog/Toyotomi.Hideyoshi.Quote.9DC2

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