Must Reads For The Week 4/22/17

Posted April 22, 2017 by austrianaddict
Categories: Must Reads For The Week

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Busting The “Free College” Myth, Jonathan Newman, at mises.org. The cost doesn’t go away when something is labeled “free”. For the student, free means a new scholarship program. For the college, free means they can increase their prices. For us the tax payers, free means we’re screwed. Free means shifting the cost to someone else. To me free means the professors would teach for…….”free”.

ASU Class Holds Protest Instead Of Final Exam, by Conner Borgelt, at azcentral.com. Tax payers! Would “free college” make the present situation in our college education system better or worse?

Has A Rothbardian Infiltrated The Department Of Education, at targetliberty.com. This is a good thing

San Diego’s Experiment With Higher Minimum Wage: 4,000 Fewer Restaurant Jobs, at reason.com. This doesn’t surprise anyone, does it?

Run For Your Life: The American Police State Is Coming To Get You, by John Whitehead, at rutherford.org. Click on some of the examples in this article. You will be shocked at the abuses of power by Government officials.

Private Equity Sets Its Sites On New Funding Victim: Mom and Pop 401k’s, at zerohedge.com. Private Equity companies have destroyed many of the largest defined benefit pension plans. Now they want to try their hand at destroying defined contribution retirement plans, your 401k. They need a new source of money to fund their skimming operations.

Frederic Bastiat Is Right (Again), by Jeff Thomas, at mises.org. Protective tariffs don’t work. Bastiat told us this in the mid 1800s. The Smoot-Hawley Tariffs (along with other government interventions) helped turn the stock market crash of 1929 into the great depression. Trumps desire for tariffs on foreign goods is a bad idea.

GM Says Venezuela Has Seized Its Car Plant, at cnn.com. Venezuela’s incremental movement toward socialism over the years is almost complete. Since there are no property rights in a total socialist system, this seizure of property may be the final goose step in Venezuela’s march toward economic destruction.

Fannie And Freddie Finally Wake Up, by Doug French, at mises.org. These bad mortgages should have been liquidated (sold at a loss) when the housing bust happened in 08.

How Mises Converted Hayek From Socialism To A Supporter Of The Free Market, at economicpolicyjournal.com.

 

CELEBRATE EARTH DAY

On Earth Day, Let’s Celebrate The Benefits Of Fossil Fuels! This is my Earth Day post from two years ago.

GEORGE CARLIN- Can We Destroy The Planet?

Earth Day 2016, at austrianaddict.com.

How Would Government Run Single Payer Healthcare Work? Look At The VA.

Posted April 19, 2017 by austrianaddict
Categories: Government and Politics

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The VA is a government-run single payer healthcare system. It is a disaster. Obamacare is the last step before you get to a government-run single payer system. Here is a video from Prager University (here) which outlines the failure of our government-run single payer system known as the VA. Obamacare is going to suffer the same failure.

OUR CHOICES ARE?

The only way to lower the cost of healthcare is to repeal all 2500 pages of the Affordable Care Act (aka Obamacare). If we truly want the lowest possible costs, we should repeal every piece of legislation related to healthcare that has been passed in the last 100 years. A majority of people believe something as complex as our healthcare system has to be managed or regulated from the top down by experts (government experts). They can’t fathom a complex order created spontaneously from bottom up decisions made by individual consumers and producers (a market). The difficulty in understanding an abstract concept like spontaneous order, allows politicians and bureaucrats to pass top down concrete planning. Seeing a plan spelled out, no matter how complex, is easier to believe than someone not being able to show what a spontaneous complex market order would look like.

2014 VA SCANDAL

Remember the 2014 VA scandal? We wrote about what was taking place in VA hospitals in this article titled Incentives Matter (here). Here is an excerpt from the 2014 article: “The incentives and constraints transmitted through the market, are totally different from the incentives and constraints transmitted to bureaucracies. In the market the incentive is to provide what the consumer wants. A bureaucracy is a monopoly on a particular service, which means the person using the service is an annoyance rather than someone who has to be pleased……Firing Eric Shinseki and replacing him with a better “angel” won’t solve the problem, {if the problem is making sure the veterans are being taken care of}, because the incentive structure will remain the same.

INDIVIDUAL DECISIONS vs. GOVERNMENT SOLUTIONS

The Republicans failed repeal and replace bill was not much different from Obamacare. The truth is Republicans like the idea of government-run healthcare. They just like their version better than the Democrats version. Only decisions by consumers and producers of healthcare, made free of government coercion, will lower costs.

The 30 or so congressman in the Freedom Caucus are the only members of the House who want to get rid of government-run healthcare. All Democrats want Obamacare to stay as written. All Republicans, except the 30 in the Freedom Caucus, want Obamacare lite. The congressmen in the freedom caucus are all that stands between a permanent government-run single payer system and the possibility of a free market healthcare system.

Related ArticleHealthcare: Market Solutions vs. Government Decrees, at austrianaddict.com.

Related ArticleSpontaneous Order = Free Market, at austrianaddict.com.

Must Reads For The Week 4/15/17

Posted April 14, 2017 by austrianaddict
Categories: Must Reads For The Week

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Taxation Is Theft, by Andrew Napolitano, at mises.org. Happy tax day. Here is an excerpt from the article: “With a tax code that exceeds 72,000 pages in length and consumes more than six billion person hours per year to determine taxpayers’ taxable income, with an IRS that has become a feared law unto itself, and with a government that continues to extract more wealth from every taxpaying American every year, is it any wonder that April 15th is a day of dread in America? ……..”There are only three ways to acquire wealth in a free society. The inheritance model occurs when someone gives you wealth. The economic model occurs when you trade a skill, a talent, an asset, knowledge, sweat, energy or creativity to a willing buyer. And the mafia model occurs when a guy with a gun says”: “Give me your money or else. Which model does the government use? Why do we put up with this?

How Government Meddles In Your Easter Chocolate, by Ryan McMaken, at mises.org. Government tariffs drives up the price consumers pay for chocolate, and also push down the wages of Cacao farmers.

NY Leads 10-State Lawsuit Against Trump Administration Over Stalled Pollution Rules, at huffingtonpost.com. Check out this line up. New York, California, Connecticut, Illinois, Maine, Massachusetts, Oregon Vermont, Washington, Pennsylvania, and NY City are suing to get these laws reinstated. Why doesn’t each of these states pass legislation that makes these efficiency standards laws in their states? Leave us alone we are fine with reduced standards.

If You’re Wondering Why Trump Can Just Bomb Countries; Ask Obama, Busch, and Clinton, at zerohedge.com. What Trump did was nothing new! Does anybody remember that last 25 years?

Which Graduate Degree Gets You Out Of Debt The Fastest, at zerohedge.com. Do some research before you choose your degree.

Students ‘Fear’ Chick-Fil-A Will  Jeopardize ‘Safe Place‘, at campusreform.com. What degrees to you think these students are going for?

New York Could Become Largest State To Offer Tuition-Free Public Higher Education, at washingtonpost.com. Free! I don’t think the greedy professors are going to teach for free, do you? Free means the cost gets shifted to the taxpayer. Get back in the bottom of the ship with Ben Hur and keep rowing.

Donald Trump’s Travel Expenses In 10 Weeks Cost Taxpayers As Much As Obama Spent In Two Years, independant.co.uk, We slammed Obama so we are going to slam Trump. STOP IT.

Sweden’s Largest Newspaper Demands “Ban Men In Cars To Stop Terror“, at  zerohedge.com. Here is headline I thought could have been from the Onion. I always say, “unbelievable”. But I guess it shouldn’t surprise anyone. Should it?

Cyborgs At Work: Employees Getting Implants With Microchips, at dcourier.com. Workers have a microchip planted in the tissue between your thumb and fore finger. It is used like a swipe card to open doors, operate machines, and to purchase things. There are government central planners all over the world that are loving this idea.

The Worlds Worst Economist, at economicpolicyjournal.com. Venezuela is living proof that big government central planning creates economic disaster. Economist Mark Weisbrot supported the policies that brought about the collapse. Another example of credentialed ignorance.

CARTOON

Must Reads For The Week 4/8/17

Posted April 8, 2017 by austrianaddict
Categories: Must Reads For The Week

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Some On The Left Now Criticize The Students They Created, by Dennis Prager, at townhall.com. Here is an except from the article: “It is the left that created the moral monsters known as left-wing students who do not believe in free speech, let alone tolerance. It is the left that taught generations of Americans that everyone on the right is sexist, intolerant, xenophobic, homophobic, racist and bigoted. It is the left that is anti-intellectual, teaching students to substitute feelings for reason.

Snowflakes Demand University President’s Resignation After Refusal To Support Safe Spaces, at zerohedge.com. Here is a recent example of what the article above talks about.

New York Fed’s Dudley Admits Fed-Inspired Student Debt Bubble Is Headwind for Economy, at zerohedge.com. College Graduates are becoming debt serfs. This is similar to the housing bubble. When will this bubble burst.

South Korean School Teachers Who Earn Over A Million Dollars, at economicpolicyjournal.com. With the price of college sky rocketing, lower cost market alternatives to our current education monopoly will be viable.

IRS Seized $17 Million From Innocent Business Owners Using Asset Forfeiture, at reason.com. Innocent people are getting their bank accounts seized without being charged with a crime. This is not supposed to happen in America. This is an example of the break down of the rule of law.

Audit The Pentagon, by Ryan McMaken, at mises.org. Every government agency should be able to cut their budget by 15%. Shouldn’t they?

The Next Subprime Crisis Is Here. 12 Signs That The U.S. Auto Industry’s Day Of Reckoning Has Arrived, at zerohedge.com. Loaning money to people who can’t pay it back is a bad idea. We didn’t learn anything from the housing bubble. Did we?

3 Lessons Learned From Wisconsin’s War On Foreign Butter, by Ryan McMaken, at mises.org. People are fighting back against Government regulations on Butter. First they are going across state lines to purchase the butter they want. Some consumers are banding together to file a suit against the law which bans this foreign butter.

Creative Destruction: Thousands Of Traditional Retailers Close As Consumers Switch To Online Retailers Like Amazon, by Mark J. Perry, at carpediemblog. Sears started as a mail order warehouse business. Now they are losing to Amazon which is warehouse delivery business. Everything old is new again.

Homeowner’s son Kills Three Would-Be Burglars With AR-15, at nypost.com. Who says AR-15’s aren’t good home defense weapons?

Is There A Wage Gap Between Men And Women?

Posted April 4, 2017 by austrianaddict
Categories: Econ. 101

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The ‘gender pay gap’ is a myth which has been spread for years. I have been reading about this ‘fake cause’ since I can remember. In 1984 Thomas Sowell covered this topic in chapter 5 of his book “Civil Rights: Rhetoric or Reality”.

Here is a Prager University video by Christina Hoff Sommers explaining the statistical fudging that takes place when the gender pay cause becomes bigger than the truth.

THOMAS SOWELL  addresses this topic in my article: “The ‘Equal Pay Day’ Canard” .

In this article titled: Equal Pay Day Is An Annual Event That Spreads Statistical Misinformation About The Gender Pay Gap, by Mark J. Perry, at carpediemblog, Mark J. Perry says choices made about hours worked, type of work, and marriage and motherhood are three of the deciding factors on how much a person is paid. Women and men make different choices in these three areas. When you compare men and women who make the same decisions the wage gap is negligible.

Mark J. Perry’s article titled: “Equal Pay Day’ This Year Is April 4th – The Next ‘Equal Occupational Fatality Day’ Will Be On January 21st 2029, shows how men work in riskier jobs than women. Thirteen men die while working on the job for every one women who dies on the job. Riskier jobs pay more. Choices have consequences.

Ignorance Perpetuates This Myth.

Supposedly smart people are ignorant when it comes to the gender pay gap. Here are two articles showing this ignorance.

The Chief Operating Officer Of Facebook Appears Clueless When It Comes To The Wage Gap, at economicjournal.com.

Ivanka Wage Gap Ignorance, at economicpolicyjournal.com.

We don’t have to be ignorant about issues like this. All we have to do is look beyond the rhetoric of the people pushing the cause.

Must Reads For The Week 4/1/17

Posted April 1, 2017 by austrianaddict
Categories: Must Reads For The Week

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Trump Threatens To Fight Freedom Caucus In 2018, Freedom Caucus Isn’t Intimidated, theblaze.com. Trump blames the freedom caucus for the defeat of the “Repeal and Replace” bill. He doesn’t understand the members of the freedom caucus are for getting government out of our lives. They understand government central planning can’t work if the goal is to lower healthcare prices. Government central planning transfers power from the individual to politicians and bureaucrats. These guys won’t be intimidated. Most of them had to fight the Republican establishment to win their seats in congress. People are mistaken if they think the Republican establishment wants to shrink the power of government.

Obamacare Explosion Could Happen On May 22nd, Here’s Why, at zerohedge.com. The Republicans won a law suit to stop tax funded healthcare subsidies in 2014.The Obama administration filed an appeal. The Trump administration has to decide whether to continue the appeal. If they decide to stop the appeal it will raise healthcare premiums because the subsidies will disappear. This is a good thing because it will allow economic reality to run its course.

Schools Ready To To Ditch Michelle Obama’s Awful Er’ Healthy Lunches, at tammybruce.com. I hope we keep getting rid of government regulations forced on us by central planning busybodies. Healthy, Hunger-Free Kids Act Doesn’t Work As Planners Planned.

Your Pension Will Be At The Center Of America’s Next Financial Crisis, at zerohedge.com. Government and union pension plans are underfunded. They will not be able to fulfill the promises they made.

Six Graphs That Reveal Big Problems For Student and Auto Loans, by Jonathan Newman, at mises.org. People are over leveraged. They aren’t going to be able to pay back their loan obligations. Easy credit doesn’t stimulate the economy. It creates debt serfs. It misallocates scarce resources to areas of production that can’t be sustained. It allows the financial system to skim wealth from the middle class.

The Problem With Paid Parental Leave, Xiong Yue, at mises.org. What will happen when the cost of employing a worker doesn’t cover what they produce? The labor will go away. Just like minimum wage increases. Central planners create unintended consequences.

Trump Thinks Your Car’s Gas Mileage Is….Your Business, at zerohedge.com. EPA standards for gas mileage are going to decrease under Trump. Central planners shouldn’t make these decisions. Allow consumers and producers to make these decisions.

The Real Reason Leftwing Groups Are Freaked Out By Trumps EPA Pick, at theresurgent.com. Environmental groups have been receiving money from corporations who have been strong armed by the EPA. The EPA fines Corporations for EPA violations. The EPA tells these corporations if they ‘donate’ a lesser amount to environmental groups, they will not have to pay the full amount of the fine. Government agencies aren’t political are they?

House Committee Passed Bill To ‘Audit The Fed’, at zerohedge.com. This won’t get enough support to be passed. But we need to keep putting it out there so people might get educated on the Fed.

How The Left Learned To Love States’ Rights, by Andrew Syrios, at mises.org. Finally the left agrees that the federal government has too much power. Blue State California Actually Agrees With Red State Texas: The Federal Government Has Too Much Power!

CARTOONS from theburningplatform.com. More here.

Healthcare: Market Solutions vs. Bureaucratic Decrees

Posted March 28, 2017 by austrianaddict
Categories: Econ. 101, Government and Politics

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Modern thin line design concept for HEALTHCARE website banner. Vector illustration concept for healthcare diagnosis and treatment.

Our current battle over healthcare is being debated from a false premise. Most people have bought into the lie that healthcare is or should be a right. It isn’t a right as understood by most people. The right to keep and bare arms doesn’t mean someone else is obligated to supply a gun. The right to free speech  doesn’t mean someone else is obligated to supply a microphone, a stage and an audience. But for some reason we think a right to healthcare means someone is obligated to provide it.

The truth is healthcare is an economic good or service produced by individuals. These individuals own what they produce. It is their property. No one has a right to what someone else produces.

How can you gain possession of what someone else owns? 1) You can produce something they want and exchange it for what they have produced. 2) They may give it to you as a gift. 3) You can steal it. 4) You can have someone steal another persons production, exchange it for what you want, and have them give it to you indirectly. 5) You can have someone else steal it and give it to you directly.

Government intervention into the healthcare market, up to and including Obamacare, has been an incremental march away from the first two and toward the last two. Everyone knows that direct theft of another person’s property is unethical and immoral because it is illegal. But when we are one or two steps removed from the direct theft, for some reason we think it’s ethical and moral because government says it’s legal.

hand writing economic demand - supply graph on chalkboard

ECONOMIC REALITY OF HEALTHCARE

Healthcare is an economic good ruled by the laws of economics. Scarcity, subjective value, supply and demand are a few laws we need to look at in order to understand why government central planning isn’t the right process to ration the scarce good we call healthcare.

SCARCITY: Healthcare has to be produced. It is a scarce good. It isn’t like the air we breathe. Air doesn’t have to be produced by anyone. The abundant supply of air exists naturally. You might say the air I put in my tires Isn’t free. The air you put in your tires is first compressed and then forced into your tires. Compressed air has to be produced, therefore it is an economic good and not free like the air you breathe.

SUBJECTIVE VALUE: Everyone values healthcare differently. There is no objective value that can be placed on healthcare. The value for healthcare is subjective depending on each individual’s needs and wants. Both the demand for and the supply of healthcare is valued subjectively.

SUPPLY AND DEMAND: Since healthcare is scarce and valued subjectively, the law of supply and demand comes into play coordinating its production and consumption. The price reflects subjective valuations by individuals related to supply and demand. The subjective valuations at the existing price drives supply and demand to a new coordinating price.

The law of supply and demand states that more is demanded at a lower price than a higher price and more is supplied at higher price than a lower price. Price changes are constantly re-coordinating supply and demand according to the subjective valuations of individuals.

The supply of healthcare is limited by the scarcity of the resources, labor, capital and time needed to produce it. It is also limited by the demand for healthcare. If the demand for healthcare increases against a fixed supply, the price will go up in order to ration the scarce resource. As the price rises more resources, labor, capital, and time will be attracted to producing healthcare. As the supply increases to meet the higher demand a point will be reached where the price will stabilize and then decrease as supply outpaces demand.

The changing price sends information to consumers and producers about the scarcity of healthcare. These price changes are figured into the subjective valuations of how much each consumer will demand and how much each producer will supply.

Free market prices are the most efficient way to ration healthcare in a world of scarcity and subjective value.

government regulations, magnifier, pencil

GOVERNMENT INTERVENTION INTO HEALTHCARE

Government mandated healthcare subsidies, taxes and regulations distort the prices that would normally exist in a free market. Consumers demands and producers supplies are going to change according to these distorted prices. A mismatch of the supply of and demand for these scarce resources is brought about by government intervention.

What did you think was going to happen when more consumers were brought into the market by the Obamacare individual mandate? Subsidies also increase demand. Prices were guaranteed to rise as demand was artificially increased.

What happens when prices for healthcare services paid by Medicare and Medicaid are fixed below what they would be in a free market? The supply of health care would decrease at these lower prices.

Obamacare created more demand and at the same time created the incentive to supply less. What happens to the price when more is demanded and less is supplied? Even though our politicians told us costs would go down under The Affordable Care Act, anyone who understood basic economics could have predicted which way the price would go. And that isn’t even including paying for the government bureaucracy needed to implement the ACA.

NOW WHAT?

The failure of the Republican repeal and replace bill is a good thing. The bill was just an exchange of a set of not quite as bad new government regulations for the existing bad government regulations. Their is only one way to reduce the cost of healthcare. Get rid of government subsidies, taxes and regulations. Unfortunately all Democrats and a majority of Republicans don’t understand basic economics.

Quoting Ludwig von Mises – “Economic history is a long record of Government policies that failed because they were designed with a bold disregard for the laws of economics.

Republicans are also scared of political fall out when they get rid of healthcare entitlements. The Democrats and their accomplices in the main stream media will trot out all the sob stories of people whose ‘access’ to healthcare was taken away. Of course the MSM didn’t tell the stories of all the people who had their healthcare costs sky rocket under the ACA. These rising premiums paid for the increased costs and subsidies caused by government intervention.

Millions of families got crushed by the higher cost of healthcare. These were small businessmen and people who worked for small businesses in the more rural counties in America. These are the same people who were barely able to stay afloat when the economy crashed in 08. They cut their discretionary spending to the bone. Many had to use their savings and retirement accounts to make it through the recession.

When the Affordable Care Act was implemented after 2013 there was no spending left to cut to pay for the higher cost of healthcare. Wives had to go back to work just for the insurance. Men took second jobs for the same reason. These are the people in the swing states of Ohio, North Carolina, Florida, Iowa, and the Democrat States of Wisconsin, Michigan and Pennsylvania who voted for Trump. He was their only hope. They literally couldn’t afford to vote for Hilary.

Fortunately market alternatives to Obamacare are starting to appear around the country.

Read Here- Direct Primary Care, A No-Insurance Model.

Read Here – Florida West Virginia Lawmakers Take Interest In Insurance Free Approach.

Read Here – Atlas MD, Wichita’s Premiere Cash-Only Clinic.

As the price of Obamacare goes higher the demand for Obamacare will decrease. This higher price will also bring about lower cost market alternatives to the Government run system. These alternatives will be outside of the system. We can call these free market alternatives as long as Government doesn’t try to shut them down with regulations. If they do try to shut them down they will then become black market alternatives (the new free market).

Fracking is an example of a market alternative to the OPEC cartel and our Governments regulations on drilling off shore and on public land. When the price of oil rose to above $110 dollars a barrel it became affordable for hydraulic fracturing to take off on private land. Now that it is profitable to frack at $45 a barrel the OPEC cartel has lost its monopoly power. The high price of $110 was what eventually brought the price of oil down. Healthcare will be no different. The market will find an alternative as the price goes higher.

Read Here – Trumpcare Defeat Could Be A Small But Important Victory For Healthcare Freedom.

Read Here – Ryancare Is Failing -What Should Happen Next?

Read Here – Forget Obamacare, Ryancare, And Any Future Reformcare – The Healthcare System Is Completely Broken.

Economic reality will end Obamacare. Let’s hope the Government doesn’t end the market alternatives that have started to take root.