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What Happens When Demand Increases?

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What Happens When Demand Increases?

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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.

New Jersey’s Takeover of Camden Proves Freedom is Better Than Taxpayer-Backed Revitalization Projects

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

New Jersey’s Takeover of Camden Proves Freedom is Better Than Taxpayer-Backed Revitalization Projects

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

Governor Chris Christie has recently announced that the state will take control of Atlantic City’s finances. As the city’s huge debt looms over its residents and the state vows to take over, critics and experts take a closer look at a previous major takeover of the city of Camden. And since many argue that state intervention ended up failing some of Camden’s most vulnerable residents, the promise of a better Atlantic City after intervention seems somewhat unrealistic.

In 2002, the state of New Jersey poured millions of taxpayer dollars into one of the largest takeover projects in US history. At least one law school, an aquarium, and a hospital were updated. But despite the taxpayer-backed incentives, the lives of residents did not improve. Instead, poverty and crime rates in the city remain high.

Camden

Despite the interventionist failures since 2002, the state announced in 2013 that it had decided to take over the education in Camden. As you will see, the results were equally disappointing.

According to a report from 2009, the initial revitalization campaign in the city counted with $175 million in bonds and loans and a one-time $7.5 million appropriation from the state budget. Shortly after, the then-Governor Jim McGreevey appointed a chief operating officer to take over the local government and the school board. The plan was to create jobs, bring in new businesses, fix the schools and the sewers, and demolish unsafe vacant businesses.

But as the takeover came to an end in 2010, Camden remained one of the most dangerous cities in New Jersey. And despite the state’s repeating efforts to reform the education system in the city, Camden school districts remain problematic.

The New Jersey government has been responsible for running the Paterson, Newark, and Jersey City school districts for more than 20 years. In 2013, it took over Camden’s as well. During the first years under state control, Camden failed to meet performance requirements in at least five areas.

While Paterson, Newark, and Jersey City report that their graduation rates had improved, local educational leaders claim that the improvement is due to the work members of the community have been doing in partnership with educational groups.

According to Paterson Education Fund’s executive director Rosie Grant, the state takeover meant little to the community.

“The gains that we have made,” she told The Record, “have been for the most part despite the state takeover.” Instead, Grant believes that the city’s decision to break the region’s largest high schools to form smaller academies is what made Paterson great.

But not all is lost in Camden.

When it comes to education, the real revolution arrived in the form of school choice.

According to a 2015 video by Jim Epstein, school choice gave local families in Camden the ability to choose. Instead of relying solely on state-run schools that continue to fail Camden’s children to this day, the implementation of charter schools has given residents the opportunity to enroll their children in institutions where children actually learn, despite their economic background.

If the state’s intervention in Camden has anything to teach other cities across the country is that pouring taxpayer money into an issue won’t make it better. Boosting choice—and freedom—on the other hand, usually works.

If the current administration is serious about saving Atlantic City, it will avoid pouring money into the problems the city is facing. Opening its doors for businesses and competition, however, may just do the trick.

Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

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

Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

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

Many think of crony capitalism as the source of all problems we face as a nation. They are not entirely wrong.

Take the domestic aluminum industry for instance. Despite the taxpayer investment, producers are losing their share of the market. Without freedom to compete, members of the industry take part in political games, using their influence with state governments and Washington politicians to beg for privileges that no other aluminum producers enjoy. The result? Major trouble for the consumer, employer, and worker.

Aluminum

In America, there are three companies that produce primary aluminum. Alcoa is the largest producer, operating multiple primary plants in New York, Washington, Indiana, and Texas.

In early November 2015, Alcoa announced that it would have to permanently close its Massena West smelter in New York. At the time, town supervisor Joe Gray said that the jobs Alcoa would take away if the smelter closed would be “next to impossible to replace,” considering the aluminum giant has been the major employer in the region for quite some time.

By late November, however, a deal was reached and the upstate New York smelting plant was saved. What happened? New York Governor Andrew Cuomo unveiled a $69 million incentive package that benefited Alcoa. At least 600 jobs were saved.

The plan was backed by Cuomo and Sen. Charles Schumer (D-NY), who made the announcement at the Alcoa plant in Massena. As union bosses celebrated the special relationship between the New York government and industry leaders, the incentives weren’t widely criticized, mainly because tax incentives aren’t seen as handouts by many. Instead, people often believe that tax incentives are good.

During the announcement event, Cuomo claimed that the incentives plan “is the state’s way of stepping up.” Yet none of those present were able to criticize the existing red tape that makes it so hard for companies to function in America in the first place.

If the cost of doing business in the country was not an obstacle, more competitors would fill up the gap, and cheap aluminum coming from China would have a hard time staying relevant. Instead of working to remove red tape and help all entrepreneurs and existing businesses to flourish, the state decided to give one group access to privileges that others in the same industry simply do not enjoy.

But as Alcoa enjoys the $30 million it got from the New York incentive package, things continue to look bad for the aluminum producers and its employees. Except now, the issue is not New York, it’s Indiana.

According to IndyStar.com, southwestern Indiana residents are now concerned that the Alcoa smelter in their state will shut down, shedding 600 jobs in the process. Early in January 2016, Alcoa announced it would be closing its Warrick Operations smelter by the end of March. This is a “major economic event,” said Warrick County Chamber of Commerce director Shari Sherman. But to Alcoa, the shutdown makes sense because the Indiana facility is not “competitive.” Meaning the cost of keeping it open is a burden.

The facility has been operating in Indiana for the past 55 years. As the smelter closes, multiple families brace for the impact. As workers struggle, so do companies that are finding it much harder to compete. The issue? They have a hard time covering the costs of doing business in America.

If workers and consumers are serious about seeing fewer job losses in their states and more prosperity, they’d be urging lawmakers to cut the red tape, not backroom deals.

In Wisconsin, Homemade Cookies are the Victims of Big Government

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

In Wisconsin, Homemade Cookies are the Victims of Big Government

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

Things are hard out there for folks trying to make ends meat.

According to Watchdog.org, Wisconsin residents can go to jail and face steep fines if they dare to sell homemade baked goods without an OK from the government.

Under Wisconsin law, entrepreneurs selling homemade baked goods who prepare their products in home kitchens are not allowed to make a profit. After all, how will the state assure the quality of the those delicious cookies baked by grandma if she’s not following state regulations?

Cookies

According to Institute for Justice’s attorney Erica Smith, entrepreneurs in Wisconsin could face a $1,000 fine or go to jail for up to six months even if they “sell one cookie at a farmers market, to your neighbor, [or] somewhere in your community.” This practice, the attorney told Watchdog, “[is] not only unfair, it’s unconstitutional.”

In order to remedy this problem locally, three Wisconsin farmers filed a lawsuit against the state Department of Agriculture, Trade, and Consumer Protection with the help of IJ’s Smith. The suit hopes to put an end to the ban on homemade baked goods.

But before there was a lawsuit, a piece of legislation introduced two years ago could have made small changes to the baked goods law. Unfortunately, the bill stalled in the Assembly after passing in the Senate. According to Smith, Assembly Speaker Robin Vos (R-Rochester) is the reason why the “cookie bill” won’t hit the House floor.

“That could very well be because he owns his own commercial food business,” known as Rojos Popcorn, Smith told Watchdog.

According to the bill, current law would be modified to allow up to $7,500 in annual homemade baked goods sale. While the proposed legislation isn’t perfect, it could have helped countless Wisconsin residents to earn some extra cash on the side.

According to Dave Schmdt, the executive director of the Wisconsin Bakers Association, the commercial food industry in the state is not happy with the proposed ban lift. “If several people in a certain market or particular community are doing that, they’re eating away at a local baker that’s been there for 100 years and taking away his livelihood,” Schmidt told Wisconsin Public Radio. To Schmidt, that’s simply not fair.

But home bakers also believe that the treatment they get from their own state government isn’t fair either.

To Lisa Kivirist, one of the plaintiffs fighting for her right to bake and sell her homemade goods, the “state’s home-baked-good ban hurts farmers, homemakers and others who just want to help support their family by selling simple goods from their home oven.”

Instead of keeping consumers happy and allowing local economies to gain from the competition, the ban also “prevents customers from buying the fresh and local foods of their choice,” Kivirist stated during a press event at the Capitol.

Current law keeps bakers from selling products that aren’t produced in commercial kitchens. To small outfits, the cost of setting up a commercial kitchen is simply too high. The only exemptions currently in place protect nonprofit groups such as churches or charity organizations. These groups are currently allowed to sell homemade goods, but there’s a catch: they may not put their products up for sale more often than 12 times a year.

State of The Union Address: What this Administration Got Wrong About Obamacare

in Healthcare, Liberator Online, News You Can Use by Alice Salles Comments are off

State of The Union Address: What this Administration Got Wrong About Obamacare

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

During President Barack Obama’s final State of the Union address, this administration’s signature healthcare law was seldom brought up. As a matter of fact, little time was dedicated to healthcare overall. But the few references to the Affordable Care Act (ACA) have been mostly ignored, suggesting that little to no attention is dedicated to healthcare law as the media focuses on the 2016 presidential election.

But to Brian Blase, Senior Research Fellow with the Spending and Budget Initiative at the Mercatus Center at George Mason University, the administration’s claims deserve a second look.

In an article for Forbes, Blase looks at how the current programs are performing. With the hopes of helping Americans have a better understanding of ACA and its consequences, the scholar analyses the administration’s claims and reports on his findings.

cooperative

According to the current administration, ACA was designed to fill “the gaps in employer-based care so that when you lose a job, or you go back to school, or you strike out and launch that new business, you’ll still have coverage.” To Blase, however, things aren’t that simple.

If the administration had made the portability of coverage a main priority, the law would not have to be as complex as it is.

Blase also argues that portability as a main goal would have prompted a piece of legislation that would have attracted considerable bipartisan support. Why? Because most healthcare experts on the right and center have always advocated for increased portability, urging lawmakers to severe the ties between insurance and employment.

To Blase, the primary purpose of ACA couldn’t be to keep Americans covered through the several changes they experience if the law standardizes health insurance and ups the requirements concerning coverage levels. By implementing a complicated tax and subsidy system to support ACA, the Obama administration forced consumers to fall prey to distorting price controls that make insurance coverage actually less affordable.

If the administration’s main goal with ACA was to keep people covered no matter what, the law wouldn’t also have been written in a way that increases gross premiums so radically, making low-income earners less likely to get good coverage.

While Blase spent a good deal of time focusing on this particular claim, another subject also caught his eye.

During the address, president Obama claimed that ACA has helped businesses to create jobs, not eliminate them. To Blase, this particular claim is troubling mostly because it’s not necessarily wrong. It’s misleading instead.

Claiming jobs were created because of the enaction of ACA is not a fact, since job growth naturally increased after the deep economic recession the country had just been recovering from when ACA became the law of the land. During the recession, millions of people were kicked out of their jobs, but as confidence grew, more jobs were inevitably created. That’s just a natural consequence of the labor market dynamics and is not at all connected to the enactment of ACA.

If the current administration is, indeed, concerned with how its healthcare programs are performing, Blase suggests, its review of ACA would lead to its repeal. Why? Because ACA is actually a negative pull on the economy.

According to the Congressional Budget Office, ACA will actually shrink the labor market in America. If the congressional projection is correct, two million full-time jobs will be lost due to ACA alone.

Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

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

Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

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

Regulations are good, some say. They keep evil elements from hurting consumers. But are regulations doing more harm than good?

By definition, regulations are laws that seek to produce pre-designed outcomes. The way they operate is by changing individuals’ behavior. As federal regulations grow, the number of restrictions on individual consumers and businesses also grow. Over time, the increased number of restrictions may completely close the paths to innovation. Who suffers? Both the consumer and the job seeker.

Regulations

According to a 2013 study, the American regulatory system is so crowded and chaotic that economic growth has slowed by about 2 percent per year between 1949 and 2005. While that doesn’t sound as bad as you might have expected, the real impact of the US regulatory system is hard to assess given the lack of a working process that helps to review regulations and weed out what’s obsolete and harmful. Without a system that helps us identify the issues with the regulations put in place, there’s no way to determine how bad these regulations really are.

While it’s hard to assess the cost of regulation now, earlier studies have at least been able to find that the American regulatory environment has been very bad for growth and very good in stifling innovation and keeping entrepreneurs from sprouting from sea to shining sea.

Despite several administrations’ efforts to modify or cut regulations that simply don’t work, all attempts were in vain.

In order to achieve success, future administrations should not take part in the same failed attempts. According to research carried out by the Mercatus Center, the US government should embrace a series of government reforms in order to remove obstacles to economic growth in America instead.

Based on the success of the Dutch Administrative Burden Reduction Programme and the Base Realignment and Closure Commission’s efforts, the Mercatus team concluded that the American government should begin by promoting an independent review of the regulatory system in place so the burden is assessed promptly and effectively.

But the key to success in this case is true independence.

An independent look into what’s stifling innovation must not be effected by crony influences, since once the influence of particular groups or stakeholders are taken into account, review teams will have a hard time assessing what works and doesn’t. Instead, those tasked with the chore of reviewing regulations should simply focus on how effective regulations have been since they were implemented.

While other steps should also be taken if the US government is serious about trimming the burden of regulations, guaranteed independence in the review process is the most important aspect of successful reforms. If future administrations are serious about growing the economy and helping America prosper, they should prioritize this type of reform. Why? Because removing roadblocks promote the growth of businesses, giving Americans the jobs they so desperately need to live their own version of the American dream.

Increasing Costs Tied to Obamacare Make Healthcare Ministries More Appealing Than Insurance Providers

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

Increasing Costs Tied to Obamacare Make Healthcare Ministries More Appealing Than Insurance Providers

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

As the country is distracted by the presidential election, issues that aren’t getting as much air time as Donald Trump or Hillary Clinton become a side show.

With reports concerning the ineffectiveness of the Affordable Care Act, or Obamacare, hitting the news but being ignored by major news channels, crusaders take it to the Internet to discredit Obamacare critics. As new reports argue that Americans are fed up, smaller publications seek to downplay some of the fears brought up by conservatives and libertarians all along. When faced with evidence that shows ACA is making healthcare less affordable, will these pro-Obamacare crusaders back down?

Health Care

Exactly two days before Christmas, the New York Magazine ran an article tailored to take conservative-leaning Americans to task. The subject? One of the left’s most adored achievements (and one of the right’s biggest, and most disputed, creations): Obamacare.

According to Jonathan Chait, the author, the NY Mag piece was conceived in order to debunk arguments presented by Ross Douthat, who wrote a column on Obamacare for New York Times earlier that same week.

While the piece discusses the number of covered Americans before and after the enactment of Obamacare and other points made by Douthat, it’s when Chait focuses on the cost of healthcare before and after the enactment of ACA that things get interesting.

In the NY Mag piece, Chait introduces a seemingly detailed blueprint of how ACA has bent the overall healthcare cost to the average consumer. Yet he ignores actual evidence proving that no, Obamacare hasn’t helped to keep the cost of healthcare low. As a matter of fact, the constant meddling with the insurance business and the healthcare industry in the past has done nothing but to increase the overall cost of health care. Now, those who lost their previous plans and who are unable to sign up for insurance after Obamacare went into full force are being cornered. As a result, they are choosing to pay the IRS fee instead of getting coverage.

Even those who supported President Barack Obama’s signature law are getting desperate.

But as a number of consumers lose their hope, a report recently published by the Wall Street Journal shows that things might have just gotten worse.

According to the WSJ, the cost of health insurance is such a heavy burden for those who lost their insurance plans after ACA became the law of the land that many consumers are now turning to healthcare ministries to cover their medical expenses.

That’s right. Health insurance costs are so out of control that consumers are turning to ministries, which operate outside the insurance system, in order to get access to the health care they need.

Instead of functioning as an insurance provider, these ministries provide health care cost-sharing arrangements to those who share the same religious beliefs.

Ministries now count with about 500,000 members nationwide thanks to ACA. Previous to the law, there were about 200,000 members enrolled in the system. But things could get crowded soon, making it hard for ministries to take in more members.

While ACA gives these ministries an exception to the law, only groups that have operated continuously since at least December 31, 1999 are eligible. Without the possibility of expanding the number of participating ministries, helping those in need could become too heavy of a burden.

When the exception was added to the law, it hoped to satisfy a relatively small number of groups that argued that nonparticipation was a matter of religious freedom. Now, ministries are being sought after as a matter of survival. And as ministries become crowded, insurance commissioners begin to complain, claiming these groups operating outside ACA are hurting consumers.

But with ministries costing about 30 percent less than private insurance, consumers who choose the more affordable path can’t be blamed for taking the easier way out.

Claiming to have the consumer’s best interest at heart, insurance commissioners from Kentucky, Washington, and Oklahoma have, in the past, decided to take action against ministries in their states. Thankfully, legislatures blocked the efforts. But as the cost of care continues to grow and the number of uninsured only shrinks because of the threat associated with non-compliance, other states may attempt to put an end to faith-based healthcare providers again, hurting thousands of consumers if they succeed.

In light of this report, will NY Mag’s Chait finally agree that Obamacare is making healthcare less affordable? Probably not. Nevertheless, ministries may have to fight yet another battle to stay open if membership growth remains steady.

Use “Venture Buyers” to Show the Hidden Dangers of Government Spending

in Liberator Online, Monetary Policy, One Minute Liberty Tip, Taxes by Sharon Harris Comments are off

Use “Venture Buyers” to Show the Hidden Dangers of Government Spending

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

You’re probably familiar with venture capitalists. But what about “venture buyers”?

I encountered that term this week in an excellent short article entitled “Federal Spending: Now for the Really Bad News” by Forbes Political Economy Editor John Tamny.

“Venture buyers” is a nifty phrase and concept that can be very helpful when you’re trying to persuade skeptics that government spending has terrible consequences.

Traian_vuia_flying_machine

In his article Tamny points out that government spending is not just ridiculously wasteful, bad as that is. It also deprives the people who earned that money of the ability to spend it themselves, on the things they consider most important. And this not only deprives them, it harms the rest of us — in unexpected ways.
One of those ways is that “venture buyers” don’t get to spend their money on new, innovative, risky, expensive and important items.
What are “venture buyers?”

“We sometimes hear them described as ‘first adopters,” Tamny explains. “These are the people with the means to experiment on what is new, frequently expensive, and possibly even life-threatening. Their buying habits tell businesses what consumers want, how they want it, and [by] doing that signal to entrepreneurs where the profits will be if they can turn what is frequently a rare luxury into a common good. But with government so aggressively spending the resources we’ve created… there’s much less ‘easy money’ in our pockets that would reveal our preferences for what is [currently] expensive and largely unknown.”

Venture buyers, then, are the people who are the first to buy new, promising, risky and costly goods and services, try them out, and bring them to the attention of the rest of us. As we watch them using and playing with their new products and toys and benefiting from exciting new services, the rest of us start clamoring for them as well. And businesses are motivated to discover how to quickly lower prices so the rest of us can enjoy them, too.
Venture buyers thus play a huge role in bringing life-changing new products and services to
society.

Think of all the things we commonly use today that began life as expensive and/or startlingly different products only used by those on the bleeding edge. Cars were once crazily expensive and dangerous, as were airplanes. Portable phones were luxuries for the rich. Home computers, VHS players, fax machines, Uber, Airbnb… it’s an endless list.

And an important note: it’s not just fun and seemingly frivolous products that venture buyers popularize. Take health and medicine.

Writes Tamny:

” [C]onsider the health implications of our free spending government. … Thinking about cancer, how much experimentation has never taken place over the last 80 years thanks to government spending having greatly shrunk the total availability of resources necessary for it? Was a cure (or many cures) lost as politicians falsely promised growth through spending on the proverbial bridges, grants, and yes, medical studies to nowhere?”

The more government spends, the less venture buyers have to spend. And that means far less experimenting with new and innovative products and services — including critical and life-saving ones. And that in turn means businesses and entrepreneurs receive far less information about society’s greatest needs and desires — and the best ways to fulfill them.

Of course, we never see the inventions, the cures, the innovations, the services that don’t come into being. We don’t know what we are missing. But we can understand that we are far poorer because of it.

This is a powerful and persuasive indictment of government spending. (There are many others, of course.) I love the catchy, intriguing phrase “venture buyers” and how using it helps explain the little-understood but crucial role early adopters play in raising living standards for everyone.
Share it, and open minds to overlooked dangers of massive government spending.

Will Republicans Allow an Obamacare Bailout?

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

Will Republicans Allow an Obamacare Bailout?

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

One of the few bright spots in the government-funding bill passed last December was the inclusion of a provision that barred the Obama administration from using taxpayer dollars to bailout a little-known Obamacare program. Known as “risk corridors,” the program receives contributions from health insurance companies that make money from plans sold on the exchanges required by the law and redistributes it to those that experience losses.

Health Care

Congressional Republicans had targeted the program for repeal. In November 2013, Sen. Marco Rubio, R-Fla., introduced legislation, the Obamacare Bailout Prevention Act, to do just that. “The American people are sick of Washington picking winners and losers, especially since the chosen losers often end up being taxpayers who foot the bills for Washington’s mistakes,” Rubio said at the time. “Washington’s bailout culture must end, and eliminating Obamacare’s blank check for a bailout of insurance companies is a common sense step to protect taxpayers when Obamacare fails.”

Lobbyists for insurance companies worried about congressional action against the program, which, according to the administration’s propaganda, is supposed to be deficit-neutral. Without the program, insurers’ lobbyists said, premiums would rise and drive consumers away from the exchanges, possibly leading to a dreaded “death spiral.” While the bill didn’t see any action in the Senate, Rubio reintroduced it in January at the beginning of the new Congress.

The language prohibiting the use of taxpayer funds for the risk corridors program that was included in the government-funding bill applied only to fiscal year 2015. It would have to be inserted into the bill for fiscal year 2016 for it to continue to apply. This is where it gets interesting. Insurers have filed more in claims than money that’s available in the program.

“On October 1, 2015, the Centers for Medicare and Medicaid Services announced the total of collections and payouts under the risk corridor premium stabilization program for 2014. CMS announced that insurers have submitted $2.87 billion in risk corridor claims for 2014. Insurers only owe, however, $362 million in risk corridor contributions,” Health Affairs reported in October. “Thus payments in 2015 for 2014 will be paid out at 12.6 percent of claims, assuming full collections of contributions owed.”

In other words, the risk corridors program faces a more than a $2.5 billion shortfall. The only way to fill the gap is to transfer funds – i.e., taxpayer money – to cover the payments owed to insurers.

The House of Representatives is in the midst of working on the government-funding bill for fiscal year 2016. The current funding agreement expires on Friday, though lawmakers will likely pass an extension to give themselves more time to hammer out a framework. But without a specific language prohibiting the administration from using taxpayer money to make the risk corridors payments, taxpayers could be on the hook for what is, ostensibly, a $2.5 billion Obamacare bailout.

Charles Koch Blasts Corporate Welfare

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

Charles Koch Blasts Corporate Welfare

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

It’s amazing how Charles and David Koch have become the boogeymen of progressives. Democratic politicians, in their class warfare messaging, often reference the multi-billionaire brothers, who frequently contribute to free market causes and Republican candidates.

In reality, the Koch brothers, both of whom are libertarians, hold views that are overlap with progressive thought. They’re skeptical of the United States’ foreign policy, support same-sex marriage, and are critical of corporate welfare.

Free-Market

Writing in Time on Wednesday, Charles Koch repeated his criticism of corporate welfare. “According to a New York Times poll released earlier this year, most Americans believe only the wealthy and well-connected can get ahead these days, leaving everyone else to fall farther behind,” Koch wrote. “I find this very disturbing – because they are right.”

The difference between Koch and progressives is that he doesn’t see government regulation and mandates as the answer to this problem; he sees the government as the problem.

“I have devoted most of my life to this cause. For more than 50 years, I have sought to understand the principles that make free societies the most successful at enabling widespread well-being for everyone – especially the least advantaged. These principles include dignity, respect, tolerance, equality before the law, free speech and free markets, and individual rights,” Koch explained. “If we want to create greater well-being and opportunity for all Americans, we must re-establish these principles. The benefits will be incalculable, flowing to people at every level of society – not just the politically connected.”

“To achieve this vision,” he continued, “we must undo decades of misguided policies that tend to fall into two broad categories: barriers to opportunity for the many and special treatment for the few.”

Koch said, “[T]he role of business is to provide products and services that make people’s lives better.” But, he notes, businesses often bring “harm” on people by taking handouts from the government. What Koch said may shock some.

“The tax code alone contains $1.5 trillion in exemptions and special-interest carve-outs. The federal government also uses direct subsidies, grants, loans, mandates, bailouts, loan guarantees, no-bid contracts and more to help the lucky few with the most lobbyists,” he wrote. “Overall, according to George Mason University’s Mercatus Center, corporate welfare in Washington, D.C. costs more than $11,000 per person in lost gross domestic product every year—$3.6 trillion lost to special favors for special interests.” He added that this doesn’t include regulations promulgated to benefit certain special interests.

Whether progressives like it or not, the Koch brothers are much more than they’ve been made out to be. Of course, as noted, they don’t believe government is the answer and, let’s be honest, it’s not. The problem is, far too few in Washington, including many self-identified progressives, aren’t interested in taking on special interests, largely because they’ve been bought and paid for by them.

American Taxpayers on the Hook for $6 Million to Promote the Beautiful Albanian Countryside

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

American Taxpayers on the Hook for $6 Million to Promote the Beautiful Albanian Countryside

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

You’ve got to hand it to the federal government; they really know how to throw away taxpayers’ hard-earned money. Just last week, Congress passed a budget that increases spending by some $80 billion and raises the debt ceiling for the rest of Barack Obama’s presidency.

Albania

Of course, it’s too much to ask, apparently, that lawmakers and the Obama administration take an axe to some of the wasteful spending that could take some of the burden off of taxpayers. Take the $6 million the U.S. Agency for International Development plans to give to Albania to promote tourism in the tiny Southeastern European nation, which was recently the subject of by Sen. Rand Paul’s, R-Ky., “Waste Report.”

Albania’s economy is experiencing turmoil because of the economic crisis that has ravaged Greece, its neighbor to the south. In May, for example, the World Bank backed a five-year, $1.2 billion loan program to try to boost the country as it tries to enter the European Union. The United States is, apparently, pitching in to boost Albania’s burgeoning tourism industry.

“To restart their economy, the Albanian government is hoping to capitalize on the country’s tourism potential, but it is the U.S. taxpayer who is footing at least part of the bill,” Paul’s office explains. “Amazingly, tourism is already a major contributor to the Albanian economy. According to the grant description, tourism (in total) currently accounts for 17 percent of the nation’s economy.”

“By comparison, The World Travel and Tourism Council reports that tourism contributes 9.5 percent to the worldwide economy and 8.4 percent to the U.S. economy. This means Albania’s tourism economy, as a percent of GDP, is already larger than the U.S,” it adds.

The problem for the United States is that much of what we’re spending in terms of foreign aid, such as the $6 million to promote tourism in Albania, is part of the increasing river of red ink that flows from Washington.

Albania may be a beautiful country worthy of a visit, but that doesn’t mean American taxpayers should be footing part of the bill to promote it. The national debt – currently north of $18.5 trillion – keeps growing while the federal government doles out goodies for other countries.

Not to come across overly nationalistic here, because there are many wasteful and unauthorized domestic programs that taxpayers are compelled to fund. The guide should be the United States Constitution. After looking it over, one will be shocked – absolutely shocked to discover – that there isn’t a “Promote Tourism in Other Countries” Clause.

Kentucky ObamaCare Cooperative Will Close

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

Kentucky ObamaCare Cooperative Will Close

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Kentucky’s health insurance cooperative will close by the end of the year, leaving approximately 51,000 looking for coverage from other insurers that offer plans on the state’s insurance exchange. The Kentucky Health Cooperative is the latest of its kind to close down due to financial difficulties.

Health Care

Nonprofit insurance cooperatives are an integral part of the Affordable Care Act, or “Obamacare.” But this type of health insurance provider has hit significant snags. According to a recent report from the Department of Health and Human Services Office of the Inspector General, 21 of the 23 cooperatives created under the 2010 health insurance reform law are losing money and 13 aren’t meeting enrollment projections.

The report revealed that 21 cooperatives have lost $382 million combined. The Kentucky Health Cooperative ran the largest deficit, losing more than $50 million. Cooperatives were meant to compete on the exchanges with private health insurance. They were a compromise when leftists in Congress were unable to get the so-called “public option,” or single-payer, included in the Affordable Care Act.

The Kentucky Health Cooperative decided to shutter after finding out that it would receive a smaller than expected payout from the Affordable Care Act’s “risk corridors” program, according to The Hill. This program provides health insurers with payouts to cover some of the losses they incur for plans available on the exchange.

“It is with sadness that we announce this decision,” Kentucky Health Cooperative Interim CEO Glenn Jennings said in a release. “This very difficult choice was made after much deliberation. If there were a way to avoid it and simultaneously do right by the members, providers and all others that we serve, we would do so.”

“In plainest language, things have come up short of where they need to be,” he added.

Senate Majority Leader Mitch McConnell, R-Ky., reacted to the news by noting that the closure of his home state’s cooperative is a sign of deeper problems with the Affordable Care Act.

“Barely a week goes by that we don’t see another harmful consequence of this poorly conceived, badly executed law,” McConnell said on Friday. “Despite repeated Obama administration bailout attempts, this is the latest in a string of broken promises with real consequences for the people of Kentucky who may now be losing the health insurance they had and liked twice within the past three years because of Obamacare’s failures.”

Five cooperatives have closed, including Kentucky’s. Others include New York’s Health Republican Insurance and the joint venture for Iowa and Nebraska, CoOpportunity.

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

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

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

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

381 Million Taxpayer Dollars Turned to Sludge

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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

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

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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

Your Electricity Rates May Necessarily Skyrocket

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

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

Surprise! The IRS Audited Campaign Donors

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

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 Jackson Jones Comments are off

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

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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.

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