By James H on 4/23/2008 4:08 PM

In today's Wall Street Journal, Senator Sherrod Brown bemoans the trade deficit.

"In just 15 years, our annual trade deficit has mushroomed to over $800 billion from $38 billion in 1993. With Mexico, our trade surplus evolved into a $90.7 billion trade deficit. With China, our trade deficit jumped to $250 billion today from about $22 billion," he writes.

To give context that you might not receive from the senator, the current account deficit is the value of exports minus the value of imports.  You can have increased trade deficits even when the value of trade is growing.

So, to add the value of exports where he discusses deficits, in just 15 years, our annual exports have mushroomed to over $1.16 trillion from $465 billion in 1993. With Mexico, our exports gained 228 percent. With China, our exports jumped to $65.2 billion today from about $6.3 billion.

There are plenty of other problems with Senator Brown's arguments. But I think giving an honest look at free trade requires an acknowledgement that the whole value of trade -- imports and exports -- is larger today than in the past.

By James H on 4/22/2008 2:51 PM

How many governments are there in the United States? According to the 2007 Census of Governments, there are 89,527 governmental units in the US.

It's up a little bit since 2002 where there were 87,525 different governments. Michigan has 2,893 of them, from school districts and Tax Increment Financing Authorities to the state, we've got an awful lot of fiefdoms.

The sheer number of governments is impressive to me, especially considering that 42 percent Americans that can't name the three branches of the federal government.

By Isaac Morehouse on 4/22/2008 1:58 PM

The Mackinac Center for Public Policy is pleased to host monthly Issues & Ideas Forums in Lansing. These luncheons, which feature experts on a diverse array of subjects, offer a forum that enhances and broadens the policy debate to include theoretical and philosophical ideals — and suggestions for achieving them.

Legislators, staff, news media and other interested friends are cordially invited to the

APRIL 29 ISSUES & IDEAS FORUM

“The Agenda Behind Michigan’s Climate Action Council”

Read More »

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By Isaac Morehouse on 4/17/2008 4:12 AM

How can we market freedom in the age of the iPod?

Why is pop culture full of anti-freedom myths? Why do advocates of big government make better bumper stickers than advocates of liberty? How can the ideas of freedom be communicated in today’s culture?

Explore these questions and much more at SFE’s 2008 Clarkson Colloquium – July 11-12!

 

What the heck is a Colloquium, and who is Clarkson?
< ... Read More »

By Isaac Morehouse on 4/16/2008 2:02 AM

Good morning Michiganders!  I hope today finds you well - even after late-night trips to the Post Office to mail in your taxes.

Leon Drolet writes in the Detroit Free Press about several Michigan business owners who discovered that the elimination of the state's hated Single Business Tax (SBT) only resulted in higher taxes.  The advent of the new Michigan Business Tax (MBT) and the addition of a 22% "surcharge" puts Michiganders in a worse position now than last year.

"A Ferndale electrical contractor who paid $142,000 in SBT in 2007 is now required to send Lansing $215,000 under the MBT -- a 52% increase. One Livonia excavating company has it worse; last year's $76,000 SBT has tripled into this year's $239,000 MBT liability."

If that weren't enough,

"Edward Rose & Sons, one of Michigan's most respected residential leasing companies, rents affordable apartments to 28,000 Michigan families. The firm reports that the MBT has increased its state tax burden by more than 300%! Michigan housing providers are struggling to keep apartments affordable while paying this massive tax increase."

Add the additional 12% hike in the personal income tax, and it's no wonder job providers want to set up shop elsewhere and our college grads are going out ot state with them.

Maybe these new tax burdens, passed only to sustain a massive state bureaucracy with extremely generously compensated public employees, will move more citizens to action...

By Isaac Morehouse on 4/15/2008 9:27 AM

Originally posted at the Prometheus Institute

Mike Getlin’s post yesterday chalked up the sub-prime ‘crisis’ (I hesitate yet to call it a crisis) to, basically, greedy profit-seekers who lacked foresight and made risky loans then sold them to other greedy profit seekers.

This certainly seems plausible. What loan agent is not interested in making more money by closing on more loans? What investment firm doesn’t want to see greater returns? If these parties took undue risk – either because of greed or any other reason – that's their choice so long as they reap the benefits or the costs. No one forced the firms to buy these sub-prime loan bundles. If they fall apart, those who took the risks should bear the cost.

Yet Getlin, after detailing how nearsighted and foolish these transactions were, went on to approve Uncle Sam putting every responsible and innocent citizen on the hook to cover the losses. It would seem if the behavior of these lenders and investors was too risky, they should take the hit when it doesn’t pan out.

Another missing piece was the fact that borrowers are not forced to borrow more money than they can reasonably pay back. One could take the line, as Barack Obama has, that these borrowers were simpletons and were hoodwinked into thinking they could afford more than they could by greedy lenders. Read More »

By James H on 4/15/2008 9:23 AM

In an article for the Miami Herald, comedian Dave Barry offers some tax planning help.

If you go to the official Internal Revenue Service site on the Internet (www.irs.gov) and start poking around among the thousands and thousands of forms, instructions, bulletins, etc., you would be amazed at the range of deduction options. For example, according to IRS Rev. Proc. 2006-50, certain individuals recognized by the Alaska Eskimo Whaling Commission may deduct up to $10,000 for whaling expenses. Could this deduction apply to you? Think about it!

He also talks about why we need taxes. After all, they go to fund things like the Catfish Genome Project (really). Why?

The answer is that the Catfish Genome Project is crucial to achieving a vital national goal that we all share: reelecting the Alabama congresspersons who stuck it in the federal budget.

 

By Isaac Morehouse on 4/14/2008 2:22 PM

A group of about 20 freedom-loving individuals in the DC area decided to celebrate Thomas Jefferson's birthday, and the ideas TJ fought for - freedom, tolerance, limited government.

The ideas was to show up at the TJ memorial in DC around midnight Sunday morning, each wear an individual iPod loaded with tunes and silently dance at the memorial in tribute to TJ's birthday and freedom in general.  They chose midnight so as not to disturb others.  Ditto for the headphones vs. externally audible music.

The celebration resulted in several Park Police showing up and forcefully telling the dancers to disband, using coarse language, and even arresting one of them.  Never did the Police give them a reason for the arrest.  They could not cite what law was being violated by the peaceful and silent expression.  Nor would the officers give their badge numbers, despite department policy that they do so.

Check out the just launched blog - Free the Jefferson 1! Complete with Youtube of the event.

By James H on 4/14/2008 11:23 AM

Peter Boettke of George Mason University laments the lack of a free market public intellectual like Mises, Hayek, or Friedman in the current political arena.

He asks, "How do we find these type of economists and how do we cultivate them? And without them can we survive the statist onslaught on our economic freedom?"

I certainly do not have the expertise necessary to begin to answer the first, but here are my thoughts on the second:

1. I have an inclination to say that figureheads for ideas can be dangerous to the ideas themselves, but I'm having trouble naming a clear real-life example of an idea champion that brought down a good ideas because of undue association.

2. There are plenty of other tools to battle statist onslaught that do not require a public-intellectual.

3. Cultural change does not require a public intellectual.

As to 2 and 3, just because a public intellectual is not necessary doesn't mean that we could use one, and it would take an awful lot to get me over my skepticism of heroes, anyway.

By Isaac Morehouse on 4/11/2008 9:41 AM

From Mackinac.org: Legislators’ Hollywood Dreams Defy Economic Reality

Michigan legislators are rushing to grant extensive refundable tax breaks, government loans and even outright cash handouts to the film industry. Upping the ante from the usual discriminatory tax breaks betrays a tinge of desperation among business subsidy advocates.

The film package is being sold as an economic development initiative, but it’s unlikely to have any significant effect on this state’s failing economy. That’s because Michigan’s current gross domestic product is nine times the size of the entire U.S. film and sound recording industry, according to the federal Bureau of Economic Analysis.

A comparison with the auto industry puts this in perspective. In terms of personal income by industry, the entire U.S. "motor vehicle body, trailer and parts" industry accounted for $86.2 billion in 2006. Michigan got $22.1 billion of that, while California’s share was $2.6 billion. The entire U.S. Read More »

By Isaac Morehouse on 4/10/2008 9:45 AM

I was recently asked by a friend what I thought was the most dangerous problem facing our country in the future.

I had to think long and hard.  Maybe the momentum towards a dangerous government controlled health care system?  Maybe all the anti-trade rhetoric?  Maybe the religious dogma of global warming and other environmental trends which seek to stop human progress?

All of these are dangerous, but I think they lack the imminent threat of something greater, yet more subtle.  The above problems are largely hype and talk.  They are mostly news stories, blogs, cranky activists, and empty political promises.  I do not foresee any of the horrible things suggested on these issues becoming a reality in any very substantive way. 

All the candidates bash free trade during the campaign, but all of them know (or their advisors do) that ending it would be a death blow to our nation's wealth and progress.  All of them talk about massive health care reform, but few recall what happened the last time such a plan was attempted.  Likely we'll get an expansion in Medicaid and Medicare, and little else.  All of them talk the talk that green zealots want to hear; but each of them will likely throw tax dollars at some "alternative energies" rather than putting us back in the Dark Ages by complying with the ludicrous Kyoto Protocol.

The most dangerous threat is something which has millions of separate sources.  Millions of mini problems feed and create this massive threat to liberty.  All of the above policies depend upon this problem.  This problem can be m ... Read More »

By Isaac Morehouse on 4/9/2008 9:20 AM

Don't miss Dave Racer tonight, 7:00 PM at Kalamazoo College's Dalton Theatre!

Racer will discuss what's wrong with health care and how to fix it.  Facebook the event here.  Below is a blog entry from Racer's blog:

 

Single Payer and Nurse Shortages

Nurses are pitching universal health care. By that, they mean that we should move toward a single payer health care system. They want this because they believe there is a nurse shortage: About this, they are right, and it will get worse, especially with government run health systems.

Now I know that rank and file union nurses are smart people. They have to be to make it through all that training. Of course, all smart people are ignorant about some things, like politics and economics. That’s why they rely on their union leaders to make good decisions for them. So I excuse the rank and file from my criticism here.

The U.S. spends about 16 percent of its Gross Domestic Product (GDP) on health care. A good deal of that goes to health professionals, like physicians and nurses. By contrast, Canada spends about 10 percent of its GDP on health care.< ... Read More »

By Isaac Morehouse on 4/8/2008 12:50 AM

Originally posted at the Prometheus Institute:

There's a reason the earliest economists likened the economy to a human body

I’m a huge fan of Monster energy drinks. The things are dangerous. I have to severely limit myself. I only consume one if I’m in desperate need of a wake-up and I know I can handle the crash that inevitably follows.

Energy drinks are basically a way of fooling your body. When the human body needs something, it sends all kinds of signals to let you know. When you need sleep, you feel tired. It tells you when you need food. You feel sick when you’ve not eaten the right nutritional mix. Health problems kick in when exercise is lacking. Headaches can mean lack of sleep, water, nutrition, too much stress, bad posture, etc. These signals can be a pain in the butt – but they perform a vital function. Ignore them at your own peril.

Your body is begging you to sleep; so you slam a Monster to make you feel like you have energy and shut down the bodily signals screaming for repose. This may give you a temporary productive burst, but there is no long-run net benefit. The burst is followed by a crash of equal (sometimes greater) magnitude on the opposite end. Worse still, the greenish liquid you’re putting in via Monster has other deleterious health effects (sugar and acid which rot your teeth to name just one) that will be especially pronounced if you frequently imbibe. Read More »

By Isaac Morehouse on 4/7/2008 6:16 AM

I'm thinking of seeking a monopoly on the production of scrambled eggs.  We wouldn't want the great tradition of scrambled eggs screwed up by someone producing mediocre eggs by the same name just to make a buck! (Plus - think of all the bucks I'd make as the only person allowed to make scrambled eggs!  Hint: that's the real motivation).

Protectionism is always about a producer or industry trying to secure a monopoly to protect from competition and innovation so they can keep their prices high.  The European Union is miles ahead of us in the protectionism racket.  Check out this article on protected pork pies from the Telegraph.

"After a 10-year battle, the famous pie has been given EU recognition, which means it is an official delicacy that requires protection.

"Fundamentally, it stops people using the name and reputation of Melton Mowbray for commercial gain alone and ensures that the market is not devalued.

(Note: Melton Mowbray is not a brand name, it is just a type of food.  It'd be like limiting the production of the famous Read More »

By Isaac Morehouse on 4/4/2008 10:18 AM

By Isaac Morehouse on 4/3/2008 5:51 AM

Come hear author Dave Racer dicuss problems and solutions for health care in the U.S. Wednesday, April 9 at 7:00 PM in the Dalton Theatre at Kalamazoo College.

SFE is partnering with the Kalamazoo College and Western Michigan University College Republicans to bring in Mr. Racer (of www.freemarkethealthcare.com).

Since 2006, Dave Racer has traveled to dozens of states across the country, speaking on health care as a keynoter, continuing education course leader, or panel member.

Racer is the co-author of two books dealing with the U.S. health care system: Your Health Matters: What you need to know about US health care (Alethos Press LLC 2006),
and FACTS: Not Fiction, What really ails the U.S. health care system (Alethos Press LLC 2007). During January 2008, Racer released the DVD “Hope4Health Care: The Reform You Can Live With” (Alethos Press LLC).

The event is free and open to all!

Facebook: http://www.facebook.com/event.php?eid=9878329194

 

By Jason Gillman Jr. on Tuesday, April 01, 2008 1:16 PM

John Lott has a great piece posted on foxnews.com where he talks about how the media and the democrats like to claim there is a recession.

I should have written about this earlier, before I read Lott's piece, but I didn't. As he mentions, the real economic definition of a recession is two consecutive quarters of negative growth. Looking at statistics published by the Bureau of Economic Analysis, we haven't even had a negative growth quarter since Q3 2001 (and even then, in current dollars at the