Progressive Democracy


Most Americans recognize that while the American Founders established a constitutionally limited government of enumerated powers, twenty-first century American government has expanded well beyond the boundaries our Founders designed. Some are unhappy about this; others believe it is entirely appropriate, thinking that our advanced post-industrial society needs much more government involvement than the mostly-agrarian nation did when it was founded.

Regardless of whether one favors or opposes the massive expansion in the size and scope of government, the reason government has been able to escape the bounds of the constitutional constraints designed by the Founders is the acceptance of the ideology of Progressive Democracy.

Tax Cut Doomsayers Need a History (and Economics) Lesson


The recent federal tax cut is creating a lot of fear and angst that a quick historical survey would go far to allay.

Consider, for example, this recent opinion piece by two officials of the Council of Nonprofits, “Nonprofits Must Move Swiftly to Fight for Sound Public Policies.” Characterizing the tax bill as unleashing a “destructive tsunami,” they go on to predict:

as governments at all levels are forced to cut spending, more work will fall on nonprofits to help people hurt by the spending reductions. Expect nonprofits to have to seek more money from foundations to cover those costs—think of it as a new tax on philanthropy to subsidize decisions of politicians.

Swamped by the legend that World War II ended the Great Depression are the facts that the U.S. domestic economy remained mired in depression until 1946—after the war had ended. The single measure by which many conclude that the Depression ended with the war is unemployment—which not surprisingly declined from a high of 9-15% in 1940, to 1.2% in 1944, when 16 million Americans were “employed” by the military. Those left at home continued to suffer low standards of living including rationing of almost everything, the pain of which was likely eased by the “spirit” of shared privation for the war effort.

Iranian Unrest


As I read about the demonstrations in Iran, my thoughts turn to conversations I’ve had with Iranian citizens over the past several years. From 2011-2016 I taught in a week-long summer program on public choice put on in the Republic of Georgia by the New Economic School headquartered in Tbilisi, Georgia. The program attracted students from between 25 and 35 different countries each year, and every year some students were from Iran.

I always enjoyed talking with the Iranian students, and hearing about their views on life in Iran, and their government. While I can’t claim that the students in attendance were a random selection of Iranians, one thing that came through very clearly in talking with them was a general dissatisfaction with their oppressive government.

News coverage of the demonstrations notes Iranian leaders blaming the demonstrations on foreign interference by Iran’s enemies, including Saudi Arabia, Israel, and of course the United States. While I have no doubt that political leaders in those (and other) countries would be happy to promote demonstrations against the Iranian government, I also have no doubt, from talking to Iranian citizens over the past several years, that the main source of unrest comes from Iranian citizens, not foreign governments.

The Iranians I talked with did not like the oppressive social policies in Iran, nor the heavy hand the Iranian government was playing in the economy. They were concerned about government monitoring of their activities, and potential penalties that might be imposed on them for stepping out of line in any way.

Rule of Law: Order Versus Justice


One of the most important factors that generate prosperity is rule of law, which means having an objective set of laws that apply to everyone. Rule of law provides the incentive for people to engage in productive activity so they can prosper themselves by producing value for others.

In the absence of rule of law, institutions favor some people over others, and entrepreneurial individuals have the incentive to look for ways to join the favored group and to benefit themselves through activities that impose costs on others. Rule of law removes the opportunity to prosper through connections and cronyism, and creates opportunities to prosper through mutually-advantageous exchange.

Brexit—Everything Changes so It Can Stay the Same?


If we want everything to remain the same, everything must change. These famous words from The Leopard, Lampedusa’s masterpiece of social upheaval in Sicily during the Italian unification, might as well have been inspired by Brexit, to judge by the first phase of the negotiations between London and the European Union, which have finally produced an agreement.

The terms of the agreement are these: London will pay the EU about 40 billion pounds; Europeans living in British territory can stay (and vice versa); and the border between Northern Ireland, which belongs to the United Kingdom, and Ireland, which belongs to the EU, will be soft. It remains to define what “soft” means, but since London has agreed to “align” its norms with those of the union to ensure that there will not be a “hard” border, clearly the outcome will resemble the current situation.

The second phase of the negotiations, soon to start, will focus on economic exchanges between the two parties.

There are two options. One is the Norwegian way: in exchange for access to the single market (its official name is “internal market”), London agrees to make economic contributions, adopt European norms, and maintain the four freedoms, which include the free movement of people. The other is the Canadian way: London and Brussels sign a free trade agreement that lifts barriers to goods but not services.

Governmentium


From the satirical vaults of 2005 by an unknown author who we wish we could credit, but most likely someone who was working for the government:

Scientists have discovered the heaviest element yet known to science. The new element, Governmentium (symbol=Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

Since Governmentium has no electrons, it is inert. However, it can be detected because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete.

Governmentium has a normal half-life of 2 to 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes. This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.

When catalyzed with money, Governmentium becomes Administratium (symbol=Ad), an element that radiates just as much energy as Governmentium, since it has half as many peons but twice as many morons.

H/T: Paul J.H. Schoemaker

Optimality—The Mainstream Economist’s Holy Grail


In discussing the economy and especially economic policy, mainstream economists have been in love with optimality for a century or so. They have built many mathematical models from which they have derived conditions related to optimal tariffs, optimal population, optimal money supply, optimal taxation, optimal subsidies, and so forth. Indeed, for talking about the overall economy, their criterion of efficiency is something called Pareto optimality.

By now, probably thousands of articles have been published in economics journals in which the author constructs an economic model, derives from it the optimality conditions, and concludes by making policy recommendations that prescribe how governmental authorities should act—that is, should use their coercive power—to force the real world into conformity with the model’s optimality conditions.

All this—above all, the policy recommendations—is for the most part an enormous waste of time and intellect.

California Should Retire the Secure Choice Program Before It Begins


Properly planning, and saving for, one’s retirement is certainly a worthy goal, but, like many other things, it can become corrupted by heavy-handed government meddling. Last year, the Legislature, and Gov. Jerry Brown, enacted Senate Bill 1234, which establishes the California Secure Choice Retirement Savings Program, a mandatory automatic retirement savings program administered by the state for private-sector workers who work for an employer with five or more employees that does not offer its own retirement plan. The California Chamber of Commerce, which dropped its opposition to the bill and remained neutral after provisions explicitly shielding employers from liability were incorporated, recently urged business to participate in workshops regarding proposed regulations for the program.

FDA Greenlights Testing ‘Ecstasy’ for PTSD Therapy


MDMA, more commonly called “ecstasy” or “Molly,” is an illicit substance often taken to induce euphoria. The Controlled Substance Act considers MDMA a Schedule 1 controlled substance, which has no known medicinal benefits and a high likelihood of abuse.

Penalties for using or distributing MDMA are considerably high even for a Schedule 1 substance. In 2001, the U.S. federal government increased penalties for people convicted of dispensing over 50 grams of MDMA to a four-year prison sentence and up to $4 million in fines. These penalties could double if the buyer was harmed from the exchange. Similarly, possessing 5 grams of MDMA can result in a prison sentence ranging from 4 to 50 years.

New Blood-Pressure Guidelines Raise Concerns about Interest-Group Lobbying


On November 13, millions of Americans had high blood pressure for the first time. It wasn’t even Thanksgiving.

That day the American College of Cardiology (ACC), working with the American Heart Association (AHA), released new guidelines regarding what constitutes high blood pressure. Since 2003, a reading below 140/90 was considered normal. Now, any blood pressure over 120/90 is considered hypertension.

These changes mean nearly half of Americans have high blood pressure, a considerable increase from about 30 percent under the old guidelines. If hypertension rates before these changes were described as an epidemic and a silent killer, the new rates will likely replace the silence with alarm and calls to action.

As a first call to action, authors from the AHA and the ACC also provided new recommendations monitor and treat hypertension, which include emphasizing a “team approach,” stress management, self-monitoring equipment, more educational materials, and drastic dietary changes.

But how are these changes going to be implemented? Historically, efforts to combat public health problems eschew competition in the market in favor of using the political process.

These most recent changes are no exception. Both the ACC and the AHA openly advocate using government to advance their interests. According to the Center for Responsive Politics, in 2016 both organizations spent just under $3 million to lobby the federal government.

  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org