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Blame Protectionist Policies for Oreo’s Exit from the United States

in Business and Economy, Economic Liberty, Liberator Online, News You Can Use by Jackson Jones Comments are off

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At the end of July, Mondelēz International, which owns the Oreo brand, announced that it would be moving the production of the delicious cream-filled sandwich cookie from Chicago, Illinois to a recently opened facility in Salinas, Mexico. Oreo’s move across the border will take with it 600 jobs.

Marilyn Katz, president of MK Communications, opined on the announcement at the Huffington Post, taking aim at Mondelēz International CEO Irene Rosenfeld. “Certainly Rosenfeld’s move is legal (although whether it should be is another question),” she complained. “But I can find no sense in which it is moral, just or defensible.”

Likewise, Donald Trump, ever the populist know-nothing, blasted the move during a rally last week in Mobile, Alabama. “You know Mexico is the new China. The other day Nabisco, Nabisco; Oreos, right, Oreos. I love Oreos, I’ll never eat them again, okay. Never eat them again,” Trump said. “Nabisco closes a plant, they just announced a couple days ago, in Chicago and they’re moving the plant to Mexico. Now, why? Why? Why?”

One conservative blogger has already opined that the United States’ corporate income tax, currently one of the highest in the world, may have something to do with the move. As a businessman, one would think that would’ve been easy conclusion for Trump.

Another logical conclusion is protectionist price supports that prop up sugar growers in the United States, which raise the cost of overhead to make sweet snacks and junk food. Oreo’s move to Mexico isn’t a new thing. The Wall Street Journal, in October 2013, noted that American-based candy producers were moving overseas, where sugar was available at a cheaper price.

“The leading ingredient in Oreos is sugar, and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar,” Bryan Riley wrote at The Daily Signal. “Sugar-using industries now have a big incentive to relocate from the United States to countries where access to their primary ingredient is not restricted.”

Like the Export-Import Bank, the U.S. Sugar Program is a product of the New Deal, one that was seen by lawmakers as a temporary step to stabilize the economy in the aftermath of the Great Depression. It was supposed to end in 1940, but it has managed to stick around, usually reauthorized every five years in the farm bill, to placate sugar growers.

The sugar program, however, comes with a big price tag for consumers. “The resulting estimated costs to US consumers have averaged $2.4 billion per year, with producers benefiting by about $1.4 billion per year,” a 2011 study from the American Enterprise Institute noted. “So the net costs of income transfers to producers have averaged about $1 billion per year.” An estimate released by the Coalition for Sugar Reform pegs the cost to businesses and consumers at $3.5 billion.

It may be easy to ride the strong populist sentiment against corporations that are sending jobs oversea to score cheap political points, but Oreo’s move to Mexico is a result of a bad, market-distorting, and outdated policy that should come to an end.

381 Million Taxpayer Dollars Turned to Sludge

in Environment and Energy, Issues, Liberator Online, News You Can Use by Chloe Anagnos Comments are off

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On Aug. 5, a team of workers contracted by the Environmental Protection Agency (EPA) spilled 3 million gallons of orange-colored waste from the Gold King Mine into the Animas River in Colorado. The pollutants flowed into New Mexico where it merged into the San Juan River, a critical source of water for Navajo communities.

Local citizens and lawmakers alike are outraged by the lack of transparency from the EPA for the spill and now, the amount of tax dollars given to the firm responsible.

Colorado and New Mexico are now in a state of emergency because of the accident.

RiverNew Mexico governor Susana Martinez said in a press release that she is “concerned about the EPA’s lack of communication and inability to provide accurate information.” Stating that, “one day the spill is 1 million gallons, the next day, 3 million.”

Part of the frustration is the EPA’s failure to disclose the name of the contractor responsible to law makers and media outlets.

However, the Wall Street Journal (WSJ) reported that a Missouri-based firm, Environmental Restoration LLC (ER), was the “contractor whose work caused a mine spill in Colorado that released an estimated 3 million gallons of toxic sludge into a major river system.”

According to a WSJ review of data, ER received $381 million in government contracts since October 2007, approximately $364 million from the EPA and $37 million from work performed in Colorado.

That $381 million is a large chunk of change for taxpayers to spend to have pollutants that were carried to the Shiprock community on the Navajo reservation.

Despite preliminary tests showing minimum adverse health effects, Shiprock Chapter President Duane “Chili” Yazzie told CNN that he is waiting for a definitive all-clear before using river water on crops.

“Our community here, the very critical nature of our predicament is that we are a river-based community and we’re a strong agricultural community and the impact is very, very tremendous,” Yazzie said.

Around 750 families rely on the river to grow melons, corn and other crops.

According to CNN, the Navajo Nation is the first to announce legal action against the federal government. Yazzie said the EPA didn’t alert them about the spill until 24 hours after the incident, placing tribe members’ health at risk.

Navajo Nation President Russell Begaye told CNN that the spill will have a “destructive impact on the ecosystems…that the Navajo culture depends on.” Begaye also said that the Navajo Nation intends to “recover every dollar it spends on cleaning up up this mess and every dollar it loses as a result of injuries to our natural resources.”

Beyond the obvious economic impact, it is the cultural and traditional impact on the community that is the most agonizing.

The river represents a spiritual element that is the basis of the tradition of the Navajo religion and for it to be harmed is spiritually, emotionally and psychologically very difficult, Yazzie said.

Audit the Fed Could Come Up for a Vote in the Senate

in Audit the Fed, Economic Liberty, Liberator Online, Monetary Policy, News You Can Use by Jackson Jones Comments are off

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Sen. Rand Paul, R-Ky., announced on Tuesday several amendments that he plans to offer to the Cybersecurity Information Sharing Act (CISA), a controversial bill that could come up for a final vote in the upper chamber later this week. While most of the amendments are privacy-focused, one of them would require an audit of the Federal Reserve.

audit the fedPaul picked up the “audit the Fed” cause from his father, former Rep. Ron Paul, R-Texas, after his exit from Congress in January 2013. The amendment appears to be the exact same language of Paul’s Federal Reserve Transparency Act, S. 264, which was introduced in January. To date, the bill has 32 cosponsors. Rep. Thomas Massie, R-Ky., has introduced companion legislation in the House, H.R. 24, which is co-sponsored by 184 of his colleagues.

The amendment Paul plans to offer – that is, if Senate Majority Leader Mitch McConnell, R-Ky., doesn’t use procedural tactics to block them – would require the Federal Reserve to give information – such as discussion between the central bank the Treasury Department and transactions with foreign banks – currently excluded from audits conducted by Government Accountability Office under 31 U.S. Code § 714(b).

“A complete and thorough audit of the Fed will finally allow the American people to know exactly how their money is being spent by Washington. The Fed currently operates under a cloak of secrecy and it has gone on for too long,” Paul said in a release on Tuesday. “The American people have a right to know what the Federal Reserve is doing with our nation’s money supply, and the time to act is now.”

The House, in July 2012 and September 2014, passed iterations of the Federal Reserve Transparency Act by strong, bipartisan margins. The Senate, then controlled by Democrats, never took the bills up for a vote.

Federal Reserve Chair Janet Yellen has firmly stated her opposition to transparency at the central bank, claiming that it would threaten its independence. “Back in 1978 Congress explicitly passed legislation to ensure that there would be no GAO audits of monetary policy decision-making, namely policy audits,” Yellen said in December. “I certainly hope that will continue, and I will try to forcefully make the case for why that’s important.”

Any attempt at an real audit of the Federal Reserve would face challenges should Congress actually pass it. The White House, in February, announced its opposition to the bill, calling the measure “dangerous.”

Created by an act of Congress in 1913, perhaps one of the worst years for liberty, the Federal Reserve holds a tremendous amount of influence over the economy. Despite the arguments against stronger audits, the power the central bank holds means more transparency is necessary. The American people have a right to know what the Fed is up to.

Your Electricity Rates May Necessarily Skyrocket

in Economic Liberty, Environment and Energy, Liberator Online, News You Can Use by Jackson Jones Comments are off

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Back in 2007, during his initial run for the presidency, Barack Obama, then the junior senator from Illinois, said that his energy proposals would “bankrupt” a company looking to build a new coal plant. For consumers, he said, “electricity rates would necessarily skyrocket.”

As President, Obama has sought to implement those policies through legislation, though he has been largely unsuccessful. Since Obama can’t get his agenda through Congress, the Environmental Protection Agency (EPA) has, at the direction of the White House, promulgated regulations to clamp down on emissions from coal- and gas-fired power plants.

The EPA rule, which was formally rolled out on Monday, directs these plants to reduce their carbon emissions by 32 percent of 2005 levels over the next 25 years. “We only get one home. We only get one planet. There is no plan B,” Obama said in a speech hailing the new rule. “I don’t want my grandkids to not be able to swim in Hawaii, or not to be able to climb a mountain and see a glacier, because we didn’t do something about it.”

The alarmist rhetoric may be a nice touch, but the rule is going to have negative consequences that will lead to job losses. In April, the American Action Forum noted that 93 power plants, representing some 80,000 jobs, would be in jeopardy because of the rule.

“As we predicted, EPA’s proposed federal implementation (FIP) entails two emissions trading schemes. Of course, Congress has expressly and repeatedly rejected such ‘cap and trade’ schemes, which raises an obvious question: Why is it appropriate for EPA to impose major policies that were refused by Congress? In practice, emissions are virtually synonymous with energy use, and, as a result, EPA’s FIP is not inaccurately labeled an energy rationing program,” said William Yeatman, a senior fellow at the Competitive Enterprise Institute. “Talk about mission creep!”

Consumers, too, will feel the impact. Take, for example, the “clean coal” power plant in Kemper County, Mississippi. The $6.2 billion (originally $4.7 billion) plant, owned by the Southern Company, has been the hailed as example of what the administration hopes to see in the future. But the plant has been plagued by significant cost overruns, which were initially passed onto consumers in the form of a 15 percent rate hike. The Mississippi Supreme Court intervened in the matter and ordered refunds.

Consumers exposed to the EPA’s new climate rule may not be so lucky. It’s expected to cost as much as $479 billion between 2017 and 2031, and there’s no guarantee that it will have any measurable impact. Of course, this rule isn’t about climate change; it’s about controlling Americans who have no choice but to spend more of their money because of regulations that will boost favored businesses selling their products to plants hoping to comply with rules created by the fourth branch of the federal government.

Do Libertarian Ideas Go Too Far?

in Ask Dr. Ruwart, Communicating Liberty, Economic Liberty, Liberator Online, Libertarianism, Taxes by Mary Ruwart Comments are off

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Question:

Ron SwansonI am coming around to libertarian ideas, but so many libertarian policies, while moving in the right direction, seem to go way too far. For instance, the idea of no taxation, only user fees, seems great. But it seems that some taxation would be necessary to pay government workers, maintain ambassadors and embassies to other nations, host state visits from other nations, and (a necessary evil) pay lawyers to defend the government against lawsuits, as well as a host of other little things that there couldn’t be a user fee for. Can zero taxation really stand up to reason?

Answer:

Yes!

Government workers would be paid by those individuals or groups that made their employment necessary. Lawyers defending the government in lawsuits, for example, would be paid for by the guilty party. Since government officials would not enjoy sovereign immunity in a libertarian society, they could be liable for attorney fees and damages for any wrongdoing. In other answers posted on the Web site, I’ve detailed the mechanism by which restitution could be made.

Since a libertarian government would not be restricting trade between nations, establishing embargoes, setting tariffs, handing out taxpayer guaranteed loans, etc., our top officials would not be wining and dining dignitaries from other countries as they do today. Naturally, heads of state from other countries could visit the U.S. at their own expense. Without the ability to pick the U.S. taxpayer’s pocket, however, few would bother.

If embassies were maintained in foreign nations, they would be supported by fees from travelers or others who might utilize their services.

Today, those who are too poor to travel pay taxes to support services for people who can afford to see the world. Taxes are one way in which government makes the poor poorer and the rich richer.


Editor’s Note: As former Advocates President Sharon Harris notes in this article from a past edition of the Liberator Online, making the case for ending the income tax is not a difficult task. One thing to consider when discussing libertarian ideas is the concept of the Overton window, which can be raised with a little help from this post from that same issue.

 

Surprise! The IRS Audited Campaign Donors

in Liberator Online, News You Can Use, Taxes by Jackson Jones Comments are off

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By now, just about everyone knows the Internal Revenue Service targeted Tea Party and other right-leaning nonprofit groups because of their ideological beliefs. But the latest wrinkle in the story, one that hasn’t been widely reported, is the IRS audited donors to right-leaning nonprofits based on the reports they submitted.

IRSAccording to documents obtained by Judicial Watch, in 2010, then-Senate Finance Committee Chair Max Baucus, D-MT, urged the IRS to “survey major 501(c)(4), (c)(5) and (c)(6) organizations .” The IRS complied, in 2011.

“In 2010, after receiving Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35 percent gift tax would be due on donations in excess of $13,000. The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information,” Judicial Watch explained. “A gift tax on contributions to 501(c)(4)’s was considered by most to be a dead letter since the IRS had never enforced the rule after the Supreme Court ruled that such taxes violated the First Amendment. The documents show that the IRS had not enforced the gift tax since 1982.”

“But then, in February 2011, at least five donors of an unnamed organization were audited,” Judicial Watch adds.

One of the groups specifically mentioned as targets by the IRS was Crossroads GPS, which was founded by Karl Rove. The U.S. Chamber of Commerce was also mentioned as an organization that could be subject to scrutiny. Lois Lerner, the disgraced former IRS official who became the subject of congressional inquiries into the IRS’s targeting of Tea Party groups, approved of the gift tax auditing scheme.

“These documents that we had to force out of the IRS prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment-protected lawful political speech,” Tom Fitton, president of Judicial Watch, said in a press release. “And the snarky comments about the U.S. Chamber of Commerce and the obsession with Karl Rove’s Crossroads GPS show that the IRS was targeting critics of the Obama administration.”

“President Obama may want to continue to lie about his IRS scandal,” he said. “These documents tell the truth – his IRS hated conservatives and was willing to illegally tax and audit citizens to shut down opposition to Barack Obama’s policies and reelection.”

The IRS is, perhaps, the most corrupt agency in the federal government – and that’s saying something. The Tea Party scandal and the documents uncovered by Judicial Watch only skim the surface of recent problems. If there’s one federal agency that deserves to be torn apart, brick-by-brick, it’s this one, folks.

By Changing U.S. Policy Toward Cuba, Barack Obama Got Something Right

in Economic Liberty, Foreign Policy, Liberator Online, News You Can Use, Trade & Tarrifs by Brett Bittner Comments are off

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After more than 50 years of a failed foreign policy, President Barack Obama formally announced on Wednesday that his administration will re-open the United States Embassy in Havana, Cuba. The historic announcement comes nearly seven months after the administration set in motion the restoration of diplomatic ties with Cuba.

In 1961, the United States, under President Dwight D. Eisenhower, severed diplomatic ties with Cuba. The tiny island country located approximately 90 miles off from Miami had come under the control of a dictator, Fidel Castro, who’d risen to power more than two years prior by toppling Fulgencio Batista, who was friendly to the U.S. The next administration, under President John F. Kennedy, added to tensions by expanding sanctions against Cuba.

CubaForeign policy experts praised the initial move. In December, Daniel Drezner, a professor of international politics at Tufts University’s Fletcher School of Law and Diplomacy, explained that the foreign policy approach toward Cuba had been a failure.

“U.S. policy on Cuba has been, literally, isolationist — as in, it isolates the United States. Unlike other cases, there is zero multilateral support for sanctioning Cuba — quite the opposite, in fact,” Drezner wrote. “Improving ties with Havana ameliorates a long-standing source of friction between the United States and Latin America. That’s called ‘good diplomacy.’”

At a press conference on Wednesday, Obama said that the new approach “is not merely symbolic.”

With this change, we will be able to substantially increase our contacts with the Cuban people. We’ll have more personnel at our embassy. And our diplomats will have the ability to engage more broadly across the island,” he explained. “That will include the Cuban government, civil society, and ordinary Cubans who are reaching for a better life.”

While there are many entirely valid criticisms of the administration policies, particularly domestic policy, Obama got this one right. There are, of course, critics. Sen. Marco Rubio, R-Fla., whose parents left Cuba before Castro toppled Batista, slammed Obama, claiming that his administration handed Cuba a gift.

“Throughout this entire negotiation, as the Castro regime has stepped up its repression of the Cuban people, the Obama Administration has continued to look the other way and offer concession after concession,” said Rubio in a press release. “The administration’s reported plan to restore diplomatic relations is one such prized concession to the Castro regime. It remains unclear what, if anything, has been achieved since the President’s December 17th announcement in terms of securing the return of U.S. fugitives being harbored in Cuba, settling outstanding legal claims to U.S. citizens for properties confiscated by the regime, and in obtaining the unequivocal right of our diplomats to travel freely throughout Cuba and meet with any dissidents, and most importantly, securing greater political freedoms for the Cuban people.”

“I intend to oppose the confirmation of an Ambassador to Cuba until these issues are addressed. It is time for our unilateral concessions to this odious regime to end,” he added.

Similarly, Sen. Ted Cruz, R-Texas, in a press release of his own, said Obama is “rewarding one of the most violently anti-American regimes on the planet with an embassy and an official representative of our government.” Cruz, like Rubio, plans to stall the confirmation of any nominee to serve at ambassador to Cuba.

Sen. Jeff Flake, R-Ariz., however, was supportive of the policy shift. “It’s long past time for U.S. policy toward Cuba to be associated with something other than five decades of failure,” he said. “It is difficult to overstate the importance of resuming diplomatic relations ‎with Cuba, in furthering our own national interests, benefiting our relations in the region, and encouraging a positive future for the Cuban people.”

The best way to promote the values of political and economic liberty is through open relations and free trade. Those who fail to realize this basic truth are, in reality, isolationists. As Cubans get see more economic liberty, they will desire more political liberty. It may take time, but that’s better than continuing an insane foreign policy approach that allows the Castros to make Cuba out to be victims.

Thank You, Taylor Swift!

in Economic Liberty, From Me To You, Liberator Online by Brett Bittner Comments are off

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Next week, Apple, already an innovator when it comes to how we listen to music, will launch Apple Music. Despite their marketing efforts, I was completely unaware, as I am not a part of what I affectionately call “The iCult.” Unaware until pop music princess Taylor Swift announced that she would not allow her wildly popular album, “1989,” to appear on the multinational technology company’s streaming service, that is.

Taylor SwiftI will admit that I am a fan of Taylor Swift. Her catchy songs, especially from the aforementioned album, get my toes tapping, and when I get to know the lyrics, I might even sing along in the car, while cutting the grass, or even when I’m out on a walk.

Music tastes aside, Taylor Swift did something that I wish more people would, when it comes to things with which they disagree. She withheld her wildly popular album, which is home to four chart-topping singles since its release eight months ago, and used her celebrity, popularity, and audience to affect change in her industry without getting her Congressman or Senator involved to have the government “do something.”

The issue at hand was about Apple’s plan not to pay royalties to artists during the initial 3-month trial they offer to new subscribers to the service, something that Swift found “shocking, disappointing, and completely unlike this historically progressive and generous company“. She points to “the new artist or band that has just released their first single and will not be paid for its success” as the real beneficiaries of her action.

Far too often, we see individuals and groups running to Big Government to change something that they disagree with or are offended by. In both of the instances noted above, people voted with their feet, something I remember Clark Howard saying frequently on Atlanta radio when I grew up. They affected change, not by rallying a City Council to deny a proposed Wal-Mart’s building plan to stop construction or by getting a law enacted in their state that’s named after someone affected by an ultra-rare situation, but by using the power of markets.

I’m pleased to share that Apple reversed course, and all my libertarian Taylor Swift fans (and maybe some who want to listen to the artist that used markets over Big Government) will be able to stream “1989″ on Apple Music during the trial period and beyond.

I would be remiss not to mention that Taylor’s media blitz around this story brought up an interesting take on the contract she has photographers sign. There are some signs of change on the horizon here as well.

Imagine that. All of this was solved by peaceful, voluntary interaction, and NOT the intervention of Big Government

Your Favorite Distilled Beverage May Get a Little Cheaper

in Economic Liberty, Liberator Online, News You Can Use, Taxes by Jackson Jones Comments are off

A bipartisan bill was introduced recently that would lower the per gallon excise tax on distilled drinks, including whiskey and rum.

The Distillery Innovation and Excise Tax Reform Act, introduced by Rep. Todd Young (R-Ind.), would relieve distilleries, especially newer ones, of some of the burdens they face when bringing products to market.

Currently, distilled drinks are taxed at $13.50 per proof gallon. Young’s bill seeks to lower the tax to $2.70 per proof gallon on the first 100,000 gallons produced by a distillery and $9 per proof thereafter.

Barrel

Rep. John Yarmuth (R-Ky.) has cosponsored the bill, which was referred to the House Ways and Means Committee on May 21. Rep. Paul Ryan (R-Wis.) chairs the powerful tax-writing committee.

“All around southern Indiana, many new craft distilleries are popping up, creating jobs and adding to the tax base,” Young said in a release on Wednesday. “But there’s a lot of red tape involved in getting a new distillery off the ground, and this bill helps reduce that burden. In addition, we have many large, established distilleries in our region of the country, and this bill will help them, too.”

The bill has support from the Distilled Spirits Council of the United States (DISCUS) and the American Craft Spirits Association (ACSA). “It is significant that the distillers of all sizes are united behind this important hospitality industry legislation,” Peter Cressy, CEO of DISCUS, said in a joint release with ACSA. “We thank the sponsors for recognizing the economic impact passage of this bill will have for our industry.”

Sen. Gary Peters (D-Mich.) introduced a companion bill in the Senate. Sens. Dan Sullivan (R-Alaska) and Kirsten Gillibrand (D-N.Y.) have signed on as cosponsors of the bill. Although the members represent states with a number of distilleries, the popularity of craft spirits has risen significantly and virtually every state now has distillery.

For the producers, the savings can mean expansion of their operations and more jobs for local communities.

“I started my distillery eight years ago to support Michigan jobs and prove that high quality spirits could be made right here in Michigan,” Rifino Valentine, founder of Valentine Distilling, said in a press release from Peters’ office. “While I’m proud to say we are expanding our facility, so many small distilleries are at a unique disadvantage as a result of the high federal excise tax.”

The bill may be common sense, but similar efforts to lower the excise tax on distilled spirits didn’t move out of committee in the previous Congress.

Free the Hops: Sin Taxes Drive Up the Cost of Beer

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Taxes by Jackson Jones Comments are off

Your favorite frothy adult beverage would be a little cheaper if sin taxes were not part of the equation, according to a new report from the Tax Foundation, a nonpartisan policy research center.

Each state taxes beer by the gallon, with the costs ranging from just 2 cents in Wyoming to $1.29 in Tennessee.

“State and local governments use a variety of formulas to tax beer,” Scott Drenkard writes at the Tax Foundation. “The rates can include fixed per-volume taxes; wholesale taxes that are often a percentage of a product’s wholesale price; distributor taxes (sometimes structured as license fees as a percentage of revenues); case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).”

There is a trend to be found in the rates, as well. States in the Southeast tend to have the highest beer taxes. Seven of the top 10 states with the highest beer taxes are located in the area of the country known as the “Bible belt.” Northeastern states tend to have lower beer taxes.

Beer Tax

Beer Tax

The Beer Institute estimates that consumers pay $5.6 billion in federal and state excise taxes annually. “Surprisingly, taxes are the single most expensive ingredient in beer,” the beer centric think tank notes, “costing more than the labor and raw materials combined.”

Although the Tax Foundation report does not touch on the cost of federal and state regulation of beer, which adds to the cost of production, particular of micro-breweries and small craft beer producers.

In a June 2014 editorial at US News, Matthew Mitchell and Christopher Koopman, both research fellows at the Mercatus Center, explained that the excessive regulations, which are just another form of taxation, create burdensome barrier to entry for small brewers looking to take their product to market.

“Once in business, brewers face more hurdles. Among the least efficient regulations are the ‘franchise laws’ that restrict their ability to sell beer directly to consumers, instead mandating that they sell through distributors. These rules can even dictate how brewers may contract with distributors,” wrote Mitchell and Koopman. “For example, some grant distributors exclusive territories, and others limit the ability of a brewer to choose to work with someone else. A recent survey found that in most cases, these rules make consumers worse off.”

Beer taxes may be an easy target for lawmakers looking to raise revenue for big government programs and regulation may be a convenient way to protect big beer brewers, but these policies are keeping Americans from the frothy goodness that is their favorite brew. Raise a glass and tell your lawmakers to “free the hops!”

Supposedly Sick Coast Guard Members Took Taxpayer-Funded Trips to Vacation Hot Spots

in Economic Liberty, Issues, Liberator Online, News You Can Use, Taxes by Jackson Jones Comments are off

Every fall, Sen. Tom Coburn (R-Okla.) publishes an annual report, known as the Wastebook, highlighting dozens of the worst examples of wasteful spending by federal agencies.

Some of the items in the report may sound unbelievable, but this is the federal government, and one should never underestimate bureaucrats with tax dollars at their disposal. More ridiculous examples from the 2014 version of the report include the $387,000 the National Institutes of Health spent on Swedish massages for rabbits (yes, seriously) and the $200,000 the Department of Agriculture spent to help a New York-based brewer build a beer farm.

Coburn, who earned a reputation as a hardcore fiscal hawk, resigned from Congress last year after a second cancer diagnosis, leaving a need for transparency in federal spending. Sen. Rand Paul (R-Ky.) is stepping up to fill the void left by Coburn’s departure.

On Wednesday, Paul rolled out a new feature on his official Senate homepage, dubbed The Waste Report. According to a press statement, the periodical report “will identify egregious examples of wasteful spending throughout the U.S. government.”

The inaugural edition of The Waste Report focuses on medical waste, specifically a little-known U.S. Coast Guard program that costs taxpayers $1.2 million each year. The Travel to Obtain Health Care Program pays for Coast Guard members stationed in locations where there are no providers to seek medical care elsewhere. The program is available to members in Alaska, Hawaii, and Puerto Rico, though the latter two account for 7 percent of cases.

The Inspector General (IG) of the Department of Homeland Security released an audit in February detailing the inefficiency and lack of oversight in the Travel to Obtain Health Care Program, which costs taxpayers $1.2 million annually.

“[T]he IG uncovered trips from Alaska to Vail, Colorado; Orlando, FL; Scottsdale, AZ; and Savannah, GA,” Paul’s report notes.

“Though a doctor’s referral is supposed to be required before travel is approved, only twelve percent of records had such notes. “

“In total, 94 percent of all records were missing key elements including travel requests, approval forms, cost estimates, and/or doctor’s notes,” the report continues. “This lack of basic documentation prevented the IG from substantiating whistleblower claims that trips – even to Anchorage – were more for shopping than medical care, while also preventing the IG from affirming the need for accompanying spouses (who also traveled at taxpayer expense) to assist patients.”

The Inspector General made three recommendations aimed at improving accountability and oversight in the program, including greater documentation requirements and training. But as The Waste Report explains, “one should not need special training to know that taxpayer funded medical travel should not be approved without a doctor’s note, especially if that travel is for couples’ trips to vacation hot spots.”

Shouldn’t We All Vaccinate So We Don’t Endanger Others?

in Healthcare, Liberator Online, Libertarian Answers on Issues by Mary Ruwart Comments are off

(From the Ask Dr. Ruwart section in Volume 20, No. 9 of the Liberator Online. Subscribe here!)

QUESTION: Shouldn’t we all vaccinate so we don’t endanger others?Vaccination

MY SHORT ANSWER: My recent column “Should Vaccines Be Mandatory?” made a civil liberties argument for the right of people to make personal medical decisions like vaccination for themselves. Several readers expressed concern. They wondered whether people who didn’t vaccinate might endanger others with compromised immune systems who couldn’t vaccinate, such as the elderly or infants.

People with poor immune function are more likely to be exposed to the flu and/or pneumonia than measles from an unvaccinated person. Many thousands of Americans get the flu annually, while less than 200 people each year develop measles. The flu can lead to pneumonia also, making these two infections the 9th highest cause of death in the U.S.

The measures that compromised individuals take to protect themselves from these more common, deadly threats (e.g., avoiding crowds), would protect them from measles as well. These precautions are necessary, because the effectiveness of annual flu shots can be as low as 10%.

Contrary to popular opinion, the measles vaccine doesn’t always work, either. One-half of Canadian cases of measles come from vaccinated individuals; in the U.S., about one-third of people in a measles outbreak have received one or two doses of the vaccine.

Only about 25% of those vaccinated maintain measles immunity for 10 years or more; 75% of the vaccinated population loses their protection before that, although they often get a milder form of measles if infected.

As one might expect, the immune system doesn’t respond as strongly to a vaccine as it does when it mounts a full scale response to an actual infection. Only people who have had measles as a child can expect a lifetime of protection.

I had measles before we had the vaccine. Back then, some people purposefully exposed children to make sure they had immunity to measles, mumps, and occasionally other childhood diseases. Parents wanted to be sure that their girl children especially had immunity, as getting measles while pregnant could be detrimental to the unborn child. The good news is that many of our seniors probably still have immunity to childhood diseases, even if they haven’t been able to vaccinate.

In conclusion, universal vaccination for measles is unlikely to significantly protect compromised individuals, not only because the vaccine has limitations, but because other infections (e.g., flu, pneumonia) are the real threat. If an immune-compromised individual alters their lifestyle to avoid those more common, deadly infections, they are likely to avoid the measles too.

Inexpensive Vitamin A is currently being studied as a treatment and preventative for infections, including measles. If my immune system became compromised, Vitamin A supplementation is something I’d likely explore.

* * *

LEARN  MORE: Suggestions for additional reading, selected by Liberator Online editor James W. Harris:

* “Vaccine Controversy Shows Why We Need Markets, Not Mandates“ by Ron Paul, M.D., February 8, 2015. Excerpt: “If government can mandate that children receive vaccines, then why shouldn’t the government mandate that adults receive certain types of vaccines? And if it is the law that individuals must be vaccinated, then why shouldn’t police officers be empowered to physically force resisters to receive a vaccine? If the fear of infections from the unvaccinated justifies mandatory vaccine laws, then why shouldn’t police offices fine or arrest people who don’t wash their hands or cover their noses or mouths when they cough or sneeze in public? Why not force people to eat right and take vitamins in order to lower their risk of contracting an infectious disease? These proposals may seem outlandish, but they are no different in principle from the proposal that government force children to be vaccinated.”

Valentine’s Day: Uncle Sam Breaks Taxpayers’ Hearts

in Business and Economy, Communicating Liberty, Liberator Online by Sharon Harris Comments are off

(From the One-Minute Liberty Tip section in Volume 20, No. 6 of the Liberator Online. Subscribe here!)

Cupid

As I often point out, holidays can be a great time to share libertarian ideas with family and friends. It’s even more fun and effective if you’ve gathered liberty-themed facts, figures and stories specific for each holiday. We often share such information in the Liberator Online as a holiday nears.

With Valentine’s Day upon us, I’m pleased to present the following information from Americans for Tax Reform (ATR) about how much government is adding to the cost of your Valentine’s Day celebration. It’s shocking stuff, sweetened just a bit by ATR’s trademark humor.

Government Versus Valentine’s Day
(from Hayley Robinson, Americans for Tax Reform)

This Saturday is Valentine’s Day. Romantics all over the nation have spent the week buying gifts and making dinner plans, all at a considerable price. Last year the National Retail Federation estimated consumers would spend a whopping $17.3 billion on Valentine’s Day — an average of $133.91 per person.

But that price is driven up enormously by an unexpected third wheel — Uncle Sam. Valentine lovers certainly won’t love discovering that, for almost every part of the day spent with that special someone, government taxes and fees send costs skyrocketing.

Consider:

Roses and Valentine’s Cards: These are romantic must-haves for many people. An estimated 233 million roses are grown for Valentine’s Day, and consumers will spend $1.9 billion on flowers145 million Valentine’s cards will be purchased for the occasion. Over $1 billion of the money spent on cards and flowers goes to… you know who.

A Romantic Dinner for… Three? Yep, save a chair at the table for Uncle Sam. $3.5 billion is spent dining out on Valentine’s Day — and a hard-to-swallow 31% of the cost of your bill comes from government taxes.

Wine: If you’ve been saving a nice bottle of wine for the occasion, be sure to savor it — 33% of the cost is due to government. That’s enough to drive you to drink… if you could afford all the taxes.

Chocolate: Consumers will spend nearly $1.3 billion on chocolate. Of this, 31% will be paid to the government. Ugh — that dessert just got a little less sweet.

Jewelry: In 2013, 6 million people expected or planned a marriage proposal on Valentine’s Day. In 2014 it was projected that $3.9 billion would be spent on diamonds, gold, and silver. But beware, the government is standing right there beside you as you pledge your love — and taking a 36% cut of the cost of your glittering symbols of love.

Cell Phones: If you’re in a long-distance relationship and can’t travel to see your sweetheart, hopefully you’ll still be able to give them a call. You might want to keep it short, though: Uncle Sam will be on the line as well, and he’ll be responsible for 40% of the cost of your bill.

Travelling: Making a surprise visit to your long-distance loved one? Whether you’re driving or flying, you’re paying Uncle Sam for the privilege. Last year 45% of the cost of gasoline was due to government taxation, while other taxes and fees accounted for 44% of the cost of airfare. An annoying backseat driver or snoring seat mate would be much better than the travel companionship offered by Uncle Sam.

ATR sums it up this way: “Single or steady, taxpayers will remain heartbroken this Valentine’s Day — when it comes to the costs imposed by the government.”

The Coming Government Debt Explosion — and How to Deal with It

in Business and Economy, Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 6 of the Liberator Online. Subscribe here!)

The U.S. ship of state is sailing full steam ahead — straight toward a massive debt iceberg. Debt Iceberg

Here are some genuinely shocking figures from “Medicare and Social Security Tabs Coming Due,” an article by Michael Tanner, senior fellow at the Cato Institute, in the March 2015 issue of Reason magazine:

  • The national debt recently reached $18 trillion — approximately 101 percent of the United States’ GDP.
  • The Congressional Budget Office projects the debt will rise to $27.3 trillion within the next decade. 
  • But those numbers are actually far too low — because they ignore Social Security and Medicare’s unfunded liabilities. Add those in, and the national debt hits $90.6 trillion.
  • Social Security, Medicare and Medicaid are responsible for fully 47 percent — nearly half — of federal spending, and they continue to grow. 
  • Social Security has a $24.9 trillion shortfall, while Medicare has $48 trillion in unfunded liabilities. Should healthcare costs rise, the Medicare figure could soar to $88 trillion. 
  • Just this year, Social Security will have a $69 billion cash-flow deficit. Every year after, that shortfall will worsen. And Medicare is in even worse financial shape than Social Security.

In an article at Vice News last January, Tanner described the difficult choices we face:

“To pay all the benefits promised in the future, Social Security would have to increase the payroll tax by as much as half, or find that revenue elsewhere. The government can always cut benefits, but without a tax increase those benefits would have to eventually be slashed by 23 percent. That would be very hard for seniors who depend on the program to get by.”

What to do about these problems? You can read Cato’s proposals for reforming Social Security at their Social Security reform website.

Cato’s research and proposals for health care and welfare reform (including Medicare and Medicaid and Obamacare) can be found here.

Libertarian Party presidential candidate Harry Browne offered his plan for replacing Social Security with consumer-based choices in his 1996 book The Great Libertarian Offer. Though the numbers are a bit dated, his explanation of Social Security’s problems, and his solution, remain very relevant, elegant, and easy to read and understand.

For a quick overview of genuine market-based health care reform, see this short 2015 article “What True Health Care Reform Would Look Like“ by Matt Battaglioli, published by the Mises Institute.

Finally, see “How to Eliminate Social Security and Medicare“ by George Reisman (Mises Institute, 2011) for more reasons why these programs should be eliminated, and a plan to accomplish this.

The Great Libertarian Idea in President Obama’s 2015 Budget

in Business and Economy, Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 5 of the Liberator Online. Subscribe here!)

 Surprise! There’s at least one great — and solidly libertarian — idea in President Barac

Occupational LicensingObama’s 2015 budget: cutting back the plague of occupational licensing.

In an item entitled “Reducing Unnecessary Occupational Licensing Requirements” Obama announces plans to “reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do,” noting that occupational licensing is “putting in place unnecessary training and high fees” in many fields.

President Obama proposes a $15 million in grants to states for “identifying, exploring, and addressing areas where occupational licensing requirements create an unnecessary barrier to labor market entry or labor mobility…”

This is yet another example of a libertarian/free market idea bursting into the mainstream.

Libertarians at the Institute for Justice, the Reason Foundation and elsewhere have long pointed out the harm of occupational licensing requirements.

For example:

  • Occupational licensing laws — found in all 50 states — restrict entry into over 1,100 different occupations.
  • They have grown explosively. In the 1950s, less than five percent of American workers were required to obtain a government license to do their job. But today, that number has passed an incredible 30 percent — meaning one in three Americans must obtain permission from the government to pursue their chosen profession. 
  • The cost of these laws to consumers is astonishing. One 2011 study estimated that occupational licensing laws increase costs to consumers by a whopping $203 billion per year. As a result, some people are not able to afford some services, including crucial ones like dental care. A 2009 study found that states allowing dental hygienists to provide routine dental care had fewer adults with missing teeth than those that did not.
  • Occupational licensing laws destroy millions of American jobs — by one estimate, a whopping 2.85 million jobs. They make it prohibitively expensive or too difficult for newcomers to enter fields in which they have competency but can’t afford costly and unnecessary training and licensing. 
  • Occupational licensing laws slow or even halt innovation. One recent example is the use of licensing regulations for taxi drivers to halt new, highly competitive app-based services such as Uber.
  • Among the occupations in which entry is restricted by licensing laws: interior decorators, hair braiders, foot massagers, animal breeders, bartenders, funeral attendants, upholsterers, shampooers, music therapists, auctioneers, talent agents, and ballroom dance teachers. 

Of course, supporters of occupational licensing argue it is needed to protect the public from unscrupulous or incompetent practitioners.

However, reports the Institute for Justice: “Research to date — on occupations as diverse as school teachers, interior designers, mortgage brokers, dentists, physicians and others — provides little evidence that government licenses protect public health and safety or improve the quality of products or services.”

Astute Liberator Online readers can probably guess the real reason these laws exist.

“These laws are created under the guise of ‘helping’ consumers,” wrote Adam B. Summers of the Reason Foundation in a 2007 study. “In reality, the laws are helping existing businesses keep out competition, restricting consumer choice, destroying entrepreneurship, and driving up prices.”

Further, many of these occupations are in fields where, in the past, the poor, immigrants and other challenged workers — those with the least resources — have been able to get a toehold in the economy.

To learn more, check out these resources:

Writing at National Review Online, economist Veronique de Rugy sums up the problem nicely:

“People who want to work, start businesses and make a living shouldn’t have to ask the government for permission to do so. Consumers can take care of themselves, especially with our sharing economy and the easy feedback mechanisms it offers. …

“Many of the licensed occupations have traditionally provided low-income Americans with a path to self-sufficiency and upward mobility. By erecting barriers to entry to these occupations, we erect barriers to entry to the American dream.”

Government Regulation to Cost Americans $1.882 Trillion This Year

in Economic Liberty, Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 5 of the Liberator Online. Subscribe here!)

Free to ProsperA new report by the Competitive Enterprise Institute (CEI) estimates that government regulation will cost the American economy a staggering $1.882 trillion in 2015.

This is larger than the entire GDP of all but 11 countries in the entire world — including major developed nations like Australia and South Korea.

Further, the regulatory burden is constantly growing. In 2014 alone, 3,541 new regulations hit the books. Complying with regulations will take an estimated 9 billion hours of paperwork. CEI contends such regulation drives up the cost of goods and services, destroys jobs and damages the economy in other ways. They also point out this huge expense is largely out of control — unmonitored and unaccountable. Many regulations are inefficient, unnecessary, destructive, and would be far better handled by market mechanisms.

The report, “Free to Prosper: A Pro-Growth Agenda for the 114th Congress,” can be read for free and includes CEI’s suggestions for reform.

Uber Revolution Shows How “Competition Breeds Competence”

in Business and Economy, Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 4 of the Liberator Online. Subscribe here!)

UberThe reaction of taxi companies to the sudden new competition from Uber and Lyft is revolutionizing the stuck-in-its-ways taxi industry — and it offers an excellent demonstration of how strong competition enormously benefits consumers, says economist Mark Perry at his blog Carpe Diem.

Writes Perry:

“When government agencies or heavily regulated industries are insulated from market competition, the incentives to offer better service and lower prices, along with the incentives to innovate, upgrade and improve are either significantly weakened or non-existent. But when faced unexpectedly with some market competition, it’s amazing how the normally sclerotic, anti-consumer and unresponsive government agencies or protected industries can suddenly become responsive and consumer-friendly.”

Perry quotes an article from the Los Angeles Times:

“All taxicab drivers in Los Angeles will be required to use mobile apps similar to Uber and Lyft by this summer, according to a measure passed by the Los Angeles Taxicab Commission this week.

“The order, passed on a 5-0 vote, requires every driver and cab to sign onto a city-certified ‘e-hail’ app by Aug. 20 or face a $200-a-day fine. The move is seen as a way to make taxicab companies more competitive with rideshare apps such as Uber and Lyft.

“Los Angeles cab companies reported a 21% drop in taxi trips in the first half of 2014 compared with the same period the previous year, the steepest drop on record. Cab companies largely attribute the drop to the popularity of app-based ride services.

“William Rouse, general manager of Yellow Cab of Los Angeles, says his company has utilized a mobile app for several years. The app, Curb, allows riders to hail and track a cab, provide payment and rate drivers. ‘If our industry is ever going to get a chance to move passengers from Uber back to taxis, each one of these companies should have an app,’ Rouse told The Times. ‘It’s a shame that the city had to mandate it in order for this to happen.’”

And this stunner, from ABC News last summer:

“Meet the new secret weapon to get a leg up in the cutthroat competition among cabbies — charm school. Taxi drivers in Washington state are getting lessons that they hope will give them an edge against startups such as Lyft and Uber. About 170 taxicab operators paid $60 out of their pockets for a four-hour training session to learn about topics including customer satisfaction and developing relationships with institutional clients.”

Taxi drivers going to charm school to learn how to better please customers? Talk about an economic miracle!

It all demonstrates what Perry calls Perry’s Law: “competition breeds competence.” It’s a perfect example, he says, of how “direct, ruthless, even cutthroat competition is often the most effective form of regulation, and provides the intense discipline that forces firms to maximize their responsiveness to consumers. … Government regulation typically reduces competition, which then reduces the competence of producers, and reduces their willingness to serve consumers and the public interest, which make us worse off. I say the more market competition the better, for consumers and for the human race.”

Food Stamps Shocker

in Business and Economy, Liberator Online, Welfare by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 3 of the Liberator Online. Subscribe here!

Exploding Cost of Food StampsSome startling numbers on the recent explosive growth of the food stamp program (aka SNAP, the Supplemental Nutrition Assistance Program), from journalist Ali Meyer of CNSNews.com:

  • The number of Americans receiving food stamps has topped 46,000,000 for 38 straight months, according to the Department of Agriculture. 
  • In 1969, the average participation in the SNAP program stood at 2,878,000. In 2014, the average participation grew to 46,536,000 — an increase of 1,516.96 percent. 
  • About 14.6 percent of the U.S. population — about one in seven Americans — receives food stamps. 
  • Just under 20 percent of the nation’s households — one in five households — receive food stamps. 
  • Food stamp recipients have exceeded 46 million every month since September 2011.
  • Rapid increase: in October 46,674,364 Americans were on food stamps — an increase of nearly a quarter-million people (214,434) in just one month. According to the conservative Heritage Foundation, the number of food stamp recipients grew by about 26.39 million people from 2003 to 2013.
  • The 46,674,364 people on food stamps in the United States in October 2014 exceeded the total populations of Columbia (46,245,297), Kenya (46,245,297), Ukraine (44,291,413) and Argentina (43,024,374), and is just less than the population of Spain (47,737,941).
  • Households on food stamps got an average benefit of $261.44 in October. 
  • In October alone the program cost taxpayers $5,978,320,593 — just under $6 billion. 

While food stamp (SNAP) enrollment and spending have both grown dramatically under President Obama, the Cato Institute notes that the explosion in food stamp use and SNAP eligibility actually began with conservative Republicans under the leadership of George Bush, via the 2002 and 2008 farm bills.

New Study: Minimum Wage Hurts Low-Skilled Workers

in Business and Economy, Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 19, No. 25 of the Liberator Online. Subscribe here!)

A new paper from the National Bureau of Economic Research brings new weight to the argument that significant minimum wage increases hurt the very people they are intended to help — low-skilled workers, especially teens and minority workers.

minimum wageEconomists Jeffrey Clemens and Michael Wither examine the effects of the minimum wage increases in 2007, 2008 and 2009. They find that minimum wage increases have three devastating effects upon low-skilled workers: “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.”

The study indicates that the minimum wage can keep low-skilled workers from moving up to a middle class income; such workers experience “significant declines in economic mobility.” Charles Hughes of the Cato Institute explains:

“Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.”

Adding weight to these findings is a report earlier this year by the non-partisan federal Congressional Budget Office estimating that a three-year phase in of a $10.10 federal minimum wage option would reduce total employment by a stunning 500,000 workers.

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, nicely summed up at MarketWatch the massive problems created for low-skill workers by the minimum wage:

“Minimum-wage laws criminalize low-skill work. Imagine being forbidden to work. That is the case for people with skills under $8.25 an hour. The federal hourly minimum wage is $7.25, and additional costs, such as Social Security, unemployment insurance, and workers compensation bring the cost of employment closer to $8.25. The minimum wage is one reason why the teen unemployment rate is 18%, the youth (20 to 24) unemployment rate is 11%, and the African-American teen unemployment rate is 28%. Those groups have markedly lower skills than average. …

“When the minimum wage is set above someone’s skill level, that person is left on the sidelines. If people cannot get their first job, how can they get their second or third? People who take minimum-wage jobs gain entry to the professional world. Once they are in, they can keep rising.”

A short, highly readable summary of the negative effects of the minimum wage is the 2004 booklet “Minimum Wage, Maximum Damage: How the Minimum Wage Law Destroys Jobs, Perpetuates Poverty, and Erodes Freedom” by Jim Cox, published by the Advocates and available at our online Liberty Store.

Study: States with Economic Liberty Benefit; States Without Economic Liberty Suffer

in Economic Liberty, Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 23 of the Liberator Online. Subscribe here!)

A just-released study shows that U.S. states with economic liberty benefit greatly from it, while residents of states with less economic freedom suffer badly from the lack of it.

Economic Freedom of North America 2014 is an annual report by Canada’s Fraser Institute that measures levels of economic freedom, and thus economic opportunity, in the 50 states (as well as Canada and Mexico).

Economic Freedom of North America 2014The report defines “economic freedom” as “the ability of individuals to act in the economic sphere free of undue restrictions.”

Elaborating on that: “The freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions such as what is to be produced, how it is to be produced, how much is produced, and for whom production is intended. As government imposes restrictions on these choices, there is less economic freedom.”

The report shows that economic liberty has clear, measurable, dollars-and-cents benefits, writes study co-author Dean Stansel in the Washington Examiner:

“States that have low taxation, limited government and flexible labor markets enjoy greater economic growth, while states with lower levels of economic freedom suffer from reduced living standards for families and less economic opportunity.

“In the three most-free states (Texas, South Dakota, and North Dakota) average personal income is about 20 percent higher than in the three least-free states (Maine, Vermont, and Mississippi) — approximately $48,000 versus $40,000. And the unemployment rate is more than seven percent in Rhode Island (45th) versus about four percent in nearby New Hampshire (5th).

“Furthermore, cities in low-freedom states like California (43rd), Michigan (37th), and Rhode Island have made headlines in recent years for declaring bankruptcy, whereas cities in high-freedom states like Nebraska (5th), Texas, and the Dakotas, have seen incomes and their tax bases expand.

“In the top ten states, total employment grew by roughly 3.5 percent, while it has barely budged in the bottom 10. Over that same period, the economy grew more than eight percent in the top 10, but only by about two percent in the bottom 10.”

Concludes Stansel:

“The research is clear: Where economic freedom is high and rising, the number of jobs is expanding and the economy is vibrant and growing. Where it’s low and declining, the economy is stagnant, limiting opportunity and quality of life for residents of those states.

“Big, costly government at the expense of the people doesn’t work. It leads to economic decline. In contrast, expanding economic freedom increases economic opportunity and provides the path to economic prosperity.”

The report ranks economic freedom along a scale of 1 (lowest) to 10 (full economic liberty). This brings a warning: “Historically, economic freedom has been declining in all three countries. Since 2000, the average score for Canadian provinces on the all-governments index has fallen from 7.8 to 7.6; the number for U.S. states was 8.2 to 7.5.”

The Economic Freedom of North America study is an offshoot of the Fraser Institute’s acclaimed Economic Freedom of the World index, the result of a quarter century of work by more than 60 scholars including three Nobel laureates.

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