Thursday, July 19, 2018

Poverty Measures

Well, they passed a law in '64
To give to those who ain't got, a little more
--Bruce Hornsby & The Range

Dan Mitchell's analysis reinforces a lesson that I learned some time ago. Measures of 'poverty' are often not what you think. Rather than reflecting the level of resources available to a person to sustain a barely functional life, modern poverty measures tend to reflect income or wealth disparty--the difference between, say, the bottom 20% and the top 20% w.r.t. annual income.

Such differences do not measure poverty. They merely provide a basis for some to argue that resources need to be taken from some and given to others in the name of 'fairness.'

They measure the potential for wealth redistribution.

Wednesday, July 18, 2018

Perpetual TDR

 "It does seem morbid doesn't it. I can't help it, though. Somebody ought to put me away."
--Louden Swain (Vision Quest)

New rounds of Trump Derangement Syndrome keep on coming from the left, neocons, and their media lackeys. The president's summit with Russian head Vladimir Putin has spawned but the latest version.

I used to wonder when TDR would wear itself out. Now I wonder if it will end.

This psychosis may be perpetual.

Tuesday, July 17, 2018

Combating Discrimination Peacefully

 There seemed no way to make up
'Cause it seemed your mind was set
--Phil Collins

God has blessed us with a tool to combat unjust discrimination in a peaceful manner: the market. If someone discriminates against another, the discriminator loses resources (material and/or psychic) as the target of discrimination takes his/her business elsewhere and trades with someone else.

If needs of the target are not served well, then entrepreneurs take advantage of the opportunity by adding capacity to better serve the target. If the labor of the target has been erroneously shunned by the discriminator, then others hire the target to gain productivity.

No government force, no earthly laws are necessary. God has provided a non-violent system that sanctions those who violate His law.

Monday, July 16, 2018

Trump Tax Increase

Take that look of worry
I'm an ordinary man
They don't tell me nothing
So I find out what I can
--Phil Collins

Current economic strength is being associated with the so-called 'Trump tax cuts.' But there is also a pending 'Trump tax increase' in the form of tariffs.

A tariff is a tax on imports. US consumers will shoulder this tax by paying higher prices for goods and services.

The net effect remains to be seen. Depending on the intensity and nature of tariffs imposed, Americans could wind up with a net tax increase.

What is certain is that tariffs tariffs will reduce the economic benefit afforded by decreased income tax payments.

Sunday, July 15, 2018

Committee on Public Information

I want to know
What you're thinking
There are some things you can't hide
--Information Society

Nazi Germany's Ministry of Public Enlightenment and Propaganda headed by Joseph Goebbels is often held as the benchmark of state sponsored information production and manipulation. However, it is a good bet that Goebbels learned much from a previous propaganda machine commissioned by the US government during WWI.

In April, 1917, President Woodrow Wilson signed Executive Order 2594. The order established the Committee on Public Information (CPI) to be headed by journalist and politician George Creel. Because America was deeply divided over the prospect of going to war in Europe, an engagement that Wilson was seeking, the CPI was created to influence public opinion and to create 'enthusiasm' for the war effort.

The CPI engaged in multimedia campaigns to disseminate patriotic information and info about how citizens could contribute to the war effort. Millions of posters, pamphlets, newspaper releases, films, and magazine advertisements were created. The CPI also trained 75,000 volunteers to deliver short patriotic speeches in theaters, churches, town halls, et al. These people became known as the 'Four Minute Men.'

The CPI also worked with government agencies such as the post office to censor what was viewed as seditious anti-war counter propaganda. It sought to pressure people into supporting the war effort and expose those who resisted. For instance, the CPI worked with local newspapers to publish names of people and families who bought war bonds and participated in rationing programs. Lists of those who did not engage in such programs were also published. Patriotic organizations such as the National Security League used these lists to strong arm holdouts into supporting the war effort.

State-sponsored speech is never free speech because resources to fund it are taken under conditions of force. Moreover, state speech crowds out speech that is legitimately free. And, as demonstrated by the Committee on Public Information, entities that act as agencies of state information are prone to engage in more overt acts of suppression as well.

Saturday, July 14, 2018

Opt Out Wish

"You can have my college money, and my Social Security checks."
--Wyatt Donnelly (Weird Science)

Another report finding that Americans would be better off keeping their payroll tax contributions currently going to Social Security and saving for retirement themselves.

Other studies indicate that many Americans do not expect Social Security to still be around when they retire. However, many of these same people want to keep the system going because they have been forced to pay into Social Security in the past and they hope to get out what they put in.

It is likely, of course, that these people will actually receive far more than they put in, thereby bankrupting the system.

Personally, if there was an opportunity to opt out of the Social Security system by letting the Feds keep all of my past 'contributions', then I would do it in a heartbeat.

Friday, July 13, 2018

Confidence Game

Chuck Scarett: How you feelin' today?
Joe Scheffer: Confident. Very confident.
--Joe Somebody

Pundits are claiming that current high measured levels of consumer confidence are good for the economy and, by extension, stocks. What does the historical evidence suggest?

At least when it comes to its relationship with GDP growth, consumer confidence seems to be a lagging indicator or perhaps even a contrarian indicator.

Thursday, July 12, 2018

Tariffs Are Inflationary

Hundred dollar car note
Two hundred rent
I get a check on Friday
But it's already spent
--Huey Lewis & The News

Several factors have kept measured price inflation, as manipulated as it is, at bay even though central banks have been on a decades-long money printing campaign. Much of the new money has been confined to the financial system which, while predictably driving financial security prices higher, has had limited effect on consumer prices to this point.

Technological advancements, particularly those related to info tech, have positively affected productivity. Higher productivity drives prices lower over time.

Greater global trade has also tempered domestic prices. When producers from various countries around the world trade with each other, then the gains from specialization, including price lowering efficiency improvements, are distributed widely. Trading with efficient producers located in China and elsewhere has permitted the US to, in effect, import lower prices.

As measured price inflation continues to perk up, rest assured that more attention will be paid to the negative effects of tariffs and other trade barriers currently being considered under the auspices of 'fair trade' and 'protecting jobs' in the US. Less trade with producers elsewhere is inherently inflationary as gains from specialization are lost in the name of becoming more self-sufficient.

The less we trade with others, the more we pay for goods and services at home.

Wednesday, July 11, 2018

Immigration and the Trustee State

Let me in
Immigration man
Can I cross the line and pray
I can stay another day
--Crosby & Nash

Several interesting points on the immigration issue made here by Hans-Hermann Hoppe. Leftists generally advocate unrestricted, 'free' immigration as a right. But on what grounds should there be such a right?

No one has a legitimate right to move onto someone else's property unless invited. If all places are already owned, then migration is by invitation only. Unrestricted immigration only holds for virgin land and the open frontier--of which little exists today.

Leftists sometimes counter that occupation of global real estate often took place through previous acts of force rather than through voluntary exchange. While certainly true, aggressive acts of previous generations do not give migrants license to tread uninvited on someone else's ground today.

Another common counter is that so-called 'public property' under the control of local, state, or federal government is akin to open frontier and thus available to migrants for open, unrestricted access. But this assertion is false as well. Just because government has illegitimately expropriated property from others does not mean that government property is unowned and available to all. Because it has been funded by tax payments, the payers of these taxes are the rightful owners of public property.

Hoppe is obviously correct. His conclusion suggests that the proper role of the State under such circumstances is one of trustee of tax-payer funded property. What should the shape of immigration look like if the State properly executed its trustee role like the manager of jointly owned community property funded by a housing association or gated community?

The answer in principle is straightforward. The trustee's guideline regarding immigration would be the 'full cost' principle. The immigrant (or inviting resident) should pay the full cost of the immigrant's use of public goods and services. The cost of community property funded by taxpayers should not rise due to the presence of immigrants. On the contrary, the presence of immigrants should ideally yield residents a profit--perhaps in the form of lower tax burdens or higher property values.

Under conditions of high immigration pressure, then the trustee's role is to secure the border to control admission to ensure that the full cost principle will be upheld.

This is not what the State generally does, of course. Rather than enforcing a full cost principle that keeps residents whole or makes them richer, the State subsidizes immigration, thereby making taxpaying residents poorer.

ECON 101 tells us that when behavior is subsidized, more of it should be expected. As they flock to countries where their behavior is subsidized, immigrants increasingly stress economic systems toward the point of collapse. Hoppe speculates that this result is precisely the goal of some groups, including the cultural Marxists.

Tuesday, July 10, 2018

Oath to Nothing

"When a man takes an oath, he's holding his own self in his own hands like water, and if he opens his fingers then, he needn't hope to find himself again."
--Sir Thomas More (A Man For All Seasons)

If the supreme law of the land, the Constitution, is subject to myriad interpretations, then it is not law at all. Instead, it becomes a tool of discretionary rule, a tool of positivism.

Acting with pure pretense, people swear an oath to uphold and protect the Constitution, and then subsequently excuse seemingly illegal behavior by claiming, "Well, that is how I interpret the Constitution."

It is an oath to nothing.

To be effective, law must have only one meaning. That meaning must be durable. And that must be understood and acknowledged upfront by those interpreting the law in advance.