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.

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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."

read the article

Sisyphus Meets Indiana Jones

National Debt Projected

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. 

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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

Communism

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.

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Inflation Adjusted Changes in the National Debt

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Unemployment 8.1%

 The first graph shows the employment population ratio, the participation rate, and the unemployment rate. The unemployment rate decreased to 8.1% (red line).


The Labor Force Participation Rate declined to 63.5% in August (blue line)- another new cycle low. This is the percentage of the working age population in the labor force.


The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although most of the recent decline is due to demographics.

The Employment-Population ratio declined to 58.3% in August (black line). This is a new low for the year, and just above the cycle low.

This graph shows the job losses from the start of the employment recession, in percentage terms. The dotted line is ex-Census hiring.
This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

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Global Debt

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National Debt Hits $16 Trillion

The Outstanding Public Debt as of 02 Sep 2012 at 05:17:52 PM GMT is:

 

The estimated population of the United States is 313,431,758 so each citizen's share of this debt is $51,052.36.

The National Debt has continued to increase an average of $3.88 billion per day since September 28, 2007!

Bakken Oil Field Jobs

Job Service of ND: Is your best resource for locating employment in the region.  The link below will take you to a comprehensive link providing an overview of oilfield employment, current job listings, wage information and frequently asked questions.

422 1^st Ave W Williston, ND 58801                                                                
701-774-7900 or 1-800-247-0989 

Q: What if I don’t have any oilfield experience?
A: When searching for an oilfield position, take time to consider what skills and talents you already possess. For example, skills in areas such as welding and construction or the possession of a Class A CDL (commercial driver’s license) are highly valued by many different companies.

Currently, there are a variety of jobs available in the oil industry, with a range of experience requirements. Some positions may require no experience, while others may require several years of experience. Jobs listed on jobsnd.com will include information on what kind of experience is required for each position.

In addition, you will also want to consider some of the many jobs available in North Dakota that are not oilfield related. Jobs are available in many different industries, and the wages for these jobs are generally higher in areas where there is oilfield activity. In some instances, the wages for these positions may rival, if not surpass, the wages of some oilfield positions.

Basic Advice:  http://www.rockinthebakken.com/OilJobs.aspx

Contact Info by City:  http://www.jobsnd.com/office-locations

TheBakken.net  http://www.thebakken.net/bakken-oilfield-jobs/

Doug Casey on the Economy

Since World War II, and especially since 1971 when the link between the dollar and gold was broken, governments around the world have accepted the Keynesian theory of economics, which boils down to a belief that printing money can stimulate the economy and create prosperity. The result has been to create huge amounts of individual and government debt. It has become insupportable. All it has done is purchase a few extra years of artificial prosperity, and we're heading deeper into a very real depression as a result.


Let me define the word "depression." It's a period of time when most people's standard of living declines significantly. It can also be defined as a time when distortions and misallocations of capital – things usually caused by government intervention – are liquidated.

We have been consuming more than we have been producing and living above our means. This has been made possible by: 1) borrowing against projected future revenues and 2) using the savings of other people. The whole thing is going to fall apart. A new monetary system of some type is going to have to necessarily rise from the ashes.

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Failed Stimulus

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Time to Re-think College?

Six Policies Economists Love (And Politicians Hate)

The Proposals


One: Eliminate the mortgage tax deduction, which lets homeowners deduct the interest they pay on their mortgages. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive houses?
Two: End the tax deduction companies get for providing health-care to employees. Neither employees nor employers pay taxes on workplace health insurance benefits. That encourages fancier insurance coverage, driving up usage and, therefore, health costs overall. Eliminating the deduction will drive up costs for people with workplace healthcare, but makes the health-care market fairer.
Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.
Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you're taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.
Five: Tax carbon emissions. Yes, that means higher gasoline prices. It's a kind of consumption tax, and can be structured to make sure it doesn't disproportionately harm lower-income Americans. More, it's taxing something that's bad, which gives people an incentive to stop polluting.
Six: Legalize marijuana. Stop spending so much trying to put pot users and dealers in jail — it costs a lot of money to catch them, prosecute them, and then put them up in jail. Criminalizing drugs also drives drug prices up, making gang leaders rich.

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Fiscally Impossible?

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$222 Trillion Unfunded Liabilities

The expert here is Prof. Lawrence Kotlikoff of Boston University. His most recent report says that total unfunded liabilities went from $211 trillion a year ago to $222 trillion this year.
 
The biggest source of future red ink will be Medicare. In second place is Social Security.

How can the government pay off these obligations? It can't. The possibility does not exist. The government needs a spare $222 trillion to invest in private companies. This investment must make a return of at least 5% to provide the money needed to pay meet the government's obligations. There is no $222 trillion available, and no capital markets large enough to absorb $222 trillion.

Conclusion: the U.S. government will default. 

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I, Pencil

 Here is the classic essay I, Pencil.

 Milton Friedman wrote:

"I, Pencil" is a typical Leonard Read product: imaginative, simple yet subtle, breathing the love of freedom that imbued everything Leonard wrote or did. As in the rest of his work, he was not trying to tell people what to do or how to conduct themselves. He was simply trying to enhance individuals' understanding of themselves and of the system they live in. 

I.6

That was his basic credo and one that he stuck to consistently during his long period of service to the public—not public service in the sense of government service. Whatever the pressure, he stuck to his guns, refusing to compromise his principles. That was why he was so effective in keeping alive, in the early days, and then spreading the basic idea that human freedom required private property, free competition, and severely limited government.

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 Donald Boudreaux wrote:

There are two kinds of thinking: simplistic and subtle. Simplistic thinkers cannot understand how complex and useful social orders arise from any source other than conscious planning by a purposeful mind. Subtle thinkers, in contrast, understand that individual actions often occur within settings that encourage individuals to coordinate their actions with one another independent of any overarching plan. F. A. Hayek called such unplanned but harmonious coordination "spontaneous order."...

For its sheer power to display in just a few pages the astounding fact that free markets successfully coordinate the actions of literally millions of people from around the world into a productive whole, nothing else written in economics compares to Leonard Read's celebrated essay, "I, Pencil." This essay's power derives from Read's drawing from such a prosaic item an undeniable, profound, and spectacular conclusion: it takes the knowledge of countless people to produce a single pencil. No newcomer to economics who reads "I, Pencil" can fail to have a simplistic belief in the superiority of central planning or regulation deeply shaken. If I could choose one essay or book that everyone in the world would read, I would unhesitatingly choose "I, Pencil." Among these readers, simplistic notions about the economy would be permanently transformed into a new and vastly more subtle—and correct—understanding. 

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Milton Friedman discussing the pencil.


 Thomas Thwaites:  How I Built a Toaster--from scratch
 

Students:
 Here is the assignment (with answer key)
 Your welcome.

I, Pencil remains relevant today.
Read and Friedman use the pencil to show the folly of central planning: Nobody can possibly know enough to manage the production of pencils. And indeed, history has proven that when governments create Pencil Ministries (metaphorically speaking), they fail – inevitably and spectactularly.
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World's Worst Economies

Worst Debt:  Japan
2012 reading: 235.8% of GDP

Worst Unemployment: Macedonia

2012 reading: 31.2%

Worst Inflation: Belarus

2012 reading: 65.9%

Worst Gross domestic product per capita: Democratic Republic of the Congo

2012 reading: $231.51 

 

Worst Gross domestic product growth: Sudan 

2012 reading: -7.3% 

 

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World GDP

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Steak Tartare

 6 oz. filet

 diced filet

steak tartare

Ingredients:
6 oz diced filet
2 teaspoons--diced sweet onion
1 teaspoon--minced garlic
2 teaspoons--chopped capers
3 teaspoons--stone ground mustard
4 teaspoons--herb infused olive oil
1 large egg (raw)
3 dashes Tabasco
4 dashes Worcestershire sauce
salt to taste
pepper to taste


Instructions:
1. finely dice a filet
2. mix other ingredients together
3. combine


Comments: A little soupy. Increase to 8 oz filet or reduce olive oil and/or yolk only

Facebook IPO

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Facebook

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Oligopoly

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Restore Glass Steagall?

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Recovery?

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Inflation

Charles Kaldec writes:

To see more clearly how the price of the dollar has changed, it helps to
view price changes over a 10 year period. Since 2002, the price of a barrel of
oil has increased four-fold, to $107 last Friday from $26 in 2002. To suggest
that oil companies had enough power to impose such a price increase, or that
speculators are responsible for a quadrupling of the price of oil is, on its
face, preposterous. Instead, the price of oil and gasoline are up because the
Federal Reserve has driven the value of the dollar down.

For example, if the dollar since 2002 had been as good as the:

Chinese yuan, the price of oil today would be $82 and a gallon of
regular gas would cost about $3.10;

Euro, the price of oil today would be $77 and regular gas would cost
about $2.90;

Japanese yen, the price of oil today would be $71 and regular gas would
cost about $2.75;

Swiss Franc, the price of oil today would be $63 and regular gas would
cost about $2.50.

Thanks Mr. Bernanke!

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Manufacturing in Alabama

"As manufacturing picks up across the United States, Alabama has become an unexpected beneficiary. The state -- best known for agriculture and textiles production -- is enjoying the best pickup in industrial manufacturing in five years as U.S. and foreign companies flock there. The credit goes to the state's low taxes, top-grade trade schools, a statute that curbs union power, and other incentives spurring many manufacturers to move to or expand in the state, experts said.

In 2011, 70 domestic manufacturers announced plans to set up a factory in Alabama. They're expected to create 4,879 jobs and $1.6 billion in capital investment over the next two to three years. In the same year, an additional 313 manufacturers, already in the state, announced expansion plans that would create another 12,369 new jobs and pour $2.5 billion in capital investment."

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Textbook Bubble

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Smart Phone Patent Wars

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Federal Tax Receipt

Job Market

Debt in the Developed World

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March 2012 Unemployment: 8.2%

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Jobless Recovery

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Problems with Fiat Currency

1. There Is No Spoon

2. Coercion

3. Rent Seeking

4. Immorality

5. Central Planning

6. Price Instability

7. Economic Volatility

8. Currency Debasement

9. Wealth Redistribution

10. Concentration of Wealth

11. Moral Hazard

12. Corruption and Cronyism

13. Confidence Failure

14. Counterparty Risk

15. Transaction Settlement

read the essay

David Stockman on the Fed

I blame it on the Fed. I blame it on the 1971 decision by Nixon to close the gold window and let the dollar float. Because out of that has evolved -- or morphed -- a central banking policy in the world that absorbs unlimited amounts of government debt. And so we went on what I call the "T-bill standard" or the "federal debt standard." And the other central banks of the emerging mercantilist Asian economies -- Japan, Korea, and now, especially, the People’s Printing Press of China -- have absorbed this massive emission of debt that otherwise would’ve created powerful negative consequences that would’ve forced politicians to act long ago. In other words, higher interest rates, pressure for inflationary monetary policy, and the actual appearance of price inflation. But because all the bonds on the margin were being absorbed by the central banks, we got away for twenty or twenty-five years with “deficits without tears.”

David Stockman

Funding Government Spending

Human Achievement Hour

On March 31, some people will be sitting in the dark to express their "vote" for action on global climate change. Instead, you can join CEI and the thousands of people around the world who will be celebrating Human Achievement Hour (HAH). Leave your lights on to express your appreciation for the inventions and innovations that make today the best time to be alive and the recognition that future solutions require individual freedom not government coercion.

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Strange Advertising

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