Voice For Liberty

Tag: Free markets

  • Kansas and Wichita quick takes: Monday May 9, 2011

    Airfares down in Wichita. A city press release announces: “Wichita Mid-Continent Airport had the country’s 11th largest airline fare decrease since 2000 and now ranks 43rd in average fare of the 100 busiest airports, according to research by the federal Bureau of Transportation Statistics (BTS).” The program’s major source of funding is $5 million per year from the state. Currently, it is not known whether this funding will be in the budget the legislature is working on. … The program is controversial for claims of economic benefit that appear overstated. There is a way to pay for the program that shouldn’t be controversial. When government provides services that benefit everyone, such as police protection, most people agree that taxes to pay for these services should be broad-based. But we can precisely identify the people who benefit from cheap airfares: the people who buy tickets. Wichita could easily add a charge to tickets for this purpose. The mechanism is already in place.

    Wichita City Council this week. A speaker on the public agenda will speak about restoring Joyland. Undoubtedly, the goal of the speaker will be to obtain public funds for this project. … City staff is recommending that the council deny a request for Industrial Revenue Bond financing by Pixius Communications LLC. As always, the benefit of the IRB financing to the applicant is the property tax and possible sales tax abatements that accompany the program. The city does not lend money, and does not guarantee that the applicant will repay the bonds. The reason staff is recommending not to approve the application is that Pixius is a service business, and under current policy, a service business must generate a majority of its revenues from outside the Wichita area. Pixius does not, and is asking the city to waive this policy for their benefit. … Separately, Pixius is applying for low-cost financing of renovations to the same building though the facade improvement program. The city has performed its “gap” analysis and has “determined a financial need for incentives based on the current market rates for economic rents.” This is another example of government investing in money-losing businesses. … Then The Golf Warehouse in northeast Wichita asks for a forgivable loan from the city as part of a larger package of incentives and subsidy. This item will prove to be a test for several council members who campaigned against these loans. … Council members will receive a quarterly financial report and view an “artistic concept” for WaterWalk.

    Joyland topic of British tabloid. The British tabloid newspaper Daily Mail, in its online version, has a story and video about Wichita’s closed Joyland amusement park. For those who remember the park in its heyday, this is a fascinating — if not bittersweet — look at the park’s current condition. The headline of the article (“New images of an abandoned theme park reveal desolation in America’s heartland”) makes a connection between the deterioration of Joyland and the economic condition of America, a false impression which several comment writers corrected. … I don’t think the closing of Joyland has anything to do with public policy. Businesses come and go all the time as tastes and generations change.

    Educational freedom to be discussed in Wichita. This week Kansas Policy Institute and The Friedman Foundation for Educational Choice will be discussing what other states have done to increase student achievement through reforms based on educational freedom and creating a student-centric focus. KPI and FFEC recently launched the “Why Not Kansas” initiative to educate Kansans on the need to reform the state’s K-12 educational system to allow Kansas schools to continue to improve. Speakers at the event will be Dave Trabert, president of Kansas Policy Institute, and Leslie Hiner, vice president of programs and state relations at The Foundation for Educational Choice. The event is Thursday, May 12 at 10:30 am, at the Central Wichita Public Library Auditorium. RSVP is requested by email to James Franko or by calling 316-634-0218.

    Do you want to live in the world of Atlas Shrugged? From LearnLiberty.org, a project of Institute for Humane Studies: “In her masterpiece of fiction, Atlas Shrugged, Ayn Rand emphasizes three key classical liberal themes: individualism, suspicion of centralized power, and the importance of free markets. In this video, Prof. Jennifer Burns shows how Rand’s plot and characters demonstrate these themes, principally through innovative entrepreneurs who are stifled by laws and regulations instituted by their competitors. In the world of Atlas Shrugged, free markets and individual liberty have been traded away for equality and security enforced by the government. Burns ends by reviving Rand’s critical question: do you want to live in this kind of world?” … The video is six minutes in length.

    Who are the real robber barons? In summarizing a chapter from his book How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present, Thomas J. DiLorenzo explains the false lessons of capitalism and government that we have been taught:

    “The lesson here is that most historians are hopelessly confused about the rise of capitalism in America. They usually fail to adequately appreciate the entrepreneurial genius of men like James J. Hill, John D. Rockefeller, and Cornelius Vanderbilt, and more often than not they lump these men (and other market entrepreneurs) in with genuine “robber barons” or political entrepreneurs.

    Most historians also uncritically repeat the claim that government subsidies were necessary to building America’s transcontinental railroad industry, steamship industry, steel industry, and other industries. But while clinging to this “market failure” argument, they ignore (or at least are unaware of) the fact that market entrepreneurs performed quite well without government subsidies. They also ignore the fact that the subsidies themselves were a great source of inefficiency and business failure, even though they enriched the direct recipients of the subsidies and advanced the political careers of those who dished them out.

    Political entrepreneurs and their governmental patrons are the real villains of American business history and should be portrayed as such. They are the real robber barons.

    At the same time, the market entrepreneurs who practiced genuine capitalism, whose genius and energy fueled extraordinary economic achievement and also brought tremendous benefits to Americans, should be recognized for their achievements rather than demonized, as they so often are. Men like James J. Hill, John D. Rockefeller, and Cornelius Vanderbilt were heroes who improved the lives of millions of consumers; employed thousands and enabled them to support their families and educate their children; created entire cities because of the success of their enterprises (for example, Scranton, Pennsylvania); pioneered efficient management techniques that are still employed today; and donated hundreds of millions of dollars to charities and nonprofit organizations of all kinds, from libraries to hospitals to symphonies, public parks, and zoos. It is absolutely perverse that historians usually look at these men as crooks or cheaters while praising and advocating “business/government partnerships,” which can only lead to corruption and economic decline.

  • The promises politicians make

    Recently John Stossel produced a television show titled Politicians’ Top 10 Promises Gone Wrong. The show features segments on government programs and why they’ve gone wrong, with a focus on the unintended consequences of the programs. Particularly illuminating are the attempts by programs’ supporters to justify their worth.

    Now the program is available to view on the free hulu service by clicking on Politicians’ Top 10 Promises Gone Wrong.

    One of the segments on the show explained the harm of Cash for Clunkers, in which serviceable cars were destroyed so that new cars could be sold. The program simply stole sales from the months before and after the program. The mistaken idea that destruction can be a way to create new wealth is held by many who should know better, and Stossel reminds us of the New York Times’ Paul Krugman, who wrote that the terrorist attacks of September 11, 2001 “could even do some economic good” as rebuilding will increase business spending. It’s the seen vs. unseen problem, Stossel and David Boaz of the Cato Institute explain. It’s easy to see people buying new cars. It was reported on television. But it’s more difficult to see all the dispersed economic activity that didn’t take place because of the programs.

    “Living wage” laws, in which people would be paid enough to live on — whatever that means — is next. While increasing wages of low-paid workers is a noble goal, increasing the cost of labor results in an entirely predictable result: less labor is demanded. Fewer people will have jobs. The Grand Canyon National Park, for example, switched to automated ticket machines. Christian Dorsey of the Economic Policy Institute, said that elimination of minimum wage laws would leave employers free to drive down wages as low as possible. But Stossel noted businesses hire employees in a competitive market, and it is that market that sets wages. Only about five percent of workers earn the minimum wage. Why do the others earn more than that? Competitive markets force employers to pay more, not laws.

    A segment on “fancy stadiums” boosting the economy holds a lesson for Wichita and the Intrust Bank Arena in its downtown. The claimed benefits of these venues rarely appear, and the unseen costs are large — “at the local bar there’s one less bartender, there was one less waitress hired at a restaurant, a movie theater that had one less theaterfull. It’s handing money from your right hand to your left and declaring I’m rich.” While Wichita’s arena seems to be doing well, it’s still well within its honeymoon period. Even then, there was a month where no events took place at the arena.

    A segment on the new credit card regulations, intended to protect consumers, shows that the regulations resulted in fewer people being able to get credit cards. Now these people have to go to payday lenders or pawn shops, which are much more expensive than credit cards. Arkansas once capped credit card interest at ten percent. The result was that few people in Arkansas could get a credit card, and the state became known as the pawn shop capital of America.

    Ethanol is the topic of a segment. Promised as a way to solve our energy problem, many politicians of both parties support ethanol. But we’ve come to realize the problems with government support of ethanol: rising price of food, excessive use of fertilizer and fuel to produce corn, and an awareness that ethanol is more harmful to the environment than gasoline. “But it makes us feel good,” Stossel says. In Kansas, Governor Sam Brownback is firmly in favor of government support of ethanol, which Boaz called “pound-for-pound, the dumbest program ever.”

    On the role of government in causing the housing bubble, Howard Husock said “Government exaggerates, rather than minimizes, the age-old impulse to greed. The government made it harder for bankers who wanted to do the right thing.” Stossel explained that bankers who wanted to stay with safe home loans lost out on profits they could earn selling high risk loans to Fannie Mae and Freddie Mac, the government-sponsored agencies.

    At the end, Stossel said: “And that’s the number one promise gone wrong. These guys say they’ll be fiscally responsible. And then we elect them, and they spend more. They’re spending us into bankruptcy. There must be 10,000 harmful programs, and yet they keep creating more. Why can’t we cut them?” Boaz explained: “Every one of those 10,000 programs has a lobbyist in Washington. … They always know when the bill is up before Congress, and they send political contributions, they send people to Washington to lobby. The rest of us don’t do that. … People should be more engaged, people should be better citizens. But the fact is we have lives, and there’s no way that any normal person can know about the 10,000 programs that make up the $3.5 trillion federal budget.”

    And so the programs keep growing, Stossel said, and we must pay their costs and unintended consequences forever — “Unless, there’s a new wind blowing in America. A new attitude, a new expectation that maybe Washington should do less. I hear there is. I sure hope so.”

  • Kansas and Wichita quick takes: Monday April 25, 2011

    American exceptionalism. This Friday (April 29) the Wichita Pachyderm Club features Kenneth N. Ciboski, Ph.D, Associate Professor of Political Science at Wichita State University. He will speak on the topic “American Exceptionalism: How and Why Are We Different From Europe?” The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club. … Upcoming speakers: On May 6, Dr. Malcolm C. Harris, Sr., Professor of Finance, Friends University on the topic “Shale gas: Our energy future?” On May 13, Craig Burns and Glenn Edwards of Security 1st Title Co. on the topic “Real Estate Transactions, Ownership, Title, and Tales From the Trenches.” On May 20, Rob Siedleckie, Secretary, Kansas Social Rehabilitation Services (SRS) on the topic “The SRS and Initiatives.” On May 27, Todd Tiahrt, Former 4th District Congressman on the topic “Outsourcing our National Security — How the Pentagon is Working Against Us”.

    Wichita City Council this week. As this week is the fourth Tuesday of the month, the Wichita City Council considers only consent agenda items. This agenda has two acquisition of property by eminent domain, one for improvements to East 13th Street, and another for land involved in the aquifer recharge project in Harvey County. … There will also be council member appointments, and with three new council members on board, there could be a number of these. … A workshop will follow to present updates to the downtown Wichita public incentive policy. A Wichita Eagle story reported on this, but raised more confusion than answers. For example, the story reports the proposal will include “A private-to-public capital investment ration [sic] of 2-to-1.” This differs from the Goody Clancy plan for downtown Wichita, which calls for a five to one ratio.

    The Great American Bailout. Tim Huelskamp, a new member of the United States Congress from the Kansas first district, warns of the seriousness of the problem the country faces with the budget and debt: “This past Monday, Standard & Poor’s (S&P) announced that it was cutting its outlook on the U.S. from “stable” to “negative,” increasing the likelihood of a potential downgrade of America’s credit rating. This should be a dire wake-up call to Washington that the time is now to address federal red ink. For all of America’s greatness, it is embarrassing that the United States may become a credit risk.” He details the rising amount of national debt, and also the increasing percentage that is held by foreign countries. … Soon we will be faced with the decision to raise our national debt limit. Huelskamp says the only way he could support increasing the ceiling is there is also a “serious and meaningful compromise that makes substantial and real cuts to the deficit and debt.” He also supports a balanced budget amendment to the Constitution.

    “Not yours to give rally” in Topeka. Next Thursday (April 28) a coalition of groups is holding a rally at the Kansas Capitol building. The event starts at 10:00 am and lasts until 2:00 pm. The lineup of speakers and topics includes Rep. Charlotte O’Hara: “Federal control of the state through the state budget,” Larry Halloran (Wichita South Central 9-12 Group): “Government Charity, the Constitution and the Rule of Law,” Dave Trabert (Kansas Policy Institute): “Kansas Budget Policy and Spending Habits,” Rep. Kasha Kelley: “House Budget,” Richard D. Fry (Patriots Coalition ): “Govt. Lawlessness and Implementing Obama Care,”Angelo Mino (Born in Ecuador – MADE in America): “Reason to Become a New Born American,” Derrick Sontag (Americans for Prosperity): “History of a Growing Kansas Budget,” and Rep. Lance Kinzer: “Court of Appeals Legislation.” … AFP is sponsoring a free bus trip from Wichita for this event. The bus will leave Wichita at 7:00 am, and should be back by 6:00 pm. The bus trip is free but reservations are required. For more information on the bus trip contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

    Kansas Bioscience Authority benefits from exemptions. The Kansas Bioscience Authority has benefited from exceptions to the Kansas Open Records Act written for its own benefit. Kansas Watchdog reports.

    The presidency in liberal society. Eighteen months before the election, presidential politics consumes a lot of energy. Conservatives complain that President Obama is already in full campaign mode. Liberals poke fun at Republicans for, well, for a lot of reasons. But with a properly limited government, we should care very little who is our president. Lew Rockwell explains in this excerpt from a speech titled “An American Classical Liberalism”: Every four years, as the November presidential election draws near, I have the same daydream: that I don’t know or care who the president of the United States is. More importantly, I don’t need to know or care. I don’t have to vote or even pay attention to debates. I can ignore all campaign commercials. There are no high stakes for my family or my country. My liberty and property are so secure that, frankly, it doesn’t matter who wins. I don’t even need to know his name. In my daydream, the president is mostly a figurehead and a symbol, almost invisible to myself and my community. He has no public wealth at his disposal. He administers no regulatory departments. He cannot tax us, send our children into foreign wars, pass out welfare to the rich or the poor, appoint judges to take away our rights of self-government, control a central bank that inflates the money supply and brings on the business cycle, or change the laws willy-nilly according to the special interests he likes or seeks to punish. His job is simply to oversee a tiny government with virtually no power except to arbitrate disputes among the states, which are the primary governmental units. He is head of state, though never head of government. His position, in fact, is one of constant subordination to the office holders around him and the thousands of statesmen on the state and local level. He adheres to a strict rule of law and is always aware that anytime he transgresses by trying to expand his power, he will be impeached as a criminal.

  • Hazlitt’s ‘Economics in One Lesson’ relevant today

    Note: The Kansas chapter of Americans for Prosperity is holding a series of viewings of videos on this important book. The next meeting is Monday May 9 at from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita.

    Economics In One Lesson, first published in 1946 and recently reissued by the Ludwig von Mises Institute, explains fallacies (false or mistaken ideas) that are particularly common in the field of economics and public policy.

    At the very start of the book Hazlitt explains:

    Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine — the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for then plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

    In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.

    At first it seems as though not much has changed since the end of World War II. What has changed, however, is the scope of the dangers Hazlitt identifies. That’s because government is much expanded and more intrusive today than when this book was written. We should take these lessons as even more important today.

    It is overlooked consequences that cause harm. They are overlooked sometimes because they are difficult to see, as in the broken window fallacy explained by Frederic Bastiat and also in this book. They are also “overlooked” because, as Hazlitt tells us, one group wants special favors from the government, and because there is no way to grant these favors without harming some other group, the favor-seeking group will seek to hide, obfuscate, muddle, or minimize the bad effects. At the same time they will promote the policy as good for everyone. This is roughly the job lobbyists perform, and billions are spent on it each year. That’s because a powerful government has the ability to bestow valuable favors, but those favors are paid for by someone else, someone often not easily seen.

    These two ideas — the special pleading of selfish interests and the overlooking of secondary consequences — are the core ideas of the book. As Walter Block explains in his introduction (This Book is So Me) to the Mises Institute’s new edition of this book:

    … the plan of Economics in One Lesson is clear: drill these insights into the reader in the first few chapters, and then apply them, relentlessly, without fear or favor, to a whole host of specific examples. Every widespread economic fallacy embraced by pundits, politicians, editorialists, clergy, academics is given the back of the hand they so richly deserve by this author: that public works promote economic welfare, that unions and union-inspired minimum-wage laws actually raise wages, that free trade creates unemployment, that rent control helps house the poor, that saving hurts the economy, that profits exploit the poverty stricken; the list goes on and on.

    An example of overlooked secondary consequences is government spending. When government spends, it must tax or borrow. What government spends is not available for individuals to spend. When we see magnificent public works (say a new downtown arena in Wichita), we don’t see all the things that would have been bought had the government not taxed to build the public work. We see the jobs created by the public work — all the construction workers that built the new arena — but we don’t see the jobs destroyed because people had to reduce their spending elsewhere.

    Foreign trade is a case where people often fail to grasp the complete picture. We often see exports as something good for our economy, while imports are seen as bad. Imported things are things that American workers can’t compete with, and so American jobs are lost, it is often said. But as Hazlitt says: “It is exports that pay for imports. The greater exports we have, the greater imports we must have, if we ever expect to get paid. The smaller imports we have, the smaller exports we can have. Without imports we can have no exports, for foreigners will have to funds with which to buy our goods.” So those wanting restrictions on imports are also calling for fewer exports — although they do not say this, either because they do not recognize it or it doesn’t matter to them.

    In recent years we have been told that our is a “consumer-driven” economy, fueled by people tapping their home equity that accumulated from increased home values, or spending by going into debt. It is as though if consumers started saving rather then spending on immediate consumption, the American economy would collapse. But Mr. Hazlitt tells us that “saving is only another form of spending.” After all, what is done with money that is saved? Today, few put their savings under the mattress. Instead, it is loaned to a bank or invested. Then it is spent on capital goods, which businesses use to increase their productive capability. The key fact is that businesses spend it. And, they spend it on capital goods that either expand their capacity to produce, or decease their present costs of production. Either way, that is good for everyone. It means more jobs, and better jobs. But this saving is derided as not being “productive.”

    As a conclusion Hazlitt tells us:

    And this is our lesson in its most generalized form. For many things that seem to be true when we concentrate on a single economic group are seen to be illusions when the interests of everyone, as consumer no less than producer, are considered.

    To see the problem as a whole, and not in fragments: that is the goal of economic science.

    This is a very valuable book which cuts through the fog and haze of economics and public policy and lets us understand the true effects of our government’s policies.

    An excerpt of this book can be read at One Lesson.

  • Ludwig von Mises: A quick introduction

    If you’ve heard of Ludwig von Mises and wondered why his ideas are important to freedom, here’s a chance to easily and quickly gain understanding of this important thinker and the field of Austrian economics.

    Or if you’ve not heard of or read about Mises and Austrian economics, here’s your chance. The Institute for Economic Affairs, a free-market think-tank based in London, has published a short book titled Ludwig von Mises — A Primer. The book is also available to download for free, so you can read it on your computer or Ipad. The book’s author is Eamonn Butler.

    Butler (using British English) explains why Mises is important: “Ludwig von Mises was one of the greatest economists and political scientists of the twentieth century. He revolutionised the understanding of money, inflation and recessions; comprehensively refuted the arguments for socialism; and provided a devastating critique of the methodologies of mainstream economics. His contributions to the Austrian School laid the intellectual groundwork for thinkers such as F. A. Hayek, Murray Rothbard and Israel Kirzner.”

    The book’s summary gives several points that show why Mises and his ideas are important:

    • The market system is much more efficient at allocating resources than political elections, where people get the opportunity to vote only every few years and have to choose between packages of disparate policies. Every penny spent by consumers, in countless daily transactions, acts like a vote in a continual ballot, determining how much of each and every good should be produced and drawing production to where it is most urgently required.
    • Free markets have no natural tendency to monopoly or monopoly prices; on the contrary, they have a powerful tendency towards diversity and differentiation, which bid quality up and prices down. Few cartels and monopolies would ever have come into being had it not been for government and the efforts of those with political power to stifle competition. Monopoly would be at its zenith under socialism, where all production is in state hands.
    • Policies that are intended to “improve” the market economy may in fact strangle it. Intervention may lead to unwelcome side effects that are then wrongly used to justify further interference, which in turn creates new problems, and so on. Eventually, although the economy still looks capitalist, it ends up being completely controlled by the authorities.
    • The belief that state institutions can improve on the market by taking what it does and somehow doing it better is a dangerous conceit. In the absence of the profit motive, there is no obvious way of measuring the success of public agencies in delivering their objectives. Incentives for entrepreneurship are weak, and managers are likely to become risk-averse and bureaucratic.

    One of the greatest contributions of Mises was explaining that under socialism, the lack of prices and profits lead mean there is no efficient way of allocating resources. Without markets, he said, economic calculation is impossible.

    The book may be purchased or downloaded on this page.

  • Kansas and Wichita quick takes: Thursday April 21, 2011

    Can anything Think Progress says about the Kochs be believed? Mark Tapscott, Washington Examiner Beltway Confidential: “Almost certainly not, to answer the question posed by the headline above. Here’s the latest example of why. Think Progress is all atwitter about a Nation magazine report concerning the Koch Industries 2010 Election Packet. This dastardly document, according to Think Progress, was “mailed to 50,000 employees instructing them on who to vote for in the 2010 midterm elections.” Curious, I clicked over to the Nation and read the cover letter in the packet. Here’s what it said about how Koch employees should decide for whom to vote: “For most of you, we’ve also enclosed a listing of candidates supported by Koch companies and KOCHPAC, the political action committee for Koch companies. Of course, deciding who to vote for is a decision that is yours and yours alone, based on factors important to you. (emphasis added)” … At RedState, Erick Erickson contrasts the behavior of unions: “Think Progress and Lee Fang love them some unions. And what do unions do? Unions send out fliers encouraging union members to vote for union backed candidates. Hell, unions even get union members to go door to door for candidates and give union dues to candidates — something KOCHPAC cannot do with all employees, just executives. Additionally, unions will often bus employees to the polls and have a poll monitor watch to make sure the union members have voted. Koch Industries does not do that. But here’s where the real intellectual dishonesty or stupidity come in. Lee Fang and Think Progress support card check. They want unions to be able to stand over a business’s employees and find out whether or not the employee has signed a card to unionize and, if not, intimidate and cajole the employee until he does (not that Think Progress or Lee Fang are on record supporting that last bit).” … Lee Fang is apparently assigned full time to digging up dirt on Charles and David Koch, and Fang’s reporting has been found to be unreliable and misinformed.

    Kansas governor on first 100 days. In a press release, Kansas Governor Sam Brownback listed some accomplishments of the first 100 days of his administration. Highlights mentioned were: “First Month Commitments” in the Governor’s Road Map for Kansas accomplished, including releasing a Strategic Economic Development Plan and establishing the Office of the Repealer. … Six Executive Reorganization Orders designed to restructure state government to become law on July 1, 2011 to increase efficiency, restructure government, and cut overhead costs. … Numerous Road Map for Kansas goals achieved through bi-partisan-supported legislation signed into law including the “Rural Opportunity Zones” bill, several deregulation bills, two pro-life bills, a voter ID bill, and a workers compensation reform bill. … On challenges ahead, the Governor said: “I am pleased with what we have accomplished in our first 100 days but our state continues to face a multitude of fiscal challenges that need to be addressed. More than 100,000 Kansans are still out of work. This administration will continue to focus on building a pro-growth environment that includes allowing businesses of all sizes to expense their investments and abolishing burdensome regulations to protect Kansans and encourage job creation.”

    Freeloaders come in all types. Recently John Stossel had an hour-long special show that focused on freeloaders. The show is now available on the free hulu service by clicking on Stossel: Freeloaders. The freeloaders Stossel profiles are not just panhandlers, although Stossel did work in disguise as a panhandler and discovered he could make over $90 a day — tax free, he added. One segment of the show uncovered farmers who received $50,000 because they were discriminated against by lenders. But — some of these farmers merely grew potted plants or fertilized their lawn to qualify as a farmer. Another reported on homeowners who stopped paying their mortgages on advice of a website. The homeowners and the website operator said there is no moral obligation to pay their mortgage loans. Corporate freeloaders didn’t escape, as General Electric was mentioned as a large recipient of government handouts. And, they won’t pay taxes: “Despite billions in profit, they’ll pay no taxes this year,” reported Stossel. … The severe poverty of American Indian tribes that live on government-managed reservations and living on government handouts is contrasted with a tribe that accepts no handouts and has no casinos. … Stossel covered his own beach house, which was covered by low-cost subsidized federal fund insurance. It suffered losses twice. … Standing in front of the U.S. Capitol, Stossel said “We rich people freeload off you taxpayers all the time, because the over-promisers in there keep churning out special deals for politically-favored groups. And they tend to be rich people, because the rich can afford lobbyists. … Think about how much money we could save if these guys just didn’t pass so many laws that encourage freeloading. But they do, year after year. They micromanage life with subsidies. And the winners are not so much the needy, but people like Bon Jovi, Ted Turner, Maurice Wilder, and — me. So let’s hope for an end to all this freeloading.”

    Are taxes the solution? From Bankrupting America: “It’s Tax Day 2011! And while it isn’t the most pleasant thing to think about, it doesn’t sting as bad as when you consider we’re $14 trillion in debt and face a $1.6 trillion deficit. So what got us into this mess? We’ve had an unfortunate habit of spending far more than we can afford — and have been doing it for years. The logical solution is to … well … stop doing that. But some have suggested we should tax our way out of the hole. Beyond the question of whether we should, there’s a more important question: can we?” … The site has an interesting infographic relating to taxes.

    The spontaneous society — centralized planning not required. In the following excerpt from Austrian Economics — A Primer Eamonn Butler explains that we don’t need centralized government planning in order to have great human accomplishment. Also, markets process far more information than any central planner could: Many people find it hard to believe that a society or an economy could survive — much less create and distribute wealth in any organised and rational way — without central planning and authority. Hayek has provided the explanation, however: the liberal human society and economy is, he says, an example of a spontaneous order. Just because something is not planned from the centre does not mean that it is wild, unkempt, random and disorderly, he points out. Societies of bees and termites are very orderly, but they are hardly planned. Human language, similarly, was never “invented”, but evolved, and grew and survived because it is useful. … The market and the price system, similarly, was never planned, but evolved as people exchanged different goods. Nor do they need any central command structure to maintain them: they have survived and expanded because they deliver such enormous benefit to us. In other words, there is a great deal of wisdom in these institutions, despite the fact that they have never been consciously designed and planned. The price system, for example, quickly and efficiently steers resources to their highest value uses, without anyone ever having deliberately invented it. The fact that there is no central planning does not mean that it is “unplanned” and irrational. We are all planners, says Hayek, in that we consciously act in order to satisfy our ambitions with the materials and information that are available to us. In the market order there is in fact far more planning taking place, and far more information being used and acted upon, than could ever be achieved by the single mind of any central authority. … In the case of the liberal market order, the rules are principles like the respect for private property and the right to hold or dispose of it, the rejection of violence and coercion, the freedom of people to enter into voluntary contracts, and the honouring of such contractual promises. Astonishingly, a few simple liberal rules such as these are sufficient to create what Rothbard calls an “awe-inspiring” harmony and co-ordination between individuals, and a precise, swift arrangement to guide resources to the greatest possible satisfaction of consumers’ desires.

  • ‘I, Pencil’ in audio argues for economic freedom, not government control

    The Foundation for Economic Education has released an audio version of the booklet I, Pencil. Written by FEE’s founder Leonard E. Read and first published in 1958, its message proclaiming the importance of economic freedom has not diminished with the passage of time.

    This audio recording, which you can listen to on your computer or mp3 player, is just short of 15 minutes in length. But it this short span it makes a compelling case for economic freedom instead of government control and planning.

    In Wichita, we have a mayor, city council, and business leaders that are steering us down the path of government control instead of freedom. We locally — and in Topeka and Washington too — need to heed the lesson of I, Pencil on the impossibility of government planning to control and regulate our economy:

    I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies — millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

    The above is what I meant when writing, “If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing.” For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand — that is, in the absence of governmental or any other coercive master-minding — then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

    Listen to the recording by clicking on I, Pencil. Or, read it by clicking on I, Pencil.

  • Liberals and economic knowledge

    Who might you guess is better informed on issues of economics: liberals who promote government intervention in the economy, or conservatives and libertarians who oppose it?

    A recent study found some surprising — or maybe not surprising — results. The study is titled Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans. At this link you can read an abstract of the study and the entire document, too.

    An article by one of the authors that appeared in the Wall Street Journal is Are You Smarter Than a Fifth Grader? Self-identified liberals and Democrats do badly on questions of basic economics.

    In the study, researchers asked a series of questions designed to “gauge economic enlightenment.” Conclusions included these: First, and surprisingly, “for people inclined to take such a survey, basic economic enlightenment is not correlated with going to college.”

    Perhaps more importantly, who scored best: conservatives or liberals? Here’s the rundown:

    Adults self-identifying “very conservative” and “libertarian” perform the best, followed closely by “conservative.” Trailing far behind are “moderate,” then with another step down to “liberal,” and a final step to “progressive,” who, on average, get wrong 5.26 questions out of eight.”

    The authors say “we should acknowledge that none of the eight questions challenge typical conservative or libertarian policy positions.”

    The authors also note:

    At least since the days of Frédéric Bastiat, many have said that people of the left often trail behind in incorporating basic economic insight into their aesthetics, morals, and politics. We put much stock in Hayek’s theory that the social-democratic ethos is an atavistic reassertion of the ethos and mentality of the primordial paleolithic band, a mentality resistant to ideas of spontaneous order and disjointed knowledge. Our findings support such a claim, all the caveats notwithstanding. Several of the questions would seem to be fairly neutral with respect to partisan politics, particularly the questions on licensing, the standard of living, monopoly, and free trade. None of those questions challenge policies that are particularly leftwing or rationalized on the basis of equity. Yet even on such neutral questions the “progressives” and “liberals” do much worse than the “conservatives” and “libertarians.”

    Author Daniel B. Klein concludes in the Wall Street Journal piece: “Adam Smith described political economy as ‘a branch of the science of a statesman or legislator.’ Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.”

  • Soros events, catering to liberal causes, largely escape notice

    This week George Soros is hosting two conferences that seek to influence and change the international financial system and the news media. In contrast to a conference recently hosted by Charles and David Koch, the Soros events have received little advance attention, and it seems likely that there will be little reporting afterward.

    A search of Google news shows just a handful of stories mentioning these events. The Boston Globe has short mention of the event taking place in New Hampshire, presumably only because it is in the neighborhood. But Dan Gainor of Media Research Center, a conservative watchdog group, has the details on these two events and who is attending.

    The New Hampshire event, previewed by Gainor in the Wall Street Journal piece Unreported Soros Event Aims to Remake Entire Global Economy, is intended to “‘establish new international rules’ and ‘reform the currency system.’ It’s all according to a plan laid out in a Nov. 4, 2009, Soros op-ed calling for ‘a grand bargain that rearranges the entire financial order.’” The goals of the conference are lofty — and scary. Soros has written that “The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.” As described by Gainor, this conference appears to exist to counter the threat Soros sees: “That’s what this conference is all about — changing the global economy and the United States to make them ‘acceptable’ to George Soros.”

    At the same time in Boston, Gainor reports (Two Soros Events Aim to Remake Financial Order and Media — So Where’s the Reporting?) that about 350 will gather for a conference on media reform. “Everywhere you they go in Boston, they’ll be making more left turns than NASCAR. It’s an event filled with lefties dissatisfied that the news media aren’t even more liberal, and their goal will be to make that happen.”

    Proposals for government funding of news media and a return to the fairness doctrine will be big topics, says Gainor.

    Contrast with Koch event

    The virtually non-existant news coverage of these two Soros events stands in stark contrast to the frenzy whipped up by media in anticipation of the recent Koch-sponsored conference in January. This is despite the fact that several journalists are speaking at the New Hampshire event, and the Boston event is all about news media.

    The Koch event was also protested, and the protests widely covered in the news. It appears there are no plans by anyone to protest the Soros events.

    Perhaps David Boaz offers insight when he wrote: “One difference between libertarianism and socialism is that a socialist society can’t tolerate groups of people practicing freedom, while a libertarian society can comfortably allow people to choose voluntary socialism.”

    The message of capitalism, free markets, and economic freedom is powerful. When people realize its benefits and its ability to foster civil society and prosperity for everyone, the special interests that live off government intervention are threatened. As Boaz notes, if people choose to reject freedom and live under some other form of order, libertarians have no problem with that.

    But Boaz qualifies this. Such a choice must be voluntary. That’s not what Soros and his supporters have in mind. Their intent is to expand the role of government, and since government operates by force and coercion, this expansion is not voluntary. The more Soros has his way, the more the freedom and liberty of Americans is at risk.

    We ought to take note of these conferences. But with a virtual news blackout, most people won’t be aware of them and the plans being made.