Wednesday, February 03, 2010

Hide the chaos 

Scott Beaulier reports on a presentation at his school by Joshua Hall, in which Hall discusses a loss of data for measures of economic freedom. (Hall blogs at Division of Labor.)
When discussing the Economic Freedom Index, Josh talked about some of the challenges they may soon be facing. According to Josh, organizations like the ILO might be making it more difficult for them to gather labor data for the index.

The World Bank and other organizations are being pushed to stop asking questions about paid leave, the costs of hiring workers, and hiring/firing regulations. Critics argue these "costs" are actually "benefits." Rather than allow organizations to recode these data as benefits, pro-labor organizations are putting strong pressure on them to stop asking questions about labor market policies altogether.

If successful, this would have a big effect on one of the core components to the EFI.
As Bryan Roberts and I wrote in our book, The Design and Use of Political Economy Indicators, governments in developing countries respond to these rankings by seeking to enact policies that increase economic freedom. That is, the measures are educational to policymakers in the developing world. Critics of growth-generating policies would rather not have this response, so they attempt to suppress the data.

I argue in that book that labor policies are largely a subset of property rights. If you have properly measured the presence or absence of laws that support private property -- including the right of contract between worker and entrepreneur -- you may not really need all of the elements in that index. Strict labor laws, expropriation of private property, and even central banking that credibly commits to price stability are simply facets of one of two logically consistent economic systems. (See Mises, Planned Chaos.)

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Friday, October 23, 2009

Two definitions 

Corporatism is a system of economic, political, and social organization where corporate groups such as business, ethnic, farmer, labour, military, patronage, or religious groups are joined together into a single governing body in which the different groups are mandated to negotiate with each other to establish policies in the interest of the multiple groups within the body.
That's governance, Chicago style. The head of government is friends with the heads of every big business, lobby and union, and together they make decisions on how everyone else will live. Those on the inside get what they want. Those on the outside -- well, they get what the big guys want them to have. That's life in the big city. ...

[I]t appears to be the way that Barack Obama, who once aspired to be mayor of Chicago, has decided to run his administration.
My previous observations on corporatist Obama here, here and here. The bashing of businessmen is just a discipline to get them back to the bargaining table. Deciding pay is part of it. (Union leaders beware, because yours isn't far behind. Obama will need your hides for his re-election campaign.)

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Tuesday, September 22, 2009

Best sentence I read while heading to the plane 

Liberals make fun of conservatives' patriotism, but in fact liberals' preferred economic policies are more dangerously nationalistic, and full of contradictions.
Ben Casnocha. On my way to a conference in China where I am speaking on the third wave of globalization, the one China embraces. I like Casnocha's description of economic nationalism, which I'm sure walks in the neighborhood of Jonah Goldberg's liberal fascism, but is probably less value-laden. Goldberg himself closed his blog for the book using the term "state capitalism", which indicates convergence with my preferred "corporatism".

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Monday, August 24, 2009

Best sentence I read today 

Don Boudreaux, from a series on how cleanliness has been the result of the expansion of markets:
[E]ven though airports in the U.S. are typically owned and operated by governments, these governments contract with private firms to design and build airports � and the creativity and innovativeness on display in our daily lives is due not to the bureaucracy of the state but to the competition and creativity of capitalism.
For my international traveling friends: Have you ever found bathrooms nicer than those in your better U.S. airports? If so, where? I remarked to someone that I thought the bathrooms at JFK were pretty poor; she answered "compared to what?" This was on my trip back from Yerevan and Prague which, while good by European standards -- Yerevan's airport getting a major overhaul a few years ago -- would have not been as nice as JFK's.

BTW, an update on my excellent adventure from last month: Delta sent a nice apology and some travel vouchers. At least they found the rest of my mileage, which moved me back into Elite. Czech Airlines sends a snotty letter saying it's not their fault and that my hotel reservation was there but I didn't ask for it, even though I had. Of course you know which one is a state airline.

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Saturday, July 04, 2009

When the Government Runs the Store..... 

This story in the Seattle Times indicates the dilemma when governments try to run retail operations.

Appears the state run liquor operations installed a new distribution software program that controls the distribution of liquor throughout the state. Shortly after the problem was detected June 8, the distribution center was filling only 65 to 70 percent of the orders it was receiving. Now deliveries are up to 80% but for business owners, it just looks bad when you are simply out of stock of key beverages.

Those of you in the restaurant business know how critical it is to have product on hand for your customers. In this situation, either the software was improperly tested or possibly not capable of handling the load. However, 18,000 cases of anything is not much to track. (Just think of your credit card transactions, hundreds of millions of items to track a day, for decades.)

Life has become more complex and legislatures everywhere keep looking for one more angle to raise taxes. I teach MIS (Mgt. Info. Sys.) If a private sector supplier had run into this programming problem, you can bet it would have been fixed by now. Why? Two reasons: Relationships with the customers (restaurants) and profit, both motivators to fix what gets broken. Because public employees rarely can be fired, the incentive to fix problems is not the same as the private sector.

Think about this: Washington is a relatively small populated state. Ask yourself if you really want the federal government to take over even more of your health care, energy supplies, manufacturing, etc.


Friday, February 13, 2009

Porkopolus - Possible Defeat? 

As King posted here, "Way to go, US Congressional Republicans!" Thank you, Eric Cantor and crew.

Now, if you still have minutes on your cellphones, call any of the following - only one need defect to stop the porkopolus bill in the US Senate. If you can't get through, look up each senator and call one of their offices in their respective state. Keep trying - I eventually got through to all of them.

Sen. Arlen Specter: 202-224-4254 - PA
Sen. Olympia Snowe: 202-224-5344 - Maine
Sen. Susan Collins: 202-224-2523 - Maine


Wednesday, February 04, 2009

More Reasons to Call Our Senators 

The stimulus aka Democrat pork fest bill that President Obama wants so desperately to pass (so he can blame Republicans if anything goes wrong), has more garbage in it than anyone knows. This is our money that they (the Dems and a few Reps) want to give away to people who support the Democrats. A few facts:

Cost of legislation: $825,000,000,000. Why? Unemployment is bad, or so the Dems and media say but in 1993 the unemployment was about the same as today (7%) and President Clinton proposed *only* $16,000,000,000 for a stimulus.

This current attempt at robbing our pocketbooks can be looked at this way: President Reagan said the best way to understand $1,000,000,000,000 (1 trillion) expenditure is this:
A crisp, new stack of $1000 bills, 4 inches high equals $1,000,000 (1 million).

To get to the $1,000,000,000,000 of the Dems, the stack would measure just over 63 miles.

In $20 bills, $1,000,000,000,000, the stack would be 3150 miles high, about the distance between DC and Trujillo, Peru.
Only 3% of the bill is for road and highway spending.

The bill will cost each and every household $6700 in additional debt paid for by our kids and grandkids. It could give every man, woman and child $2700. Another way to view it, the supposed number of jobs that this legislation would create is 3,000,000 or $275,000 per job. Yet average household income is $50,000. Something is just wrong.

"A government big enough to give you everything you want, is big enough to take away everything you have." Thomas Jefferson.

Interest rates on US Treasury bills are increasing (yield on 10 year treasury bills has gone from 2.23% on 1/15 to 2.95% today - big swing)and this graph shows that our current situation is not as bad as the Dems and their microphone in the media would have us believe.

Call the Congressional switchboard, (202) 224-3121) ask for your senator and tell them, "NO, period." We don't need this bill, period.

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Thursday, January 22, 2009

Obama's and the Democrats' Socialist Policies 

While it may take a while for the impact of the socialist policies (the government can spend our money more wisely than people can - Larry Pogemiller, DFLer in the MN State Senate), the Democrats may wish to ponder the following two scenarios:
1 - The story about the Central American rebels who went to villages to gain support:
The rebel leader said to the crowd:
"If a man has 2 houses and another has none, shouldn't the man with two share one?"
"YES!!!!" replied the villagers.
"If a man has 2 tractors and another has none, shouldn't the man with two share one?"
" YES!!!!" yelled the villagers.
"If a man has 2 cows and another has none, shouldn't the man with two share one cow?"
Dead silence....................
Stunned, the rebel leader turned to the village chief and asked, "What did I say wrong?"
Replied the chief, "Most of the villagers have 2 cows."

2- Here is a (perhaps apocryphal) quote attributed to Margaret Thatcher that nevertheless captures an important truth: "The problem with socialism is that you eventually run out of other people's money."

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Friday, January 02, 2009

When people spend other people's money on other people... 

KSTP reports:
There is a push at the State Capitol to make sure Minnesota workers get paid if they take a sick day from work.

The Minnesota Paid Sick Days Coalition along with Sen. Ellen Anderson and Rep. John Lesch will unveil the Healthy Families, Healthy Workplace Act Friday.

Sen. Anderson and Rep. Lesch say sick workers cost employers in lost productivity while also spreading illness in the workplace.

The bill would establish a minimum number of paid sick days and detail how workers can accrue sick days.
The government can better figure out the cost to employers of possible infection from sick employees than can the employers themselves. Right. Gotcha.

A reminder to Sen. Anderson and Rep. Lesch to read their Friedman:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you�re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I�m not so careful about the content of the present, but I�m very careful about the cost. Then, I can spend somebody else�s money on myself. And if I spend somebody else�s money on myself, then I�m sure going to have a good lunch! Finally, I can spend somebody else�s money on somebody else. And if I spend somebody else�s money on somebody else, I�m not concerned about how much it is, and I�m not concerned about what I get. And that�s government. And that�s close to 40% of our national income.

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Wednesday, December 17, 2008

Obamanomics not to include free trade 

As I warned last spring, it was hard to tell President-elect Obama's positions on trade policy. Aside the NAFTA dance, we did not see much interest in the subject from him. I found Dan Tarullo's answers in the WSJ online debate on trade uninformative. And in the October 15 debate with McCain, all you got from Obama was Bill Clinton's rhetoric from the 1992 campaign before Ross Perot pushed Clinton into a free trader.

So it has to come as no surprise that the pick for U.S. Trade Representative got passed over by Obama's first choice.
Rep. Xavier Becerra has decided not to accept Barack Obama's offer to be United States Trade Representative, according to an interview the California Democrat gave to the editorial board of La Opinion, a Spanish-language newspaper in Los Angeles.

Becerra said, "My concern was how much weight this position [U.S. Trade Representative] would have and I came to the conclusion that it would not be priority No. 1, and perhaps, not even priority No. 2 or 3."
Maybe it will take another Perot to push Obama into the arms of free trade. Barring that, the Columbia Free Trade Agreement is probably dead. And Canada can't be too happy with incoming Ag Secretary Tom Vilsack.

On the other hand, Becerra now regrets his vote in favor of NAFTA. So while the Obama team may not advance the cause of free trade, they might be distracted enough to not do it too much damage.

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