Blogroll Category: Current Affairs

I read blogs, as well as write one. The 'blogroll' on this site reproduces some posts from some of the people I enjoy reading. There are currently 555 posts from the category 'Current Affairs.'

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Six Graphs that Reveal Big Problems for Student and Auto Loans

Mises Institute - 1 hour 7 min ago
By: Jonathan Newman
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The New York Fed’s most recent household debt report showed ballooning debt and delinquency in student and auto loans. Total household debt has just about reached its previous late-2008 high of over $12.5 trillion.

You’ll notice that housing debt (blue) has not increased much since its 2013 low, meaning that the increases in total debt have mostly come from non-housing debt (red). A closer look at the composition of non-housing debt reveals that the biggest increases in debt have come from student and auto loans (red and green, below).

In fact, the numbers make it look like the housing bubble was almost exactly replaced by new bubbles in education and cars. From 2008 to 2016, housing debt has decreased by $1.01 trillion, while student and auto loan debt together have increased by $1.04 trillion. The Board of Governors of the Federal Reserve has an even higher estimate than the NY Fed for current student loan debt, at $1.41 trillion.

Shahein Nasiripour at Bloomberg showed the relative changes based on the same data this way:

While both student and auto loan debt have increased substantially, delinquency rates are higher for student loans. In 2012, student loan delinquency spiked up enough to claim the top spot, probably due to the number of people who chose more school over searching for employment during the bust. The graph below shows that student and auto loan delinquency rates are the only ones not decreasing.

Of course, this is more of an intended feature than a flaw of the Fed’s monetary policy since the housing bubble popped. Expansionary monetary policy can only replace bubbles with new bubbles. Malinvestments are not totally liquidated, but shift from one sector to another. Consumer debt is not directly paid off, but transferred from one type to another.

The redirection is mostly guided by new government interference in markets. Pre-2008, federal government programs to encourage new housing and mortgages, along with the low interest rates and new money from the Fed, created the housing bubble. Since 2008, programs like Cash for Clunkers, auto manufacturer bailouts, and income-based student loan repayment have funneled spending, borrowing, and increasing prices into education and autos.

Some recent headlines already signal a collapse in used car prices this year. Meanwhile, college tuition increases are still the norm every year, despite the decreasing value of a diploma. According to this AP report, “the average amount owed per borrower rose to $30,650 in 2016, after rising steadily for years. In 2013, borrowers on average owed $26,300.”

Another recent release by the NY Fed contains data on labor outcomes for college graduates versus all other laborers. There have been dramatic swings in employment across the board since 2008, but comparing September 2008 to September 2016 on net, the unemployment rate for college graduates has increased while the unemployment rate for all other workers has decreased. The underemployment rate (“defined as the share of graduates working in jobs that typically do not require a college degree”) for recent graduates has hovered around 45% since 2008. An indexed measure of job postings indicates that demand for laborers with a college degree has not increased as much as demand for laborers that don’t need a college degree, though both reached a peak late 2015.

The overwhelming conclusion from all of this data is that we almost certainly have new bubbles in education and the auto industry. A trillion dollars of housing debt has been replaced by a trillion dollars (or more) of student and auto loan debt. Delinquency rates are increasing for student and auto loans, while other loan types have seen a decrease in delinquency. Finally, the value of both the university education and the automobiles people are buying don’t seem to justify the amount being borrowed and spent, from a big picture perspective. Their prices are artificially inflated due to the Fed and the federal government teaming up to create new bubbles, just like they did to create the housing bubble.



Categories: Current Affairs

Okoh backs bishop in Sapele diocese split

Anglican Ink - Sun, 26/03/2017 - 11:50

The primate of the Church of Nigeria has urged members of the Diocese of Sapele who have rebelled against their bishop to repent and submit to his lawful authority

Primatial Statement on the crisis in the Diocese of Sapele

Anglican Ink - Sun, 26/03/2017 - 11:30

The Church of Nigeria cannot be held to ransom by any group; the Anglican Church belongs only to those who can operate within and submit to its constituted authority and structures.

There's nothing quite so conservative these days as a worried liberal

Adam Smith Institute - Sun, 26/03/2017 - 08:05

That's liberal in the American sense you understand, a wet left winger. As with Will Hutton here:

The internet celebrated its 28th birthday a fortnight ago. It’s an invention that ranks alongside the wheel, immunisation against disease and the internal combustion engine as a transformer of human existence. As an open information digital connector, it is an extraordinary force for individual liberation, embodying the very best of Enlightenment values: more information is available to more people through their mobile phones and personal computers than ever before.

The world can then follow the Enlightenment injunction to dare to know to a degree that the great philosophers, arguing for a free public realm where information and evidence could be openly marshalled and tested for human betterment, could never have foreseen.

Over the last 18 months, it has become obvious that the internet is the most serious threat to the Enlightenment values it purports to represent.

The Enlightenment was about more people gaining more access to more information in their own language. The King James Bible, as with Wycliff before and the equivalents in other languages of translations into the vernacular, were really the start of it all. And now that very same process, where more people gain more access to more information in their own language is a threat? 

Well, yes, it is actually, but it's a threat to a certain set up, not to the idea itself:

Worse, the advertising draining from newspapers is reaching such a scale that the viability of a free press is under threat. Online newspapers can charge subscribers, but still need advertising to support journalism and the expensive edifice of complying with publishing law. At the very least, as upholders of true news, they should be competing with Google and Facebook on equal terms.

The world of cushy berths is threatened, berths where four digit weekly pay checks are distributed for an hour's work on a column. That's the actual complaint and that's the threat, not to the Enlightenment or its values but to the people who have done very well out of he current structure. Thus the most conservative insistence that nothing must change.

Categories: Current Affairs

The most outrageous drivel

Adam Smith Institute - Sat, 25/03/2017 - 06:55

Terrible events have the capacity to bring out the most dreadful drivel in society. The murder of PC Palmer appears to be doing just that:

The website running a fundraising campaign to raise money for the family of murdered policeman Pc Keith Palmer is refusing to waive its five per cent fee, The Telegraph can disclose.

The fundraising page set up by JustGiving for the Metropolitan Police Federation has raised over £670,000 by Friday night. 

This means that JustGiving - which pockets 5p of every pound donated - is likely to receive around £33,500 in administration fees.

It costs money to run a website. It costs quite a lot of money to run one which can work at scale.

The website takes a cut from most donations. While some of the money is used for maintenance, product development and charity training, accounts allegedly show that more than £10million was spent on staff costs last year.

People were paid for turning up to work? What horrors!

As it happens, JustGiving spends all the money it earns on developing the services of JustGiving. There's not even some rapacious capitalist behind the curtain. Although if there were we'd be defending them too:

He said: "The unfortunate thing is that they are a business and there is no other way of doing it other than asking people to go to bank and pay the money in over the counter."

We are enriched by the service they offer, as is true of all of the other things that we voluntarily spend our own money upon. Seriously, where did this drivel start, that people should not make a living giving us what we want?

Categories: Current Affairs

Week in Review: March 25, 2017

Mises Institute - Sat, 25/03/2017 - 03:00
By: Mises Institute
Week in Review image

Our guest on Mises Weekends is Professor Per Bylund, a man who studies entrepreneurship for a living. Why is the role of the entrepreneur — the individual who risks capital, time, and energy to build a business — almost completely disregarded by most economists? Does the Austrian focus on individual human action explain why business schools are far more willing to embrace Austrian principles? Can real-world entrepreneurs improve their business skills in traditional university settings, or are much-hyped campus incubators a waste of time? Why do progressives dismiss entrepreneurs with their "You didn't build that" mentality? And how do socialist policies in places like Dr. Bylund's native Sweden kill the spirit that makes us rich? Join Jeff and Per for an insightful discussion of "Who Built That?"

And in case you missed any of them, here are the articles featured this week on the Mises Wire:



Categories: Current Affairs

Idaho Politician Opposes Removing Tax on Gold for a Very Odd Reason

Mises Institute - Sat, 25/03/2017 - 03:00
By: Jp Cortez
Idaho_State_Capitol.jpg

The Dunning-Kruger effect is the idea that low-ability people tend to suffer from illusory superiority. The phenomenon, first studied by David Dunning and Justin Kruger, says that people who know the least tend to overvalue their own competence, and tend to believe that they are experiencing some sort of upper-echelon level of thinking.

While the original study was conducted in 1999, we witnessed what appeared to be the Dunning-Kruger effect in action earlier this month on the floor of the Idaho House of Representatives.

And while it’s only March, we also have identified the front-runner for our “Aurophobe of the Year” award. (Aurophobia is the irrational fear of gold.)

RELATED: "Sound Money Is Rising at the State Level

During the March 14th floor debate on Idaho’s House Bill 206, a measure that promotes sound money by removing Idaho income taxation from precious metals, Democrat Representative Mat Erpelding — the House Minority Leader — couldn’t help himself and had to share his two cents, even after asserting that he had no opinion on the bill (but then voted against it).

Thank you, Mr. Speaker. I don’t have an opinion on this bill. However, I do have an opinion on facts. Facts are somewhat important,” Representative Erpelding said with an air of superiority. “If we say that gold is going to protect us from inflation, I want to point out that in 1868, gold was $27 an ounce, and today gold is $1,218 an ounce. So, we can’t say that gold is going to protect us from inflation when you have that type of a price range over the last hundred years. So, I just want to point out that facts are important.

Huh? The purchasing power of the dollar versus gold has fallen nearly 98% and gold therefore offers no protection against inflation?

Despite Minority Leader Erpelding’s objection, House Bill 206 overwhelmingly passed in the House 56–13. Next, sound money supporters hope to receive a hearing and a vote in the Idaho Senate.

See the video: 

 



Categories: Current Affairs

The Right to Discriminate Is a Basic Property Right

Mises Institute - Sat, 25/03/2017 - 02:45
By: Laurence M. Vance
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Back in 2013, Barronelle Stutzman, the owner of Arlene’s Flowers in Richland, Washington, refused to provide flowers for a gay friend’s same-sex wedding. The legal battle that ensued has now ended: The Washington State Supreme Court just unanimously ruled that the florist violated the state’s anti-discrimination law.

The case has given rise to some misconceptions about discrimination.

Here is the back story.

In 2012, the state of Washington enacted Senate Bill 6239, which recognized same-sex marriage. Gay men Robert Ingersoll and Curt Freed, who had been a couple since 2004, decided to get married in September of 2013. At the time of his engagement, Ingersoll had been a customer of Arlene’s Flowers and Gifts for at least nine years. Stutzman, an active member of a Southern Baptist church who believed that marriage can exist only between a man and a woman, knew that Ingersoll was gay and in a relationship with Freed. When Ingersoll spoke with Stutzman about providing flowers for his wedding, she told him that she would be unable to do so because of her religious beliefs. She gave Ingersoll the names of other florists who might be willing to serve him and hugged Ingersoll before he left the store.

Stutzman said she “draws a distinction between creating floral arrangements — even those designed by someone else — and selling bulk flowers and ‘raw materials,’ which she would be happy to do for Ingersoll and Freed.” But she said she believes that “to create floral arrangements is to use her ‘imagination and artistic skill to intimately participate in a same-sex wedding ceremony.’”

Ingersoll maintains that he left “feeling very hurt and upset emotionally.” His partner Freed posted something on Facebook about the incident and the story “drew the attention of numerous media outlets.” Ingersoll and Freed then “lost enthusiasm for a large ceremony” and got married in July in “a modest ceremony at their home.”

That, of course, should have been the end of it. But

after the state became aware of Stutzman’s refusal to sell flowers to Ingersoll and Freed, the Attorney General’s Office sent Stutzman a letter. It sought her agreement to stop discriminating against customers on the basis of their sexual orientation and noted that doing so would prevent further formal action or costs against her. The letter asked her to sign an “Assurance of Discontinuance,” which stated that she would no longer discriminate in the provision of wedding floral services.

Stutzman refused.

The state then filed a complaint about injunctive and other relief against both Stutzman and Arlene’s Flowers under the Consumer Protection Act (CPA) and the Washington Law Against Discrimination (WLAD). Stutzman answered by “asserting, among other defenses, that her refusal to furnish Ingersoll with wedding services was protected by the state and federal constitutions’ free exercise, free speech, and freedom of association guarantees.” Ingersoll and Freed then filed a private lawsuit against Stutzman and Arlene’s Flowers, which the trial court consolidated with the state’s case.

The trial court ultimately decided against the defendant and awarded “permanent injunctive relief, as well as monetary damages for Ingersoll and Freed to cover actual damages, attorneys’ fees, and costs.” The court ruled not only that Stutzman violated the WLAD’s “public accommodations” provision, violated the CPA by refusing to sell floral services, and was personally liable, but also made five constitutional rulings. It concluded that the application of the WLAD’s “public accommodations” provision to Stutzman in this case:

(1) did not violate Stutzman’s right to free speech under the First Amendment to the United States Constitution or article I, section 5 of the Washington Constitution,

(2) did not violate Stutzman’s right to religious free exercise under the First Amendment,

(3) did not violate her right to free association under the First Amendment,

(4) did not violate First Amendment protections under the hybrid rights doctrine, and

(5) did not violate Stutzman’s right to religious free exercise under article I, section 11 of the Washington Constitution.

Stutzman appealed to the Washington State Supreme Court, which affirmed the trial court’s rulings last month.

There are a number of misconceptions that people have about discrimination, including Barronelle Stutzman, the attorneys who represented her, and the state’s attorney general.

Stutzman contended that her floral arrangements were “artistic expressions protected by the state and federal constitutions and that the WLAD impermissibly compels her to speak in favor of same-sex marriage.” She contended that her floral arrangements are “speech” for purposes of First Amendment protections “because they involve her artistic decisions.” She argued that the WLAD violated her First Amendment protections against “compelled speech” because it “forces her to endorse same-sex marriage.” She sought “an exemption permitting discrimination in public accommodations.” She argued, “discrimination cannot be ‘invidious’—and thus subject to governmental prohibition—if it is based on religious beliefs.”

RELATED: "The Trouble with "Public Accommodation"

The Alliance Defending Freedom (ADF) attorneys who represented Stutzman argued: “It’s wrong for the state to force any citizen to support a particular view about marriage or anything else against their will. Freedom of speech and religion aren’t subject to the whim of a majority; they are constitutional guarantees.”

Washington’s attorney general, Bob Ferguson, said that “Arlene’s Flowers in Richland doesn’t have to sell wedding flowers at all.” However, “if they choose to sell wedding flowers, they cannot choose to sell wedding flowers only for heterosexual couples and deny that same service to gay couples.”

We Don't Need a Special Right to Speech when We Have Property Rights 

Let’s clear up these and other misconceptions about discrimination from the libertarian perspectives of property rights, the non-aggression principle, and individual liberty.

Designing, making, selling, or not selling floral arrangements has nothing to do with free speech or speech. The U.S. Supreme Court has greatly erred by labeling certain actions as a form of speech in order to protect them instead of just recognizing property rights.

Refusing to sell a product has everything to do with property rights. Since no potential customer has a claim on the property of any business owner, he has no legal recourse if the owner of the property refuses to sell it to him.

Selling someone a product has nothing to do with endorsing the buyer’s opinions or use of the product.

Discrimination is a crime in search of a victim. Every real crime needs a tangible victim with measurable damages. Discrimination is not aggression, force, or threat. It should never be a crime.

To outlaw discrimination is to outlaw freedom of thought.

Public accommodations are still private businesses. Just because they serve the public by offering to sell them goods and/or services doesn’t mean that they should be regarded as public libraries, public parks, and public buildings that have to accept all members of the public.

If discrimination is wrong, immoral, unjust, hateful, and bigoted, then it doesn’t suddenly cease to be these things because the entity doing the discriminating is religious in nature or the person doing the discriminating is doing it for religious reasons.

There is no “right to service.” In a free society, business owners have the right to refuse service to anyone for any reason on any basis.

If a florist can choose not to sell a particular type of flower arrangement, then why can’t it choose not to sell a flower arrangement to a particular person? If the government is so interested in stamping out discrimination, they why doesn’t it mandate that florists sell every type of flower arrangement for every situation? Aren’t florists who don’t sell flower arrangements for weddings discriminating against customers who want to buy them and suppliers who want to provide the necessary raw products to the florists?

If an individual can discriminate against a business owner in any way, for any reason, and on any basis, then why can’t a business owner likewise discriminate against an individual?

That discrimination may be based on based on stereotypes, prejudice, hate, sexism, xenophobism, homophobism, bigotry, or racism is immaterial.

That discrimination may be because of race, creed, religion, sex, color, age, national origin, political ideology, IQ, physical appearance, marital status, socio-economic status, disability, gender identity or sexual orientation is irrelevant.

That someone thinks an act of discrimination is unfair, illogical, irrational, nonsensical, unreasonable, or just plain stupid is of no consequence.

Barronelle Stutzman should be able to choose to whom she will sell flowers or floral arrangements. Discrimination is the exercise of freedom.

Originally published by LewRockwell.com. 



Categories: Current Affairs

Per Bylund: Who Built That?

Mises Institute - Fri, 24/03/2017 - 22:00
By: Per Bylund, Jeff Deist
Per Bylund on Mises Weekends

Our guest this week is Professor Per Bylund, a man who studies entrepreneurship for a living. Why is the role of the entrepreneur—the individual who risks capital, time, and energy to build a business—almost completely disregarded by most economists? Does the Austrian focus on individual human action explain why business schools are far more willing to embrace Austrian principles? Can real-world entrepreneurs improve their business skills in traditional university settings, or are much-hyped campus incubators a waste of time? Why do progressives dismiss entrepreneurs with their "You didn't build that" mentality? And how do socialist policies in places like Dr. Bylund's native Sweden kill the spirit that makes us rich?



Categories: Current Affairs

Archbishops launch investigation in the borking of Philip North

Anglican Ink - Fri, 24/03/2017 - 19:58

Welby and Sentamu ask for an official review of the process

Fed Financial Statements: $6 Billion Drop in Fed Remittances

Mises Institute - Fri, 24/03/2017 - 19:15
By: C.Jay Engel
FedWatchGrey.png

As the Fed continues to increase the rate of interest it pays on excess reserves, the Fed's profits that are left over are slowly going to shrink in size. Since the Fed sends its profits to the US Treasury each year, the US Treasury will be receiving less. The Wall Street Journal reported on Friday:

The Federal Reserve sent $91.5 billion in profits to the Treasury Department last year, a $6 billion decline that officials have long expected as a result of rising interest rates.

The Fed’s total net income declined by $7.6 billion, to $92.4 billion, according to the Fed’s audited financial statements released Friday. The decline was primarily the result of higher interest payments it made to banks on the reserves they keep at the central bank.

David Howden has explained this process– and the implications for "Fed independence"– rather nicely:

Each year, the Fed remits to the US Treasury its net income, and thus provides the federal government with an important source of funding.

For the US Treasury, Fed remittances are something of a free lunch. When someone buys a Treasury bond, the government must pay them interest. This applies to the Fed as well, but then at year-end the Fed remits the interest back to the Treasury.

As much as economists talk about the independence that the Fed holds from Congress, these remittances represent a strong link. In fact, since they enable federal spending they create a form of quasi-fiscal policy for the Fed to use, in addition to its more common monetary policy options.

The slowly decreasing profits remitted to the Treasury each year is going to have implications for the increasing tension between the Trump administration and the Fed. If Trump wants to get his tax cuts through, he's going to need all the revenue help he can get. It may be even worse:

The payments are likely to shrink in the coming years as the Fed raises short-term interest rates—a process that involves paying banks higher interest on reserves they keep at the Fed—and when it eventually shrinks its balance sheet. Fed economists estimate the payments will fall to around $40 billion annually by 2020 but would likely rebound to about $65 billion a year by 2025.

A $40 billion payment in 2020 is less than half this year's $91.5 billion payment, which means that, assuming today's budget levels there's a massive $50 billion drop in revenue for the Federal Government, all things equal. Of course, spending goes up every year and so by 2020, who knows what may happen. 

In the meantime, will the Fed eventually be "forced" reverse course on interest rates to put a band-aid on the absurd Federal budget?  



Categories: Current Affairs

Regan King: Being anti-abortion is not enough

Christian Concern - Fri, 24/03/2017 - 16:00
After a vote in the House of Commons last week in favour of decriminalising abortion, Regan King analyses the Johnson bill and urges us to be pro-life.

After a vote in the House of Commons last week in favour of decriminalising abortion, Regan King analyses the Johnson bill and urges us to be pro-life.

"We must cultivate a helpful and hope-filled willingness to not only call people away from what is bad, but to simultaneously point people to what is good and make adequate provisions to accomplish that good," he says.
 

read more

Andrea Williams: Radio 4 and Religious Freedom

Christian Concern - Fri, 24/03/2017 - 15:00
Andrea Williams comments on a BBC Radio 4 programme discussing last week's 'headscarf ruling' by the Court of Justice at the European Union.

Andrea Williams comments on a BBC Radio 4 programme discussing last week's 'headscarf ruling' by the Court of Justice at the European Union. She says that "the integration of new faiths cannot result in the undermining the Judeo-Christian foundations of our free society".

But this is exactly what is happening, and the experience of the Christian Legal Centre proves it. "We must not ignore this reality which has brought great life and flourishing to our nation," she says.
 

read more

Tim Dieppe: Jihad in Westminster

Christian Concern - Fri, 24/03/2017 - 10:30
Tim Dieppe comments on the attack in Westminster this week.

Tim Dieppe comments on the attack in Westminster this week. He points out that the Islamic State have been encouraging this kind of attack for some time, and that there have been a number of similar attacks across Europe in the last year.

read more

Book Review: The Mission of God

Christian Concern - Fri, 24/03/2017 - 10:00
Tim Dieppe reviews Dr Joe Boot's Mission of God.

Tim Dieppe reviews Dr Joe Boot's The Mission of God.
 

read more

Keeping calm and carrying on

Lustig's Letter - Fri, 24/03/2017 - 09:18
Remember these people:
Aysha Frade, a school administrator with a Spanish mother and a Cypriot father, on her way to pick up her children from school.
Kurt Cochran, an American from West Bountiful in Utah, on a tour of Europe with his wife Melissa to celebrate their 25th wedding anniversary.
Leslie Rhodes, aged 75, who died of his injuries late on Thursday night.
Keith Palmer, a police officer with 15 years’ experience, a member of the Metropolitan police parliamentary and diplomatic protection command.
Four victims of a callous murderer whose name need not concern us.  (Although now that we know that he was born in Kent as Adrian Ajao, I look forward to the apologies from all the racist bigots who claimed that the attack was in some way related to immigration.)
How unlucky his victims were to be at Westminster on Wednesday afternoon -- three of them walking across Westminster Bridge, the fourth doing his job at the entrance to the houses of parliament.
And as we mourn all victims of politically-motivated killings, let us also remember Lee Rigby, the off-duty soldier who was murdered in 2013, and Jo Cox, the MP who was killed last June and whose husband Brendan has been a role model ever since as we struggle to find the right words in response to such cruelty.
After the Westminster attacks on Wednesday, he said: 'The person who did this wants us to be fearful and divided. Let's show them that we are neither.'
In Paris 16 months ago, 130 people died when gunmen opened fire in a series of coordinated attacks. In Brussels, exactly a year ago, 32 people were killed. In Nice, last July, 86 died when a lorry ploughed through Bastille Day crowds on the Promenade des Anglais. And in Berlin last December, 12 died in a similar attack on a Christmas market.
So we may be forgiven for thinking that London got off lightly. We knew the city was not immune, we knew that the security services believed an attack was 'highly likely'. It was a question of when, not if.
Why did London get off lightly? It is tempting to say that we were lucky, but luck was only part of it. The attacker was armed with only knives. No gun -- because it's not easy to get hold of guns in a country with strict laws about the ownership of firearms.
He couldn't get into the Palace of Westminster because it is extremely well-fortified. Those hideous black security barriers are there for a reason. If he could have, I'm sure he would have loved to kill some MPs. PC Palmer was in his way, and gave his life to defend them.
Let us not forget: in 1979, the senior Conservative MP Airey Neave was murdered when Irish republican bombers placed an explosive device beneath his car while it was in the House of Commons underground car park.
In 1984, they blew up the Grand Hotel in Brighton and nearly wiped out Margaret Thatcher's entire Cabinet. In 1991, they tried to kill John Major's Cabinet by firing mortars at 10 Downing Street.
So yes, we were lucky on Wednesday that it was 'only' a man in a rented car with a couple of knives. But we also owe an immense debt to the police and security services who have learnt well from the mistakes of the past. We are all immeasurably safer today than we were during the IRA bombing campaigns of the 1970s and 80s.
It would be the height of folly to claim that a coordinated series of attacks on the scale of the 7/7 bombings in 2005 could not be mounted again. But it is worth noting that for more than a decade, there has been nothing comparable. (In 2007, two car bombs were discovered and disabled before they could be detonated, and the following day, there was an attempted attack at Glasgow airport.)
Londoners like to claim that the spirit of Blitz lives on in the capital. The truth is that in all the major cities of Europe that have been attacked, life goes on. Which is, of course, exactly as it should be. Twenty-four hours after the Westminster attack, I walked through the heart of London's West End -- and with the exception of a helicopter whirring noisily overhead and a couple of heavily-armed police officers on patrol in Leicester Square, it was as if nothing at all had happened.  
Over the coming days, we will learn more about the man who was responsible for the attack and perhaps begin to understand more about the best way to minimise the risk of more such attacks in the future. For the police and the security services, the task is never-ending -- to find, identify and monitor those who seek to do us harm. As the IRA said after they failed to kill Margaret Thatcher in 1984: 'Today we were unlucky, but remember we only have to be lucky once. You will have to be lucky always.'

The task for the rest of us is crystal clear: we keep calm and carry on. Because that's the exact opposite of what the killers want us to do.
Categories: Current Affairs

The Tax Justice Network makes another unsubstantiated claim

Adam Smith Institute - Fri, 24/03/2017 - 08:01

The Tax Justice Network has just told us, once again, that countries lose gazillions in tax revenue to tax dodging. However, their claim is not in fact true. Specifically, this is not true:

We focus now on the long-term estimates of the revenue (in per cent of GDP) lost by each country i in period t as a consequence of profit shifting through tax havens in 2013, i.e. ????????????????. 

They are not measuring long term revenue anything. For they are not measuring the effects of the corporation tax rates they look at.

Imagine, for example, that a country had a corporate profit tax of 100%. There would be little to no corporate activity leading to profit to be taxed. The country would be dirt poor in fact. Thus there would be little revenue.

Equally, a tax rate of zero would encourage activity like billy oh. And revenue would be gained from other taxes instead, like the consumption of the workers now gaining higher wages, even perhaps their income tax.

This is, of course, the Laffer Curve argument and just like that argument it is something which is true at some level of taxation. Lower rates will increase revenue, higher rates reduce them.

We're not insisting that current rates are either above or below that revenue maximising level, not right here and right now we're not. But we do insist that failing to even consider the point means that no estimation of long term revenue losses has in fact been made.

We'd also point out that going over that revenue raising rate is easier than many think. The combination of three things made it probable that the UK corporation tax system in the UK in the 1970s managed this. High inflation, a corporate tax system which did not rebase costs on that inflation and relatively high tax rates meant that corporate capital wasn't even earning enough to cover depreciation in some of those years.

It really is necessary to consider the wider effects, not just do sums as the TJN has done. But then, you know. This is the same researcher who insisted that Zambia was losing squillions in revenues by comparing the price of tens of thousands of tonnes of copper in that country with the price of 10 kg samples of copper in Switzerland. Experimental design might not be the strongest suit here.

Categories: Current Affairs

How the Global Drug War Pushed Down Heroin Prices

Mises Institute - Fri, 24/03/2017 - 03:00
By: Chris Calton
poppy.JPG

In the 1950s, Corsican gangsters such as Lucky Luciano created a mafia empire by smuggling morphine base from Turkey to Sicily, where it was refined into heroin, then shipped to France and finally to the United States. This was the infamous "French Connection" that supplied the bulk of the heroin supply that the United States received through the early 70s.

When Nixon took office, he pressured the Turkish government to outlaw poppy production, and the enforcement of these new laws largely shut down the Turkish opium trade in 1972. Nixon's "War on Drugs" looked like it was going to be a short one.

But where there is a market, there will always be a supply. The Mafia abandoned Turkey as their source for opium and found a new supply in the "Golden Crescent," referring primarily to Iran, Afghanistan, and Pakistan. Southeast Asia's "Golden Triangle" — being Laos, Thailand, and Burma — was another source for opiates that the Mafia was able to turn to, as well. The heroin trade quickly rebounded from the Turkish setback and even exceeded previous production levels.

As I detailed in a previous article, the US government tolerated the Asian heroin trade during the Vietnam War because they wanted to stay on good terms with their allies (primarily the Hmong) against the communists. After the Vietnam War was over, the DEA turned their attention on the East Asian drug trade, which was now the major world supplier of opiates, and the increased enforcement of drug laws yielded a reduction of Asian heroin by more than two-thirds.

With the drug trade pushed down in Asia, it quickly popped up in Mexico. This was a region that was easier for the United States to control, and enforcement efforts quickly and successfully shifted to Mexico. But a regime change in Afghanistan allowed the suppression of Mexican poppy to pop back up in the Golden Crescent with a force unseen in the early 70s. Opium production in the Middle East doubled between 1982 and 83.

No matter how successfully drug laws were enforced in one region, drug production always seemed to pop up elsewhere to fill the newly created void in the heroin market. In Drug War history lingo, this is called the "Push Down Pop Up Effect." In economics, this is little more than comparative advantage in action.

Comparative Advantage in the Drug Trade

The concept of comparative advantage has never, to my knowledge, been applied to the "Push Down Pop Up" phenomenon, but I am convinced that this economic concept better explains what we've seen in the global War on Drugs over the past several decades.

According to the Push Down Pop Up doctrine, when drug production is "pushed down" in one region through heavier enforcement, it will simply "pop up" somewhere else. This is empirically true when looking at the history of the Drug War. My issue with this doctrine is that it does not contain the full implication of these enforcement policies.

For one thing, the Push Down Pop Up theory cannot explain the trend of heroin prices over the past several decades. The United Nations started documenting global heroin prices in 1990, and since then, heroin prices have consistently dropped (and other quantitative data shows the same trend going back as far as the 1970s). Push Down Pop Up explains why heroin production continues despite enforcement efforts, but it gives no insight as to why prices actually fall.

The theory of comparative advantage, combined with an understanding of capital accumulation, answers both questions. Heroin production is dominated by a given region because that region is uniquely suited for it, obviously. This may mean that the lands are particularly fertile for poppy cultivation, or it might mean that the farmers have developed skills or tools particularly suited for this crop. In the case of Laos, for example, it came from technological innovations in heroin refinement that produced a purer substance. It can also mean, of course, that lighter enforcement of drug laws (or even the absence of such laws) lowers the relative cost of production through reduced risk of operating illegally. This last point is obviously the relevant variable in this analysis.

Every time enforcement increases in a specific region, this raises the cost of production in the target region and thus raises every other country's comparative advantage in heroin production. As a result, whatever region was previously the second most efficient producer of heroin now becomes the first most efficient producer. Turkish suppression meant East Asian advantage. East Asian suppression meant Mexican advantage. Mexican suppression meant Afghan advantage. And so the pattern continues.

The reason capital theory and the theory of comparative advantage actually explain the reduction in heroin prices is because each time the comparative advantage shifts, whichever new country takes the top spot of efficient heroin production makes capital investments in the heroin trade. Examples of these investments would be the construction of refinement facilities or the individual learning of agricultural practices for growing poppy. As drug law enforcement jumps from place to place, an increasing number of countries make these kinds of capital investments.

Once a country has made these capital investments, the long-term costs of heroin production decrease in absolute terms. This means that even once enforcement shifts to this newly dominant market, the cost of heroin production ends up being lower than it would have been had there never been the incentive to invest capital outlays to begin with. What we see in the Push Down Pop Up doctrine is that the dominant region of heroin production is constantly jumping around as the market adapts to the capricious enforcement practices of the various governments. But the overall cost of heroin production, globally speaking, is actually driven down by the ongoing incentive for more and more countries to make capital investments in heroin production. After all, even when a country is "pushed down" from its dominant position, it still continues to produce nominal levels of heroin.

In economic lingo, this means that global drug enforcement has made the heroin supply more elastic. When the Push Down Pop Up effect circles back around to a country that had previously enjoyed the dominant position, it is able to resume heroin production with at least some of its previous capital investments already in place, and the other countries are continuing nominal levels of production with the capital they invested during their own dominant production period.

The concept of comparative advantage also better explains the War on Drugs because it illustrates the unavoidable futility in any attempts to suppress drug production. In the Push Down Pop Up framework, it is at least theoretically plausible that world governments coordinate together and invest enough resources to push down poppy production in all relevant regions at the same time, leaving no region left for new production to pop up. Comparative advantage theory addresses this possibility with a simple answer: because the market still exists, if costs of production increase equally in all regions of production, the comparative advantage — and thus the dominant production — would simply remain in the same region that is currently dominant. Suppressing heroin production is therefore entirely futile when analyzed through this economic lens.

Instead of stymying the heroin trade, government efforts to enforce drug laws only helped to encouraged global capital investment in heroin production and thus helped created a more elastic heroin supply and continually falling drug prices. As these enforcement efforts continue, with an increasingly elastic supply curve, police resources will have to increase exponentially to even maintain the same poor results seen in the past as capital investment continues to increase regardless. Economically speaking, it is literally impossible to win the global War on Drugs.



Categories: Current Affairs

Ryancare is Failing — What Should Happen Next?

Mises Institute - Fri, 24/03/2017 - 02:00
By: Tho Bishop
paul ryan sad.jpg

The beltway Republicans are scrambling now that it seems the Obamacare replacement package put forward for Paul Ryan and endorsed by Donald Trump can’t get enough support to get through the House. The failure of the American Health Care Act should surprise no one, as it is a piece of legislation that managed to please no one. The Freedom Caucus, made up of the “true believers” of the Tea Party, balked at its similarities to Obamacare, while more moderate members found the bill’s modest change to the ACA too radical for their tastes. 

While the failure of the Ryan/Trump/Whatevercare represents a political defeat for the president and GOP leadership, it is probably a net-win for those who oppose socialized healthcare. After all, nothing could be more beneficial to the Bernie Sanders-wing of the Democratic party than for the nominally “free market” Republicans passing its own brand of reform that fails to fix America's insurance market. Much like the 2008 financial crisis, its collapse would absurdly be seen as a defeat for “capitalism” and be used as justification for even more government control.

The unfortunate reality going forward is that more significant approaches to healthcare reform, such as the bill pushed by Senator Rand Paul and his allies in the House, are unlikely to find enough support in the Senate. Further, considering the way the media portrayed the Congressional Budget Office’s analysis of the ACHA, which noted that 14 million consumers may no longer purchase healthcare without an individual mandate and therefore are “losing coverage,” any healthcare plan that comes close to pricing real healthcare risks (like properly accounting for the costs of those with pre-existing conditions) will be skewered relentlessly. This is all before even addressing the problems caused by Medicare and Medicaid.

This is precisely why attempts to push grand “free market” reforms in the Federal government end in failure. Few politicians in DC have the economic lens required to appreciate how necessary these tough decisions are, so Federal politics simply becomes a race to see which party can buy more votes than the other.

Given this grave reality, is there anything that can be done to improve American healthcare?

The answer is it is already happening because of the market.

Increasingly, doctors are abandoning the broken insurance model and claiming their own independence by offering direct patient care. As Business Insider profiled recently, around 1,000 doctors (and counting) are moving toward charging patients a monthly membership fee for service and then patients pay a la carte for the services they actually need. This allows clinics to eliminate most of the administrative costs and it restores the relationship between doctor and patient that has been undermined by a century of government intervention. For more specialized care, clinics such as The Surgery Center of Oklahoma, also use a cash-for-service business model without the monthly fee. 

Given that this is happening naturally on the market already, the legislative focus for those in Washington concerned about American healthcare should be preventing any future laws and regulations that would destroy this model going forward. Further, rather than trying to completely overhaul Obamacare, simply eliminating the individual mandate tax and allowing Health Savings Accounts to be used for healthcare membership would be subtle ways of empowering the market to revolutionize American medicine. This should be coupled with real tax cuts, not “revenue neutral reform” to help Americans keep their own hard-earned money to help pay for it.

Steps can also be taken on the state level to further empower medical professionals. For example, expanding the abilities of medical practitioners would help mitigate doctor shortages. Reforms to medical licensing — such as recognizing the real-world experience of military trained medics — would also make it easier for skilled individuals to enter the market.

This more modest approach to healthcare reform shouldn’t be seen as a defense of Obamacare or the status quo. It’s not. Obamacare was a deplorable piece of legislation, designed by people who were either utterly delusional or intentionally crafting a framework that would fail. In a just world, everyone who played a hand in crafting it should be forever stuck with the fruits of their labor for their own personal care.

Yet we can’t be blind to the realities of modern politics — Washington is dominated by progressive ideology in both parties. While the long-term solution to this has to be political decentralization, in the short term we can settle by defending the ability of markets to compete along side government regulated disasters. This was how Ron Paul sought to destroy the Fed, it’s how homeschooling parents are able to free their children from public education, it’s how Patrick Byrne plans to undermine government cronies on Wall Street.  

As the Soviet Union was collapsing, Murray Rothbard wrote a paper outlining how to desocialize an economy. Gradual reform would fail, he noted, because “the giant socialist bureaucracy will only seize upon such delay to obstruct the goal altogether.” Instead, he advocated prioritizing the protection and normalization of already established black markets.

America doesn’t yet have completely socialized medicine, but the same approach is true here. As long as we preserve the functioning markets that currently exist, and allow them to grow, Americans can maintain hope for a functioning healthcare system in the future.

The same cannot be said for Washington politics. 



Categories: Current Affairs

Ryancare Failed — What Should Happen Next?

Mises Institute - Fri, 24/03/2017 - 02:00
By: Tho Bishop
paul ryan sad.jpg

The beltway Republicans are scrambling now that it seems the Obamacare replacement packaged put forward for Paul Ryan and endorsed by Donald Trump can’t get enough support to get through the House. The failure of the American Health Care Act should surprise no one, as it is a piece of legislation that managed to please no one. The Freedom Caucus, made up of the “true believers” of the Tea Party, balked at its similarities to Obamacare, while more moderate members found the bill’s modest change to the ACA too radical for their tastes. 

While the failure of the Ryan/Trump/Whatevercare represents a political defeat for the president and GOP leadership, it is probably a net-win for those who oppose socialized healthcare. After all, nothing could be more beneficial to the Bernie Sanders-wing of the Democratic party than for the nominally “free market” Republicans passing its own brand of reform that fails to fix America's insurance market. Much like the 2008 financial crisis, its collapse would absurdly be seen as a defeat for “capitalism” and be used as justification for even more government control.

The unfortunate reality going forward is that more significant approaches to healthcare reform, such as the bill pushed by Senator Rand Paul and his allies in the House, are unlikely to find enough support in the Senate. Further, considering the way the media portrayed the Congressional Budget Office’s analysis of the ACHA, which noted that 14 million consumers may no longer purchase healthcare without an individual mandate and therefore are “losing coverage,” any healthcare plan that comes close to pricing real healthcare risks (like properly accounting for the costs of those with pre-existing conditions) will be skewered relentlessly. This is all before even addressing the problems caused by Medicare and Medicaid.

This is precisely why attempts to push grand “free market” reforms in the Federal government end in failure. Few politicians in DC have the economic lens required to appreciate how necessary these tough decisions are, so Federal politics simply becomes a race to see which party can buy more votes than the other.

Given this grave reality, is there anything that can be done to improve American healthcare?

The answer is it is already happening because of the market.

Increasingly, doctors are abandoning the broken insurance model and claiming their own independence by offering direct patient care. As Business Insider profiled recently, around 1,000 doctors (and counting) are moving toward charging patients a monthly membership fee for service and then patients pay a la carte for the services they actually need. This allows clinics to eliminate most of the administrative costs and it restores the relationship between doctor and patient that has been undermined by a century of government intervention. For more specialized care, clinics such as The Surgery Center of Oklahoma, also use a cash-for-service business model without the monthly fee. 

Given that this is happening naturally on the market already, the legislative focus for those in Washington concerned about American healthcare should be preventing any future laws and regulations that would destroy this model going forward. Further, rather than trying to completely overhaul Obamacare, simply eliminating the individual mandate tax and allowing Health Savings Accounts to be used for healthcare membership would be subtle ways of empowering the market to revolutionize American medicine. This should be coupled with real tax cuts, not “revenue neutral reform” to help Americans keep their own hard-earned money to help pay for it.

Steps can also be taken on the state level to further empower medical professionals. For example, expanding the abilities of medical practitioners would help mitigate doctor shortages. Reforms to medical licensing — such as recognizing the real-world experience of military trained medics — would also make it easier for skilled individuals to enter the market.

This more modest approach to healthcare reform shouldn’t be seen as a defense of Obamacare or the status quo. It’s not. Obamacare was a deplorable piece of legislation, designed by people who were either utterly delusional or intentionally crafting a framework that would fail. In a just world, everyone who played a hand in crafting it should be forever stuck with the fruits of their labor for their own personal care.

Yet we can’t be blind to the realities of modern politics — Washington is dominated by progressive ideology in both parties. While the long-term solution to this has to be political decentralization, in the short term we can settle by defending the ability of markets to compete along side government regulated disasters. This was how Ron Paul sought to destroy the Fed, it’s how homeschooling parents are able to free their children from public education, it’s how Patrick Byrne plans to undermine government cronies on Wall Street.  

As the Soviet Union was collapsing, Murray Rothbard wrote a paper outlining how to desocialize an economy. Gradual reform would fail, he noted, because “the giant socialist bureaucracy will only seize upon such delay to obstruct the goal altogether.” Instead, he advocated prioritizing the protection and normalization of already established black markets.

America doesn’t yet have completely socialized medicine, but the same approach is true here. As long as we preserve the functioning markets that currently exist, and allow them to grow, Americans can maintain hope for a functioning healthcare system in the future.

The same cannot be said for Washington politics. 



Categories: Current Affairs

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