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Why Government Is Responsible For Harvey

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

Why Government Is Responsible For Harvey

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Whenever a major natural disaster like Hurricane Harvey hits the United States, many of us often wonder why is it that so many people still live in areas that are at risk of being greatly impacted. After all, why would people continue to build homes and buildings in areas that are more likely to be hit by a hurricane than others?

As you can imagine, the answer lies with the government.

Harvey

As Politico reports that the powerful home builders’ lobby was successful in killing new legislation that would have brought government-backed insurance coverage for new constructions in high-risk areas to an end prior to Harvey, it fails to explain why we have a National Flood Insurance Program in the first place. It also seems to ignore that the very existence of government-backed insurance is what created the problems we are experiencing now in Texas.

In 1968, when the NFIP was created, the program was sold as an answer to the high costs of federal disaster assistance.

But this issue could have easily been addressed if disaster relief had been allowed to be provided mainly by charities and local governments, just as it used to all across the country up to 1917.

Instead of scaling the federal government’s involvement down and giving the taxpayer a well-earned break, politicians decided to go the other way, making sure that new construction plans for risk areas would only be put into action if they were covered by the insurance program first.

But as the always insightful James Bovard wrote in 2006, the only thing this bloated U.S. government program achieved was to serve as a perverse incentive that pushed more and more companies to build in “river flood plains and coastal areas long favored by hurricanes.”

In an old ad showcasing NFIP to average Americans, FEMA told viewers then they couldn’t “replace your memories,” but they would “help you build new ones.” Instead, Bovard wrote, all that FEMA and the NFIP did was to “[induce] people to build homes in areas where their memories get swept away.”

Still, many alerted both Americans and the federal government that the program was nothing but a sham.

In 1997, a report by Idaho Statesman revealed that NFIP “[brought] more people into harm’s way” by making dangerous development “look not only possible, but attractive.”

Scott Faber, the former Senior Director for Public Policy for American Rivers and current Vice President of Government Affairs at the Environmental Working Group, once said that the NFIP had essentially become a tool in the hands of powerful construction overlords against the environment.

“Prior to the 1960s, you didn’t have much development in flood-prone areas because you couldn’t find any insurer crazy enough to underwrite it,” Faber told Bovard. “But the federal government came along and said it is okay — we are going to make it financially possible for you to live in a flood plain. The effect of this has been much more dramatic in coastal areas, where we have seen a huge boom in coastal development in the last 30 years.”

Thanks to government’s involvement, we now have many more damaged properties, people being displaced, and some even being killed thanks to floods than if insurance hadn’t been subsidized by the taxpayer. And we have nobody but government to thank for it.

So when time to rebuild comes and people call for more federal government involvement, how about reminding our fellow Americans why Hurricane Harvey had such great impact in Houston, Texas, in the first place?

Massachusetts Moves To Put An End To Hair Braiding Licensing Requirements

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

Massachusetts Moves To Put An End To Hair Braiding Licensing Requirements

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

Some estimate that the practice of hair braiding is about 5,000 years old, making it a much more traditional and well-established practice than going to the state for permission to braid hair.

Still, hair braiders across the country are often forced to dedicate long hours of training and spend thousands of dollars on classes they shouldn’t be required to take to continue braiding hair professionally.

braiding

Thanks to state laws regulating the practice, many women found themselves in tough situations, being forced to stop making a living out of hair braiding out of fear they would end up having troubles with the law. As a result, the libertarian-leaning Institute for Justice filed several lawsuits across several states on behalf of these hair braiders.

Now, many states exempt hair braiders from having to follow licensing laws. Still, the most populous state in the New England region remains in the dark ages, requiring anyone who wants to braid hair for a living to log in 1,500 hours of training and spending up to $20,000 just so they may obtain a cosmetology license.

Because these licensing laws often impact women of color and immigrants, it’s hard to ignore the impact on these communities, especially when we consider that hair braiding poses no threat to public safety.

In order to address this issue statewide, Republican Massachusetts Senator Ryan Fattman proposed legislation that would ensure hair braiders would be exempt from cosmetology licensing laws. If this bill passes, it could help countless women who are predominantly black and immigrant to get back into the workforce without fear of being driven out of the market by the law.

When defending his bill, Fattman explained that licensing laws keep people from turning their talent into a fulfilling profession. “It’s an ethnic vocation that people have learned in their upbringing and they do it, and they do it without realizing they have to be licensed,” Fattman explained. “We wanted to basically lower the barriers to entry for people who make a living this way.”

As it stands, the bill is being reviewed by the Committee on Consumer Protection and Professional Licensure, but a hearing about the piece of legislation won’t be held until this fall.

While forcing hair braiders to obtain licenses to perform their duties is usually seen as nonsensical by most, many seem unable to think the same way about other professions and commercial endeavors, failing to see how regulation actually hurts professionals and consumers across the board by imposing barriers to entry in the market that will eventually inflate the cost of doing business. Still, it’s encouraging to see that yet another state is working on abolishing licensing requirements for hair braiders.

New York’s ‘Worker Protection’ Laws Will Only Hurt Workers

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

New York’s ‘Worker Protection’ Laws Will Only Hurt Workers

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Politicians cannot create value, and neither can governments. Still, voters are often the first ones to admit they chose a particular candidate because he or she promised to “create jobs.” With both conservative-leaning and progressive-leaning Americans making the case for government-sponsored programs that create more jobs, it’s easy to ignore the role of basic economics. After all, knowing economics in depth means that you understand that you cannot create jobs out of thin air. What you can create instead is value, and the only way to do so is by having government get out of the way completely.

Workers

In an environment where individuals are free to start businesses by basing their decisions on the demands of consumers, jobs are created out of a real necessity. By responding to an actual market need, employers then offer potential employees the opportunity to trade their labor for wages, which in turn will help them better their standard of living. As Robert Fellner wrote for the Mises Institute, “wages spring directly from, and are proportional to, the degree in which a job creates wealth by helping to satisfy an unmet need.” Or in other words, wages are the product of the wealth creation process triggered by a service or product created to meet the market’s demands.

When government attempts to “create jobs” and stipulate wages artificially by passing minimum wage laws, they are neither creating these positions out of a real necessity to meet a market demand nor raising standards of living by creating value. Instead, government-sponsored job creation is often the result of taxpayer-backed projects, which are in turn managed by central planners with little to no knowledge of market demands. And by increasing restrictions on the productive sector of the economy with minimum wage laws or other restrictive policies, the government takes the businessman’s freedom to give low-skilled individuals a chance at being employed, learning a trade and perhaps going on to take jobs in the future that offer higher wages.

 The new law also stipulates that workers may not work without breaks of at least 11 hours between shifts.

Needless to say, this new law will only hurt workers who are often the first to take on extra shifts and are willing to cover for colleagues due to an abrupt schedule change — not the employer. These individuals will be forced to take on extra side gigs to make ends meet instead of simply working more hours for their current employers.

If anti-poverty advocates were honest about helping those in need, they wouldn’t demand government do “something” about creating new jobs or raising wages artificially. Instead, they would look at the only viable way of actually helping the greatest number of people possible: the free market.

How would roads be operated and financed in the ideal libertarian world?

in Ask Dr. Ruwart, Business and Economy, Economic Liberty by Mary Ruwart Comments are off

How would roads be operated and financed in the ideal libertarian world?

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Question: How would roads be operated and financed in the ideal libertarian world? How would traffic violations, actions which may be victimless crimes but would be very likely to harm others if they were allowed to continue unchecked, be handled?

RoadsAnswer: Roads would probably be operated by companies which would finance them through tolls (highways), subscription fees (local roads), or measures similar to condominium dues (neighborhood streets). Even today, some communities finance almost half of their roadways through these alternatives, saving themselves up to 50% when compared to government-run alternatives.

Road owners would set the standards for drivers’ conduct (e.g. speed limits, alcohol load, etc.). Reckless drivers, regardless of whether they were under the influence of mind-altering substances, would probably be banned by road owners so that customer safety could be maintained.

Libertarians believe that defensive force can be used against those who initiate or THREATEN to initiate force against others. Prohibiting reckless driving could certainly fall into that category.

Marijuana Sales Break Records in 2016, Here’s Why This is Important

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

Marijuana Sales Break Records in 2016, Here’s Why This is Important

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

In 2016, marijuana sales grew 30 percent in the United States and Canada, reaching $5.86 billion in U.S. sales alone. As new rules regarding marijuana use and commerce begin to take effect in states like Florida, the year of 2017 promises to be the best in record for cannabis. And yet, the federal government continues to uphold its ban on the plant. Going as far as reassuring the public that CBD, one of the main ingredients in the cannabis plant used to manage pain, is also a Schedule I drug.

MarijuanaRegardless of the federal government’s lack of grasp, the market has chosen to ignore restrictions. Which is what the last big numbers tied to marijuana sales helps to prove.

By 2021, legal sales in the North American continent could reach the $20.2 billion mark, making the marijuana industry’s growth incomparable to the growth of other remarkable industries such as the the Internet. At this rate, the industry could be posting a 25 percent compound annual growth, experts say. But before marijuana, few industries showed this type of success.

In the 1990’s, one of the few consumer industry categories that reached the $5 billion mark in annual spending — only to produce the same rate of growth following the boom — was cable television. In the 2000’s, the Internet did the same, with a 29 percent compound annual growth. As the marijuana market continues to grow, however, the most important aspect of this story is often ignored.

As options become more widely available, and substances such as cannabis achieve legitimate statuses, consumers who rely on the product or who are simply curious now have options. When consumers have options and they are able to “shop around,” they are also less likely to be exposed to the evils of defective or corrupted products. Bad quality is often associated with items available in the black market precisely because the dealer selling products in obscurity has no incentive to compete.

When drugs and other products considered dangerous are decriminalized or legalized, consumers are the first to benefit.

Instead of standing in the way of personal choice, we must boost choice by simply letting the market decide where it goes first. Not because companies and entrepreneurs have a right to tell consumers what to do, but because consumers will lead the way, demanding better services and acting accordingly, by boycotting a certain product or service provider.

Officials Responsible for Stadium Subsidies Get Privileged Seats for Free

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Officials Responsible for Stadium Subsidies Get Privileged Seats for Free

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

Freedom is easy to like. All it takes is for us to let it reign. But with crony capitalism being as ingrained in American political culture as it is today, most of the public isn’t aware of the disastrous consequences of the practice.

MinnesotaAccording to Reason magazine, at least six government appointees responsible for securing a great amount of public money for the construction of the Minnesota Vikings’ new football stadium are now getting access to luxury boxes at no cost.

The appointees are members of the Minnesota Sports Facilities Authority (MSFA), an agency created by the state government in 2012 to administer public subsidies granted to the building of the U.S. Bank Stadium. The stadium opened earlier this year with the help of $1.1 billion grant from the taxpayer and now, the six appointees who must have worked quite hard to ensure public money was readily available are able to enjoy all and any events in the stadium for free.

During an investigation by the Minneapolis Star-Tribune, reporters found that, while the Vikings claim that the very existence of these luxury boxes is a marketing move, family and friends of the same MSFA board members responsible for government’s generous grants are often in attendance.

While attempting to explain why they have access to the suites, at least two MSFA members told reporters that since they work “long hours on game days and spent long nights negotiating on behalf of taxpayers during construction of the building,” privileged access to events is “reasonable.” How about that?

Despite their comments, one of these privileged government workers happens to be the son of Walter Mondale, the 42nd Vice President of the United States under President Jimmy Carter, while a second MSFA board member is the daughter of Tom Kelm, the chief of staff for former Minnesota Gov. Wendell Anderson.

As you can see, power players in local and federal politics are often quick to identify. As many of them live their lives being involved in lobbying efforts to ensure special interests are being protected and propped by official entities, they also fatten their own bank account or enrich their lives as a result.

The lesson here is: Incentives always matter.

For this issue to be addressed in a direct and effective matter, those concerned with how their money is spent should always press for reform that removes these incentives from the game altogether. Change will come only when we are able to ensure that neither party is gaining something from government intervention.

Hamilton Fans, BEWARE: Anti-Scalpers Bill Will Hurt Concert Goers

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

Hamilton Fans, BEWARE: Anti-Scalpers Bill Will Hurt Concert Goers

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Scalpers are often “greedy,” and widely known for their “malicious” ways, at least that what we constantly hear. But when concert goers forget to buy tickets to their favorite band’s concert, the reliable scalper is their best friend. So what’s up with monopolies such as Live Nation Entertainment attempting to put an end to scalping “bots?”

HamiltonAs any major corporation would do, Live Nation spent no time attempting to develop a system that would keep said “bots,” or rather the scout bot software, from purchasing tickets en masse and reselling them online. Instead, the company decided to lobby the government for “help.” As a result, Senators Jerry Moran (R-KS) and Chuck Schumer (D-NY) introduced the BOTS Act in order to offer “equitable consumer access to tickets.”

In order to pressure the Senate to pass the bill, legislators are even using personal testimonies from fans who lost the opportunity to purchase cheap tickets to “Hamilton.”

But according to technology policy fellow at the R Street Institute, Anne Hobson and senior research fellow at the Mercatus Center at George Mason University Christopher Koopman, the legislation does not pass the smell test. Simply because the bill would not benefit fans as it promises.

What senators may call a solution, experts call a “solution in search of a problem.”

According to Koopman and Hobson, the problem is not a problem at all. Take Live Nation, for instance. The company’s Ticketmaster service sold over 147 million tickets in 2012. Even if bots acquired about 100,000 tickets a year, which hasn’t been proven since there isn’t enough data to support this claim, “that would still be significantly less than 1 percent of all tickets sold,” experts contend.

The company vows that 60 percent of its most desirable tickets are purchased by bots, but choose to ignore the fact that the company loses tickets by not selling them to the public directly.

By using a system such as Ticketmaster, Live Nation opens itself up to this type of issue.

On top of this problem, proponents of the BOTS Act ignore that by barring scalpers from operating the way they do today would help to push the price of tickets up, not down. Thus hurting the consumer.

By limiting the public’s access to tickets with the use of Ticketmaster, companies like Live Nation also help the cost of concert tickets to be artificially high by preselling or putting the majority of tickets on hold for artists and managers.

With artists and managers reselling these tickets to the highest bidders, they are also competing with scalpers. With that in mind, it’s easy to see why the industry is so concerned with this matter, willing to lobby Congress to act on it in such a dramatic fashion.

But if the goal is to create an “equitable consumer access to tickets,” government must step away from this fight.

But since my hint is that the goal is to just ensure the entertainment industry is protected from those “greedy” scalpers, I’m sure few in Congress will act with the consumer in mind.

Yes, Corruption Cripples the Economy

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Yes, Corruption Cripples the Economy

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When analyzing the potential ramifications of picking one presidential candidate over the other, many prefer to overlook claims of corruption. On one hand, voters might not be exactly aware of what corruption may entail, but on the other, they might not be entirely sure of how corruption taking place in high levels of government will ever impact their personal finances. Unfortunately for those who do not seem to understand how corruption affects them, the consequences of rent-seeking and influence-peddling schemes go deeper than we expect.

corruptionIn Protectionism vs. Corruption: Which Is Worse for the Economy?, economist D.W. MacKenzie writes that while “an overwhelming majority of economists have agreed on the benefits of free trade since 1817,” many contemporary politicians believe that some trading restrictions help boost the U.S. economy.

But when it comes to analyzing the impact of corruption, few seem to take into consideration that political corruption “impairs economic efficiency and lowers living standards.”

Traditionally, corruption has always been treated as a legal affair, which might explain why the population’s attention is steered away from the real-world consequences of the practice.

According to MacKenzie, the problem with widespread corruption is that special interest groups take advantage of it, lobbying government elements directly to provide them with special treatment, therefore transferring wealth “from the general population into their pockets.” When analyzed closely, these special relationships between private industries and the government “make us all worse off” because the resources used to ensure these groups’ needs are being met could have been spared. In other words, taxpayer money spent on what many call corporate welfare could have stayed in the consumer’s pockets and then used for other purposes, getting that amount back into the economy and helping to make it grow.

Another aspect of political corruption that is often ignored is that free trade is the necessary condition for economic growth to occur, but in countries where markets thrive, their governments are often less impacted by corruption. Considering political corruption is inefficient and bad for growth, MacKenzie concludes, giving more power to politicians known for being corrupt will further damage the economy.

As voters cast their ballots for president, they must have in mind that the only policy that will bring economic growth and peace to America is the complete elimination of barriers to commerce, getting the government completely out of the business of picking winners. Unless the link between the government and the rent seeker is severed, there will be no room left for prosperity.

Goldman Sachs’ CEO: Regulations Help Us Grow, Keeping Competitors at Bay

in Business and Economy, Economic Liberty, Economics by Alice Salles Comments are off

Goldman Sachs’ CEO: Regulations Help Us Grow, Keeping Competitors at Bay

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Crony capitalism continues to expand big government’s grip, extending the realm under government’s control in ways we once thought impossible. As businesses and employees hurt due to government’s increasing control over all business fields, so does the economy.

GoldmanWhile this issue is inherently a government problem, big business has a lot to do with the growing regulatory burden. Instead of downplaying their role, libertarians should be pointing out how both parties are to blame, and how even big businesses understand this reality and often use it to their advantage.

In a 2015 interview, Goldman Sachs’ CEO Lloyd Blankfein explained how regulations help to protect large, established firms, keeping smaller competitors from having access to the market.

In his own words, he gave the reporter an outline of what happens when a large firm like his is afraid of its competitors, and what’s funny is that few news outlets caught on to the CEO’s unabashed honesty, choosing to never reproduce his comments or downplay their importance.

When talking about how upstart tech companies and the threat they pose to Goldman, Blankfein said that while “all industries are being disrupted to some extent by new entrants coming in from technology,” regulations have been a friend of Goldman mostly because “there are some parts of [Goldman] business, where it’s very hard for outside entrants to come in, disrupt our business, simply because we’re so regulated.”

The burden of regulation, Blankfein added, is a serious issue for “people in our industry,” but, “in some cases,” Blankfein continued, “the burdensome regulation acts as a bit of a moat around our business.”

As you can see, Goldman Sachs’ own CEO refers to regulations as moats. In other words, the regulatory burden can be heavy and Goldman executives agree, but as long as the rules keep competitors from getting anywhere near the Goldman castle, the company doesn’t see a problem with complying.

According to Bill Anderson, a professor of economics at Frostburg State University in Frostburg, Maryland, America truly embraced regulations during the Progressive era, following the lead of progressive leaders such as Theodore Roosevelt, William Jennings Bryan, and Woodrow Wilson who believed that “the federal system of delegated powers was archaic and out of date for a ‘modern, progressive’ society.”

To these politicians, stripping “powers from state and local governments and transferring them to Washington, DC” and “convincing members of Congress to give up their own constitutionally-designated powers” were essential steps in making America a truly progressive nation. How did they manage to go about putting their plan in practice? By “crafting of regulatory agencies,” all of which are part of the executive branch.

So next time you see a Bernie Sanders or Hillary Clinton supporter go on and on about how government and big business should not be involved in any way, remind them of what has enabled this cozy relationship.

Arizona Business Pushing for More Prohibition Gets a Taste of Free Market Consequences

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

Arizona Business Pushing for More Prohibition Gets a Taste of Free Market Consequences

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In The Economics of Prohibition, Austrian economist Mark Thorton explains that the “search for privilege and personal gain through the political process” embraced by major corporations and their lobbying minions are responsible for “any net losses to society produced by government policies.” Adding that, throughout history, we are able to see countless examples of prohibitionist policies being enacted due to this marriage of convenience.

boycottAs information is more readily available due to the widespread growth of the Internet, we now live in an era in which people are often made aware of how companies use their political influence to push for certain policies.

In Phoenix, a company whose political activities have been associated with marijuana prohibition is getting a taste of how the free market deals with unwanted subjects.

According to The Phoenix New Times, a Discount Tire Company is facing a growing boycott movement after its billionaire owner made a $1 million donation to help defeat the ballot initiative crafted with the goal of legalizing marijuana in the Grand Canyon state.

The boycott was first launched by local immigrant-rights groups following the company’s decision to hang a “Re-Elect Sheriff Joe Arpaio” sign in their windows. More recently, however, the company donated money to defeat marijuana legalization in the state, and the boycott movement grew.

The reaction did not come as a surprise, considering that the pro-legalization sentiment in Arizona is growing strong.

Prop 205, the initiative Discount Tires has invested money against, would legalize the use of cannabis for adults who are 21 or older. Individuals would be allowed to possess up to an ounce of the product. If Prop 205 wins, weed sales would also be legalized, and individuals would be allowed to grow the plant for personal use.

Possession of more than an ounce up to 2.5 ounces would be considered a non-arrestable civil offense. Nevertheless, the individual caught with more than one ounce of weed would have to pay a fine.

Despite the restrictions proposed by Prop 205, the law would help locals, offering a solution to an aspect of the drug war that continues to put countless of non-violent young men and women in jail.

In addition to Discount Tires’ donation, other groups have invested heavily in the campaign against the pro-marijuana legalization initiative.

Some of the groups behind the effort include the Arizona Chamber of Commerce, Insys Therapeutics, a synthetic THC-maker, Larry Van Tuyl, whose family’s string of car dealerships was sold to Warren Buffett in 2014, Bennett Dorrance, a local resident who’s the heir to the Campbell Soup fortune, Tucson real estate mogul Donald R. Diamond, Foster Friess of Wyoming, who’s known as a “Republican mega-donor,” Empire Southwest LLC, which sells, rents, and services machinery and power generation equipment to contractors, and the Arizona Republican Party.

As long as the boycotts are peaceful, the effort is a perfect example of how free individuals are able to show their preferences in a freer market setting, letting service providers know where they stand and thus, forcing company owners to cater to their clientele in a way they deem acceptable if they are willing to survive their competition.

How Egg Regulations Hurt the Environment — And Your Pocket!

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

How Egg Regulations Hurt the Environment — And Your Pocket!

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Government has a way of making us all question our sanity. Especially when it comes to food regulations and its environmentally unsound consequences.

In many countries across the globe, the practice of washing eggs is seen as anti-hygienic. Because when egg producers wash fresh eggs, they also remove a layer of protein known as cuticle.

EggsThe cuticle is important because it prevents the egg shell from being porous. With a porous exterior, eggs are vulnerable to bacteria.

In the 1970s, regulators with the U.S. Department of Agriculture concluded that egg producers should invest in “fancy machines,” as NPR puts it, to shampoo eggs with soap and hot water. But once the eggs were washed, regulators added, producers should place them immediately in a refrigerator.

To justify the addition of yet another requirement for the egg industry, regulators claimed this step helped to avoid salmonella contamination. But washing the egg’s exterior does little to prevent contamination.

As NPR explains, the cuticle “is like a little safety vest for the egg, keeping water and oxygen in and bad bacteria out. Washing can damage that layer and ‘increase the chances for bacterial invasion’ into pores or hairline cracks in the shell, according to Yi Chen, a food scientist at Purdue University.”

Salmonella enteritidis often infects a chicken’s ovaries, which tends to impact the yolk before the shell hardens. The bacteria can be killed when consumers cook it. Washing the exterior of the egg does little to prevent contamination. As expected, salmonella continues to expose about 142,000 individuals to infections each year.

While many contend that washing the egg and refrigerating it or leaving the cuticle both work, only the method adopted by the United States government requires a great deal of electricity use to ensure the product’s safety. Considering only 10 percent of the total U.S. energy consumption comes from renewable sources, it’s hard to see why environmentalists are not urging government to nix this particular regulation.

But too much energy consumption is not the only negative consequence of egg-washing. The cost of purchasing an egg washing machine, the device’s maintenance, required labor, and the cost of electricity employed in maintaining the product shielded from contamination all add up, increasing the price of eggs and harming the consumer.

With reports showing just how salmonella is still a problem despite the regulatory requirements imposed on the egg industry, it’s hard to contend forcing all producers to wash their eggs is somehow productive. Especially when so much electricity is required to maintain the eggs refrigerated.

Why not try freedom for a change?

How Regulations Helped to Kill the Blackcurrant Berry Market in America

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

How Regulations Helped to Kill the Blackcurrant Berry Market in America

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It’s no secret that regulations are used as tools by rent-seeking firms in order to keep competitors off the market. But when US regulations restrict the production of items for long periods of time and for no apparent reason, it’s often hard to bring the same items back into particular communities.

FruitThis happened with the blackcurrant berry, which has impacted Skittles, the fruit-flavored sweets that are both produced and marketed by the Wrigley Company.

In the United States, the purple Skittle tastes like grape. But anywhere else, including the United Kingdom and Australia, the company uses blackcurrant to produce these pesky purple pieces of candy. Outside of the country, everyone knows what blackcurrant is. But in America, many haven’t even heard of the powerful fruit.

What many also don’t know is that blackcurrant berry is not widely known in America because of a regulatory black hole.

For many years, growing the sweet and tart berry in the United States was outlawed. Since the early 1990s, farmers were forced to drop the production, but it wasn’t because there wasn’t a demand. Instead, the policy was embraced after legislators learned that the berry bushes could act as a vector for white pine blister rust, which could destroy the wood. That was a problem for lumber producers, and the berry was outlawed.

While in the 1960s the federal government loosened restrictions, allowing states to set their own rules, a few have kept the ban in place. Nevertheless, most states now allow farmers to grow the berry. Regardless of the policy change, the decades of obscurity made Americans remain unaware of the very existence of blackcurrant berry. The fruit, which is widely popular in Europe, is seldom found anywhere in the United States.

One man’s journey to formally decriminalize the fruit in New York started in Germany, where he ran a restaurant in the Bavaria region. Coming back to New York, Greg Quinn lobbied local lawmakers, helping overturn the ban on growing the fruit. Ever since 2003, Quinn has been growing blackcurrants in Hudson Valley, and now counts with at least 10,000 bushes in his backyard.

Ever since the very first moment he learned about the berry, he knew he alone had to help reintroduce the flavor back to the American palate.

As his brand of juices and concentrates start to slowly hit the market, many cocktail bars and restaurants appear to like the products, but the flavor is so foreign to Americans that the product is often seen as a tough sell.

Until blackcurrant berries are popular in America again, one can only hope that this story will help others to think twice before supporting more restrictions in the future.

Former Felons Could Benefit from Free Markets Too

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

Former Inmates Could Benefit from Free Markets Too

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For too many former convicts, life after prison is hard. Oftentimes, quite impossible. That’s why most of those who are given a second chance end up going back to jail.

But to this 35-year-old, his second chance came in the form of a local restaurant manager who was not scared of government’s formal tagging of felons.

Applebee'sAfter his release in 2011, Marcellus Benbow was struggling to find a job. He told reporters that, at the time, he was doing odd jobs, hoping to avoid going back to a life of crime while looking for a full-time opportunity. As he struggled to find a steady occupation in order to gain custody of his two oldest daughters, he also found no sympathy from potential employers.

That all changed when he answered an ad on Craigslist.

As soon as he met with the general manager at Apple-Metro, the New York franchisee of Applebee’s, both men hit off. That was it. Benbow had finally scored full-time employment with the company as a broiler cook.

“Applebee’s saved my life,” he said.

Now, Benbow is an assistant kitchen manager at Applebee’s Fordham Road location in the Bronx. He could soon be getting a promotion, taking the role of kitchen manager. He was lucky that his current employer was not afraid of his past, but many in his position aren’t as lucky.

In America, felons are required to disclose whether they have spent time in jail. But even if they don’t disclose this information, background checks help potential employers learn more. In many cases, non-violent felons are seen as a threat by employers who prefer to hire someone else, spurring a wave of discrimination suits against business owners.

The result is quite concerning.

The estimated unemployment rates among ex-prisoners are between 25 and 40 percent, despite the federal incentives some get by hiring felons. But laws that have helped to create so many non-violent criminals are still in effect. Instead of urging Congress to review some of these laws, namely the drug war and other pieces of legislation such as the Violence Against Women Act, many advocates for equal employment opportunities blame companies alone for their refusal to hire felons.

Recently, the often feared tycoons known as the Koch brothers announced they would stop asking potential employees about their criminal record. According to Koch Industries’ general counsel, Mark Holden, and Charles Koch, the decision came about after leadership noticed that overcriminalization had been affecting “us all but most profoundly harms our disadvantaged citizens.”

At the time of the announcement, both men penned an op-ed that asked the question: “If ex-offenders can’t get a job, education or housing, how can we possibly expect them to have a productive life?”

Instead of forcing employers to change, advocates could see a real change in the country’s employment environment by just pushing Washington to focus on real criminal justice reform.

BREED LOVE: What the Country’s First Female Self-Made Millionaire Taught Us About Free Markets

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

BREED LOVE: What the Country’s First Female Self-Made Millionaire Taught Us About Free Markets

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

“Don’t sit down and wait for the opportunities to come. Get up and make them!” Sarah Breedlove Walker

Sarah Breedlove, also known as Madam C. J. Walker, had a tough but incredibly fulfilling life.

WalkerThe African American entrepreneur, philanthropist, and political activist became one of the wealthiest black women in the country by launching Madame C.J. Walker Manufacturing, a company created to meet her communities’ cosmetic needs.

Born to enslaved parents in 1867, Breedlove was the first child in her family to be born as a free woman. As a young woman, Breedlove went through severe financial hardships, but once she moved to Saint Louis, Missouri, she became aware of some of the health difficulties people in her community suffered.

Some of the issues Breedlove saw other black women experiencing included severe dandruff and other scalp ailments associated with skin disorders caused by the lye added to the soap of the era, as well as other socio-economic factors.

Seeing so many women like her suffer from these ailments prompted her to act.

Once Breedlove saw a demand for better cosmetic products designed for different types of skin, she first sought more information on hair care with her brothers, who were barbers. In no time, she became a commission saleswoman for Annie Turnbo Malone, the owner of the Poro Company.

As the time passed, Breedlove used what she learned from her work along with the knowledge she had gathered as a result of her own research, developing her product line.

In 1905, Breedlove moved to Colorado where she and her daughter launched their business. The door-to-door saleswoman would teach other young black women how to style and care for their hair locally until 1910, when Breedlove established her business in Indianapolis, training other women to use “The Walker System,” her own method of grooming that promoted hair growth and scalp conditioning.

For about a decade, Breedlove employed several thousands of black women as sales agents. By 1917, Madame C.J. Walker Manufacturing had employed nearly 20,000 women.

Breedlove took pride in her system, but she also wanted to see others like her flourish.

Instead of just training employees, Breedlove started teaching others about finances and entrepreneurship, empowering an entire generation of black women through the establishment of the National Beauty Culturists and Benevolent Association of Madam C. J. Walker Agents.

During the National Negro Business League (NNBL) annual meeting in 1912, Breedlove celebrated her individuality and self-empowerment by stating:

“I am a woman who came for the cotton fields of the South. From there I was promoted to the washtub. From there, I was promoted to the cook kitchen. And from there, I promoted myself into the business of manufacturing hair goods and preparations. I have built my own factory on my own ground.”

Breedlove was special because she never complained. Instead, she looked around and saw an issue that she could solve. Through markets, she learned to compete by offering a product that met the demands of people in her community. As she grew as a businesswoman, she also gave back, teaching others that hard work and dedication pay off in the end.

Sarah Breedlove Walker may have not always seen her own story as an example of how markets help empower the individual. But this generation of young women could learn a great deal from her. Not just because of her defiance in the face of difficulties, but also because of her vision. Instead of simply demanding attention to her cause, Breedlove made her mark in the world by helping others (while helping herself).

As the F. A. Hayek character says in The Fight of the Century: “Give us a chance so we can discover/The most valuable ways to serve one another.”

Revolving Door: Google Enjoys Privileged Position within the US Government

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Revolving Door: Google Enjoys Privileged Position within the US Government

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Putting an end to the revolving door used to be one of the issues presidential candidate Barack Obama appeared to be most passionate about. In December of 2007, then Senator Obama vowed to close the “revolving door … [in other words] the pattern of people going from industry to agency, back to industry,” as soon as he entered the White House. But by 2016, Franklin Center’s Watchdog.org reports, the practice couldn’t get more popular.

GoogleSince 2009, more than 250 people moved between Google and other related firms and the federal government. According to the results produced by Campaign for Accountability’s Google Transparency Project, there have been 258 revolving door instances associated with Google employees and other related firms. In many cases, these individuals were either involved with national political campaigns or with federal government agencies and Congress.

But according to Watchdog.org, one of the most eye-catching discoveries is that “[m]uch of that revolving door activity took place at 1600 Pennsylvania Avenue, where 22 former White House officials went to work for Google and 31 executives from Google and related firms went to work at the White House.”

In many of these cases, the Obama administration appointed these individuals directly.

Many of the Google employees who left the tech giant and its associated firms ended up in the President’s Council on Science and Technology and the President’s Council on Jobs and Competitiveness, two boards responsible for regulating programs that directly impact Google as a company.

When the other end of the revolving door is analyzed, we also learn that 25 government officials involved with the intelligence community, the Department of Defense, or national security have joined the Silicon Valley giant in the past few years. And at least 18 former State Department officials embraced new positions with Google as well, while five Google staffers were hired by the State Department, and at least three Google executives switched jobs, moving their desks to the DOD headquarters.

According to the general counsel for the Project on Government Oversight, Scott Amey, the number of people moving between the government and Google is high, raising concerns among anti-revolving door activists. Amey says that precisely because information concerning the quantity of people involved in this revolving-door game is hard to find, the actual scope of this mass migration may not be easy to grasp at the moment. Nevertheless, 250 individuals involved in this activity is “a very significant number.”

Amey told Watchdog.org that, if individuals working inside the government “have access to information on competitors and they go to Google … then you have to wonder if Google is getting an unfair advantage over others in their market.” Interestingly enough, Amey’s comment serves as the perfect example of why crony capitalism or, in other words, the marriage of the state and private special interests, is bad.

Without a government setting the rules, winners are only picked by the market, not the privileged few.

How Crony Capitalism Almost Destroyed a Small Vegan Business

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How Crony Capitalism Almost Destroyed a Small Vegan Business

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Crony capitalism, what many still believe to be actual capitalism, is everywhere. That’s why every aspect of modern life seems to be ruled by those who nurture a cozy relationship with government.

Even what you eat for breakfast is under their control.

PastaLast year, we learned that the American Egg Board, a group of egg producers supervised by the US Department of Agriculture (USDA), had used its influence and might to (try to) destroy a small company, the start-up Hampton Creek, which is behind Just Mayo.

The egg-less product became the target of the crony organization, which is funded by the mandatory fees members of the industry must pay, whether they are willing to be part of the organization or not. The USDA is in charge of overseeing the group’s budget and activities, making the AEB an arm of the state. So when the group’s president called the vegan Just Mayo a “crisis and major threat to the future of the egg product business” in an email and a USDA official suggested having Just Mayo’s labeling claims challenged with the US Food and Drug Administration, Hampton Creek was hit with a warning letter claiming that they had made unauthorized claims regarding their product, effectively “misleading” consumers by using the image of an egg on the label of a vegan item.

But the FDA move wasn’t enough. Later, the cartel group with direct ties to the US government moved to hire a lobbyist with the goal of making the grocery chain Whole Foods stop selling Just Mayo. While this step backfired, AEB ended up looking to another corporate ally to put an end to the competitor by convincing Unilever, the manufacturer of Hellman’s Mayonnaise, to file a lawsuit against Hampton Creek.

The lawsuit was later dropped.

A Freedom of Information Act request helped us learn more about this sordid pursuit against the small company just because of its competitive factor, giving us yet another great example of how government and special interests often work together to put an end to anything that makes them uncomfortable.

In a recent article for the Tenth Amendment Center, Mike Maharrey claimed that this episode in the recent history of food regulations shows the importance of fighting the federal government locally. After all, Maharrey wrote, “[t]he Constitution does not delegate the federal government any authority to regulate food safety.”

Despite the lack of legitimate authority, special interest groups like the American Egg Board continue to become involved with government, both local and federal. As they obtain privileges and special treatments that competitors do not enjoy, lobbyists work alongside lawmakers to solidify their clients’ position, oftentimes creating a scare regarding their competitors’ products that are sometimes powerful enough to nearly destroy small companies.

The result? Consumers end up having restricted access to variety, forcing the prices of commodities to go up.

Even if you’re not entirely positive the US Constitution should be followed at all times, you might agree that, if regulators and lawmakers do, indeed, have the health and safety of consumers in mind, they should be celebrating and welcoming new competitors in the food market, not fighting to keep the number steady. ​

How Regulation & the Fed Killed the Competitive Spirit in the Banking Community

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How Regulation & the Fed Killed the Competitive Spirit in the Banking Community

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During a recent House Committee on Oversight and Government Reform hearing, a group of lawmakers wanted to know why there have been so few new banks opening their doors in America in recent years.

MoneyWhile it’s hard to admit that, for once, a group of Washington insiders are actually asking the right question, it’s also important to go beyond their concern by looking at why the sluggish economy is, in fact, to blame, but not because of economic factors alone. The problem, Mercatus Center’s Stephen Matteo Miller wrote, is regulation.

As the country announced the end of the economic crisis of 2008, the Federal Deposit Insurance Corporation’s application process was prolonged, hoping to cap the number of failed banks over time.

While this explains part of the problem, another issue also brought up by the Mercatus scholar may explain the other reason why there’s so little competition in the banking business.

According to a study carried out by the Federal Reserve Bank of Richmond, the implementation of low interest rates defended by the Federal Reserve leadership may have had been directly to blame for low competition as well.

The conclusion both economists and the Mercatus scholar agreed on despite the findings by the Richmond Fed is that, laws like the Dodd-Frank Act, which adds to the regulatory burden, as well as the FDCI’s rule change had the most negative effect on the competitive aspect of the banking market, effectively protecting established banks and keeping smaller, more consumer-oriented banks out of the market. The artificial modifications made by the Fed have also contributed.

Over time, restrictions developed as regulations embodied in the Code of Federal Regulations have also had a negative effect on the overall health of the American economy. According to the Cumulative Cost of Regulations study carried out by the Mercatus Center, the regulatory burden may have helped to reduce gross domestic product (GDP) by $4 trillion. This aggressive and dramatic reduction may have also prompted entrepreneurs in the banking community to think twice before launching a new business.

So when reviewed carefully, the phenomena now under consideration by Congress has little to do with what many believe to be slow economic growth, or what many progressives like to call “record profits.” After all, it’s easy to measure how successful the established, too-big-to-fail banks have become over the past 6 or 7 years. What’s hard to assess is how much wealthier we would have been if government had gotten out of the financial system altogether.

After Brexit, Is Amexit Next? This ​Libertarian Congressman Says Yes

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

After Brexit, Is Amexit Next? This Libertarian Congressman Says Yes

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After Britons voted to leave the European Union on June 23, libertarian-leaning Rep. Thomas Massie (R-KY) decided to lead the charge to get the United States out of the United Nations, attaching the term “Amexit” to the endeavor.

ThomasMassieIn a post on his official Facebook page, Massie shared the full text of HR 1205, the American Sovereignty Restoration Act, which was introduced in 2013 but died in the previous Congress.

The bill was cosponsored by Massie, and according to the congressman, it would effectively keep the United States from spending taxpayer money on the organization, prevent US Armed Forces from serving under UN command, put an end to diplomatic immunity for foreign UN members in the country, close the UN headquarters in New York, and terminate the country’s membership with other organizations such as UNESCO and WHO. The bill would also repeal the United Nations Environment Program Participation Act.

​Mentioning the fact many of the countries involved with the UN are run by dictators, Massie said that binding US citizens to decisions made by tyrants goes against the US Constitution, which is the “supreme law” of the land.

Massie went on to say that the UN gives “cover to corrupt governments” while preventing “citizens from owning guns.” In the “best case,” Massie responded in a comment, “the UN is a bureaucratic waste of American taxpayers’ money.”

Dr. Ron Paul has recently written a column for the Ron Paul Institute for Peace and Prosperity calling for a US exit from NATO.

According to the former congressman, NATO is a “Cold War relic” that “survives only by stirring up conflict and then selling itself as the only option to confront the conflict it churned up.”

Shortly after the Brexit vote, the head of the Texas Nationalist Movement used Twitter to call on Texas Gov. Greg Abbott asking him to schedule a statewide referendum on the independence of the Lone Star state.

Last year, the Texas Republican Party rejected an initiative that would give voters the opportunity to vote to leave the union. If the measure had become a non-binding ballot initiative, it would have stated that the state of Texas would “reassert the prior status as an independent nation” if “the federal government continues to disregard the Constitution.”

When talking secession in his book Omnipotent Government, economist and philosopher Ludwig von Mises said that a nation doesn’t have the right to tell a province that it belongs to a large body of power. “A province consists of its inhabitants. If anybody has a right to be heard in this case it is these inhabitants,” he added. “Boundary disputes should be settled by plebiscite.”

In the book Liberalism, Mises goes further, stating that if there’s a way to grant the individual with the right of self-determination, “it would have to be done.”

Minimum Wage Laws Push Young Blacks Out of the Workforce

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Minimum Wage Laws Push Young Blacks Out of the Workforce

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Unemployment is in the news again. But the media’s focus on the presidential elections seems to keep Americans from discussing the ongoing economic disaster we haven’t had the time to deal with since 2008. But as the Federal Reserve chairwoman shows signs of mild nervousness, more news outlets begin to pay attention. Still, few choose to dig deeper, and the great majority of the American electorate remains oblivious to the root causes of the problems they are dealing with now.

Walter E WilliamsIn order to help his fellow Americans understand the realities of government-management of economic policies, economist and professor Walter E. Williams wrote an article discussing the shift in unemployment rates and demographics over the past decades, helping us understand how bad the consequences of government interference are.

According to Williams, the unemployment rate of African American teenagers in 1948 was 9.4 percent while in 2016, the black teenage unemployment rate is about 30 percent. Still in 1948, the unemployment rate of white teens was higher, at 10.2 percent, while in 2016, it’s at 14 percent.

To the libertarian economist, what has caused this problem we have at hand is the elitist mentality.

In his article, Williams points out to comments made by another economist, David Howell, to illustrate the shifting mentality.

When talking about minimum wage laws and the reasons why we should embrace a higher minimum wage policy, Howell, who Williams calls a New School economist, says that we should not be worried about one of the most devastating consequences of raising the minimum wage: job losses. “Why shouldn’t we in fact accept job loss?” Asked Howell. But it was another scholar, Economic Policy Institute economist David Cooper, whose comments appeared to have truly triggered Williams.

“What’s so bad about getting rid of crappy jobs,” Cooper says, “forcing employers to upgrade, and having a serious program to compensate anyone who is in the slightest way harmed by that?” To Cooper, working fewer hours but making more money is all that matters, even if millions end up struggling to have access to entry level jobs due to the tough wage requirements.

To Williams, a “crappy job,” economically speaking, is a job. And being unemployed means being out of a job.

Whether Americans do not look fondly back to the 1940s and 1950s, Williams explains that, back when wage policies weren’t as interventionist, teens took jobs that would seem undesirable to the New School economists of today.

When Williams was a teen, he explained, he and his buddies would rise early during summers to board farm trucks headed to New Jersey. His jobs then varied a great deal. At times, Williams would pick blueberries, but sometimes he washed dishes and mopped floors, but he also worked unloading trucks at Campbell Soup.

Unfortunately for many teens living in poverty nowadays, the same jobs are either unavailable or not “good enough” for big city kids. Instead of allowing people to choose what job they are willing to take in order to make some kind of money, those who support interventionism in the economy prefer to see the poor unemployed and unskilled to see them fend for themselves.

If Williams is correct and current black leadership is all in favor of this view, things are only going to get worse.

FDA Ignores Science, Pushes for Nutrition Label Changes

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FDA Ignores Science, Pushes for Nutrition Label Changes

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

The US Food and Drug Administration is at it again, trying to find even more reasons to get involved in the eating habits of Americans and US residents. To Mercatus Center’s Richard Williams, this is a serious problem.

GroceryAccording to Williams, an expert in benefit-cost analysis regarding food safety and nutrition, the FDA’s tendency to meddle with our food is a tradition to the agency, mainly due to the government’s resistance to looking into new ideas.

The FDA’s latest efforts revolve around nutrition labels.

According to the agency’s latest announcements, products will be required to carry labels with “more obvious” calorie counts, reports ABC. The FDA will also add a new line for added sugar, such as sweeteners and high-fructose corn syrup. With this change, the FDA hopes to “help Americans make healthier choices.”

But according to Williams, the label improvements do little to help consumers. Why? Because a very small percentage of the population uses “nutrition labels to eat healthier.”

According to the expert, what we currently know about what consumers eat and how their health is impacted is based solely on “data that come from people trying to remember what and how much they ate.” Studies on this subject have shown that, due to the fact people often forget what they eat, data associated with people’s eating habits are often “flat wrong.” The consequences are as follows: Instead of looking into the issues and dissecting the researching procedures prior to taking the data into consideration, the FDA is simply forcing an entire nation to adjust by basing its knowledge of how healthy people are on inaccurate information.

Back in 1993, Williams wrote in his article for Politico, he worked as the chief economist at the Center for Food Safety and Applied Nutrition in the FDA. At the time, he predicted that the FDA’s implementation of the Nutrition Labeling and Education Act of 1990 would generate good outcomes, helping people make healthier choices. At the time, Williams confessed, he believed that the country would see 40,000 fewer cases of cancer and heart disease over the next 20 years. He also believed that 13,000 deaths would also be prevented as a result of the implementation new nutrition label requirements. Unfortunately, his predictions were off.

Nowadays, fewer people read food labels, claiming it’s easier for them to figure out their taxes than to work toward having healthier eating habits. And how do we know this? Well, research carried out by the Department of Agriculture shows that nutrition labeling laws have no effect on food consumption of ingredients such as saturated fat and cholesterol while another study carried out by independent researchers shows that food labels may be harming consumers who actually read them. According to the piece of research, evidence suggests that labeling requirements have “had limited success and in fact may be misleading to consumers.”

In order to help Americans make better decisions, Williams writes in his column, the FDA needs to walk away from micromanaging people’s lives. First, “the FDA would need to honestly concede how little it knows about how different foods and food combinations actually affect individuals with distinct genetic and environmental factors,” then, the agency would have to review its methods, putting an end to what Williams calls experiments “on the entire American population.”

Will the FDA listen?

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