That’s the headline in this USA Today article.  Some excerpts:

“Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year… At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high… The result is a major shift in the source of personal income from private wages to government programs. … The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all…”

Will we, collectively, come to the same realization Professor Grimes has, or will we keep moving toward the situation Greece finds itself in now?  Perhaps we’ll get some indication in November.

The federal budget is to a tolerable government

as the Palace of Versailles is to a two-car garage.

***

The Code of Federal Regulations is to the rule of law

as a trainload of cyanide is to a nutritious diet.

***

A member of Congress is to the preservation of our liberties

as a member of the Mafia is to the propagation of Christianity.

***

The Pentagon budget is to the cost of adequate national security

as the Taj Mahal is to low-income housing.

***

The IRS is to serving the public

as a hungry shark is to a school of small fish.

***

A government prosecutor is devoted  to seeking justice

as a wolf is devoted to preserving a flock of sheep.

***

Eminent domain takings are to the public interest

as plague epidemics are to the public health.

***

Government “stimulus” spending is to economic recovery

As a sadistic physical therapist is to physical recovery.

***

Government planning is to rational allocation of resources

as tone deafness is to musical composition.

***

Most federal statutes are to the Constitution

as the Crusaders’ plundering and killing were to the Holy Bible.

***

The Supreme Court flees from logic

as a vampire flees from holy water.

***

Taxation is to extortion

as extortion is to extortion.

Today the Supreme Court decided United States v. O’Brien.  Under 18 U.S.C. 924(c) certain mandatory minimum sentences apply for carrying/using/possessing a firearm during a crime of violence or drug trafficking crime.  The typical mandatory minimum is 5 years, but if the weapon is a machine gun, then the minimum becomes 30 years.  The Court, in a unanimous decision, held that the determination of whether the weapon is a mere pistol or a machine gun must be made by the jury where the standard is beyond a reasonable doubt.  The government argued that this determination could be made by the judge where the standard is a preponderance of the evidence.   

This decision makes sense.  The status of the weapon seems to be clearly an element of the offense and this matter, like all other elements, should be presented to a jury of the defendant’s peers.

The Obama Administration has announced that it wants to spend at least $3.5 billion—and I wonder where they’re getting that kind of money?—over the next 3 years to help as many as 60 poor nations feed themselves.

While it is very good news that this involves ending the practice of sending U.S. crops to such countries, which development economists from at least the time of Peter Bauer have shown undermines local farmers, the thinking behind the new plan is no less fallacious:

With the initiative, Feed the Future, the administration said the countries would be required to draw up their own development plans, which could include breeding better seed and giving farmers access to credit, insurance and markets.

There is not one example of a country that has developed as the result of such central planning. On the contrary, there are countless which have flipped from self-sufficiency or even net food exporting to dependency on food aid as a result of a switch to central planning, including Ethiopia, Zimbabwe, and Venezuela.

As our books, Lessons from the Poor and Making Poor Nations Rich show, if Obama truly wants to help the world’s poor feed themselves, the U.S should pledge $0 to such aid and call for the economic and political liberalization, secure property rights, and the rule of law that has resulted in transforming formerly poor nations like Botswana, Estonia, and Chile (and let’s not forget North America) into middle- and upper-income nations.

… to the evidence that a North Korean submarine torpedoed and sunk one of its ships is to write it off as North Korean incompetence.  Despite persuasive evidence by the South that its ship was sunk by a North Korean torpedo, North Korea denies its involvement.  South Korea should accept that denial at face value, and claim it as evidence that the North Koreans are unable to even keep track of their own military.  Even after the fact they are unable to figure out what their navy has done.  They should issue a press release along these lines, acknowledging that the denial could only be the result of North Korean incompetence, and then simply let the incident drop.

They can close their statement, and smooth over the incident, by saying “We understand that they did not intend to sink our ship, because even after the fact they are unaware of what they have done. ”

Despite lots of saber-rattling over this issue, recall that there was not much in the way of sanctions or other punishment when the Soviet Union shot down a Korean Airlines 747 in 1983.  In that case, as in this one, it appears the attacks really were mistakes.  So, the claim that the sinking was a result of incompetence on the part of the North Korean Navy appears accurate.  What would North Korea have to gain by sinking the ship and then denying any involvement?

Pointing out North Korean incompetence, first by their accidental sinking of the ship (evidence: they don’t even realize they did it, if their denial is accepted), and second, by their inability to understand what happened even after the fact (evidence: their denial again) would probably do more to curb North Korean aggressiveness than sanctions and condemnations.

The New York Times is running an article about U.S. District Judge Jack B. Weinstein and his plan to inform juries about certain statutory mandatory minimum sentencing requirements imposed by Congress.  Weinstein believes that long sentences for simply possessing child porn are improper. 

He is right that individuals possessing child porn face serious time.  The advisory Sentencing Guideline used for possession is 2G2.2.  Here is how the sentence for the typical child porn possession case is calculated:

18  Base offense level

2  pics of a prepubescent minor

4  some pics featuring bondage

2  distribution (e-mailing a photo to a friend)

2 use of computer

5 over 600 images

33 Total

-3  for pleading guilty (acceptance of responsibility)

30  Final Calculation

Assuming no prior convictions on his rap sheet, the defendant faces 87-108 months in jail. 

One can see why Judge Weinstein has some concern about sentencing men with no criminal history to seven or eight years in federal prison for simply possessing child porn. 

Jury nullification, though virtually unknown today, has a long history in the United States.  In colonial days, juries were especially sacrosanct bodies and could not be overridden by a judge even if the judge believed the jury’s decision was against the greater weight of the evidence.  Juries in pre-revolutionary America possessed virtually unlimited power to determine both law and fact. Judges were often relegated to deciding pretrial motions and other ministerial matters. In the words of Thomas Jefferson, written shortly after penning the Declaration of Independence, judges should be “a mere machine” when performing their duties. In Georgia, for example, the juries of the county superior courts decided issues of law and fact, turning to judges only when they desired advice. Decisions of the superior courts could be appealed to special juries, not a supreme court. By placing such power in juries, the community could control the content of substantive law.  A legislature could pass a statute and a judge could instruct on the common law, but juries possessed the power to veto both.   

Perhaps juries should enjoy renewed power in modern America and not just in child pornography cases.

If the Tea Parties and conservative activists want to be serious about opposing big government, they need to abandon their love of border police, immigration controls and statist nationalism. The hysterical response to those on the left comparing the Arizona law to Nazism reminds me of the equally hysterical response to those on the right comparing Obama to Hitler. We are never to compare America’s big-government policies to those of the Nazis, unless we ourselves don’t like those policies. That seems to be the standard on both left and right.

The borders cannot be sealed. There is just far too much a stretch of land to try to control. A fence won’t work. People can easily circumvent walls. Any attempt to truly “crack down” on immigration would devastate America. The cost in civil and economic liberties, and the diminution of the freedom of association, are much too severe to treat cavalierly. How is the U.S. government going to “stop” illegal immigration, when it cannot do anything else right? Do we want to see more than 10 million people rounded up and deported? If not, what are we talking about exactly, and if so, how can this possibly be done without destroying the rest of America’s freedom? And where does the Constitution even authorize the federal government to control immigration? Naturalization is the prerogative of Congress; immigration is not.

Those who favor small government and free enterprise should oppose the overbearing state necessary to control immigration. Yes, commentators are right that other nations control immigration, but why should America be more like other nations? If Western Europe is a bad model for economic policy, why should our border policy mimic theirs?

Republicans are split on the Arizona law, but the underlying factor appears to be politics, not principle. This was not always the case. Ronald Reagan implemented the last major immigration amnesty, and if he’s good enough for today’s Republican Party to look upon with nostalgia (as opposed to the Bushes who followed him), why do today’s conservatives ignore one of Reagan’s most sensible policy prescriptions, in the area of immigration?

For more on immigration, see Jonathan Bean’s Race and Liberty in America and the Institute’s immigration archives.

I’ll confess up front to being a Walmart stockholder.  The company’s annual report arrived in my mail last week, with the statement on the front, “We save people money so they can live better.”  A number of studies (for example, here, and here) suggest that Walmart has lowered prices significantly in the United States, supporting the claim on their annual report cover.

They are not just saving money for people in the United States.  More than half their stores are outside the United States, including 1,469 in Mexico and 279 in China.

In making this comparison, I don’t mean to minimize Mother Teresa’s help for the poor.  Wikipedia reports that her Missionaries of Charity, which she founded in 1950 in Calcutta, had expanded to 610 missions in 123 countries by the time she died in 1997.

Worldwide, the percentage of people living in extreme poverty declined from about 40% in 1981 to about 21 percent in 2001.  Most of that decline was in East Asia, where China and other countries moved away from central economic planning toward market economies.  We can’t give Sam Walton credit for all that, but the move toward economic freedom more generally probably deserves most (or all) of the credit.  Walmart sells in China, but the also buy Chinese products, and their presence in the market has forced other competitors to be more efficient and more productive.

Private charity helps lots of people, and Mother Teresa did some great things.  I’m not arguing that markets can replace private charitable activity.  But the well-being of humankind — including the poor — has been improved much more by the economic progress generated by market institutions than it has by charitable activities.

“Why do voters hate incumbents?” asks Glenn Greenwald.

One reason why media mavens seem reluctant, even unable, to grapple with this question is because it so plainly falls outside their familiar, comfortable narratives. Contrary to efforts earlier this year to depict the problem as one aimed at Democratic incumbents due to the unpopular health care plan and the growing “tea party” movement, Republican voters — as demonstrated in Florida, Utah, and last night in Kentucky — clearly hate their own party’s leadership at least as much as the animosity directed toward Democratic incumbents. The trend is plainly trans-partisan and trans-ideological, and the establishment political media has a very difficult time understanding or explaining dynamics about which that is true.

I share Greenwald’s hopeful view that throughout the country an anti-establishment disposition is brewing strong. I also share at least some of his reservations about the political views of many of the people upset at the current government—but this is always true and was certainly true for me under Bush. The real hope is in the prospect of Americans adopting a more consistent ideological commitment to liberty. The establishment is often on shaky ground with millions of people at any given time. While the discontent with Washington has probably ballooned in recent years, there is always the risk that the opposition will become co-opted when the other party rises back to party, as usually happens. On the other hand, if the growing realization that Bush and Obama are not very different after all and that the leadership of both parties is irredeemably corrupt is any indication, there is the real chance this could turn to an even more fundamental public understanding of the problem with massive and unlimited central political power as a matter of principle. Americans are frequently upset at the powers that be, but they must learn to oppose the power itself. Can this happen? Yes, especially if Americans finally cast away the false distinction between personal and economic liberty that the modern left and right thrive on, and the false distinction between the inherent nature of foreign intervention and the inherent nature of domestic intervention.

What economic lessons can be learned from the Haiti earthquake recovery?

Below are five lessons drawn from economist Robert Murphy, based on his article for the Ludwig von Mises Institute about the week he spent in April volunteering with Hands On Disaster Response in Leogane, Haiti. (His blog post on his motives for volunteering is also worth reading.)

1. Economies of scale can have a large impact even on micro-entrepreneurs. A small-scale currency exchanger found it worthwhile to offer foreigners a significantly more favorable exchange rate. He could afford to offer a rate more favorable than that charged by retailers because his rate attracted a comparatively large number of customers. His margin was slim, but he made up for it in volume.

2. Markets outperform governments in the delivery of services. Murphy writes: “…if we set aside the issue of law enforcement and focus on more conventional services, then I definitely did observe the impotence of government and the vitality of the market. Any service that was nominally supplied by the government — including electricity, water, and garbage removal — was basically nonexistent. Moreover, it wasn’t simply a matter of the earthquake; I got the sense that many, perhaps most, of the locals hadn’t had electricity beforehand, either.”

3. Economic growth is the fundamental requirement for safe and affordable buildings. Given Haiti’s extreme poverty, strict building codes would have pushed up construction costs and created more homelessness. (Many engineers Murphy spoke with in Haiti overlooked that point.) “In summary, I think the explanation for Haiti’s vulnerability to a major earthquake is that they are very poor, and couldn’t afford safer buildings,” writes Murphy.

4. Cultural attitudes can help or hinder post-disaster recovery — and economic growth in general. Many Haitians regarded volunteer workers with suspicion, according to Murphy. They believed the volunteers were actually paid workers who were “stealing their jobs.” The locals, he writes, “thought they should be getting paid to remove the rubble from their collapsed homes…. If this is the predominant mindset, how could anyone start a successful business? I would imagine the jealousy and gossip of his neighbors would be unbearable.”

5. Non-profit disaster relief organizations can offer impressive strengths — and a few weaknesses. Among the strengths, Murphy describes the dedication, stamina, and fearlessness of many of his co-volunteers, who took sledgehammers to rubble all day, often in temperatures above 100 degrees Fahrenheit. Among the weaknesses, Murphy cites the difficulty of allocating resources in the absence of a price system. In the case that he witnessed, the organization for which he volunteered had trouble establishing clear guidelines for prioritizing tasks and putting volunteer labor to its best use. Murphy came up with a few ideas for improving the allocation of labor, but given the tremendous constraints that his organization faced, he wasn’t sure his ideas would have made much of a difference.

Murphy’s conclusions:

“In my brief time in Haiti, I saw the laws of economics at work. Entrepreneurs rushed to satisfy customers, as proven by the owners of motorcycles who suddenly became taxi drivers after the roads were filled with rubble. Government, in contrast, completely failed to deliver promised services to the people. I was pleasantly surprised to see that the ‘nongovernmental organizations,’ at least the one I worked for, were filled with some of the most interesting people I have ever met.

“Although outsiders can definitely provide emergency relief, and even long-term advice, ultimately Haiti will remain mired in poverty so long as the majority retains their current hostility to open competition and commerce.”