The Market Fundamentalist

http://pajamasmedia.com/blog/breaking-anti-lobbyist-obama-administration-recruited-left-wing-lobbyists-to-sell-bogus-green-jobs/?singlepage=true

I have reported several times regarding studies done in Europe (Spain, Denmark, Germany) that have concluded that government subsidized “green jobs” actually destroy more productive jobs than they create.

Now unlike Bob, who has dismissed all three studies as somehow the product of big oil, the Obama administration has taken them quite seriously. Seriously enough that the anti lobbyist Obama administration has asked George Soros to help fund a rebuttal study backed by (not big oil of course) but by BIG WIND. BIG WIND is an entity known as the American Wind Energy Association which has as its funders not just corporate welfare seekers like GE but numerous EUROPEAN wind and solar power companies who are panicked that the European studies criticizing their domestic subsidies might not only hurt that welfare stream, but also that they could damage the potential huge new export market known as the USA. In fact, Germany, France and Italy have made some efforts to reduce feed in tariffs and other subsidies as their consumers suffer under high energy costs in a deep recession.

Which just goes to show that it is not lobbyists in general that the left doesn’t like, but only those lobbyists that pitch facts and figures that they don’t approve of.

So,

Big Oil lobbyists BAD. Big Wind lobbyists, GOOD.

The Freedom of Information Act has been used to ferret out the cozy ties between the Administration and BIG WIND. Some of the requests have been denied, and are on appeal. But the very reason for the denial is alarming. The administration has claimed it denied the requests because the email correspondence between the administration , ie

National Renewable Energy Laboratory (NREL) in Boulder, Colorado.

NREL is an extension of the Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE). EERE is run by Assistant Secretary of Energy Cathy Zoi, who, until assuming this post, served as CEO to Al Gore’s Alliance for Climate Protection. Zoi is responsible for many millions of the “green jobs” stimulus dollars pushed for and designed by Van Jones (this according to Jones himself).

and the Soros foundations is “inter agency correspondence”. In other words, between GOVERNMENT AGENCIES. Are we then to make of this that George Soros and his foundations ( especially the Center for American Progress ) are in fact government agencies? Very interesting.

Now there is a spat between the administration and NREL about who asked who to generate the rebuttal report, which was not written by economists, but by two activists in NREL. EERE says NREL took it upon themselves to write the rebuttal. NREL says EERE told them to.

Aside from the battle of the acronyms over who spilt the milk, the milk itself is curdling rapidly. The substance of the rebuttal report is not about the conclusions of the European studies trashing welfare for green energy, but about the methodology.

The Spanish paper suffered from a “lack of rigor.”

– The Spanish paper applied “consensus economics.”
What pray tell is “consensus economics”? Why, nothing more than the same economics that are applied in the real world to solve real problems about how to allocate resources. What would the Obama lefties prefer that the European studies used? Why it would be: input-output (or Leontief) methodology designed for central planning, in which all is assumed to be knowable, controllable, and static. This method has been discredited outside of social democratic government agencies and select associations

The problem with Leontief modeling is ( as I have posted a while ago) that it is similar to GLOBAL CLIMATE CHANGE modeling–that it is garbage in, garbage out. You have to have massive amounts of data input into a funnel that spews out predictions but, what if the data is incomplete? In global warming modeling, it is becoming more and more apparent that the data on water vapor was always woefully incomplete. For economic modeling, how can any central planner have enough knowledge in his mind when knowledge is dispersed throughout society in millions of minds ? What if real people in the real world do not react to the data as you assume they should?

All central planners believe they know enough to play God with real people. But, as ADAM SMITH said in the eighteenth century, people are not pieces on a chess board. There are all sorts of unintended consequences that cannot be modeled as real people react to real life incentives and barriers that they are confronted with by agencies backed by the guns of the state.

So, in real life government subsidies to industry, whether it is old established industry like big oil, or new industry like wind and solar, will produce unintended consequences that will lead to inefficiencies and waste.

Better to let the real people in the real world make their own decisions based on market choices than have technocrats try to decide what is best for them, and for some big abstraction, like “the planet”.

Brendan

http://www.scotusblog.com/2010/02/the-neglected-case-of-buchanan-v-warley/

Many folks I know scoff at the importance of property rights as the main pillar of justice in our world.

They believe in HUMAN RIGHTS, or so they claim, not mere property rights.

Property rights are for big corporations, or so they think, not the “little guy”.

Can the homeless have property rights? (Yes, because YOUR BODY IS YOUR PROPERTY.)

Property rights implies protection for those awful Rich White folks who live in gated communities and hire illegals to clean them.

In the movie smash Avatar, we saw the natives rise up to defend their PROPERTY RIGHTS in the Tree of Life AGAINST the big corporation. OK, it was just a movie, but wouldn’t native populations the world over benefit from property rights against crony capitalist development?

The article above lists the importance of the Supreme Ct decision in Buchanan v Warley, (1917)

Starting in 1910, many cities in the South, border states, and lower Midwest, responded to a wave of African-American in-migration from rural areas by passing laws mandating residential segregation in housing. More cities were ready to follow suit if the laws survived constitutional challenges. Several southern state supreme courts upheld the laws against constitutional challenges. In 1917, however, the Buchanan Court unanimously invalidated a Louisville residential segregation law as a deprivation of liberty and property without due process of law.

Yes, the Supreme Ct itself erred earlier in PLESSY VS FERGUSON (1896) , when it ruled that SEPARATE BUT EQUAL was constitutional.

IN Buchanan,

The Court for the first time held thait discrminatory animus, even when supported by popular opinion and expert opinion backed by contemporary social science evidence, and justified by fear of miscegenation and racial violence, was not a proper police power justification for laws violating recognized individual rights. This was hardly a foregone conclusion.

The article shows that Buchanan, panned by most legal commentators, did not completely overturn Plessy. The right of a black man to sit in a whites only railroad car was a mere “social right”. Plessy did not have a PROPERTY RIGHT to sit where he chose to, based on his railroad ticket, according to this doctrine.

But Buchanon marked a turning point in US jurisprudence regarding the rights of minorities. The Supreme Ct became much more deferential to minority rights after Buchanan.

And it did stop De Jure racial segregation in housing, even when the Ct (again mistakenly, IMHO) ruled that ZONING was constitutional. Zoning never became a major tool of segregationists.

Buchanan was argued by the FIRST PRESIDENT of the NAACP, Moorfield Storey. See http://en.wikipedia.org/wiki/Moorfield_Storey

Storey was a Cleveland Democrat, descended from the Jefferson/Jackson tradition, and was anti war. In other words, a CLASSICAL LIBERAL.

Unfortunately, the NAACP later became infused with anti property sentiments, and abandoned the property rights arguments in its post WW II victories such as Brown vs Board of Education(1954). Famously, classical liberal blacks like author Zora Neale Hurston criticized Brown for its anti property, paternalistic views toward race relations.

This abandonment of a principled property rights argument against racial segregation had, IMHO, unfortunate consequences, as it threatened the legitimate rights of ALL property owners, white and black together, and has facilitated the rise of the welfare and nanny state. And it led to the famous WHITE BACKLASH over state imposed anti property regulations, most famously FORCED BUSING.

This is why Barry Goldwater did not vote for the 1964 Civil Rights Act. NOT because he favored segregation, but because he correctly foresaw that the ACT would open the door to all kinds of federal encroachments on legitimate property rights.

Brendan

What a suprise ! Even more than seeing Drew Brees outplay Peyton Manning, or hearing the whole stadium chant “We won’t be fooled again!” like a 60,000 strong Tea Party chorus during the Who’s halftime show, was this little gem of a commercial by Audi to announce its new diesel engine car during Super Bowl XLIV yesterday .

Ludwig von Mises must be smiling in libertarian heaven seeing the market produce in one minute a video set to popular music that perfectly illustrates his famous quote:

“It is important to remember that government interference always means either violent action or the threat of such action. . . . Taxes are paid because the taxpayers are afraid of offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money that it wants to spend. Government is in the last resort the employer of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.”

Grocery clerk:Paper or plastic?
Consumer : Plastic.
Cop( slaming his face onto the grocery checkout counter): That’s the magic word. Green Police!

Leading him off in cuffs: You picked the wrong day to mess with the ecosystem, plastic boy!

What a great minute of rebellion , and from a car manufacturer whose product I would never buy!

But that is how the market works, as spontaneous improvements in our lives can come, not from a heavily regulated political system, but from anyone with the brains and pluck to make something new where nothing existed before!

http://www.lewrockwell.com/orig11/wargas1.1.1.html

As one of my sisters might remember, I used to say nice things about Judge Richard Posner. Of course, that was in the early 1990’s when I visited her in Chicago during the LP convention (the one attended by both the late Timothy Leary and Robert Anton Wilson).

I still have a copy of his excellent book, SEX and REASON in my library.

But lately the good judge has been demonstrating feet of clay. Neocon Clay, the worst kind.

Even though Judge Posner should be condemned for his screeds on how to make federal warrant- less wiretapping “accountable”
(http://www.fas.org/irp/congress/2006_hr/071906posner.pdf), his worst crime may be to embrace Keynesian Economics.

After all, Judge Posner did not earn his reputation as a civil liberties judge, but as a jurist who applied economic reasonings to the law. That is rare in itself, but now the libertarian/neocon confused judge is veering off into exercises of illogic that would make a freshman blush.

Posner’s reasoning is wrong :

Posner reasons that economists did not see the bubble meltdown coming. The Chicago School of economics, Monetarism, is the primary school since 1980. Therefore, he must abandon Monetarism and return to Keynes theories.

First of all, the primary premise itself is wrong. While it is true that Monetarists did not see the bubble coming (see the statements of Ben Bernanke and the Maestro himself, Alan Greenspan), it is also true that Keynesians missed it also.

But, Posner overlooks the one school of economics that DID see the Meltdown coming, the Austrian School. Ron Paul has been predicting a major crisis for years. More recently, Peter Schiff can be seen on numerous YOU TUBES debating snarking “everything is rosy” types in 2007 and before.

The Austrian School is reluctantly being recognized as the only economic school that has a logical, coherent explanation for the BOOM AND BUST cycle in modern mixed economy capitalism. Only, not by statists like Judge Posner.

The Austrian School was poised to become the primary school of economics based on its theory of subjective value and its explanation of why socialism cannot work in the 1920’s. Not to mention its monetary policy prescriptions that saved Austria from the hyperinflation that Germany endured during the Weimer Republic.

But, then along came Keynes, and the Great Depression (which the Austrians also predicted). Keynes theories became established because the political class wanted it to be established, NOT because it had better ideas. Fascism and Communism were all the rage in the thirties, and common sense took a beating. Classical economists abandoned their long held ideas and embraces Keynes, largely because that was where the government grant money was. Austrians like the great Ludwig von Mises struggled to find work. Only FA Hayek lucked out, landing a good job at, of all places, the University of Chicago.

But then Keynes theory fell apart in the 1970’s, the days of STAGFLATION. You see, Keynes built his house of cards on the idea that government should inflate the money supply to lower unemployment. (the Phillips Curve). More inflation, less unemployment, less inflation, more unemployment. But the 1970’s produced a new paradigm that Keynes’s theory could not explain: High Unemployment, High Inflation, AND High Interest Rates. Keynes was dead, as a practical matter, and his theories are hardly studied since 1980.

Except for those who use them to justify TARP and all the other Keynesian reflexive actions that occurred in the present Meltdown.

No one turned to the Austrian School in the late 1970’s either, although it did make some inroads. People turned to Milton Friedman’s Monetarism, and it did in fact prove effective -for a good while, in fact. By concentrating on restricting the money supply under new Fed Chairman Paul Volker, and letting interest rates “float”, the Fed did end STAGFLATION and generated a BOOM that lasted until the recent Meltdown, albeit with several crises and Bailouts along the way.

What about the Austrians? Well, Ron Paul got his Commission on the role of Gold, and the opportunity to write his own magnificent MONETARY HISTORY OF THE US, that makes Friedman’s Nobel Prize winning History pale in comparison. Gold was once more legalized for personal possession, but NOT as legal tender.

Monetarism failed because it’s major flaw is that a CENTRAL BANK can, in fact, control the money supply. The money supply is created from the bottom up, in commerce, and is not easily controlled by central planners. We quickly saw the invention of M1, M2, M3 etc as the Fed tried to get a handle on just WHAT money really was out there. Then, we got Petro Dollars, and eventually the EURO and other creatures of market forces and government interventions battling over money and all its myriad substitutes in a regime of “floating ” currencies, central banks and FIAT MONEY.

Now, the MELTDOWN is displacing Monetarism, but folks like Judge Posner, instead of looking to the Austrian School, are
returning in desperation to a Vulgar, Paul Krugman version of the failed policies of JM Keynes.

For shame, Judge Posner. Open your eyes to real freedom, and sound reasoning. Learn to love Austrian Economics, and do not turn to the Siren of Keynes, because you are abandoned by your love, Milton.

Brendan

http://www.amconmag.com/headline/1287/index.html

The hopes of the Democrat Party for the next election lie in a recovery that allows the unemployment figure to well below the over 10% mark it has now.

That 10% mark is a minimum number. Many put the real number at 17-22%. Among blacks, even higher.

Now that the health care plan is on the “back burner”, and most people think cap’n'trade legislation as well, the focus will be on the economic recovery. And the central planners are hard at work to propose ways to “solve” the problem.

Dennis Kucinich has proposed that the government offer early retirement via expanded social security benefits so that the older workers can be replaced by younger workers. How this central plan will actually expand jobs is not clear. But, Kucinich obviously believes that JOBS are simply SLOTS that you can fit any old human being into without losing a step. Replacing experience with youth–that’s the ticket!

Meanwhile, only a few days after publishing its excellent cover story study debunking the MYTH OF THE VIOLENT IMMIGRANT, (see: http://www.amconmag.com/article/2010/mar/01/00022/), the AMERICAN CONSERVATIVE MAGAZINE has reverted to form by publishing Pat Buchanon’s sister, Bay, in an article that proclaims that the way to create jobs is to …what else?…CUT DOWN ON IMMIGRATION. She trots out the old sawhorse that immigrants are “competing” for our NATIVES’ jobs. Like anyone owns a right to a “JOB” that someone can “steal”.

Both Kucinich and Bay Buchanon are promoting the same economic fallacy: that there is a fixed number of jobs, a PIE if you will, that government can allocate by restricting competition, or merely by cutting up the pie differently.

The economy is not a stable entity like a pie, it is the dynamic interaction of millions of self motivated individuals, that can grow or diminish like any ORGANISM.

In a modern economy, jobs are a contract that carries with it a bundle of rights and responsibilities. But the important thing to remember is that the contract is for PRODUCTION. The ultimate beneficiary of any job is neither the employer, or the employee, but the CONSUMER. In semi free market American capitalism, the Consumer is still king, if a greatly weakened monarch by attacks from the state.

Central Planning, by either the left or the right, will never CREATE JOBS. Only the ability of entrepreneurs to meet consumer demand will create jobs. And consumer demand is relatively low now, as we are in a CORRECTION from massive BUBBLES caused by the state, and its unholy alliance with FRACTIONAL RESERVE BANKING and a STATE CONNECTED SINGLE CENTRAL BANK.

What this means is that even though there are still an infinite amount of human needs to fulfill, the ability to serve them is hampered by the INABILITY OF THOSE WHO WOULD CONTRACT TO HAVE A MEETING OF THE MINDS.

The primary lack of an ability to contract is the barriers to contract that the STATE has raised, directly or indirectly. These barriers are in the form of the usual suspects: Taxation, Regulation, threats of litigation, threats of more legislative interventions, etc.

The last major recession that the US had in an atmosphere of regulatory freedom occurred in 1921, when World War I ended. The war spending boom was now a bust, and the boys came home to glut the existing job market. Unemployment shot up to over 10%.

In that instance, President Harding did almost nothing. What he did do was significant-he instituted an across the board tax cut, that included defense spending. Nothing else. No bailouts, no stimulus package, nothing. Unemployment decreased rapidly, and in about a year the economy was humming again, into the ROARING TWENTIES. The history books do not mention the GREAT DEPRESSION OF 1921.

President Hoover, on the other hand, was a PROGRESSIVE to the core. He instituted the current model of BIG GOVERNMENT INTERVENTION to combat the Stock Market Bubble’s collapse. He raised taxes, signed the SMOOT HAWLEY TARIFF, exhorted businesses to keep wages high, and used the bully pulpit to claim “Prosperity is just around the corner”.

His successor, Franklin Roosevelt, used the same interventionist tactics, although he added his own wrong headed ideas, like ending gold backed notes and contracts, and replacing it with paper money. He tried to centrally plan the economy MUSSOLINI style, but the Supreme Ct voided the NRA as unconstitutional. He tried massive public works, packed the Supreme Ct, empowered unions, and finally, he entered World War II over the objection of the America First Movement. Nothing worked, until after the war. WE DO READ ABOUT THE GREAT DEPRESSION OF 1929 in our history lessons, because it lasted about FIFTEEN YEARS.

Since World War II, the US has followed the same interventionist, Keynesian path to correct the boom and bust cycle that it creates itself through fractional reserve banking, managed by a government connected central bank, and the other regulations that impede the ability of employers and employees, buyers and sellers, to FREELY CONTRACT.

In the first 150 years of the modern capitalist economy, unemployment almost never happened. Yes, there were booms and busts, due again to fractional reserve banking and its alliances with the state, either at the federal or the state level. But they were generally short lived, quickly corrected. Economists never bothered to study unemployment, because it so seldom happened.

In the twentieth century, OTOH, unemployment became a constant concern. In America, we still hope to keep it at 5% officially. In Europe, with its expanded Welfare State, chronic unemployment of at least 10% is a given fact of life. In both societies, the youth and minorities fare much worse.

How can we really CREATE JOBS? Economists like the late British economist WH HUTT (see :http://mises.org/store/Keynesian-Episode-The-P198.aspx) and more modern American economists like Richard Vedder and Lowell Gallaway ( see: http://mises.org/store/Out-of-Work-Unemployment-and-Government-in-Twentieth-Century-America-P295.aspx) who have studied unemployment propose solutions that are very much in line with the recent article by Lew Rockwell ( see: http://mises.org/daily/4083) ” HOW TO FIX THE JOBS PROBLEM”.

It consists of a program that includes:

Unemployment is not due to a lack of work to be done. It is too expensive to pay for the work to be done. So ask yourself, what are those things that prevent deals from being made?

Let me list a few barriers:

*

The high minimum wage that knocks out the first several rungs from the bottom of the ladder
*

The high payroll tax that robs employees and employers of resources
*

The laws that threaten firms with lawsuits should the employee be fired
*

The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?
*

The unemployment subsidy in the form of phony insurance that pays people not to work
*

The high cost of business start-ups in the form of taxes and mandates
*

The mandated benefits that employers are forced to cough up for every new employee under certain conditions
*

The withholding tax that prevents employers and employees from making their own deals
*

The age restrictions that treat everyone under the age of 16 as useless
*

The social-security and income taxes that together devour nearly half of contract income
*

The labor-union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less

Now, that’s just a few of the interventions. But if they were eliminated today, and it would only take one act of Congress to do so, the unemployment rate would collapse very quickly. Everyone who wanted a job would get one.

The Marxists who control the government would never approve these free enterprise reforms, because they still labor under the paradigm that PROFIT = EXPLOITATION. Until that notion is gone from public discourse, and centralized banking and state control of the money and currency is abolished, we will still endure BOOMS AND BUSTS , or periods of feverish economic activity followed by a crash that results in high unemployment for years. And more misguided government interventions that only make the problem worse.

Brendan

http://www.reuters.com/article/idUSLDE60J0PA20100120?type=marketsNews

Germany will slash its feed in tariff subsidies for solar energy. France will also, as will other countries.

The study that Bob claims was paid for by “big oil” is a major reason. It has blown the cover off of the protectionist feed in tariff schemes.

If merely installing solar and wind energy was the goal, then feed in tariffs certainly worked. But, if producing usable energy is the goal, or effectively reducing greenhouse gases, then not so much.

Germany leads the world in installed solar panels, and is second in installed wind power. But the RMI Institute study (http://www.instituteforenergyresearch.org/germany/Germany_Study_-_FINAL.pdf) says:

“Installed capacity is not the same as production or contribution.” In 2008, 6.3 percent of Germany’s electricity production was from wind, followed by 3.6 percent from biomass and 3.1 percent from water. Meanwhile, the report notes, “The amount of electricity produced through solar photovoltaics was a negligible 0.6 percent despite being the most subsidized renewable energy, with a net cost of about €8.4 billion (US $12.4 billion) for 2008.” German consumers foot that bill. In 2008, the price mark-up due to green energy subsidies amounted to 7.5 percent of average household electricity prices. Keep in mind that German residential electricity prices are already high at about 30 cents per kilowatt-hour. The average American pays about 12 cents per kilowatt-hour.

Kind of reminds me of the Canadian Supreme Ct decision that noted that “saying that everyone has access to medical care is not the same as providing access” if you have to wait months or years for procedures.

As for reducing greenhouse gases, the feed in tariffs are also prohibitively expensive.

the RWI analysis found that the feed-in tariffs for solar electricity in Germany are equivalent to paying more than $1,000 per ton to reduce carbon dioxide emissions (the wind power subsidy from feed in tariffs was better at only $80 per ton). In late 2009, an emissions permit for a ton of carbon could be had for less than $20 on the European climate exchange. “Hence, the cost from emission reductions as determined by the market is about 53 times cheaper than employing [photovoltaics] and 4 times cheaper than using wind power,” notes the report. Clearly, feed-in tariffs are an absurdly expensive way to cut carbon dioxide emissions.

What about that protectionist scheme of promoting technological progress in solar power? Again, not so clear that is working either.

Alexander Hamilton proposed that the US adapt protectionist schemes to allow the US to develop its own industry in his “Report on Manufactures”. Bob’s hero Thomas Jefferson opposed him, and Jefferson won. The US did not become protectionist until the invention of the cotton gin spurred high agricultural tariffs around 1817.

But, when it comes to Bob’s pet project, green energy, Thomas Jefferson can take a back seat. ( again, I am attacking the ideas, not the person, but when a person has bad ideas, and is championing them, then that person can be mentioned by name.)

Protectionist policies to promote infant industries never work, for pretty much the same reason that protectionist policies to promote established industries do not work well.

As we unravel the tangled web of protectionist argument, we should keep our eye on two essential points: (1) protectionism means force in restraint of trade; and (2) the key is what happens to the consumer.

Another protectionist fallacy held that the government should provide a temporary protective tariff to aid, or to bring into being, an “infant industry.” Then, when the industry was well-established, the government would and should remove the tariff and toss the now “mature” industry into the competitive swim.

The theory is fallacious, and the policy has proved disastrous in practice. For there is no more need for government to protect a new, young, industry than a mature older industry.

In the last few decades, the “infant” plastics, television, and computer industries made out very well without such protection. Any government subsidizing of a new industry will funnel too many resources into that industry as compared to older firms, and will also inaugurate distortions that may persist and render the firm or industry permanently inefficient and vulnerable to competition. As a result, “infant-industry” tariffs have tended to become permanent, regardless of the “maturity” of the industry. The proponents were carried away by a misleading biological analogy to “infants” who need adult care. But a business firm is not a person, young or old.
http://mises.org/rothbard/protectionism.asp

In this case, rather than spur new technologies in solar panels, the European feed in tariff schemes are promoting a speculative frenzy in existing OLD AND INEFFICIENT solar technologies. Companies are producing the same old solar panels to grab the tariffs , and NOT investing in research and development of new technologies.

The European Photovoltaic Industry Association (EPIA) stressed that it would be important for both France and Germany to follow the evolution of market prices in their feed-in tariff systems.

“We are advocating the implementation of sustainable policy support schemes. That support should lead to an accelerated penetration of solar energy but avoid a market overheat and possible speculation,” said Adel El Gammal, secretary-general of EPIA.

El Gammal has it wrong in the next sentence, when he claims that:

He warned, however, that if feed-in tariff cuts were too high, this would have a detrimental impact on the industry. “It would for instance eliminate smaller actors too early, which in some cases would have innovative ideas,” he said.

The study shows that the “market overheat” and “possible speculation” being CAUSED BY THE FEED IN TARIFFS are the main reasons why smaller actors are being eliminated. The partnership of government and business always makes it harder for the little guy with new ideas.

It is a sad commentary that well intentioned but economically challenged people in America are advocating European ideas like feed in tariffs and socialized medicine when Europe itself is trying to move away from them.

It is also unfortunate that the Green movement which is anti war and voluntarist at its core, and which advocates purely voluntary ideas like fair trade coffee and food coops, is also infused with those who would use the power of the state to restrain free trade, and yes, as we saw this week, free speech as well.

Brendan

A tea party tornado picked up a House and dropped it on Massachusetts yesterday, killing the Wicked Witch of the East, and the health care broomstick she rode in on.

Ding Dong the Health Care Witch is Dead!

The Boston Globe details the voting breakdown. My own lovely sister lives in Natick, a suburb of Boston, which narrowly went for Coaxley. Except for Boston, and Northwestern Mass, where the civil servants who don’t want to brave the snow in New Hampshire go to retire on their lucrative public pensions, the Bluest state in the union was painted RED!

Sure, its only one Red Gang Leader beating another Blue Gang Leader. Brown is a neocon, a pretty boy Republican who wants to keep the US Defense establishment rolling in clover while he promises to cut taxes without cutting spending.

But once enacted, Health Care by Big Government is hard to take apart. The American people didn’t want it, and they have shown for the third and most dramatic time they don’t want the government involved any more than it already is in the most intimate aspects of their lives.

Hooray for Massachusetts!

Brendan

All the talk from the President and the left is about HEALTH CARE REFORM based on the North American and European models, and occasionally Japan.

No one on the left wants to talk about the THIRD WORLD as an example for health care reform.

It is well known that many Canadians come to the US for so called “elective” procedures that they have to wait weeks and months for in Canada.

What is NOT so well known is that many Americans also vote with their feet and go to THIRD WORLD countries for medications and treatments that the current level of American government regulation denies them.

When the FDA refuses to allow terminally ill patients a fast track to experimental drugs that could possibly kill them but might just save their lives, where do Americans go?

Typically, to Mexico, the Carribean and Brazil, where you don’t need a doctor’s prescription to get drugs, and where helpful nurses are available in drug stores, so you don’t have to even pay for a doctors visit.

Alternative medical clinics driven out of the US by the FDA also often set up shop in the THIRD WORLD.
What is even more significant is the state of medical care and medical costs in INDIA. The left should look at the INDIAN MODEL, except they won’t.

The reason is, INDIA is a mostly free enterprise model of health care access, with government playing a relatively minor role.

Another reason is that HEALTH CARE INSURANCE is NOT the primary means of payment for health care in India. Most health care costs are out of pocket.

Another reason is there is no AMA to keep the numbers of Doctors artificially low. Indian medical schools turn out doctors at the rate of 25,000 a year.

The result:

/Because there is so much competition, doctors and hospitals are forced to keep their prices low to get patients. Residents, who go to medical school straight from high school, only make the equivalent of a few hundred dollars a month. An average surgeon’s salary would be around $8,000 per month. The take-home pay to fix a hip fracture, for example, might run between $100 to $300, out of the $1,000 fee to the patient, says orthopedic surgeon M.S. Phaneesha. At his hospital in Bangalore, he says, there are 20 orthopedic surgeons alone on staff. For 1,600 beds, the hospitals employs around 700 doctors full-time; 300 of them are surgeons. In the U.S., by comparison, a first-year resident might take home around $2,500 each month, and the average surgeon more than $20,000 per month. A hip fracture would cost a patient around $30,000, of which the surgeon’s charge is $5,000. Even general practitioners in America earn on average more than $100,000 a year ./

This is no TOP DOWN HEALTH CARE SYSTEM, but instead works the way most UNREGULATED BUSINESSES WORK-to please consumers.

Hospitals are sparkling clean and efficient, at $20 a night. There is NO COST SHIFTING. NO $400 aspirins to compensate for those who by law must be admitted for free.

India is a third world country, and emerging from NEHRU style SOCIALISM only since the early 1990’s. So poverty is a major concern.

With so many medical schools turning out so many doctors, it can be hard to get a handle on the quality of the doctors abilities. The less able may migrate to the poorer neighborhoods.

However, it is time Americans started to question the role of the AMA and the government through its licensure laws to RESTRICT THE SUPPLY OF MEDICAL PERSONELL by limiting the number of doctors and other health care professionals, and by driving alternative medicine into the underground.

The AMA strategy of allowing only the “highest quality” of doctors into the system by controlling the number of entrants into medical schools by a whole series of often arbitrary standards has ensured for its members, and the physicians who are not members, a higher than market rate of return.

These higher salaries in turn could be factor in the large number of MALPRACTICE SUITS and the cry for TORT REFORM.
IF Doctors are supposed to be these fantastic embodiments of wisdom and skill, maybe that is a good reason to sue them if they mess up. Deep pockets make great targets.

There is, after all, a broad range of competence between a quack and a brain surgeon. Most doctors are somewhere in the middle. Training more doctors would provide more doctors who may be a bit on the lower end of the competency scale, but hardly a danger to patients. With more competition, more doctors would be content to find a niche where their competency level is most comfortable.

There is a word for the best way to balance supply and demand, to satisfy the basic needs of consumers as cheaply and quickly as possible, and to generally keep costs down and quality high. The name for that is free market capitalism. The left should take a look at that sometime, as should most Republicans as well.

Brendan Trainor

See-

http://www.salon.com/news/feature/2009/09/03/india/index.html

http://reason.com/blog/printer/130475.html

Link from Reason.com blog, HIT AND RUN

Sometimes, in order to understand how large social organizations work, it is illuminating to examine a relatively trivial example of the dynamic and gain insights into the more complicated large scale organization.

In Oregon, car dealerships, who are facing hard times, are asking the state government to PASS A LAW forbidding car sales on SUNDAY.

Of course, they will say that Sunday is a religious day, and large scale commerce should be banned for religious reasons.

This is a perfect example of the Baptist and Bootlegger paradigm in “rent seeking activity”. (RENT SEEKING is the PUBLIC CHOICE school of economics term for using the state to gain competitive advantages in the market)

The Baptists would be the evangelicals and others who would welcome the State of OREGON to ban car sales on Sunday as a religious gesture of the importance of the SABBATH.

The Bootleggers, in this case, are the CAR DEALERSHIPS who want to cut down their expenses in a sagging economy and try to squeeze more sales out of the Saturdays they are open.

The KICKER is that the dealerships do NOT just want to close on their own. Why? Because PRIVATE CARTELS do not last long, that is why. Even OPEC has its internal discipline problems. If all the current dealerships decide to close down on Sundays voluntarily, why some one might change their mind, or an UPSTART new guy from Nevada might see an OPPORTUNITY FOR PROFIT and open a dealership that is closed on MONDAYS, but open on SUNDAYS, when frustrated weekend shoppers might be willing to close the deal.

Ok, Ok this is small potatoes. What is the point you were trying to make about major issues?

Well, since we have numerous liberals on this list, let’s look at JIM CROW laws.

OMG, he’s talking about RACISM in economic terms! How dare he analyze the relationship between HUMAN BEINGS in anything but purely humanitarian calls for equality?

Well, because, like it or not, we live in a world of scarcity, and with limited knowledge, and those are the conditions that economics is geared to analyze.

Consider that in the DEEP SOUTH, the majority of the white people were racists and wanted to keep blacks down. What would their strategy be? Well, the majority of white people is STILL not the majority of all people. Some whites are not racist, and the blacks might even outnumber the whites.

So, what organ of power would you try to focus your attentions on? Controlling the free market? Not likely, because the free market is well, free. Too many variables.

So, how about controlling the STATE! Yes, that’s the ticket! Concentrate on controlling the STATE!

So, make it harder for blacks to vote. Sure, that is important. Then, the majority of racist whites can elect RACIST governments, willing to pass and uphold JIM CROW LAWS.

Then, be sure the District Attorney is racist, and the judges. Easy to do when justice is a MONOPOLY controlled by the state. Make sure juries are all white.

Then violence and intimidation against blacks will go unpunished, and any uppity blacks will be prosecuted to the “full extent of the law”.

Now, this is most important: Pass laws that state that EVERYONE MUST DISCRIMINATE. No exceptions. Every business must be all white, or all black. No one can move to the South , no big corporations can move in, without obeying the JIM CROW laws.

No white liberals can gain a competitive advantage (like being open on Sundays in Oregon) by being willing to serve both whites and blacks.

There you have it. Jim Crow was a function of the state controlling business, not vice versa.

Free markets in the South would never have supported JIM CROW, because segregation does not make MARKET SENSE. You would have to have two of everything: two locker rooms, two bathrooms for each gender, two lunch rooms, etc. The costs of doing business would be prohibitive. Not to mention the constant racial tensions in the workforce.

That is why when the black man Plessy dared to sit in a whites only railroad car in the 1890’s and was arrested , the RAILROADS paid for his defense all the way to the Supreme CT., which did not uphold his right, or the rights of the railroads either (government regulated, you know) to conduct their business in a PROFIT MAXIMIZING WAY.

So, large corporations usually avoided investing in the JIM CROW south. The south did NOT become prosperous until JIM CROW ended.

Now, what about the civil rights movement? Was it the best solution?

Not necessarily. Sure, the power of the state was crushed. But, the power of individuals to think and act in a private capacity was crushed as well.

Does passing laws saying NO ONE CAN DISCRIMINATE an ethically better option than laws saying EVERYONE MUST DISCRIMINATE?

Given that those who wish to discriminate will face market losses and pay for their discrimination, and that free markets will not sustain large scale discrimination, was it worth attacking private property rights and free speech and free thought to “stamp out” all discrimination?

Those who believe in political correctness, favor forced busing, believe that the government must constantly intrude into the lives and businesses of citizens to enforce “equality” certainly do.

Those of us who are skeptical of government intrusions, and are willing to tolerate private behavior we do not agree with so that the overall freedom of association (and non association as well) is protected, do not.

Barry Goldwater did not vote for the Civil Rights Act, because he thought it would indeed lead to the PC culture we indeed have today.

Was he right?

Brendan