Posted tagged ‘Government Intervention’

Must Reads For The Week 5/18/19

May 21, 2019

“The coordination of men’s activities through central planning or through voluntary cooperation are roads going in very different directions, the first to serfdom and poverty, the second to freedom and plenty.” – F. A. Hayek

 

MEDIA

Journalism Is Dead – Long Live The Media! by Victor Davis Hanson, at amgreatness.com. Excerpt from the article:   “….over the last 20 years, marquee journalists saw themselves as wannabe celebrities who were to make news, not to report it, to massage stories in such a fashion to serve their social justice agendas, and to virtue signal their superior morality, as many revolved in and out of government.”

“What have they become instead? People with enormous self-regard, but with little experience with the public whom they were supposed to serve.”

“They espouse opinions on nearly everything while knowing almost nothing. They believe Washington and New York are the centers of the universe, while the universe is making both more irrelevant. As their ethics dissipated, their vocabularies shrank. Their poor communication skills grew ever poorer, and they displayed little knowledge of the history and culture of the people they reported on.”

“Cultural Schizophrenia”: US Media No Longer Reports Facts, But Appeals To Emotions, at zerohedge.com. Excerpt from the article: “The mainstream media in the United States has made a shift in the past few decades.  Now, they appeal to emotions as opposed to reporting the facts. This “cultural schizophrenia” is tearing the U.S. apart at the seams.”

Tulsi Gabbard: James Clapper Lied On Mass Surveillance….Yet Landed A Job On CNN, by Jennie Taer, at saracarter.com. No comment necessary.

 

EDUCATION SYSTEM

Higher Education In America, by Walter Williams, at jewishworldreview.com. Excerpt from the article: “The extraordinary high college cost not only saddles students with debt, it causes them to defer activities such as getting married and starting a family, buying a home and saving for retirement. Research done by the New York Federal Reserve Banks and the National Bureau of Economic Research shows that each dollar of federal aid to college leads to a tuition increase of 60 cents.

Asian American Push Back Against Identity Politics In Washington State, by Helen Raleigh, at thefederalist.com. Even though Americans of Asian decent are on the top rung of the intellectual ladder, they are on the bottom rung of the identity politics ladder. Why should we expect equal outcomes when there are different inputs?

Title IX Updates: OCR Opens Investigations Against Brown, Rutgers And Clemson, by Mark J. Perry, at carpediemblog. Universities are getting snared in the Title IX traps they set years ago.

The Growing Phenomenon Of Racially Exclusive Grad Ceremonies, by Daniel Payne, at thecollegefix.com. Excerpt from the article:  “The great American political movements of the 19th and 20th century were about bridging the profound and often brutal chasm that has divided the races in this country since its earliest beginnings. Many campuses are now helping to widen that chasm rather than close it further. It’s a terrible thing to witness.”

 

CULTURAL CRAZINESS

Actions Have Consequences, at the burningplatform.com. Watch these two short videos of Pro Abortion students attacking Pro Life protesters. Ask yourself if it would be possible to have a rational discussion with either of these two individuals? By the way the cop in the first video shows how to deescalate a situation with an emotional individual.

‘Gender-Inclusive Puberty’ Is The Latest Myth Peddled By Trans-Activists, by Mary Rice Hasson, at thefederalist.com. Excerpt from the article” “Gender-inclusive puberty education” is an invented term that conceals ideological hokum under language vaguely suggestive of fairness and science. It’s an activist-driven maneuver to embed the gender-identity construct into the minds of impressionable children—all children—under the guise of health education. The real goal is to normalize transgender and non-binary identities and the drastic medical and surgical interventions that “affirm” them.

Prescription For Violence: The Corresponding Rise Of Antidepressants, SSRIs & Mass Shootings, at theburningplatform.com. These antidepressant drugs come with a warning that the user may have suicidal thoughts. How much of a difference is there between suicidal and homicidal thoughts?

The Fight Over Abortions Is Now Total War, by David Marcus, at thefederalsit.com. Roe v Wade was the Government forcing a one size fits all decision on every State. Alabama’s recently passed restrictive abortion law, and New York’s recently passed permissive abortion law is exactly where we were in 1973 when abortion activists butted in and the the Supreme Court made the Roe decision. We have had 45 years of unnecessary conflict. The court should have allowed the States to continue to enforce the abortion laws each had on the books in 1973. It would have worked out better.

Dear Fellow Unbelievers: We’re Not Any Smarter Than People Of Faith, by Chason Gordon, at thefederalist.com. Excerpt from the article:

“In college, I voraciously ingested all the great anti-theist scribes, from Christopher Hitchens to Richard Dawkins to Sam Harris, as if preparing for that one hypothetical argument with a religious person over dinner while everyone else awkwardly ate their meatloaf. It enabled me to roll my eyes at anything religious with the best of them. Little is more fun than smugly looking down on a group of people and saying cruel things about them with a feeling of righteous superiority.”

“Still, this unrelenting disdainful stance gets tired after a while and doesn’t stand up when dealing with actual human beings who can talk back. My once-rabid atheism evolved not into belief, but into a calm acceptance of the more faithful people I met, as I gradually came to understand what many non-believers fail to: You’re not smarter or stronger than religious people, and you don’t know something that they fail to grasp.”

“There’s probably a person of equal intelligence to you, who enjoys the same bands and movies and salad dressing, and maybe even looks a little like you, except he or she has faith. All of that person’s skepticism and doubt is simply pointed in the other direction.”

 

IMMIGRATION

Spain Sees Surge In Migrant Crime “Because Of Political Cowardice“, at zerohedge.com. Europe is farther down the road with the immigration issue than the US. It is proving to be a disaster for these countries. But that can’t happen here? Can it?    In an unrelated article   Hundreds Of Migrants Occupying French Airport Terminal, by Tamar Lapin, at nypost.com.

 

VOLUNTARY COOPERATION vs. CENTRAL PLANNING

A Peck On The Neck, by Eric Peters, at ericpetersautos.com. Individuals with government power are forcing their utopian agenda on us. The reason they are doing this is because consumers in the free market are not choosing their world view. Man made global warming was and still is one of the biggest scams ever!

Excerpt from the article:

“A vampire’s continued existence depends on the continuous flow of the blood of the living. The same principle animates Tesla and other purveyors of electric cars – who are about to receive another $2 billion-plus from FiatChrysler (FCA) over the course of the next three years.”

“This ought to stave off bankruptcy long enough to bankrupt legitimate car companies like FCA (which choose not to purvey electric cars, because people aren’t buying them).”

“After which, the vampire will feast on the blood of us – directly, this time.”

“The cash infusion is performed via what is styled the “purchase” of carbon credits. These are purchases in the manner of our “contributions” to Social Security – i.e., they are extorted payments made under duress for something the victim would never freely pay for if he had the option to say no.”

“The “credits” being “purchased” are for electric cars not built by FCA. Instead, FCA pays Elon, et al, to build them and gets the “credit” for the supposed reduction in C02 “emissions” (it takes many italics and  air quotes to parse government-speak) achieved thereby.”

Whole Foods Now Accepts Cryptocurrency, at zerohedge.com. Bitcoin and other cryptocurrencies are becoming legit currencies. This is going to challenge Central Bankers money printing monopoly. They can’t allow this.

If You Think Capitalism Is Dying Because Two Companies ‘Control 90 Percent Of The Beer Americans Drink,’ Go Home, You’re Drunk, by Nick Gillespie, at reason.com. The demise of free market capitalism has been greatly exaggerated. Economic forces are always in play no matter how much government central planning exists in any economic system (socialism, communism, crony capitalism, crony socialism).

Billionaire Promises To Pay Off Student Loan Debt Of Morehouse College Graduating Class, at cnn.com. Free market capitalism is why this guy can afford to pay off these students college debts. These kids were going to be debt serfs to the government for years. This evil capitalist bailed them out. And all he want’s is for them to pay it forward. What a greedy SOB.

Nigel Farage ‘Milkshaked’ As Brexit Party Extends Double-Digit Polling Lead, at zerohedge.com. The Status quo doesn’t want Brexit to take place. They want to keep their power. The people have been ignored for three years since they voted to leave the EU. They have had enough of the May’s BS. They don’t want bureaucrats in Brussels making decisions for them. It is bad enough that their own bureaucrats are making laws they have to follow.

Immunize Your Kids Against Intrusive Government, by J.D. Tuccille, at reason.com. Our founders didn’t trust individuals who were in a position to wield the power of government. Our children should be taught the individual is sovereign over the government.

 

SATIRICAL HEADLINES

Caravan Of Unborn Babies Heads Toward Alabama To Apply For Asylum, at babylonbee.com.

In Order To Stop White Men From Legislating Women’s Bodies, Democrats Fight To Overturn Roe v. Wade, at babylonbee.com. The Roe decision was made by a Supreme Court made up of mostly white men.

Bernie Sanders Criticizes Billionaire For Giving Money To Students Instead Of The Needy Federal Government, at babylonbee.com.

Facebook claims Party Celebrating Candace Owens’s Suspension Was ‘An Honest Mistake‘, at babylonbee.com.

 

CARTOONS

From theburningplatform.com. (more here)

Political Cartoons by Michael Ramirez

Political Cartoons by Pat Cross

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Political Cartoons by Steve Kelley

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Must Reads For The Week 7/8/17

July 7, 2017

Elizabeth Warren Calls For Democrats To Embrace Single-Payer Health Care, by Igor Bobic, at huffingtonpost.com. Single-Payer was the goal all along. Obamacare was just another step in the single payer direction. Here is what Elizabeth Warren said that has me scratching my head because it is a lie fake recollection of the facts: “President Barack Obama  tried to move us forward with healthcare coverage by using a conservative model that came from one of the conservative think tanks that had been advanced by a Republican governor in Massachusetts…..Now it’s time for the next step. And the next step is single payer,”. Mrs. Warren. Please define what you think conservative means because the Affordable Care Act wasn’t a conservative model. Conservative to me means individuals making decisions about their healthcare in a free market instead of bureaucratic decision making backed by government force.

Government Medicine: Court Declares Child Should Die Rather Than Receive Privately Funded Health Care, by Ryan McMaken, at mises.org. This is where government run health care eventually ends up. Bureaucrats will  make the decision on whether an individual will receive treatment or not. The individual has no say. And in this case the answer was no even though the medical treatment was to be funded privately instead of being paid for by public dollars. But this can’t happen in America; can it?

Gun Controllers Know Their Policies Won’t stop Murder. It’s Another Game They’re Playing, at thefederalist.com. The left is patient. They want Government to grow categorically. But they will take incremental increases. They understand how hard it is to get rid of government programs once they are implemented. Just look at Obamacare.

Climate Scares Fail To Occur, by Craig Rucker, at cfact.org. The Arctic was supposed to be ice free by now. We were supposed to have cat 4 and cat 5 hurricanes on a yearly basis. No cat 4 or 5’s  have hit America since Katrina in 06. The climate crazies are admitting that “there has indeed been a pause in the warming and that it’s models failed to predict it.” Maybe their data and their models are “fake science”.

Replacing Fossil Fuels With Renewable Energy Would Inflict Major Land, Wildlife, and Resource Damage,by Paul Driessen, at cfact.org. Environmental crazies have never read, “That Which Is Seen, And That Which Is Not Seen” by Bastiat. They don’t see the cost in land, resources, capital and labor that would be needed to meet the worlds growing energy needs. And that is not even looking at replacing less costly energy from fossil fuels with more costly renewable energy.

Wind News Update: Catastrophic Failures Jump, Maryland Gets Serious, by Lisa Linowes, at masterresource.com. You never hear about the problems with “green” energy in the main stream media. Why?

Norway’s ‘Voluntary’ Tax Plan Brings In Just $1,325, at economicpolicyjournal.com. In Norway if anyone thinks they’re paying too little in taxes, they can send more money to the government. It is shocking that people aren’t voluntarily sending in more money to fund Norways social programs.

Missouri Set To REDUCE St. Louis Minimum Wage From $10 to $7.70, at economicpolicyjournal.com. Excerpt from the article: “Missouri has discovered that the law of supply and demand applies to wages and that the higher you set minimum wage laws the more unemployment you get. In response, Missouri’s governor will allow a bill to pass that rolls back St. Louis’ minimum wage from $10 back to $7.70, the standard across the state.

Road Congestion: It’s All About Politics, by John Hinderaker, at americanexperiment.org. Minnesota’s Twin Cities traffic congestion can be blamed on bad decisions by politicians. Despite the fact that Twin City drivers time wasted in traffic has quadrupled since 1982, the Minnesota Department of Transportation will spend $700 million on bike and pedestrain infrastructure in the next 20 years and only $265 million on improvements for infrastructure for cars. Why do voters think politicians possess enough knowledge to make decisions outside their area of their expertise. Their area of expertise being getting reelected. HT carpediemblog.

How The FAA Killed Uber For Planes, by Andrea O’Sullivan, at reason.com. Once again government bureaucrats making decisions that squash market solutions that would make the economy more productive. HT carpediemblog

Why Does Michigan License Painters? by Jarett Skorup, at makinac.org. You need to have 60 hours of courses, pass an exam and pay $300 in fees to become a painter. Another example of bureaucrats using power to interfere in free decision making by individuals in the market. HT carpediemblog

FAKE NEWS

CNN’s Ratings Collapse As Primetime Shows Draw Less Viewers than Re-Runs Of “Yogi Bear”, at zerohedge.com. They are hanging themselves and they don’t even know it. I and some of my friends are watching CNN now because it is so funny. With more people like me watching, how much of their regular viewers are turning them off.

CNN President Jeff Zucker: “Trump Is Trying to Bully Us“, zerohedge.com. The mainstream media is accusing Trump of what they have been doing for years. The difference is Trump won’t cave into their bullying like other Republicans, and they don’t know how to handle it.

AWESOME The Truth Will Out, at targetliberty.com. The Washington Post is forced to retract.

Triggered: CNN’s Jim Acosta Accuses Trump Of “Fake News Conference” In Poland, at zerohedge.com. These people don’t realize that they’re actions prove their bias. We can see it. They can’t. That is why this is so funny.

Rachel Maddow Caught In Latest Fake News Scandal; Proof Her “Forged NSA Document” Segment Was a Hoax, at zerohedge.com. Rachel is a special kind of crazy person.

CARTOONS

at therightreasons.net.

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Economic Ignorance Has Caused Our Political Chaos.

March 8, 2017

Microeconomics or Micro Economics as a Concept

What do Jeffery Sachs (economics professor at Columbia), Bill Gates, the Pope, Donald Trump and Republicans in Congress have in common?….. Economic ignorance!

Why are  pronouncements by people with authority rarely challenged?….. Economic ignorance!

I found some recent articles on economicpolicyjournl.com which have a similar theme: People with authority demonstrating their ignorance about basic economic principles.

Here are the articles.

Harvard Educated Economist Clueless About The Fundamentals Of Economics.

I Never Realized The Economic Ignoramus Bill Gates Is….Until Now.

The Pope’s Problem With Basic Economics.

Trump In Melbourne Spilling His Economic Plans And How Non-Free Market Are They.

House Republican Border Adjustment Tax Plan Gains Support In White House: Prepare For Higher Prices And Less Product.

Jeffery Sachs, Bill Gates and the Pope don’t have the power of Government behind anything they say. Their authority exists in the minds of the people who believe they have authority. They can’t force their economic ignorance on us

The President and Congress have the power of Government behind their policies. Politicians and bureaucrats can force their economic ignorance on us.

OUR ECONOMIC IGNORANCE

The increasing political chaos existing in the U.S is rooted in the economic ignorance of a vast majority of people. Both the masses, and people with “authority”, bear responsibility for our present political and economic situation.

People with “authority” being economically ignorant creates a problem because we the masses accept what they say as truth. This leads to the passage of Governmental policies which can’t produce the outcomes predicted by the people with authority.

We have the power to be a check on these people with authority. But we reinforce their authority on the one hand, and increase the economic ignorance of the masses on the other, when we don’t challenge the economic validity of what they say.

People with authority always want more power. Their power can’t be increased unless we allow it. Authority not backed by the force of Government isn’t real authority. We voluntarily give people their position of authority.

With politicians and bureaucrats it’s different. Their authority is backed by the force of Government. Our first non-violent voluntary recourse to their power is to vote the economically ignorant out of office, or not to vote them into office in the first place. Our second is putting political pressure on politicians. But this only works if a overwhelming majority of people put political pressure on them.

The ability of politicians and bureaucrats to grow their power, rests on the economic ignorance of the electorate. If the economic consequences of the policies passed by these politicians were known by the voters, they wouldn’t have been passed. Understanding basic economic principles allows us to look over the horizon and see the consequences of these policies.

EXAMPLES OF FAILED POLICIES

The Affordable Care Act aka Obamacare sounds great. But the laws of economics will not allow the ACA to lower the cost of healthcare. The costs can be shifted, but not lowered by government decree. The result of passing the ACA is chaos in the healthcare market, or what is left of a healthcare market.

Increasing the minimum wage for low skilled workers sounds great. But the laws of economics won’t allow increasing the minimum wage, above what that labor produces. The result of passing this law is fewer low skilled workers will be employed.

FORSEEABLE CONSEQUENCES

If, we the people, understood some basic principles of economics we wouldn’t allow these interventionist ideas to be planted, let alone take root.

Some of these basic principles are: 1) Scarcity, 2) Subjective Value, 3) Supply and Demand 4) Production Precedes Consumption.

Lets look at the Affordable Care Act and mandated minimum wage increases through the binoculars of scarcity, and supply and demand.

Scarcity is the first rule of economics. Scarcity simply means, “what everybody wants adds up to more than there is”. Put differently. Their are limited means available to satisfy the unlimited ends we seek. These limited means have to be allocated toward producing the ends we seek. There are two ways to allocate these means. One way is voluntary cooperation, through prices in a free market. The other way is force, through the edicts of politicians and bureaucrats using government power.

Supply and Demand is easy to understand. Put simply; More is demanded and less is supplied at a low price, and more is supplied and less is demanded at a high price. Prices reflect and drive supply and demand. If their is a sudden drop in the supply of a product, the price rises. This increase in price rations the existing supply, and sends a signal that more needs to be produced. On the flip side of the coin, if their is a sudden increase in the supply of a product, the price will go down. This decrease in price sells off the existing glut, and sends a signal less needs to be produced.

AFFORDABLE CARE ACT AND MINIMUM WAGE LAWS

The Affordable Care Act forced “30 million” uninsured people to enter the healthcare market. This meant the demand for healthcare was going to increased. Even though the supply of healthcare couldn’t be increased as quickly. (Example) It takes years for people to become doctors and nurses. Increasing the supply takes more time than the almost instant increase in demand brought about by the stroke of pen. If we apply the economic principles of scarcity, and supply and demand to the Affordable Care Act, what was going to happen to the price of healthcare? And this is not even calculating the cost of the regulations and new bureaucracy created by the 2500 page bill.

Raising the minimum wage increases the price of labor. According to the law of supply and demand, less is demanded at the high price. Voting for laws which increase the wages of people who we think are not being paid enough doesn’t help these people. Fewer people will be employed at the higher price. Many times these low skilled workers jobs will disappear all together because they can be replaced by automation. The price of labor was artificially increased to the point where it was economical to automate (read here). If we apply the law of supply and demand to the rhetoric of increasing the minimum wage, people wouldn’t have been fooled into thinking they were helping the people the law was actually hurting..

OUR CHOICES

Economic principles are always in play. Government edicts can’t negate economic reality. The political chaos we have today is the result of ignoring the reality of basic economics. We can’t wish these realities away because we don’t like the fact they limit what we demand.

I’m going to quote a person with authority at this point. So don’t take this quote as authoritative. Figure it out yourself.

F. A. Hayek a Nobel Prize winning economist, (how is that for status), said: “Planning, or central direction of economic activity, presupposes the existence of common ideals and common values; and the degree to which planning can be carried is limited to the extent to which agreement on such a common scale of values can be obtained or enforced.

Let’s get educated in basic economics. Life is easier to understand when you understand how the world works. Here is another quote.

F. A. Hayek: “The curious task of economics is to demonstrate to men how little the really know, about what he imagines he can design.”

We have two choices. Scarce resources can be rationed through prices voluntarily in the free market. Or Scarce resources can be rationed forcibly by politicians and bureaucrats through the power of Government. Which direction are we moving?

CONCLUSION

Political insiders of both parties have shaped the battle field into a choice between the R’s and the D’s. In reality the real battle is between the insiders in both parties who want to grow the power of Government, and people who stand for free markets and want to cut the power of government. Neither group is a majority. The majority of people are the economically ignorant. These people have been fooled into fighting the battle through the R and D paradigm.

Our job is to educate the economically ignorant. When this majority understands basic economic principles, they will they stop fighting on the fake R and D battlefield and start fighting on the real battlefield: central planning vs. voluntary cooperation.

 

Related ArticleMinimum Wage Laws Create Unemployment, at austrianaddict.com

Related ArticleIncome Inequality Part II: Increase The Minimum Wage, at austrianaddict.com.

Related ArticleThe Reality Of Obamacare, at austrianaddict.com.

Related ArticleThe Economics of Healthcare vs. The Right To Healthcare, at austrianaddict.com.

 

Drifting Towards Fascism

September 20, 2016

man drifting in a boat

First let’s define Fascism so we can begin at the same starting point. Fascism is an economic system where the state doesn’t own the means of production, but the state makes the rules that producers and consumers have to follow. There is a bureaucratic layer between businesses and politicians which plans the economy. It is crony capitalism on steroids.

Fascism places politicians and bureaucrats as the ultimate rulers aka decision makers. The individual has no rights or liberty except what the rulers say they have. Order comes from the state, (top down) not from the individual, (spontaneous order).

I saw a great chart (below) showing America’s drift toward Fascism, in an article titled, The Road To Fascism In Just Two Charts, at bawerk.net. I have always thought economic systems fit on a line where at one end no government exists, and at the opposite end there is total government control. Where an economic system is placed on this line depends on how much government intervention exists, or put another way, how little governmental intervention exists.

WHAT IS AN ECONOMY? WHAT IS SOCIAL FREEDOM?

An economy is what results when each individual is free to decide what to produce, consume, exchange and save in a world of scarce resources which have alternative uses. Simply put, you own what you’ve produced or what you’ve received in exchange for your production. It is your property and you have a right to do with it what you wish.

Production is the creation of wealth. Consumption is the destruction of wealth. Exchange is the increase of wealth as both parties place a higher value on what they received than what they’ve given up. Saving is the preference of consumption at some point in the future to consumption in the present. Savings is the basis for capital formation. Capital formation is what increases productivity. Increased productivity is the creation of larger amounts of wealth.

Each individuals decision on what and how much he will produce, consume, exchange and save according to what he  subjectively values in a world of scarcity is the essence of freedom.

In order to have economic freedom you have to have social freedom and in order to have social freedom you have to have economic freedom. In other words, economic freedom and social freedom are different sides of the same coin. Individuals are free to act. Each individual is responsible for the consequences of his actions if they bring harm to others or himself.

I have a quote by F. A. Hayek at the top of my web site. It is my favorite quote because it sums up the choice individuals have faced since the beginning of time:

F. A. HAYEK: “THE COORDINATION OF MENS ACTIVITIES THROUGH CENTRAL PLANNING OR THROUGH VOLUNTARY COOPERATION ARE ROADS GOING IN VERY DIFFERENT DIRECTIONS, THE FIRST TO SERFDOM AND POVERTY THE SECOND TO FREEDOM AND PLENTY.

Let’s take a look at the chart and see what it reveals.

true-political-axis

Zero Government intervention into the economy starts at the bottom left of the chart and moves upward and to the right as Government intervention starts to increase. Zero Social Freedom starts at the top right of the chart and moves downward and to the left as the level of Social Freedom starts to increase.

Communism, socialism, fascism and democratic socialism are on the top right of this chart. They are economic and political systems that strangle individual liberty. Their very nature means intervention into, or control of, what is produced, consumed, exchanged and saved.

Anarcho capitalism, free market capitalism, classical liberalism and our America constitutional founding are on  the lower left of the chart. They are economic and political systems that strangle Government and allow individuals the freedom to produce, consume, exchange, and save as they see fit.

What exists today is the middle ground of crony capitalism, crony socialism and other forms of government interventionism. This is the utopian middle ground that elites think mixes the best parts of both ends of the chart. They know that free market capitalism produces great amounts of wealth as seen by our standard of living. But the elites don’t like the way the wealth is “distributed” and want to use the force of government to make this distribution  “fairer” according to their idea of “fair”.

The elites attempt to redistribute wealth differently than it would exist in the free market, creates incentives that ultimately decreases the wealth that is being produced. It divides us into groups that can be pitted against each other by political opportunists.

These statements by Ludwig von Mises tell us all we need to know about the above chart:

The issue is always the same: the government or the market. There is no third solution.”

The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”

Anti capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled “progressives” interpret as evidence of the failure off capitalism are the outcome of their allegedly beneficial interference with the market.”

CONCLUSION

We are in the chaotic middle. Our choice is to move towards freedom and free markets. It is going to take a lot of time and effort to educate enough people in order to tip the scales toward freedom. Is the cost too high? It’s your decision.

 

Related ArticleCapitalism vs. Crony Capitalism, at austrianaddict.com.

Related ArticleSocialism Sounds Great, at austrianaddict.com.

Related ArticleWhat Creates Wealth? Freedom, at austrtianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

 

Reaction To EpiPens Increased Price, Reveals Our Economic Ignorance.

September 1, 2016

SAINT LOUIS, UNITED STATES - AUGUST 25, 2016: Two EpiPen auto-injectors used for treatment of allergic reactions.

The angst over the recent price increase of the product EpiPen, reveals our economic ignorance. This economic ignorance in and of itself wouldn’t be a problem in a free market capitalist system. Unfortunately we live in a crony capitalist economic system, where more and more economic decisions are being made through the political process. Businesses are being forced to obey interventionist laws passed by Congress, on the one hand, and cave in to political shaming by ignorant consumers and politicians on the other.

When this point is reached, companies are incentivized to put their resources toward lobbying Congress to pass laws that favor these incumbent businesses. They also donate money to politicians and political parties which is like paying protection money to the mob.

All of these resources could have been used to satisfy consumer demand. But these companies have decided that these resources can best serve their interest if they are invested in lobbying government. This is not how free market capitalism works. This is how crony capitalism works.

The EpiPen kerfuffle is an example of how our economic ignorance has allowed politicians to place the blame for the price increase on Mylan, the producer of EpiPen. The blame should be placed on the very politicians who are doing the finger-pointing. Government intervention into the healthcare market over the last 75 years, culminating in The Affordable Care Act (aka. Obamacare), is what has caused prices to skyrocket. Let’s take a look.

ECONOMICS 101

EpiPen is a product that delivers a life saving dose of epinephrine to individuals who have severe allergic reactions to food, insect stings, and medicines. Lets look at the economic reality of how EpiPen magically appears to perform its life saving task.

As much as people want to think that healthcare is a right, they are literally dead wrong. Healthcare in general and EpiPen in particular, is an economic good. This means it is subject to the first rule of economics which is scarcity.  EpiPen just doesn’t appear out of thin air as if we lived in the Garden of Eden. In the real world, someone has to produce this product, and you don’t have a right to take what a person produces.

The people who produce this product have to be compensated for the cost of production plus a profit. If they can’t make a profit, they would cut their losses and stop producing the product. This is why prices are so important in a free market economy. Prices send information through the production process. Government intervention increases the cost of production, which in turn sends false information through the pricing system.

CENTRALLY PLANNED HEALTHCARE

The Healthcare system was one of the most regulated industries before the Affordable Care Act (aka Obamacare) was passed six years ago. There is no true price discovery in our current healthcare system. This means information about which healthcare goods and services should be produced and in what quantity they should be produced doesn’t exist.

When third-party pays, whether it’s an insurance company or Government, prices are distorted. If you add the fact that insurance companies have to abide by the rules set by Government it is worse. Take a quick glance at this article, EpiPen Price: What To Know, at webmd.com, to see how much Government intervention there is in the healthcare system. Government intervention is essentially an attempt at price-fixing. Price fixing distorts the information sent through the market.

Government has created the monopoly position that Mylan holds with EpiPen. Government regulations have made it more difficult for competitors to enter the market and produce an EpiPen like product. Scan this short article, Why The EpiPen Has A Monopoly (Hint It Is Not Runaway Capitalism), at thelibertarianrepublic.com, to see how Government planners created the monopoly position for Mylan that allows the price to soar.

Supply and demand chart drawn on a blackboard.

SUPPLY AND DEMAND RULE THE DAY. EVEN IN A HAMPERED MARKET.

At a lower price more is demanded and less is produced. At a higher price more is produced and less is demanded. This is the law of supply and demand.

Government had artificially lowered the price, that people were paying for EpiPen, through Insurance mandates and Government subsidies. Because of the artificially low price, demand increased. When Auvi-Q, one of the other two producers of automatic injection devices for epinephrine, was taken off the market by regulators in October of 2015, overall supply was reduced. What happens when demand is increasing and supply is decreasing? The price has to go up to ration the scarce resource. Is this a good thing? It is neither good nor bad. It is just the reality of prices. Prices discovered through free markets not only coordinate supply and demand. Free market prices also reveal the scarcity that exists. But free market prices don’t create the scarcity.

Let’s look at the price of oil to understand what would happen if there were free markets in the healthcare system. When the price of oil was around $120 dollars a barrel, there was talk of oil going to $200 a barrel. But what happened. People started using less, demand started to decrease. At these higher prices fracking became economically viable. The supply of oil started to increase. Frackers started to find more productive methods of extracting oil from the ground. As supply increased and demand decreased the price of oil started to decrease. Because of these more productive methods, fracking wells could keep supplying oil at lower and lower prices. Because supply remains high and demand has just marginally increased, the price has remained low.

Even though Obama’s EPA took government land off-line for fracking, that didn’t keep fracking from happening on privately owned land. The free market pricing system worked to supply more oil to the market at a lower price. Bureaucrats in Government didn’t do this, free markets did. What does this have to do with the price of EpiPen?

In a free market the rise in the price of EpiPen would do two things. People would start using less. And companies would start supplying more. The price would eventually go down.

Because of Government intervention their won’t be new suppliers even at the higher price. They are being restricted from entry into the market by Government rules. Supply won’t increase like supply increased in the oil sector.

If Government and insurance companies subsidize the purchase of EpiPen, and Mylan gets bullied into lowering prices, their will be no true price discovery. False information about production and consumption will be sent through the hampered market. Their will be over consumption and under production of EpiPen. The more the planners plan the more their plans will not work.

CONCLUSION

Central planners, and people who vote for central planning, think that whatever is decreed, will happen. Unfortunately for them economic laws are more powerful than central planners mandates. Unless more companies are allowed to supply EpiPens, the artificially created shortage will continue. If the price is artificially kept below what it would be in a free market, demand will remain high. High demand and short supply means EpiPen will have to be rationed by bureaucrats in Government instead of by prices in a free market. Look at the waiting lines in Venezuela if you want to see what rationing by Government looks like.

The answer? Get rid of Government regulations and let free market prices work. Until people gain understanding about free markets, they will continue to get fooled by slick politicians, and we will remain in this political quagmire.

 

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Government: Is It Ever Big Enough? by Prager University

April 26, 2016

Will Government ever stop its intrusion into our lives?

How can the growth of Government be stopped?

Here some excerpts from the video.

“A government powerful enough to give you everything you want, will also necessarily be powerful enough to take away everything you have. Including your freedom. Government power must be limited because the alternative is unlimited Government.

(Modern day) “Liberals believe that if there is a societal problem they believe the best solution is a new Government program. If it fails to achieve its goal, which it invariably does, the solution is a bigger Government program – More – and when does more become enough? The honest answer is NEVER“.

SHACKLE  THE GOVERNMENT TO SOUND MONEY

The Constitution was supposed to control the size of government. Since “the Constitution is no threat to our current form of government,” as Joseph Sobran has said, the only way to shrink Government is to get back to sound money. As long as Government can fund itself via The Fed’s electronically printed counterfeit money, there isn’t much that can be done. Cutting the size and scope of government is the real solution to the problem, but we all know that shrinking government is almost impossible because of our political process. No matter who gets in control of congress and/or the presidency, government keeps growing.  In this article by Paul-Martin Foss titled, Sound Money And Fiscal Policy (read here at mises.org), he talks about the relationship between the growth of government and a central banks ability to print money. Here are some excerpts from the article.

“Sound money….. is the most important check on government spending. If money is sound, meaning that the government cannot inflate the money supply at will, then government spending will be limited. Remember that governments can fund their operations through three methods: 1.) Taxation; 2.) Bonds, or borrowing; 3.) Inflation.”

“Taxation is self-limiting because at higher tax rates there will be massive tax avoidance and tax revenues will fall, or the government might be voted out or overthrown if people are angry enough. Bonds have to be repaid, which comes from future taxation, so we are back to the self-limiting aspect of tax funding. Bonds also require interest payments, and if a government isn’t creditworthy then the interest payments may make borrowing money prohibitively expensive.”

“This leads us to the third and preferred method, inflation. By creating more money, the government decreases the value of each monetary unit. But it normally does so in a slow enough manner as to be barely perceptible to the average person. And where does this newly-created money go? Why, to the government’s coffers, of course. There it gets spent on wars, welfare, and other boondoggles. In the meantime, the newly-created money causes the prices of goods to increase, driving up the cost of living for the average person. In this way, inflation is a stealth tax. Its effects are just as insidious as direct taxation in that it takes money from citizens and deposits it into government coffers, but it does so in such an imperceptible way that very few people realize that they are being fleeced. That allows governments to spend far more money than they otherwise would be able to by relying on taxes and borrowing alone, which is why governments prefer it.”

Sound money and the Fed are subjects not many people had heard about, let alone understood, until Ron Paul shed light on them during his run for president. More people have to understand the concept of sound money, on the one hand, and how the Federal Reserve produces counterfeit fiat money on the other, if there is any chance of reigning in Leviathan.

 

Bernie Identifies Problems: Doesn’t Understand Their Cause.

March 10, 2016

Bernie Sanders has identified problems like increased costs of healthcare, rising student loan debt, and the financial crisis of 08. Unfortunately Bernie thinks the cure for these problems can only come from the very entity that caused the problems in the first place, and that is government and the Federal Reserve. He is like a doctor who finds his patient has lung cancer, and thinks the cure is to smoke more cigarettes. He doesn’t understand that cigarettes caused the cancer in the first place. Government intervention has caused the rising costs of healthcare and college education, and the Feds easy money policies caused the financial crisis. More Government intervention can’t fix these problems it can only make them worse. Individuals making decisions in free markets will improve these problems. I didn’t say free markets would lead to a perfect “solution”, because there can be no perfect solution when human beings are involved. Free markets allow individuals to make trade offs between competing values. In other words markets don’t proscribe one size fits all solutions, that’s what government does. The difference is when government “solutions” don’t work, government gets credit for trying to solve the problem and is given perpetual do overs, while markets are demonized for doing exactly what they are supposed to do (allow individuals to make decisions).

In this article, Bernie, It’s Government That “Rigs” The Economy, at mises.org, Tho Bishop explains that most  problems are blamed on the market economy when in fact it’s government intervening in the free market that causes these problems. Here are some excerpts from the article.

Touching back on Sanders’s indictment of Wall Street regarding the financial crises, perhaps no entity is more responsible for “rigging” the economy than the Federal Reserve — which not only enabled much of Wall Street’s reckless borrowing in the lead up to the crisis, but actively sought to inflate the stock market (at the expense of risk-averse savers) following it. While, to his credit, Sanders has supported the full audit of the Federal Reserve long advocated for Ron Paul, he has fully advocated for the Fed to double down on these very same policies.”

“In fact, almost every example the left points to regarding a “rigged economy” can be directly linked to the State. Be it Pharma Bro and the broken pharmaceutical industry, or the cost of healthcare in America, or the burden of student loans being felt by Millennials across the country, the market is blamed for the sins of government. Capitalism is demonized for the evils of interventionism.”

As Ludwig von Mises wrote in Human Action:

“[Advocates of government intervention] blame the market economy for the consequences of the very anticapitalistic policies which they themselves advocate as necessary and beneficial reforms. They fix on the market economy the responsibility for the inevitable failure and frustration of interventionism.”

“Unfortunately this anti-capitalist mentality continues to dominate politics today. Until that changes, politicians like Sanders will continue to find success demonizing a rigged economy they bear personal responsibility for creating.

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