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

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

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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

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

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

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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

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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!

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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?

Taiwan Streets: a Case of Free Markets in Action

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Taiwan Streets: a Case of Free Markets in Action

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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

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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 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.

Video Game Shows the Economic Benefits of Legalizing Marijuana

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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

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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.”

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?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is American Entrepreneurship Dead?

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

Is American Entrepreneurship Dead?

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

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

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

Entrepreneur

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Aluminum

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

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

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

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

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

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

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

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

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

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

Charles Koch Blasts Corporate Welfare

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

Charles Koch Blasts Corporate Welfare

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

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

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

Free-Market

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

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

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

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

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

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

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

Raising the Price of Milk: A Minimum Wage Metaphor

in Communicating Liberty, Economics, Liberator Online, Libertarian Answers on Issues, Libertarian Stances on Issues, One Minute Liberty Tip by Sharon Harris Comments are off

(From the One-Minute Liberty Tip section in Volume 19, No. 15 of the Liberator Online. Subscribe here!)

First, the bad news.

A strong majority of Americans favor increasing the minimum wage. A recent Reason-Rope poll asked Raising the Price of Milk1,003 American adults this question: “The federal minimum wage is $7.25 per hour. Do you favor or oppose raising the minimum wage to $10.10 per hour?”

Fully 67 percent supported raising the minimum wage.

But there’s more.

When the poll further asked: “What about if raising the minimum wage caused some employers to lay off workers or hire fewer workers? Would you favor or oppose raising the minimum wage?” the response changed dramatically. 58 percent opposed raising the minimum wage, and only 39 percent favored it.

And when asked: “What about if raising the minimum wage caused some employers to raise prices? Would you favor or oppose raising the minimum wage?” the vote was split almost evenly.

And that’s the good news. We can change minds and win the majority to our side on this issue — if we help people understand the true, terrible consequences of minimum wage laws.

How can we do that? It’s not easy. To many people, a higher minimum wage seems compassionate. It even seems to make economic sense. As one state representative said earlier this year: “Raising the minimum is a win-win. If you put an extra $700 or $800 in a worker’s pocket, that money is going to be spent. Everybody will benefit.”

One problem is that most people aren’t employers; they don’t “buy” labor. They don’t think in those terms.

But most people do buy milk. And that suggests a simple analogy that can cut through foggy thinking and help people understand why the minimum wage produces such bad results.

Ask your listeners: What if the government decided to mandate an increase in the retail price of milk? Suppose the price of a gallon of milk was doubled?

Would that help farmers, dairies, and grocery stores? Would it mean more money for them? After all, it would only be a small increase for most milk buyers, just a few dollars per week.

Ask your listener what they think would happen if the cost of milk doubled.

How would people react? Would people buy more milk, or less?

For some people, the price increase wouldn’t matter. They’d just keep on buying milk.

But for many consumers, the price increase would make a big difference. Struggling families would be hit especially hard.

Many people would start exploring milk substitutes. Instead of buying whole milk, they might switch to cheaper soy or almond or rice milk.

Others would simply cut back on the amount of milk they consume.

Still others might water down their milk after purchasing it, to make it stretch further.

Further, the cost of items that used milk — cheese, ice cream, butter, etc. — would also rise. Consumers would buy less of those items, too. And manufacturers, just like consumers, would switch to milk substitutes whenever possible, in order to keep the prices of their products as low as possible.

The bottom line? Consumers would buy less milk. And, ironically, many farmers — the very people the increase was supposed to help — would lose money or even go out of business.

Which brings us to the minimum wage.

Employers buy labor, not milk. But if you increase the cost of labor, employers will act in much the same way that our imaginary milk consumers did.

Some employers will no longer be able to afford to buy labor at the price mandated by the new minimum wage. As a result, some jobs will shrink (fewer bag boys, fewer check-out counters, fewer waiters, fewer warehouse workers, etc.). Some jobs will disappear altogether. (Remember movie ushers, and car attendants who pumped your gas and checked your oil for you?)

Further, as the price for labor is incorporated into the price of goods, prices will go up for some products, and others may simply disappear from store shelves.

Some employers will look for labor substitutes, just like our consumers above looked for milk substitutes. They will use technology. Check-yourself-out counters. Automation. Robots. When labor reaches a high enough price, substitutes suddenly become cost-effective. Even moving to a new country with cheaper labor costs may be feasible.

Still others will “water down” the work. They will hire fewer people, or fewer full time employees, and stretch the work out between them.

Most people understand that if you forcibly increase the cost of milk, less milk will be sold, and ultimately both consumers and farmers will be harmed.

This simple metaphor lets them see the same is true of labor, too. A mandated increase in the price of labor, via the minimum wage, brings fewer jobs, higher prices for goods and services, harder work loads, and other negative consequences.

That’s not what people want. When they learn such these things are consequences of the minimum wage, they will no longer support it.

(To learn more arguments against the minimum wage, see “Minimum Wage Maximum Damage” by economist Jim Cox, published by the Advocates. This short easy-to-understand booklet devastates every argument for the minimum wage.)

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Free Markets Nurture Empathy

in Communicating Liberty, Economic Liberty, Economics, Liberator Online by Michael Cloud Comments are off

Free markets(From the Persuasion Powerpoint section in Volume 19, No. 10 of the Liberator Online. Subscribe here!)

Would you like to live in a world where empathy is both virtuous and profitable?

A world where it pays to meet the wants and needs of others?

Look for it in the private sector. Private enterprises. Free markets.

Without empathy, private businesses and free markets wither and die. With empathy, they survive and thrive.

Each business must be guided by empathy for their customers’ wants and needs and budgets.

Or the customers will seek out and patronize a business that does.

Every retail business faces this truth each day.

What would attract customers to our store?

How do our shoppers want to be greeted and treated?

What store layout and merchandising would appeal most to our customers?

What kind of employees would our customers be most comfortable with?

What do our shoppers expect from our employees? Information? Guidance? Courtesy? Close assistance, or room to roam?

What prices and terms make it easiest for our customers to buy?

What do our shoppers think? What do they know? What do they need to know? What do they want? What are they looking for — that no one else has offered them?

Empathy guides businesses toward the right solutions. The answers that open the wallets and purses of their customers.

Private enterprises instill a deep and abiding empathy in each of us who work there.

Free markets nurture empathy.

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