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City Uses Pot Taxes to Help the Homeless

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City Uses Pot Taxes to Help the Homeless

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Drug legalization continues to be an important topic. And as local governments look to marijuana taxes as a reliable way to boost their revenue, more Americans now see a greater number of practical reasons to lobby their states to liberate access to cannabis and other prohibited substances.

HomelessIn Colorado, where sales and consumption of recreational marijuana is legal, legalization of pot helped to boost the economy, injecting about $2 million into the local economy during the first month of legalization alone. Over time, the flood of cash coming from pot sales also helped the state’s education system. Now, the Colorado city of Aurora is also putting the legal cannabis money to what many believe to be a top priority project.

According to the Huffington Post, Aurora has recently announced that it will be allocating $1.5 million in recreational marijuana tax revenue for programs that focus on the city’s homeless population.

Due to this program, a local nonprofit group known as the Colfax Community Network should receive $200,000 from this special fund, while other organizations will be provided with vans to be used for homeless outreach. All paid by taxes tied to marijuana sales.

Toward the end of the year, the city of Aurora is projected to raise $5.4 million in marijuana tax revenue, a figure that could prompt legislators across the country to take the idea of the legalization of recreational marijuana seriously.

But what about other recreational drugs?

In March of 2016, a group of 22 top medical experts called for the decriminalization of all nonviolent drug use and possession. According to the group of doctors brought together by Johns Hopkins University and The Lancet, the global war on drugs was and still is a failure. Instead of maintaining these failed policies in place, these experts urged countries to “move gradually toward regulated drug markets and apply the scientific method to their assessment.”

Mentioning torture, abuse, and a dramatic downward change in life expectancy in Mexico since the country’s government decided to militarize its response to the drug trade in 2006, these doctors also cited use of incarceration as a drug control measure, which has destroyed the lives of many nonviolent drug users. Resorting to incarceration as opposed to treatment, these experts concluded, is the “biggest contribution” to the HIV and Hepatitis C epidemics among drug users.

When discussing domestic policy, the same group also concluded that prohibitionist laws in the United States have contributed to “stark racial disparities” when it comes to drug law enforcement.

While the debate surrounding drug use and commerce may naturally lead to a taxation debate, current laws keeping consumers from having access to their drug of choice continue to hurt more than help. Especially in poor areas of the country.

As libertarians all know, the free trade of goods and services is all consumers need to have access to so they may prosper and self-regulate, but if the pot taxation argument helps us bring more drug warriors to our side, we shouldn’t be ashamed of using it.

The damage done by the drug war calls for a drastic change.

Bloomberg Reports: The Gold Standard Is Popular Again

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Bloomberg Reports: The Gold Standard Is Popular Again

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Bloomberg has published an article recently discussing the gold standard, its critics, and its backers. And according to the media company’s assessment, “one of the oldest ideas about money” appears to be finally making a comeback.

GoldAssociating the idea of sound money to a “fringe movement,” mainstream economists and former White House officials are quoted in the article as saying that while they do not like the idea of establishing the gold standard, that’s what “we’ll increasingly talk about” in the future.

According to Tony Fratto, who worked as a Treasury and White House official during the George W. Bush administration, the gold standard “let to some of the worst economic downturns and bouts of deflation in history.”

But the kind of deflation he is talking about isn’t a bad thing.

When discussing economics, many believe that both deflation and inflation are all about the drop and rise in prices. Once you look into the definition of these terms, you’re given an opportunity to understand why Fratto is wrong.

When “Austrian economists talk about inflation or deflation,” the Executive Director at the Carl Menger Center for the Study of Money and Banking Paul-Martin Foss once wrote, “they mean an increase or decrease in the money supply.” Therefore deflation, which is a contraction of money supply is, in fact, dangerous. But when mainstream economics use the term, they use it in reference to a fall in prices, not in money supply.

So what Fratto appears to be particularly afraid of isn’t the contraction in supply of cash, but a fall in prices.

He must really hate competition!

As Foss explained in another article, “the gold standard did not fall away because it was inefficient or counterproductive; it was actively destroyed by governments which did not want to continue to be bound by its strictures.” I

f the gold standard is in place, governments are restricted, and their creative methods of expanding power and reach are, as a result, also restricted. What brought the gold standard to an end wasn’t a drop in prices. Instead, governments sought more control and influence. Getting rid of the gold standard gave them power over the currency and over those who use it.

While the Bloomberg piece claims the idea of restoring the gold standard “is almost inconceivable,” the monetary theory’s growing popularity may be a sign that times are, indeed, changing. Take Russia and China for instance. While neither one of those nations are currently serious about instating the gold standard, they are leading the central bank gold buying spree.

As the price of gold increases, more and more individuals begin to wonder whether they too should get into the practice, exchanging failed, inflated, and worthless fiat currency for a commodity whose value has stood the test of time.

Perhaps Bloomberg’s Michelle Jamrisko is right and the gold standard is, indeed, making a comeback. We just hope it sticks this time.

What Mainstream News Sources Get Wrong About Economic Recovery

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What Mainstream News Sources Get Wrong About Economic Recovery

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The press, author and philosopher Edmund Burke once argued during a parliamentary debate in 1787, is the “Fourth State,” a “societal force” whose powerful influence makes it the perfect tool of the powerful men. All too often, you see this powerful tool being used to shift the blame from government’s intrusive, unproductive policies to taxpayers, in an attempt to make the idea that government always acts with our best interest in mind popular again.

WaPoIn a recent Washington Post article, Robert J. Samuelson takes American consumers to task for not allowing President Barack Obama administration’s economic recovery plan to work. A comment Zero Hedge’s sassy Tyler Durden does not seem to be very happy about.

In a piece exposing the problems with Samuelson’s article, Zero Hedge claims that Washington Post, or what the author calls an “administration mouthpiece,” goes to the extreme of indirectly accusing Americans of being “stingy” when Samuelson argues that the only drag on the economy is “us.”

Since Americans refuse to go out and buy more stuff, WaPo’s Samuelson claims, “American consumers aren’t what they used to be … and that helps explain the plodding economic recovery.”

But according to Zero Hedge’s author, America’s current economic issues may be traced back to other culprits, such as increasing health insurance premiums and the high cost of property and rentals. Zero Hedge also argues that even when looking at the jobs created over the past few years, it’s easy to see that what has risen recently is the rate of part-time or minimum wage jobs, not full-time work. Should the current administration take pride in that?

Once we look deeper into the issues Americans are currently facing, we become more aware of the roots of the economic problems we, as a nation, have experienced in the past decade, making Samuelson’s claims sound shallow.

Soaring national debt and money printing are two problems that directly affect consumers nowadays, whether they are rich or poor. Both of these problems have been devaluing our dollar, inflating prices, and crushing our money’s overall purchasing power. And both of these issues have been the policies of most of US presidents over the past decades.

While economic intervention is a real problem, it’s not the only thing keeping Americans down. Big government’s overpowering regulations are also adding more fuel to the fire by raising a greater amount of barriers to businesses.

The regulatory burden keeps entrepreneurs with little capital in hand from entering the marketplace, depriving workers and consumers from options. That, Mercatus Center’s Patrick A. McLaughlin argues, contributes to poverty.

Without government’s artificially imposed barriers, the American consumer would have a stronger currency to work with, and the unemployed would have better job opportunities.

Unlike Samuelson claims, Zero Hedge reports, the average American is now broke. Samuelson may miss what was once the “world’s most vibrant middle class,” but he does not know how to get us there.

So instead of asking broke Americans to resort to easy credit—yet another issue with today’s economy—so the current administration’s economic recovery finally “works,” how about taking the individual’s struggle to make ends meet under the thumb of government’s heavy-handed interventionism into consideration next time?

How will ending the income tax help the poor?

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How will ending the income tax help the poor?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Question:

I was unable to persuade a liberal friend that the income tax is evil because it is essentially forced labor through coercion, or that we could largely pay for the elimination of the income tax simply by halting our overseas empire (it seemed best to use a liberal priority in this instance). He maintained that eliminating the income tax would benefit only the wealthy. Could you help me show that eliminating the income tax is in everyone’s best interest?

TaxesAnswer:

Ultimately, the poor are hurt most by income taxes and government spending of any kind.

When government spends, it must tax or run a deficit. Both harm the poor. Deficit spending results in inflation. People on a fixed income, low income, or no income at all are hurt most by inflation. The little money that they have buys even less than before.

When government taxes middle or upper income individuals, money is diverted from consumer spending, spending which otherwise would create jobs that might lift some of the poor out of poverty.

Instead, the tax dollars go to government spending, which delivers half the service at twice the price of the private sector. Gross domestic product (GDP), a measure of wealth creation, goes down as government spending goes up (for details, see Chapter 12 of my book, “Healing Our World,” available as a free download [1992 edition] at www.ruwart.com or [greatly expanded and footnoted 2003 edition] for purchase from The Advocates).

Less wealth creation means that goods and services are more expensive than they otherwise would be. The poor are hurt the most when prices rise or do not fall as they otherwise would.

Thus, when government spends, GDP falls and inflation grows, middle and high income individuals cut back on discretionary spending, like vacations; the poor, however, must cut back on necessities, such as food, safe housing, and preventative medicine.

On the other hand, when government spending slows, inflation slows too and jobs increase. Some of the poor move into the workforce and become more affluent.

Income taxes are bad for everyone, but the poor are hurt the most. The hidden negatives are often overlooked, and those who are trying to help the poor often hurt them out of ignorance.

Massachusetts Lawmakers Stand Against Federal Raw Milk Ban

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Massachusetts Lawmakers Stand Against Federal Raw Milk Ban

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Consumers should always have access to the products and services they want and need. As long as these products and services are not used to harm others, individuals are ultimately free to make their own choices, especially when it comes to what they put in their own body. This argument holds true when it comes to drugs, but it’s also true when applied to raw milk.

CowIn the United States, consumer access to milk in its raw form was banned by the Federal government in 1987. Long before then, in 1924, “Grade A Pasteurization” had become a recommended federal policy, but consumers still were able to purchase raw milk without the fear of having to fight the government to have access to it.

In 2011, former congressman and presidential candidate Ron Paul made the news for his pro-raw milk stance, which was turned into an unsuccessful pro-raw milk bill. While many railed it as a victory to the establishment, the movement had just started to shape up.

Following in his footsteps, congressman Thomas Massie took the fight for milk choice to Washington a second time, dropping two bills addressing the same issues. At the time, Massie hoped to restore the farmers’ right to distribute raw milk once again, meeting the needs of their customers.

While his bills didn’t see the light of day, states picked up where he left off, pushing for local legalization of raw milk commerce.

Now, the Tenth Amendment Center reports, an agriculture bill drafted by the Senate Ways and Means Committee in Massachusetts is hoping to expand raw milk sales in the state, helping to nullify the federal ban on raw milk sales locally. An effort that could expand to other states.

According to the Tenth Amendment Center, Senate Bill 2258 incorporates a series of measures relating to agriculture by allowing farms to deliver raw milk to consumers via contractual arrangements. The bill states that licensed raw milk farmers “shall be allowed to deliver raw milk directly to the consumer, off-site from the farm, provided that the raw milk farmer has a direct, contractual relationship with the consumer.”

The bill even allows farmers to sell raw milk from a stand, and whether the stand is or isn’t attached to the raw milk dairy wouldn’t serve as an impediment to local farmers. To Tenth Amendment Center’s Mike Maharrey, S.2258 also “open[s] the door to raw milk sales at farmer’s markets.”

Currently, Massachusetts consumers are only allowed to purchase raw milk on the farm. Expanding sale and consuming liberties helps consumers and farmers maintain a better relationship, protecting the purchase and consumption of raw milk locally once again.

While the bill is limited, it represents a stand against the federal government’s ban.

According to the US Food and Drug Administration, unpasteurized milk poses a higher risk of contamination. While the feds use the higher risk as a reason to keep consumers from having access to the product, state efforts to lift the ban could help the nation see that the criminalization of raw milk has been doing more harm than good to local economies.

It is the Tenth Amendment Center’s hope to see more states following suit, passing their own nullification bills, and helping local consumers to have greater access to the products and services they are willing to take part in, whether the federal government likes it or not.

Nurse Practitioners Want to Help Patients, but Stifling Rules Stand in the Way

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Nurse Practitioners Want to Help Patients, but Stifling Rules Stand in the Way

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The fight to serve Americans freely, offering low income patients the option of having access to affordable care, has been an important battle for nurses in certain states.

According to Watchdog.org, nurse practitioners in Pennsylvania are beginning to question the straining and oftentimes useless requirements they must meet in order to help their patients.

MedicIn many states, nurses with advanced degrees and special certifications are allowed to perform several functions primarily performed by physicians. While giving these nurse practitioners the freedom to help patients without access to expensive health insurance is important, many states limit their effectiveness by forcing nurses to seek the approval from doctors before being able to help patients in need.

To the thousands of patients who benefit from having access to nurse practitioners, the process may seem confusing. But they are not alone, healthcare providers also share their frustration.

To nurse Jerry Driscoll, a nurse practitioner running Primary Homecare, doctors “are signing paperwork on patients they’ve never seen,” making their job extremely difficult. After all, nurses like Driscoll “can order their insulin, but not their shoes” he said.

In an interview with Watchdog.org, Driscoll explained that issuing prescriptions or even ordering medical devices such a simple walker or orthopedic shoes is impossible for nurse practitioners in Pennsylvania, forcing organizations such as Primary Homecare to spend thousands of dollars yearly to maintain collaborative agreements with local physicians.

If Primary Homecare didn’t have to spend $25,000 a year due to the state’s laws, Driscoll explained, he would be able to give his patients much better care. Some of the pieces of equipment Driscoll’s company would be able to afford if laws were different include mobile imaging equipment and other technologies used for blood tests. On top of that, not having to spend so much on agreements with physicians could also lower the cost of care to patients, making access to direct healthcare much more affordable.

Last year, lawmakers in the state sought to put an end to this problem by introducing legislation that would have ended the mandatory collaborative agreements between physicians and nurse practitioners.

While the last attempt had failed in the previous session, the bills introduced in the State House and Senate last year are currently languishing in legislative committees. If at least one passes, Pennsylvania would be the 22nd state to allow “full practice” models, giving nurse practitioners the freedom to practice more broadly but still within the scope of their training.

But before nurses are able to obtain the freedom they require to better care for their patients, they must fight the crony capitalists at the Pennsylvania Medical Society, who are opposing the bills currently under review.

According to the medical association, physician oversight of nurse practitioners is essential. The idea that the arrangement between physicians and nurse practitioners is just a formality is far from the truth, said Karen Rizzo, the president of the Pennsylvania Medical Society.

But according to recent studies, the notion that patients get better care from nurse practitioners in contact with physicians is nothing but a myth.

Nurse practitioners, the five studies conclude, improve patient outcomes while also reducing healthcare costs by as much as 29 percent. One of the studies has also suggested that patients who have access to nurse practitioners have lower hospital admission rates.

As Pennsylvania struggles with 155 areas in which patients have little to no access to adequate health care, loosening nurse practitioner’s requirements could help to give more patients access to quality care at a lower price.

What are lawmakers waiting for?​

LA County Wants to Spend $425 Million Just to Connect Bike Paths (Not Build Them)

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LA County Wants to Spend $425 Million Just to Connect Bike Paths (Not Build Them)

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

In November, Los Angeles County residents will be asked to vote on a new half-cent sales tax increase that would add $120 billion to the county’s public transit fund. The hike would extend the current sales tax for 18 years and raise its rate for four decades. Just the type of tax hike Californians do not need right now.

bikepathlaWhile the proposal was met with enthusiasm by the LA River Revitalization Corporation, a group that hopes to see an “unbroken 51-mile river spine, giving Los Angeles a ‘linear central park,’” the idea of using $425 million of that money to simply connect existing bicycle paths and provide access to the river—which is often mocked over the absence of water—is somewhat hard to process, even for some of the most pro-big government members of California’s media.

While the goal of the proposal is to use the $120 billion to double LA’s existing rail network, LA Weekly focused on the proposal’s goal of linking the bike paths and questioned county officials, asking whether these bike paths would “be paved with gold,” “[l]ined with tuxedo-wearing attendants serving riders hot cocoa,” or perhaps “speakers carefully hidden behind the shrubbery” will be made to play soft jazz throughout the day and that’s why the plan is so expensive.

In an official statement, Metro spokeswoman Pauletta Tonilas responded to the concerns claiming that since the LA river is “constrained by urban development,” and its roads, freeways, and rail provide a great deal of over-crossings, “bike path requires heavy civil construction.”

According to Tonilas, a complete “LA River Bike Path” will function “as the backbone of biking and walking infrastructure for densest parts of” the county.

Even bicycle activists like Joe Linton, who serves as the editor of StreetsblogLA, believe that the county is spending too much on the project. After all, LA Weekly reports, the goal is to “connect the existing paths,” not build new ones.

According to research from 2013, bike paths cost an average $133,000 per mile. The most costly paths can cost about $537,000 per mile. With those figures in mind, LA Weekly claims that the construction of an entirely new, 51-mile bike path should cost Angelenos anything between $7 million and $27 million. So why is the proposal’s estimated cost so high?

While the answer to that question may not be that easy to answer, this is not the first time we hear about bike path proposals carrying hefty price tags. In 2012, New York Governor Andrew Cuomo planned to spend $400 million on a 3-mile bike lane that would have realistically cost about $40 million.

At the federal level, the US government is often targeted by its own watchdog agency, the Government Accountability Office, for wasting billions in improper payments. In 2008 alone, GAO reports, the federal government wasted $72 billion on improper payments. While this particular report is associated with a series of agencies and doesn’t touch on transportation expenditure, it’s a great example of how easy it is for governments to misuse taxpayer money.

In an article for Heritage Foundation, Brian M. Riedl provides us with 50 examples of government waste. And while bike paths haven’t made the list then, it would be incredible to see the overblown expenses tied to the LA County’s bike bath plan getting audited. But first, Angelenos must agree with the proposal in the November ballot.

Brewery Forced to Drop ‘LSD’ From Label—In America!

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Brewery Forced to Drop ‘LSD’ From Label—In America!

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The war on drugs has finally gone too far.

LSDAleIndeed Brewing, a Minneapolis-based brewery, was recently forced to change the name of their LSD Ale after federal regulators thought it sounded too offensive.

Everything had been going alright for Indeed Brewing while it was only selling its products in Minnesota. But the moment the company decided to start selling LSD Ale across state lines, things went sour.

Once the company started working on the licenses needed to expand and start selling outside of the state, federal regulators realized the beer presented a “threat.” The result? Indeed Brewing had to drop the name or stop expansion.

In an attempt to comply without having to drop the product’s name altogether, Indeed Brewing decided to try different hippie-themed labels that kept the beer’s name somewhat under the radar. That didn’t work.

“Unfortunately,” Indeed Brewing co-founder Thomas Whisenand said, “we sell a regulated product and there’s not much you can do when the feds say no.”

To appease federal regulators, the company had to change the ale’s name to Lavender, Sunflower Honey, Date Honey, dropping the terrifying LSD from its labels.

While the name may sound terrifying to some, it does not indicate that the beer is indeed made with LSD. Watchdog.org reports that, if the beer was, indeed, made with LSD, federal regulators would be concerned with things other than the ale’s name. So why are the feds so invested in how the manufacturers chose to advertise the beer?

In the past, multiple states banned the sale of Founders Brewery’s Oatmeal Breakfast Stout because of the baby that appears on the label. According to the Michigan Liquor Control Commission, the advertisement of alcoholic beverages “shall not depict or make reference in any manner to minors,” which prompted the state to ban the sale of the product locally. But what exactly is Indeed Brewery doing wrong?

Nothing, really.

According to research carried out by the Mercatus Center, barriers raised by the federal and state governments are hurting small breweries more than ever, which hurts consumers as a result. Even if the problem is not drug-related, governments will always find something to pick on. It might be a drug-sounding name, or that you do not have a hood for a food oven in your brewery, even though you do not produce food. Or perhaps the fact that your small craft brewery does not have the equipment to handle raw chicken, even though poultry is not an ingredient to any of your products.

According to Mercatus researchers, brewers often face high costs and long waiting times when attempting to obtain a seal of approval from state and federal governments. As associated costs also rise, brewers are often barred from entering the market simply because they cannot afford to meet the unreasonable standards provided by regulators.

In Virginia, for instance, regulators are authorized to deny a small brewer a license because he or she is “physically unable to carry on the business,” or is incapable of speaking, understanding, reading, and writing “the English language in a reasonably satisfactory manner.”

What that even means is beyond reason.

Did the Government Offer a Contract to New Balance in Exchange for TPP Support?

in Business and Economy, Economic Liberty, Economics, Liberator Online, News You Can Use, Trade & Tarrifs by Comments are off

Did the Government Offer a Contract to New Balance in Exchange for TPP Support?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Government has a way of selling incredibly bad economic deals by calling them free trade agreements. Haven’t you noticed?

ShoesThe Trans-Pacific Partnership, or TPP, is a trade agreement between Pacific Rim countries, including the United States, that hopes to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections.” But according to information released by WikiLeaks, only five of TPP’s 29 sections deal with trade.

At the time, WikiLeaks’ Julian Assange claimed that many of the other sections dealt with Internet regulations, which includes details on what specific type of information Internet service providers will be required to collect once TPP is enacted.

To former congressman Ron Paul, TPP is dangerous because of the several items listed in its sections that benefit special interest groups. Instead of opening up the market, Paul argues, TPP would boost “world government,” meaning that international nations would unite for all the wrong reasons, such as spying on its citizens. Opening up the trade among individuals in different parts of the globe, Paul explains, has little to do with the effort.

To folks at Tech Dirt, TPP has always been bad, mostly because of the issues mentioned previously. But as reports claiming the US government has allegedly pressured a shoe company to back TPP in exchange for exclusive contracts hit the news, we learn that power players behind the TPP might be just as corrupt as the politicians under fire in South America over one of Brazil’s largest embezzlement schemes in recent history.

According to New Balance, an American footwear company from Boston, Massachusetts, the US government allegedly promised the shoe company would get a “big government contract” if the company stood by TPP.

Unfortunately for New Balance, the deal never came through.

According to the Boston Globe story, It wasn’t until 2015 that New Balance chose to stop criticizing the deal. Until then, the company resisted supporting the pact for years. If what New Balance now alleges is true, executives only chose to change their tune after the Department of Defense claimed it would consider choosing New Balance for a contract to outfit recruits.

So far, New Balance hasn’t received any official contract proposal, and New Balance now say Pentagon officials are intentionally delaying the purchase.

While the US government claims that the contract problem is not associated with TPP in any way, the company is now renewing its battle against the TPP. For all the wrong reasons.

According to Tech Dirt, New Balance claims that while most of the uniform purchased for the military is made in the United States, sneakers are the exception. With that in mind, New Balance decided to offer its products to the government, hoping to obtain a contract. That’s when a representative for the current administration “more or less” asked New Balance to accept a compromise version of the trade deal in exchange for a pledge of help in pressuring the Department of Defense to expedite the government’s purchase of American-made shoes.

According to the Defense Department, New Balance didn’t get the contract because its sneakers aren’t durable or inexpensive enough. Regardless of what the government alleges, Tech Dirt claims, the idea that the government may have offered the company deal if it sided with its trade deal is “highly questionable.”

Why Florida’s Asset Forfeiture Reforms Don’t Go Far Enough

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Why Florida’s Asset Forfeiture Reforms Don’t Go Far Enough

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

If you only got your news from major publications such as the Huffington Post, you wouldn’t have learned that Senate Bill 1044, which was signed into law by Florida Governor Rick Scott this past Friday, does nothing to help Floridians protect their property from unlawful seizures from law enforcement agencies.

According to Tenth Amendment’s Mike Maharrey, the bill was a step in the right direction. But while the new law attempts to do the right thing, it doesn’t go far enough. It also fails to close the federal loophole that renders state reforms meaningless.

Florida According to SB 1044’s text, prosecutors have to prove beyond a reasonable doubt that property being targeted for seizure is linked to a crime before forfeiture is justified.

The bill also states that suspects must be formally prosecuted and convicted of a crime before asset forfeiture can be implemented. But due to the committee hearing process, Maharrey explains, the bill was somewhat diluted before the final text was sent to the governor’s desk.

Instead of applying the conviction requirements evenly, amendments added to the bill ended up trimming said requirements. Now, all that the law requires is an arrest before most assets are seized. To Maharrey, the fact the bill got a great deal of support from politicians from both sides of the aisles is proof that “reforms didn’t go as far as needed.”

But what the bill does get right can be easily neutralized by federal law.

The fact SB 1044 only restricts state agencies, Maharrey argues, gives local law enforcement officials and prosecutors a choice. Instead of taking on asset forfeiture by using their own resources, Florida can simply hand the case over to the federal government, rendering reforms passed into law toothless when it comes to protecting Floridians’ property from government abuse.

The Department of Justice has seized more than $4.5 billion from property owners across the country, which now sits in the agency’s civil asset forfeiture fund. According to the Institute for Justice, that represents a 4,700 percent increase over the last generation. When added to the Treasury Department’s civil asset forfeiture fund, the numbers are even more staggering. According to Cato Institute, the government took more than $5 billion from Americans in 2014 alone, making this the first time in history that the government has seized more money than burglars stole from private citizens.

According to Tenth Amendment’s Maharrey, the federal government is fighting hard to keep civil asset forfeiture laws in place because “the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness.” Unless the federal government’s Equitable Sharing Program, which the Department of Justice has just launched once again, is slashed for good, state and local police will always have incentives to take part in the practice of seizing private property.

Until then, efforts like Florida’s must be celebrated, but not considered our only way out. State reforms will only be effective if they keep local agencies from having access to the stolen gifts presented by the federal government’s poorly written laws.

What House of Cards Gets (Very) Wrong

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What House of Cards Gets (Very) Wrong

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Sandy Ikeda, a professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism, wrote about why everyone’s favorite TV show is wrong on its portrayal of an economic crisis. In his article for the Foundation for Economic Education, Ikeda argues that, while House of Cards is a major hit among political animals, whether they are progressive, conservative, or libertarian, its portrayal of welfare policies and shortages is extremely unrealistically.

Gas CrisisIn the third season of House of Cards, ficticious president Frank Underwood proposed a major policy program known as “America Works,” a policy that intended to “create” millions of jobs. Despite the superhuman goals tied to the policy, the real-world consequences of such endeavor were never even questioned, leaving a lot to the imagination.

But as Americans binge-watch season four, Ikeda points out to another faulty portrayal of public policy and its consequences. This time around, the show’s writers failed to grasp what a gas crisis actually looks like.

During the fourth season, the show introduces the audience to Underwood’s America, where an ongoing oil crisis threatens Underwood’s popularity among voters. The audience is told to believe that gas prices have soared, nearing the $7 a gallon mark. Yet any “astute first-year econ student” will tell you that this is very unlikely, at least in a country in which price controls haven’t been enacted—yet.

According to Ikeda, if buyers and sellers are free to adjust prices, gas stations all selling gas for $7 a gallon is a fabrication. “In the absence of price controls,” Ikeda writes, “the quantity demanded and supplied will tend to be equal.” That means that markets won’t have any unexpected inventory accumulation, since most of the oil will be sold, but it will also suffer no shortages, since consumers who are scared by the high prices will simply walk away, empty-handed.

To Ikeda, the scenes depicting long lines of angry drivers waiting at gas stations while these same stations are shown running out of gas are completely unlikely to occur in a real world scenario.

Ikeda adds that, the only thing that could actually cause America to experience something similar is the implementation of a price ceiling, making it illegal for gas stations to sell gas above a certain price.

In the 1970s, the Organization of the Petroleum Exporting Countries (OPEC) flexed their monopolistic muscle by pushing oil prices up dramatically. The long lines and rationing in America that followed OPEC’s actions weren’t caused by the artificial price increase. Instead, price control policies that affected gasoline and diesel fuel prices led to the consequences often tied to what we now call the “oil crisis.” Many ignore the fact that President Richard Nixon had imposed wage and price controls on the American economy prior to the incident, and what followed was chronic shortage everywhere, not only at the pump.

While Underwood’s line about the government having “all the men with guns” may be of great inspiration to liberty advocates everywhere, the show’s ignorant remarks on economics may disappoint some viewers.

Why didn’t Netflix use an economic consultant?

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

in Economic Liberty, Economics, Liberator Online, Monetary Policy, News You Can Use by Comments are off

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Many praised Vice President Joe Biden for talking about the “enormous concentration of wealth” in the hands of “a small group of people,” but to Mercatus Center’s economists and researchers Patrick A. McLaughlin and Laura Stanley, the comments seem out of touch.

BarberWhile politicians from both major political parties often refer to income inequality as an issue that must be combatted, anti-poverty policies are mostly ineffective. In order to further their agenda, many of the politicians who promise to “do something” about the inequality problem often resort to higher tax rates and higher minimum wage policies once they get elected, making it even harder for uneducated and inexperienced individuals to make a living.

Being oblivious about the unintended consequences tied to minimum wage policies and higher taxes, researchers and economists from the Mercatus Center say, is what keeps our economy growth sluggish, and our poor from lifting themselves out of poverty.

Instead of repeating the same mistakes by passing more inefficient policies, free market advocates believe that there’s only one policy that will solve the so-called “inequality” problem for good: regulatory reform.

According to a Mercatus study released recently, regulation can be related to income inequality.

Researches argue that erecting barriers to entry ends up discouraging entrepreneurs at the bottom rungs of the income ladder to start a business. What researchers also found is that countries with more restricting entry regulations have higher levels of measured income inequality. Restrictions to entry makes the higher share of income go directly to the top 10 percent of earners, which is why regulatory reform is so important.

Occupational licensing and other policies that prolong the permitting processes are great examples of barriers that increase the cost of doing business. As a result of the enactment of these policies, low-income earners find it hard to join the market.

According to another recent study, the quality of service provided in many areas seldom changes when licensing is introduced. Currently, all states require licenses from truck drivers, pest control applicators, and even cosmetologists, making it harder for individuals to enter the market without a permit. In some states, even florists need a license to do business. With so many barriers, it’s no wonder low-income individuals prefer to steer away from these occupations, mostly because the cost of entering the market is too high.

While workers in the United States face fewer restrictions to enter the market when compared to several other countries, the regulatory cost of doing business is still too high. If America is serious about putting an end to income inequality, researchers argue, we must put an end to entry regulations that keep entrepreneurs from entering the market legally, not enact more barriers whose unintended consequences are bound to create even more inequality.

Wouldn’t It Be Nice…

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

Wouldn’t It Be Nice…

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Last Friday, I had surgery for the first time.

Don’t worry… It’s nothing major, and I’m back at work already. Kinda.

The pain from the incisions and the stitches, both internal and external, is the worst part. To help me manage it, I was prescribed a narcotic painkiller.

In addition to pain management, I was warned about the nausea that often follows anesthesia. The opiates did nothing for me in that regard, and I spent virtually the whole trip home with my head out the window to combat the nausea I experienced.

Unfortunately, I live in Indiana, where legislators are slow to accept that cannabidiol, a compound found in marijuana, can be used to alleviate pain in place of opiate narcotics, as I was prescribed.

Cannabidiol can also alleviate nausea. With the prospect of vomiting being among the worst things that could happen after abdominal surgery, it would have been great not to worry about it.

The side effects of the opiate I was prescribed include lightheadedness, dizziness, anxiety, nausea, vomiting, upset stomach, drowsiness, constipation, headache, mood changes, blurred vision, ringing in your ears, dry mouth, and difficulty urinating. My biggest struggles are with concentration and train of thought.

When I take them, I don’t have the ability to follow the plot of a sitcom. Seriously, I wanted to binge-watch the 4th season of House of Cards during my downtime, but I wasn’t able to concentrate on the 6 episodes of Fuller House (and mindless sitcoms backed up on my DVR) that I watched instead. I’ve also found that I am likely to be trying to have a conversation, only to trail off mid-sentence and be unable to complete the thought or return to it.

Wouldn’t it be nice if my doctor and I could find the BEST way to manage my post-op pain and nausea without the concentration issues that may have made this post unintelligible?

Why aren’t free markets dominating in countries with weak or failed governments?

in Ask Dr. Ruwart, Economic Liberty, Economics, Liberator Online by Mary Ruwart Comments are off

Why aren’t free markets dominating in countries with weak or failed governments?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Question: If a free market with no government oversight and protections for the People is a successful model, then how come countries with failed/weak governments are not mopping up all the worlds’ business?

Free Market

Short Answer: If by “failed/weak” governments you are referring to the Third World, some “mopping up” is indeed occurring. Since governments that exploit their people the most usually have the lowest wages, U.S. and European manufacturers are utilizing the “cheap labor” there. If by “failed/weak” governments you mean something else, please give me more detail and I’ll try to answer you.

By the way, a free market is not one without “protections for the People.” Truly free markets usually require those who defraud or harm others to compensate their victims; this usually keeps them more honest than government oversight does. Indeed, the penalties for violating government regulations usually do little or nothing to restore victims and may even cost them more. For example, those polluting river water were usually successfully sued by those downstream for damages in both Great Britain and the western territories of the U.S. before they became states). Once the U.S. government took over the waterways, however, downstream landowners rarely got compensation, even from the fines imposed by government. They not only had to put up with the pollution, they had to pay taxes for the government oversight.

Makes you wonder who is being protected from whom, doesn’t it?

White House Sacks the Treasury in the Name of Corporate Welfare

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

White House Sacks the Treasury in the Name of Corporate Welfare

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Friday, one day before the President’s day holiday weekend, the Barack Obama Administration announced that $7.7 billion of taxpayer dollars would be allocated to Affordable Care Act insurers through the law’s reinsurance program.

From the Americans for Tax Reform website:

“For 2015 Obamacare reinsurance, the administration will pay out $6 billion raised from a fee on private health insurance and an additional $1.7 billion that under federal law belongs to the Treasury department.”

Seal According to pro-taxpayer organization, at least $1.7 billion of the $7.7 being used to cover insurers is being funneled illegally.

Doug Badger of the Galen Institute explains that ACA’s reinsurance program works by silently taxing every individual in America with health insurance. In 2015 and 2016, each individual with insurance is being allegedly taxed a total of $107. According to Badger, the program is designed to “prop up insurers that have agreed to sell Obamacare policies in the individual market.”

While the administration continues to claim that ACA is working, insurers that participate are losing money. But since the reinsurance program exists to cover the losses of the insurers, the administration seems to think keeping corporations happy with the deal is more important than following the law.

With the failure of the system, and with a growing number of consumers referring to alternative methods to have access to care, the administration is having to get creative.

According to the New York Post, not one dollar out of the $7.7 billion being promised to insurers should be taken from the Treasury under ACA law.

From the New York Post:

“The law states a fixed share ‘shall be deposited into the general fund of the Treasury of the United States and may not be used’ to offset insurance companies’ losses.

But the administration gave all of it to the insurance companies last year, and got away with that heist. So now they’re trying it again.”

While the administration projected it would be raising $12 billion for the ACA reinsurance program in 2014, it was $2 billion short. In order to handle the situation, the administration decided to keep the money from the Treasury, using it instead to hand it over to the participating companies.

The administration isn’t a stranger to this type of move. According to the House Energy and Commerce Committee, at least $8.5 billion in taxpayer money has already been illegally funneled to ACA’s corporate welfare programs.

Another initiative designed to shield insurers enshrined in ACA also seeks to secure the investment of insurers. The initiative is known as the Risk Corridor program, and it has also been tied to scandals in the past.

In 2014, insurers requested $2.87 billion in “risk corridors” payments, but the administration only offered 12.6 percent of that value.

The risk corridor program works by redistributing funds from insurers that make money with the Obamacare exchange to insurers that don’t. Not knowing how sick their customers were going to be due to the new healthcare law and its mandates, insurers were not being able to set premiums realistically, making it hard for companies to turn a profit.

Despite falling short on the risk corridor payments, the administration decided to bail out insurers that weren’t making money off the exchanges last year. ACA chief Andy Slavitt, who’s also the former Vice-President for United Health, made the announcement in December of 2015, saying the federal government was going to bail out insurers and offer them the amount they had previously asked. Later, however, Congress blocked the $2.5 billion “risk corridor” payment. The effort was championed by several conservative and libertarian organizations that came together to urge Congress to act.

If nothing is done this time around, taxpayers will have to foot the bill and cover the $7.7 billion the administration has vowed

Private Initiative Ignites Flame of Real Change in Flint, Michigan

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

Private Initiative Ignites Flame of Real Change in Flint, Michigan

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The Flint, Michigan water scandal has been shaking up the lives of locals, putting their health in grave danger, and alerting the country to the dangers of too much government.

As private organizations like Walmart, Coke, Nestle, and Pepsi take steps to help Flint residents by delivering 6.5 million bottles of water to the city, free market advocates have been arguing that the private sector is the compassionate sector, while the state is often the originator of most of our problems.

HandSanitizer

Now, news about another private initiative in Flint is flooding social media websites, reminding us that the flame of change—and real hope—can only be ignited by the individual.

According to a GoFundMe page by the 7-year-old Isiah Britt from Virginia, kids at the Eisenhower Elementary School, a Flint facility, had become fearful of using the school water to wash their hands when they’d go to the bathroom. In order to make a real change and help the kids in Flint in a meaningful way, Britt decided to start a campaign. The goal? Buy enough hand sanitizer to everyone in his school.

Britt’s effort was celebrated by many who also helped by donating. Now, the 7-year-old has enough money to cover all schools in the city.

The GoFundMe page was created by the child and his mother on February 19 and it has raised over $10,000. On Saturday, the child announced on the page that both he and his mother had raised enough “to send hand sanitizer to every school in Flint!” He thanked the public and asked everyone to “keep going until all kids in Flint have clean hands!!”

The second-grader’s initial goal was to raise only $500 to buy twenty cases of hand sanitizer. But the campaign was so successful that a local news source in Virginia and Michigan decided to pick up the story.

The first shipment of hand sanitizer arrived at Eisenhower Elementary just a week into the fundraiser. Neithercut, Pierce, and Holmes Elementary Schools should be receiving their shipments in the near future.

During an interview with Richmond’s WTVR, Britt told the reporter he had never been happier. “That was the best day of my life,” the second-grader announced. “Trying to help a different school.”

“It doesn’t matter if you’re small. It doesn’t mean you can’t do big things.”

According to Britt’s parents, the 7-year-old now has a new goal, which is to send hand sanitizer to daycare and women’s centers across Flint.

While Britt’s story is a moving one, it hasn’t been the only one to demonstrate the importance of private initiative in the face of crisis.

In January, Humanity First USA partnered with Detroit’s Ahmadiyya Muslim Community to donate 52,400 bottles of water to Flint residents impacted by the crisis. At least 104,800 bottles of clean water were gathered and delivered to two senior citizen homes, three churches, a local YMCA, and to the general Flint public. Many of the bottles were stored at the Salem Lutheran Church. Families in need of clear water were invited to stop by.

The organization still accepts water donations in Rochester Hills, Troy, and the Detroit Metropolitan area.

The Sharing Economy is Challenging Labor Laws, Are Lawmakers Paying Attention?

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

The Sharing Economy is Challenging Labor Laws, Are Lawmakers Paying Attention?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Ride-sharing apps are revolutionizing how people across the country commute. But with the growth in popularity, companies like Lyft and Uber become easy targets for regulators and lawmakers, mostly because laws already in place protect industries that are already losing their appeal due to competition.

Last month, Lyft settled a class-action lawsuit brought by its California drivers. With the settlement, Lyft upheld the freedom of drivers locally by avoiding to classify them as employees. By allowing participating motorists to remain as contractors, Lyft gave drivers the flexibility to control when, where, and for long they work through the platform.

Lyft To many, this was a step in the right direction. But to Christopher Koopman, a research fellow with the Project for the Study of American Capitalism at the Mercatus Center, this victory is not enough.

In an article for The Hill, Koopman says the settlement fails to resolve other issues tied to worker classification laws.

Since sharing economy apps like Uber and Lyft do not easily fit within current state and federal labor laws, Koopman explained, “challenges [to] the status quo of government regulation” will continue to present a legal headache to company executives—and drivers.

In places like New York City, Uber and Lyft stood up to taxi regulations. By doing so, sharing economy apps helped to boost transportation choices for low-income households. At the federal level, Koopman explained, Uber and Lyft are now challenging an 80-year-old law known as Fair Labor Standards Act of 1938, which defines what an employee is. According to Koopman, the Department of Labor’s own interpretations of the 80-year-old law do nothing to clarify the issue, making the lives of individuals relying on Lyft and Uber to pay their bills much more complicated in the long-term.

If this issue is not fixed at both federal and state levels, Koopman says, Uber and Lyft will continue to battle lawsuit after lawsuit. And leaving the decision to the courts, Koopman stated, is “far from ideal.”

As labor laws remain unchallenged by lawmakers, Koopman warns that the sharing economy is not the only one that will suffer.

Using IRS data, Koopman found that the growth in non-employment working arrangements “predates the advent of the sharing economy.” In 2010, the Government Accountability Office estimated, at least 40 percent of workers in America operated under “alternative arrangements.” If their choice had been questioned legally, they would have lost their arrangements, therefore making it hard for folks to make ends meet.

To loosen the restrictions by changing legal definitions could prove beneficial to workers across the country, so why rely on the courts? If that’s the case, Koopman warns, juries, or “ordinary folks simply working with square pegs and round holes” will be tasked with the duty of choosing who should be classified as employees.

Will they choose solutions that boost freedom instead of giving government even more power?

ACA’s Bureaucratic Requirements Force Patients to Lose Access to Care

in Economic Liberty, Healthcare, Liberator Online, News You Can Use by Comments are off

 ACA’s Bureaucratic Requirements Force Patients to Lose Access to Care

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The Affordable Care Act has become a joke among conservatives and libertarians.

Since the passing of the law, mandates concerning enrollment requirements pushed the cost of health care up, forcing countless to not only find themselves uncovered, but also unable to have access to the care they had before Obamacare.

DoctorWhile the overregulation of health care in America is nothing new, ACA accelerated a process that was well under way before President Barack Obama took office. Unfortunately, officials didn’t pay attention to the market signals. What the current administration decided to do instead was to focus on pushing laws based on hopes and aspirations, ignoring the potential consequences.

The story of Walt Whitlow is the perfect example of why politicians should always consider the short and long-term consequences of their policies.

According to the Associated Press, Whitlow was under treatment for cancer when he learned that his financial assistance had gotten slashed under ACA. With a premium costing four times what it cost prior to the passing of the new health care law, his deductible went from $900 to $4,600.

Patient Ana Granado also suffered due to the bureaucratic nature of the law.

Granado had undergone a breast cancer surgery and was waiting to undergo breast reconstruction procedures when she was notified that her coverage had been canceled. Under ACA’s new rules, her immigration status became an issue, which forced her insurer to drop her. While lawyers were able to resolve the issue promptly, her financial assistance for premiums were suspended.

Under ACA, Lynn Herrin’s tax credits for premiums were also questioned by the IRS, forcing her to pay $700 to the taxman. Having issues to find a doctor, Herrin decided to cancel her plan, which left her without any assistance when she later found out she had oral and neck cancer.

As countless Americans and residents ditch their plans or pay more for their previously affordable plans because of complex paperwork requirements, many believe that the law was never written to make health care access affordable.

By adding more roadblocks and mandates, ACA forced many Americans to rely on the government for subsidies so they can afford health care. Under a free market system, they would be dealing directly with insurers and providers instead.

By making the cost of insurance an issue, the federal government created a monster that costs the taxpayers and leaves millions of patients without access to quality care when they need it the most.

Currently, 12.7 million people are covered thanks to subsidies created by ACA. But about 470,000 people had their coverage terminated through September 30, 2015 because of complex paperwork requirements. Another 1 million of households had their financial assistance “adjusted” due to what the government calls “income discrepancies.”

By making the process more bureaucratic than it should be, ACA forced countless of consumers to rely on the government for health care. Elizabeth Colvin of Foundation Communities says people have been panicking when they “get that bill for a full-price plan.” This issue is undermining ACA’s insurance markets, simply because the cost to obtain coverage through the government is too high.

As more and more Americans look for alternative ways to have access to health care, the future of ACA is uncertain. Will the next administration take these matters into account when thinking about reforming US health care law?

Is American Entrepreneurship Dead?

in Economic Liberty, Economics, Liberator Online, News You Can Use by Comments are off

Is American Entrepreneurship Dead?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Promises of a better future post the 2008-2009 recession injected new confidence in the American economy. With the President Barack Obama administration’s push to use public money to stimulate the economy back to recovery, many believed that a full comeback was in order.

But years after the implementation of the stimulus plan, corporate debt continues to increase due to the federal reserve’s meddling, and the participation rate in the labor force continues to fall.

Entrepreneur

As the current administration claims falling unemployment rates prove the stimulus worked, it’s easy to see why so many believe that things are “back to normal.”

But according to Yonathan Amselem, an asset protection attorney in Washington, D.C., things are far from “normal.”

In an article published by the Mises Institute, Amselem explains that after a market crash, the unemployment rate eventually drops, naturally. He also reminds us that the Obama administration took over after the market crash. And that the so-called “recovery” may have just been a sign of a process that would have happened with or without the stimulus.

He also argues that a review of the type of industries that have been growing since the stimulus plan was put into action prove that the creation of jobs alone has nothing to do with economic recovery.

“We are pumping out an army of waiters, social workers, and associate professors with worthless six-figure degrees they have no hope of paying off in this life or the next,” Amselem argued. Instead of “high value, goods-producing workers,” America is producing workers who do not rely on innovation.

Individuals, Amselem argues, are not being encouraged to start businesses. Instead, they seem to believe that they are perfectly capable of turning “a six-year sociology degree into a job that doesn’t involve bringing people mimosas for brunch.”

But the workforce is not to blame for this shift in leading industries.

Instead, Amselen argues that the lack of incentives tied to entrepreneurship is forcing countless Americans to keep their dreams and aspirations locked away. As businesses now fail at a greater rate than they start, free market advocates like Amselen remind us that people are discouraged to try out on their own.

To the D.C. attorney, America’s structure of production has been disrupted by the political class in a dramatic way, making workers less competitive and forcing the entire nation to carry a very heavy debt burden while keeping the entrepreneurial spirit stuck under a mountain of bureaucracy.

As free market advocates continue to make the case against overwhelming regulations, urging the public to look at government intervention as a means to hinder economic development, media outlets and influencers often accuse them of being against the poor.

But economic growth can only be accomplished when competition and freedom are reinstated. Being against the poor means being pro-government intervention in the economy, which forces those with pauper means to resort to the black market for their needs.

What Happens When Demand Increases?

in Conversations With My Boys, Economic Liberty, Liberator Online by Comments are off

What Happens When Demand Increases?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

How will I explain the phenomenon of rising prices after a disaster to my seven-year-old son? I’ll say something like this.

You know there was a big storm in the Northeast. We saw it on television. There was flooding, there was a big fire, trees were down, and now there’s no electricity in a lot of places. It’s pretty miserable.

Supply And Demand Analysis Concept

People want clean water, food, and gasoline. They want to be able to clear away the trees that fell and they want to be able to run their generators if they’re without power. Normally, they could get these things, but because of the storm not only do they need more, but it’s hard for these things to get in. The normal supply lines are cut. So they want more and there’s less than usual around.

We’ve talked about scarcity before. It’s when there is a limited amount of the things we want. Right now, the things that they want are scarce. Demand has increased.

We’ve also talked about what happens when demand increases. When demand increases, prices go up. Prices just tell us how much of this thing is available. It’s information. Like when there’s a bad drought, the price of tomatoes goes up because there are fewer tomatoes to sell. The opposite is also true. When there is a lot of something, the price goes down. If I have a tomato farm and I have twice as many tomatoes one really good year, the price of tomatoes will go down. You can tell how much of something there is by its price.

This is the situation in the Northeast right now. Demand for gas, clean water, generators, and things like that has increased. What happens to prices when demand increases? Right. Prices go up.

You’ve seen this happen in daddy’s ebay business. When he’s down to the last ten of an item, he hikes up the price. It’s still available if someone really wants it, but those last ten are really really valuable. When he gets more in stock, he lowers the price again.

Remember how your brother asked you what you would do if you only had one cup of water each day? You said you’d drink that water. And if you only had two cups, you would use the second cup for keeping clean. And if you had three cups you would use the third cup for growing plants. And if you had four cups you might use the fourth cup for playing in the sprinkler or something. You understand when things are scarce, you use them differently. You economize. They are more valuable when there is less. Everyone understands that.

Anyway, back to the storm. Let’s say daddy sold things that would be important in an emergency. He has a store that sells gas, water, ice, and flashlights. He knows that as a storm approaches the demand for these things will increase and that perhaps his supply line will be severed for many days. He won’t be able to get more for a while. He will have a limited supply–like when you only have three cups of water. When demand increases, he’s going to raise prices. People won’t be able to buy as much. They’ll have to think about how they use what they buy. This keeps things on the shelves longer and when someone desperately needs a thing, it is more likely to be there for them. That’s really important during an emergency. It can even save people’s lives. Now, some people would say that it’s mean of daddy to raise prices when demand increases. But that’s not true. He’s simply letting people know that it’s time to economize. They need to think hard about how they want to use things. He’s just passing along information. And there’s good reason for him to do it. He’ll make more money if he’s doing the right thing. It also makes it worth his while to go to the store and keep it open for the one guy who really, really needs something. When the prices go up, he’s not going to sell as much, but he still has to be there. If he keeps his prices low, he’ll sell out and close his store.

So, what we know is that when demand increases, prices go up. When demand decreases, prices go down. Those are just laws. Like inertia. We just have to know that they’re laws and that they’re always in effect. We shouldn’t be surprised by them.

Some people try to suspend law and make it so store owners can’t increase their prices as demand increases. That’s really bad. It doesn’t work and it leads to more shortages because people won’t economize on their use of the scarce goods and services. If they aren’t properly priced, the consumer doesn’t know how valuable it is. They might buy the last flashlight to entertain their children in the dark when a guy two blocks over needed that flashlight to find something really important–like maybe the gas shut off–in the night. When things cost more or when we have less of a thing we really think about how we use it. If the prices don’t give us that information, that causes more problems in an already bad situation.

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