Wednesday, August 20, 2014

The Real Value of $100 in Each State

The states where $100 is worth the least are the District of Columbia ($84.60), Hawaii ($85.32), New York ($86.66), New Jersey ($87.64), and California ($88.57). That same money goes the furthest in Mississippi ($115.74), Arkansas ($114.16), Missouri ($113.51), Alabama (113.51), and South Dakota ($113.38).

As we showed in an example in our recent paper on income data, adjusting for prices reveals average real incomes in Kansas to be higher than in New York, despite New York having much higher incomes as measured in dollars.
The tax policy consequences of this data are significant. For example, because taxes must be calculated based on nominal income, the average New York resident pays significantly more in taxes than the average Kansas resident. But the Kansas resident actually has higher purchasing power, meaning that they get to pay lower taxes despite getting to have a richer amount of consumption.

Saturday, August 16, 2014

Gary North on the Fed

Gary North writes:

"If the central institution of an economy is the monetary system, and this institution is controlled by a government-created cartel, and this cartel is independent of the government, then what possible opportunity does the general public have to reclaim freedom for monetary affairs? The answer is obvious: none."

Sisyphus Meets Indiana Jones

Tuesday, August 12, 2014

Burger Flipping Robots v, Minimum Wage

The Technology

The Burger

"Mmm-mmmm. That is a tasty burger." Jules Winnfield

Fast food doesn’t have to have a negative connotation anymore. With our technology, a restaurant can offer gourmet quality burgers at fast food prices.
Our alpha machine frees up all of the hamburger line cooks in a restaurant.
It does everything employees can do except better:
·    It slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.
·    Our next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.
      Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.
·     It’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.
The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better. 


Sunday, August 10, 2014

Interview with FEE President Larry Reed

Daily Bell: What are the "lofty standards of liberty"?

Lawrence Reed: I'll list some of the big ones here but this is by no means a complete roster: Respect for the lives, property, choices and contracts of your fellow citizens. A healthy recognition that as much as you think you know, there's a world of knowledge out there that you don't know. Self-improvement should be a life-long commitment. If you want to reform the world, you must reform yourself first and then be a good example that others will seek to emulate. Refrain from the initiation of force, which is something that should be used only in defense of individual rights. Central planning requires an arrogant, condescending, know-it-all attitude that a person of solid character should shun. Take responsibility for yourself and your loved ones; no one owes you a living just because you breathe. When you see someone who needs and deserves help, remember that the Good Samaritan wasn't good because he told the man in the gutter to call his congressman; he pitched in and got the job done himself at probably half the cost and twice the effectiveness that any politician could. Don't assume that liberty is automatic or guaranteed just because you or your grandparents had it; if good people who believe in it don't work for it, teach it, insist on it and support it, it can be easily lost. Have patience, be courageous, stand on principle, sacrifice if necessary for what you know to be right. Live for the future, not merely for the here-and-now. Be optimistic because pessimism is a self-fulfilling prophecy; you can change yourself if necessary and you can change the world but not if you think either cause is lost before you even get started. Keep your character up because freedom requires it, and you'll never regret it.

Daily Bell: Your point is that it is more difficult to live up to liberty than down to socialism?

Lawrence Reed: That's exactly right. Socialism requires little more than obedience to authority: pay your crushing taxes, keep quiet and let somebody else run your life for you, even when they order you to give it up for a stupid cause like dictating how another country should live. Living to socialism's standards means living down to some pretty ugly things: dependency and disrespect for the rights and property of others being chief among them. Liberty is a lofty objective. It requires us to live up to very high standards. It's tempting to take what's not yours or hire a politician to do that for you, but doing so is incompatible with liberty and puts a permanent stain on your personal character. We should each be asking ourselves every day, "Am I good enough for liberty?" If the honest answer is NO, then the next logical step is to muster the courage and integrity to clean up your act.

Daily Bell: Of course, the world is in lousy shape these days. The drive toward global consolidation by elites continues. Are they winning? They seem to be becoming more brutal.

Lawrence Reed: What is becoming increasingly known as "crony capitalism" is very strong but it's also under both intellectual and popular attack like never before in our lifetimes. I think the term, "crony capitalism," is unfortunate because I believe if it's cronyism (that is, dependent on the dispensing of political favors), it's not capitalism. It really ought to be called "crony socialism" but that's actually redundant. Socialism, or even the half-way house of interventionism, always reduces to cronyism. The politically well-connected always favor their friends and the corrupt will always seek to use political power. For the moment, at least by the measure of government activities and growth, it would appear they are winning. But I think the growing numbers of those who believe in liberty and free markets are eating away at the foundations of the welfare-warfare state the cronies have erected. I remain optimistic as to the long term, even if short-term trends aren't all in the right direction.  

Daily Bell: What is so hard to understand about markets or the advantages of competition versus laws and regulation? Can politics ever take the place of market discipline?

Lawrence Reed: Laws and regulation provide the appearance of a quick fix. Pass a law! Impose a rule! Problem solved, or at least we can retire with the satisfaction that we've done something. Talk about competition and other market forces and to many people it all sounds nebulous, as if no one in particular is "in charge." Our government schools have done a pretty good job of convincing people that good intentions plus a little "democratic" force imposed by people we elect will get the task done. It's our job as economists to explain that laws and regulations pose their own costs and dilemmas: The lawmakers and the bureaucrats have motives of their own and seldom consider all the side effects of whatever they do, laws and regulations often prevent better solutions and stymie innovation and rules can often be circumvented while they lull people into complacency and a false sense of security. We also have to explain how the seemingly nebulous forces of the market are, if the market is in fact free, more powerful and productive than we usually assume. So those of us who believe in free markets often have a tougher sell than the socialist con artist has. All he has to do is make promises that sound good in and of themselves; we're left to explain the wreckage as well as the alternative. I've often said that coming to understand things like market forces, individual rights, entrepreneurship, personal responsibility, etc., is part of the growing-up process. Some people just don't grow up. Babies are all socialists in the sense that they can think only of the short term. They want whatever they want and they want it now. They don't much care where it comes from or who pays for it. They make a lot of noise and mess if they don't get it and even if they do, they still shit their pants. Becoming an adult means learning patience. It means doing things for yourself, taking responsibility for your life, avoiding the superficial, quick fixes. It means getting what you want through persuasion, not force or tantrums. Socialists, in effect, are babies with guns.

 read the entire interview here

Saturday, August 9, 2014


From the New York Times:

More than 1.7 million people died under Khmer Rouge rule between 1975 and 1979.

The proceedings of the tribunal, a joint effort of the Cambodian government and the United Nations, have been criticized as being extremely belated and for covering only a narrow sliver of the crimes perpetrated by the Khmer Rouge. The judgments against Nuon Chea, 88, and Khieu Samphan, 83, were the first to be handed down against the Khmer Rouge leadership, although a lower-ranking official, who ran a notorious prison for the regime in Phnom Penh, was convicted in 2010. Both senior leaders will file appeals, their lawyers said Thursday.

We think of Soviet Communism because it was the best documented of the Communist regimes, and because the Soviets were the Cold War and expansionist foe.  But there were other regimes that were labeled "Communist" because of their political structure, when in reality they were organized strictly for extermination.  Cambodia is the perfect example of this.

Pol Pot and the Khmer Rouge emptied the cities in less than three days, then proceeded to exterminate everyone who was not needed for their agrarian utopia.  Their selection process was based on envy and resentment - the core attributes of Communists worldwide.  They killed everyone with a shred of education, intelligence and/or wealth. 

Here is a group photo of Cambodians who could read back in 1975:

I highly recommend The Tears of my Soul by Sokreaksa S. Himm if you're interested in learning more about the Cambodia massacre.