Dormant blog

If you're a regular reader you've probably noticed that I've been blogging way less frequently. I've been busy finishing my last semester of college; getting my BS in Accountancy. Now I have a full time job at an Accounting firm. Unfortunately, I don't have the time to blog any time in the near future. I might resume someday, but until then, good-bye and thanks for reading.

No New Sales Tax in Hong Kong

A follow-up to an earlier post, it looks like Hong Kong will not introduce a new sales tax due to wide-spread opposition.

Via Stefan Karlsson

Milton Friedman RIP

Milton Friedman died today at 94. He will be missed.

Update: More from the Cato Institute

The Problem With State DB Plans

I think this is one reason why government defined-benefit plans are a terrible idea. Schwarzenegger signed a bill that bars state investment plans from investing in Sudan because of the Darfur crisis. No doubt it's well intentioned, but what does the Darfur crisis have to do with getting an adequate ROI? The problem is that decisions are being made on a political basis rather than an economic one. Since CalPERS has hundreds of billions in assets, it has a lot of clout. CalPERS desparately needs to be reformed into a defined-contribution plan so individuals can control where the money goes.

Update: After rereading the last sentence opf my post I think that I should elaborate more. If individuals controlled where their contributions went they could base their decisions on politics, but my guess is their main concern would be achieving a satisfactory ROI.

Terrible Trade Policy Proposal

I'm going to second Dingel's comment; he believe's that this is one of the worst trade policy proposals in recent memory. The proposal is to force importers to obtain a government certificate to import goods as a remedy to the trade deficit. Oddly, the senators that are proposing the new law argue that it's a "market based system". Huh?

WHO wants more DDT

The World Health Organization wants to use more DDT to help fight malaria. According to the article, "DDT, longed banned in the United States because of environmental damage, is no longer sprayed outdoors". This is due to extensive lobbying from wealthy western environmentalists. Other measures seem to have questionable results, "Bednets soaked in different insecticides already are used to protect sleeping families. But if the nets are torn or aren't used every night, a mosquito can infect someone. Plus, mosquitoes can develop resistance to those nets' chemicals, Shiff added, pointing to a 2002 malaria outbreak in part of South Africa using bednets. DDT in those houses quelled the outbreak".

Update: More from the BBC
Update 2: More from the WSJ

A Little Liberty Goes A Long Way

Those economists at GMU are worth their weight in gold. Here's a list of areas where GMU economists think could benefit from liberalization and privatization. I do have one question though. How do you privatize "All job training and workforce assistance programs"? Is that the same thing same as privatizing a loan program (like a student loan) or does it refer to something else?

Via Arnold Kling

Ouch! The Truth Hurts.

It looks like, contrary to popular belief, outsourcing increases domestic wages:

Take that, Lou Dobbs. Despite much handwringing and political posturing, the surge of job outsourcing, by increasing productivity, has actually helped raise real wages for low-skilled U.S. workers, according to two Princeton University economists.

Also, it looks like most of the burden of the corporate income tax gets passed on to employees:

...domestic labor bears slightly more than 70 percent of the burden of the corporate income tax.

Via Jane Galt and Greg Mankiw

Now, do you think any politicians will run a campaign on a platform of letting companies outsource and reducing corporate income taxes? Given that it's an election year, I doubt it.

Libertarian Entertainment

Here is some excellent libertarian humor (via Bryan Caplan).

Update: Also, a humorous observation (about a serious situation) from Johan Norberg about Bolivia's Evo Morales recent move to nationalize the country's energy sector, "the Bolivian government has just realised that they don´t have the funds or the technical knowledge to take over the production. So now they want their victims to help them make the loot operable. It´s like someone stole your car and then asked you for driving lessons."

How To Argue With A Libertarian

I found this post to be so accurate that it's creepy. No doubt others have encountered similar situations. Here are a few gems:

1. Attack libertarians for their motives. Advertise your own in the process.

Example: "You just recite propaganda against high taxes and social programs because of greed! I support such things out of a concern for those in need." This particular example is most effective if "need," "greed" and "propaganda" are left undefined.

4. Criticize capitalism by its worst cases. But do not (ever!) compare these to the worst cases of statism.

Example: "The Enron scandal was the product of unfettered profit seeking under capitalism." If a libertarian replies that Stalin's brutality was the product of a statist program, change the subject or claim that your brand of statism precludes such abuses. Better still, try to argue that Stalinism was actually a kind of capitalism.

5. Always interpret any criticism of government programs as a demand for perfection and attack such a demand as unrealistic.

Example: A libertarian might argue that the benefits of the FDA keeping some drugs off the market are outweighed by the costs of keeping other drugs off the market. Engaging this argument directly can be a real quagmire. Instead, accuse the libertarian of using perfection as the standard for evaluating government activities.

8. Criticize libertarians for whatever interaction or noninteraction they have had with the state.

Example: "Yet another libertarian that went to a state school. What a hypocrite!" Alternately: "Yet another libertarian that went to a private university. Of course the super rich can afford to be libertarian." Since the government is involved in just about every aspect of our lives, it should be easy enough to find a similar charge to make against any libertarian. Whatever the personal activities of a libertarian may be, be sure to find fault.

9. No policy should ever be tried until it has already been tried.

Example: "Let libertarians point to a successful example of their policies being implemented before we consider implementing them." Be sure to use this argument like a taxicab, however, as it implies that no government program should ever have been implemented in the first place.

11. The complexity of the world is always and everywhere an argument in favor of government intervention.

Example: A libertarian might argue that price ceilings will lead to shortages. Do not waste time discusing the interplay of supply and demand. Istead, try an argument like "Society is too complex for simplistic supply and demand arguments to be taken seriously. So the government should implement price ceilings." Characterizing libertarian arguments as simplistic is helpful too, as it makes statists seem to be the more sophisticated group.

14. Disregard the possibility that libertarians make tradeoffs in their own lives.

Example: "You claim to oppose taxation but you live in a place with taxes." The libertarian in question will argue that he opposes taxation but remains in his present place of residence to avoid other things that are worse than taxes, such as even higher taxes or the costs of leaving the country. Disregard any such protest. Call the libertarian a hypocrite.

16. Call policies by names that presuppose their effectiveness.

Example: "I can't believe that libertarians oppose Aid to Families with Dependent Children (AFDC). How could they be against programs that aid these people?" The same approach is suitable for "anti-discrimination" laws, "foreign aid," "affirmative" action, price "controls," "guaranteed access" to health care, "fair lending" laws and so on.

Via Freeway to Serfdom

Hong Kong Tax Protest

Thousands Protest Sales Tax in Hong Kong

Nearly 3,000 people marched from a downtown park in Hong Kong to government headquarters Sunday to protest a proposal to levy a sales tax in the territory, arguing it will hurt local businesses.

Protesters carried signs saying, "Say no to sales tax" and chanted "no to GST."

"Our costs will be high. We expect many restaurants to not be able to take it and shut down," Woo Chu, a restaurant industry association official, said in an interview aired on Cable TV.

The pro-business and traditionally pro-government Liberal Party, which organized Sunday's march, said in a statement that the demonstrators came from the retail, logistics, jewelry, restaurant, cosmetics, fashion and real-estate sectors.

In my opinion, there's a case to be made for going from an income tax to a consumption tax, but that's not what's going on here. What's being proposed is a GST being placed on top of the current system, that's why it should be opposed.

Argh!

How frustrating, my hard drive has crashed and is in need of repair. I'm typing this post off of someone else's computer. Needless to say posting will be minimal until I have a working PC.

Update: Everything is up and running again after being out of commission for about a week.

Governator Meets Friedman

I just found Free to Choose on Google video! You can see a younger Schwarzenegger giving an intro to the series here. I like how he describes freedom as being able to "chase your own rainbow". LOL, I've never though of it like that, but I guess it makes sense.

Via the comments to this post for another Friedman video.

FEMA and Corruption

A new study argues that FEMA relief leads to more corruption. Here's the abstract:

Could bad weather be responsible for U.S. corruption? Natural disasters create resource windfalls in the states they strike by triggering federally-provided natural disaster relief. Like windfalls created by the natural resource curse and foreign aid, disaster relief windfalls may also increase corruption. We investigate this hypothesis by exploring the effect of FEMA-provided disaster relief on public corruption. The results support our hypothesis. Each additional $1 per capita in average annual FEMA relief increases corruption nearly 2.5 percent in the average state. Eliminating FEMA disaster relief would reduce corruption more than 20 percent in the average state. Our findings suggest that notoriously corrupt regions of the United States, such as the Gulf Coast, are notoriously corrupt because natural disasters frequently strike them. They attract more disaster relief making them more corrupt.

Via Division of Labour

Rising Drug Prices

According to this article:

Prices of medicines used by older Americans for chronic conditions such as arthritis and high cholesterol are rising even as new federal drug coverage has been rolled out to help make prescriptions more affordable

Do you think it's a coincidence that the two events are occurring at the same time. I don't and neither does Stefan Karlsson:

This correlation in time is hardly coincidential, as this is just what you could expect from any increase in subsidies. Subsidies of anything will increase demand, something which in turn will of course raise prices.

I think I only partially agree with his analysis, though. Subsidies can also be used at times to increase supply (by subsidising the production of a good) thereby lowering prices. Of course, that's not what's happening here. In this case, the federal government is subsidising consumption thereby raising demand and prices along with it.

Interesting

Someone actually did a side by side comparison between the United States Constitution and the Confederate States Constitution. See here.

CA Cable Reform

Adam Summers is mildly supportive of California's cable franchise reform:

The legislation, A.B. 2987, sponsored by Assembly Speaker Fabian Núñez (D-Los Angeles) and Assemblyman Lloyd Levine (D-Van Nuys), would reform the anachronistic cable franchise system by eliminating the costly practice for providers of obtaining cable franchises city by city. The change is intended to open up cable competition to telephone companies and others and offer consumers greater choice and lower cable bills.

He also has some doubts:

Perhaps the greatest concern, however, is that the concentration of franchise power in the state could actually lead to higher franchise costs and more burdensome regulation in the long run.

Scrooge Reads My Blog

Someone arrived on my blog by doing the following Yahoo! search:

negative effects santa clause has on kids

I'm sorry, but I don't think I have any knowledge on the topic. ;)

Bi-Partisan Fiscal Irresponsibility

We all know Bush spends like a drunken sailor, but when the Democrats take charge in November we'll have a divided government and fiscal responsibility, correct? Oh, maybe not:

“When I become chairman [of a House appropriations subcommittee], I'm going to earmark the shit out of it,” Moran buoyantly told a crowd of 450 attending the event.

Via Donald Luskin

Organ Shortages

Virginia Postrel on organ shortages:

The most obvious way to increase the supply of any scarce commodity — paying more for it — is illegal. Federal law blocks transplant centers, patients and insurers from compensating donors in an above-board process, with full legal and medical protections. The growing and inevitable "transplant tourism" industry, and even shadier organ brokers, are the kidney equivalents of back-alley abortionists.

LEGALIZED FINANCIAL incentives would encourage more people to volunteer their organs. Donors would probably still be relatively rare, just as surrogate mothers are. Many, like me, would still help out without payment, just as some people get paid for giving blood or fighting fires while others do it for free.

Paying donors need not hurt the poor, any more than paying dialysis centers does. Compensation could, in fact, help low-income Americans, who are disproportionately likely to suffer from kidney disease.

Via Greg Mankiw

The Vicious Circle of College Tuition

Neal at the Cato blog makes what I consider to be an important observation:

The political cycle that drives tuition is actually easy to understand: Some people complain that tuition is too high and demand that politicians make college “affordable.” Politicians, to get votes, provide student aid. Then schools, suddenly able to get more money, raise tuition. But wait, that makes college “unaffordable” again! And so it goes…

He has an update to the previous post here.

Good News

Support for agricultural subsidies is starting to diminish:

Fat days may be over for farm subsidies

From the article:

Opponents cite several reasons why existing farm subsidies need to change:

• Some call them unaffordable. Pat Toomey, a former Republican congressman who heads the fiscally conservative Club for Growth, calls them "Moscow on the Mississippi."

• Some call them protectionist. Groups such as Oxfam and Bread for the World, as well as Irish rock star Bono, say American and European subsidies help flood the world market with inexpensive crops, holding back farmers in Third World countries.

• Some call them discriminatory. Hoagland says 93% of the payments go to farmers who account for just 21% of farm income.

Of course, some call them "all of the above".