Tuesday, July 30, 2013

Immigration in America

I think one of the most ironic things an American can say is that they are against immigration.  Yes, while none of us should really support illegal immigration, there are people who are against even legal immigration.
I don't quite understand how people can do that.  Our country is formed on immigration. While yes, we are American, that is not an ethnicity.  We are all made up of genes from countless other countries. America is a melting pot!
Now what many people against immigration argue, is that immigrants steal American's jobs.  They think that immigrants mooch off our hard work and do absolutely nothing to contribute to our country.  But for the most part, this isn't true.  Immigrants actually boost our economy! They take any job that will have them, that they have the skills for.  Then with that money, they pay rent, they buy groceries, they put the money back into the economy!
Another argument brought up by the anti immigrant supporters in this article is that immigrants, especially those from Mexico are stupid.  This is just an ignorant statement.  It's like when Europeans say all Americans are fat and lazy.  There are always those who fit a stereotype, but nine times out of ten, it is just a small percent of the entire population that were the cause of the creation of the stereotype. 

Article: http://www.washingtonpost.com/blogs/right-turn/wp/2013/05/09/what-the-anti-immigrant-movement-really-believes/

Team "Free Market"

"When consumers and businesses set out to reduce their debt burden, and private spending and investment stall, it is the government’s job to borrow, spend and pick up the slack."
This quote is from an article supporting Keynesain economics.  Keynesian economics thinks that during a recession, people should continue to spend their money freely, which will stimulate the economy and bounce the country back.
I disargee.  Recessions are unavoidable, they happen routienely.  Their purpose is to weed out the companies and ideas that are weakest, with the least support from the public, and open up those goods and resources to a new idea, or to those businesses who have already proven their worth.
When a recession eliminates the weakest links, that recession is ended, in a free market.  Our economy cannot and should not be controlled by Keynesian politicians.   Everyone needs to step back, no rules and regulations, and see what happens. We will see the jobs that we need, we will see where the money goes and does not go, we will see the economy fix itself.

Article link: http://www.nytimes.com/2013/05/22/business/despite-keynesians-victory-economic-policy-holds.html?pagewanted=all

Friday, July 12, 2013

Prepare for Big Piece of Health Law

Health insurance experts are saying that now is the time to learn about different health care plans available. The Although, the new health-care law doesn't kick in until next year says Karen Pollitz, a senior fellow at the Kaiser Family Foundation says if you don't already have insurance don't wait until then to buy it. The new health-care law mandates that insurers sell it to applicants even if they are sick. Avery Johnson says that individuals can go online and view the checklist for getting ready to apply for the new insurance for 2014 online.

The new rules that will go into effect in 2014 are not protecting the liberty of the insurers. The insurers should have the right to decide who they will make exchanges with and the new law requires that insurers must accept applicants even if they are sick. A fair market exchange should allow the two people making the exchange to agree upon the exchange. If one person does not feel as if the benefits and greater than the costs then they should have the right to not make the exchange. The government may be protecting the liberty of certain individuals by giving them the opportunity to receive health-care, but during this process they are not protecting the liberty of the group of individuals who own the health-care insurance companies. A way to fix this problem would be to not make a new law that requires insurers to accept people they would not like to, but to create a government run health insurance company that has to accept everyone that applies regardless of their health.

Wednesday, June 26, 2013

Are Employee Recognition Programs good or bad?

Many companies today use Employee Recognition Programs in order to motivate their employees into working their very best. According to brighthub.org, Employee Recognition Programs are not beneficial and can actually make a working environment worse. This is because when companies use these programs, the employee that was recognized will start to get a worse work record and will eventually become an inadequate employee. Reasons why this happens is because management selection of employees leads to allegations (or actual cases) of favoritism. An employee nomination system may lead to the creation of discord and factions within the workforce. Limiting recognition of an employee to only one occurrence per calendar year stifles the continued willingness of the worker to excel. A lack of funds makes an employee rewards program unproductive. For example, a worker who just invented a way to prevent thousands of dollars’ worth of warehouse shrinkage should get more than merely a computer-generated certificate and a mug with the corporate logo. Not having an employee reward program is better than keeping in place a poorly run or inadequately funded one.

Although Employee Recognition Programs have their downsides, I believe that these programs are beneficial to employees and can help better a company’s way of work. Some reasons why this is true are employee recognition systems reward workers who advance the business’ goals. This opens the door to rewards for hard work, creativity, loss prevention, and initiative by workers at all levels. An employee nomination process motivates other employees to work harder. Finally, leveled employee rewards offer recognition for various forms of worker excellence. People respond to changes in incentives in predictable ways. These workers are being given rewards (the incentive), such as a pay raise or a bonus, for working hard. These workers will respond to this change in the predictable way by working hard for these rewards, which follows this rule of human action. Because this concept of Employee Recognition Programs fit this rule of human action, it is shown that having these programs are beneficial to employees.

Was it right to legalize Marijuana?

With the new law of legalizing marijuana being passed, many individuals are still uneasy as to whether it should have been legalized or not. According to CNBC, marijuana should not have been legalized. This is because they believe that if marijuana were to be legalized, consumption of it would likely increase. Along with that would likely come health and community costs: increase in accidents due to motor impairment, increase in associated illnesses such as cancer, as is the case with cigarette smoking. Marijuana is not harmless, it is addictive, and it does affect the brain. Since legalization of marijuana for medical or general use would increase marijuana use rather than reduce it and it would lead to increased rates of addiction to marijuana among youth and adults. The biggest argument in the article is how the legalization of Marijuana adds taxes. According to the article, "if marijuana was legalized, the only way to eliminate its illegal trade would be to sell marijuana untaxed and unregulated to any willing buyer." because no buyer would be willing to buy taxed Marijuana.

I however disagree. I believe that legalizing marijuana was the right decision. I believe that this is because from an economic standpoint, there would be numerous benefits to legalizing Marijuana.  A new industry could emerge that would allow people to buy and sell marijuana without being sent to jail.  The illegal pot dealer that is currently making their money in the black market could possibly start a profitable business. They would already have a good amount of clients, which is a key to succeed in any business. Since Marijuana is no longer illegal, customers could receive their order from the mail legally since there is no need for drug trafficking anymore. This would create many jobs across the country, which will help the big problem of unemployment as well. Also, prisons are able to save a lot of money from not having to put Marijuana users in jail anymore. Moreover, if a marijuana distribution grew large enough, it could be registered and traded on an exchange which would mean that Marijuana could be taxed so that the government could benefit. Voluntary trade (cooperation) means that both gain. The person who is the buyer is giving up some money in return for the good or service, the seller is giving up to get the money. The exchange allows both parties to benefit from it, which means that they have both gained which suits this rule of human action and why legalizing Marijuana is the best choice because if it was not legalized, these benefits could not exist.

Saturday, June 15, 2013

Gas Prices

Oil. It's something we Americans use every day. Be it for our cars or for other purposes, it plays an integral part in our lives. However, it seems there is a monopoly on how to get it. We only seem to want to get it from overseas, which leads to gas prices soaring, as the oil prices per barrel skyrockets. We can't even trade to get this item. The nations that produce it know that since we need oil in our lives, we will pay whatever price it is to get it. They specialize in this market. Is it unjust that they charge such outrageous prices for what they produce? Absolutely. But until we achieve other means of energy that will power not just a few things that are in our lives, but EVERYTHING in our lives, we cannot stop needing oil. Therefore, we will continue paying their ridiculous prices. The oil nations have us in what can be surely described as a stranglehold and we slowly try to find a way out of it, be it other sources of fuel such as E-80, which is made from corn or electric power, which is becoming more and more common. Still, oil is the main source needed to power the majority of things we use and we will still be needing to pay for it for a few more years.


At the E3 convention last week, Microsoft unveiled their new gaming system, XBOX One. However, many consumers and analysts have viewed this new console as a screw-up by Microsoft. Among many questions that arose, mostly about price and backwards compatibility with the old games of the 360, there was one that definitely stood out. This was the fact that the Kinect sensor, in some articles written by said analysts, captured everything about you and held all your personal info. With this talk of the NSA reviewing of our phone records and computer browsing records, it's more than likely a safe bet that these reports about the Kinect are more than likely true. This brings into question the ideal of public good. All these seemingly bad ideas Microsoft has put into their new console begs the question of why does Microsoft want to screw us and themselves over? I mean, at the last console reveal, Playstation did the same thing pricewise and it lead to Microsoft taking over the gaming world for the past 8 years now. To do this, is a question of sanity on Microsoft's part. They know all of the things they talked about at E3 are things consumers are not going to want in a console, so why do it? All I know is Microsoft is going to be taking a beating in revenue of products if they don't change what they made.

Legalization of all drugs

This article discussed that in order to get rid of all the drug problems, you simply make them all legal, sell them at a high price, and label the side effects. They say that by doing this, in the long run people will not use them as frequently. I do not agree with this because by making it legal and available, it is easier to do more of it, hence why there are many addiction problems to alcohol, cigarettes, and tobacco.  I think that what should be done is continue to have them illegal, but have more severe consequences for having them. In class, it was discussed that a government is successful when the consequences of one committing a crime are a greater expense than actually committing the crime. Although, the article does say that the government should allow everyone to do as they please as long as they do not harm others, the government is also there to protect the people. I believe that in this case the government needs to step in and protect its people. You may ask, how does preventing people from doing these drugs protect them? Well I must say that these drugs are not healthy for a person and can cause death. Another way it can be dangerous is to children. Having a friend whose parents suffer from addictions of drugs and alcohol, I can see how that really takes a toll on them. If these drugs were not so easily available, my friend may have had a better childhood and not so much emotional pain. If the governments’ job is to protect, then shouldn’t this apply to protecting the upbringing of children? By making it easier to access it, it makes it easier to abuse it. In the long run, legalizing drugs does not make this problem easier because they will be too easily accessible, leading to a higher risk of abusing the drugs.

Buyers of Fake Designer Goods

This article discusses the buyers of fake designer goods. It states that the people who buy counterfeit goods should be fined up to $1000 and/or imprisoned for doing so. This is a bit absurd considering how many people have committed this crime. As a shopper, I do appreciate the real and authentic fashion items that many name brands have, but at the same time, I have the choice as to what I want to buy. If I see an item that I think is of great benefit to me, I am going to buy it, whether or not it is or isn’t a fake designer good. If it should be illegal to buy these “fake designer goods,” then it should be illegal to sell them in the first place. This is one of those cases where you need to treat the problem at the source. If there were more severe rules/ consequences for the vendors, then, you would not have as many instances of people purchasing fake goods. As for the people who are frustrated because they bought the authentic bag and others did not, it all comes down to a choice, and if you chose to spend on the authentic bag, as oppose to the fake bag, then that is your own problem. This could in a way be considered rent seeking, except in this case, the “rent seeker” is simply benefiting by obtaining their integrity. It is also rent seeking, because if this were to take place, not many people would buy the bags therefore eliminating endless possibilities of a voluntary trade. This would in fact hurt the market, as oppose to help the market. Making this a legal issue is a bit ridiculous considering there are more important things to worry about.

Immigrants and Education


"The federal DACA program allows immigrants to apply to remain in the country if they arrived in the United States as children, have no criminal record and are in school, have graduated or obtained a certificate of completion from high school, have obtained a general education development  certificate, or are an honorably discharged veteran of the Coast Guard or Armed Forces of the United States. While Georgia  law allows illegal immigrants to attend its public colleges, it has erected barriers, including requiring them to pay out-of-state tuition. They are also barred from the University of  Georgia , Georgia Tech, Georgia State University, Georgia College & State University, the Medical College of Georgia or any other campus that has rejected academically qualified applicants  over the last two years because of space or for other reasons. TheRegents  adopted the ban to address mounting public and political concerns that academically qualified  Georgia  residents could lost spots at premier state colleges to illegal immigrants."

I think it is very nice that the DACA program allows immigrants to stay in the US and obtain a higher education. The only thing I do not agree with is that they have to pay out of state tuition. I do not think that is very fair for the immigrant if they have lived in state most of their life and are trying to succeed and increase their knowledge and attend college. Also, I think it is ridiculous that some of those schools in Georgia rejected perfectly qualified students because they are immigrants because of the fear of natural born citizens potentially losing a spot at the school to illegal immigrants. If they are qualified, and probably better qualified than others, then they should get the privilege to be accepted and attend the college and further their education. They are obviously putting a lot of effort on their education and trying to succeed in this country. Let them have a chance and prove that they can do it.

My uncle was an illegal immigrant and attend high school in the states. He was valedictorian of his school. He was very smart and got excellent grades. He did not go to prom or parties because he was studying. He put everything he had in his studies. He wanted to succeed and further his education. He wanted to attend college. The university he wanted to go to and most of them actually would not let him apply because he was an illegal immigrant. He was left to settle at a community college for many years. This breaks my heart because you could see his dedication and potential. He could have finished his schooling earlier if he was only allowed to attend a university. He did get citizenship and attended a university and graduating with honors and is doing a wonderful job today.


In this article, it says, "Abortion was supposed to empower women, free them from the rigours of childbearing and the drudgery of housework, and enable them to achieve an equal place with men in the workforce". Some say that abortion is good for the economy because it reduces the government spending. With abortion, there are less students which means there is a less demand for teachers. This saves the government money by not having to pay so many teachers.

I don't think that abortion is saving the economy from spending. Government spends money no matter what. We are in debt still and there are a lot of abortions still going on. I think that abortions are actually hurting the economy. All those bodies lost are bodies that could have contributing to our economy. They are potential consumers. Even though babies are too young to consume, their parents do it for them. There is demand for a lot of things for babies such as; diapers, wipes, food, toys, etc. Abortions are hurting the economy with not contributing to the consuming of those products.

Abortion is also making the population growth go down. "Population growth is a major source of economic growth. More people create more demand for products and services and supply labour that is need by industry and commerce". With the population decreasing, there is a low supply of teachers, nurses, key professions, etc. "Abortion and more efficient birth control together have wiped out about half of our future human resources".

Washington Legislature Paid $77,000 in Per Diems and Accomplish Nothing

Washington taxpayers get $77,000 bill for most unproductive Legislature gathering in state’s history. You can read the article here: http://www.foxnews.com/politics/2013/06/15/washington-taxpayers-get-77000-bill-for-most-unproductive-legislature-gathering/

Washington Legislature adjourned on Tuesday from a 30-day session after not passing a single bill. Most of the time spent in session was spent squabbling over the budget. Despite being so unproductive many members claimed their daily per diems totaling $77,000 for taxpayers. A per diem is a daily expenses allowance paid to members while in session. This daily allowance is money they are given on top of their regular salary. These politician are now gathering again for another special session to try and come to an agreement on the budget. Meanwhile some state workers may be laid off because there is no agreement on the budget.

Is it just me or does this seem wrong? First of all these politicians need to be a little more mature and quit fighting so much. The article referenced democrats and republican being so disagreeable and blaming the other party for the inability to come to an agreement. While there are many that have claimed their per diems the entire time they were in session there were some that claimed only some or part of what they are allowed. Senator David Frockt a Democrat from Seattle said it best, "We shouldn't be getting paid when we're not doing our work within the time allotted." These politicians are wasting taxpayer money by not being able to come to an agreement. It seems more and more these days there is a sense that democrats and republicans can't seem to come to an agreement in many areas of government for the benefit of the people. State workers may be laid off while the Washington Legislature tries to come to an agreement. These men and women in government need to work together and be more willing to compromise. Why should taxpayers pay more when they are accomplishing nothing? I'm pretty sure in most professions, if you don't do your job, you don't get paid. Politicians should be treated the same. 

Unemployment Based on Skills Gap

The New York Times article referenced can be read here: http://www.nytimes.com/2013/06/16/opinion/sunday/dont-blame-the-work-force.html?ref=unitedstateseconomy&_r=0

There is a common belief that most of the unemployment we see today is because of a skills gap. This means that the good jobs that people want to get, nobody can get because they are unqualified or under-educated. Recent research shows that neither is a reliable reason for the unemployment problem. In a good economy there would be many job openings and few that are unemployed. In April there were 3.8 million job opening and unemployment was still at 7.5% or 11.7 million people. Clearly there are not enough job openings for all those needing work. In this weak economy the real problem is not a skills gap but rather that companies can not justify hiring more workers.

I think there are many reasons that there are so many still unemployed. The jobs available may be less than desirable or people are just unwilling to take a low-paying position. Also with so many needing jobs, employers can be choosy in who they decide to employ. In dealing with the recent recession many are still hesitant to spend money. Not putting money into the economy will only hurt it further. Corporate executives want us to think that we need more educated, more highly trained people to have available into the workforce so they can get government aid in programs to help workers. The real problem is not the skills gap but the lack of money going into the economy. If we don't start spending, companies can't rationalize hiring more employers.

Friday, June 14, 2013

Abortion: A Key Economic Factor

According to Mychal Massie there is a real economic toll related to abortion, and it is evident that the majority of congress supports it in an economic standpoint. U.S News and World Report labeled the child as a "high priced consumer item with no warranty." According to these people, less children means less welfare spending, less unemployment and generally more money to go around.

I disagree with these beliefs of abortion being beneficial to the economy. I think abortion plays a key factor in our economy's crisis. If a woman has an abortion, she is simply taking away her chances of consumer spending in the real economic market. Consumer spending is the dominate way the economy operates and functions. Babies are demanding individuals and may not be able to contribute first handedly to the economy, but their mothers can be greater consumers that help in the consumer spending, allowing the economy to thrive. Babies need diapers, toys, blankets, books, cribs, clothing every few months. They have a higher demand for regular spending than any other age group. I think that people with babies are of greater importance in the economy than anyone else. Abortion is not the answer. Getting rid of babies that are born second hand consumers, that grow o be first hand consumers will only harm the economy. Government officials need to realize this and take a stand in order to help a life, and the ever important economy.  

Gas Price Surge Harms Economy

According to Richard Davies, business correspondent with ABC news, the rapid rise in gas prices has become a growing problem for the economic market. The nationwide average for regular gasoline is leveled at $3.70 a gallon, which accounts to a 40 cents increase in the past month. There is a direct correlation to the rise in gasoline prices and less consumer spending, causing the economy to suffer. Higher gas prices means less consumer spending on other goods and services.

Because gas prices are on the continual rise, and because gas has become a key part of our society, it is likely that consumers will make the sacrifice to purchase such gas instead of products that are not of daily use. Every seller in the market in in hopes of earning a profit. It would be impossible for a seller to make a profit if they were not selling, and it would be even more difficult to compete with products that have no similarities; gasoline in this instance. Although high gas prices are increasing and staying that high, the economy always "fixes" itself. If there is a surplus, then the demand will lower, and vice versa with a shortage. Gas prices will not always remain consistently high, and the economy will return to normal after a short period of time. The economy is in constant change, and it is constantly making improvements and adjustments to the world around it.

Supreme Court rules against patenting human genes

Article found at:

This is an interesting article over a recent supreme court ruling, as recent as yesterday, that ruled 9-0 that gene sequences cannot be patented. The argument made by the court is that singling out a gene sequence that occurs in nature is not the same as inventing something. The Corporation in Utah was able to retain patents over two synthetic DNA sequences because this did qualify as an invention. That corporation is Myriad Genetics, and the code they held a patent for was important in identifying the probability of breast and ovarian cancer in women. Now, after this decision, the expected cost of these tests is lower and easier to obtain.

Patents are government sanctioned monopolies over new innovations. They allow the first person to invent a product to secure extra profit from it's production for a specified period of time, without feared of being pushed out by someone else able to recreate it cheaper. This is essentially a subsidy for innovation. The thought behind this is that innovation is a positive externality, that creates benefit for others outside of the market. But, the vast majority of these inventions occur within the market, lowering prices and increasing productivity in other markets. These advances in technology are exceptionally important, but do not qualify as a positive externality. From an efficiency standpoint, no patents should be issued because they create a monopoly (market failure), and they should not be an incentive to invent. Patents hurt the consumer and should not exist, this case should have never been a question. 

Location looms large in pump prices at California gas stations

Article found at:

In this article, the author loosely tries to explain how the price of gas is determined, and why the price will vary from place to place. The example used in the article is in California in 2012, when Michael Denis paid $4.69/gallon and 4 miles away Lupe Alfaro only had to pay $3.89/ gallon. The difference comes, "because fuel refiners charge unequal amounts to service station dealers in separate areas based on a host of closely guarded factors, such as nearby competition, traffic volume and station amenities." The writer essentially calls gasoline pricing a conspiracy designed to hurt consumers in a way that retail stores do not. His example is that sweaters in a chain's stores will always have similar pricing.

Gas stations operate at a level approaching pure competition. The barriers to entry are low, and if they do not function at the market level, then they will not sell and they will go out of business. They are price-takers. The distributor sells to the highest bidder, depending on demand, and then the local gas stations can only put out the product at the market price. These stations might have a chain name, but they are normally independent franchises and are constrained by demand as much as the next. If consumers are willing to shop around and choose cheaper locations, then prices will have to change to accommodate. The market drives these factors, it is not some large business conspiracy that is bent on sucking extra profit out of the consumer. 

Is Apple paying its' fair share?

According to the numbers Apple is "the largest corporate income taxpayer".  How is this true when  Apple keeps much of its earnings off shore?  How is it  they are still #1 in corporate income tax?   I shutter to think what their tax liability would be if all their earnings were taxed at their current rate of 35%!  Yes, they pay a rate of 35%.  So do some individuals but that is not what this is about.  This is about Apple not paying taxes on roughly $74 billion dollars from 2009-2012.  This money was earned outside the US.   All this income was deposited in Ireland where there is virtually no tax.  Apple makes no apologies for keeping their funds on shore.  They feel they justify this behavior by providing nearly 600,000 American jobs.   It appears that we look the other way when it comes to Apple because of  the number of jobs it provides.  Instead lets look at the big picture.  35% is the top corporate tax rate.  The very top rate among advanced nations.  Shouldn't we be asking why are rates are so high and not why Apple keeps its funds elsewhere?  Wouldn't it be more logical to lower the tax rate for corporations like Apple and encourage them to bring their dollars and their jobs back to US soil?  Do we really want to continue to send "our taxable income" elsewhere? I don't!

New York City Considers Jail, Fine for Buyers of Fake Designer Goods

In the article, New York City Considers Jail, Fine for Buyers of Fake Designer Goods by Steven Nelson, it states that New York City Council, Margaret Chin is proposing harsher punishment for buyers who purchase counterfeit trademark items, such as handbags and electronics. Currently, the draft of the bill states it is illegal to "purchase a tangible item containing a counterfeit trademark when such person knows or should have known such trademark is counterfeit for reasons including, but not limited to, the quality and price of the purchased item, and/or the condition of the seller and the sale location."

In terms of protecting liberty, the government would be protecting the rights to a certain design of a product. However, in order for counterfeit sellers to make a profit selling these goods, they have to use lower quality products in making these goods, thus making a lower quality product overall. People who are willing to purchase a lower quality product for a lower price than the higher quality version will. Their item will probably also break down more quickly or have technical issues. For this reason, I don't believe that counterfeit sellers have much if any impact on the sales of the trademark products. I also don't believe that Margaret Chin has put this proposal into action in order to protect trademark items. 

I believe that Chin has proposed this bill for personal reasons. Counterfeit sellers are not hurting their possible trademark competitors nor any other third party. There is no market failure. If anything this bill would decrease competition and increase the price of trademark items, making it even more difficult for consumers to afford them. Counterfeiters are simply making a decent profit of the sale of a more cheaply made, similar item. Chin should not be using force to tell consumers what they can and cannot buy as this removes voluntary action and thus spontaneous order will not occur. 

The real reason Chin is proposing this bill is more likely that she feels that her  social status is somehow  threatened because while she owns an authentic bag others around her are buying the "same thing" but at a lower price because they cannot afford what she can. 


Americans blame government for increases in poverty and dependence

"Want more poverty and dependence?  No problem.  Just pay for it!"   Economic principals don't come much simpler or less arguable than this.  If we want less, tax it.  If we want more, subsidize it.
We all know that the government, in order to control consumption of the things it considers bad, taxes them.
When the  tax goes up so does the actual cost paid by the consumer.  An increase of the tax on cigarettes pushes the price higher.  In turn we have fewer people willing or able to buy cigarettes.  Higher prices, fewer smokers.  Fewer smokers, less production.  Less production means fewer jobs. 

On the other hand we can increase the sales of select goods and services.  When we want more of something  we subsidize it.  If we want fewer people in the work force we simply subsidize them.
We pay people for agreeing to not produce.  Just as we once paid farmers to not plant, we pay Americans to avoid innovation and unpleasant work.  Hence, we are turning millions of people into consumers and
into non producing individuals.  This is economically devastating.  Don't get me wrong.  There are many people out there who, for valid reasons, cannot hold a job.  These are not the people we should resent paying for.  It is the nearly 10 million individuals living off the government (system) that I question.
Paying healthy people to stay home and collect benefits (that our tax dollars pay for) makes less sense
than subsidizing junk food and cigarettes does.

As Gun-Control Debate Rages, the Nation's Gun Industry Thrives

The article "As Gun-Control Debate Rages, the Nation's Gun Industry Thrives" written by David Francis, talks about the issues that will possibly arise for gun-dealers should gun control laws go into effect. Currently, the gun industry has made "$992 million dollars in profit last year" and is "[expected] to grow 3.7 percent annually until 2017" (David Francis). The reason behind this that due to the threat of stricter gun laws, people have been buying guns before these laws come into effect. 

The government states that the reason for these gun laws is to prevent tragedies like the Sandy Hook Elementary School Shooting. There are three different gun control laws that the article discusses that may go into effect; required background checks for buyers at gun shows, a ban on magazines that hold more than 10 rounds, and the ban of semi-automatic rifles.

From an economic stand-point, the government might be looking at this in terms of a market failure. If there is market failure, it would most likely be a negative externality in which a transaction is made between two parties and a third is made worse off. There are now three things we must look at to see if this is true. It must be an unintentional nonmarket interdependence. We would have to see if the transaction itself is what is harming the third party, which in this it's not. People are not dying because people choose to buy guns. Even if this were the case, it would be intentional on the buyers end. 

We could compare this to the ban on the buying, selling and use of heroine. Do people die from the buying and selling of heroine. The answer is no. Do people die from the use of heroine? Yes. But the ban on heroine does not stop people from buying, selling and using it. It may lower the number of exchanges, however a ban creates other problems. Heroine users must now steal and perform other illegal acts in order to obtain the money to purchase the drug. A similar thing would happen if there were a ban on guns. Would murder and other criminal activity with the use of guns still occur? Yes. A black market for assault rifles  and other banned weapons would appear, making it more difficult for authorities to keep track. 

If the government were to treat guns and ammunition like a negative externality and simply increased the tax to decrease the number of weapons and ammunition sold, there would be fewer weapons being made, sold, and bought in the market. From a liberty perspective, law abiding citizens may not be happy about the increase in prices for such goods, but at least the people have the freedom of purchasing weapons. This would also prevent otherwise law abiding citizens from obtaining guns through illegal means for reasons of protecting their 2nd Amendment rights or simply protecting their lives from non-law abiding citizens. 

In conclusion, government would not be protecting the peoples liberty and would cause potential other related criminal activity by putting a ban into effect.


Tuesday, June 11, 2013

Abstinence Programs Might Work

This article states that researchers have reported that sex education classes that focus on children remaining abstinent can persuade a significant proportion of teens to delay sexual activity.

The Obama administration eliminated more than 170 million in annual federal funding targeted at abstinence programs after a series of reports concluded that the approach was ineffective.  It has been found that states that prescribe abstinence only sex education programs in public schools have significantly higher birth rates than states with more comprehensive sex education programs. 

Teen pregnancy negatively impacts the economy.  Teen moms are less likely than their peers to receive a high school diploma.  They are very unlikely to attend college.  This leads to significant amounts of lost earnings.  Teenage pregnancy affects the job sector and education.  They are more likely to be reliant on government programs.  According to the Alliance for Excellent Education it's estimated that over the course of a teen moms lifetime she will cost the nation 260,000 dollars in lost earnings, taxes, and productivity.  

Should Colleges Enroll Illegal Immigrants?

This article talked about a girl named Ceylia.  She is a native of Poland.  She has lived as an illegal immigrant in the United States for almost 21 years.  She was valedictorian of her high school class and will be graduating from college with a degree in bioengineering with a 3.84 grade point average.  She will be unable to use her degree due to federal immigration laws.  In 1982 a Supreme Court  decision entitled illegal immigrants to a free education from kindergarten through high school.  After that it is undecided.  Congress has left it up to individual states to handle higher education policies.  Concerns about the slowing economy and illegal immigration has led some states to close the door on higher education for undocumented students.  Supporters say that money should be spent on making college more affordable for United States citizens. 

I don't believe that students like Ceylia should be denied use of her college degree.  Every individual has choices.  A person acts in an effort to achieve a purpose.  Purposeful action involves the choice of purpose and the choice means.  She studied hard to get where she is today.  She would ultimately be paying more taxes and make greater contributions as a professional.  We have people who are United States citizens who do nothing but take advantage of the welfare system.  That is their choice.  These immigrants who are succeeding in making their lives better shouldn't be penalized because their parents came into the country illegally.


Monday, June 10, 2013

Colorado Sheriffs Wrestle with New Gun Laws in Differing Ways - The Denver Post - Sunday June 9th

Sheriffs have been deciding if they are going to enforce the new gun laws. Multiple sheriffs have announced they disagree with the new universal background checks and have refused to complete them. People are also stating that these new laws are against the second and fourteenth amendment and therefore should not be enforced. More than 400 sheriffs from around the country have signed a Constitutional Sheriffs pledge declaring they won't enforce executive orders regarding guns that Obama signed into law in January.

I believe that Obama is using the wrong type of force by signing the new gun laws because there is a negative externality in the purchase of guns. There are multiple third party people that are being harmed by guns each day and therefore he should tax the purchase of guns and equipment to an appropriate amount. Since the American government cannot always protect it's people and their property, they should not make it more difficult for people to obtain guns by enforcing new laws. Government's policies and actions result from the purposeful actions of individuals and therefore I believe people have gone to the government and requested them to make these new gun laws, when the government should have taxed the purchase of guns and equipment.

Sunday, June 09, 2013

Subsidized Student Loan Rates to Increase?

I recently came across an article on CNN.com and it reminded me of the discussion we had in class about the fact that the rates may be increasing on subsidized student loans. So here are the facts according to the article. On or by July 1st Congress will vote to increase the current rate doubling it to 6.8%. This will affect roughly 7 million undergraduate students. Under the plan, the rates would remain low but increase as the economy improves. This rate increase will only affect subsidized student loans which the federal government currently absorbs some of the interest rate. This is about 1/3 of all student loans given out and these loans are awarded based on economic need. Most students actually take out unsubsidized loans, which the rate has been at 6.8% already since 2007. This rate will remain the same for most middle class students. The article concludes by stating that based on the way things are going we will most likely see the rate increase.

I found the article mostly to be informative and didn't cause much cause for debate... what interested me the most was actually all the comments that were posted below the article. Obviously if you are a student this is an important issue. First of all tuition is expensive. My husband just finished his college degree about two years ago and now I am a student and the loans are definitely piling up. I understand where people are coming from and the frustration they feel behind the increases. What startled me was that there were quite a few comments that stated they thought that college education should be free. College should be free? I find this thought completely absurd. Another comment made really struck home with me. The comment made was that we take things for granted if we don't have to earn it. I couldn't agree more. My first year at college I received a scholarship and the remaining portion of my tuition was paid for with a grant. I was attending college for "free". And let's just say my first year at college was less than productive. I mean I did ok, but I certainly did not try as hard as I could and I dropped some courses half way through. I just didn't care all that much. I finally finished my Associate's degree and then years later I am finally finishing my Bachelor's degree. I am an A student, I have been on the Dean's list and I have received a small scholarship recently. I work my butt off at school and here is why... I am paying for it. I am paying a lot for it. Not only am I paying tuition and fees, but I pay for it with time away from my husband and my three kids. My education means enough for me to take the time away from them and in my eyes, I am going to make it worth it. My perspective has changed so much since that first year right out of high school when I was getting a "free ride". 

So would it be nice if college was "free"? Well my bank account would sure be appreciative. But nothing in this life is free. And if students want a college education the truth is, it comes at a cost. This rate increase is no different than the unsubsidized loan rates right now, which a lot of students are already dealing with. We know what we are signing up for when we take out students loans. If we are unwilling to pay them back, we shouldn't take them out in the first place.

The article can be found here.

Monday, June 03, 2013

Guns and Public Policy


Dr.  Alan Scott wrote this article, and it seems to me is writing it from a Liberty standpoint.  The constitution clearly states that we have the right to bear arms, BUT congress can regulate it at any time.  He says that the reason there is a lot of gun violence in the U.S. is basically because we have a hard time finding the balance between our rights, and our freedom to live in a society with gun regulation.  No one can ever agree on that balance in congress.  He also says that there is a higher percentage of people using guns other than self-defense in their homes because they never got background checks. He then goes on to say that an effective way of regulating guns would be to ban them all together, and from what I understand, to "rebuy" them from the government.  He contradicts himself shortly after that by saying that this would lead to overthrowing the government.

This seems like an exaggeration to me.  First of all, the constitution covers us from a liberty point of view from the government ever banning guns..."we have the right to bear arms".  While they do have the right to regulate gun control, they cannot simply ban our guns completely.  Second, coming back to "rebuy" our guns, thus leading to overthrowing of the government is ridiculous. 

He states that the U.K. has less than 200 deaths per year from guns.  This is because their government regulates their gun control a lot more than the U.S.  This is how we should lower our gun violence as well.  It is efficient, and not damaging our Liberty rights.

Discounted Dental Insurance?

There is a new dental program making itself heard in parts of California called Brighter.  Brighter's goal is to charge very little or nothing at all for dental insurance to make it more affordable to the hundreds of thousands of people who don't have dental insurance. To still produce income, their plan is to charge the employees to list their services online.  The discounts range from 20-30% discounts with no charge, to 60% plus with a small annual fee.

What it does not cover is how this effect the people who already have secure jobs and dental insurance.  It does not cover whether we will have to pay taxes on this new program.  It also is concerning that unless there is any other competition out there, it will soon be monopolized and will in turn become a market failure. 

I did not think to add the link until I already closed the browser, but it is called Brighter Dental Program. 

Sunday, June 02, 2013

Affordable Care Act

According to a New York Times article, one of the greatest difficulties faced by entrepreneurs is obtaining individual health insurance.  The cost of individual insurance plans can be significantly higher than a group plan through an employer. Some individual may even be ineligible for health insurance.  Even as a small business it had become increasingly difficult to find affordable health care plans to offer your employees.  If you were a small business owner you would pay more for the exact same plan a larger company would pay.  When congress passed the Affordable Care Act (ACA) of 2010 it was designed to lower the cost of health care. One way the ACA sought to lower the cost of health care was to increase the size of the risk pools.  By increasing the amount of people on an insurance plan, the risk would be spread out enough that even high risk members and small business owners would be able to afford health insurance.  According to the New York Times article, the availability of affordable health insurance would allow entrepreneurs to begin new business ventures and shake free of the shackles of their employers health insurance.

There are many issues with the American health system but the most universal is the high cost of care.  But we need to consider why the cost is high.

1) Doctors spend nearly a decade in school accumulating hundreds of thousands of dollars of student loans.  By going to medical school doctors are making an investment in their own human capital in hopes that their future will be more productive and generate more income than they otherwise would.  There is also an opportunity cost in terms of lost income, lost productivity, and the allocation of future income to pay off student loans.

2) The American judicial system that does little to restrict frivolous lawsuits by plaintiffs anticipating an out of court settlement.  One of the main purposes of any government is to enforce personal property laws.  By allowing these lawsuits the government is granting the approval for plaintiffs to steal the productivity and property of doctors. A doctor could allow the case to go to court and fight to defend his honor, practice, and income.  But the opportunity cost may be great enough that an out of court settlement would be the least harmful route for the doctor.  Today many doctors carry malpractice insurance in order to mitigate the majority of the risk of these types of lawsuits.

3) The free market is restricted because insurance providers are not allowed to sell policies across state lines.  Lobbyists and rent seekers have created a virtual monopoly in the health insurance industry through state laws and legislation.  Without free and fair competition consumers will be restricted in finding an affordable policy for their individual needs.  The policies that consumers eventually purchase will be higher than they would be if we expanded our insurance networks nationally.

The ACA does nothing to address any of these problems.  Instead the ACA treats health care as a public good and compelling Americans to purchase insurance plans that the government approves.  But this notion of the health care system being a public good is false.  A public good is a good that is both non-excludable and non-rivalrous in that individuals cannot be effectively excluded from the use and where use by one individual does not reduce the availability to others.  Doctors and patients compete for patients to exchange their productivity and services for income.  Even patients are in competition with one another.  In some cases it may take months to see a specialist or a doctor may stop seeing new patients if their current patient population has exceeded their ability to provide service or fulfills their income requirements. Health care is not a public good because it is excludable and rivalrous.  Doctors accrue opportunity costs, dept, and risk in anticipation that they will be rewarded for the services that they will offer consumers.  Nurses, medical technicians, lab specialists, administrators, and many other careers also accrue opportunity costs, debt, and risk in order to over their services to consumers.

As well intentioned as the government is with the ACA, it will in fact make health insurance prices rise and health care increasingly scarce.  A free market will find a price that both parties benefit from the exchange.  The health care system is broken because of the very entity that is trying to fix it.  The government uses force to get in between the free exchange of insurance providers, health care professionals, and patients.  By enacting the ACA the government has harmed both the consumer and the economy in many ways.

1) In the ACA law, health insurance plans are required to meet criteria set forth by the government regardless of the insurance coverage needs of the consumer.  This interrupts free and voluntary trade between insurance providers and consumers.  Many consumers will end up paying for services they do not need or wish to have.

2) The ACA continues to enforce the restriction of selling health insurance across state lines.  Lobbyists and rent seekers have manipulated the system so that they can benefit financially.  The elimination of competition has caused insurance costs to be higher than free market levels.

3) The ACA forces insurance companies to insure individuals with preexisting conditions.  By introducing these high risk patients into the insurance pools everyone must share in the increased risk by raising the cost of health insurance.

4) The ACA compels Americans to purchase health insurance with an opportunity cost.

5) The ACA compels employers to offer health insurance to employees who work at least 30 hours per week.  Employers have already found ways around this portion of the ACA by reducing hours of low skilled labor to under 30 hours per week.  This forces these individuals to find a second job as a means to their standard of living.  With each employee now having a health care cost to employers in addition to wages it forces many employers to restrict or eliminate new employees, business expansion, and hiring of entry level workers.  The increase in operating costs will cause prices to rise as businesses struggle to maintain profitability.  Unemployment and underemployment among low skilled workers will rise which will have an opportunity cost of disposable income that will no longer be able to be spend at small businesses and start ups.  With less disposable income people will spend less.  The less people spend the more businesses will struggle.  The more businesses struggle the more unemployed we will see and prices rise.  This vicious cycle will destroy small businesses in America and we will only be left with large box stores with enough capital to wait out the coming economic disaster.

These are all reasons why the New York Times articles is wrong in assuming there will be an increase in entrepreneurs because of the ACA.  Capital will be allocated away from small businesses and start up companies.  It will be spend instead on higher insurance premiums and taxes to pay for the unemployed which will cause a decrease in aggregate spending.  But the solution is not to subsidize doctors education because there is not a positive externality.  The solution is not to restrict insurance market size because of rent seekers and lobbyists.  The solution is not to force people into the health insurance networks.  The solution is not to compel employers to offer expensive government approved health care plans.  The solution is to remove the force of government from the health care industry.  The free market will, by trial and error, find the most beneficial prices and services for all parties involved if it is left to its own devices. Only the free market will allow insurance companies to find a balance between risk and reward while consumers find balance between cost and value.  But as long as the government uses its force to manipulate the free market system we will always have unintended consequences and a failure in the health care market.

The New York Times article referred to in this post can be found here.