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The Solution to Detroit’s Corruption Scheme is Less Government

in Issues, Liberator Online, Libertarian Answers on Issues, News You Can Use by Alice Salles Comments are off

The Solution to Detroit’s Corruption Scheme is Less Government

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

Certain municipalities in the United States look a lot like South America these days.

According to a CBS affiliate, the public school system in Detroit is facing bribery and fraud charges associated with some of its current and former principals.

DetroitTwo months ago, ex-principal Kenyetta Wilbourn Snapp—also from Detroit—pleaded guilty after being accused of pocketing a $58,050 bribe from a local vendor. She was sentenced to 46 months in prison. Paulette Horton, a 60-year-old consultant, also admitted to being part of the scheme. She allegedly played the part of the middleman between Snapp and other contractors and vendors seeking to seal deals with Detroit’s public schools.

The most recent corruption case involves 12 principals, a school district vendor, and an administrator. They are all being accused of participating in corruption schemes involving payments in exchange for exclusive contracts between businesses and public schools.

The legal charges were brought against the educators by the federal government. US Attorney Barbara McQuade, along with other FBI and IRS officials, made a public statement about the case on Tuesday. During the press conference, she claimed that the corruption case is a “punch in the gut.”

If the legal charges tied to the latest corruption case stick, suspects would be implicated in a nearly $1 million bribery and kickback scheme.

Detroit Free Press explains that the legal ordeal revolves around Norman Shy, a 74-year-old businessman who’s being accused of paying $908,500 in kickbacks and bribes to 12 Detroit Public School principals. These same schools used Shy as their school supply vendor for the last 13 years. The exclusivity deals with Shy helped him milk $2.7 million from Detroit’s public schools over the years. According to prosecutors, Shy kept the contracts going thanks to his personal transactions with school principals.

Recently, Michigan legislators passed a bill securing $48.7 million to the Detroit Public School (DPS) system, ensuring local schools wouldn’t run out of cash. To Speaker of the House Kevin Cotter, a Republican from Mt. Pleasant, the state should pass “strong financial and academic reforms” as “a part of any long-term solution to decades of DPS failures.” But unless the root of corruption is unmasked, and legislators finally admit that the very existence of government regulations is why corruption continues to take place, any reform will only lead to a momentary—and feeble—solution.

In a piece for Mises.org, David R. Henderson explains that “the reason so much corruption occurs in government is that government officials hand out so much in the form of subsidies, tax breaks, permits and regulatory exceptions.” Having power to make decisions for others while nobody’s watching makes corruption more likely to occur. To Henderson, this is the main reason why “private corruption often occurs in corporate purchasing departments.”

If federal prosecutors and Michigan legislators are serious about tackling this issue and putting an end to corruption, they must first focus on putting an end to favoritism. And the only day of accomplishing that is by reducing government grant giving.

Fixing Detroit’s corruption disease will involve a great deal of courage, especially when you consider that the government would have to relinquish control over the economy and education so the incentives are removed from the equation. As Henderson explained, the “sure cure for corruption is to reduce or even eliminate official power over the economy.”

Apple Wins Court Battle Against FBI, and the Immorality of the Surveillance State is Exposed

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

 Apple Wins Court Battle Against FBI, and the Immorality of the Surveillance State is Exposed

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

As privacy advocates urge the federal government to stop pressuring Apple to create a backdoor to its iPhone, a move that would essentially undermine the company’s own encryption software, the company has just won big in a federal court.

iPhoneAccording to The Intercept, the ongoing battle between the tech company and the surveillance state could turn out bitter for the federal agency since a New York federal magistrate judge has just rejected one of the US government’s requests.

The criminal case involves an iPhone whose encrypted system has put its data out of the reach of the FBI. Apple was asked to aid investigators, but Magistrate Judge James Orenstein ruled against the government’s request.

The iPhone in question belongs to Jun Feng. Back in October, he pleaded guilty to drug charges. While the Drug Enforcement Administration seized Feng’s phone, it claimed it was unable to access its data. As both the DEA and the FBI tried to break the code, they also claimed they were unable to overcome Apple’s security measures.

As a result, a motion was filed, and the company was ordered to assist the investigation “under the authority of the All Writs Act,” a piece of legislation that is also being used by the FBI to force Apple to help investigators with the phone belonging to the San Bernardino killers.

Apple rejected the request on both cases. According to The Intercept, the government has requested the company to aid investigators in at least nine other occasions.

Using previous decisions pertaining to the interpretation of the All Writs Act, Judge Orenstein concluded that “imposing on Apple the obligation to assist the government’s investigation against its will” was not justified by the law. The question raised by the government’s requests, Judge Orenstein added, is whether the All Writs Act gives a court the power to compel Apple to perform work that goes against its will. Apple, the private party in the matter, has no alleged involvement with the criminal activity involving Feng, therefore the federal government has no legal means to compel Apple to create a backdoor to its product.

To Glenn Greenwald, the privacy advocate and journalist involved with the dissemination of information leaked by former NSA contractor Edward Snowden, Orenstein’s ruling clarifies that the purpose of the request put forth by the FBI is not directly tied to the data evidence. Instead, Greenwald argues, FBI wants to broaden its authority, giving the federal government precedential authority to force other tech companies to undermine their own security systems in future investigations.

To privacy—and liberty—advocates, Apple’s decision makes sense.

In an article for the Foundation for Economic Education, Andrea Castillo explains that Apple has decided to put its consumers first. A move that goes against the attitude embraced by many corporations that “serve as quiet collaborators for the surveillance state to avoid retribution from the government.”

To Dr. Ron Paul, the former congressman and founder of the Ron Paul Institute for Peace and Prosperity, the United States is not East Germany. Complying with the FBI’s order would represent a major threat to liberty.

If Greenwald is right, the recent court ruling could help privacy advocates in their fight against the federal government’s overreach. But is the over reliance on the courts the best move?

Reps. Justin Amash (R-MI) and Thomas Massie (R-KY) have both claimed that the FBI’s request is unconstitutional. The recent court ruling may confirm the fact the FBI wanted more than a simple aid in their investigations, but the fact the requests were unconstitutional—and immoral—should be enough to give anyone enough reasons to say no to the surveillance state.

Private Initiative Ignites Flame of Real Change in Flint, Michigan

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

Private Initiative Ignites Flame of Real Change in Flint, Michigan

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

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

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

HandSanitizer

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

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

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

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

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

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

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

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

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

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

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

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

Your Favorite Distilled Beverage May Get a Little Cheaper

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

Your Favorite Distilled Beverage May Get a Little Cheaper

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

A bipartisan bill was introduced recently that would lower the per gallon excise tax on distilled drinks, including whiskey and rum.

The Distillery Innovation and Excise Tax Reform Act, introduced by Rep. Todd Young (R-Ind.), would relieve distilleries, especially newer ones, of some of the burdens they face when bringing products to market.

Currently, distilled drinks are taxed at $13.50 per proof gallon. Young’s bill seeks to lower the tax to $2.70 per proof gallon on the first 100,000 gallons produced by a distillery and $9 per proof thereafter.

Barrel

Rep. John Yarmuth (R-Ky.) has cosponsored the bill, which was referred to the House Ways and Means Committee on May 21. Rep. Paul Ryan (R-Wis.) chairs the powerful tax-writing committee.

“All around southern Indiana, many new craft distilleries are popping up, creating jobs and adding to the tax base,” Young said in a release on Wednesday. “But there’s a lot of red tape involved in getting a new distillery off the ground, and this bill helps reduce that burden. In addition, we have many large, established distilleries in our region of the country, and this bill will help them, too.”

The bill has support from the Distilled Spirits Council of the United States (DISCUS) and the American Craft Spirits Association (ACSA). “It is significant that the distillers of all sizes are united behind this important hospitality industry legislation,” Peter Cressy, CEO of DISCUS, said in a joint release with ACSA. “We thank the sponsors for recognizing the economic impact passage of this bill will have for our industry.”

Sen. Gary Peters (D-Mich.) introduced a companion bill in the Senate. Sens. Dan Sullivan (R-Alaska) and Kirsten Gillibrand (D-N.Y.) have signed on as cosponsors of the bill. Although the members represent states with a number of distilleries, the popularity of craft spirits has risen significantly and virtually every state now has distillery.

For the producers, the savings can mean expansion of their operations and more jobs for local communities.

“I started my distillery eight years ago to support Michigan jobs and prove that high quality spirits could be made right here in Michigan,” Rifino Valentine, founder of Valentine Distilling, said in a press release from Peters’ office. “While I’m proud to say we are expanding our facility, so many small distilleries are at a unique disadvantage as a result of the high federal excise tax.”

The bill may be common sense, but similar efforts to lower the excise tax on distilled spirits didn’t move out of committee in the previous Congress.

Study: States with Economic Liberty Benefit; States Without Economic Liberty Suffer

in Economic Liberty, Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 23 of the Liberator Online. Subscribe here!)

A just-released study shows that U.S. states with economic liberty benefit greatly from it, while residents of states with less economic freedom suffer badly from the lack of it.

Economic Freedom of North America 2014 is an annual report by Canada’s Fraser Institute that measures levels of economic freedom, and thus economic opportunity, in the 50 states (as well as Canada and Mexico).

Economic Freedom of North America 2014The report defines “economic freedom” as “the ability of individuals to act in the economic sphere free of undue restrictions.”

Elaborating on that: “The freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions such as what is to be produced, how it is to be produced, how much is produced, and for whom production is intended. As government imposes restrictions on these choices, there is less economic freedom.”

The report shows that economic liberty has clear, measurable, dollars-and-cents benefits, writes study co-author Dean Stansel in the Washington Examiner:

“States that have low taxation, limited government and flexible labor markets enjoy greater economic growth, while states with lower levels of economic freedom suffer from reduced living standards for families and less economic opportunity.

“In the three most-free states (Texas, South Dakota, and North Dakota) average personal income is about 20 percent higher than in the three least-free states (Maine, Vermont, and Mississippi) — approximately $48,000 versus $40,000. And the unemployment rate is more than seven percent in Rhode Island (45th) versus about four percent in nearby New Hampshire (5th).

“Furthermore, cities in low-freedom states like California (43rd), Michigan (37th), and Rhode Island have made headlines in recent years for declaring bankruptcy, whereas cities in high-freedom states like Nebraska (5th), Texas, and the Dakotas, have seen incomes and their tax bases expand.

“In the top ten states, total employment grew by roughly 3.5 percent, while it has barely budged in the bottom 10. Over that same period, the economy grew more than eight percent in the top 10, but only by about two percent in the bottom 10.”

Concludes Stansel:

“The research is clear: Where economic freedom is high and rising, the number of jobs is expanding and the economy is vibrant and growing. Where it’s low and declining, the economy is stagnant, limiting opportunity and quality of life for residents of those states.

“Big, costly government at the expense of the people doesn’t work. It leads to economic decline. In contrast, expanding economic freedom increases economic opportunity and provides the path to economic prosperity.”

The report ranks economic freedom along a scale of 1 (lowest) to 10 (full economic liberty). This brings a warning: “Historically, economic freedom has been declining in all three countries. Since 2000, the average score for Canadian provinces on the all-governments index has fallen from 7.8 to 7.6; the number for U.S. states was 8.2 to 7.5.”

The Economic Freedom of North America study is an offshoot of the Fraser Institute’s acclaimed Economic Freedom of the World index, the result of a quarter century of work by more than 60 scholars including three Nobel laureates.