Posted tagged ‘Free trade’

Must Reads For The Week 12/16/17

December 17, 2017

Pentagon To Undergo First Ever Audit After Decades Of Sloppy Accounting And Missing Trillions, at zerohedge.com. Trying to make government agencies more efficient is a fool’s errand. Government agencies have no incentives to be efficient. If you want to cut spending by making bureaucracies more efficient you have put the cart before the horse. The only way to constrain spending is to cut their budget. Cutting their budget by say 25% would reveal what is and is not important to the Pentagon. They will cut spending on what is least important. If you cut their budget another 10%, the next wasteful marginal activities will be revealed. The Pentagon can’t spend what it doesn’t have.

Net Neutrality And The Problem With “Experts“, by Ryan McMaken, at mises.org. The term “Net Neutrality” sounds just as good as “The Affordable Care Act”. No one could be against these policies could they? Progressives are great at making up clever names for their regulations. Unfortunately the results of these regulations are the direct opposite of their names. Net Neutrality is about individuals in government (the deep state) wanting to control the internet. The insiders knew they couldn’t get their regulation passed legislatively, so they used the FCC to implement the policies. If you are for “Net Neutrality” I have one question for you. If the internet, with all its complexity, came to exist today without government regulations, will it continue its growth under government regulations?

Here is a quote from George Gilder: “Socialist and totalitarian Governments are doomed to support the past. Because creativity is unpredictable, it is also uncontrollable. If the politicians want to have central planning and command, they cannot have dynamism and life. A managed economy is almost by definition a barren one.

Harvard Business School Professor: Half Of US Colleges Will Be Bankrupt In 10 to 15 years, by Abigail Hess, at cnbc.com. I have said for years that we can cut the cost of educating high school and college students through online education. This is an example of the creative destruction of the market. Colleges will try to protect their monopoly position by lobbying government to decertify online education and use taxpayer money to prop up their failing business model. Will the market (decisions made by individuals) win, or will individuals in government intervene?

Germany Ends Tesla Model S Subsidies In Massive Blow To Company’s Government Funded Business Plan, at zerohedge.com. Elon Musk is a scam artist. He has become wealthy by convincing individuals in government to give his company tax payer dollars directly and through subsidies for buyers of his product. Under normal market conditions consumers wouldn’t be as ‘charitable’ with their own money. Electric cars may be the cars of the future. That future could come to exist incrementally as the unsubsidized cost of electric cars becomes less than the cost of gas-powered cars. But the cost isn’t the only factor. The electric car must also be a better product according to the desires of consumers. And each consumers desires are subjective, with cost being just one factor.

Ban The Bike! How Cities Made A Huge Mistake In Promoting Cycling, by Lawrence Solomon, at businessfinancialpost.com. Here is another example of government central planning creating economic inefficiency. Using scarce resources for non productive activities is what government does best. Free markets (what results when people are allowed to produce, exchange, consume and save what they want according to they subjectively value) channel scarce resources to their most productive uses. This is why bike advocacy groups spend their time and money lobbying government to get what they want, because markets would constrain their plans.

John Cochrane On Surge Pricing, Economic Freedom And The Sad Paradox Of Free Markets…. by Mark J. Perry, at carpediemblog. Raising the price of tolls during rush hour is a free market solution (trade-off) to traffic congestion during rush hour. Toll road I-66, in the Virginia suburb of D.C., has increased tolls during rush hour to relieve congestion. Of course everyone is complaining. Which means politicians are trying to step in and get these ‘unfair’ prices reduced. People don’t understand how markets work. But they seem to believe that politicians using government power can conger up a solution to an economic ‘problem’. The laws of economics are still in play even though government tries to wish them out of existence. The reality is there is more demand for road space during rush hour than what exist to handle this demand. During normal times of the day there is less demand for this same road space. We could call it an over-supply of road space. One ‘solution’ would be to supply enough road space to handle rush hour demand. But at what cost? The new supply of road space would be a waste of scarce resources at all other times except rush hour. Raising tolls during rush hour is not a solution as much as it is a trade-off. The scarce resource of road space can be rationed through price increases. The increased price of the toll allows individuals to make the trade-off between purchasing higher priced road space now, or lower priced road space at some other time.

Here is an excerpt from the article: “It does not occur to anyone that you’re really not paying tolls to the government. You are paying your fellow drivers to stay home, carpool, come later, so that they will get out of your way and let you sail to work.”

“The reaction to Uber surge pricing is a similar test. Economists love it. You mean rather than sit in the rain and wait, I can pay more, compensate someone else for waiting, encourage a driver to skip dinner, and take me where I want to go, now? I’m in. Or, I can save some money and to later. Everyone else hates it. and gets cities to ban it. And we to back to waiting.”

“The fundamental reason so many markets are not free, and so dysfunctional, is that the voters of our democracy don’t really want freedom. Freedom will come when we want it, when we insist on it, when the average voter sees a free market solution rather than endless controls as the answer to real world problems. The sad paradox of free markets is that free markets don’t need people to understand them to work. But democracy does require voters to understand how things work.

Is The Oil Glut Set To Return? at zerohedge.com. Simple supply and demand. The American fracking industry is what is keeping the price of oil from increasing. OPEC’s attempt to increase oil prices by constricting what they will supply won’t work. As soon as the price increases, because of their production cuts, it becomes profitable for American fracking to increase production. This in turn drives the price back down. The only reason oil is staying around $50 a barrel is because the price rose to an average of $100 a barrel from 2008 to 2014. This price made it profitable to start fracking. During this time period the fracking industry found more cost efficient ways to extract the oil. Today they can pump oil profitably at prices above $40. Free market prices work.

Chicken Wing Spot Prices Collapse 30% As NFL Protests Take Their Toll, at zerohedge.com. Not only are fewer people going to NFL games. Fewer people are going to wing restaurants to watch NFL games. Politicizing the NFL has economic consequences.

Is Free Trade A Problem If Some People Use Their Greater Freedom To Eat More Than Intellectuals Think Wise? by Don Boudreaux, at cafehayek.com. Free trade increases the number of choices for consumers. This is a good thing, unless you are a central planner. Central planners don’t like free trade if the choices people make don’t coincide with what the planners think is wise.

NRA-Republican Backed Bill Makes It Easier For Feds To Disarm Citizens, by Tho Bishop, at mises.org. Excerpt from the article: “While Republicans and supporters of the NRA may not fear the Trump Administration coming after their guns, it is obviously reckless to grant additional power and resources to future administrative states that may be quite hostile to the right to gun ownership. To put it simply, there is never a good reason to give Federal agencies the power the revoke an individual’s ability to lawfully purchase a weapon without due process.”

Can We Be Honest About Women? by D.C. McAllister, at thefederalist.com. With all the allegations of sexual harassment, maybe we need to step back and take a look at the reality of human nature.

CARTOONS, from therightreason.net.

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Must reads For The Week 6/3/17

June 3, 2017

WE BID ‘ADIEU’ TO THE PARIS CLIMATE AGREEMENT

President Trump Announces US Withdrawal From The Paris Climate Accord, at zerohedge.com. Jerry Brown, Bill DeBlasio, Al Gore, Bernie Sanders, and Barack Obama respond to Trump pulling out of the Paris Climate Accord. If these five are for the Paris climate agreement, it must be nothing more than a socialist scheme for redistributing US tax payer money to the rest of the world. This agreement fits the world view of these gentlemen. Getting out doesn’t.

Obama Responds To Trump’s Withdrawal From Paris Climate Agreement, at zerohedge.com. First let me say this. President Obama. Since you didn’t send this treaty to the Senate for ratification, you had to know that the next President could get us out of this ‘agreement’  just as easily as you got us in to it.

Now here is what the former President said in his statement: “….the private sector already chose a low-carbon future. And for Nations that committed themselves to that future, the Paris Agreement opened the floodgates for businesses, scientists, and engineers to unleash high-tech, low-carbon investment and innovation on an unprecedented scale.”

Mr. President. The private sector didn’t choose “a low-carbon future”. Government ‘invested’ in green energy because the private sector wasn’t. The private sector doesn’t invest in technology that isn’t productive. Government ‘investment’ is nothing more than Politicians using taxpayer money to subsidize a non productive activity they think is a good idea (which means it fits their socialist world view). Once government money was available for the taking, crony capitalists, like Elon Musk and Jeffry Immelt, got in line for their share of tax payer dollars. Crony capitalist companies chose unproductive activities that were “made profitable” by tax payer dollars (Read-The Hidden High Cost Of Green Energy). So of course they’re against the US getting out of the Paris Agreement.

More from the former President: “…But even in the absence of American leadership……I’m confident that our states, cities, and businesses will step up and do even more to lead the way, and help protect for future generations the one planet we’ve got.”

First. It is OK if states, cities, and businesses want to freely choose this course of action. As long as they aren’t forced by the Federal Government or subsidized by the Federal Government.

Second. Getting out of the Paris Agreement is not the absence of American leadership. Getting out is American leadership. Leadership in America doesn’t come from political decrees. It comes from individuals coming up with new and better ways of producing output. A perfect example of American leadership is fracking. Fracking has broken the OPEC cartel because of the increased supply of oil. It has also helped lower US CO2 emissions because it has made natural gas so inexpensive that power plants are using natural gas instead of coal to produce electricity (If the purpose of the Paris Agreement was to lower carbon emissions they should be celebrating what fracking has accomplished). Here is an excerpt from an article I wrote titled; “Free Market Fracking Trumps Government Solutions When It Comes To Producing Energy.”

Market forces are more powerful than the hoped for results of central planners. The most recent example of this is the boom in oil and natural gas production, created by hydraulic fracturing [ fracking], which is taking place on private land in spite of Government policies. Our politicians shut down some Government lands to oil exploration, and made the process of getting permits for exploration on remaining lands more time-consuming [costlier]. They used their power, and our tax dollars, to promote and invest in, “green energy”. Green energy was going to create new jobs and lead our economy into the future; do you remember Van Jones the Green Jobs Tzar. As always, the plans by our best and brightest politicians, must be obedient to economic forces. Green energy has, and is, going bankrupt, in spite of being propped up by Government. Government tried to make carbon based fuels more expensive through regulation, and green energy more affordable through tax payer subsidies; And with all this Government intervention, the economic reality that green energy produces less energy at a higher cost, and carbon based fuel produces more energy at a lower cost, can’t be overcome.”

Elon Musk Leaving Trump Advisory Councils following Paris Agreement Withdrawal, at techcrunch.com. Having crony capitalist Elon Musk on a Government advisory council is like having the fox advising the farmer on how to make the hen-house more secure. (Read Here – Gov. Subsidies Helped Musk Attain $13.3 Billion Net Worth)

Studying The Climate Doesn’t Make You An Expert On Economics And Politics, by Ryan McMaken, at mises.org. Excerpt from the article: “…the Paris Climate Agreement isn’t a scientific study. It’s a political document that lays out a specific public-policy agenda…..to people who know nothing about economics or political institutions – public policy is like a magic trick. A group of politicians get together, declare that they’re going to solve problem X, and then problem X is magically solved, so long as everyone supports the “solution”…….what if the cure is worse than the disease?

THE REST OF THE MUST READS

To Lower Healthcare Costs, Try Freedom, by Julian Adorney, at mises.org. Quote from above. “Market forces are more powerful than the hoped for results of central planners.

The ‘Logic’ Of Protectionism Leads To An Absurd Conclusion: total Economic Self-Sufficiency At the Individual Level, by Mark J. Perry, at carpediemblog. Free trade increases wealth. Mercantilist protectionism decreases wealth.

Why Do Half-Measures Work For Markets, But Not for Socialism? by Ryan McMaken, at mises.org. Even as Venezuela fails as it adopts more socialist solutions, true believers say it isn’t true socialism. When a socialist country adopts some market solutions it helps lift more of their people out of poverty.

Auto Bloodbath: Lowest Domestic Auto Sales In Three Years Despite Record Inventories and Incentives, at zerohedge.com. Is the auto bubble about to burst?

Spying On You, Spying On Me, Spying On The President, by Andrew Napolitano, at lewrockwell.com. Once you  allow government surveillance outside of our fourth amendment rights. It is almost impossible to recapture the pit bull of government you let off the chain.

Voter Fraud? 5,500 Non-Citizens Discovered On Virginia’s Voting Rolls, at zerohedge.com. Now this is how you break the law to influence the election!

CARTOONS

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Must Read “Leftovers”

May 3, 2017

Here are some articles I’ve had in the archives for a while.

WE SHOULDN’T TRUST INDIVIDUALS POSSESSING GOVERNMENT POWER

IRS TARGETING AND LOIS LERNER

Court Rejects IRS’s Plea To “Just Trust Us”, Permits Discovery Into IRS Targeting, at aclj.org.     Another Victory Over The Abusive IRS Targeting Of Conservatives, at aclj.org. When the IRS can slow down the legal process for four of more years, there is no justice. Government agencies have unlimited finances to drag out every case. The plaintiff doesn’t.

Lois Lerner Wants Her Deposition In Tea Party Case To Be Sealed: She’s Afraid People Will Want To Kill Her, at tammybruce.com. Lois Lerner doesn’t really believe her life is in danger. She just wants to protect her @$$. The people she targeted haven’t threatened her up to this point. Even though they know she targeted them. She has been collecting her pension ever since she retired, before she could be fired. Can you get a sweet gig like that?

Most of these bureaucrats are not elected. But they are politically biased toward protecting their fiefdoms.

YOU DECIDE IF OBAMA ADMINISTRATION SURVEILLED TRUMP

Obama Officials Made List Of Russia Probe Documents To Keep Them Safe, at nbcnews.com. Or was the purpose to share it so widely so it could eventually be leaked?

Did President Obama’s Own Defense Deputy Admit Obama White House Spied On Candidate/President-Elect Trump? at the burningplatform.com. What do you think?

Confirmed: Susan Rice “Unmasked” Trump Team, at zerohedge.com. Leaking who was unmasked is the problem. She is not denying back door surveillance happened.

Susan Rice Responds To Trump Unmasking Allegations: “I Leaked Nothing To Nobody” at zerohedge.com. I am not much of a grammarian but I think her quote is a double negative. Which means she leaked something to somebody. What does “incidental surveillance” mean?

Representative Schiff Has Seen Devin Nunes’ Evidence For Obama Surveillance – Here’s What He Said, theblaze.com. Democrat Schiff sang a different tune after he saw what Nunes saw.

FBI Got Court Order To Monitor Ex-Trump Adviser In Russia Probe: at reuters.com. More evidence of surveillance?

Obama, Comey Relied On Discredited Dossier To Obtain FISA Warrant On Trump Campaign, at zerohedge.com. Fake Dossier + Real Surveillance = Fake News.

You decide. Did surveillance happen?

TRADE INTERVENTION BY GOVERNMENT

Here’s What’s Behind The US-Canada Dairy Battle That Has Chuck Schumer Agreeing With Trump, at businessinsider.com. You know it is a bad policy when Schumer and Trump agree on trade. The answer is to let individuals in America trade with individuals in Canada. Agriculture in both countries is subsidized. That is where the problems starts.

Trump Slaps First Tariffs On Canadian Lumber, at money.cnn.com. Canadian lumber is cheaper. It is subsidized by Canadian taxpayers. So Canadian taxpayers are literally paying us to buy Canadian lumber at a lower price. Why shouldn’t we take advantage of their stupidity? Our answer is to raise our level of stupidity above theirs. We are going to raise the price of Canadian lumber higher by putting a tax (tariff) on it. What will be the next move on this checker board of stupidity?

How can Trump think on the one hand that lowering federal taxes will benefit the economy, and on the other hand think that increasing a tax on lumber will benefit the economy?

 

Free Trade or Trade Restrictions: Which Leads To Prosperity?

March 16, 2016

Free Trade Is The Path To Prosperity, by Georgi Vuldzhev, at mises.org. – When people make voluntary exchanges,  both parties actions reveal that they value what they have received more than what they have given up. It is an increase of value for both parties. Without trade each of us would have to produce all the goods we wanted to consume. Would you have enough time or knowledge to pull this off? No chance! If you had to pull this off, would you be poorer? Absolutely! When government interferes with trade (voluntary exchange), society becomes less prosperous. Are you listening Mr. Trump, Mr. Sanders, and Mrs. Clinton? Politicians purchase votes, at a low cost, with protectionist rhetoric. Unfortunately the high cost of government trade restrictions, subsidies, and tariffs, is paid by consumers and workers who lose their jobs.

Donald Trump vs. Milton Friedman on Trade Policy. by Mark J. Perry, at carpediemblog. – In time of war countries blockade their enemies ports to prevent imports from coming in. Why? Because it harms them economically. Tariffs are the same as blockades. Blockades prevent trade, which causes economic harm. Henry George said: “What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.” Donald Trump has proposed a 45% tariff on Chinese goods. Just because you are successful in the business world doesn’t mean you know anything about economics.

Here is the video from LibertyPen

 

Related ArticleSpecialization And Trade Create Wealth, at austrianaddict.com.

Related ArticleWalter E. Williams: Voluntary vs. Involuntary Exchange, or Seduction vs. Rape, at austrianaddict.com.

Must Reads For The Week 6/20/15

June 19, 2015
The pen is mightier than the sword...

 The pen is mightier than the sword… (Photo credit: mbshane)

Why Freddy’s BBQ From “House Of Cards” Couldn’t Really Exist, by Johnny Fugitt, at the federalist.com. Government is messing with my BBQ! Now they’ve gone too far. Government has to regulate everything, remember the lemonade stand article from last weeks must reads. I can see it now, a BBQ speakeasy.

If You Eat This Sweet Every Day, You May Lower Your Risk For Heart Disease, by Kimberly Morin, at thefederalistpapers.org. Eating chocolate regularly is actually good for your heart! I eat enough chocolate to counter act all the BBQ I eat. Life’s full of trade offs isn’t it.

Tesla Leases Former Solyndra Building In Fremont, by David Baker, at sfgate.com. Crony capitalist Tesla has leased bankrupt crony capitalist Solyndra’s former building. Some of our tax dollars are paying for the lease on a building built by our tax payer dollars. Not a very productive use of scarce resources.

Fans Can Bring Their Weed To The U.S. Open, Outside Water Bottles Still Banned, by Dan Regester, at foxnews.com. A few questions. 1) Are they allowed to smoke the weed they bring in? 2) Are people allowed to smoke tobacco products at the open? 3) If weed was sold at the U.S. Open, would people be allowed to bring their weed into the event? 4) Does it seem like everything is upside down?

Those Were The Days, My Friend, at the-econotrairian.blogspot.com. Look at the first chart from this article. It shows GDP growth in the 23 quarters after the bottoms of the 8 recessions dating back to 1961. This “recovery” is the worst, and the tech bubble of 2001 is the second worst. These were both bubbles caused by cheap credit and electronically printed counterfeit money. The Fed can’t even print a good GDP number.

Media Matters Misdirects On FBI Report On Mass Shootings, by John Lott, at johnrlott.blogspot.com. Typical journalism malpractice.

Economics At Its Best – The Story Of The Iowa Car Crop, by Mark J. Perry, at aei.org. Great story on how free trade works. If you tax or ban imports, you are taxing our own industries. If you protect a specific industry, you are damaging other industries.

Micro-Totalitarianism, by Thomas Sowell, at jewishworldreview.com. Thomas Sowell is always a must read. Here is an excerpt from the article. “The Left is not necessarily aiming at totalitarianism. But their Know-it-all mindset leads repeatedly and pervasively in that direction, even if by small steps, each of which might be called “Micro-totalitarianism“.”

Culture and Social Pathology, by Walter E. Williams, at jewishworldreview.com. Walter Williams is also a must read. Here is an excerpt from the article. “If it were only the economic decline threatening our future, there might be hope. It’s the moral decline that spells our doom.

 

Specialization And Trade Create Wealth

July 24, 2013

In our previous post I briefly touched on specialization and trade. Civilization advances  through specialization and trade not just from the stand point of creating more wealth, but also from the stand point of creating a more peaceful world because of the cooperate involved in trade. This short video from LearnLiberty.org, featuring Art Carden, is a very good explanation of these concepts.

Specialization and trade utilize scarce resources, time, labor, and capital as efficiently as possible. Labor, time, capital, and resources are freed up, because of specialization and trade, and can now be used for other activities that couldn’t have been attempted before these scarce resources were freed up. These new activities may prove to be productive or they may not. The good news is that in a free market they will be allowed to succeed or fail depending on their ability to produce more value than the cost of the production.

For a more in-depth analysis of this subject read, People Can Just Get Along, by Robert P. Murphy, at mises.org.