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The Policy and Commentary Blog of The Heartland Institute
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The New York Times Wakes Up – Sort Of

July 31, 2015, 12:31 PM

Even a blind pig roots up a truffle every now and again. 

Still, it was with some shock and amusement that I read in The New York Times a story by Josh Barro entitled “Fast-Food Minimum Wage Has Unintended Effects.” 

Gee, do ya think?

The proposed wage New York State wage increase, limited to fast food restaurants with thirty or more locations, “doesn’t do much to raise incomes for workers who don’t work at fast-food chains,” the Times helpfully points out, “[a]nd it imposes higher costs on some businesses than others; in this case, much higher, because fast-food chains will be required to pay about $6 an hour more than their nonchain competitors.”  Good points, both.

Not only that, The Times continues, “[t]he rule could cause owners to change their business models to avoid the higher wage.”  Some fast-food operators might instead choose to open non-fast food restaurants, not to expand if they are just below the minimum threshold of 30 locations that trigger the required raise, or even to install iPads (unpaid product placement announcement alert!) for taking orders instead of hiring real live cashiers. 

Others still might decide to purchase and serve food prepared by outside vendors, to hire fewer workers, or to relocate to adjacent jurisdictions.  Imagine that!

All of these alternatives are, The Times points out, what economists call “distortions,” and all of them have negative effects:  fewer workers than intended will receive the new minimum wage, and businesses will wind up doing things that customers may not prefer. 

Exactly right. 

That’s why markets determine wages and prices better than bureaucrats, no matter how smart and well-educated they may be.  The market, is after all, simply the aggregate of millions of individuals expressing their individual preferences and making their individual needs known when allowed freely to exchange their labor, wages, and services, for the goods and services they prefer.

When people don’t want Big Mac® burgers and fries they don’t go to a McDonald’s restaurant, and when they prefer some brie and pinot grigio they will go to a wine bar instead.  If they don’t care about brand names or high-priced service they’ll go shopping at street fairs or at Wal-Mart, and if they’re really brand-conscious they’ll buy their handbags at Gucci and Louie Vuitton instead.  And, most likely, if they have to spend $15.00 to buy a Big Mac® hamburger and fries they’ll choose the wine bar instead.

The minimum wage – if there is to be one – should be a starter wage, not something on which a breadwinner can expect to support a family of four.  And anyone who wishes to earn more than the minimum wage should work his or her way up inside an organization into a managerial position, become an entrepreneur, or obtain the training and education necessary to start in a career filed likely to pay more than a starter job at a fast-food chain is worth.

MacDonald’s, Jack-in-the-Box, White Castle, Chik-Fil-A, and a host of other fast-food restaurants I don’t have the time or space to name all serve fine food at a good price in ways that look and taste the same the world around.  But not every job they can offer is worth $15.00 per hour if they are to compete fairly in the marketplace for consumer’s fast-food dollars.  Competition among them will determine what those jobs are worth – nor more, no less – and well-meaning fools in the New York State Legislature (or elsewhere) cannot and will not change that by fiat no matter how hard they try.

It’s been said that progressives think the only reason that socialism never works is because the wrong people are in charge.  The truth is, no matter who’s in charge, you can’t repeal the basic laws of supply and demand.  Anyone who tries to do so is foreordained to fail.

Categories: On the Blog

Cato University Day Five: Foreign Policy and the Future of the Liberty Movement

July 31, 2015, 11:54 AM

Cato Institute Vice President of Defense and Foreign Policy Studies Christopher Preble presented on U.S. foreign policy on Thursday. He argued that the U.S. is in a good position to adopt libertarian policy—reducing defense spending and participating in fewer conflicts abroad. According to Preble, some misconceptions about American foreign policy are that counterterrorism requires nation building, most security threats are imminent and urgent, allies reduce the country’s defense burden, and our country should maximize its relative military advantage over other countries. Preble said the country should only go to war when it has public support, a clearly defined and attainable mission, and if its national interest is at stake.

Cato Institute Director of Monetary and Financial Alternatives

Cato Institute Headquarters and Cato University 2015 site

George Selgin discussed the government monopoly of currency. A currency can emerge organically like cigarettes did in prisoners of war camps; the most successful currencies are durable, retain value, and are easy to carry. During the Appalachian and California gold rushes in the 19th century, American private companies competed for public acceptance with their various currencies. The highest-quality currency won out and equaled or exceeded that of the government. With the establishment of national banks in the United States, the government claimed a monopoly on currency. Selgin noted that with no more currency competition and the ability of the Federal Reserve to print large amounts of money, it has become difficult to hold the U.S. central bank accountable.

Atlas Network Co-Director of the Sound Money Project Judy Shelton lectured on the need for a reformed international monetary system, calling the current floating exchange rate system an “antisystem” governments can exploit by artificially setting its currency value. Shelton argued currency should be a reliable tool of measurement, not a policy instrument. She called for a return to the Bretton Woods system, in which currencies were backed by gold and fixed exchange rates. The 2008 crisis and subsequent Eurozone troubles signaled the need for a return to a coherent international monetary system.

That afternoon, Georgetown Law School Professor Randy Barnett lectured on the modesty of libertarianism. He identified three prominent political approaches: the social justice advocates, legal moralists, and libertarians. The first two approaches are problematic since advocates disagree on how much societal redistribution or moral reform is needed, require overly interventionist governments to achieve their goals, and violate private rights to achieve utopian goals. Libertarians call for a limited government that supports a national defense and the Lockean conception of property—the ability to do what you will with what is yours, provided you do not harm others. Barnett also highlighted their belief in the sovereignty of self.

During dinner, Cato Institute Executive Vice President David Boaz discussed libertarianism in the 21st century. He summarized the past successes of classical liberalism and libertarianism: the abolition of slavery, promotion of women’s rights, and codification of limited government and property rights protection in the U.S. Constitution and other documents around the world. Boaz highlighted the role of liberty in the 1989 European revolutions and the failed 1989 Tiananmen Square rebellion in Communist China. Because there is an increasing consensus on libertarian principles around the world and a new generation that is receptive to libertarian ideas, Boaz expressed hope for the future of liberty.

Categories: On the Blog

Cato University Day Four: The Constitution and U.S. History

July 31, 2015, 11:44 AM

On Wednesday, Georgetown Law School Professor Randy Barnett started with a lecture on the two traditional visions of the Constitution. Proponents of the well known democratic Constitution contend rights are derived from government, believes popular sovereignty is found in the group as a while, and supports majoritarian rule. Supporters of the republican Constitution believe popular sovereignty points to individual rights and uphold the primacy of natural rights and limited government. Barnett defended the latter vision and maintained these visions are incompatible with each other.

Four-time New York Times bestselling author and libertarian

Senator Jeff Fake (R-Arizona) addresses Cato University attenders.

columnist Amity Shlaes then presented on the Great Depression, a crisis which influenced policymakers’ decisions in the 2008 recession. A short but severe economic downturn in the early 1920s was truncated when President Calvin Coolidge cut government and hiked interest rates. President Herbert Hoover used Keynesian policies in the late 1920s when the economy was overheating, raising taxes and minimum wages and imposing tariffs. Shlaes called President Franklin Roosevelt’s response to the subsequent depression adding “an Affordable Care Act in every sector of the economy.” Roosevelt heavily regulated businesses and rewarded labor, farming, and other special interest groups to gain their support. After World War II began, Roosevelt loosened the reins on businesses and the U.S. economy finally began to rebound.

During a dinner at one of the U.S. Senate office buildings later that day, we had the honor to hear a speech from Senator Jeff Flake (R-Arizona). Senator Flake discussed the United States’ warming relations with Cuba, the persistent problem of high earmark spending in Congress, and the recent surge in federal spending on entitlement programs like Medicare, Medicaid, and Social Security. He called for an immigration system that makes it easier to become an American citizen and prioritizes legal immigrants over illegal ones in gaining citizenship.

Categories: On the Blog

Policies that Promote Environmental Results, Not Regulations, Could be Attractive to Millennial Voters

July 31, 2015, 9:16 AM

A science and the environment policy brief in the Hoover Institution’s summer 2015 digest indicates that millennial voters are interested in real environmental results, rather than regulations. The author of the piece suggests that this fact should shape GOP policies for the 2016 election, and beyond, and could refashion electoral politics in the U.S.

“The 2016 presidential campaign gives Republicans a chance to speak to those millennials, and the Republican environmental policy message could be a starting point,” writes Terry L. Anderson, a senior fellow at the Hoover Institution, in the piece entitled, Green Allies: What would bring conservationists and conservatives together? Environmental solutions that really work.  “Command-and-control regulations, Clean Air Act, Clean Water Act, and the Endangered Species Act, to mention a few, from Nixon-era Republicans, may have played well with boomers, but millennials want results, not regulations.”

Research shows that the younger generation does care about the environment as a pocket book issue, as Generation Y has a concern with securing an “economic benefit” when making “eco-friendly purchases.”

Furthermore, another 2014 poll showed that half of the voters between the ages of 18 and 29 are “unwedded” to either party. “Environmental policies based on markets, incentives, and entrepreneurship, offer Republicans a chance to win them over,” Anderson writes.

Millennial vote up for grabs. Photo courtesy of Harvard University.

Categories: On the Blog

Hedge Funds: Fire Teachers to Pay Us

July 30, 2015, 9:56 AM

Hedge fund managers are telling politicians and school administrators in Puerto Rico to fire teachers so they can get paid, according to several recent articles on the debt situation in San Juan. A few other, actual headlines are:

These headlines certainly aimed to inflame emotions. The question is what did the report actually say and are these headlines accurate? The report called for higher taxes, cutting expenses and structural reforms. To focus on education here, the report stated, “Reduce number of teachers to fit the size of the student population”. The following chart was included: As the chart states, “Education expenditures increased 39% or $1.4 billion in the past decade while total school enrollment declined ~25%.”  While, the report did call for a reduction in the teaching workforce, the call was much broader in nature and aimed at helping Puerto Rico become fiscally stable again. The Guardian reported, “Puerto Rico’s current education spending works out at $8,400 per student, below the US national average of $10,667.” This amount is 78.7 percent of the US national average in spending.  While the Puerto Rico education expenditures increased 39 percent from 2004 – 2013, the US national average has increased only 11 percent. US student population grew by about 2.6 percent over this time period contrasted to Puerto Rico’s student population decline of approximately 25%. The reality of the expenditure growth versus the population decline clearly demonstrate the politicized nature of education and its associated spending. The mantra of “it’s for the children” is ingrained with in society and allows those within the education system and its defenders an attack vehicle to silence debate, demonize any dissenting voices, and protect the system from economic realities.

Categories: On the Blog

RING THE CURTAIN DOWN ON EPA OZONE RULES

July 30, 2015, 8:35 AM
“On November 25, 2014, the EPA proposed to strengthen the National Ambient Air Quality Standards (NAAQS) for ground-level ozone, based on extensive scientific evidence about ozone’s effects. The proposed updates will improve public health protection, particularly for children, the elderly, and people of all ages who have lung diseases such as asthma. The updates also will improve protection for trees, plants and ecosystems.”   The proposed new standards were placed in the Federal Register December 14, 2014 and asked for public comments on lowering the current standard of 75 parts per billion (ppb) of ground-level ozone over an eight-hour period to 65 to 70 ppb.  Considerations may also be made lowering the standard to 60 ppb.  A final ruling may be made October 15, 2015. In support of the new standard is a Guest Column “Reduce ozone levels for kids’ sake” by Dr. LeRoy M. Graham Jr., pediatric pulmonologist, in the July 1, 2015The Atlanta Journal-ConstitutionDr. Graham wrote, “Ozone, also known as smog, causes millions of asthma attacks every year in the United States. According to this year’s recently released American Lung Association “State of the Air 2015” report, Atlantans are among the nearly half of all Americans – more than 138 million – who live in counties where ozone or particle pollution levels make the air unhealthy to breathe.”  He further wrote, “Based on the review of thousands of studies, experts agree ozone harms health at levels well below what is currently considered ‘safe.’  In my opinion, the EPA needs to heed the scientific consensus and set stronger ozone standards based on the scientific evidence available.”    Dr. Graham is a member of the Board of Directors of the Georgia Chapter of the American Lung Association.   EPA CHANGES GAME PLAN ON GLOBAL WARMING   On March 18, 2009, EPA employee Allyn Brooks-LaSure sent a three-page e-mail “Strategic Communications Conversation” to Richard Windsor, aka EPA Administrator Lisa Jackson.  Ms. Brooks-LaSure points out polar bears and ice caps were not attracting public attention on attempts to curtail fossil fuel use to stop global warming.  She stated, “However, if we shift from making this about polar caps and about our neighbor with respiratory illness we can potentially bring this issue to many Americans.”  Thus use of children struggling with asthma attacks would be a major issue supporting EPA regulations.   President Obama has used asthma on several occasions to support his efforts to stop use of fossil fuels to stop global warming.  The May 31, 2014 The Guardian carried an article “Obama heralds health benefits of climate plan to cut power plant emissions”  which described a presentation President Obama made, with white-robed individuals in the background, in an asthma ward at the Children’s National Medical Centre in Washington, DC.  The President said, “just in the first year the plan would reduce asthma attacks by 100,000 and heart attacks by 2100″.  A 7-page report from The White House “The Health Impacts of Climate Change On Americans” list their claims of health problems from global warming.  No mention most health problems occur in the winter.  On April 7, 2015, President Obama appeared on ABC television news and mentioned 12 years earlier his 4 year old daughter had to be rushed to an emergency room due to asthma attack.  As a heavy smoker at that time, President Obama must have been unaware that indoor smoking is a big contributor to causing asthma attacks.   EPA’S POWER USING MONEY   In its war against fossil fuels, the EPA has a variety of tools of which one powerful help is the ability to give grants to a variety of organizations such as governments, businesses, Indian tribes, education institutions, and non-profit organizations called non-government organizations (NGOs).  The database show grants for the past ten years, including earlier grants that started before that time and still continuing, are 33,069 for a total cost of $56.087 billion.  In spite of Americans being numbed by annual federal deficits exceeding one half trillion dollars, $56 billion is a lot of money.  Using a conservative estimate of $100,000 grant money equaling one man-year of effort, this sum represents 560,000 man-years employment.  Many of these workers do the bidding of EPA on supporting its policies.  Enthusiastic support may be necessary for grant renewals.  A strange category of awards is 6179 awards of $1.741 billion to Indian Tribes.   NGO grants the past ten years are 4436 grants for $2.227 billion.  The American Lung Association is very supportive of the EPA on air pollution with 79 grants over ten years totaling $18,509,199.  Donations to NGOs are tax-deductible, so their activities are considered fully taxpayer supported.   SUPPORT FOR OZONE RULE   The Center for Regulatory Solutions — a project of the Small Business & Entrepreneurship Council — analyzed comments for the ozone rule and found the Natural Resources Defense Council generated 17,000 comments; 74,000 comments came from the Sierra Club; and there were 28,000 comments from Organizing for Action.  Center for Regulatory Solutions also noted the American Lung Association generated 4,700 comments in support of tighter ozone standards.  The Center for Regulatory Solutions found “the four groups generated more than 124,000 mass comments in support of the EPA”. Comments from these activist groups made up nearly 30 percent of the total submitted on EPA’s ozone rule.   As previously mentioned, EPA gave 79 grants for $18,509,199 to the American Lung Association the past ten years.  They also gave 2 grants for $2,332,780 to the Natural Resources Defense Council.  Organizing for Action is an Obama Administration political action group operating out of the White House that sends e-mails requesting action to millions who have signed up for the program.   EPA AIR QUALITY TRENDS   EPA’s published Air Quality Trends shows continuous reductions in air pollution from 1980 to 2013.  This in spite of Gross Domestic Product growth of 145 %, miles traveled growth of 95 %, population growth of 39 %, and energy consumption of 25 %.  (Note the increase in energy consumption is far smaller than population growth.  This indicates far more efficient use of energy in spite of demands for more energy to satisfy new technology requirements like the Internet,the cloud storage, cell phones, and smart phones.)  Aggregate emissions of 6 common pollutants (carbon monoxide, lead, nitrogen oxides, volatile organic compounds, particulate matter, and sulfur dioxide) dropped 62 % from 1980 to 2013.  This information was last updated October 8, 2014.   Measurements of 8-hour ozone at select locations showed a 33 % decrease from 1980 vs. 2013, 23 % decrease from 1990 to 2013, and 18 % decrease from 2000 to 2013.  This shows a continuous decrease in ozone in spite of lack of full implementation of the latest standard of 75 ppb enacted in 2008.   Air qualities today are unbelievably clean in comparison prior to 1950.  Coal was burned without environmental controls for electric power generation, train propulsion, and business and home heating.  Laundry hung outside to dry turned grey, snow on the ground the day after a snow fall was black, and soot was lodged on surfaces of objects (cars) left outside.  Most paints contained lead.  Tetraethyl lead was used in all gasoline.  Catalytic converters didn’t exist on cars.  The list of pollutants goes on and on.   THE RELATION BETWEEN OZONE AND ASTHMA   “No one really knows what causes asthma.  We do know asthma is a chronic inflammatory disease of the airways.  Causes of asthma symptoms vary for different people.  Still, one thing is consistent with asthma: when airways come into contact with an asthma trigger, the airways become inflamed, narrow, and fill with mucus.  Allergies with asthma are common problem.  Eighty percent of people with asthma have allergies to airborne substances such as tree, grass, and weed pollens, mold, animal dander, dust mites, and cockroach particles.  In one study, children who had high levels of cockroach droppings in their homes were four times more likely to have childhood asthma than children whose homes had low levels.  Asthma exacerbation after dust exposure is usually due to dust mite allergy.”   Questions about relationships between air pollution (ozone) and asthma is posted in the May 7, 2004 article in the Georgia Public Policy Foundation’s website by University of Georgia Emeritus Prof. R. Harold Brown “Commentary:  Asthma and Pollution:  a Puzzling Picture”.  Prof. Brown pointed our urban areas in Georgia had less hospitalizations for respiratory illness than rural areas.  In addition, Prof. Brown wrote, “asthma rates increased in the 1980s and 1990s, at a time when Georgia’s air was becoming cleaner. Across the nation, asthma cases increased from about 35 per 1,000 population in 1982 to 55 in 1996.”  Finally Prof. Brown pointed out the timing of asthma hospitalizations did not match air pollution.  Ninety percent of the days air pollution exceeded the 85 ppb eight-hour ozone standard occurred in June-July-August; while 83 percent of hospitalizations occurred in other months.   A July 11, 2011 article in The Atlanta Journal-Constitution by Prof. R. Harold Brown “Politics of asthma have outrun the science of the condition” destroys EPA arguments power plant emissions cause asthma.  EPA claims ozone causes asthma; but Prof. Brown cites studies show a negative correlation of asthma attacks with peak eight-hour ozone concentrations.  Air pollution would be thought to be worse in urban areas; but asthma rates are as high in rural areas as urban areas.  A 2004 global report on asthma cited asthma incidences among adults as 10.9 percent in the U. S., 2.1 percent in China, and 2.2 percent in Russia; all countries with far more polluted air than the U. S.  A 2001-2004 CDC study reported 14.6 percent of U. S. born women, 4 percent of Mexican born women, and 6.8 percent for immigrants born elsewhere claimed they had asthma.  Additional studies, most in Europe, show children born on farms with lots of livestock contact are less likely to have asthma.   A more recent paper by Prof. Brown is the June 19, 2015 post on the Georgia Public Policy Foundation’s website “The Great EPA Ozone-asthma Caper”.  Prof. Brown wrote, “From 1979 to 1997, the maximum allowable level for ozone was set at 120 parts per billion (ppb), averaged over one hour. During this period, maximum one-hour ozone concentrations for the nation decreased 20 percent. The rate (per 10,000) of doctor visits for asthma increased 25 percent.  Then, in 1997, the standard was tightened to 80 ppb averaged over eight hours.  In 2008, this limit was set at 75 ppb.  Previous reductions of ozone levels nationally (25 percent since 1990) have not relieved asthma sufferers of ER visits, which are up 18 percent since 1992-1995. If ozone was reduced and serious asthma attacks increased, what will further ozone reductions do?”   An additional observation by Prof. Brown is, “The projected benefits of the proposed new, stricter standard appear small and contrary. The EPA estimates it will reduce emergency room visits for asthma by 1,400-4,300 per year by 2025. Considering that an average of 1.95 million ER visits for asthma were made from 2008-2010, a reduction of something less than 4,300 is miniscule, less than 0.2 percent.”  Finally he wrote, “Clearly, the EPA doesn’t know how to cure asthma; certainly, it doesn’t know how to treat it. It is well aware, however, of its ability to push through regulations to reduce emissions to ever lower levels, regardless of cost or impact.”   A study “Seasonal variation in asthma-related hospital and intensive care unit admissions”, J Asthma. 2005 May; 42(4):265-71, examined asthma admissions to 285 hospitals over 2001-2002.  The study showed admissions in winter months were almost twice as prevalent as summer months (10.3 percent in winter months versus 5.9 percent in summer months).   “Air pollution not correlated with asthma hospitalizations” is reported by a JunkScience.com study.  Soot and smog were not correlated with emergency admissions for asthma at a large Los Angeles hospital over the two-year period 2010-11.  Los Angeles is one of the most polluted areas in the United States.   To add more confusion to causes of asthma is a new study reported June 6, 2014 in Health Daily News “Too-Clean Homes May Encourage Child Allergies, Asthma:  Study” reported children from dirty homes were less likely to have wheezing coughing by age 3.  The study is still in infancy.   The June 16, 2015 written statement by Dr. Louis Anthony Cox, Jr. on “EPA’s Proposed Ozone Rule:  Potential Impacts On Manufacturing” shows no expected health benefits from ozone reductions.   An article by Brian Palmer titled “How Dangerous Is Asthma?” claimed people are more likely to die from drowning than asthma in the U. S.  Deaths due to asthma have fallen from 2 per 100,000 in 1998 to 1 per 100,000 in 2010.     COST OF OZONE REGULATIONS   The National Association of Manufactures opposed the EPA proposed ozone regulations and produced a video “Our National Parks Could Violate Clean Air Laws?” that “highlights the absurdity of proposed ozone rules and the adverse impact they stand to have on manufacturers and communities across the country.”   A July 2014 study by NERA Consulting for the National Association of Manufactures titled “Assessing Economic Impacts of a Stricter National Ambient Air Quality Standard for Ozone” examined economic effects of lower ozone standards.  Employing their energyeconomic model for a 60 ppb ozone standard, they estimated “potential emissions control costs would reduce U.S. Gross Domestic Product (GDP) by $270 billion per year on average over the period from2017 through 2040 and by more than $3 trillion over that period in present value terms.  The potential labor market impacts represent an average annual loss of 2.9 million job-equivalents.”  In addition, “a tighter ozone standard may also result in barriers to new energy production activity in areas that become in nonattainment.  We therefore also consider a sensitivity case that includes constraints on new natural gas production in the U.S., leading to even greater estimated impacts in terms of energy costs for consumers and losses in economic output. In this sensitivity case, we estimate a GDP reduction of $360 billion on average and more than $4 trillion over the period from 2017 through 2040 in present value terms, and a projected average annual loss of 4.3 million job-equivalents.”   Additional studies by the Center for Regulatory Solutions are contained in the report “EPA Ozone Rules: Still the Costliest Reg…Ever”.  Lost Output and Jobs. “Employing our integrated energy-economic macroeconomic model (NewERA), we estimate that the potential emissions control costs could reduce U.S. Gross Domestic Product (GDP) by about $140 billion per year on average over the period from 2017 through 2040 and by about $1.7 trillion over that period in present value terms. The potential labor market impacts represent an average annual loss employment income equivalent to 1.4 million jobs (i.e., job-equivalents).”  • Reduced Household Consumption. “Average annual household consumption over those same years could be reduced by an average of about $830 per household per year.”   The ozone rule will have similar results to EPA’s Clean Power Plan issued June 2, 2014 which brought the following response from the United Mine Workers of America: [TRIANGLE, VA.] United Mine Workers of America (UMWA) International President Cecil E. Roberts issued the following statement June 2, 2014: “The proposed rule issued today by the Environmental Protection Agency will lead to long-term and irreversible job losses for thousands of coal miners, electrical workers, utility workers, boilermakers, railroad workers and others without achieving any significant reduction of global greenhouse gas emissions.” “Our initial analysis indicates that there will be a loss of 75,000 direct coal generation jobs in the United States by 2020. Those are jobs primarily in coal mines, power plants, and railroads. By 2035, those job losses will more than double to 152,000. That amounts to about a 50 percent cut in these well-paying, highly skilled jobs. When a U.S. government economic multiplier used to calculate the impact of job losses is applied to the entire economy, we estimate that the total impact will be about 485,000 permanent jobs lost.   Also in response to the Clean Power Plan the National Black Chamber of Commerce wrote a report “Potential of Proposed EPA Regulations on Low Income Groups and Minorities”.  “The EPA rules would: 1) Significantly reduce U.S. GDP every year over the next two decades –over $2.3 trillion; 2) Destroy millions of jobs; 3) More than double the cost of power and natural gas to over $1 trillion; 4) Require the average family to pay over $1,225 more for power and gas in 2030 than in 2012.  The EPA regulations will increase Hispanic poverty by more than 26% and Black poverty by more than 23%.”   EPA PROMOTES PLANS INCREASING OZONE   The Energy Security and Independence Act (ESIA) of 2007 charges EPA with enforcing programs increasing use of renewable fuels (corn-based ethanol, cellulosic ethanol, biodiesel, etc.) up to 36 billion gallons by 2022.  This is called the renewable fuels standard (RFS).  Corn-based ethanol is limited to a maximum of 15 billion gallons.  At the time the act was written there was no means of making cellulosic ethanol on large scales like millions of gallons per year.  This is still presenting a problem in 2015.   Weather alerts given in cities about impending bad air is due to ozone increases caused by automobiles.  One source of atmospheric ozone is due to ethanol being mixed with gasoline as a renewable fuel.  A December 14, 2009, report by Stanford University researchers “Ethanol results in higher ozone concentrations than gasoline” shows vehicles running on ethanol generate higher concentrations of ozone than those using gasoline, especially in the winter.  This could create new health concerns in areas where ozone hasn’t been a significant problem before.  Areport by the National Academy of Sciences also confirmed ozone producing problems using ethanol as a fuel.  Further evidence of ethanol causing ozone is in an April 28, 2014 Nature Geoscience article “Reduction in local ozone levels in urban Sao Paulo due to a shift from ethanol to gasoline use”.  Forty percent of automobiles in Sao Paulo are flex-fueled and can run on ethanol or gasoline.  When ethanol was more expensive than gasoline, the percentage of flex-fueled vehicles using gasoline rose from 14 percent to 76 percent and ozone pollution dropped 20 percent.   Another complicating factor besets EPA.  The EPA has a simulator model calledMotor Vehicle Emissions Simulator (MOVES) which measures tailpipe exhausts from automobiles.  States are required to use MOVES to demonstrate compliance with federal air quality standards.  MOVES predicts increased air pollution using ethanol.  This creates a problem justifying increased ethanol use mandated by ESIA.  The Urban Air Institute and others are suing the EPA because they have evidence MOVES incorrectly predicts increased air pollution from ethanol.   The situations described show EPA is attempting to reduce ground- level ozone by regulation while it is promoting use of ethanol that may increase ozone through ESIA mandates.   WHAT SHOULD BE DONE?   Due to the non-existent link between asthma or asthma attacks on ground-level ozone and extreme cost of reducing ozone standards below the current standard of an average 75 ppb ozone over an eight-hour period, consideration of lowering the standard should be stopped.  An additional factor is EPA’s charge with promoting ethanol use which may cause increased ozone.  The EPA is zealous in its attempts to promote new pollution standards.  Only Congressional action can stop their work.  It is necessary citizens of this country contact their two U. S. Senators and House member to inform them of their concerns.  
Categories: On the Blog

Corporations Pledge Fealty to Obama Global Warming Agenda

July 30, 2015, 8:21 AM

Democratic presidential candidate, Sen. Barack Obama, D-Ill., addresses the Democratic National Convention at Invesco Field in Denver, Thursday, Aug. 28, 2008. (AP Photo/Matt Sayles)

The planet is in a nearly two-decade global warming standstill; an Arctic research expedition to study warm was halted due to too much ice; polar bear habitat is healthy; another quiet hurricane season is expected; and a paper on sea level rise by climate alarmism founder Dr. James Hansen has been dismissed by his fear-mongering colleagues as “flimsy.”

Nonetheless the corporate world has loyally marched to the White House doorstep to pledge fealty to President Obama’s carbon dioxide reduction agenda. On Monday 13 large companies announced they would collectively spend $140 billion on various initiatives to reduce carbon dioxide emissions and expand so-called “clean” energy. The collective action has been dubbed the “American Business Act on Climate Pledge” by the White House, and is intended to enhance the president’s negotiating position at international climate talks in Paris at the end of the year.

“Rising temperatures can lead to more smog, longer allergy seasons, and an increased incidence of extreme-weather-related injuries, all of which imperil public health, particularly for vulnerable populations like children, the elderly, the sick, the poor, and some communities of color,” the White House press office said in a statement. “No corner of the planet and no sector of the global economy will remain unaffected by climate change in the years ahead.”

Upon that false premise Obama brought in many of the usual renewable corporate cronyism suspects for the White House dog-and-pony show:Alcoa, Apple, Bank of America, Berkshire Hathaway Energy, Cargill, Coca-Cola, General Motors, Goldman Sachs, Google, Microsoft, PepsiCo, UPS, and Walmart. Some are known for taking advantage of government-distorted “markets” (i.e., subsidies and mandates) that keep renewable energy profitable; others have been big supporters of Obama during his campaigns; others were recipients of bailout funds from the administration; and others just purely pander to the “green” agenda. Some fit two or more of the categories.

Would any of the above companies be so environmentally altruistic if government – meaning the Obama administration – wasn’t manipulating regulations and extending corporate welfare as a carrot? It’s hard to imagine that would be the case. For example, Bank of America says it has poured billions of dollars into its “environmental business initiative.”

“We are putting our financial capital, our intellectual capital, and the strength of our partnerships to work to help create a better future for all of us,” said BofA CEO Brian Moynihan.

The mega-bank announced in its press release that it would increase its “environmental business initiative” from $50 billion to $125 billion in “low carbon (dioxide) business” by 2025. It claims to have provided more than $39 billion to finance “low-carbon (dioxide)” activities since 2007 – 40 percent of which went to renewable energy projects and 33 percent funded energy efficiency. Similarly, Goldman Sachs says in 2012 it committed to invest $40 billion in clean energy and plans to expand that pledge.

It’s doubtful that BofA, Goldman Sachs or others would be so ambitious throwing money at these sectors if taxpayers weren’t on the hook for the majority of their costs. As NLPC has reported in the past, investors in renewables enjoy a wealth of revenue-generating benefits from government that include accelerated depreciation (which frees up cash flow and reduces the corporate tax burden), a bevy of tax credits, and various grants and government contracts that assure income. In addition, as archived at theDatabase of State Incentives for Renewables & Efficiency, there are hundreds of additional incentives across the country offered at the state and local level.

As Obama supporter Warren Buffett – the financial brawn behind Berkshire Hathaway Energy – said last year, “On wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

As for heavily subsidized energy efficiency programs boasted about by BofA, they have been shown to be rife with waste and fraud, and a recent study showed they don’t pay off economically either.

In recent years NLPC president Peter Flaherty has called Walmart to account, via shareholder actions, for its support of cap-and-trade and for initiatives such as the use of 100-percent renewable energy, and creating “zero waste,” as policies that he said “are neither achievable nor desirable.” Likewise Apple – with Al Gore among its directors – has been shown by NLPC to make fraudulent claims that its data centers are powered completely by renewable energy, when in fact they enjoy consistent, cheap electricity supplied by Duke Energy while pushing expensive, intermittent solar onto the utility grid. There are countless other schemes under which businesses profit, while taxpayers foot the bill, without benefit.

The corporate “climate pledge” to Obama is no noble commitment. It’s a scam.

[Originally Posted at NLPC]

Categories: On the Blog

Hollywood Seeking Sequel to ‘Hope and Change’ with Versatile Starlet Hillary Clinton

July 30, 2015, 7:19 AM

Noted environmentalist, philanthropist, and con artist, Hillary Clinton, is seeking the allegiance of big donors in Hollywood. It’s not an easy sell, for producers, writers and directors would rather see yet another sequel for the handsome star of “Hope and Change.” But their hero Barack Obama — on hiatus, permanently, from seeking re-election to a third term as president of the U.S., and readying himself for a return to his true homeland, Indonesia, or where ever it may be — is not available.

Powered by  volunteer fundraiser Tobey Maguire, star of sci-fi action films Spiderman, Spiderman 2, and Spiderman 3, as well as Spiderman video games, Clinton’s fundraising web caught $47.5 million during the second quarter of this year, according to The Hollywood Reporter. “Even the pickiest Obama supporters have come away from Clinton’s events feeling better about her candidacy,” reports the trade newspaper.

One trick of the trade for tinsel town fundraisers — holding three versions of the same fundraising event, at the same location, say the Beverly Hills Hilton, on the same night. This allows them to evade fundraising caps, as set by federal election laws.

Leftist directors and producers Norman Lear and Rob Reiner and Jeffrey Katzenberg are now said to be fans of Clinton, who during her career has played roles as a liberal, a moderate, an extreme liberal, or progressive, with one, stunning cameo appearance as a klutzy Secretary of State who seems to have lost her e-mail about some place called Benghazi, which is a city in Libya, or, she guesses in testimony before the U.S. Congress, somewhere in the Middle East.

Even producer/executive Tom Rothman, whose e-mails were hacked by Korean spies, and whose complaints about Clinton were publicly aired, has come around. He donated $2700 recently to HRC.

Now all she needs is super-agent Ari Gold to help her spin the inevitable primary flops in Iowa, and New Hampshire 2016. With a c.v. like hers, though, including big accomplishments like the failed HillaryCare health care push in the early 1990s, she is likely to vanquish threats from Bernie Sanders, Martin O’Malley, and Chauncey Gardner.

Categories: On the Blog

Clinton Climate Plan Benefits Big Green

July 29, 2015, 2:57 PM

On Monday, Hillary Clinton, the presumed front-runner for the 2016 Democratic nomination for President and noted environmentalist, unveiled a “Climate Plan” that she claims would help foment the rise of solar power as a cheap and effective alternative to fossil fuels, thus combating “Climate Change.”

Her choice of solar power, though, as a leading fuel technology is mystifying to some, as solar has seen its share of recent instability. After a two-year skid, which saw some solar stocks decline by up to 20% because of rapidly decreasing crude oil prices, solar is just now evening out. And even then, that’s thanks to investors who picked up the stocks at bargain basement prices, on speculation that the industry, rife with government funding unconnected to evidence of success, would continue to flow. As of 2012, according to the CBO, alternative energy companies received $24 billion in federal support, including $20.5 billion in special tax rates, tax credits and grants, and $3.5 in spending, through the Department of Energy.

It turns out, of course, that Hillary Clinton is targeting solar for just that reason – some her most ardent supporters are primary investors in major solar energy companies and connected to major environmental policy shops – and her “Climate Plan” would heavily benefit “Big Green” and it’s policy affiliates.

The Washington Free Beacon reports:

Hillary Clinton’s plan to dramatically boost U.S. solar power production and installation could benefit a number of companies that have paid or donated to various arms of the former secretary of state’s expansive political network.

Leading solar panel manufactures and installers have donated to the Democratic presidential candidate’s family foundation, employed members of her inner circle, bankrolled a group providing policy advice to her campaign, and enlisted the services of lobbying and public relations firms run by her top supporters.

The solar industry will see a major boost if Clinton is elected and enacts her newly unveiled climate and energy policy plan. Released on Monday, the plan calls for a seven-fold increase in solar power capacity by 2020.

Much of the “boondoggle-to-be” can likely be traced back to Clinton ally Jon Podesta, a founding member of the Center for American Progress, recruited for the organization specifically for his connections to other Clinton allies. Podesta was instrumental in getting George Soros, among other anchor donors, to underwrite millions in startup costs for CAP, even as Democratic “big money” donors were moving away from the concept of financing think tanks. Podesta served as CAP’s President until 2013.

It seems to be no coincidence, then, that Clinton’s “green strategy” is the work of major environmental policymakers at the Center for American Progress. Clinton’s track record on environmentalism is shaky, earning, initially, support only from the League of Conservation Voters Action Fund (which, of course, features at least one CAP environmental policy group alumni, Senior VP Daniel Weiss, in its administration, and shares at least one board member with CAP).

And it also seems to be no coincidence that Clinton’s green strategy, were it to be enacted, would greatly benefit some of the Center for American Progress’s top donors.

Clinton’s climate strategy would likely benefit solar companies such as First Solar, whose donations to the Center for American Progress came under scrutiny after the policy group actively promoted the company’s positions on key legislative issues.

“First Solar gave money to CAP and CAP’s staff advocated for First Solar before Congress and in articles on CAP’s website without disclosing that pertinent piece of information,” wrote the Nation’s Ken Silverstein in a 2013 story about the group’s corporate supporters.

More recent corporate donors to the group include the Albright Stonebridge Group a political intelligence firm founded by Madeline Albright, the former secretary of state, that boasts of its ability to connect businesses to Washington power-brokers.

Albright Stonebridge represented First Solar in its efforts to secure a contract with the Chinese government to build a huge solar plant in Inner Mongolia. And the Free Beacon turned up evidence that Wendy Sherman, who worked at Albright Stonebridge, and is close with Hillary Clinton, has also worked closely with First Solar as a consultant.

And then, there’s the donations First Solar has made to the Clinton Foundation, between $25,000 and $50,000. NRG Energy, also a major solar energy company, gave to the Clinton Foundation, as well. Podesta also has ties to other solar energy companies, including Elon Musk’s SolarCity, which hired Podesta’s firm to lobby on its behalf.

Much is frequently made about “dark money” in political campaigns, often as a critique of major donors to Republican candidates, looking for corporate handouts in return for their financial fecundity, but Big Green is very closely aligned with the political process as well, giving, as demonstrated, thousands in carefully placed donations, in an effort to prime future administrations to keep government funds flowing, even to alternative energy sources that the market has clearly indicated are economically – if not environmentally – unsustainable.

Categories: On the Blog

The Donald Trump Rule: ‘Flip-Flopping’ to the Right Position Can Be a Very Good Thing

July 29, 2015, 11:09 AM

We hear the charge leveled all the time: “Flip-flopper.” When someone fundamentally changes their position on an issue.

We are naturally left to wonder if the move is genuine. Are they are saying what they think – or what they think we want to hear?

Republican presidential candidate Donald Trump has rocketed to to the top of the sixteen-candidate heap – in large part because of his anti-illegal immigration stance. Which is from all appearances a relatively new position for him. Here’s November 2012 Trump:

“(Mitt Romney) had a crazy policy of self deportation which was maniacal,” Trump says. “It sounded as bad as it was, and he lost all of the Latino vote,” Trump notes. “He lost the Asian vote. He lost everybody who is inspired to come into this country.”

Trump’s current illegal immigration stance is…slightly more staunch. And it appears to be working for him.

(Of course, Trump is by no means the only 2016 candidate to radically reconfigure his immigration position – Hello, Senator Marco “Gang of Eight” Rubio.)

If a pol flip-flops to the right side of an issue – we shouldn’t mindlessly attack. Because we can not with any certitude know why they did it. What we can do is hail their correction – and hold them to it.

So it is with the awful Innovation Act.

The Innovation Act is fundamental transformation of the Constitutionally-protected patent process – without benefit of the Constitutional amendment process. All under the (intentional or accidental) false flags of “litigation reform” – to deal with “patent trolls.”

But “patent trolls” are almost always nothing more than people with patents – defending them against patent thieves. The patent holders usually have to sue to do that – this “litigation reform” makes it exponentially more difficult for them to do so.

An Innovation Act House vote is expected after the August recess. Except:

Patent Reform Defectors Emerge in House

The House Judiciary Committee’s lopsided approval of patent reform legislation last month would not have looked as overwhelming if every member showed up.

Six of the seven members of the committee who were absent told The Hill they are leaning toward opposing the measure in its current form. Five of those opponents supported a similar bill last Congress….

Flip-floppers all, potentially. Hopefully.

House Majority Leader Rep. Kevin McCarthy (R-CA) 62% (R-Calif.) had put it on the July schedule and it appeared to be heading toward quick approval after a similar bill passed the full House last Congress 325-91.

But after a series of meetings, which opponents say did not go well, the bill was taken off the July calendar. McCarthy said last week that “there is more work to be done on it.”

But why waste any more lipstick on this pig? When there are actual attractive bills to be had?

TROL Act

This is not fundamental transformation. It specifically reforms demand letter abuse – without total system disruption.

It gives the Federal Trade Commission (FTC) the authority to deal with bad demand letter writers – on an a la carte basis. The FTC examines each case as it comes – rather then preemptive, all-encompassing legislation where every single patent holder trying to protect their intellectual property is assumed to be acting in bad faith.

And that’s about it. With DC – less is almost always more….

Strong Act

This isn’t fundamental transformation either. It reforms demand letter abuse – and cleans up some previous DC mistakes.

The last patent reform bill – the America Invents Act – established overly broad standards for when and how patents can be challenged at the patent office. This bill tightens them.

And it uses the TROL Act language that ends abusive demand letters.

As Ronald Reagan said of his treaty dealings with the Soviet Union – “Trust, but verify.”

We should (almost always) give flip-floppers to correct positions the benefit of the doubt – and thereafter the totality of our scrutiny.

If actually elected, Trump should absolutely be held to his new anti-illegal immigration stance – which will have helped deliver him to the White House.

And to these new tentatively anti-Innovation Act Republicans and Democrats – we say “Welcome (almost) home. Do the right thing – and vote No.”

Better still, House Leadership should take further note – and not waste any more makeup on this swine.

Let’s permanently leave it in the legislative pen. And move on to much better looking bills.

[Originally published at RedState]

Categories: On the Blog

FAA Warning Raises More Questions About Boeing Batteries

July 29, 2015, 9:00 AM

It appears – two years after Boeing had fire incidents from installed lithium ion batteries that shut down deliveries of its vaunted Dreamliner 787 – that its “solution” to “vent” heat and flames outside the aircrafts has prevented any catastrophes, so far.

But it hasn’t alleviated concerns about the batteries’ physics and makeup. Last week Boeing issued a warning to its airline customers to not carry bulk shipments of lithium-ions because if they catch fire or overheat, they’re unstoppable. A spokesman told the Associated Press that the manufacturer has advised airlines not to transport the batteries “until safer methods of packaging and transport are established and implemented.” Likewise, the FAA simultaneously stated that its research has found that carriage of lithium ion batteries “presents a risk.”

The alert was industry-wide. At a safety forum held last week in Washington by the Air Line Pilots Association, Boeing’s fire protection system specialist Doug Ferguson explained what led to the decision to issue the warning. He said standard fire suppression systems employed on aircraft, called Halon 1301, are ineffective against the “thermal runaway” that bulk quantities of lithium ion batteries are known for.

“Unrestricted quantities of lithium batteries that are involved in a cargo fire…can still create hazards that would effect the continued safe flight and landing of the aircraft,” Ferguson said, “particularly depending on the location, the type and quantity of batteries and the time required for a safe landing.”

Boeing, after dismissing any fears about fires in the lithium-ion batteries that power most of the Dreamliner’s systems (saying “it almost doesn’t matter” what caused them), apparently had an intervention from a higher power. According to Aviation International News, the International Coordinating Council of Aerospace Industries Associations issued recommendations regarding transport of lith-ions. Boeing and fellow manufacturers Airbus, Embraer and Bombardier participated in developing the advisory, with plans to meet soon to work on packaging that can contain or mitigate thermal runaway fires.

“What has happened,” Ferguson added, “is that testing has shown that there are higher rates of smoke production, flammable vapor, pressures and temperatures that occur with fires that involve…lithium-ion batteries….than with ordinary Class A type combustibles – paper products for instance.”

So did Boeing learn something new all of a sudden? Or was the company pressed by industry groups to align with them over their serious concerns about the dangers of lithium-ion batteries? According to a physicist who has closely followed the Boeing situation, and battery fires in general, the dangers of bundled lith-ions and the shortcomings of Halon are nothing new.

“It was already very well-known 5 years ago that Halon has no chance whatsoever to extinguish a fire involving significant numbers of Lithium-ion batteries in air cargo,” said Lewis Larsen of Chicago-based Lattice Energy. “The notion that it would take yet another 5 years for this particular epiphany to finally dawn on them is simply not believable.”

At the safety forum Ferguson said in testing, the Halon controlled flames, but the thermal heat that migrated from battery to battery was unaffected. It’s a phenomenon with which Ferguson and Boeing’s safety team should be well experienced. Two Japanese airlines suffered battery fires on Dreamliners in January 2013, which spurred the Federal Aviation Administration to shut down operations while the incidents were investigated. And in 2006 a 787 battery explosion caused a “devastating lab fire” in Arizona, burning a 10,000-square-foot facility to the ground.

Two years ago Larsen said debris from a thermal runaway event on a Japan Air Lines Dreamliner showed that heat from internal shorts reached temperatures far higher than Boeing engineers likely contemplated in their design. The evidence showed that temperatures reached to the boiling point for stainless steel and then turned into gaseous vapor.

Boeing, however, was not to be deterred from its celebrated, fuel-efficient “green” Dreamliner, which is loaded with the troublesome batteries. Despite never finding out what caused the Japanese airlines’ fires, the company took measures designed to vent heat and flames outside the fuselage and thus mitigate risk, rather than try to detect the cause of the fires in the first place.

The FAA says the solution is good enough, but that may not instill confidence since the agency certified the airworthiness of the Dreamliner batteries in the first place. A National Transportation Safety Board investigation into the original fires determined that both FAA and Boeing failed to sufficiently oversee the batteries’ manufacturing process, which opened the door to design flaws. The list of failures in the safety inspection process is reportedly lengthy.

The problems haven’t fully dissipated. In January 2014 Japan Air Lines suffered another malfunction with a Dreamliner battery overheating, with reported smoke and liquid coming out. Last month an Aeromexico Dreamliner made an emergency landing in Ireland due to an alert in the cargo hold, but a spokesman said there was no fire. The cause has not yet been announced. And in May the FAA issued a maintenance mandate for the Dreamliner, after testing showed the plane could lose all electrical power after being continuously powered for 248 days.

Flyer, beware.

[Originally posted at NLPC]

Categories: On the Blog

A Newfangled Nanny State? U.K. Government to Force Fat People to Lose Weight

July 29, 2015, 8:46 AM

Academy Award Winning Actress Gwenneth Paltrow on the set of the movie, Shallow Hall.

The Conservative Party of the U.K. – the Tories, Winston Churchill’s political bloc back in the day – is giving new meaning to the old pejorative “the nanny state” when it comes to health care policy.

A report in the Daily Mail, republished in the Conservative Home daily, the newsletter of the Conservative Party, indicates that the government of Prime Minister David Cameron  has floated a plan that would force the obese to lose weight, or lose their disability benefits.

“Obese people who refuse medical treatment to help them lose weight could have their benefits cut, the Prime Minister will announce today,” The Daily Mail reported. “David Cameron will launch a review to work out the cost to taxpayers and the economy of ‘preventable’ conditions such as obesity and drug and alcohol addiction. He has asked a government health adviser to examine plans to force people with health problems to undertake treatment when claiming benefits.”

Approximately 1,800 men and women in the U.K. receive “ incapacity benefits,” what Americans call disability, with the main reason listed as “weight-related issues,” the report added. “The claimants currently get offered treatment such as courses and medication to help them get better and back to work, but there is no legal requirement to accept the help.”

According to The Conservative Home daily, the Prime Minister has also asked a government health adviser to examine the feasibility of these plans to “force people with health problems to undertake treatment when claiming benefits.” The reports did not note at what weight level — or Body Mass Index (BMI) score one is considered overweight by the government.

One wonders what Michelle Obama – the dietary doyenne and First Lady of the U.S. – thinks about this intrusive policy of the newfangled nanny state, called the United Kingdom, and whether her husband, the President of the United States, Barack Obama, would ever consider making this kind of a policy integral to Obamacare.

Categories: On the Blog

The Latest Bughouse Square Debates: Heartland, and School Choice, Won

July 29, 2015, 12:15 AM

At the latest Bughouse Square Debate in Chicago on July 25, from left: Mark Weyermuller, Heartland’s Bruno Behrend, and Lennie Jarratt.

Standing on a soapbox giving a political speech sounds like fun. That was the order of business this past Saturday at Bug House Square. This is the informal name of Washington Square, a park at Clark and Walton on the near north side of Chicago. The event was sponsored by the Newberry Library, which is across the street.

I came out to hear my friend Bruno Behrend speak on the subject “Public or Private? What should be the future of public schools in Chicago?” He debated Troy LaRaviere, a Chicago Public School principal.

You can imagine the topics. Bruno spoke of school choice, charter schools, right to work, vouchers, private schools, with focus on the residents, taxpayers, and children. Bruno is known  for using the term, “government education complex.”

This from his Heartland Institute blog: “The ‘Government Education Complex’  is the interlocking set of interests that control the vast majority of American education dollars, education policy, and the steady increase in unnecessary education job creation. The explosion of spending, debt, and taxation we’ve witnessed in the last 25 years was used to fund the growth of this Complex.”

The other side spoke of higher taxes and more spending. Much of his focus was on the importance of teachers. In true “soapbox debate” fashion, the audience of about 1000 cheered, booed, groaned, and heckled.

Many people look at the Chicago Public Schools as a jobs program for teachers and as a political activist group. Of course there are millions of dollars available for vendors and contractors.  Recently I wrote about the $20 million no bid contract for SUPES, an outsourced educational firm to train principles now under investigation. This led to the dismissal of Barbara Byrd Bennett, the superintendent and part of the school board. Many refer to it as a scandal, but few media stories about it lately.

I would call it the appearance of impropriety or better yet, waste, fraud, mismanagement, and corruption.

 

There were several other smaller debates throughout the park all day.  There were about 20 tables of activist groups including Planned Parenthood, The Green Party, and Socialists of America. The socialists were promoting the candidacy of Bernie Sanders. It appeared that the attendees could be categorized as left-leaning. The term “socialism” was used openly throughout the afternoon. Of course, there was a handful of us conservatives promoting limited government with freedom, liberty, and opportunity.

 

The debate went well, as I declared Bruno the winner. Bruno is a senior fellow with the Heartland Institute.  Its mission is to discover, develop, and promote free-market solutions to social and economic problems.  They just moved their offices to Arlington Heights and are planning an open house on Saturday, August 23, 2015 from 10:00 AM till 6:00 PM.  More details can be found on their website.

Next year I would encourage more conservatives to attend this event.  It is important to get the message out of limited government with less taxes, less spending, and less borrowing. This will create more freedom, liberty, and opportunity for all. I welcome the debate, even if I have to stand on a soapbox.

[First posted at Illinois Review.]

Categories: On the Blog

Cato University Day Three: Liberty and the American Experience

July 28, 2015, 10:09 PM

Georgetown Law School Professor Randy Barnett speaks on jurisprudence.

Today, Cato University Director Tom Palmer concluded his lecture series on the origins of state and government. He showed how guilds, churches, and other associations served as an alternative to government in mediating disputes between private citizens. He also showed how earlier documents like the Magna Carta and some Kosice and Hungarian tracts served as predecessors to the American republic because of their emphasis on limiting arbitrary monarchic rule. He also showed how the unique feudal system in Europe, while imperfect, introduced more equal relations between lord and subject and a contractual system of reciprocal obligations that would be echoed in today’s democracies.

Georgetown Law School Professor Randy Barnett gave Cato University attendants a treat when he interpreted various portions of the Declaration of Independence for us. Barnett discussed how natural rights are naturally found in humans, noting that the primary function of the government is to preserve its citizens’ natural rights. He discouraged the judiciary from “discovering” rights in the Constitution and to consider how their rulings may unintentionally benefit special interest groups. Barnett also showed how the theme of unalienable rights—life, liberty, and the pursuit of happiness—is also echoed throughout the Constitution.

United States Military Academy Professor Robert McDonald gave two lectures in the afternoon. The first concerned the role of property rights in improving the lots of the American colonists. In the settlements Jamestown and Plymouth, many inhabitants initially starved to death in the early 17th century because of the collective farming system imposed on the populations by the British government. Men were mandated to work together in the fields, give their crops to the state, and receive an equal amount of the total yield. Morale soon fell as they were disincentivized to work and committed themselves to other endeavors like seeking gold. When men in those towns were allowed to plant and keep their crops privately a few decades later, production skyrocketed and the overall population and life expectancies increased. These formerly backward colonies became so successful with newfound property rights that indentured servants and later slaves were brought from across the Atlantic Ocean to satisfy European demands for crops.

McDonald’s second lecture concerned liberty and the American experience. Oppressive tax laws by the British on the American colonies were repealed time and time again before the tragic Boston Massacre in 1766. The Tea Act taxed the colonies on that highly demanded good and led to the Boston Tea Party. Although the newly formed United States won the Revolutionary War a few years later, liberty was difficult to preserve. Contentious elections in 1800, 1860, 2000 and other years divided the country even while the United States grappled with an increasingly activist judiciary and the legacy of slavery and Native American displacement. McDonald argued that the American experiment, while fraught with tragedy and errors, is well-worth maintaining because of its unique history and the Founding Fathers’ emphasis on small government and liberty.

Our customary dinner lecture was given by Palmer on the history of the liberty movement in the world. Palmer highlighted every society has two narratives: one of power and domination and the other of liberty. Statist and individualist forces have often fought throughout history. Palmer located the American Revolution as a link in the chain of pro-liberty Atlantic Revolutions. Classical liberalism emphasizes the unalienable rights of individuals and has been used to promote the women’s movement and eliminate slavery and serfdom in the 19th century. The 20th century was tragic in that many nations became dominated by statist and fascist factions and wreaked havoc on their own people. Since the dawn of the 21st century, the liberty movement has shown promise due to new communications technologies and the appeal of the libertarian virtues of individual rights and responsibilities, solidarity, respect for peaceful diversity, and a belief in the dignity of mankind, he concluded.

Categories: On the Blog

Chris Farley Government: Remember When It Was Congress That Made Law? That Was Awesome

July 28, 2015, 11:00 AM

Remember that recurring Saturday Night Live skit where the late Chris Farley was the ultimate fanboy – interviewing those for whom he was the ultimate fanboy?

Sniveling and sweaty, he would bring up some of his favorite memories of his interviewees – pretending they were questions by prefacing them with “Remember…?”

And when the interviewee said he did in fact remember, Farley would blurt out “That was AWESOME.”

To wit: Farley’s sit-down with Paul McCartney.

“You remember Beatle Mania? Where those four guys went on stage and looked like you and then they played Beatles songs and….

“Yeah, I heard about that.

“That was AWESOME.

I often think of the Farley Model when watching the media “interview” a Democrat. Especially, sickeningly so when it’s Barack Obama or Hillary Clinton.

But with the eternally overreaching Obama Administration, I am starting to feel more and more like the Anti-Farley.

This Administration issues executive fiat after executive fiat – piling the power grabs skyward.

And again and again, the allegedly opposition Republican Party – emplaced by We the People in control of the Legislative Branch – acts outraged and issues stern press releases. But does nothing to actually rein them in.

The President keeps encroaching on Congress’ lawmaking turf – and the lawmakers keep ceding the field.

Leaving us Less Government types to turn to one another and ask “Remember when it was Congress that made law? And defended their Constitutional prerogative to do so? That was AWESOME.”

Obama: ‘I Have a Pen and I Have a Phone’

Obama’s One-Man Rule Amounts To A ‘Gradual, Quiet Coup’

President Obama and every one of his Departments, Agencies, Commissions and Boards are working non-stop as stealth, unelected, unaccountable “law”makers.

By Unilaterally Changing ObamaCare, Obama Is Making A Mockery Of The Constitution

Obama EPA Climate Decrees Will Further Damage U.S. Economy

Obama’s Objective: Nationalize California’s Government-Made Water Disaster

Obama Proposes Massive Gun Ban by Regulation Fiat

Obama to Order Expansion of Overtime Pay for Millions of Workers

Likely the biggest Obama Administration power grabs have come from the Federal Communications Commission (FCC). Because they have so much more of the still-private sector to grab.

Because the FCC has set its sites on the Internet. Which – unlike just about every other economic sector – didn’t really have an agency (or eight) assigned to crush regulate it.

Back at the Internet’s dawn – during the Bill Clinton Administration – two unbelievably unleashing government decisions were made. The World Wide Web was privatized – and deemed to be basically regulation-free.

As always happens when the government doesn’t “help” – the Web has exploded. Becoming an always-evolving, ever-expanding, free-speech-free-market Xanadu.

President Obama could not let that stand. So he sicced on the Internet the FCC. Which is supposed to an independent agency – free from political arm-twisting.

President Obama’s FCC happily obliged. And unilaterally declared the Internet subject to 1934 law. Written for…land line telephones – and railroads. Seems eminently applicable, yes?

This is Network Neutrality – on century-old steroids. It is a HUGE power grab. Which will hopefully (yet again) be dumped by the courts.

Of course the FCC has by no means stopped there. Behold their abuse of the merger approval process.

When any two or more companies want to become one – the Federal Trade Commission (FTC) and the Justice Department both have to give their approval. If those companies have anything to do with anything communications – the FCC piles in and piles on.

As does the FTC and Justice – when the FCC goes into merger-approval-mode, they grab their “law”-writing pens. And impose countless a la carte regulations they could never get through Congress. All three agencies take their licks – but the FCC usually hits the hardest.

These are called merger “conditions” or “concessions.” But that’s like saying I conceded my wallet to the guy with the gun and the mask. The merging companies are government hostages – to get out they have to give in. These are merger capitulations.

Rent Seeking in the FCC’s Approval of the AT&T/DirecTV Merger

(T)he FCC is largely free to ask firms for an almost unlimited range of concessions in exchange for favorable outcomes in matters before the commission. Such rent-seeking is business as usual.

In the merger context, the only practical limit on what the commission can request is however much the parties are willing to give up before walking away from the deal.

The FCC almost always takes full advantage.

FCC Approves AT&T, DirecTV Merger ‘With Conditions’

  • The soon-to-be single entity must expand high speed fiber Internet access to at least 12.5 million customer locations, E-rate eligible schools and libraries within the next four years.
  • AT&T must offer broadband access to low-income consumers at discounted rates. AT&T responded it will start with plans of 3Mbps service at $5 per month and 10Mbps for $10 per month.

These two capitulations will cost a LOT of money. These exorbitant costs will of course be passed along to AT&T and DirecTV customers – in the form of much higher monthly rates. Because “pro-consumer” – or something.

  • AT&T cannot write its own rules on data caps and providing access to online video, circling back into the tangled web that is net neutrality.

The FCC mandated a la carte Net Neutrality – in case the courts dump the whole-hog-grab. Something the Commission also did in the Comcast-NBC merger.

And remember this?

(FCC Chairman) Tom Wheeler Tweaks Net Neutrality Plan After Google Push

When the FCC Chair turned his law-writing pen into a waiter’s order-taking pen. Allowing huge President-Obama-and-Democrat-donating Google to order customized a la carte changes to the grab.

Fellow bandwidth-uber-hog Netflix is also in Waiter Wheeler’s section. And also gets to order way off the menu.

Netflix to Support Charter Acquisition of Time Warner Cable

So – merging companies now have to get Obama’s cronies’ approval, too. Which they will grant – in exchange for self-tailored capitulations, of course.

Netflix Inc. will support Charter Communications Inc.’s $55 billion acquisition of Time Warner Cable Inc. in exchange for free access to Charters customers…. 

To quote another Saturday Night Live skit: “Well isn’t that special.”

So in the Age of Obama – the unelected regulatory agencies get to write “laws.” Their Crony Socialist donors get to write “laws.”

The only people who don’t get to write (actual) laws – are the Representatives elected and Constitutionally-mandated to do so.

All of which is anything but awesome.

[Originally published atRedState]

Categories: On the Blog

‘Repeal and Replace’ Fails in Senate, As Conservatives Scramble for Anti-Obamacare Votes

July 28, 2015, 8:32 AM

Sen. Ted Cruz (R-Texas) and other conservatives this weekend were unsuccessful in their attempt to repeal Obamacare through a parliamentary procedure. Sen. Majority Leader Mitch McConnell (R-Ky.) would not allow the “repeal and replace” legislation to be added to another bill regarding the Import-Export Bank. Conservatives are concerned the Senate does not have the votes to pass a veto-proof bill.

Consequently, the National Center for Public Policy Research is proposing a “five-point plan” to help Republicans repeal ObamaCare and replace it with free market-based reforms. The NCPPR plan is as follows,

1. Sponsor Regular Congressional Hearings. Congress should hold weekly hearings on key health care issues, including mounting problems with ObamaCare and alternatives for more free-market reforms. Hearings on the latter will enable lawmakers and the public to debate free-market alternatives.

2. Hold Regional Town Hall Meetings. Republicans should hold town hall meetings across the U.S., seeking advice from Americans on what works and what doesn’t work about our current health care complex.

3. Appoint Congressional Working Groups. Speaker John Boehner and Senate Majority Leader Mitch McConnell should appoint health care working groups consisting of Members of Congress/Senators they trust who are committed to ObamaCare repeal.

4. Put Health Care Bills on the President’s Desk — Despite His Pledge to Veto Them.  Nothing gets a policy conversation started faster in Washington than sending a bill to the President’s desk.

5. Be Transparent. Americans should not have to wait for reform to pass to find out what’s in it.”

Experts commented that, all told, the cumulative effect of these moves would be powerful. “The hearings, town hall meetings, working groups and public debates of this Five-Point Plan will help insure that the process of evaluating, repealing and replacing ObamaCare is done in a transparent manner, which in turn will help insure that the next health care policy approved by Congress is one the American people are happy to live with,” said Amy Ridenour, chairman of the National Center for Public Policy Research.

Categories: On the Blog

Freedom to Move: Personal Freedom or Government Control, Part II

July 28, 2015, 7:01 AM

There are many economic fallacies that surround the issue of freer or open immigration into the United States, and few of them can stand up to serious critical examination.

The Fallacy that Immigrants “Steal” Jobs from Americans.

Opponents of more open immigration sometimes argue that the arrival of more immigrants means the threatened loss of jobs for those already living in the country.

The often-implicit assumption behind this argument is that there are a fixed number of jobs in the country, and if more workers enter the labor market, by definition any work gained by one of the new arrivals must mean lost employment for someone else already there.

As long as there are unsatisfied wants that more production could gratify, then there is always more work for more hands to do. An increased number of workers within a country means that there can occur what economists call both more extensive and more intensive use of labor. By more extensive use of labor is meant that things that could not be done before because there were not enough hands to do them can now be undertaken.

The available number of employable workers might have enabled the production and supplying of a certain amount of, say, shirts, pants, and shoes. But given the availability of labor, and the importance that consumers assigned to having desired goods, it may have been impossible to also produce and supply hats that people also wanted to wear.

The arrival of additional hands through immigration to do productive work would now allow this unsatisfied want for headwear to be partly fulfilled without having to withdraw hands for the production of any of those shirts, pants, or shoes.

By more intensive use of labor, economists mean the more refined development of the system of specialization. More hands to perform desired work means that employers can undertake a more developed division of labor that enables an increased productivity.

Suppose that within a factory there were enough available workers to divide possible tasks into four steps or stages of production, each of which enables the participants to more industriously and productively focus their efforts and attentions to one part of the production process.

The arrival of more workers, again possibly through immigration, to be employed within such enterprises enables the potential and possible tasks to be divided into more refined and detailed steps that, again, raises the productivity and output of all those who participate in the economy’s activities. The increased output per worker means that all in the society can have available through trade a greater supply of wanted goods and services that might not have been possible without the new hands to assist in the work to be done.

Adam Smith began his famous book, The Wealth of Nations (1776), precisely by emphasizing the benefits from division of labor. He also pointed out that the extent of the division of labor is limited by the extent of the market. It makes little sense to take greater advantage of specialization to expand output to, say, a quantity of 1,000 units of some useful good from 500 units if there are not enough people participating in the network of exchange to buy all that can be produced through that intensified division of labor.

But in a country as large as the United States with its more than 320 million people and a global economy within which America trades with billions of people, any opportunity to more intensively develop the division of labor through the use of more available hands made possible by immigration can be successfully and profitably absorbed into the national work force.

The Fallacy that Immigrants Lower the National Wage Level.

Another fear often expressed about the arrival of large numbers of immigrants is that their addition to the national labor force will tend to push wages in general down in the economy as they compete for jobs currently held by the existing workers.

It should be remembered that there is no such thing as a “national wage level.” This, like the general “price level” of goods and services, is a statistical creation by selecting, summing, and averaging a large number of individual wages, each of which reflects the supply and demand for the specific types, skills and qualities of labor in particular markets for hiring workers.

It is certainly the case that if, all other things the same and unchanged, a significant number of qualified immigrant economists, all with teaching and specialization skills similar to my own, were to enter the job market for professors’ positions, the salary for my labor services in my narrow segment of the university teaching market would likely be bid down.

But this is no different than if more college and university age students out of the domestic population were to decide to major in economics, then earn their advanced degrees in the subject, and proceed to try to land jobs with their newly acquired PhDs. The greater supply of such economists might result in my employable salary being competed down.

On the other hand, the consumers of economics teaching services might very well find themselves able to acquire their education at a lower price because the cost of hiring such qualified economics professors will have decreased.

Suppose this were to happen. With a decline in the cost of an economics education, both parents and students may now have more money left in their pockets after having paid the tuition and related expenses. With this “freed up” sum of money they would now have the financial ability to buy more of other things they previously could not afford when paying higher tuition fees.

This will result in an increased demand for other desired goods and services. The prices for these goods and services, other things held given, would tend to rise, increasing the profitability of increasing their supply. This would open up new and increased demands for other types of labor – those able and skilled to, perhaps, produce more flat-screen televisions, or more service jobs at restaurants as people can afford to eat out more frequently, or more employment in other avenues of education. This greater demand made possible by the lower cost of some labor services due to immigrant workers in certain sectors or parts of the market would raise the demand for more workers, and therefore their potential wages and incomes, in other parts of the market.

The Fallacy that Unskilled Immigrants Have No Niche to Fill.

But what about the unskilled or poorly educated immigrants at the lower end of the employment scale? Studies over the years have shown that often it is the unskilled immigrants who fill niches in the market that many in the existing labor pool in the nation are unwilling to perform.

In the middle decades of the nineteenth century it was not unusual to find that many of the domestic servants in not just wealthy but middle class households were young Irish girls who had come over to escape from the potato famine in their native country as well as the British rule that they disliked. Uneducated with only simple “country manners,” this became their entry into the American labor market. Over a generation or two, the wave of Irish immigrants and their children improved their education and employment skills and left behind such domestic work as their talents fetched higher wages in other corners of the market.

In the early decades of the twentieth century, hired gardeners were often of Japanese background in places like California, for instance. As the descendants of these Japanese immigrants entered the mainstream of American life, especially after the Second World War, the image of the hired gardener was no longer that of Japanese.

Over the last few decades those of Hispanic background have filled the niche of hired gardeners, certainly not exclusively but often, as has the role of domestic servant in various parts of the country. If immigrant integration into American society follows the same paths as in the past, two or three decades from now, the stereo-types of Hispanics will have changed as they integrated into the general labor market, moving on to other economic niches and roles, as it did f other immigrant groups in earlier times.

We have seen this with many ethnic groups that have settled and integrated themselves into the general and greater social and economic environment within the country. It is no longer a caricature or cliché to refer to the “Chinese” laundry, because those of Chinese ancestry in America are simply, now, “Americans” distributed and dispersed among many professions and occupations and callings fully integrated into American society in almost all instances.

As new waves of immigrants have entered the American economy, they have filled roles that earlier waves have transitioned out of, just as they are most likely to do in the future. Think of it as the “new guys” who start their careers with the “entry level” jobs. They often are paid less than other workers at first, and are assigned tasks and jobs that others in the firm or enterprise no longer do and do not want to do. But it is the starting point for learning skills, gaining experience, and demonstrating higher worth and value for themselves over time to earn the promotion and better salary in the future, either from their initial employer or some other who sees and values their acquired abilities and potentials.

Filling these roles and entry level positions for the unskilled or low skilled enables part of the immigrant population to have an avenue for starting on the path of improved opportunity in America compared to the old country they have left behind.

To statistically cover over all these real and distinct changes and improvements in employments, incomes, and availabilities of goods by reducing them to price and wage averages and aggregates hides from view not only the real nature of adaptation to change in general, but more specifically many of the positive affects and impacts of immigrants to the United States.

Reducing Government Regulations and Welfare Temptations

We should keep in mind that the problems that some immigrants face are the same problems that government has imposed as stumbling blocks to improvement on all in the society: minimum wage laws, business taxes that hinder investment and capital formation, and regulations that prevent growth and innovation through anti-competitive policies.

These are the roots of many of our social and economic difficulties that harm both native-born and immigrant looking for work and trying to materially advance, including, for some, finding ways to escape from poverty and poor living conditions.

But what about the attempts of political panderers and plunderers to try to buy the votes of new immigrants who obtain or may obtain in the future the right to vote by offering them access to the “benefits” of the welfare state?

Let us remember that those who use such means for gaining political power have had their success with the American-born and American citizen population. It is their votes that have established, maintained, and expanded the interventionist-welfare state that so dangerously burdens the country. It cannot be blamed on “foreigners” – whether legal or illegal. As the cartoon character, “Pogo,” once said, “We’ve met the enemy, and he is us.”

Rather than punish those who, like our ancestors, want to come to America for their “second chance” for a better life for themselves and their children by closing the door of immigration, the task should be to eliminate the controls and regulations that hinder improvement for all of us.

Ending Access to the Welfare State for Any Immigrants

But given that fact that this is not likely to happen in any immediate future, what might be a “second best”? Let me suggest that one answer is to say that anyone may come to America to work, investment, live, and enjoy a freer life.

But for a period of, say, the first fifteen years during which they reside in the United States they are ineligible for access to any welfare-redistributive programs for themselves and their family members.

If this seems harsh, it is worth recalling that before the modern welfare state that is how every generation of immigrants came to America and made their way – either through they own hard work or the voluntary assistance of private charity.

I wonder how many critics of open or freer immigration into the United States would be as negative as they are if the new arrivals were expected to make their own way rather than receive any tax-based handouts from the government?

Part of America’s greatness has precisely been as a haven, a port of last call, for those denied religious freedom, or suffering under brutal and corrupt governments, or locked out of economic opportunities due to political systems of favor and privilege in their own lands.

It has not always been an easy or straight path for the new comer to America’s shores. But the fact that for over two centuries millions have come shows that it has not just been a dream but a reality of a land of opportunity and prosperity.

It has also been the country’s life-blood of new and innovative risk-taking, entrepreneurially spirited enterprisers, and youthful hopefuls who want to breath freer than where they were born. It is a good part of what had made America a dynamic and vibrant country unlike so many others around the world.

To turn our backs on this American tradition and legacy is to betray the essence of what America has been since its beginnings.

[Originally posted atThere are many economic fallacies that surround the issue of freer or open immigration into the United States, and few of them can stand up to serious critical examination.The Fallacy that Immigrants “Steal” Jobs from Americans.

Opponents of more open immigration sometimes argue that the arrival of more immigrants means the threatened loss of jobs for those already living in the country.

The often-implicit assumption behind this argument is that there are a fixed number of jobs in the country, and if more workers enter the labor market, by definition any work gained by one of the new arrivals must mean lost employment for someone else already there.

As long as there are unsatisfied wants that more production could gratify, then there is always more work for more hands to do. An increased number of workers within a country means that there can occur what economists call both more extensive and more intensive use of labor. By more extensive use of labor is meant that things that could not be done before because there were not enough hands to do them can now be undertaken.

The available number of employable workers might have enabled the production and supplying of a certain amount of, say, shirts, pants, and shoes. But given the availability of labor, and the importance that consumers assigned to having desired goods, it may have been impossible to also produce and supply hats that people also wanted to wear.

The arrival of additional hands through immigration to do productive work would now allow this unsatisfied want for headwear to be partly fulfilled without having to withdraw hands for the production of any of those shirts, pants, or shoes.

By more intensive use of labor, economists mean the more refined development of the system of specialization. More hands to perform desired work means that employers can undertake a more developed division of labor that enables an increased productivity.

Suppose that within a factory there were enough available workers to divide possible tasks into four steps or stages of production, each of which enables the participants to more industriously and productively focus their efforts and attentions to one part of the production process.

The arrival of more workers, again possibly through immigration, to be employed within such enterprises enables the potential and possible tasks to be divided into more refined and detailed steps that, again, raises the productivity and output of all those who participate in the economy’s activities. The increased output per worker means that all in the society can have available through trade a greater supply of wanted goods and services that might not have been possible without the new hands to assist in the work to be done.

Adam Smith began his famous book, The Wealth of Nations (1776), precisely by emphasizing the benefits from division of labor. He also pointed out that the extent of the division of labor is limited by the extent of the market. It makes little sense to take greater advantage of specialization to expand output to, say, a quantity of 1,000 units of some useful good from 500 units if there are not enough people participating in the network of exchange to buy all that can be produced through that intensified division of labor.

But in a country as large as the United States with its more than 320 million people and a global economy within which America trades with billions of people, any opportunity to more intensively develop the division of labor through the use of more available hands made possible by immigration can be successfully and profitably absorbed into the national work force.

The Fallacy that Immigrants Lower the National Wage Level.

Another fear often expressed about the arrival of large numbers of immigrants is that their addition to the national labor force will tend to push wages in general down in the economy as they compete for jobs currently held by the existing workers.

It should be remembered that there is no such thing as a “national wage level.” This, like the general “price level” of goods and services, is a statistical creation by selecting, summing, and averaging a large number of individual wages, each of which reflects the supply and demand for the specific types, skills and qualities of labor in particular markets for hiring workers.

It is certainly the case that if, all other things the same and unchanged, a significant number of qualified immigrant economists, all with teaching and specialization skills similar to my own, were to enter the job market for professors’ positions, the salary for my labor services in my narrow segment of the university teaching market would likely be bid down.

But this is no different than if more college and university age students out of the domestic population were to decide to major in economics, then earn their advanced degrees in the subject, and proceed to try to land jobs with their newly acquired PhDs. The greater supply of such economists might result in my employable salary being competed down.

On the other hand, the consumers of economics teaching services might very well find themselves able to acquire their education at a lower price because the cost of hiring such qualified economics professors will have decreased.

Suppose this were to happen. With a decline in the cost of an economics education, both parents and students may now have more money left in their pockets after having paid the tuition and related expenses. With this “freed up” sum of money they would now have the financial ability to buy more of other things they previously could not afford when paying higher tuition fees.

This will result in an increased demand for other desired goods and services. The prices for these goods and services, other things held given, would tend to rise, increasing the profitability of increasing their supply. This would open up new and increased demands for other types of labor – those able and skilled to, perhaps, produce more flat-screen televisions, or more service jobs at restaurants as people can afford to eat out more frequently, or more employment in other avenues of education. This greater demand made possible by the lower cost of some labor services due to immigrant workers in certain sectors or parts of the market would raise the demand for more workers, and therefore their potential wages and incomes, in other parts of the market.

The Fallacy that Unskilled Immigrants Have No Niche to Fill.

But what about the unskilled or poorly educated immigrants at the lower end of the employment scale? Studies over the years have shown that often it is the unskilled immigrants who fill niches in the market that many in the existing labor pool in the nation are unwilling to perform.

In the middle decades of the nineteenth century it was not unusual to find that many of the domestic servants in not just wealthy but middle class households were young Irish girls who had come over to escape from the potato famine in their native country as well as the British rule that they disliked. Uneducated with only simple “country manners,” this became their entry into the American labor market. Over a generation or two, the wave of Irish immigrants and their children improved their education and employment skills and left behind such domestic work as their talents fetched higher wages in other corners of the market.

In the early decades of the twentieth century, hired gardeners were often of Japanese background in places like California, for instance. As the descendants of these Japanese immigrants entered the mainstream of American life, especially after the Second World War, the image of the hired gardener was no longer that of Japanese.

Over the last few decades those of Hispanic background have filled the niche of hired gardeners, certainly not exclusively but often, as has the role of domestic servant in various parts of the country. If immigrant integration into American society follows the same paths as in the past, two or three decades from now, the stereo-types of Hispanics will have changed as they integrated into the general labor market, moving on to other economic niches and roles, as it did f other immigrant groups in earlier times.

We have seen this with many ethnic groups that have settled and integrated themselves into the general and greater social and economic environment within the country. It is no longer a caricature or cliché to refer to the “Chinese” laundry, because those of Chinese ancestry in America are simply, now, “Americans” distributed and dispersed among many professions and occupations and callings fully integrated into American society in almost all instances.

As new waves of immigrants have entered the American economy, they have filled roles that earlier waves have transitioned out of, just as they are most likely to do in the future. Think of it as the “new guys” who start their careers with the “entry level” jobs. They often are paid less than other workers at first, and are assigned tasks and jobs that others in the firm or enterprise no longer do and do not want to do. But it is the starting point for learning skills, gaining experience, and demonstrating higher worth and value for themselves over time to earn the promotion and better salary in the future, either from their initial employer or some other who sees and values their acquired abilities and potentials.

Filling these roles and entry level positions for the unskilled or low skilled enables part of the immigrant population to have an avenue for starting on the path of improved opportunity in America compared to the old country they have left behind.

To statistically cover over all these real and distinct changes and improvements in employments, incomes, and availabilities of goods by reducing them to price and wage averages and aggregates hides from view not only the real nature of adaptation to change in general, but more specifically many of the positive affects and impacts of immigrants to the United States.

Reducing Government Regulations and Welfare Temptations

We should keep in mind that the problems that some immigrants face are the same problems that government has imposed as stumbling blocks to improvement on all in the society: minimum wage laws, business taxes that hinder investment and capital formation, and regulations that prevent growth and innovation through anti-competitive policies.

These are the roots of many of our social and economic difficulties that harm both native-born and immigrant looking for work and trying to materially advance, including, for some, finding ways to escape from poverty and poor living conditions.

But what about the attempts of political panderers and plunderers to try to buy the votes of new immigrants who obtain or may obtain in the future the right to vote by offering them access to the “benefits” of the welfare state?

Let us remember that those who use such means for gaining political power have had their success with the American-born and American citizen population. It is their votes that have established, maintained, and expanded the interventionist-welfare state that so dangerously burdens the country. It cannot be blamed on “foreigners” – whether legal or illegal. As the cartoon character, “Pogo,” once said, “We’ve met the enemy, and he is us.”

Rather than punish those who, like our ancestors, want to come to America for their “second chance” for a better life for themselves and their children by closing the door of immigration, the task should be to eliminate the controls and regulations that hinder improvement for all of us.

Ending Access to the Welfare State for Any Immigrants

But given that fact that this is not likely to happen in any immediate future, what might be a “second best”? Let me suggest that one answer is to say that anyone may come to America to work, investment, live, and enjoy a freer life.

But for a period of, say, the first fifteen years during which they reside in the United States they are ineligible for access to any welfare-redistributive programs for themselves and their family members.

If this seems harsh, it is worth recalling that before the modern welfare state that is how every generation of immigrants came to America and made their way – either through they own hard work or the voluntary assistance of private charity.

I wonder how many critics of open or freer immigration into the United States would be as negative as they are if the new arrivals were expected to make their own way rather than receive any tax-based handouts from the government?

Part of America’s greatness has precisely been as a haven, a port of last call, for those denied religious freedom, or suffering under brutal and corrupt governments, or locked out of economic opportunities due to political systems of favor and privilege in their own lands.

It has not always been an easy or straight path for the new comer to America’s shores. But the fact that for over two centuries millions have come shows that it has not just been a dream but a reality of a land of opportunity and prosperity.

It has also been the country’s life-blood of new and innovative risk-taking, entrepreneurially spirited enterprisers, and youthful hopefuls who want to breath freer than where they were born. It is a good part of what had made America a dynamic and vibrant country unlike so many others around the world.

To turn our backs on this American tradition and legacy is to betray the essence of what America has been since its beginnings.

[Originally Posted at Epic Times]
Categories: On the Blog

Cato University Day Two: Liberty, The State, and The Free Market

July 27, 2015, 8:52 PM

Cato University Logo

Today, I started my second day at Cato University by attending a morning lecture by Jeffrey Miron, director of undergraduate economic studies at Harvard, on the power of incentives. Miron taught the audience about consequential libertarianism, an approach that advocates “small government across the board” and is healthily skeptical of policies from the political left and right. Consequential libertarianism asks questions about the relative impact of policies and serves as a useful system for ranking them. Miron distinguished this approach from philosophical libertarianism, which equally rejects most government policies because they violate individuals’ unalienable rights. Miron concluded by noting policies often have unintended consequences that must be taken into account by analysts and legislators.

Next, Tom Palmer, the director of Cato University and senior fellow at the Cato Institute, delivered his first of a two-part lecture series on the origins of state and government. He started by contradicting an interesting argument espoused by University of Chicago law professor Cass Sunstein: the state is the source of all created value. Palmer argued government exists because of the surpluses of individual and group production. Businesses and individuals create wealth through exchange, as seen in many modern economic institutions today. Palmer drew from Cicero and other thinkers to show that without an established rule of law, crime would run rampant and fruitful production would cease because of a breach of societal trust. Palmer also elaborated on the role of the rule of law in promoting trust, justice, and freedom in society.

After lunch, Palmer lectured on freedom from a historical perspective. He defined rights as “an instrument for human liberty” and voiced skepticism about Karl Marx characterization of history as a predictable and inevitable pattern of events, noting that history contains more accidents than most want to acknowledge. According to Palmer, a theory of higher law was born in the influence of philosophical Athens and religiously inspired Jerusalem. All humans derive their rights from their capacity to reason and are equally under the scrutiny of the law, so “law is not just what a guy with a big club says it is.” He highlighted John Locke’s robust definition of property as life, liberty, and estate and harkened to the belief that we also “own” our actions. Palmer also discussed how states successfully claim a monopoly on force and distinguished between external and internal sovereignty.

Miron gave another lecture on the economics of cooperation and coercion, arguing that many interventionist policies have a negative impact on society due to unintended consequences. Some unintended consequences include tax distortions, an elimination of Pareto voluntary exchanges that benefit one party at no expense to the other, and altered individual incentives. Government programs can be notoriously difficult to enforce, especially when evaders’ livelihoods depend on their illicit activities. Too many interventionist policies and complicated laws can incentivize the citizenry to select which laws to follow and which to break. Palmer argued that small governments are superior to their counterparts in promoting equity, efficiency, and economic liberty and said federal agencies performing the same actions as civic organizations and religious institutions should be eliminated.

After a scrumptious dinner, New York Times science columnist John Tierney discussed the role of self-control in successful people’s lives and how it is intrinsically linked to human freedom. During the American Revolution, the rebels realized “to be free from a tyrant’s rule, man had to be able to rule themselves.” The Victorian Era touted hard work and discipline as the path to success and happiness, as opposed to the feel good pop psychology of today’s self-help books. Will power is the ability to master your temptations and complete tasks. This ability can be sapped with too many decisions, indecisiveness, a poor diet, and exhaustion. Tierney said will power is a muscle that can be developed through setting realistic goals, monitoring progress, not juggling too many tasks at once, and above all not making decisions on an empty stomach.

 

Categories: On the Blog

Cato University Day One: Arrival and Settling In

July 27, 2015, 8:39 PM

Goodie bags for Bastiat Scholars!

I am attending Cato University 2015, an immersive seminar program occurring on July 26-31 at the think tank’s headquarters in Washington, DC that educates students and professionals on political economy. I received a Bastiat Scholarship I that covers my hotel stay and conference-related expenses. Interning at Heartland helped me receive the scholarship, and I am very grateful to this organization for helping open new doors for me. I am structuring my Cato University 2015 experience as a five-part chronological blog series.

I arrived in the capital on Sunday in 90-degree weather. I visited The Newseum, a museum devoted to cataloguing the history of journalism and calling for freedom of the press throughout the world. The museum exceeded my expectations with its interactive exhibits and memorialization of journalists killed in civil and international conflicts. The juxtaposition of the gray East Germany side of the Berlin Wall with its graffiti-covered western counterpart spoke truths words couldn’t about the transformative role of democracy in people’s lives. Afterward, I visited the Capitol. Although the Rotunda and other parts of the building were closed, I watched the Senate proceedings in the chamber, spotting John McCain and Rand Paul.

Later that Sunday afternoon, I registered for Cato University, receiving a large tote bag stuffed with educational sustenance. After a lovely reception on the roof of the Cato Institute headquarters, we ate dinner while listening to Cato University Director Tom Palmer lecture on the role of Cato the Younger in promoting liberty in the floundering Roman Republic and the impact of his legacy on the Founding Fathers and, indirectly, the founding of the Cato Institute. The audience also learned about the Cato Institute’s mission: promoting limited government that primarily serves to enhance individual rights around the world. After dinner, we attended a brief meeting for Bastiat Scholars before going to bed.

 

 

Categories: On the Blog

Bughouse Square Debate Recap

July 27, 2015, 4:25 PM

On July 25, Heartland Institute Senior Fellow Bruno Behrend took part in the famous “Bughouse Square Debate”  before an audience of 500 people in Washington Square Park in the North Side of Chicago. Behrend debated Troy LaRaviere, principal of Blaine Elementary School in Chicago’s Wrigleyville, on the question: “Public or private? What should be the future of public education in Chicago?”

The debate was passionate, yet civil. LaRaviere started explaining the difference between scientific data and  the use of averages and overall data. He then espoused the virtues of Chicago Public Schools (CPS), quoting statistics and claiming CPS was outperforming charter schools in Chicago. To bolster his claims, he referenced the Chicago Sun-Times article “CPS outpaces charter schools in improvements, especially in reading.” LaRaviere later revealed the data was furnished by CPS.

Behrend’s argument was clear: The current large urban districts, the teachers unions, and the public school system itself, are willing to protect themselves with lobbying in Springfield and Washington, DC. The lobbyists use cherry-picked data that obscure the truth. Behrend stated: “There is not enough money in the world to implement a top-down bureaucratic approach that will work for everyone.”

Two questions Behrend asked the audience put the matter into a proper perspective:

  1. Why is there such a high demand for charter schools if CPS is working so well?
  2. If CPS is doing so great, why are nearly 40 percent of the students not graduating?

Behrend went on to highlight the rights of parents to choose, for whatever reason they deemed important, the school and education for their children. He called for the breaking up of large urban districts such as CPS into local parent councils, wards, or individual schools run by excellent principals, such as LaRaviere.

LaRaviere, in praising CPS, also directly called parents who wanted out of CPS uninformed and misled due to continual talk of failing schools. This was reiterated during the audience Q&A. An audience member brought up the fact nearly 40 percent of CPS teachers choose to send their children to private schools. LaRaviere admitted that both teachers and principals do this.

Behrend noted the best “vote” a parent could make was not for mayor or alderman, but taking an education savings account and vote with the money following their child to the school of their choice, thus opening up a “vast new array of education opportunities.”

The crowd was heavily skewed center-left, with dozens of CPS teachers in attendance. Questions from the audience were heavily tilted to the protection of public schools and against capitalism. Behrend handled the audience questions deftly. There were two particular instances that stood out.

The first was an attack on Heartland as a stakeholder in education. Behrend rejected the premise of the question itself and the underlying connotation that unless one is certified by the system or employed by the system, one does not have a right to criticize it. He stated, “Everyone here is a taxpayer and is paying for the system.”

The second notable interaction with the audience when the questions turned to corporations and their profits. The audience, i.e. teachers union members, reacted very negatively when Behrend pointed out the union itself was actually a corporation.

At the end of the lively event, the debate moderator  stated, “This is the most civil and best debate I can remember here at the Bughouse Square Debates.”

 

Categories: On the Blog