Water is a dying resource

Water is an increasingly scare resource all over the world, thereby an excellent example of supply and demand, and conservation for future generations. Because water is scare, demand for the resource is increasing, driving up the price. Residents in Washington D.C. pat about $350 for approximately 480 cubic meters of water, whereas that same amount of water would cost approximately $1700 in Guatemala City. The price people pay for water is determined by transport costs, the total demand for the water, and price subsidies. An example of a transport cost is in China. China is constructing 3 canals to transfer water from the Yangtze River to Beijing and other growing northern provinces. Water markets exist in some portions of the world. Where these markets exist, it is evident how high the scarcity of water can be. For example, in India, water scarcity has encouraged farmers to profit by selling their water instead of the goods from farming. This promotes a rapid drop in the underground water tables which is a “back-up” resource of water. Because of the drop in the underground water tables, water is not being preserved for future generations in India. Water subsidies can be very large. For example, water revenues in Delhi are less than 20% of what it spends on water each year. Oftentimes, residents in urban slum areas have no access to municipal water and must purchase their water from private surveyors who bring the water in by truck. The price for this water is exceeding $1 per cubic meter. The poorest households in Uganda spend approximately 22% of their income on water, while those in El Salvador and Jamaica spend more than 10% of their income on water. Water subsidies also exist in California and Utah. The price of the water subsidies provides for a good example of the scarcity of water. One way to avoid the subsidy problem is to use a block rate pricing system where a low level of consumption is very cheap, while prices increase at higher levels of consumption. If there is a way to make the use of water more efficient, then it will be relatively inexpensive and will save water and energy.

-Erin Kelly
-http://www.globalpolicy.org/socecon/gpg/2007/0307waterprices.htm

Solar Energy for a few!

The link http://www.miamiherald.com/business/v-print/story/251785.html

Last Wednesday former President Clinton and Florida Gov. Charlie Crist, announced plans for a solar power plant aimed at reducing Florida’s carbon emissions. This solar plant is expected to reduce the carbon emissions by 2 million tons over five years and is a part of a 2.4 billion dollar clean energy program. The first thing that caught my eye was the question of, who is going to front the bill for this? Well, if it’s a state run program then the citizens of Florida are going to pay. The citizens are also paying right into the pockets of the utility company owned by the FPL Group. The FPL Group has a three step plan for this carbon emission reduction escapade. First they are planning to spend 500 million dollars to develop 4.3 million Smart Meters so there customers can track their electricity usage each day online to help control their energy usage. To me this sounds absolutely ridiculous. Every month customers get a bill and are charged according to how much they use, how would knowing daily what your usage is differ from knowing monthly? If people were really interested in how much they used they could walk outside to the meter on the side of the house and take a look. But, these are my value judgments and I guess convenience isn’t worth 500 million dollars to me.
The second part of the plan is to start with a 10 megawatt solar plant and then increase it to 300 megawatts in Florida and another 200 megawatts somewhere else. To let everyone know solar energy is more expensive to produce per kilowatt than other energy producing sources already in place and requires of course, sunlight. ''As we all know, Florida is one of the sunniest places in America, but this is the sort of thing, if they can prove it works, it can be done in sunny places all over the world,'' Clinton said. ``If you mix it in to your overall power mix, the extra cost is not particularly great.'' On a side note, Clinton said “if they can prove it works”. What? They don’t know if it’s going to work? Looks like a huge gamble to me. Back to the issue, yes it will cost more and there are going to be in the end 500 megawatts available. This leads into the third phase of FPL Group’s master plan. Next year FPL is planning on selling Renewable-energy credits nationwide. Renewable-energy credits are credits that prove that energy bought was offset by renewable energy sources. People can now chose to buy electricity at a higher price and get the satisfaction of knowing that it was offset by renewable electricity and they are saving the world from impending doom at the same time! What a fantastic idea, until one comes back to reality. Why would anyone buy more expensive electricity? I had a hard time understanding this from the article so I looked up Renewable-energy credits and found out that in other states they have mandated some companies to have purchased so many of these Renewable-energy credits or they are fined. This is the transferable pollution credits in action just as a different flavor.
My main point of this whole thing is; I see a government subsidized monopoly rising to power. Here is my logic. First, the utility company is owned by the company FPL Group which is already a kind of monopoly second of which is being subsidized by part of the 2.4 billion dollar clean energy program. In perfect competition a company wouldn’t willingly spend $500 million to create convenient ways to help people reduce their consumption of the company’s product. A company in perfect competition that is going to sell a completely homogeneous product like electricity is not going to employ higher priced capital such as a solar plant. To put it plainly, I think this company is using its somewhat existing monopoly power as the utility company and a little natural monopoly (the sunny state of Florida) to gain more profit. They are having the tax payers pay for their solar power plant. Then the company is going to sell electricity at a higher price and get away with it because it is a government mandated product that other companies have to purchase. I think that there is a clear market failure being created by the government and it’s going to hurt the tax payers and the companies that are required to by the credits, but it will reduce carbon emissions and that’s what the legislation is trying to do.
Robbe Uhrhammer

Marekt for Carbon Emission Permits

From the New York Times Online
http://www.nytimes.com/2007/09/26/business/26bank.html

This week a group representing the world’s leading banks urged the United States and other industrial nations to move rapidly to introduce a lightly regulated system for trading carbon emissions permits. Yet, the banks, failed to make a strong argument as to the reason why the U.S. and other industrialized nations should adopt this Kyoto style of idea. This essay will try to make the point, from an economic standpoint, that the U.S. should adopt a system for trading carbon emissions permits. However, to understand why industrialized nations should start trading these permits, it is first necessary to know the basics about this new system.

Under this newly proposed plan, all polluters are required to have permits in order to discharge pollution. Each permit will state the exact amount of pollution a business may emit. The key idea here though is that the permits can be freely transferred between firms. The control authority will allot the number of permits needed to reduce emissions to the preferred level. Any company that pollutes in excess of the allowed permit requirements would then be fined.

Now if the controlling body issued the permits very precisely and every company received the right amount of permits, there would be no reason for a market in emissions permits. However, it is not a perfect world, were there is perfect knowledge, so permits would need to be traded to make up for the over or under allocation of permits to certain companies. With this system, the world now would have a cost-effective allocation without having even the slightest knowledge about control costs. When using this system the affected governments can now meet there policy objectives while still allowing for greater flexibility in reducing pollution. However, with any new market, especially one on such a large scale, there are bound to be a few drawbacks.

The good news with this venture is that there is only one main negative aspect, which is foreseeable. The one problem that could arise would be if the industrialized nations over allocated their permits; this would lead to volatility and then a collapse in the price of permits. However, the problem is fixed when the controlling authority auctions its permits, thus ensuring that the permits are scarcer and costlier, than if the controlling authority just gave out a certain number to each company.

With only one drawback, which is easily rectified, the new market for pollution is possibly one of the best moves the U.S. and other developed nations could make in reducing pollution. The new market guarantees that businesses have flexibility to achieve the specified reduction in pollution at the lowest possible cost. Next, this new market would probably grow to the point were it would be the world’s largest commodity market, creating new wealth throughout the developed nations. Finally, pollution would be reduced, and in the grand scheme of things isn’t that what we wanted to achieve in the first place.

Hogs Farmers Against Global Warming

Brendan Miniter in the WSJ ($$$):

North Carolina's global-warming activists are in hog heaven. Late last month, Gov. Mike Easley, a Democrat in his second term, signed legislation mandating that more electric power in his state come from "green" sources such as wind, solar energy, and hog and chicken waste.

Today, North Carolina gets about 2% of its electricity from "renewable resources." By 2021, under the new mandates, Progress Energy and Duke Energy will have to find 12.5% of the power that they sell to Tar Heel residents from renewables. Hog-waste-generated power -- as required by the new law -- will nearly triple to 0.2% of the electricity used in the state over the next decade as farmers capture and sell the methane gas given off from tons of decomposing manure.

Sounds like the kind of idea that might be relevant to a national energy-environmental policy. Do such mandates make any economic sense?

A search for Cleaner Fuels: A Burden for the Rich to Bear

The Bush Administration opened the President's climate meeting this Thursday with hopes of discussing issues surrounding a global consensus on the need for cleaner sources of fuel. This comes closely following on the trail of the UN who has been underway with it's own climate meeting. There seems to be little difference between the two meetings with the big problem being that developing and industrialized nations seem to have little concern for environmental sustainability and global warming. Ultimately, countries that are in the position to be concerning themselves with global warming, don't want to have to bear the burden of the costs to fix it!

Too Little Too Late
The first question that must be asked is can the Bush Administration effectively make any headway in this battle before their time in office runs out? My response would be no. While the UN may continue to make headway on the issue, or will atleast be able to continue to develop answers with some sort of continuity in their process, the Bush party has effectively no time to get a campaign of this magnitude off the ground. This is something that should have been looked at long before now if the current administration wanted to have a significant impact on the policy decisions of the campaign. The beurocracy that already seems to have developed will take much longer to sift through than the one year the Bush Administration effectively has. Given the current dynamic within presidential candidates and their respective parties, the reality is that we will most likely see a much different approach to this issue with the next person in office. My opinion is that someone should have done a better job of uniting with the UN rather that forming some independent meeting and trying to do it on our own. This is especially true given our current global voice. America no longer runs the world! It's as simple as that. We operate as a global economy now so to try and launch a worldwide campaign all on our own would be wishful thinking at best.

The Economic Implications
Initially it seems to make sense that the whole world should share in a desire to find a cleaner source of fuels. After all, we're all going to reap the effects of not having cleaner fuels right? The supposed acid rain is going to burn my skin here just as much as it is in Argentina right? Right. Well then shouldn't we all have to pay to fix this problem? This is just not the case. But luckily, for those that tend to sway to the side of an efficiency based value judgement, it is a great answer.

The definition of efficiency is to maximize net social benefit. This is a highly subjective terminology since the definition of benefit and the places people put value are going to be extremely varied on a global scale. In many countries just having a meal and electricity is the greatest thing one could ever have. In this and other prosperous countries however, food and electricity is a given and quite frankly we've moved on to the more luxurious things in life like Lazy Boy recliners big screen TVs. Oh and most lately, we want enjoy those things without having to get cancer as a result of their production. It's sort of a conceptual heirarchy of the world's needs.

With that said, the definition of efficiency leads us right to the economic realities of whether or not we will actually see a global response to the necesity for cleaner fuels. In order to maximize net social benefit each country will choose to maximize whatever it puts the biggest value in and gets the biggest benefit from. For some this will be eliminating poverty by any means possible. For others this will be ensuring that we don't drown from polar ice caps melting. Whatever the allocation, net social benefit will be maximized provided some world power doesn't evolve and force everyone under on global clean fuel policy and then have a way to enforce it.

It's Ours
In class we used a model of efficiency where whoever had the means of controlling pollution was the one that did the controlling. The solution is very much the same on a global scale. Prosperous nations have both the incentive and the means to find cleaner sources of fuel while developing and industrialized nations have neither. Therefore, the burden is ours to bear. If the UN and President Bush and whoever else wants to see a solution to the dirty fuel problem, they are going to have to be the change they want to see.

-brendon

Carbon Tax

You might want to check out the Carbon Tax Center.

Navajos vs. Enviornmentalists

If there was one group in America that you think would be concerned about the environment it would be the Native Americans. Yet, it is the Navajos that are promoting the building of a new bigger better coal-fired power plant on reservation land.They say that it will bring in over $50 million, produce hundreds of jobs and better lives for the 200,000 people that live in the reservation.
The construction of this plant is not going up without opposition. Everyone from the Sierra Club to the Governor of New Mexico has something to say about this plant. They say that it will emit the same amount of carbon dioxide and 1.5 million cars.
Should the plant be built? I think that it should be. Yes, it is going to be bigger and thereby emitting more carbon dioxide but the new plant will be cleaner and more efficient than the old plant. Even if they do not build a new plant the old plant will still be running emitting the same amount of carbon dioxide and burning coal less efficiently. Not building the plant is not a solution to eliminating green house gases. The same gases are going to be emitted with the old factory. The Navajos that live on the reservation are going to be directly effected by this plant and if they see that it is worth it and are willing to take the trade offs then they should build the plant.

Blogging Assignment Illustrated

If you want to see a couple of examples of what I'm looking for with your blogging assignments, then you might take a look at this post of mine as well as this post by a former student.

Energy Guzzling

Tim Habb:

I read things like this one out of England:

THE Conservatives will propose banning plasma screens and other energy-guzzling electrical goods in a report to be unveiled next week.

...and I slam my head against the wall screaming "Why, Why...WHHHHHYYYYY!?"

Bans on non-deadly goods are bad economic policy. Period.

Consumers choose their energy usage based on what it costs them--not others. If energy use imposes costs on others and that cost is not captured in the price of energy, then fix the price. Banning products does nothing to fix the real problem--screwed up incentives to consume energy.

Well said.

the waste dilemma

From a science perspective, the topic of waste management is not as hotly debated as maybe Global Warming. Essentially, it comes down to the capacity for the earth to absorb wastes and the cost to implement this degradation, which can be modeled using various methods. An article from Nature magazine (Energy and the Entropy Business) makes the point that “The type of waste acceptable depends on a society’s priorities.” Also, the world is starting to realize that it is not realistic to remove all of the ammonia from wastewater, all of the phosphorus from soil, or all the carbon dioxide from the air. Therefore, the question remains: what levels for waste are acceptable? People from different disciplines will give many different answers, surely. However, this article acknowledges a scientific and realistic view:

“Wastes are disorder, entropy. They are, almost by definition, of little use or value. Any effort, energy, time, or other investment to handle and manage them implies cost. Economic forces have, therefore, argued for minimal waste management. However, this changes when other factors, notably space, become limiting: survival in a limited space requires appropriate waste handling….One can strive for total dissipation of molecular species and structures, possibly with minimal energy expenditure (or even energy gain)….The future options for waste treatment and management thus depend on the availability (price) of energy.”

http://www.nature.com/nbt/journal/v17/n2s/pdf/nbt0399supp_27.pdf

Energy & Environment

You might be interested in this commentary about energy policy. Here is the opening paragraph:

Just about everyone claims the U.S. must urgently become "energy independent," yet at the same time just about every policy that may actually serve that goal is met with environmentalist opposition. That contradiction has impeded the Bush Administration's attempts to increase domestic energy production. And even the modest progress so far may be blocked because litigation is driving the conflict out of politics and into the courts.

What might be interesting to you in this paragraph when you think of the term paper topic (Energy-Environmental Policy) is that there is an aspect of energy policy that seems opposed to environmental policies that are pursued by some interest groups.

Evolution, Immigration and Trade

Paul H. Rubin discusses free trade, immigration, and evolution. He argues for the restrictions of trade to be dropped and to let immigration work. He also says that evolution has a lot to do with this. But what I find most intriguing is his view on a static world:

Our primitive ancestors lived in a world that was essentially static; there was little societal or technological change from one generation to the next. This meant that our ancestors lived in a world that was zero sum -- if a particular gain happened to one group of humans, it came at the expense of another.

This was one of the topics we discussed at length this past semester. There are so many people today who cannot see the world in any way but a static view. They also therefore see economics as static as well. Rubin thinks, like I do, that the economy (in particular immigration and trade) are evolving. We can not view these two policy issues as we once did. John Stossel had a good piece on 20/20 concerning outsourcing (http://abcnews.go.com/Video/playerIndex?id=1747656). In his piece he argues the benefits of outsourcing. Aside from the obvious union objections, many see outsourcing, like immigration and trade, as static views and therefore it must be bad.

Rubin is correct. We need to be looking at out world, economics, as evolving, or changing. When we can open our minds to the non-linear model, we might make more progress.

Smoking

In certain countries smoking can be considered part of the culture, some 30% of Spaniards smoke. It is right for government to take that away. In January of 2006, the government of Spain made it illegal smoke in the workplace. They have also restricted smoking in certain bars and public locations. Is this a violation of our liberty?

I really don’t like the concept that other can take rights from you. It really comes down to the question what are your rights and what is not. If direct harm is being inflicted upon you or your property then you have the right to retaliation. Conclusive evidence has been provided saying second hand smoke causes health damage. Is it the place of the government to use coercion to prevent second hand smoke in public areas? If the population actually votes to remove smoking from public areas, because of health and lifestyle issues, I can not disagree with that. I do think lines do need to be drawn on where the government can and can not intervene. When it comes down to inflicting physical harm on others the choice is obvious, however, its not that easy. Many people feel that smoking is their right and should not be taken from them. It comes down the perspective of the citizen.

Being a non smoker it is easy for me to say that it is the right of the majority to ban smoking from designated areas. If second hand smoke really causes harm to individuals then from a liberty standpoint I can recommend this use of coercion.

Is socialism better? Some think so....

Recently, on May 4, 2007, I read an article titled Is socialism possible in the United States? By John Beacham on pslweb.com that talked about the possibly of the United States being a socialist country. While our country is moving more in that direction, I still believe we are a capitalist nation. Capitalism is blamed for things such as people not having health insurance, infant mortality, and poverty. It is believed that under a socialistic government society will be one of “true justice and peace, a society that works in the interest of the vast majority.” Private ownership is believed to be the root of all evil it seems.

This article really concerns me. It seems as though the author isn’t thinking rationally at all. He talks about workers having the power to decide their fate. However, from what I understand, socialism puts the power to decide everything in the hands of a few people, not workers. I think health care is the responsibility of those who work or have worked. People with disabilities of course would be taken care of by the government, but all others who work would be responsible for their health care. Free public health care would be a public good and be inefficient. Private ownership of property would increase the incentives of individuals to be productive, not diminish their desires to be productive. Individuals are more likely to work harder if they get to keep what they earned. I believe that workers are better able to decide their fate under capitalism by making choices about education, health care, places of employment, etc. Who wants the government to decide for you what is best for you? I know that I do not and I’m sure many people of the world agree. This isn’t saying that our country isn’t moving towards socialism, but more of that thinking socialism works better than capitalism is just nonsense.

Congestion Pricing

On April 22, 2007 the mayor of New York City, Michael Bloomberg, proposed a plan to charge $8 per day for cars to use the streets of the central business district of lower Manhattan. The policy is really nothing more than an increase to motoring taxes overall. This policy could help ease congestion in the area, but at what cost to the freedom of movement. Some opponents argue on the grounds of individual rights and that the government should not put financial barriers that restrict the freedom of movement.

This concern will likely fall on deaf ears, Bloomberg in the past has shown no concern for individual rights. He has already made New Yorkers live according to govenrment standards. He has previously passed bills prohibiting smoking and trans-fat. Both the smoking and trans-fat policies are based on a paternalisitic framework telling the citizens what is and what isnt good for them. The prohibitions are attrocious attacks on individual liberty, but yet they still were passed. So it should not be surprising if Bloomberg pays little to no attention to the impact that congestion pricing might have on the freedom of movement.

Political "Truth"?

I often read the editorial sections of our fine newspapers in the State of Colorado. In reading a recent editorial in the Denver Post it struck a nerve with me regarding the inefficiencies of the United States government. This article was directed at presidential candidate John Edwards response on funding for a universal health care plan. His blunt description of how this would be funded was through tax increases on the wealthy and corporations. These components of our economy are the ones that fuel growth spending in our country. Furthermore, the consumer will ultimately feel the pressure in the form of higher prices. This article stressed that this is a reduction in individual freedom through tax increases.

In my eyes the United States government spends to much for to little in return. I do believe in defense spending and police protection, yet much spending is wasteful and does not provide benefits to society as a whole. I agree with this that we need to define the real purpose of government as set forth in our constitution. This trim down will lead to less government spending and lower taxes for Americans. This in turn will provide individual liberties to the consumer.

Do I believe that tax increases for the rich is the only option to explore in establishing a universal healtcare system for the United States - NO. We need to lower government spending across the board and let free market conditions bear the weight of our economy. I do not agree with John Edwards plan, but his straight-talking approach said what people needed to hear. The Truth!

Creation of a New Constituion

It has been disussed in a recent lecture as to the validity and meaning of the United States Constitution. The Supreme Court of the United States presently has the ability to make final decisions regarding the enforcement of our Constitution. I feel this why we have the ability to amend the the Constitution as required. The fact is nine judges have the ability to manipulate and rule on the wording of our constitution does not give the document any enforceable right. All lawyers, judges and law professionals have their separate beliefs on how law is interpreted. They routinely research case laws, statutes and rulings to see how the law can be determined.

In the recent ruling (2005) by the Supreme Court on the Kelo Case, this took interpretation of "Public Use" to a new extreme. The wording of the Fifth Amendment of the United States Constitution was not taken literally rather was "interpreted". I'm not on board that we should abolish or rewrite the United States Constitution. I would suggest that make the wording more concrete so that we do not get caught up in the interpretation of what is actually meant. It would not be very popular or wise to redraft a founding principle in the creation of the United States, yet it would be bested suite us to clarify the meaning so that decisions on our liberties are based on the true meaning.

Could Global Warming Regulations Become Even More Ridiculous?

During the past month, if you have a habit of watching Late Night TV, you may have noticed several jokes being made by comedians, such as Jay Leno, about comments the singer Sheryl Crowe has made on how people can combat Global Warming. The comment most often ridiculed by the comedians was Crowe's suggestion that the amount of toilet paper a person uses be limited to one square per visit. YahooNews, and several other sites, have also posted short articles talking about Crowe's bizare suggestions.

Now it's really hard to tell if this suggestion is really just a suggestion, or if Crowe actually thinks it's something the goverment should impose on us, but the possibility that she could be serious doesn't seem that far fetched, and that's a scary thought O_O. Of course the idea is laughably bad; how does she expect that the goverment could possibly enforce such a limitation, hire attendants to stand around in every public restroom in American and ration out toilet paper squares? Have mechanized toilet dispensers in the stalls? An enforcement of such a limitation for private citizens in their own homes would require an even bigger breach of freedom and privacy. Of course, the effect Crowe wants might be just as easily achieved by charging a toll for toilet paper in public restrooms (as I believe some other countries in the world actually do), but of course people like Crowe seem more comfortable lobbying goverment for it's coercive power, instead of relying on market forces.

And it;s pretty scary to me that this is just a continuation of such proposed resrictions as banning conventional lightbulbs in favor of the low power ones. Makes me wonder what strange proposals will be made next. The precedent that goverment has set to intervene in market operations seems to have opened up the possibility for us to slide into even more bizarre encroachments on our freedom. It's reassuring to see, at least for now, that Crowe's suggestions have been met with the eye-rolling comments they deserve from people in the media. I hope we won't reach a point one day when such a suggestion is really taken seriously.

A few of Crowe's other strange suggestions include designing disposable "diner sleeves" for people to wear on their clothes as a replacement for paper napkins (what does she expect these sleeves to be made out of? and I highly doubt wearable napkins would catch on with anyone who actually has manners. ^^) and creating a reality TV show where people would compete to see who lives the most "environmentally friendly" life, with a recording contract for the prize. (Does she think that living well with the environment really correlates with singing talent? What if someone like William Hung won? *shudder*) Well...at least those suggestions seem like they would be market determined, hopefully ^^.

Hypocrisy and Animal Rights

Among child molestation and genocide stands animal abuse. Animal abuse has become such a repulsive practice that we now have entire TV shows dedicated to eradicating it and punishing these subhuman practitioners. However, even the smallest degree of coercive force used against animal abusers is even more vitriolic to liberty than the harshest of animal abuses. Animal 'rights' in America fails utterly when given the most cursory glance under a logical magnifying glass.

Today we enjoy meat from slaughtered animals on an almost on a tri-daily basis. Meat has become so ingrained into the American culture that grilling is also known as the great American pastime. The businesses engaged in slaughtering animals on a large scale are even traded on the stock market. If animals are more than property, as activists and much of the world is convinced how can we permit this widespread murder to occur? Many people will answer, “because we consume them to continue living” or other sundry arguments amounting to “fulfillment of needs.” Then animals don't have “rights” so much as they have privileges. We don't murder another to fulfill our needs; the other person has a right to their body and life. We allow animals to be killed to fulfill our needs, yet we don't allow animals to be abused to fulfill the bizarre needs of an individual. If these were rights and not privileges both of the above statements could not be contradictory because either animals have the right of their body or they don't. If they have the right to their body they cannot be slaughtered without consent; something I have never heard a chicken consenting to. Ergo, animal abusers are punished not because of their affront to a creature's rights but because their actions are deemed socially deviant.

Now sure, I admittedly find animal abuse repulsive and the direct loss to liberty from using force against animal abusers to be small. However, we should never direct our full attention to the immediate costs of an action; by allowing the state to punish an individual for his personal behavior because a large enough group of individuals deems it inappropriate, we set a precedent for further encouragements on liberty. We have not come to the point in time where the kid burning ants with a magnifying glass becomes the neighborhood Jeffrey Dahmer and we may never. However, by allowing even a modicum of animal rights hypocrisy to continue we legitimize the use of force by the state to satisfy the tastes of the majority.

Looking Back at Randy Barnett

I really couldn’t think of anything to write about so I just decided to read something from earlier in the semester and then write on that. When reading Randy E. Barnett’s, “The Moral Foundations of Modern Libertarianism,” and “A Law Professor’s Guide to Natural Law and Natural Rights,” I discovered many great ideas that Barnett argued that I agreed with. He gave his argument and then gave great support to explain to his audience why he believed certain things. One idea that he stated which I really agreed with is when he said, “Most people do not want to sacrifice their liberty to act even if such sacrifices would significantly benefit others” (Libertarianism 6). Even in today’s society this statement is still true. If I have something that I truly believe in or hold dear to my heart, then I would not give this up even if me giving this up would benefit many others. For example, if I have a piece of land that has been in my family for centuries and it means the world to me, I would not want to give this up even if it benefited others. If people wanted me to give up some of my land they that they could build an interstate to connect two major cities, I would do everything in my power to hold on to what is mine. It is my right as a citizen of this country to do with my property as I wish and if I did not want to sell my land then that’s just too bad for everyone else. This idea is important to me because it illustrates the right that we as American citizens should have.
In the essay, Barnett brings up a problem that is a part of every society. He states, “Given that the actions of each person in society are likely to have effects on others, on what conditions is it possible for persons to live and pursue happiness in society with other persons” (Libertarianism 11). When I read this problem, the first thing that comes to my mind is that there probably is no answer to totally answer this question. The reason I believe that “it possible for persons to live and pursue happiness in society with other persons” (Libertarianism 11), is because an individual needs other people to achieve happiness in a cooperative manner. For instance, if I am a business owner, and I see happiness as being well off financially then, I need people to purchase a good or service of mine in order to achieve my happiness. If I do not have others in society then I would never be able to pursue my happiness.
Another great point that Barnett makes is in his essay, “A Law Professor’s Guide to Natural Law and Natural Rights,” when he states that “Whether we attempt to feed ourselves, build bridges, or live a good life is a matter of choice. How we go about making our attempts and whether we succeed or fail will be constrained by natural law” (Natural 666). This is a great statement because when we make everyday decisions we have to take into account natural laws which no matter how bad we may want to, will never be able to change. A great example that Barnett uses is when he says that it might make someone happy to jump off a building, however that person needs to remember that gravity is a natural law and causes to person a fall fast, so if he/she wants to keep on living then he/she will not jump. “The existence of gravity and the nature of the human body lead to the following natural law injunction for human action: given that gravity will cause us to fall rapidly and that our bodies will not withstand the fall, if we want to live and be happy, then we better not jump of tall buildings” (Natural 657).
Barnett has many great ideas that he explains thoroughly in his essay. To be honest however, this was not one of my favorite readings so far in class. I enjoy reading essays where the author gets to his point quickly and then supports his theory with great facts and detail.

Delta Airlines Set to Try Business Again.

Delta Airlines left bankruptcy protection earlier this week. The company had been reorganizing for 19 and a half months. A bankruptcy judge in New York allowed the company to leave chapter eleven protection by closing a $2.5 billion dollar loan to pay back creditors. It will unleash a new marketing scheme which includes painting 900 airplanes and a new advertising campaign which will cost $10 million. Delta Airlines supposedly entered Chapter 11 protection due to high fuel and labor (including pensions) costs. Delta's bankruptcy has cost the company more than $127.9 Million in legal fees. Creditors will receive anywhere from 62- 78% of their claims in the soon to be reissued Delta stocks (all facts from attached Associated Press article).

Although the company may have genuine reasons for bankruptcy with gas and labor costs, I don't believe for a minute that the company should be able to return to business. Airline companies often seek Chapter 11 protection from the government to 'reorganize.' Protectionism is not the answer. Pilots' unions and other unions do have unfair monopsony control of labor costs in the airline industry. Fuel prices are subject to changes. But it simply seems more likely the case of a senile industry. Delta Airlines, as well as many other airlines, are offering their services at higher per unit costs (diseconomies of scale). Many of the causes of diseconomies of scale sound very plausible in this case. Top Heaviness: albeit there is reason for management and chief officers of companies to receive large salaries, it makes a company bear high costs in wages and stock options to a very limited set of workers. Inertia: there may also be a lack of willingness to change. Slow response and isolation of decision makers: information not communicated efficiently and is mainly held by too few workers.

Chapter 11 is of course the logical move for Delta Airlines. But not for the market, government or taxpayers. I believe large companies should either never be allowed to return to business after bankruptcy, or only get one shot at it. I don't think painting nearly a thousand planes will make much difference. Delta ought to sell off all/portions of its' fleet to other airlines (dissolve or get diminish). Or it could also increase stock options to all employees to create incentives for profitability. Information may not be efficiently communicated in their previous manner, allow for some spontaneity. As for the unions and high pensions, who the hell knows.

Constitution not respected

Is it right for the current president to not respect the Constitution? It is not right for the president to make a firing of eight attorneys because they were not in cahoots with Bush. In a recent speech done by former presidential candidate Barack Obama he states the Bush does not respect the Constitution. This is absolutely absurd to have our current president not even respecting the document that hold this country together. The constitution are rules that have been established along with principles that govern an organization or political entity. The constitution guarantees right s to people, and for the president to not respect that is ridiculous. The president uses his coercive power to get rid of eight attorneys which can backfire and make this country worse off. The reasoning behind the firing of these attorneys was mainly do to the fact that they were not on Bush's side. This is unconstitutional to do by the president which is also the reason why it is said that he doesn't respect our constitution. Obama has made efforts to rally up people to get the truth out there. If our own president can not respect the constitution then why should we respect him.

Zoning regulations - Government Rent Control?

The recent discussions on land zoning regulations led me to think of the current development and growth in my hometown of Colorado Springs. I have lived in this region for thirteen years of massive growth. Areas of town that were not inhabited such as Stetson Hills, Falcon and Fountain have experienced dramatic housing and commercial growth. I'm a firm believer in "responsible growth", yet it seems that zoning changes from previously agriculture zoned land to residential is merely a phone call and a back room discussion away from approval. It is true that these changes in zoning to residential applications increases employment, tax base and promote economic growth, however is this growth smart?

The east side of Colorado Springs is a ill-conceived sprawl of suburbia. This has led to increases in schools with no funding to provide new schools (i.e. Falcon School District. In the mix on the development is the question of water availability. Furthermore, as the population of Colorado Springs heads east, no insight has been given to improving our east-west travel. I do realize that growth has periods of changes and adjustments yet, our city council and county commissioners have given little consideration to responsible growth, rather a green light to developers to keep building.

It is interesting that this land can be so easily rezoned without thinking of the ramifications of the development. A moritorium on building is not a viable answer. The plans of developers should be closer scrutinzed to examine their appeal, need and sustainability. It appears to me that our local government is thinking in a short term mentality of stimulating our economy, when a long run plan is in the other back room waiting to rear its ugly head.

No freedom of speech for students?

In Indiana a teacher was the advisor for the school paper. One of the students wrote an article on tolerance of gays. The teacher allowed the article to be published in the school paper. The teacher has been reprimanded and forced to resign. The settlement has included her placement in a new district where she will not be allowed to have any involvement with the school paper. the principle has justified her reprimand on the grounds that she was required to discuss any articles of a controversial nature with him prior to them being published.

So, I can understand that in schools the board and the administration is subject tot he desires of the parents. There may have been some people who were offended by the article. There were probably people that were not offended. Certainly on the grounds of liberty this is a ridiculous situation. The teacher is being punished because she let a student express her views. the teacher did not even write the content in question. Certainly the teacher was preserving the students rights. Certainly no harm was inflicted on other people due to the article. If people found it offensive they could certainly opt not to read it. I might suggest that it is the parents responsibility to direct the students in what is acceptable. Generally, if the parents are doing their job and they feel that something is unacceptable the children will know that and also feel that way and avoid content that offends them. The school and the disapproving parents have overstepped their boundaries. Maybe people don't like it, but everyone has a right to express their opinion.

Social Security or Liberty Liability

Social security has been a dark cloud hovering over the US for numerous years. The many problems with social security have left American wondering if they are ever going to see their money that was invested. Reform has been attempted, but the myriad of problems has been a tomato seed under the fingers key politicians. No publicly appealing short term solutions have been seriously considered. One of the largest and most difficult problems to address comes from our age structure. In the early 50s the worker-to-beneficiary ratio around 16.5 to 1, this allowed for minimal contribution by the workers. Because our reproductive cycle has slowed to 3.3 to 1 it takes more contribution per worker to give the same benefits, within 40 years the ratio is expected to drop to 2 to 1. The second major problem is the investment vehicle the government chosen. They have invested in themselves almost exclusively in US government securities! The only way for the government to pay off the debt they have issued is to issue more, cut spending or tax our shirts off. Some government assistance is necessary, but when citizens become dependent on transfer payments their personal retirement planning is effected.

How can the government get out of this major problem they have created? The obvious solution is to increase public savings and slowly reduce the benefits of social security until it no longer exists. Unfortunately, a politician running on that campaign could not get elected for dog catcher in Grand Junction.

The idea that we are paying for something we may never see is a very serious infringement on our liberty, and by many, could be construed as stealing. Why do we allow them to forcefully steal our money with almost no hope of repayment? Because their coercive force is greater than the individual, we do not have a choice. Only in large aggregates can change be made. It will just take time for Americans to realize the shear size of the problem, and create political demand for a solution.

It turns out that FEMA is inefficient

A new report set to be released by the Department of Homeland Security found that FEMA poorly awarded contracts for the Hurricane Katrina disaster. Most the contract bids were either exceptionally low or high. One goal of FEMA was to hire local companies to spur the devastated economy. Several companies were found to be exceptionally large and non- local, and had ties to the Republican party. Flour Corp. and its subsidiary PRI-DJI received large no- bid contracts and have happened to have donated more than $930,000 to primarily GOP candidates. FEMA officials claimed that expensive contracts would be offset later down the road by lower payments. Some of the examples of erratic bids were; a range of $74 to $4,720 to refurbish trailers, when cost should have been $295 according to Homeland Security audits, and bids accepted from companies with negative net worths (all information from attached associated press article link).

It is of course not surprising that a government entity is inefficient. A company was contracted recently by the Department of Defense to make tourniquets for Iraq, which cost about $40.00 apiece and consisted of a piece of webbing and a couple d- rings (a glorified scout belt). The story of hammers that cost $70.00, etc, etc. And especially FEMA, after all the previous mismanagement and misspending estimated to have cost 1 billion dollars. This sort of mismanagement of a national disaster really makes for a sound argument for privatization of certain government sectors. Real fodder for Rothbard's argument. Even when government contracts private firms it cannot do so in a way which is allocatively efficient. A small group profits while the majority suffers, in this case taxpayers. According to Rothbard: The essence and the glory of the free market is that the individual firms and businesses, competing on the market, provide an ever-changing orchestration of efficient and progressive goods and services: continually improving products and markets, advancing technology, cutting costs, and meeting changing consumer demands as swiftly and as efficiently as possible (For a New Liberty, 195). When government is left to do the allocation, it becomes inefficient.

Appeal to force

Is it justified that an Army Ranger take an order form an officer to with hold information about a specific incident that occurred. The case dealing with the friendly fire case of a former solider had a situation that dealt with the appeal to force. The soldier was threatened that if he did not give false information then he would get in trouble. This is an example of an appeal to force brought upon by some person of higher rank. When the information was revealed to President Bush he made no reference to the idea that it may have been friendly fire even though it was suggested to him. The government violated its most basic responsibility in that in order to make a better story parts of the incident were left out. The government used its coercion to neglect the fact that the truth was being avoided in order to protect people. The least the government could do is inform the family what had really happened. The military instead of telling the truth about what had actually happened was to make up a story that was unreasonable to give the death a sense of heroic efforts, rather than a friendly fire death. The appeal to force or the use of governments coercion is unjust in the sense that when used to make a story be portrayed as a lie is wrong and there should be legal action taken by the government.

One and Only One Lesson in Economics

Opportunity cost, or said, all costs of an action, immediately visible or otherwise hidden by the 'what may be' and 'what could have been'; is the single most important lesson one can learn in economics. However, the true significance of the lesson lay outside the realm of economists. What makes the lesson of opportunity costs so important is the impact on the overwhelming majority non-economists. Certainly, esoteric lessons in Methodenstreit are important and impact non-economists but if the world could be educated in one idea I would not have a second thought that the idea would be opportunity costs.

Opportunity cost is the foundation for much of economics, it also has deeper applications. Accounting for opportunity costs is the first step in building an abstract or higher model for an individual's thinking and the supreme aegis against the demagoguery of destruction.

The ability for one to explain, “the only cost incurred in selling these tickets is five dollar price tag the tickets carry” is about as common as a glutton for embarrassment at an American Idol audition. In this thought process the individual only sees the immediate cost, the price of the tickets and ignores all the costs, where as the individual keeping opportunity costs in heart would see all the costs like, what the money used to buy the tickets could otherwise be used for and the time it takes to actually sell the tickets. An understanding of opportunity costs will impart everyone from the stay-at-home mom to the prospective businessman with an invaluable tool in accounting for the mundane and monumental.

After 9/11 and Katrina it was common to hear arguments along the lines of, “well at least the rebuilding process will stimulate the economy and add jobs.” What is even more unfortunate about such statements is that sometimes they were coming from economists themselves. The slightest understanding of opportunity costs would prevent the proliferation of such pro-destruction rhetoric. The offending party correctly thinks that some parties will benefit, such as Home Depot, what they fial to understand however is that this benefit comes at an overall detraction to society. Home Depot benefits from the home owners now buying a large amount of their goods whereas previously they would have not. Home Depot then buys more goods from its suppliers, hires more workers and invests more, the workers buy more goods like Ipods and milk, Apple invests more, hires more works etc; and I cant object, this is all true. However, what the destruction dunce fails to account for is the hidden costs. In my example this is the homeowners who had to purchase drywall and beds instead of computers and shoes. So where society had previously had a house and a computer we now have a house and we are all that much worse off because of it. Or maybe we should just run around and firebomb entire cities to stimulate the economy.

Cartoons

I started to reread the road to serfdom and found this cartoon.

This is probably the best music track ive ever heard too.

http://www.megaupload.com/?d=YE3083GD

Assassination, Government Officials and Liberty.

Recently, in conversation it dawned on me, Nancy Pelosi would take the presidential throne should the president and vice president be killed. My synapses were flooded with horrific images and not just the ones that are normally conjured when one looks upon the ruined skeletal visage hidden behind a wall of makeup three pounds thick. No, my mind recoiled at the thought of someone that is so openly anti-liberal laying a foundation for further affronts on liberty in much the same way Lincoln; whom, contrary to my build up of Mrs. Skelator, is the focus of my writing today.

Lincoln comes to my immediate attention for two reasons. Not only was Lincoln assassinated but he is considered by many to be a great American hero because of his manner of death. Furthermore, Lincoln is responsible for the most salient and enduring anti-liberal action undertaken by a president, the American civil war. When I was just a stripling in middle school I can recall doing a presentation on American presidents. Each student was assigned one president, as you can guess, I had Lincoln. I also remember concluding my presentation on, “the greatest American president” with the end of his life and something along the lines of, “those last four days were the happiest days of his life.” Lincoln, of course, was actually Americas greatest tyrant and is responsible for the death of over 600,000 men and the American liberal spirit.

The question then becomes, if Lincoln was in fact responsible for the death of all these men and and innumerable violations of property how should he be held responsible? I would advocate a market solution, the violated parties seek restitution or injunction. If a thief is to break into my home would I not take action to prevent and recover my losses? This motivation to protect ones property is actually a result of market forces. The butcher, next to the baker sees that his neighbor has been robbed because he left his back door unlocked every night. The butcher not wishing to be victim to a similar fate locks his door. In this way, the bank has the safe, the home owner the shotgun.

Government officials, being constituted of humans like you and I are no exception. For example I pay my neighbor to murder my wife I'm no less responsible for the murder of my wife than my neighbor. Yet, the above is exactly what government officials around the world do. When an official in the production of say, votes, encroaches on another's property, in say eminent domain, and does not have to account for the costs of his action these actions will tend to be oversupplied. In the case of Lincoln and his Proclamation of Blockade Against Southern Ports the injured parties should, in a market driven society, seek injunction and restitution to make further officials aware of all costs associated with their actions. We can even apply the principle to a smaller scale, such as police officers.

Finally, we come to my title, Assassination, Government Officials and Liberty. Assassination is warranted on a far larger scale than it is currently practiced. There is a reason why leaders around the world have come to a consensus on the matter, why all government officials from the lowly street thug with a badge to the president and chancellor with a pen are hailed as unconditional heros upon their slaying, why assassination is considered one of the most barbaric things one can do in a modern society. The only thing barbaric is a cowardly official hiding behind a title or an army to impose his will on the unwilling.

Worker rights in trade agreements

A recent article in the New York Times discussed negotiations between Congress and the President on several pending trade acts. The Democrats of course are pushing for more protection of labor rights. The labor rights that are expressed in the bill are a ban on child and slave labor and the right to organize. The Democrats also want to include the International Labor Organization accords.
This whole debate does not make much sense to me. How is the U.S. going to make sure that these laws are enforced? Enforcing these kinds of laws would be a waste of our time needless to say inefficient. The whole point of trading with these countries is for their cheep labor which in turn makes their goods cheep. By enforcing these laws we are increasing the cost of labor. The Democrats are in a way pushing for unions. Of course the labor unions in the U.S. are supporting the Democrats in this legislation. To me it sounds a little bit like rent seeking behavior. If international labor laws are enforced then labor around the world becomes more expensive; therefore, raising the price of goods and possibly allowing unions in the U.S. to compete.

Darn those American polluters!

Cars are an American pastime. Since Henry Ford’s Model T, Americans have loved their cars. But with the recent concerns over global warming and emissions, the US has been taking a lot of flak over the amount of gas guzzling cars that we own and their effect on the environment. Are there solutions to this problem? Of course. Any that Americans would take to? Probably not.

Aside from certain states attempting to pass laws that would lower overall car emissions, little has been done to decrease the impact that American drivers have on the environment. Of course there are other ways of lowering the pollution that American vehicles produce, but they’re not very likely. Some would suggest that we take advantage of public transportation or walk to our destinations. Doing either of these would significantly lower our impact on the environment. However, unlike many European and Hispanic countries, the Landscape of most of American states is not built for this. Colorado Springs is a prime example. Most people are living in one area and working in another. With the open landscape that we have, walking anywhere is simply out of the question. Public transportation wouldn’t be much better. With the variety of destinations that residents travel to every day, an hour of errands would turn into an entire day of traveling. Not to mention that a prevalent trait among U.S. citizens is their love of the open road and its symbolism of freedom. So, people can gripe all they want about our car pollution, but until pollution-free fuel is created, Americans will continue to drive their gas guzzlers and love doing it while the rest of the world blames us for global warming.

Democracy or Liberty

In the article On Democracy on the website Free Market News Network Corp. author Steve H. Hanke writes about democracy and U.S. documents. He explains that the intention of the Framers of the Constitution was never democracy as many people in the public think. Hanke states that “the Constitution was designed to further the cause of liberty, not democracy”. Within the Constitution are set limits(rules) for each branch of the United States Government: legislative, judicial, and executive. These limits give the branches certain powers to exercise and to check the other branches of government while ultimately protecting people from abuse of government powers. Democracy isn’t even mentioned in the Constitution, Bill of Rights, or the Declaration of Independence. I think it is interesting to look at the principles of which our Constitution and other documents were founded on and the direction our government is taking today with domestic and foreign policy. Our government seems to be forcing democracy, not liberty, on other nations as well as our own. It would seem more rational to me to take the route of the Framers of the Constitution and push for liberty. I am not saying that democracy is evil or bad, but I am saying that I could see where democracy could move our country towards more government intervention and control that would result in less freedom for the people. I think the Framers of the Constitution realized this as well and that is why they wrote the Constitution and other documents the way that they did.

Global Climate change is raising the price of dinner

Due to the current hot topic of global climate, the world is in a scramble to find an alternative to oil and coal. Recent attention has been focused on corn based ethanol as a alternative. The surge in use of corn as a fuel is having a huge impact on the US agricultural market. Not only are farmers growing more corn but they are selling it at a much higher price. Corn is the primary ingredient of cattle feed in the US, and the inflated prices are making it harder for cattle ranchers to properly feed their animals. It is reported that livestock are weighing in 10-20 pounds lower than usual. Lower weights mean a lower supply of beef and higher prices to the consumer.

As of now there has not been any notable rise in prices for beef but if demand continues to increase for corn and the price continues to rise, this will undoubtedly rise beef prices in the near future. So not only does the government subsidizing of ethanol encourage a switch to a less efficient, less cost effective fuel, it is also increasing the prices on our dinner menu.

Economic Freedom

This link is to Michael J. Totten's diary as he is in Iraq (thank you to Dr. Eubanks for making aware this site in his blog Economics & Liberty"). In this particular entry, Totten talks about how Kurdistan is booming in a country with sectarian violence and strife. Yet here is a part of that country which is booming. In fact, land is being scooped up by investors (more than likely foreign investors).

As the theme for our class has been on economic freedom, I can't think of a better example of how this type of freedom works. I have been reading a biography on F. A. Hayek and one of the things mentioned is that socialism does not work and that our century will be remembered by the battle between socialism and capitalism/economic freedom. I can't help but think that we are living in a time where we will see the end to socialism and the re-birth of the economic freedoms our founders so desperately wanted to impose on future generations.

Within so many news articles today (many you have to look for) describing the benefits of property rights and economic freedoms, I think our primary role as economists should be coming up with solutions to help those in countries that do not yet have the economic freedoms we have. How can we help Mexicans want to stay in their own country. Do micro loans really help those in developing countries.

Before I started this class, liberalism was a dirty word to me- I did not understand it's first, or true, meaning. Now, I can not think of other solutions to the problems we, as Americans, and those needing freedoms, other than property rights and free markets without government interference. The roots of all of the solutions I can come up with begin with these simple, yet
necessary rights.


I find it so discouraging that the main stream press does not report on such progress like that seen in Kurdistan. This lack of reporting also shows to those in oppressing regimes (such as Venezuela) that economic freedom is not important to us. I wonder if more Americans knew about the success in Kurdistan and, say Lebanon or Lybia, if the support for our troops would increase. We see how bad it is, we don't see any success. I think countries like Iran like that- how unfortunate.

Ethanol Efficency

In the ways in which we make the production from corn to ethanol we are using production methods that use fossil energy. The idea that it takes the a lot of pollution to make the process of the corn to ethanol so that it may be used as fuel. This is supposed to make our environment a safer and less polluted place. On the grounds of liberty the production of the corn to ethanol is that the production does harm people. The cost and benefit of what is produced compared to how much harm is actually emitted by the production. The recent pushes for the production of ethanol make it so that people may be mis-informed on how good the corn to ethanol transition really is. The efficiency of producing ethanol doesn't completely go along with the idea of liberty.

Gas Prices Rising Once Again

As I was driving home yesterday I drove by three gas stations and noticed that gas prices are continuing to rise. When I get gas a have to put premium in my gas tank and as of today that costs me $2.85 a gallon, which is ridiculous. When I got to my destination I asked some of my friends if anyone knew why gas prices were rising but no one could come up with an explanation. This is a very frustrating topic to me because as of right now I can not come up with a good reason why prices are always getting higher.
In 2003, we went to war and gasoline prices rose, but this was really not a surprise to anyone. However, when I look back it still does not make complete sense. People were always saying that the reason prices were going up was because we went to war with Iraq and we got oil from them. We do get oil from Iraq however; we only receive 5% of our oil from them. The country that we receive the most of our oil from is Alaska and we did not have problems with them at this time. Why then did oil prices rise? Gas prices have been pretty much stable since late 2004 and now all of a sudden gas is becoming way too expensive once again.
Another explanation I always hear from people is that we are running low on oil. I do not believe this because of two reasons. First of all, we have millions of barrels of oil in reserves and who honestly knows how long these reserves would last us. I have heard so many different numbers of years from many different people. Scientists make predictions about how long these reserves would last but there are so many different predictions that I really don’t listen, because no one really knows. The second problem I have is when people try to tell me that we have X number of years of oil left. Who really knows how much oil is left on our planet? Companies find new locations of oil all the time so I honestly couldn’t care less about these scientists’ guesses. People are always making predictions, but to me all they are doing is making an educated “guess.” A prediction is nothing but a guess because a prediction has to due with the future and no one knows what other variables could come into affect.
If I had to answer the question, “why are gas prices rising?” my answer would be, “I believe that our government needs more money to fund the war and the easiest way to do this is by raising the price of something that is a necessity to everyone in our country. No matter how high prices go people have to be able to get to work and school, so they will have no choice but to continue to pay whatever they have to in order to get gas.

Crichton On Liberty

You might be interested in this post at Economics & Liberty.

Traffic laws

Today in New Delhi a series of new traffic laws were passed. The laws included normal things like running red lights etc. There is also a provision to prevent cell phone usage while driving which is a law that seems to be getting more and more attention and acceptance. Currently in the state of Colorado if you get in an accident one of the questions that you can expect to be asked is if you were on your cell phone. The new law that is getting particular attention is that people are not allowed to smoke while driving their cars. Justification for the law was given by new Delhi's traffic commissioner, he stated, 'Anything that distracts the attention of driver is dangerous. The human mind cannot do two things simultaneously'. the purpose of the laws is to make New Delhi's roads safer. Apparently all the people driving on the roads have little or no regard for the traffic laws. Larger fines are also being set.

Those caught smoking behind the wheel would pay $32, a heavy fine by local standards. Offenders caught more than five times would have their license revoked, the court said. The same fines apply to using a cell phone and the less well-defined offense of "dangerous driving." by comparison the fine for running a red light is $13. Maybe it's just me but it seems that running a red light is far more dangerous than smoking while driving. The government of New Delhi is claiming to have passed these laws to protect its citizens, but it would seem that it is more of a control issue. It would seem to me that danger is more prevalent when a vehicle is where it shouldn't be rather than if you choose to smoke while you drive or not. it would seem to me that in the interest of liberty action should not be taken on cell phone users or smokers unless it could be proven that they were in the middle of those activities when they got in the accident. I would also think that the governing bodies would have to be able to prove that the usage was the exact cause of the accident. If a person were to get rear ended while using their phone or smoking the punishment would be equal to that of the person that hit them. Smoking and talking on your cell phone cause no harm to others so in the interest of liberty the government should avoid regulating these practices.

China's poperty laws

Last Friday I read an article in the New York Times that talked about China enacting its first law to protect private property explicitly. This law gives individuals the same legal protection of their property as the state. This law may sound good but it does not give everyone the protection they need. It does aim to better protect farmers in the countryside from seizures, but it does not privatize the land they farm. This law mainly helps the middle class in the cities.

The protection of private property is one of Mancur Olson's conditions for prosperity. If China would protect the property rights of the farmers they might see unprecedented growth and would definitely have lower unemployment in the rural areas. The inequality of income between the cities and the country would begin to lessen. This inequality poses a threat to the country's stability. Giving the poor farmers property rights would help stabilize the country. The farmers would be able to use their land as a security and borrow and invest off of it making it more productive not to mention more efficient. It would be in every one's best interest (except for the communists) to move toward more privatization and protection of property rights. I think that China will see the benefits from this law rather quickly because they will see more private investment in the economy. China is taking steps towards capitalism though they might be baby steps they are still in the right direction.

The real reason you're broke

I saw this article today and I just thought this might get you thinking about the share a car idea I mentioned today. While sharing a car seems very economical. I can tell you with certainty that I am definitely not ready to give up my big, gas guzzling, V8, Suburban just yet. I also know that there are a lot of entities (Chevy, Exxon, Goodyear, etc.) that are not ready for me to give it up either. :)

World Poverty

Walter E Williams is saying, actually shouting, what everyone in this country, especially our government leaders, needs to hear, and most importantly, understand: economic prosperity begins with economic freedom. I am not sure how much more proof is needed for our leaders to understand that the more economic freedom we have the more prosperous we will become. I think this is the answer to the question; if we are losing our economic freedoms, then how can we, as a nation, be so economically prosperous? Yes we are prosperous, but we could be even better. By achieving more, then we can help more people.

To me, the most important part of this commentary is the ranking that we (the U.S.) are in- 4th behind Hong Kong (China) and Singapore. It strikes me as amazing that we were founded on economic freedoms and we do not have a score of at least in the 90's. This tells me that we should be shouting from the rooftops every day that our economic freedoms can NOT be allowed to disappear anymore. I feel it so important that I will make the commitment to e-mail news organizations on a weekly basis asking them to make this a headline issue every day. Do we really care if Brittney Spears shaved her head?

Our economic freedoms are, I believe, the single most important ideals we have as Americans. We must do whatever it takes to hold on to them.

Should Liberty get a Spanking

In a recent article ‘Discipline Debate: Spanking gets a timeout,’ they discuss if spanking is a good or bad practice. Either good or bad, does making spanking illegal fall under the constructs of liberty? Do you think the new spanking law will motivate a change for the better, are we incapable of making changes for the better? Is it right to infringe on someone’s parenting techniques? All this and more in “Should Liberty get a Spanking?”

It is quite apparent what many libertarians would say about this new bill. They would feel that it infringes on their liberty as parents, while other libertarians might say, “hitting another human being is against what liberty stands for, and at that moment the child would have the right to defend themselves.” What if the child is too young and incapable to defend themselves, do they have the right to be defended by the government? After reading the presuppositions of the classical liberal as defined by Barnett he revolves them all around the pursuit of happiness. I feel it is the child’s right to grow up in a family that will encourage the pursuit of happiness, and that is best done without physical abuse. In this case I think Barnett might side with making spanking illegal.

If this truly is a “better” method of parenting wouldn’t the general public be inclined to ‘spare the rod and spoil the child.’ Why would the government need to interact? Apparently, the incentives have not been strong enough for parents to shift their rearing techniques. Even though many benefits of non-physical reprimanding exist, “they found that spanking seemed to be associated with more aggressive behavior and increased anxiety.” (Slade 1) Also, Researcher Paul Frick of the University of New Orleans in Louisiana warns, “Even children who are only smacked occasionally are more likely to show signs of depression or lower self-esteem” Frick and his team, who studied the impact of corporal punishment on 98 children and published their results in the Journal of Applied Developmental Psychology said “they couldn't find any positive effects for spanking. Children on the receiving end of a slap can learn that when they are upset and angry they hit, he says, rather than understanding their behavior was wrong and that they need to do better.” (Clayton) Saying it is the right for a parent to hit their children is implying that they own their children, that they are the property of the owner. I do not think this is right. Libertarians speak of unalienable rights, to me this means no matter what age, race or gender, you have the right to the pursuit of happiness as long as you are not effecting another’s pursuit.

On the other side of the argument “The association (between hitting children and aggression) was weakest in Kenya, where physical punishment is culturally accepted and common. It was strongest in Thailand, where the culture generally discourages spanking.” (Slade 1) This makes me think that if we discourage spanking then it will become more taboo and children will feel more victimized when hit. Theoretically, this law could exacerbate the current societal effects of spanking.

All in all, I feel spanking and liberty can live under the same roof.

http://www.cbsnews.com/stories/2005/11/14/health/webmd/main1042550.shtml
Eric Slade, PhD
Can Spanking Cause Aggression?

http://www.msnbc.msn.com/id/16929303/page/2/
Victoria Clayton
Discipline Debate: Spanking gets a timeout

An Economist Tackles Autism

I read an article in the February 27th issue of the Wall Street Journal that I thought was pretty interesting. An economist from Cornell University, named Michael Waldmen, made waves when he published a paper that tried to show a link between autism and Television watching. The paper has incited the wrath of families and other experts, who believe evidence shows that genetics play the biggest role in determining whether a child develops autistic disorders, and have led people to question whether economists like Waldmen are "stepping over the line" and getting involved with issues that they shouldn't. Part of the discussion centeres around the method Waldmen used to come to his conclusions, the statstical teqnique of the Instrumental Variable, when a random or natural variable is introduced to help researchers sort out caue and effect. Often it is difficult to determin in research whether A causes B or B causes A. For example, if it was shown that autistic children watch a lot of TV, it could be that the TV causes them to be autistic, or that something about being Autistic makes them more interested in TV. The ideal instrumental variable is one that is shown to be correlated with A but has no direct effect of it;s own on B. If the data in the study shows that the instrumental variable is linked to B, then it suggests that A must be contriuting to B. The somewhat strange instrumental variable that Waldmen chose for his study was weather; because weather data and goverment time-use studies showed that kids were likely to watch more TV on days when they were forced to stay home due to weather, Waldmen used weather as the variable to help him determin if Autism was linked to TV viewing. The researchers took precipitation and autism data from Washington, California, and Oregon. The results seemed to show that children who grew up in years of unusually high precipiation were more likely to be diagnosed with Autism. A second study using the percentage of houselholds that prescribed to able as the instrument turned out similar results. Walden himself, however, is willing to admit that his hypothesis is not all inclusive, and that there are likely other triggers besides just TV watching that might cause the disorder. His interest in the subject began when he son was diagnosed at risk to evlop autistic behavior and Walden subsequently cut down on his child's TV watching and saw an obvious improvement in his behavior.

Anyway, I found the article pretty interesting because I have Asperger's Syndrome, a form of austism, and I'm always interested in reading stuff like this about the causes of the disorder. Personally I think that if TV is a factor in causing these disorders, that it's a smaller factor than genetics. But I thought the statistical method that the professor used for his research was interesting, I'd never heard of "instrumental variables" before.

Guest Workers

A recent article in the New York Times talked about the influx of guest workers and how they are being mistreated. Recruitment agencies in countries like Thailand bring workers over by promising that they will make about $16,000 a year to work in farms all over the country. To many Americans this is not enough money for the type of work they would have to do, but to a Thai farmer who is making about $500 a year in Thailand, coming to America to work seems like a great opportunity. The fact of the matter is that when they come over here there is only about two months work for them, and they do not end up getting paid as much as they were promised. They end up making about $1,400 to $2,400 a year; however, this is still more than they would be making in Thailand.
Many people in Washington are talking about how to stop the mistreatment and abuse of guest workers. There is not a simple answer to this problem. The industry is so large that there would not be enough people to do all the inspections( if that was the answer). In the process of hiring people to do these inspections we are creating inefficiency. This abuse is not a market failure that the state needs to correct. Inspecting would be a waist of money because you would have to pay government salaries for the inspectors. Is it unfair that they are being mistreated? Without a doubt. If efficiency is our goal then we don't care about fairness.
Another problem is with the recruitment agencies. They are not in the U.S., so they are not subject to U.S. laws. Many of the companies that higher guest workers pay the recruitment agencies or contractors the wages and they in turn pay the workers.
Should we stop guest workers from coming over and working in the farms? No. Many Americans would not like to admit that they like the benefit they receive from cheep labor. It is something that we would not realize how much we benefited from it until after it was gone.

Health Care, Interventionism, and Federal Government

President Bush's new budget for a health care program to insure millions of uninsured children has already failed to gain support. The program aims to insure people, primarily children, who do not qualify to use Medicaid. But, like according to Rothbard in For a New Liberty; Inherent in all government operation is a grave and fatal split between service and payment (196). The program depends on states who run budget surpluses to keep the other states afloat. There is enough money among states to cover short-term shortfalls, if states with surpluses would share with those with deficits, an idea that has little support among governors (Associated Press). Governors from both parties oppose this budget. The federal government is incapable of internalizing the costs of this program, so it wants the states to finish paying for it. Analysts say his [Bush's] spending plan would shortchange the health program even if the number of people served did not grow... The longterm shortfall is put at $10 billion to $15 billion over the next five years (Associated Press). As consumers demand more, the government must either produce more at higher costs, or allow shortages.

The Federal Government is incapable of producing public goods at an efficient price and quantity. According to Rothbard in For A New Liberty; there is no profit and loss mechanism in government to induce investment in efficient operations and to penalize and drive the inefficient or obsolete ones out of business (198). Government monopoly of public goods allows programs to be coercively forced on citizens. Free markets are much more cost effective and productive; they have the ability to cut costs and meet consumer demand. Should the federal government try and increase its already inefficient medical programs? No. The government relies on taxes, through coercion and sanction, as its capital. In this case, it relies on direct intervention from the states. That is not to say there is no coercion; the federal government may withhold federal funds from states who do not comply.

Liberty

Liberty is generally considered a concept of political philosophy and identifies the condition in which an individual has the ability to act according to his or her own will as long as they dont harm another person. Can liberty be broken up into two different catagories positive and negative? A negative liberty is stated to be a liberty that gives us the ability to make our own choices. A positive liberty refers to the states active aid in our endeavors. The most common use of liberty is the use negative liberty and we see this in the first amendment. According to libitarians the most important liberty is the view of a negative liberty and that it is the most important of all values. The main focus of the negative liberty is to achieve our goals and without the goals this view would be empty. The government provides the positive liberties in that they provide student loans and grants along with libraries, public transportation, roads, parks, and other positive liberties. To understand the argument for governments positive liberties can be privitized there must be a complete understanding of the two liberties. If we were to privatize the roads of even schools this will make for those not able to pay not able to get an education. This will only make for more illiteracy in our country and with educated people they would rely on crimes to get there source of income. I dont agree with the idea of positive liberty trying to privitze things that shouldnt be privitized because the marginal cost will be greater than the marginal benefit which wouldnt be rational.

Government and Business

Growing up in the United States has both its highs and its lows. I love the freedom that we have and the many different ways we can use it. We still in some ways are the country where someone can go from “rags to riches,” however it does not happen as frequently as it used to. At the same time, we have a government that is now all powerful and can do whatever it wants because there is no power greater than it. When reading Murray Rothbard’s, “For a New Liberty,” he says so many things about our government that is totally correct. In chapter 10, he talks about “Government and Business,” and the things he says scares me, because he is so right.
I know that the businesses in our society that create the most income are those ran by the government. Things such as firefighters, police, electricity, water, and sewage for example are necessities in our society. It seems to me that a lot of our necessities are controlled by the government. If someone wanted to start their own business having to deal with supplying electricity for citizens there is no way he/she could do it. First of all the government would not allow it, however, if we look past that point, the cost of starting something like this is to high for over 99% of our population. And even if someone had enough money, the government would have the ability to reduce their prices so low that the person would have no choice but to go bankrupt. If anyone was to go up against the government, the winner would always be the same.
Something I learned while reading Rothbard is that the government does not need to worry about financial loss or going bankrupt because it will always have the ability to make up for financial loss thanks to the citizens of the United States of America.
“The government bureau does not get its income as does the private firm, from serving the consumer well or from consumer purchases of its products exceeding its costs of operation. No, the government bureau acquires its income from mulcting the long-suffering taxpayer. Its operations therefore become inefficient, and costs zoom, since government bureaus need not worry about losses or bankruptcy; they can make up their losses by additional extractions from the public till” (Liberty 200).
This is something that pisses me off about our country. When the government needs money for a new plant, all they do is take it away from its citizens. I work hard and it frustrates me when I have to pay so much money in taxes so that the government has funding for its projects which will create some product that I will later on have to pay for. The way the government runs is just not fair, and I understand that life is not fair, but if I want to open my own business I first have to find a way in order to pay for everything that I have to have in order to run my business. I’ll tell you what, it would be so easy, oh so easy, if all I had to do in order to start my business was burrow money from others and never have to pay them back. This essentially is what the government does.
Another topic that Rothbard talked about that I found interesting was about the government and “shortages.” He talks about how regular business works compared to how the government does business. “If consumer demand should increase for the goods or services of any private business, the private firm is delighted; it woos and welcomes the new business and expands its operations eagerly to fill the new orders. Government, in contrast, generally meets this situation by sourly urging or even ordering consumers to “buy” less, and allows shortages to develop” (Liberty 201). This is something that I have had to deal with personally. A couple of summers ago Colorado Springs was going through a drought and the city made restrictions so that households could only use a certain amount of water. I remember we were only allowed to water our lawns in the early morning or after sunset. The way they enforced this is by having police periodically driving through the neighborhoods and giving fines to those who were not cooperating with the law. It is just funny to me how a lot of the businesses owned by the government are always restricting us while private businesses are always encouraging us to buy more.
Another thing I hate about the government is that they are never wrong, and it is always us who are wrong. Rothbard gives a great example of this; “Failing to supply enough water, and failing to price that water in such a way as to clear the market, to equate supply and demand (which private enterprise does automatically), New York’s response to water shortages has always been to blame not itself, but the consumer, whose sin has been to use “too much” water” (Liberty 201). I believe that if all of sudden there is a shortage then it is the governments fault for not foreseeing something like this and making changes in its operation in order to avoid it. You would think with all of its resources the government could do something like this but I guess it must be harder than it seems.
I really enjoyed the reading by Rothbard and this honestly is the first reading that I have enjoyed for the class thus far. It probably has to do with the fact that I for the most part agree with his views on our government and the way it does business. I wish I could for one day be one of the people who “are” the government to see what their life is like and see how the government actually works.

Immigration and Minimum Wage Issues

In a memo I came across on the interent, Alan Krueger, the Bendheim Professor of Economics and Public Policy at Princeton argued that increased immigration has little impact on wages for low income domestic workers. He goes on further to argue for raising the minimum wage, if we want to be serious about helping low income workers. It is strange to hear an economist that is arguing pro minimum wage laws, but that is exactly what he does. Im sure he is aware that minimum wage laws and increases often cause an increase in structural unemployment. The equilibrium wage is lower than the policy set market wage, and will result in less positions of employment demanded. So in the end, instead of helping a portion of low income workers by raising their wage, they are confronted with unemployment. Raising minimum wages will only take away more jobs from domestic workers, since they are the ones which the new laws will affect. Illegal immigrants are often paid under the table, and immigrant work is more like a black market for labor. The black market price for immigrant workers will not rise like that of the legal domestic worker who would be entitled to a higher wage under the new law. This will in turn put more strain on domestic workers looking for employment in low-skill industires. Krueger goes on to say how we must protect the rights of illegal immigrants and should prevent the exploitation of immigrant and domsetic workers. I believe we should protect peoples rights, but saying that we are going to prevent exploitation is just silly. Exploitation is one of the keys of capitalism, without exploitation there would be no profit. In actuality every worker regardless of wage is exploited in a capitalist economy.