Students for a Free Economy

I Am SFE... Why Aren't You?

Wed, 25 Aug 2010 10:58:20 -0500

88 Keys to Economy

Tue, 24 Aug 2010 09:54:54 -0500

From the ever entertaining Donald Boudreaux in the Pittsburgh Tribune-Review:

Suppose that several years ago Uncle Sam -- pressured by the powerful lobbies of piano producers and piano teachers -- adopted policies to encourage the manufacture and purchase of pianos. Tax deductibility for piano purchases, along with special government-created agencies designed to make credit artificially inexpensive for piano buyers and manufacturers, were used to ensure that no American household was denied the dream of easy access to a grand or upright piano.

Pianos, being beautiful to behold with eyes and ears, were indeed produced and purchased in record numbers. Families that otherwise would not have purchased pianos actually did so because of these government efforts to promote these exquisite musical instruments.

Politicians and the punditry were well-pleased. The rate of piano ownership soared to an all-time high. Citizens took pride in owning their very own pianos, as well as in knowing that their country was so prosperous and humane that piano ownership was spreading across the land.

And piano teachers and piano tuners were hired in record numbers. Wages for these occupations rose. Many young men and women who might have trained to become nurses or carpenters or clarinetists became, instead, piano teachers and tuners.

Piano production, retailing, delivery, maintenance, repair and instruction all boomed. "The piano industry is a mainstay of our economy," many all-knowing talking heads explained.

But a few discordant notes eventually were heard. Because consumers' demand for pianos was never really as strong as government policy made it appear to be, some creditors who lent money to piano buyers or piano producers started growing anxious. "Will the demand for pianos remain artificially high long enough for me to be repaid?" many of these creditors wondered -- at first to themselves, but then more vocally.

These (reasonable) concerns gripped increasing numbers of creditors. Concern became panic. Even with government subsidies, creditors no longer wished to lend money to anything or anyone associated with the piano industry.

Demand for pianos collapsed -- and along with that came the collapse of demand for the services of piano makers, retailers, tuners and teachers.

"Greedy business people seeking a quick buck nearly destroyed this vital industry, thus threatening the entire economy," politicians all said in unison. "We must legislate to ensure that such a financial fiasco never happens again.

"But in the meantime," these politicians continued, "we must also stimulate the economy with spending to combat rising unemployment."

Pundits -- along with many of the land's most prominent economists -- agreed wholeheartedly: "Without massive government spending, the economy will collapse."

So Uncle Sam spent. And spent. And spent some more. Much more.

Some lonely souls wondered, however, what it was, exactly, that this spending was supposed to stimulate. After all, once it was clear that too many resources were invested in the piano industry, it was equally clear that these resources (including many workers) would have to leave this industry and find employment in industries that did not depend upon government to inflate consumer demand for their outputs.

This process of paring down the piano industry and building up other industries necessarily takes time. During this time, an unusually large number of workers are unemployed. This unemployment is the sad but inevitable result of the inappropriate investments made earlier in the piano industry.

So if the "stimulus" spending is to keep unemployment from rising, it would have to reinflate demand for pianos. That's the only way to avoid the time-consuming process of workers being laid off from the piano industry and finding jobs elsewhere.

But because the root of the problem is an artificially inflated demand for pianos, reinflating the demand for pianos only delays the day of reckoning.

If, instead, the stimulus spending does not reinflate the demand for pianos, then it won't prevent unemployment from rising. Workers laid off from the piano industry will not all find new jobs immediately. They'll be unemployed for a time.

The lonely souls who dared to question the received wisdom that stimulus spending is a "must" were informed that no industry would grow without stimulus. The pessimism spawned by the collapse of the piano industry spread like cancer throughout the entire economy. "Only government spending can kill this cancer," pronounced the pundits.

The lonely souls, though, would not be quieted. They asked: "Why not simply cut taxes throughout the economy? By allowing producers and risk-takers to keep more of what they produce, they'll be encouraged to expand successful businesses and to start new ones in search of profit. That's how economies grow and real jobs are created."

Alas, the lonely souls were not heard. Stimulus funds were spent in unfathomable quantities, yet the economy remained depressed.

Our little piano fable takes us to where we are in America today. It's too bad that the voices of the lonely souls are being drowned out by the cacophonous screams of the stimulus crowd.

Free Trade and Private Contracts

Wed, 18 Aug 2010 15:55:46 -0500

Tom Palmer takes on Lou Dobbs on free trade principles. It is important to decipher when people who purport to like free trade, are in fact are making a case for free market.

Can YOU tell the difference?

Thu, 12 Aug 2010 15:16:45 -0500

Milton Friedman Legacy Day... Today!

Fri, 30 Jul 2010 08:48:54 -0500

He’s been called a “revolutionary thinker,” an “intellectual freedom fighter,” a “tireless advocate for freedom,” and “a giant in the world of ideas.” Others refer to him as an “old friend,” the “father” of school choice, the Nobel laureate economist, and of course, some know him only as “Uncle.”

Dr. Milton Friedman, who passed away in 2006, continues to live on in the hearts and minds of freedom-loving people both in the United States and around the world. Although this great visionary died almost four years ago, so many prove every year that his vision is not lost.

In celebration of that vision, Students for a Free Economy will be hosting in conjunction with the Foundation for Educational Choice the annual Friedman Legacy for Freedom Day. SFE will be holding Milton and Mummies at the Detroit Science Center on July 30.

America is in the midst of an economic and philosophical crisis with regard to the proper role of government and the role of the individual. Because of this, it is more important than ever to look back and celebrate the life and times of Milton Friedman, his contributions to the cause of freedom, and his opinions on government.

As Dr. Friedman once said so eloquently: “The great achievements of civilization have not come from government bureaus… The record of history is absolutely crystal clear: That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

It is this clear moral framework for freedom and free enterprise that is missing in today’s debate: Individual freedom is better than government force. Free markets are better than monopolies. And parental school choice is better than bureaucrats’ school choice.

That is what led Milton, and his wife Rose, to found the Foundation for Educational Choice and to dedicate their remaining years to the cause of school choice, the success of which, they said, “requires…the cooperation of the many groups around the country.”

That is why, on July 30, Students for a Free Economy is joining with 64 groups around the country—and world—to celebrate school choice, Milton Friedman, and the cause of freedom. “Uncle” Milton, we hope, would be proud.

Voluntary Cooperation: Friedman's Gift to Us

Thu, 29 Jul 2010 12:42:37 -0500

Boost economy with more immigrants

Fri, 16 Jul 2010 15:22:36 -0500

The following is my letter published by the Detroit Free Press in response to their editorial on immigration:

I commend the Detroit Free Press for supporting the Department of Justice’s decision to contest Arizona’s new immigration law, but the prescriptions offered are reminiscent of worn-out Republican talking points. Bolstered immigration legislation will not solve the problem. The answer lies in embracing free-trade and extending that principle to the labor market. Conservatives who traditionally support free trade should remember that borders have the effect of restricting the free exchange of services, which is bad news for an already ailing economy. Also, increased immigration only makes the economy stronger, a fact observed by virtually all economists. If President Obama and congressional Democrats voted to loosen up current immigration restrictions, Democrats could reclaim support from their discouraged liberal base while simultaneously pleasing the rising libertarian voting bloc. Hopefully, the president can garner enough political will to adopt a new immigration policy of free-trade by opening up our borders.

More spending will prolong recession

Tue, 13 Jul 2010 10:00:59 -0500

The following letter is in response to UCB School of Law Dean Christopher Edley's New York Times op-ed:

Christopher Edley’s proposal (“Let Treasury Rescue the States,” July 7) fell short of a realistic solution to current fiscal hurdles. In claiming that states could pay back the U.S. Treasury by accepting less future federal dollars, Edley failed to address how existing programs would be paid for were funds advanced for other purposes. The answer is in the form of higher taxes or spending cuts, a scenario he claims would undermine the federal stimulus. He further claims that states would repay the Treasury including interest with no expense to the federal government. Yet he fails to explain that the expense would instead be felt by increased taxes to pay interest. Ultimately, Edley’s premise that extending current recovery efforts can improve the economy is flawed. If Edley wants the suffering expedited, he will abandon his opposition to balanced budgets and instead favor free-market solutions, including decreasing debt and spending.

Students for a Free Economy Intern Gives Opinion on a Controversial G20 Summit

Tue, 06 Jul 2010 15:34:41 -0500

The G20 summit recently held in Toronto, Canada has gained much press due to the clashes between protesters and police. However, SFE summer intern Clint Townsend of the University of North Texas delves into the deeper issues under discussion by these powerful leaders in his commentary published July 4 on Amarillo.com. The full text of his article can be found here:http://www.amarillo.com/stories/070410/opi_opin8.shtml

Clint discusses the need for more fiscal and monetary restraint on the part of the world’s largest powers in solving the current economic turmoil still plaguing many parts for the world. Clint notes the fear that many European states have over looming deficits in light of the unfortunate fate of states like Greece and remarks:

“For once it seems as though the United States should heed the advice of Europeans and support initiatives to ease pressures on the government credit card.”

He also cites the United States’ ongoing wars and unnecessary foreign involvement as reasons for our precarious financial state. Initial solutions for the U.S. would involve the ending of PAYGO and reformed interest rate policies.

SFE encourages such informed commentary from students and hopes to see more student leaders make their voices heard in the debates of our day.

The Basics of the Minimum Wage

Tue, 06 Jul 2010 10:29:43 -0500

Come hang out with SFE twice during July!

Mon, 28 Jun 2010 11:58:14 -0500

July 23-25, 2010-Liberty Summer Seminar in Orono, Ontario

SFE will be attending the Liberty Summer Seminar hosted by the Institute for Liberal Studies. This is a great camping adventure held in the woods of Orono, Ontario. Attendees camp out, eat, drink and listen to some of the best minds in the liberty movement. The line up currently includes highly sought after speakers like John Carpay of the Canadian Constitution Foundation, Greg Lukianoff of the Foundation for Individual Rights in Education (FIRE), and Michael Moynihan, senior editor of Reason Magazine and reason.com. This event is always a great time. Registration can be done here.

Students are required to pay for their own registration, but SFE and ILS are working together to offer TWO full scholarship opportunities for students. These scholarships are in memory of Sarah Grether, an active SFE student and LSS veteran who died early this year. (A memorial can be found here.) Simply write a brief essay about what you hope to accomplish during Liberty Summer Seminar and how you would like to apply it to the liberty movement in the future. Please email inquiries about these scholarships to sfe@mackinac.org or just click here.

TIME: Depart 10:00 am July 23, 2010
LOCATION: Carpool meetup in Swartz Creek (directions here)
COST: Transportation is free, along with meals going to and from Orono. Meals are included in the registration for the seminar.
Facebook event: Here.

We look forward to having you there!

July 30, 2010-Milton Friedman Legacy Day
Come join SFE at the Detroit Science Center and the Union Street Restaurant during the afternoon and evening on July 30, 2010. We will be checking out the newest exhibit at the DSC titled: The Accidental Mummies of Guanajuato. Afterwards, we'll grab food and drink around the corner at the Union. We'll talk about the exhibit and Friedman's contributions to economics. Please RSVP via Facebook or e-mail!

TIME: 2:00 pm begin exploring exhibit at the Detroit Science Center
LOCATION: Detroit Science Center (map) and the Union (map)
COST: Free!
Facebook event: Here.

SFE Student and Reason Hit and Run

Tue, 22 Jun 2010 20:07:27 -0500

SFE activist Robby Soave is spending some time with Reason. Check out his first blog post here!

Smoking Kills Puppies

Think anti-smoking scare tactics can't get any more ridiculous? Check out this commercial released by anti-smoking activist organization Ydouthink and the Barber Martin advertising agency in Virginia.

Setting aside the issue of whether this is a responsible way to educate people about the ill effects of smoking (SMOKERS ARE PUPPY-KILLERS!), let's take the message at face value. Technically speaking, yes, pets can choke to death from attempting to swallow cigarette butts. Then again, pets can choke on just about any appropriately-sized household item, including cotton balls, loose change, and dryer sheets. Indeed, chocolate is among the more poisonous substances for dogs, and owners should make sure not to leave chocolate within reach of their pets. But if a commercial depicted a puppy dying from chocolate ingestion, and the intended conclusion was that people shouldn't eat chocolate, such a commercial would be rightly mocked. Ydouthink's commercial doesn't prove you shouldn't smoke; it proves that anti-smoking zealots will do anything to scare people, particularly young people, away from cigarettes.

Ydouthink has an arguably worse commercial that features a cat choking on a cigarette butt. At this rate, I wouldn't be surprised to see commercials asserting that cigarette butts will kill Santa Claus, summer vacation, and the Disney Channel in the near future.

Read Jacob Sullum on hypocrisy and the anti-smoking movement here.

Modern Day Bootleggers? Not likely.

Thu, 17 Jun 2010 10:36:32 -0500

Kathy Hoekstra does it again!

Fri, 11 Jun 2010 14:46:51 -0500

The Overton Window: A Novel

Tue, 08 Jun 2010 18:32:57 -0500

The Mackinac Center is being recognized for a theory of political change our late VP Joe Overton created in the 1990's. The idea is this: public policy choices are on a spectrum that changes over time. Public support for different options come and go. General rabble rouser Glenn Beck has learned about this theory and wrote his newest novel about the process, naming it the Overton Window.

Be sure to check out our president Joe Lehman on Beck's show tomorrow!

For more information, be sure to check out the Mackinac Center's page dedicated to the topic here.

America: the story of whom?

Mon, 07 Jun 2010 11:50:20 -0500

History is one of those subjects, that depending on the subject and the observer, the story can change significantly. The amount of time and care an observer decides to spend on any historical topic is important. For this reason, it’s important to take any representation of history with a grain of salt. It’s safe to assume that license has been taken for the sake of brevity at best or ignorance at worst.

Recently watching “America: the story of us” on the History channel, I became engaged in the segment on Jamestown and Plymouth. Always a fan of pre-American Revolution history, I was excited to see how they might relate the plight of the early Americans. Jamestown and Plymouth faced similar problems in maintaining enough food to feed themselves.

Anyone that needs a refresher, Jamestown was founded in 1607 as a product of the Virginia Company. The segment in “America” picks up where John Rolfe, the pioneer in tobacco production, comes into Jamestown. According to the show, “Rolfe finds at Jamestown Hell on earth. More than 500 settlers made the journey before Rolfe. Barely 60 remain. It’s called the ‘starving time’…The English arrive unprepared for this new world, and unwilling to perform manual labor. Instead of livestock, they bring chemical tests for gold.” The program fails to address though why the Englishmen, who had risked their lives in the trans-Atlantic trip, could not be compelled to work, despite George Percy’s 1607 account that the land was “good and fruitfull”.

According to Tom Bethell in his seminal work on historical property rights The Noblest Triumph, “The colonists were indolent because most of them were indentured servants, expected to toil for seven years and contribute the fruits of their labor to the common store before becoming freemen.” This communal property system inhibited the efforts of all the individuals in the camp. This true race to the bottom for ambition created massive shortages of food.

Sir Thomas Dale rectified this problem upon his arrival in 1611. He immediately split up all the land, giving each man three acres to use to his own ends. The only requirement on the property was that the man devote one month in community service and deposit two and a half barrels of corn to the store house every year.

What was the result of letting individuals of being largely responsible for their own fortunes? According to John Rolfe in 1616, “Whereas heretofore we were constrained yearly to go to the Indians and intreate them to sell us corne…now the case is altered; they seeke to us ¾ come to our townes[…]to buy corne”.

How does this differ from the narrative of the “America” project? The portrayal is that John Rolfe had come into town, planted black market tobacco seeds, and the colony took off. Needless to say, a family can’t sustain simply off of tobacco. With the irregularity of new shipments, the colonists couldn’t depend on trading tobacco for the products imported. It was the distribution of property to individuals, rather than public ownership, that allowed Jamestown to feed itself.

The story of property rights in Plymouth weren’t much different. At the end of 7 years, the property would be equally distributed between the investors in England and the Pilgrims working the land. From the start, the workers disagreed with the communal property stipulation, but the investors demanded it. Here again, we see that these individuals felt unmotivated to be productive.

When the Governor decided after years of failure to split the land, the scene changed dramatically. Bethell writes of William Bradford’s account of the pilgrims before and after the transition, “the community was afflicted by an unwillingness to work, by confusion and discontent, by a loss of mutual respect and by a prevailing sense of slavery and injustice. And this among ‘godly and sober men.’ Therefore the land they worked was converted into private property, which brought ‘very good success.’ The colonists immediately became responsible for their own actions.”

How does this compare to the “America” narrative again?

The program does a good job showing the dynamic between the Native Americans and the Pilgrims. It puts a heavy emphasis on the sense of community between these two groups. (The Native Americans, wanting their own expansion of lands, bartered their knowledge of fertilization in the poor soils of Plymouth for weapons to take over a rival tribe). This is likely accurate, but misses the point of receiving the knowledge of fertilization. Even after this knowledge was disseminated, the colony could not feed itself. The effect in “America” is accurate, but the cause shown ignores all besides the glossy Thanksgiving report we all learned in grade school.

The moral of Jamestown and Plymouth is that, left to their own devices, people must and choose to take care of themselves. The moral of this essay? History must told from the eye of the beholder. When looking at any topic, look for many beholders.

Don Boudreaux and the Minimum Wage

Tue, 01 Jun 2010 13:48:00 -0500

Here is a letter he recently sent to the NYTimes:

Dear Editor:

Suppose Uncle Sam orders you to raise by 41 percent the price you charge for subscriptions to your newspaper. Would you be surprised to find a subsequent fall in the number of subscribers? If you assigned a reporter to investigate the reasons for this decline in subscriptions, would you be impressed if that reporter files a story offering several possible explanations for the fall in subscriptions without, however, once mentioning the mandated 41 percent price hike?

Unless you answered “yes” to this last question, I wonder why you published Mickey Meece’s report on today’s record high teenage unemployment rate (“Job Outlook for Teenagers Worsens,” June 1). Between 2007 and 2009, Uncle Sam ordered teenage workers (who are mostly unskilled) to raise the price they charge for their labor services by 41 percent. (That is, the federal minimum-wage rose from $5.15 per hour in 2007 to its current level of $7.25 in 2009 – a 41 percent increase.)

Does it not strike you as more than passing strange for your reporter – assigned to help explain why teenagers today have an increasingly difficult time finding jobs – to ignore the fact that these teenagers are ordered by government to raise significantly the wages that they charge their employers?

Sincerely,
Donald J. Boudreaux

let's be adults here

Sat, 22 May 2010 22:25:33 -0500

A letter I sent to the New York Times:

In a New York Times editorial on May 21st titled "Limits of Libertarianism" you published, "It was only government power that ended slavery and abolished Jim Crow, neither of which would have been eliminated by a purely free market"

The government abolishing Jim Crow and Slavery were incredible steps forward for our society; however, hailing these laws as miracles of government is like saying, "sorry I ran you over with my car, but now everything is okay because my bumper is no longer smashing your face."

Immigration reduces crime...

Fri, 21 May 2010 20:28:59 -0500

...or evidence of Bryan Caplan's anti-foreign bias.

Futurity.org links to a University of Colorado-Boulder study and an Arizona Republic article which seems to suggest that, at worst, immigration has led to no rise in violent crime or, at best, has actually lead a society with less violent crime. From the UC-Boulder study:

"Cities that experienced greater growth in immigrant or new-immigrant populations between 1990 and 2000 tended to demonstrate sharper decreases in homicide and robbery," Wadsworth writes. "The suggestion that high levels of immigration may have been partially responsible for the drop in crime during the 1990s seems plausible."

...

Wadsworth's research suggests that, controlling for a variety of other factors, growth in the new immigrant population was responsible, on average, for 9.3 percent of the decline in homicide rates, and that growth in total immigration was, on average, responsible for 22.2 percent of the decrease in robbery rates.

Polls have shown that sixty-one percent are in agreement with the SB 1070 legislation; however, the data seems to go against the populous fervor against immigrants the country seem to hold.

Cross posted at Trying LIberty and Rational Conduct.

Biles Chosen for Pilot Program with SFL

Fri, 21 May 2010 00:21:34 -0500

Alex Biles, a good friend, tremendous activist with SFE, and newest Vice President of the University of Michigan's College Libertarians has been selected as one of 30 members of a new campus program for Students for Liberty known as Campus Coordinators. He can be seen here talking to Emily Cochran of the Leadership Institute about the smoking ban on U of M's campus. He will be a tremendous asset to the program, and I look forward to working more with him and SFL with many projects in the state of Michigan.