Wealth Creation:

Cooperation:

Conservation:

“The whole of economics can be reduced to a single lesson, and that lesson can be
reduced to a single sentence. The art of economics consists in looking not merely
at the immediate but the longer effects of any act or policy; it consists in tracing
the consequences of that policy not merely for one group but for all groups.”"Economics is haunted by more fallacies than any other science known to man.”
– Henry Hazlitt in Economics in One Lesson

[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

-U.S.Constitution (Article I, Section 8, Clause 3)

Here is a great segment from Reason.tv discussing the history and expansion of the federal power through more modern understandings of the interstate commerce clause.

The ultimate question here has more to do with how you view the Constitution. Is it a legal contract written specifically to limit the power of government – or was it just some basic guidelines for setting up a government system?

This is a fundamental question that American’s each must reconcile. It may not seem important, but rest assured – your rights and liberties will look very different, based on your answer.

Whenever you read Paul Krugman, it is always helpful to remember that this man won a Nobel Peace Prize in Economics. It might as well have been for Pushing Water Uphill. Here are a couple remarkable statements from his latest New York times column. That’s right…THE New York Times – where The Vision of the Anointed is valued above any rational thought:

Beyond that, this is a story that could happen only in America. In every other advanced nation, insurance coverage is available to everyone regardless of medical history. Our system is unique in its cruelty.

[...]

So you end up with a tripartite policy: elimination of medical discrimination, mandated coverage, and premium subsidies.

Above, Krugman is referencing the much lauded “pre-existing conditions” angle. Now, in a tiny way, I actually agree that often insurance companies can be extremely harsh in their restrictions regarding people who have pre-existing conditions. However, the problem here is the screwy way some companies define “pre-existing.” That should draw Krugman’s ire – not the fact that any pre-existing condition must be ignored. The latter concept is lunacy. What would be the incentive to purchase insurance, if you were guaranteed coverage regardless of any pre-existing conditions? The whole point of insurance being that you are paying someone else to pool the risk that you may or may not require healthcare. It is not “discrimination” to willfully take on exorbitant risk.

So what of Krugman’s solution: 1) Force insurance providers not to “discriminate.” Coercing and removing the risk for mortgage lenders to make less “discriminatory” loans sure worked out really well for the mortgage industry. 2) Mandate everyone purchase insurance to increase the risk pool. Good idea…except that the poor are immediately and totally screwed. His solution for that – subsidize the poor. His solution to pay for that subsidy – you guessed it – taxing other groups of people. This is a fine strategy, if you endorse using the law to plunder various arbitrary groups of individuals. Since the law’s sole purpose is to provide justice by defending a man’s life, liberty, and property, you should be able to see the obvious contradiction. In short – Krugman solution is practicing injustice to promote justice.

Also, with regard to his, “every other advanced nation…,” statement; massive entitlement programs are exactly why most of these nations are going broke. Apparently, in Krugman’s mind, it is considered “advanced” to not only be fiscally irresponsible, but also to proclaim that A is not A.

Next quote:

Can you imagine a better reform? Sure. If Harry Truman had managed to add health care to Social Security back in 1947, we’d have a better, cheaper system than the one whose fate now hangs in the balance.

The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

Posted via web from Andrew Colclough

This is a thoughtful critique of the private vs. public control of our air traffic control system. However, it raises some important issues which deserve more attention.

Whenever someone trots out the ‘Profits vs. People‘ line, it is important to recognize this as nothing more than an economically illiterate straw-man. We live in a society of free people, not of slaves.  Therefore, there is no such thing as People versus Profit, rather – they go hand in hand.

In a free society, Profit in not something which necessarily requires the sacrifice of People (as the video above puts it: ‘People before profits’). In fact, Profit is not possible without People – whether workers or consumers. Nor is Profit simply “making money,” though it is almost exclusively discussed this way. (Note that money is nothing more than a representation of value, and a means of easily trading it. Without money – trading would be nearly impossible. I would have to barter hours of web development directly for flight control service, or mexican food, or Wii games, or my mortgage payment, etc.) People trade things they value and produce, (usually represented by money), for things they value more or are incapable of producing. This creates a ‘profit’ for both traders. The one offering the service – turns a profit on the service provide, the other gains a profit from the service rendered. There is no ‘versus’.

Likewise, the animosity toward the ‘profit motive’ is also illogical. This phrase is often used as a pejorative describing an enterprise making money. But what of the consumer’s ‘profit motive‘ to obtain the service for the cheapest cost? Both parties are negotiating a trade of value. Why is only one seen as profiting, and is thus demonized? As a service provider or producer in a free market – it runs counter to the ‘profit motive’ to do something that is destructive to your customers or the public image of your company. Because a private entity does not have the ability to use force (in contrast with the government, which IS force), it is inherently imperative to, not only, earn your trust and support – but provide something of greater value, than whatever thing of value (money) you would trade for it. If a certain product or service is not of greater value – or if the provider is known to harm its customers, you are free to trade for something else that isn’t harmful and is a better deal. Essentially – you are free to choose to pursue a better trade – one in which you gain a bigger (here comes that ‘evil’ word again…) profit with regard to what you offer to trade. The profit motive is hardly more than the desire to not get screwed over when making a trade.

Consider these thoughts the next time someone attempts to decry Profits, the profit motive, or pushes the false idea that Profits and People are enemies fighting for opposing teams.

One Crucial Distinction About Capitalism

Above I am arguing for capitalism. It is essential to point out that private entities who do use governmental force to compel consumers to trade for their service are not practicing capitalism. Capitalism is free trade, hence -laissez faire.  The power to determine and negotiate value and fairness is on the individual traders. Forced trade is a feature of socialism, communism, and/or fascism. With forced trade, the government (force) is used to increase a private entities influence or bargaining power. For example: Let’s say General Electric is lobbying congress (which they are) for all sorts of things (as is their constitutional right). Among those things is likely a push to pass legislation against incandescent light bulbs in the interest of climate change. Congress then may outlaw these bulbs, and you will be obligated to purchase the new curly florescent bulbs. Obviously, G.E. will profit greatly from this new legislation, even if you buy your new bulbs elsewhere, because the new law will necessarily create an increase in demand. The point is that G.E. will have bargained with the politicians to borrow the government’s monopolistic force to influence the market and raise the value of florescent light bulbs. This is anti-capitalism. 

Perhaps you may argue that you get to vote about the new legislation (usually you don’t, but for the sake of the argument…) – but your decision is either upheld or overruled by the majority of other voters. This is a far cry from actually freely choosing – “I will trade some value, in exchange for something you value more”.

This difference is crucial and must be distinguished, as it is commonplace to blame laissez faire capitalism (free trade) for the faults which are actually aspects of socialism (government sponsored forced trade). Ayn Rand further lays out this distinction in the video below:

Posted via web from Andrew Colclough

Part of me laughs, and part of me cringes whenever I see these signs….because they are absolute rubbish. This sign is based on the assumption that we the public are either too lazy, or just too ignorant to think beyond what we immediatly see.

Whenever we are presented with this concept: that the government can “put people to work,” the question must be asked, “How?” 

When a non-state entity creates a job, it does so either by taking out a loan on the investment bet that the job created will produce enough value to repay or exceed the loan taken, or by reinvesting its own existing capital with a similar goal.

The State “creates jobs” or “puts people back to work” either with existing tax revenues, or by taking on debt to be funded through future tax revenues. I used quotes above because anyone with a grasp of elementary mathematics would realize that this is neither “creating jobs” nor “putting people back to work.” It is nothing more than shifting work around.

Ask yourself, what would the tax revenues taken by the state to ‘put Oregon back to work’ have been used for otherwise? What of the things the tax-payers would have invested their money in, had it not been taxed away?

The answer is: jobs.

Perhaps the tax-payer was planning on buying some new shoes (a shoe salesman’s paycheck), going out for an extra nice dinner (a restaurant worker’s wages and tip), a kitchen remodel project (construction material producers, contractors, cabinet makers, plumbers, etc) planning to add to their payroll at work to hire a new employee, or even donating money to their favorite charity. But these things will never be seen because some politician had the nice, though deceptive and false idea that they had the ability to “put Oregonians back to work.”

It is important at this point to understand that money is nothing more than a representation of labor, or work. We choose to work and earn money because money allows us to trade the value of something we are good at (in my case, web developement), for something we value that we aren’t good at, or couldn’t possibly create on our own (e.g. a ticket to football game. I neither play football, nor do I have the knowlege or ability to coach a team, let alone build a football stadium. Heck, I even suck at Madden…).

The point is that the sign above is clearly hogwash. It is based on the flawed notion that governments create things. To accept this idea, is to throw out the economic concept of opportunity cost. Government is force. The government is the only entity that we allow the power to involuntarily take our money and re-appropriate it. In this case – it is the opportunity for the tax dollars to have been spent elsewhere – that the government is forgoing so they can be assigned to this road project. If the sign was actually honest it would read: Taking a portion of your work, and directing it to someone or something else. Or perhaps simply, Making Oregonians pay for this road project.  

But telling the truth doesn’t matter to politicians because when there is a problem (such as a down economy) they must be seen as doing something to fix the problem. The perception that they are doing something to ‘put Oregon back to work’ is far more important politically than the actual truth, that they just moved work to a project that the voters will see. What the voters won’t see is all of the jobs that were sacrificed to make that particular road project possible.

It is important for me to mention that here, I am not necessarily arguing against road or other government projects. I am however calling out the hack politicians who think that tax-payers are dumb enough to fall for the ludicrous idea that government can create jobs by simply spending them into existence. From here, you can draw your own conclusion on whether the ‘stimulus’ bill will actually stimulate anything, other than some politician’s delusion of grandure.

Oh, and here’s the real irony of ironies: This sign is on a road leading up to the city Amtrak station. Amtrak is in business today, and its employees have jobs, only because they are subsidized with money taken from tax-payers. I suppose a sign for that could have read: Putting Amtrak back to work – which of course actually means, Forcing you to pay for Amtrak, rather than whatever else you valued more. 

“In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.”

-That Which is Seen, and That Which is Not Seen -Frédéric Bastiat, 1850

Posted via email from Andrew Colclough

I’m always appreciative when a fellow says what he really means. Tim Flannery, the jet-setting doomsaying global warm-monger from down under, was in Ottawa the other day promoting his latest eco-tract, and offered a few thoughts on “Copenhagen”—which is transnational-speak for December’s UN Convention on Climate Change. “We all too often mistake the nature of those negotiations in Copenhagen,” remarked professor Flannery. “We think of them as being concerned with some sort of environmental treaty. That is far from the case. The negotiations now ongoing toward the Copenhagen agreement are in effect diplomacy at the most profound global level. They deal with every aspect of our life and they will influence every aspect of our life, our economy, our society.”

Hold that thought: “They deal with every aspect of our life.” Did you know every aspect of your life was being negotiated at Copenhagen? But in a good way! So no need to worry. After all, we all care about the environment, don’t we? So we ought to do something about it, right? And, since “the environment” isn’t just in your town or county but spreads across the entire planet, we can only really do something at the planetary level. But what to do? According to paragraph 38 on page 18 of the latest negotiating text, the convention will set up a “government” to manage the “new funds” and the “related facilitative processes.”

Tim Flannery’s disarmingly honest characterization passed almost without notice, reported as far as I can tell only by Brian Lilley of CFRB Toronto and CJAD Montreal. But professor Flannery has it right. Government transport policy is about transport, and government education policy is about education, but environmental policy is about everything, because everything’s part of “the environment”: your town, your county, your planet—and you. “We are the environment. There is no distinction,” declared another renowned expert, David Suzuki, last year. And just as the government now monitors air and water quality so it’s increasingly happy to regulate your quality.

In the name of “the environment,” the state gets to regulate everything you do. The cap-and-trade bill recently passed by the U.S. House of Representatives, for example, is a bold assault on property rights: in order to sell your home—whether built in 2006 or 1772—you would have to bring it into compliance with whimsical, eternally evolving national “energy efficiency” standards, starting with a 50 per cent reduction in energy use by 2018. Fail to do so and it would be illegal for you to enter into a private contract with a willing buyer.

Hey, but who would ever find out?

Don’t be so sure. In 2006, to comply with the “European Landfill Directive,” various municipal councils in England, Scotland and Northern Ireland introduced “smart” trash cans—“wheelie bins” with a penny-sized electronic chip embedded within that helpfully monitors and records your garbage as it’s tossed into the truck. Once upon a time, you had to be a double-0 agent with Her Majesty’s Secret Service to be able to install that level of high-tech spy gadgetry. But now any old low-level apparatchik from the municipal council can do it, all in the cause of a sustainable planet. So where’s the harm?

And once Big Brother’s in your trash can, why stop there? Our wheelie-bin sensors are detecting an awful lot of junk-food packaging in your garbage. Maybe you should be eating healthier. In Tokyo, Matsushita engineers have created a “smart toilet”: you sit down, and the seat sends a mild electric charge through your bottom that calculates your body/fat ratio, and then transmits the information to your doctors. Japan has a fast-aging population imposing unsustainable costs on its health system, so the state has an interest in tracking your looming health problems, and nipping them in the butt. In England, meanwhile, Twyford’s, whose founder invented the modern ceramic toilet in the 19th century, has developed an advanced model—the VIP (Versatile Interactive Pan)—that examines your urine and stools for medical problems and dietary content: if you’re not getting enough roughage, it automatically sends a signal to the nearest supermarket requesting a delivery of beans. All you have to do is sit there as your VIP toilet orders à la carte and prescribes your medication.

[...]

At their Monday night poker game in hell, I’ll bet Stalin, Hitler and Mao are kicking themselves: “ ‘It’s about leaving a better planet to our children?’ Why didn’t I think of that?” This is Two-Ply Totalitarianism—no jackboots, no goose steps, just soft and gentle all the way. Nevertheless, occasionally the mask drops and the totalitarian underpinnings become explicit. Take Elizabeth May’s latest promotional poster: “Your parents f*cked up the planet. It’s time to do something about it. Live Green. Vote Green.” As Saskatchewan blogger Kate McMillan pointed out, the tactic of “convincing youth to reject their parents in favour of The Party” is a time-honoured tradition.

The problem, alas, is that, for the moment, there’s still more than one party. But why? Last year, David Suzuki suggested that denialist politicians should be thrown in jail. And only last month the New York Times’s Great Thinker Thomas Friedman channelled his inner Walter Duranty and decided that democracy has f*cked up the planet. Why, in Beijing, where they don’t have that disadvantage, they banned the environmentally destructive plastic bag! In one day! Just like that! “One-party autocracy certainly has its drawbacks,” wrote Friedman. “But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.”

Forward to where?

Well, fortunately the Copenhagen convention’s embryo “government” appears immune to such outmoded concepts as democratic accountability.

Don’t take my word. Listen to what the activists are saying: it’s about every aspect of your life.

PS: Just to be safe, after reading this column, tear into pieces and flush down your toilet.

Oh, no, wait, don’t

Be certain not to misunderstand my intent in posting this article. It isn’t environmentalism I reject — rather, that idea that environmental concerns are so dire that they justify Statism. It is a wonderful thing when people realize that it is in their own best interest to make prudent environmental decisions. However, this is a choice that must be made freely.

If the State removes this choice, it likewise removes the responsibility for making it. This is what creates the destructive notion that, “It’s not my problem – the government (or someone else) will take deal with it.”

The true environmentalist – the one who loves Liberty and does not use the environment as just another excuse for collectivism – seeks to change individual people’s minds about how they deal with the environment, who they buy products from, how they live. They do not seek the power to force people into compliance with their worldview, through governmental legislation and coercion.

Here’s to true environmentalists.

“I don’t want to be made dictator. I don’t believe in dictators. I believe we want to bring about change by the agreement of the citizens. I don’t believe in arbitrary rule.If I can’t persuade, if we can’t persuade the public that it’s desirable to do these things, we have no right to impose them, even if we have the power to do it.”

-Milton Friedman

Posted via web from Andrew Colclough

This is an outstanding economics talk from the Mises Institute, by Art Carden. Carden uses everything from LOST, to WALLE, to Walmart to illustrate core economic concepts like scarcity, opportunity cost, comparative advantage, firms, capital, and voluntary trading (just to name a few).

Sounds dry, right? There are probably more coherent and logical thoughts covered in this relatively short lecture than in every political speech given in the last 10 years combined.

I certainly agree with the idea that we deserve the government that we get. If we, as a society, feel that the decisions and responsibility concerning our own health are things that our government should be shouldering, rather than us – then we deserve socialized medicine.

If this is our choice, then we must also acknowledge we will be necessarily handing our own choice over to a third party – and be willing to live with this decision. We also must be willing to accept that in the future, removing this government program will be impossible – given that it provides citizens with something they perceive as ‘free,’ in exchange for their votes and loyalty to keep that program going. Mark Steyn points writes about this change in rolls:

“The problem isn’t the cost. These programs would still be wrong even if Bill Gates wrote a check to cover them each month. They’re wrong because they deform the relationship between the citizen and the state. Even if there were no financial consequences, the moral and even spiritual consequences would still be fatal.”

[...]

“Once you have government health care, it can be used to justify almost any restraint on freedom: After all, if the state has to cure you, it surely has an interest in preventing you needing treatment in the first place.”

This idea of cultural infantilism is much more fully discussed in Steyn’s article: Live Free, or Die.

You are probably wondering, if I am against a socialized or nationalized plan – what alternative would I suggest? Well, I am certainly no expert on health care – however, I do have several guiding principals and questions that we should ask or consider when we talk about health care:

First, Thomas Sowell’s famous three questions:

1. How much does it cost?
2. Who pays for it?
3. Does it work?

Now, several of my own:

1. Does the new plan increase – or decrease personal liberty?
2. If the new plan isn’t initially in conflict with personal liberty (question 1), can it easily be made to be so (for instance, by a future corrupt government)?
3. Why does any plan need to be created at the National or Federal level? Why not let the states figure out their own plans, especially since they are much closer and more knowledgeable about their own peoples and situations?
4. What evidence can you point to that our government can afford such a program, given the state of Medicare, Medicaid, and Social Security?
5. Does the new plan increase personal choice? In other words, under any proposed plan, would an individual have more choices overall, or less?
6. Does the plan encourage competition? Historically, industries that have free and tough competition, have to find ways to entice the customer to their service – or they will cease to be. Usually they do this through innovation, providing cheaper services, or providing better services for similar prices. Would whatever new plan we are considering create  competition, favor one business over another (such as one provider teaming up with the government, similar to lobbying), or eliminate competition?

Those are just a start, so I will probably return to this post and add additional questions. Feel free to add your own in the comments. In the mean time, here’s John Stossel’s take also:

And here are ten facts about the U.S. health care system you might not know (via The Hoover Institute – follow the link for in-depth explanations):

1. Americans have better survival rates than Europeans for common cancers.
2. Americans have lower cancer mortality rates than Canadians.
3. Americans have better access to treatment for chronic diseases than patients in other developed countries.
4. Americans have better access to preventive cancer screening than Canadians.
5. Lower-income Americans are in better health than comparable Canadians.
6. Americans spend less time waiting for care than patients in Canada and the United Kingdom.
7. People in countries with more government control of health care are highly dissatisfied and believe reform is needed.
8. Americans are more satisfied with the care they receive than Canadians.
9. Americans have better access to important new technologies such as medical imaging than do patients in Canada or Britain.
10. Americans are responsible for the vast majority of all health care innovations.