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Thank A Bureaucrat: Baby Boomers Aren’t Leaving The Labor Force, Millennials Can’t Find Jobs

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

Thank A Bureaucrat: Baby Boomers Aren’t Leaving The Labor Force, Millennials Can’t Find Jobs

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Early in 2017, the New York Times reported that the workforce is growing slowly as more baby boomers retire. Recently, economist Janet Yellen, otherwise known as the Federal Reserve System’s Chair, stated that another economic crisis is unlikely “in our lifetime.” Still, reports show that now more than ever, Americans of retiring age are choosing to forego retirement altogether. As these older Americans notice that Social Security and the meager savings they have accumulated over the years won’t be enough, they continue working.

boomer

But as young Americans leave college and find themselves stuck in part-time jobs that don’t even cover their student loans, baby boomers remain active. So, as a matter of fact, labor force participation hasn’t been falling thanks to older Americans finally retiring. Instead, young, fully capable and educated men and women are the ones who aren’t being able to find suitable work.

Don’t trust me? Look at the numbers.

Last quarter, Bloomberg reports, 19 percent of 70- to 74-year-olds were still working. In the same period in 1994, only 11 percent of people in that age group were still in the labor force.

Also, this past quarter, 32 percent of Americans between the age of 65 and 69 were employed. And according to the Bureau of Labor Statistics, 36 percent of people in this age group will be working by 2024. A huge increase from 22 percent of Americans aged 65 to 69 who were active in the labor force in 1994.

 If these numbers aren’t enough, consider that in a survey by the Employee Benefit Research Institute, 79 percent of respondents said they expected to go into retirement while continuing to work. Workers aren’t even relying on retirement anymore as they struggle to save throughout life due to the high cost of living, high debt, and knowledge that Social Security alone just won’t do.

As you’ve read previously here at The Advocates, many young, educated Americans have already chosen to completely ignore their diplomas, going for occupations that are often available only to the low-skilled and poorly educated. As older Americans find it increasingly hard to leave the labor force altogether, expect an even greater number of young Americans failing to find gainful employment, especially in their areas. But instead of blaming baby boomers alone, remember what policies have paved the way for these discrepancies and who champions them.

 More government-backed student loans and easier access to loans and grants, ensuring everyone has a higher education, has always been a staple of the progressive agenda. One that has been thoroughly supported by… yes, Millennials.

As a result of the implementation of this kind of policy, the government created an inflated, artificial demand for a college education that would not be the norm if the state hadn’t decided that college is for everyone. Students, who are often just influenced by peer pressure, were led to believe that any degree was enough, and that they shouldn’t be taking a good look at the labor market before making a decision. The result? Too many Americans with useless degrees who will eventually settle for occupations that have nothing to do with their “calling.”

Unless government is removed entirely from the picture, this trend will only worsen.

What will happen to people with low incomes if minimum wage is done away with?

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

What will happen to people with low incomes if minimum wage is done away with?

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

Question:

If you take away minimum wages, businesses can pay whatever small amount they want and keep the rest for profit. What about those who will only make $3.00 per hour?

wage

Answer:

If businesses can pay what they want, why do 90-95 percent of today’s workers in the U.S. make more than the minimum wage? The answer: supply and demand applies to employees as well as products. If a business doesn’t pay a person what he or she is worth, they go to a new employer or start their own business. In a libertarian society, with its expanding economy, such moves will be much easier than they are today.

Minimum wage laws actually destroy entry-level positions for the unskilled. Black economist Walter Williams believes that the minimum wage laws are the single most important factor in keeping young blacks out of the job market. The next time Congress considers raising the minimum wage, look in your newspaper for an estimate of the number of jobs that will be lost – potential training jobs for the disadvantaged.

Arizona Bill Could Be A Win For Sound Money

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Arizona Bill Could Be A Win For Sound Money

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A bill being considered by the Arizona legislature could be the park of a sound money revolution. Much like the marijuana legalization movement ignited by anti-drug war advocates across the states, this new movement could help strike the root of all of our economic woes.

MoneyAccording to the Tenth Amendment Center, House Bill 2014 would initiate the sound money revolution by eliminating state capital gains taxes on gold and silver specie. Thus encouraging individuals to use the metals as currency. The bill, which passed the House on the 13th, will need a final approval from the Senate. And if approved, the legislation would then initiate a movement that could help put an end to the Federal Reserve’s monopoly on money.

By removing the burden of applying state capital gains taxes on income “derived from the exchange of one kind of legal tender for another kind of legal tender” and redefining legal tender as ““a medium of exchange, including specie, that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues,” coins having precious metal content could become, once again, a legal form of currency.

By passing this bill, the Arizona legislature would be allowing silver and gold specie to be treated as money, essentially “legalizing the constitution.”

Currently, Arizona law requires individuals to pay capital gains taxes whenever they use gold and silver in transactions or any time they want to exchange the metal for Federal Reserve notes. Due to inflation, the purchasing power of fiat money decreases, which then causes the metal’s nominal value to rise. Thus the “gain” taxes. Even if they are fictional. The result is obviously unfair because it penalizes those using gold and silver as money.

By passing HB 2014, Arizonans would not have to add the amount of any net capital gain tied to the exchange of different kinds of legal tender, freeing the consumer from being subject to state taxes.

This could open up currency competition in Arizona, causing other states to perhaps do the same once they realize competition will help to bring the government monopoly over the currency down.

To advocates of states’ rights like Tenth Amendment founder Michael Boldin, this piece of legislation in Arizona is a great first step to “end the fed’s monetary monopoly,” even if it won’t put an end to it overnight. By giving the individual Arizona resident his freedom to trade freely, he will be securing the purchasing power of his money as a result.

Who Owns Jobs: The Government or the Employer?

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

Who Owns Jobs: The Government or the Employer?

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

Reuters has reported that the Donald Trump administration’s pick for head of the U.S. Labor Department has admitted to hiring undocumented immigrants in the past. More specifically, he admitted to employing a foreigner who wasn’t legally allowed to work in the United States as a house cleaner.

EmployerThe pick, who serves as the chief executive officer of CKE Restaurants Inc, made the revelation on Monday, adding that the employment had taken place for a few years. The statement he released also claimed that he and his wife were unaware that the worker wasn’t allowed to seek employment, but that once they were made aware they terminated her, offering her help to obtain legal status.

This piece of news is sure to be explosive, considering the scrutiny the current administration’s picks for cabinet positions have been receiving in the past months. Nevertheless, this story matters for a much more important reason. After all, who owns the job, the government or the employer?

While countries have boundaries by default due to the state’s need to set rules and impose restrictions on everything from migration to commerce, it is important to remember that only the individual employer owns the job he or she is creating.

Regardless of where you stand on immigration, it is up to the job owner to determine whether a particular individual is fit — or not — to perform the duties available in exchange for what the employer is willing to pay. It is also the employee’s right to accept the offer, whether or not the federal government has wage restrictions imposed. After all, if an unskilled mother of five who has just lost her husband is willing to take a job for $9 per hour, what authority does a lawmaker have to tell her she can only find a job that pays $15?

Employers willing to pay that much will undoubtedly hire someone with skills, leaving this poor individual out of the workforce and, what’s worse, in the hands of the welfare state.

When it comes to immigration, racism and security concerns aren’t what’s at stake. Instead, we must understand the basic principle of economics: supply and demand. If there’s a demand for workers willing to take on certain jobs and a supply of workers willing to do them, it will happen. Whether the government allows it or not.

Allowing individual job creators to take on the burden of understanding this risk makes them better employers, which also helps the country, by making sure that only hard workers who keep their promises and follow local rules are getting employed. When government imposes restrictions, workers are forced into the shadows. Putting their lives, the lives of their children, and employers at risk.

How about handing the burden back to the individuals involved in the transaction? It saves us money, boosts the economy, and helps us weed out those who aren’t serious about their intentions.

Bay Area Restaurants Suffering due to Local Minimum Wage Laws

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Bay Area Restaurants Suffering due to Local Minimum Wage Laws

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

Californians are proud of their politics. More often than not, they will claim they have set the standards, yielding “real change” across the country. But when policies embraced by Californian progressives backfire, don’t expect to see them apologizing to the rest of us.

In the Bay area, folks working in the restaurant business had one of their worst years yet in 2016. And it had nothing to do with the presidential election. Instead, it was a local wage policy that changed their realities, making it difficult for restaurant business to stay afloat or expand.

Oakland-CaliforniaRecently, a local favorite closed its doors while a new restaurant opened in the same area. Unfortunately, the second place was also forced to shut down. What both places have in common? The cost of doing business is too high.

According to a local radio station, rents are helping to drive restaurant business out of the region and into the East Bay. But employees are also feeling the rent blues, moving away from the Bay area and finding it harder to keep a job due to the distance. On top of all that, food prices have also risen, while California’s new minimum wage law begins to claim its first victims.

In the case of the Bay area, the minimum wage jumped from $9 per hour to $12.25 in 2015, due to a recent Oakland wage law. In 2016, the minimum wage rose even higher, to $12.55, leaving restaurants scrambling to keep the same number of employees while struggling to stay in business.

As a result, restaurant owners are either closing or reinventing their businesses, turning full service restaurants into casual eateries. Local reporters who discussed the matter with these business owners all agree: when everything is expensive, whether it’s keeping employees to buying ingredients, the cost of doing business becomes too high. Now that we’re in 2017, local restaurants will be forced to pay $12.86 per hour to their minimum wage employees. In San Francisco, the minimum wage will increase to $14 this year. As restaurants struggle to keep up with payroll demands while paying the bills, they look at local politics and find themselves choosing between sticking with their communities or leaving. To stay, they must slash the number of employees or close their doors. With fewer employees — either because commute is unreasonable or because the minimum wage is bringing these businesses down — the industry’s future seems bleak.

While there’s still a vibrant and competitive environment for restaurants in the region, the cost of living and doing business locally is forcing people to think twice about their choices. Instead of staying put, they often prefer to walk away. And over time, this problem will yield even worse outcomes, producing fewer jobs in the region, which will eventually translate into poor economic growth.

Not being able to take risks, these entrepreneurs who decide to stay must downsize their businesses, and those who were employed are now, once again, struggling to find a job.

As locals begin to live the unintended consequences of minimum wage laws, they also learn about economics.

Who will fund national monuments in a libertarian country?

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

Who will fund national monuments in a libertarian country?

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

QUESTION: National landmarks such as the Jefferson Memorial, the Washington Monument and the Lincoln Memorial are symbols of national unity, strength, and sources of inspiration. They are monuments of a national republic. How would these monuments be constructed for the entire nation in a libertarian society?

Monuments

MY SHORT ANSWER: They would be constructed and maintained through private donations rather than taxes. Donations are given freely; taxes are forced.

We honor Jefferson, Washington, and other American icons because they believed in the importance of individual freedom, even though they may not have practiced it perfectly (e.g., Jefferson had slaves). We dishonor their memory and the values they cherished by forcing our fellow Americans to pay for their memorials.

Without tax funding, the edifices of these great men might be less grandiose than they are today. (Of course, they might just as well be even grander, better preserved and staffed, and better funded.) However, they would be a truer symbol of the freedom that made our nation great.

Even today, many renowned historical sites and monuments are privately funded. George Washington’s home Mount Vernon — the most popular historic estate in America, open 365 days a year — has been maintained and made available to the public since 1853 by the Mount Vernon’s Ladies’ Association, which proudly declares it “does not accept grants from federal, state or local governments, and no tax dollars are expended to support its purposes.”

Thomas Jefferson’s home Monticello is maintained by a private, non-profit corporation, in cooperation with the University of Virginia.

Colonial Williamsburg was restored with private funds and is run as a private national museum not dependent on government funding.

A libertarian society, based on free enterprise and free from today’s crippling tax burden, would be far wealthier than our society today and thus better able to fund such monuments and landmarks. And the drive to collect the funding for them could unite and inspire the country every bit as much as the actual monuments themselves.

 

Californians Continue to Flee as Public Pensions Eat Up 20 Percent of City Budgets

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

Californians Continue to Flee as Public Pensions Eat Up 20 Percent of City Budgets

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

California has, for a long period in American history, been the go-to place for entrepreneurs and seekers of fortune and fame. But as the regulatory burden grows, making it difficult for business owners to stay, they simply pack and move somewhere where the cost of doing business won’t be as overwhelming.

LuggageThat is a reality and it has been bad for quite some time.

According to CoreLogic’s recent analysis, for every home buyer coming into the Golden State, there are three Californians selling their property and flocking elsewhere.

What the study concluded, deputy chief economist at CoreLogic Sam Khater told reporters, is that the the current state of the California housing market shows that there’s a clear connection “between migration patterns and home prices.”

Since property costs in California have risen 71 percent since 2011, members of the middle and lower classes simply cannot afford to stay so they flee, taking their taxes with them. With local government’s worker pensions growing at a staggering rate — even after reforms were implemented — it isn’t farfetched to believe that, as young, hard-working people leave the state, local governments begin to face tough times, much like what happened in places like Detroit, Michigan.

In a state where the median home price is at $480,000 statewide due to the local and state government’s heavy-handed intervention in the real estate market, incomes aren’t keeping up with the home price increases, making it hard for young families to keep up with their expenses. Instead of opting for paying bills and taxes instead of spending on themselves, people are choosing to leave.

In cities like Los Angeles, taxpayers foot billionaire pension bills, which eventually added up to $1.04 billion in 2015, a sum that represents 20 percent of the city’s general fund. And despite the changes to the laws, city officials will continue to use up to 20 percent of the Los Angeles city budget just to cover pensions and retiree healthcare in the future.

But what about the tech industry? You might ask. Isn’t it making Californians rich?

While the tech industry in is, indeed, thriving, the wealth it creates helps to play into the hands of crony capitalism.

As wealthier tech giants become even more prosperous, they also become more influential among California and Washington politicians. But that’s not all. They also raise the overall cost of living for those around them.

With local governments eating into locals’ paychecks, only those who are powerful enough to influence policy will remain in California. And as history teaches us, this is bound to have a very bad ending.

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

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

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

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

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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!

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How Egg Regulations Hurt the Environment — And Your Pocket!

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

Government has a way of 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?

Taiwan Streets: a Case of Free Markets in Action

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

Taiwan Streets: a Case of Free Markets in Action

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

In Liberalism: In the Classical Tradition, Ludwig von Mises explains that classical liberalism “was the first political movement that aimed at promoting the welfare of all, not that of special groups.”

TaiwanIn an article for the Foundation for Economic Education, Professor Peter St. Onge, a long-time Taiwan resident, discusses a real world example of free markets working to promote the welfare of all members of a community.

In “Taiwan’s Social Safety Net Is the Street Market,” St. Onge reviews some of the most striking traits of the streets of Taiwan and the state’s loose regulations, giving us a better idea of what Mises wrote nearly 90 years ago.

According to Onge, libertarians and free market apologists are “often ridiculed” when they claim that free enterprise is the best substitute for the welfare state. They are often called naïve for suggesting that fully capable individuals would have a better shot at making a living if they were given freedom instead of government dependence.

In Taiwan, Onge writes, the welfare state is “tiny,” and the regulations aren’t as restrictive when compared to the United States or Europe. The few regulations the state has in place are also lightly enforced.

With the gaps created by government’s hands-off approach in the island of Taiwan, commerce exploded. The result? “Near-zero homelessness.”

The obvious effect of less restrictive regulations is the growth of business, which makes local streets bright with store signs, consumers, and shop keepers. But brick-and-mortar stores are not the only ones benefiting from this freedom. According to Onge, the island hosts a number of pop-up businesses that take over the streets, employing “mainly low-skill labor.” These businesses give the poor and the unskilled the chances that the state’s handouts can’t.

To illustrate his point, Onge writes that, every morning at 5 am, farmers bring their produce to a street close to the university where he works. Using folding tables, they place their products along the street undisturbed. As the diverse sets of customers arrive, the street is filled with color and sound. Some of the customers include the elderly, who aren’t healthy enough to drive to a large store, mothers with small children, and fathers getting ready to cook breakfast. At 7 am, farmers pack up and leave the spots, opening up the space to breakfast pop-ups like noodle shops, sandwich places, and joints offering full English breakfast.

Past noon, these spaces are freed again, giving the night crew time to set up different types of restaurants and stores.

At night, Onge reports, you can buy anything in that street. From fried chicken to kids’ toys. Customers can be seen enjoying the creative madness until 3 in the morning. Just a couple of hours before farmers are ready to unload their produce once again.

This “small river of entrepreneurial income” helps low-skilled workers find jobs, even if temporarily, while also bringing consumers what they want, conveniently.

Instead of crony capitalism, these streets are filled with old-fashioned free markets, allowing competitive enterprise to shape commerce, not government-backed favoritism.

The result is happier customers, more jobs, more safety, and cheaper products.

Revolving Door: Google Enjoys Privileged Position within the US Government

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Revolving Door: Google Enjoys Privileged Position within the US Government

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

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

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

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

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

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.

Video Game Shows the Economic Benefits of Legalizing Marijuana

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

Video Game Shows the Economic Benefits of Legalizing Marijuana

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

In a truly free society, individuals would be able to provide the products consumers are after without having to deal with the restrictions imposed by bureaucrats.

Hemp IncWhen analyzed closely, private regulatory practices promoted within the marketplace are often much more efficient than regulations imposed by government officials who often are responding to potential threats instead of responding to legitimate market demands, putting a strain on job creators and consumers, who end up paying more—sometimes with their lives—for the product they want or need.

But as states begin to accelerate the process to legalize marijuana, the debate is finally shifting. Now, we’re finally talking more about the health and financial benefits of marijuana legalization than the legalization’s downside.

That’s why Hemp Inc. matters.

According to VICE News, the video game produced by HKA Digital Studios allows users to grow and sell weed while interacting with smokers, who sometimes happen to be celebrities. As a result of their economic ventures, these pot entrepreneurs are able to build marijuana empires. Unfortunately, that’s only currently—and legally—possible in real life if you move to states like Colorado and Washington.

The app was launched on April 26, but few news outlets covered the story.

Regardless of how popular the app becomes, the message it conveys is a powerful one. Despite the drug war, demands will always be met, no matter how many laws Congressmen pass. Once you lift barriers, however, industries flourish—including health industries—and consumer safety becomes a priority. Instead of assaulting people’s freedoms under the guise of safety, lawmakers are being increasingly reminded that they don’t know what is best for everyone. And that’s OK. Leaving it up to the individual is the only moral alternative.

So instead of logical arguments alone, anti-drug war advocates now have a new tool that demonstrates just how easily individuals are able to benefit themselves while benefitting others once marijuana is legal.

Instead of violent, bloody wars between gangs over street territory, the relationship between marijuana producers, sellers, and consumers is slowly becoming more like the relationship between the farmer, grocer, and the consumer—and that’s a positive development.

Unlike a real war, the drug war is an effort that targets a behavior seen as immoral, not a real enemy. But we have a modern historical example of how that type of war doesn’t lead us anywhere. Why are we still hesitant to put an end to this madness?

Better Economic Prospects, Not Incarceration, Behind US Crime Decline

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

Better Economic Prospects, Not Incarceration, Behind US Crime Decline

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

For the past two decades, crime in the United States has declined considerably. Compared to the crime rate of the early 1990s, US crime rates have fallen about half while violent crime has fallen by 51 percent. Between 1991 and now, property crime has fallen by 43 percent.

Sign But while many understand that better economic prospects tend to help keep the crime rate low, many tend to attribute the considerable reduction to a series of factors that, when closely reviewed, have little to do with safety.

Some of the most common arguments brought up by experts include the expansion of enforcement agencies, “tough on crime” policies, and increasing incarceration rates. Some have even gone as far as claiming that legalized abortions had helped to boost safety, ignoring the fact that abortion rates have declined over the past decades.

But according to research on the subject by New York University School of Law’s Brennan Center for Justice, socio-economic factors, not mass incarceration, has helped reduce the crime rates across the country.

According to the paper, increasing incarceration has had no effect on the drop in crime rates since 2000. When it comes to violent crime, the rate is also close to zero. States like Texas, California, Michigan, New Jersey, and New York have all seen a drop in crime as incarceration rates have also dropped.

Between 2000 and 2013, the study concludes, growth in income and decreased alcohol consumption have been the top factors responsible for the drop in crime, along with a boost in consumer confidence. Between 1990 and 1999, factors that helped to push crime rates down included decreased unemployment, growth in income, decreased alcohol consumption, and increased incarceration and police numbers.

But as the number of police officers increases, the number of low-level offenders behind bars shoots up. According to Brennan Center for Justice, the fact we have more low-level offenders in jail now than before impacts the crime reduction effect.

From the study:

“The incarceration rate jumped by more than 60 percent from 1990 to 1999, while the rate of violent crime dropped by 28 percent. In the next decade, the rate of incarceration increased by just 1 percent, while the violent crime rate fell by 27 percent.”

During a recent justice reform event organized by the grassroots organization FreedomWorks, Molly M. Gill, a former prosecutor who’s now the Director of Federal Legislative Affairs for Families Against Mandatory Minimums Foundation (FAMM), pointed out that “very few violent offenders end up in federal prisons.” Instead of violent criminals, federal prisons hold a great number of non-violent drug offenders, who account for more than 25 percent of the federal budget every year. Instead of rehabilitating them once they are inside the system, U.S. Justice Action Network Deputy Director Jenna Moll told attendees, prisons are often seen as the easy way out. During the FreedomWorks event, Moll also talked to attendees. She pointed out that a “national survey found prisoners prefer one year in prison versus five years probation,” adding that “if even prisoners know” prison is “the easy way out,” it proves that the system is not working.

In a 2000 article for the Foundation for Economic Education (FEE), economics professor Bruce Benson explained that, while few studies on the matter have been carried out, “Private security employment has accelerated since 1970,” leading him to believe that the “private security market … the second fastest growing industry in the United States” may have something to do with the drop in crime rates. To the economist, private-sector responses to crime should be studied as a major factor behind crime decline.

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

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

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.”

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

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

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

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

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

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

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

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

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

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

Unfortunately for New Balance, the deal never came through.

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

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

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

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

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

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

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

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Free Market

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

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

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

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