Thursday, July 31, 2008


Those supporting public funds for higher education typically point to the social benefits of education. But a recent study suggests college means four more years of social deviance. From a NYT article titled College Students Behaving Badly:
“College attendance is commonly associated with self-improvement and upward mobility,” Mr. Seffrin said. “Yet this research suggests that college may actually encourage, rather than deter, social deviance and risk-taking.'’
With similar results, Dr. Lawson compares the alma maters of DoL contributors with Princeton Review's list of party schools. T-Stats throught the roof.

[HT: Sarah]

Wednesday, July 30, 2008

Blogroll Roundup

TC says random posts are optimal.
But with Google and Wikipedia you must choose the topic. A good blog writer can randomize the topic for you, much like a good DJ controls the sequence of the music.
Justin Ross discusses HR 5843, a bill aimed at legalizing marijuana possession.
[...]as you would expect the actual bill falls far short of having any teeth.
Janet suggests Poor People Don't Need Food Anyway.
Poor people need to slim down by picking something like organic, free range, locally made granola and home made yogurt with local organic clover honey instead of that fatty Egg McMuffin. [...] Once we tell people how to budget their (very limited) funds, I'm sure they'll find a way to make it work.

And Libby gets started.

Cato Event: The Dirty Dozen

Thursday, July 31, 2008 at 12:00 PM

Not in DC? Watch live online.

Released to great acclaim in May 2008, The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom analyzes 12 U.S. Supreme Court decisions that, according to coauthors Robert Levy of the Cato Institute and William Mellor of the Institute for Justice, changed the course of American history away from constitutional government. In addition, The Dirty Dozen provides insights into the proper role of the Court and calls for judicial engagement to remedy these harmful decisions. The book has rapidly become the catalyst for an energetic, wide-reaching debate about the Supreme Court, generating an extensive range of opinions among legal professionals, concerned nonlawyers, and Court followers about the 12 cases, their impact, and the role of the Court. The Cato Institute and the American Constitution Society are pleased to provide a public platform for this important debate. Leading practitioners and academics from different perspectives will discuss the cases and the authors’ legal analyses.

Writing is Right

Over at Mises, Art Carden writes on...writing. Specifically, he says we should do more of it. A lot more.
I've been writing for a long time, but I haven't written as frequently and regularly as I should have. Also, it has taken a very long time to develop anything resembling proficiency. Nevertheless, some of my favorite wisdom on the subject comes from a chapter title in D.N. McCloskey's short volume Economical Writing: "fluency can be achieved through grit." Or, as 1986 Nobel Laureate James Buchanan once said it a little more bluntly and a little less poetically, "keep your a** in the chair."

Tuesday, July 29, 2008

Blockquoting X

From the cover letter to some film tax studies I am reading:
Anytime money is spent in the economy, it generates a positive economic impact. This impact varies from industry to industry. For example, the impact multiplier for earnings in the film industry is 1.93. However, for the automobile manufacturing industry it is 2.25; for a new supermarket it is 1.7; for the commercial construction industry it is 1.73; for a nuclear power plant it is 2.51; and for a new hotel it is 1.91. Thus an economic impact analysis will always show that public subsidies result in a positive economic impact for the state.
Ignore Bastiat. Assume this is correct. It should still be noted that "generating a positive impact" is not the same as being the optimal path to pursue. And in a complex world where knowledge is dispersed (and, in some cases, tacit), only a discovery process like that of the market economy can reveal the latter. Comments open.

Cato Attacked!

For those of you outside the beltway (and not on the email lists), Cato was attacked by Students for a Democratic Society yesterday. So much for peace, I guess.

Michael Cannon describes the event:
I work at the Cato Institute. I jumped up from my desk today when I heard lots of yelling coming from outside the building. When I got to Cato's interior balcony, I saw dozens of SDS lemmings pushing a handful of cops against the front doors and the glass facade of Cato's winter garden. (What did they think would happen if they got in? I guess they didn't follow Heller.) At great risk to their personal hygiene, the cops pushed the protesters back, but not before the little buggers slapped some anti-NAFTA stickers on the building and the marble wall outside. When I got downstairs with my camera, these are the pictures I took. I also took a video, and I'll see if I can post that. I'm leaving this album open for everyone to see, in the hopes that some of these SDS morons will self-identify, and we can explain to them how they're lining up with corporate interests to fuck the world's poor.
More pictures are available here.

Battle of the Hayeks

Glen Whitman has an interesting section on his site comparing Friedrich Hayek with the smoking hot Mexican actress of the same last name
So, you're an intellectual who appreciates the subjectivist economic theory and classical liberal political theory of Friedrich Hayek. And you're also a moviegoer who appreciates the exotic allure of Mexican screen goddess Salma Hayek. But who would win, if they went head to head? Lucky for you, I'm keeping score.
Check out the scorecard for complete results.

[HT: Ed]

Monday, July 28, 2008

Jib Jab

For those of you who have not yet seen the newest Jib Jab cartoon...

featuring yours truly.

Send a JibJab Sendables® eCard Today!

Blockquoting X (and Y)

From a public health perspective, there is a solid case to be made that arresting marijuana users, giving them criminal records and disrupting careers and families, does more harm to more people than the drug itself does.
That is from Joyce Elders, M.D., former US Surgeon General.
There is no logical basis for the prohibition of marijuana [...] It's absolutely disgraceful to think of picking up a 22-year-old for smoking pot.
And that is from Milton Friedman.

Now, let's hear from you. Comments open.

What I am Reading

How to Drive Fast on Drugs While Getting Your Wing-Wang Squeezed and Not Spill Your Drink

My favorite O'Rourke article, hands down. I read it from time to time, primarily to remind myself how poor of a writer I am. And also in a sad hope that I can improve by reading more articles like this one. Or at least by reading this one over and over.

The Myth of the Rational Voter: Why Democracies Choose Bad Policies

This book is on track to be the best I have read all year. Caplan clearly articulates the debate thus far, then adds his contribution to the discussion. Most importantly, he couples his scholarly research with witty stories and interesting quotes. Add this one to your queue. Preferably near the top.

Markets in Everything

Hair dye, of a sort.

Slogan: "Boldly going where no color has gone before."

[HT: Sarah]

Friday, July 25, 2008

Raise your Glasses

I would like to make a toast to Ed Stringham. And I suggest everyone has a drink in his honor tonight.

In case you did not catch the DOL post, Stringham took part in a discussion on San Francisco public radio where he defended alcohol consumption. You can listen here.

Stringham has published on this subject before.

[HT: Ed Lopez]

Cost of Living

Prices are going up, right?

...well, Mark Perry says not so fast.


Also, I will be adding Perry's blog to the Blogroll. This is the second time I have cited his blog.

Answers to My Liberal Friends

The Progressive Policy Institute is a think tank which, according to its mission, aims "to define and promote a new progressive politics for America in the 21st century." You might call them Neo-Democrats.

Fortunately, it appears NeoDems are much more sensible than there predecessors on international trade. Consider the work of Edward Gresser.

Samaritan's dilemma

I had lunch at McDonald's today. On the way out, I saw the guy who had been in front of me in line handing a homeless woman a hamburger. I could have given up a buck for her burger, but I didn't. Am I a bad person?

To be honest, I have legitimate concerns with helping the poor. On the one hand, I feel the urge to help those in need. On the other, I know about the Samaritan's dilemma. How does one avoid this conundrum?

Oil Prices

According to NYMEX, light crude oil is down to about $124. That is $2.50 less than yesterday.

As my office mate Bob jests, gas will be free in 100 days if this market trend continues. It won't. But there is a good chance Caplan wins his bet with Cowen and Balan. Anyone interested in a side bet? Comments open.

What I am Reading

I am on the final chapter of Coyne's After War. This book has been on my desk for some time now and I am glad I finally got around to reading it.

In the book, Coyne lays out a framework to illustrate the potential problems involved with establishing liberal democracies by force. Observing the relevant successes (Germany, Japan) and failures (Somalia, Haiti), he shows what problems policymakers will continue to have in Afghanistan and Iraq. In his final chapter, Coyne lays out his plan for spreading liberty.

I highly recommend this book, so pick up a copy right away.

Thursday, July 24, 2008

Blockquoting X

This time, X refers to Chris Coyne. From After War:
The first major hurdle is the knowledge problem. In short, policymakers and academics lack the knowledge of how to construct liberal democratic institutions where they do no already exist. The second hurdle is the political decision-making process. Policymakers must act within a set of political institutions that will tend to distort the policies driving the reconstruction process. It is critical to realize the implications of this second impediment to successful reconstruction. Even if policymakers possessed the necessary know-how regarding the construction of liberal institutions, we have good reason to believe that the political process would distort the actual implementation of the policies and directives based on that knowledge and information.
I would say this is an excellent use of Public Choice and Austrian theory. At the intersection of these two distinct perspectives lies an incredible argument against political action of any sort: they don't know how; and even if they did, they couldn't. Comments open.

Up in the Air

NYT reports on the surprising(?) success of Southwest Airlines:
Dallas-based Southwest posted its 69th straight profitable quarter while many other airlines lost money [...]
But how did they do it?
[...] and it is mostly because of fuel hedging -- financial transactions that Southwest uses to lock in lower prices for most of its fuel.


In recent years, Southwest has poached business from weaker or higher-priced competitors in Denver, Philadelphia, Pittsburgh and Dallas.
Ahhhh. The old better service/lower price model.

To clarify: Southwest makes better deals, resulting in lower prices for consumers. Then, consumers reward Southwest by choosing the low-cost airline over its competitors. So, Southwest gains and other airlines eventually go out of business.

What an earth-shaking discovery. I wonder how long it will be before the other guys catch on.

Competition. It works, folks.

LtE Graveyard

John Nordloh ("Government should look to Internet for tax solutions," July 7) suggests raising revenues for the City of Chicago and the State of Illinois by taxing out-of-state businesses. He claims the new policy is only fair, as it will put all "transactions on the same 'tax' playing field." Unfortunately, Nordloh misses the point.

Taxation is not about leveling the playing field, but rather paying for public services. Public education, libraries, police protection, and courts are financed with tax dollars. These services are not used by out-of-state businesses.
Roads, on the other hand, are used to deliver goods across state lines. However, gas taxes are collected roughly in proportion to the amount of use and provides for the maintenance of state roads.

Raising revenues by taxing entrepreneurs in other states is unfair; it allows Illinois residents to consume public services paid for by residents in other states. And since Buckeyes and Hoosiers are not represented in the Illinois General Assembly, it is a modern case of taxation without representation.

Barr Campaign Responds to Boehner

I blogged Tuesday about Boehner's view on protest votes. Over at the Barr Campaign website, they have posted a response.
Rep. Boehner would rather coerce people into voting for someone they do not want through fear tactics so that the Republicans and Democrats do not have to change their runaway spending habits. After all if they have no dissent from the voters over a big spending Republican and a bigger spending Democrat, they are free to argue over whose special interests get the benefits of our hard earned tax dollars.

I think if the public is happy with the direction our country is headed then they should thank the Republicans and the Democrats. If they want a change, their only option is Bob Barr.

[HT: Joe Henchman]

Wednesday, July 23, 2008

LtE Graveyard

In defending Chicago's paternalism, Mary Schmich ("Rules Bring Reason Back to City Life", July 2) states that "big cities are like big families." I respectfully disagree.

I do not know Ms. Schmich, as is evident by my use of Ms. and not Miss or Mrs. On the other hand, I know my family members quite well. This allows my family to make rules that are in our best interest. The city of Chicago is ill-suited for such a task.

It is not about rules versus chaos, but rather who determines the rules. Whether my air conditioner is running in the middle of the summer is of no concern to Schmich. My family pays the bill. My family endures the temperature. So my family decides when to turn it off.

Governments should establish laws which allow strangers—like Schmich and I—to coexist. When my air conditioner affects her temperature, legislators can get involved.

Hold Your Breath

According to the Herald, Zanu-PF and MDC officials are set to meet Thursday in South Africa to discuss power sharing in Zimbabwe.

I, for one, am not optimistic. It just seems unrealistic to think a leader who so boldly disregards free and fair elections would be willing to give up any of his power. But there is pressure from the EU.
EU foreign ministers agreed yesterday to freeze the assets and deny travel visas to Reserve Bank of Zimbabwe Governor Gideon Gono and Attorney General Bharat Patel, according to a statement posted on the EU's Web site today. Several serving and retired military and police chiefs, as well as reporters working for state-controlled media, are on the banned list.
You won't see trade embargos, however. Trading with Zimbabwe is like sipping tea with the Easter bunny.

Tuesday, July 22, 2008

LtE Graveyard

I find it ironic that Richard Cohen ("Energy crisis shows that it's time to scrap Reaganism," July 8) condemns the US as "a nation that believes that you can get something for nothing" while suggesting a government solution to rising energy costs.

Individuals need to adjust to higher prices at the pump. Cut out frivolous trips, carpool and, when the time comes, buy a more efficient vehicle.

But constituents don't want to hear that; they want a "something for nothing" government fix. And with elections in November, they will probably get it—regardless of how much it actually costs.

Boehner on Upcoming Election

House Minority Leader John Boehner was the special guest at today's Newsmaker hosted by Americans for Tax Reform and The American Spectator. Good candidates and good policies, he claims, mean House Republicans will do better than expected.

Energy, Economy, and Health Care are the top three policies Republicans will focus on this fall. Later, Boehner added National Security to the list.

A correspondent from Reason magazine asked about voting for Libertarian candidate Bob Barr in protest of the shift from limited government taking place among Republicans. Go ahead, Boehner said, "if you want to throw your vote away." A vote for Barr is a vote for Obama, according to the esteemed Representative from Ohio.

Of course, a protest vote for Barr (or not voting at all) is not a vote for Obama. If one were going to vote for McCain and, instead, voted for Obama it would put McCain down two votes--the one he lost plus the one Obama gained. Not voting or throwing your vote away on Barr only leaves McCain down one vote.

I am America and so can You

I was just looking up some YouTube clips of my esteemed representative from Ohio, Jean Schmidt. You might remember her from the "Cowards tuck and run" speech. Well, she is still fighting strong in this ONN clip where she states:
Well first off, I, like most of America, is not pleased with the pace of this war.
Yes, I know that sentence is gramatically incorrect. And I, like most of Ohio, is embarrassed.

Multiple-Choice Tax Proposal in Florida

The Florida Taxation and Budget Reform Committee placed an amendment on the upcoming ballot to eliminate the school portion of local property tax. According to one estimate, property owners would save $9.3 billion in 2011. But as the Jacksonville Business Journal reports, not everyone is happy about the measure.
If passed, that part of the amendment would create a shortfall in the state budget. As a result, the proposal also calls for Florida lawmakers to make up the difference through one or more of four options:
• Raise the state sales tax by a penny.
• Eliminate state sales tax exemptions on a host of services such as legal fees, dry cleaning, advertising and haircuts.
• Cut spending.
• Use new or other revenue.
Of the four options, (2) and (3) are preferred. There is no reason for states to favor some transactions over others. This just distorts the price system and causes markets to work less efficiently. And I am sure Florida can trim some fat in the spending area (perhaps from the Department of Citrus?).

Option (4), on the other hand, is the scariest. I have no idea what new or other sources of revenue the fine legislators in Florida might be considering, but I doubt they have sound tax policy in mind.

So is this amendment good, bad, or ugly? Your guess is as good as mine. It really depends on how they counteract the cut. At present, the best we get is a pick- four situation: eeny, meeny, miny, mo.

[TF Post]

BATSA, Amazon Tax

Kudos to Joe, my boss at the tax foundation, for providing much of the meat in this New York Sun post on the Business Activity Tax Simplification Act.
"States are increasingly reaching out across their borders to tax out-of-state revenue," the tax counsel for the Washington-based Tax Foundation, Joseph Henchman, said. "BATSA would restrain many of these, while the Amazon tax is an example of one of these efforts."
The Tax Foundation has been in the news quite a bit lately.

Blockquoting X

Insights into capital, as George Soros recently observed, are often more sophisticated than those of Adam Smith. Marx understood clearly that "in themselves, money and commodities are no more capital than are the means of productions and of subsistence. That they want transforming into capital." He also understood that if assets could be converted into commodities and made to interact in markets, they could express values that are imperceptible to the senses but can be captured to produce rents. For Marx, property was an important issue because it was clear to him that those who appropriated the assets obtained much more than just their physical attributes. As a result, the Marxist intellectual tool kit has left anticapitalists powerful ways to explain why private property will necessarily put assets in the hands of the rich at the expense of the poor.
No, I did not pull that quote from It is from De Soto's The Mystery of Capital. What do you think? Comments are open.

Monday, July 21, 2008

Gas Prices

Mark Perry says gas is still affordable.From the comments:
Oh yeah Mark this makes it all better now that we are better off than in 1919. Maybe I should get into the habit of putting away ruts n berries for the winter and drying the meat I kill with my daddy's rolling block.
It seems capitalism has been so successful that people are no longer appreciative of growth and development; instead, they expect it. This is a bizarre sense of entitlement with respect to human history...

Saturday, July 19, 2008

Dollars without Sense

I don't know whether to laugh or cry at the announcement of Zimbabwe's 100 BILLION! dollar note. For those wondering what the new note is worth:
[...]Z$100 billion [...] is only enough for two trips on an urban commuter bus or two loaves of bread -- if one can find it.
This is, of course, the result of the hyper-inflation and draconian economic policies supported by the current regime.
Central bank Governor Gideon Gono announced on Wednesday that inflation had surpassed 2.2 million percent, though some economists put it much higher.
What can you say when the conservative estimate is so ridiculous?

Friday, July 18, 2008

Rangel's Rent Control

Support for rent control is usually based on the idea of affordability: poor people cannot find suitable housing in their price range. Yet these same supporters manipulate the system for their own gain.
U.S. Rep. Charles Rangel on Friday defended living in three combined, rent-stabilized Harlem apartments as a legal benefit of long-term city residency, but said he may abandon a fourth apartment he uses for campaign work if it's not allowed.
Full text here.

It is good to know the poor have people fighting for them in Washington. I would hate to think that representatives like Rangel are just in it for themselves...

Flat Tax Competition

Dan Mitchell at Cato discusses the recent buzz of flat tax competition in this new video. I saw Mitchell speak last Tuesday. He is very quick on his feet.

Tuesday, July 15, 2008

Cato Policy Forum on Presidential Candidates' Tax Plans

The Cato Institute hosted a policy forum today entitled McCain and Obama: Comparing Their Economic Platforms. One of the three speakers, Dan Mitchell, summed the future of the American tax burden up quite nicely:
No matter who wins, it's going to grow.
Mitchell also offered a fair comparison of the two distinct tax proposals. Obama's plan, according to Mitchell, means "higher taxes on work, savings, and investment." He pointed out that politicians understand the economics at play when they tax activities like smoking: higher taxes, less smoking. Why then, he asked, would we want to increase taxes on work, savings, and investment?

As for McCain, Mitchell states that his agenda is much better than Obama's at encouraging economic growth and development. McCain's track record, however, left Mitchell unsure of the sincerity of this election season proposal.

To watch a video of the conference the Tax Foundation cosponsored in April on the candidates' proposals, click here.

[TF Post]

LtE Graveyard

There is an ever-growing collection of corpses in my inbox. So I will start posting unaccepted letters to editors a couple weeks after submitting and hearing nothing back. Feel free to leave comments on the content of the letter, as well as how I might make them more interesting for editors.

Here is the first of many:

Timothy Ash correctly notes the importance of economic freedom in addition to political freedom ("Forget us versus them", July 3). However, to state that the world, overall, is less free today than in the past is simply erroneous.

The Fraser Institute's annual Economic Freedom of the World report reveals that most places are much freer today. According to the executive summary, the average score increased from 5.4 (out of 10) in 1980 to 6.6 in 2005.

Likewise, Freedom House's annual Freedom in the World study indicates that political rights and civil liberties have extended over the same period.

Travesties like Zimbabwe at present have become the exception and not the rule. Historically, rigging an election or slaughtering your political competition was commonplace. It is only in the current era of freedom that such acts are deemed appalling.

So let's forget us versus them, as Ash recommends. But don't forget the facts: we enjoy more liberty today than ever before.

Another Reason to Drill for Domestic Oil

Local fishwrapper takes another:
Although offshore drilling certainly would lower the future price of oil, letter writer Mitchell Blatt ("If it takes 10 years to get oil to market, we'd best get started," Letters, July 10) misses an important point: If the future price declines, the current price will fall as well.

Prices signal the expected value and rarity of goods and services. If suppliers expect more prevalent oil in the future, they will conserve less. So more oil comes to market and the price falls, today.

Tip of the Day: New City

As a recent mover myself, I suggest becoming a regular. Somewhere. Anywhere.

If you drink, a bar is perfect. Bartenders are much more apt to talk than waitresses.

The key is to go on an off night. Or at an off time. Tuesdays are usually good. And the more Mom and Pop's-y the place, the better. Not that I have anything against chains. I have just found that turnover is usually lower. So your investment is more likely to pay off.

Oh, yeah. I should mention that there is a literal investment here. You MUST tip well at this place. Extrodinarily well. Even if you are usually a big tipper. Just remember that you are not only paying for the service; you also want to be recognized when you return next Tuesday.

Big tips and regular attendance on an off night means your drinks start arriving before you do. And you will start to feel more at home in your new city just invite some folks from work/school/etc to join in at your new establishment and you are good to go!

Friday, July 11, 2008

TF in Cosmo?

That is correct. Our intellectual street cred is on the rise.
And high-income dudes (those earning $104,000 and up, as defined by the Tax Foundation Group in Washington, DC)are on our radar even more thanks to shows as The Hills, Gossip Girl, and Millionaire Matchmaker.
Glad we could help, Cosmo. Keep doin' what your doin', baby.

For the Pessimists...

Disclaimer: Adult language

This is without a doubt the funniest thing I have seen all day.

State Taxes, a Children's Game

Like children squabbling over a toy, state policymakers attempt to take tax dollars from residents of other states. Tax Foundation Tax Counsel Joe Henchman's BATSA brief sheds some light on the situation:
State officials [...] have every incentive to pursue beggar-thy-neighbor tax policies designed to shift tax burdens from voting in-state residents to out-of-state residents and businesses unable to resort to the ballot box. Not only does democracy not prevent harmful tax exporting from occurring, it actually worsens it, since services can be provided to a majority of voters, paid for by non-voters.
Interestingly, taxing nonresidents often encourages other states to inflict the same poor policies in a legal "Oh, yeah? Well, we'll show you!" counter. The Ohio tax code's list of exemptions provides an illustration:
22. Sales of Motor vehicles to nonresidents (Sec. 5739.02 (B) (23), Ohio R. C.). Effective August 1, 2007, Ohio motor vehicle dealers must collect Ohio sales tax on the sale of vehicles to out-of-state residents who reside in the eight states that charge sales tax to Ohio residents. (Motor vehicle leases to nonresidents continue not to be subject to Ohio sales tax.) The eight states are Arizona, California, Florida, Indiana, Massachusetts, Michigan, South Carolina, and Washington (Letter to Motor Vehicle Dealers, Ohio Department of Taxation, July 2007). [Emphasis added.]
At the end of the day, taxpayers dole out more of their hard-earned cash and the tax code becomes increasingly complex. If only state officials could play nice in the sandbox.

[TF Post]

From The Hill

Interns at Congressman Don Young's office put together a survival guide. Tips include how to deal with the congressman's wife, act around "The Boss," and who to let through on the phones. As for the latter:
The A-Team: Rick Alcade, Colin Chapman, Randy Delay, Billy Lee Evans, Jack Ferguson, Mike Henry, Ducan Smith, CJ Zane, Jay Dickey. These people can talk to whomever they want.
As the survival guide suggests, google the names listed above. Oh, lobbyists.

Thursday, July 10, 2008

Fourth Amendment, Schmourth Amendment

First line from NYT editorial:
The Department of Homeland Security is routinely searching laptops at airports when Americans re-enter the United States from abroad. The government then pores over or copies the laptop’s contents — including financial records, medical data and e-mail messages.
One of my coworkers suggests saving everything on a jump drive and swallowing it just before landing.

[HT: Sarah Larson]

Sin Tax Increases State's Role

From the NYT:
Calls to New York City’s 311 hot line for help to quit smoking surged in the week after cigarette taxes went up in early June, driving the cost of a typical pack up to around $8.50 (and in some cases to more than $10), the Department of Health and Mental Hygiene announced on Thursday morning.
The bureaucracy is growing to meet the needs of the growing bureaucracy.

[HT: Robert Schmidt]

TF at Freedom Fest

Joe and Tonya are at Freedom Fest and, thanks to YouTube, so are you!

Corporate Taxes

From the Ludwig von Mises Institute:
The main point is this: by definition, corporations do not pay taxes — people pay taxes. A corporate tax is either a tax on shareholders of the firm, customers of the firm, or employees of the firm. Less corporate tax means more innovation, capital savings, and spending by these groups — also known as economic growth.
I think this article sums up the issue quite nicely.

Wednesday, July 09, 2008

What I am Reading

The Mystery of Capital

Incredible. I am at the halfway point and cannot put it down.
It stands to reason that if the written law is in conflict with the laws citizens live by, discontent, corruption, poverty, and violence are sure to follow.
Pick this one up. Pronto.

Stimulating the Economy

I was not convinced that economic stimulus checks would actually stimulate. Clearly, I was wrong.
Adult entertainment Web sites began seeing a spike in business shortly after the first wave of checks went out in mid-May, according to Adult Internet Market Research Co., a New York firm that tracks the adult online world.
Full article available here.

Tuesday, July 08, 2008

Best Thing I Have Read All Day

From Jonah Goldberg in the LA Times:
There's a weird irony at work when Sen. Barack Obama, the black presidential candidate who will allegedly scrub the stain of racism from the nation, vows to run afoul of the constitutional amendment that abolished slavery.
Obama promised that as president he would "set a goal for all American middle and high school students to perform 50 hours of service a year, and for all college students to perform 100 hours of service a year."
In short, he'll make service compulsory by merely compelling schools to make it compulsory.

And, finally, the real zinger.
It's funny that, when the right seeks to use the government to impose its values, the left screams about brainwashing and propaganda. When the left tries it, the right thunders about social engineering. But when left and right agree -- as seems to be the case on national service -- who's left to complain? As ever, the slipperiest slopes are greased with the snake oil of "bipartisanship."
Read this one in its entirety. It is well worth it.

Technical Tax Term: Doughnut Hole

The Washington Post on Obama's tax plan:
The Democrat from Illinois has proposed raising taxes on upper-income Americans to address projected shortfalls in Social Security, but his plan has been greeted with skepticism, even from some in his own party.

Under current law, income up to $102,000 a year is taxed for Social Security. Obama would create a "doughnut hole" by not imposing new Social Security taxes on income between $102,000 and $250,000. His aides said income exceeding $250,000 would be taxed at a rate of 2 percent to 4 percent, rather than the 6 percent tax that people pay toward Social Security on income below the $102,000 cutoff, which is matched by their employer's paying a 6 percent tax. Employers would probably pay an additional tax, but the total tax paid by both employee and employer would not exceed 4 percent of the amount of income earned over $250,000.
Back to the drawing board?

[HT: Joe Henchman]

Crony Capitalism

From the Philadelphia Inquirer:
DeNaples, with his relatives and businesses, has given hundreds of thousands of dollars to Senate Democrats and a Mellow political action committee.

Mellow represents the district where DeNaples lives. He pushed for a slots parlor in the Poconos. The license for the casino eventually went to DeNaples.

What luck.

In another masterstroke of luck, state lawmakers, in writing Pennsylvania's gaming law, said felons may get a casino license, provided their conviction was at least 15 years old. That cleared the way for DeNaples, who pleaded guilty in 1978 to his role in defrauding the government of more than $500,000 for cleanup work following Hurricane Agnes.
Recall this story when you next here someone say "greedy capitalists." And promptly reply with "No, favor-dolling government officials."

African Aid

Instead of serving their people, most African states function as vehicles for the self-enrichment of political elites that have inherited none of the public-spiritedness of their colonial predecessors but all of the latter's contempt for the African masses. The remedy, therefore, might be to let Africa's failing neocolonial states disintegrate totally -- so that organic African political structures can emerge.
That is from today's LA Times piece by Edward N. Luttwak, Center for Strategic and International Studies, and Marian L. Tupy, Cato Institute's Center for Global Liberty and Prosperity.

Monday, July 07, 2008

Return of the Supply Siders

James Pethokoukis puts McCain in the Supply Side camp. And rightfully so, I think.
Bottom line: The only way this all makes sense is if McCain believes his tax cuts will supercharge the economy in true supply-side fashion, that growth from the tax cuts will more than make up for the loss in revenue from lower rates. If so, this represents a change in philosophy. In the past, Team McCain has not claimed such powerful economic effects from his tax cuts.
Does this really work? Personally, I think too much emphasis is put on lowering taxes and not enough is aimed at lowering spending. I agree that tax competition is important for growth. But I am not sure that you can raise revenues by lowering taxes. Even if you can, I imagine it would only be until other governing bodies catch on and follow suit. And this could be desirable.

Comments open.

Friday, July 04, 2008

Anarchy Hour

So, I think I am heading to Anarchy Hour Tuesday evening. Maybe I will see you there.

Thursday, July 03, 2008

Jobs, Jobs, Jobs

A White House conference call today with Edward Lazear, Chairman of The President’s Council of Economic Advisers, reveals that the US is down some 62,000 jobs. On the upside, unemployment remains relatively low at 5.5% and wages are increasing at about 0.3% from month to month.

But what does this really mean, down 62,000 jobs? It reminds me of the Metro advertisement which states that "Millions of Jobs" would be created by fighting global warming. True. But shouldn't we consider the usefulness of these jobs?

I could create seven or eight jobs (if I were able to tax and spend, that is) in my home. I would love to have someone do my dishes, take out the trash, etc. But these jobs are not productive jobs. In fact, America would be worse off if I were capable of taking money from some people to employ others in positions which would otherwise go uncreated. Why? Because those resources are not flowing to their most valuable location. And this is wasteful.

Wealth creation, not job creation, is the goal of an economy.

[Side note: When the moderator stated that Richard Vedder had a question, everyone in my office suddenly became interested. Because, as one of my coworkers put it, "You never know what he might say." I believe Dr. Lawson studied under Vedder at Ohio University.]

Wednesday, July 02, 2008

More on Movies

Did you know that states have film commissions?

Charged with promoting the film industry in their particular states, these bureaucrats are hard at work hauling tax dollars from state treasuries to private movie makers.

Google "[State] Film Office" to check out your state's interesting incentives.

Tuesday, July 01, 2008


To clarify, jaywalking is any walking which takes place outside of a crosswalk.

This seems like a silly law, overall, but it does have at least one legitimate purpose: it creates a rule that faults a particular party in the event of an automobile/pedestrian accident. Specifically, the pedestrian is at fault unless he/she is in the crosswalk. Drivers should not be concerned with crazy pedestrians filing suit for darting out in front of cars and getting hit.

Now I am not sure if this is actually the way the law plays out in the event that an actual accident occurs. However, the law can certainly be justified on these grounds. Note that this says nothing about fining people for jaywalking (which rarely happens anyway). A better law might create the standard while refraining from penalizing those who jaywalk and are not involved in an accident.

Any other justifications for this law? Think mine is bunk? Comments open.

To Do List

This morning I read about legislation passing in the North Carolina Senate that would extend film tax credits to 2015 (scroll halfway down page). This prompted a Fiscal Fact which will hopefully be up by the end of the week. The aim: detail movie tax credits by state.