Was 'tulipmania' a 'rational bubble?'

Tulipmania.

Mises:

Austrian bubbles need some sort of expansion in the money supply, by definition. To provide this, French works through several threads in far more detail than this review provides, to gear the underpinnings of a necessary money supply growth:

* Following the regular gold debasements of the previous century instigated by Charles V, the Holy Roman Emperor who ruled over the Netherlands, the Dutch revolt of the late 1560s instituted a policy of "free coinage", whereby any amount of precious metal brought to the Dutch republican state would be minted "free" of charge and returned as the same weight of precious metal in the form of coins. (This "free coinage" policy came to the Netherlands by way of the Dutch East Indies, via the Portuguese and the Moslem governments of India.)

* This anti-imperial policy encouraged a rising flow of specie to the port of Amsterdam, especially from the Spanish silver mines in South America and from as far afield as Japan. This was especially true after the mercury amalgamation process was invented in the middle of the 16th century, which boosted the production of silver, particularly with the opening of the Peruvian Huancavelica mercury mine in 1572 and the discovery of the Potosi silver mine in Bolivia, a single source which produced 45,000 tons of pure silver between 1556 to 1783.

* Due to various complications of Dutch legal-tender laws, the Bank of Amsterdam was founded in 1609 and given a state monopoly on the trading of all specie.

Thus, we see already that three government interventions were settled into place before Tulipmania began; "free coinage" of money (i.e., Dutch taxpayers forced to subsidize minting, thereby sucking in specie from all over Europe), legal-tender laws (ripped apart by Gresham's law, which created a flood of debased and clipped overvalued money to push out newly minted undervalued money), and an imposed monopoly via the Bank of Amsterdam to counteract the two previous interventions (as often happens with government interventions in the free market, where one wrong-headed intervention generates a chain-reaction of further wrong-headed interventions).

So much for a "free market" then. But French has more to add before he is finished; his colorful brushstrokes lay down two more Vermeerian layers of light and shade before the ultimate dénouement:

* The city of Amsterdam, released from the strictures of the Holy Roman Empire, became a center for world free trade, thus sucking in even more specie. (Hurrah!)
* The Dutch state naval fleet, one of the most effective in the world at the time, often seized huge volumes of gold bullion from the Portuguese eastern empire and silver bullion from the Spanish western empire. (Boo!)

Thus we have a fourth violent state intervention, though tempered by the more noble causative factor of free trade, boosting the supply of currency to the Dutch homeland. And so the varnished picture is ready for a gilt frame:

* Kings around Europe regularly debased and clipped their nation's coins, thus many people sent their bullion to the Netherlands, which practiced a republican policy of "honest" money, to protect their wealth from royal avarice.

* The Dutch state policy of providing "free coinage" meant that more bullion was turned into coin than a free market would otherwise have produced.

Thus, the scene was pregnantly ripe for speculation and malinvestment in the usual bubble pattern of a typical boom and bust, which manifested itself in something quaintly Dutch; the buying and selling of tulip bulb futures.

How much of the financial sector is the government guaranteeing?

NY Times:

According to Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, Va., only 18 percent of the nation’s financial sector was covered by implied federal guarantees in 1999. By the end of 2008, his bank’s research shows, the federal safety net covered 59 percent of the financial sector.

Argument against the Community Reinvestment Act being a major cause of the housing crisis

Coordination Problem:

Only 6 percent of identified subprime mortgages in 2006 were made to CRA-qualified borrowers or neighborhoods by CRA-covered institutions.

For loans originated between January 2004 and April 2008, the observed 90-day delinquency rates are actually slightly lower in zip codes that are CRA-qualified than for zip codes with median incomes that are just sufficiently higher to make them CRA-unqualified.

The reason why the CRA wasn't a factor is two-fold: it does not cover non-bank lenders, such as mortgage and finance companies, which means all the high-risk loans originated from those sources (which were many) were taking place without CRA incentives. They were much more about being able to sell them off to Fannie and Freddie. Second, in theory, the banks to whom the CRA does apply still had to demonstrate their loans were "within the norms of safe and sound operation."

British tax

Express:

BRITONS spend more than half of each working day earning money just to pay taxes.

Analysis relating the tax burden to the working day suggests that the average 9-5 worker takes until 1.21pm to cover their tax bill and then spends three hours 39 minutes working for themselves.

Socialism and the environment

Reason:

Czechoslovakia, and especially the you-had-to-see-it-to-believe-it environmental hellscape of Northern Bohemia, was one of the most polluted places on earth during Really Existing Socialism. Since the re-introduction of capitalism, it has become one of the most rapidly improving.

Crime during Prohibition

Reason:

During alcohol prohibition—when the U.S. homicide rate rose by 43 percent, peaking the year of repeal—there were no criminal penalties for drinking. Yet by making it illegal to manufacture and sell alcohol, the government invited the likes of Al Capone to vie for control of a lucrative black market, with predictably violent results. Once alcohol was legalized, the business was no longer run by criminals, and liquor suppliers stopped shooting at each other.

Reason with another take on the Civil Rights Act

Reason:

Richmond Times-Dispatch columnist A. Barton Hinkle asks Rand Paul's critics how consistently the principle of nondiscrimination reflected in Title II of the Civil Rights Act should be applied. He mentions cases involving anti-gay discrimination by the Christian Legal Society and the Boy Scouts of America, where even some progressives (e.g., Washington Post editorialists and George Washington University law professor Jonathan Turley) see a freedom of association and freedom of religion case not just for letting the groups set their own rules but for granting them official recognition and subsidies on the same terms as other groups. And Hinkle cites several examples of private discrimination that most progressives would consider benign:

A lawyer friend in Northern Virginia asks, "Why shouldn't a business be able to offer a safe, gays-only retirement home?"

Even more pertinent: What about the scholarships offered exclusively to racial minorities—such as the Ford Foundation's Diversity Fellowships, the Southern Regional Education Board's Doctoral Scholars Program, the University of California President's Postdoctoral Fellowship Program, and the literally thousands of others like them?...

What about the comment by the Virginia NAACP's King Salim Khalfani, just the other day, that "We need race-conscious remedies because race-neutral does not work"? And what about the dozens of women's colleges across the country—which, although technically private, receive significant government funding? Or Curves, a chain of fitness clubs that caters to women and is, in some states, off-limits to men. Should it be forced to integrate?

One possible response to some of these questions is that the solution chosen for African Americans, with their unique history of slavery and oppression, was appropriate for them and them only. The most compelling argument offered by libertarian defenders of Title II's ban on discrimination in places of "public accommodation" (such as Richard Epstein, David Bernstein, and Julian Sanchez) is that segregation in the South was not just enforced by law and not just maintained by attitudes that the government shaped through centuries of racist policies but perpetuated by threats of private violence that police either endorsed or ignored. In such a situation, say Epstein and Bernstein, a federal ban on private discrimination gave business owners the freedom to integrate without fear of violent reprisals. The only alternative, Bernstein says, would have been a federal takeover of local law enforcement. Since racist (or cowardly) police forces that refuse to protect integrated businesses from violent bigots are a pretty strong reason for federal intervention under the 14th Amendment, I'm not sure that what looks like the easier solution was actually the right one. But the general point is that the treatment of blacks is a special case in American history that justified deviating from respect for property rights, freedom of contract, and freedom of association.

Ron Paul supports repeal of Don't Ask, Don't Tell

Apparently, he didn't before. I'm glad he's changed his mind.

Washington Post:

"I have received several calls and visits from constituents who, in spite of the heavy investment in their training, have been forced out of the military simply because they were discovered to be homosexual," Paul said Friday. "To me, this seems like an awful waste. Personal behavior that is disruptive should be subject to military discipline regardless of whether the individual is heterosexual or homosexual. But to discharge an otherwise well-trained, professional, and highly skilled member of the military for these reasons is unfortunate and makes no financial sense."

Tax rates

Reason:

In 2006, the top quintile of households earned 55.7 percent of pretax income and paid 69.3 percent of federal taxes, while the top 1 percent of households earned 18.8 percent of income and paid 28.3 percent of taxes.

Film credit tax

Common Wealth Foundation:

Film tax credits are tax breaks given to filmmakers, up to 25 percent of production costs. In fact, the tax credit can be larger than a film production actually owes in taxes.

The credit is an incentive to film movies and TV commercials in a specific state, a process which ostensibly creates jobs, but has failed to result in much economic benefit.

According to the Bureau of Labor Statistics's quarterly survey of employment, Pennsylvania has fewer than 8,000 workers in the industry category of "Motion picture and sound recording industries," representing about 0.2% of the state workforce, and an increase of 800 employees since 2004.

The film tax credit program joins other corporate welfare programs on Pennsylvania lawmakers' docket of wasteful spending. The Tax Foundation reports that states are showing less than a 20 cent return in taxes for every $1 in credits given away.

Unfortunately, Pennsylvania lawmakers have been unable to resist the giant, overpriced bucket of popcorn that the film tax credit represents.

The way I feel

Did regulatory spending actually rise under Bush?

Yup.

Cato:

The Civil Rights Act of 1875

Holy cow.

Wikipedia:

The act was passed by Congress in February, 1875 and signed by President Grant on March 1, 1875. It was declared unconstitutional by the US Supreme Court in 1883...

The Act guaranteed that everyone, regardless of race, color, or previous condition of servitude, was entitled to the same treatment in "public accommodations" (i.e. inns, public conveyances on land or water, theaters, and other places of public amusement).
If found guilty, the lawbreaker could face a penalty anywhere from $500 to $1,000 and/or 30 days to 1 year in prison.

Katching Krugman like the bastard he is

Econlib:

OK, let's have some fun with this golden oldie from 2005:

And the backlash [against neoliberalism] has reached our closest neighbor. Mexico's current president, Vicente Fox, a former Coca-Cola executive, is a firm believer in free markets. But his administration is widely considered a failure.

So what is Krugman saying here? You might think; "Isn't it obvious? He's saying that Fox implemented free market reforms and they failed." If so, you underestimate the subtlety of Mr. Krugman. He didn't say that Fox implemented any free market reforms at all. He said he was a firm believer in free markets. And who could dispute the proposition that mere belief in free markets, if not actually implemented, does not produce economic miracles? How dare you assume he claimed Fox implemented such policies!

...The fact is that Mr. Fox did not implement free market reforms. Why not? Because the Mexican legislature was firmly controlled by the opposition PRI, who had no interest in helping him... Think about it. If you wanted to say economic reforms failed, why not just come out and say it. Why refer to a leader who believed in market reforms, when it takes no more ink to say a leader who implemented market reforms. (OK, 'implemented' is a couple extra letters--'enacted' would do.)

And:

Latin Americans are the most disillusioned. Through much of the 1990's, they bought into the "Washington consensus" - which we should note came from Clinton administration officials as well as from Wall Street economists and conservative think tanks - which said that privatization, deregulation and free trade would lead to economic takeoff. Instead, growth remained sluggish, inequality increased, and the region was struck by a series of economic crises.

At first glance you might think; "Aha Sumner, there's your smoking gun. He does oppose the neoliberal agenda of privatization, deregulation and free trade, or at the very least thinks it failed. Just as you said. You've finally nailed him." Not so fast. He didn't say these policies were tried and failed, he said they were recommended by American officials, and he also said Latin America had not done well. But he never actually said the policies were tried and failed.

Ron Paul on the Civil Rights Act of 1964

Lew Rockwell:

The Civil Rights Act of 1964 not only violated the Constitution and reduced individual liberty; it also failed to achieve its stated goals of promoting racial harmony and a color-blind society. Federal bureaucrats and judges cannot read minds to see if actions are motivated by racism. Therefore, the only way the federal government could ensure an employer was not violating the Civil Rights Act of 1964 was to ensure that the racial composition of a business's workforce matched the racial composition of a bureaucrat or judge's defined body of potential employees. Thus, bureaucrats began forcing employers to hire by racial quota. Racial quotas have not contributed to racial harmony or advanced the goal of a color-blind society. Instead, these quotas encouraged racial balkanization, and fostered racial strife.

Of course, America has made great strides in race relations over the past forty years. However, this progress is due to changes in public attitudes and private efforts. Relations between the races have improved despite, not because of, the 1964 Civil Rights Act.

As I watched Jeopardy last night an intresting final clue spurred my attention. The question asked: "In what to states do 6 of the 10 largest cities in the USA reside?" Think about it for a minute... Califorina obvisouly is a no brainer. But what was the second one? I am sure New York crossed a few minds and you were wrong. It is Texas.
Over the past two decades millions of people have flocked to Texas. Not just the illegal immigrants from south of the border, but also American citizens. Why? Its simple. The state level of Big Brother does not interfere into an individual's life. Texas is the freest state in the union, put all of your sterotypes about the state aside, there is no disputing that not Texas is an attractive state that millions have flocked to. San Antonio, Dallas, and Houston have swelled in their size in the past twenty years.
The reasons are simple, lower taxes; litteraly no gun control laws; stricter punishment on actual criminals, such as murders and rapists; and the least amount of control on small businesses. Dispite the economic "recession" (I debate that we are in a recession and that we have actually been in a slight depression since the dot com bubble at the turn of the cunetury, which I will cover in another article shortly) major cities in Texas have not seen the slow down. Companies from over seas flock to Houston because of its relaxed laws on city zoning and planning ordinaces. Reason TV documented this is their great special "Reason Saves Cleveland With Drew Carey" which compared why most old industrial cities of the north and midwest to cities like Houston, and the results are that cities like Cleveland and Detroit are becoming living hell holes because of their strict laws on almost all human activity.
Although I despise Dateline on NBC, there was a great documentary on what has happened to Detroit over the last 20 years. Of course NBC would not tell you the truth that the reason for the distruction of the city is becasuse of big government, progressive policies. But it does document the real danger the the city has of becoming a ghost town.
It is simple if you have freedom and opertunites created by capitalist enterprise people will come. That is why at the turn of the 20th century in this country millions upon millions immegrated here for the opertunity at freedom and a chance to live the american dream. And frankly Texas is the last home of the American Dream that most people still believe in, and that is why they are flocking there.

Bill introduced to make public liable for private pensions

We already do a little.

Pension Benefit Guarantee Corporation:

Subject to other statutory limitations, the PBGC insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at age 65 ($54,000 a year as of 2009).[1] The benefits payable to insured retirees who start their benefits at ages other than 65, or who elect survivor coverage, are adjusted to be equivalent in value.

Washington Examiner:

The government’s Pension Benefit Guaranty Corporation only guarantees pensioners $12,000 a year, should their pension plan fail. Good luck retiring on that.

But as the economy sours, there’s increasing pressure to bail out workers from failing unions. Last July, for example, the PBGC agreed to take on $6.2 billion in pension liabilities from bankrupt auto parts manufacturer Delphi. And that’s just one company. In 2007, the PBGC was already running a deficit of nearly a billion dollars. Things will only get worse as the PBGC is expected to assume $86 billion in liabilities by 2015.

Fox News Business:

A Democratic senator is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers.

The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions
for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people.

As FOX Business Network’s Gerri Willis reported Monday, these pensions are in bad shape; as of 2006, well before the market dropped and recession began, only 6% of these funds were doing well.

Although right now taxpayers could possibly be on the hook for $165 billion, the liability could essentially be unlimited because these pensions have to be paid out until the workers die.

High regulation CA vs. Low regulation TX

Enterprise Blog:

California's medical marijuana laws lower prices

Of course, the fact that prices are going down is painted as something that's destroying the quaint drug growing/selling communities of CA by NPR. This is while it's an ultimate good thing for the consumer.

NPR:

With the Reagan crackdown, Custer recalls, wholesale prices shot up — to as high as $5,000 a pound. That sudden and ironic windfall for those growers willing to risk prison time transformed the community.

What's happening is the people that don't have quality product aren't selling it. So they're the ones that are creating this panic. So it really comes back down to that, just like in every other agricultural industry. When you get too many vineyards and too many people growing vines out there, then only the good ones make it.

- Tim Blake, former underground grower who now cultivates medical marijuana

"A lot of people were living on welfare and peanut butter and banana sandwiches for a long time before pot made it possible to be part of the middle class," Custer says.

Nearly 30 years later, Custer says that boom may be over.

[...]Legal pot, under the guise of the California's medical marijuana laws, has spurred a rush of new competition. As a result, the wholesale price of pot grown in California is plunging.

Prices are now much less than $2,000 a pound, according to interviews with more than a dozen growers and dealers. Sheriff Tom Allman of Mendocino County says some growers can't get rid of their processed pot at any price.

In Los Angeles, 45% of things purchased with taxpayer money can't be found

Reason:

City Controller Wendy Greuel released an audit today showing that
various City departments could not locate hundreds of items purchased with taxpayer
funds, and that hundreds of other items had been sitting unopened or unused for up to 7 years.

[...]* Of 254 items that we attempted to locate, 115 were not where they should have been. While 56 items were ultimately found in the wrong location, 59 were unable to be located at a cost of $938,000.

—Some of the items that were never found included a video recorder purchased by ITA for almost $60,000.

* Departments are supposed to conduct a physical inventory of items every two years to maintain accurate physical inventories of equipment. ITA and Sanitation have not conducted a review in at least 5 years and Recreation and Parks has not conducted a review of all items in at least 7 years.

* ITA and Recreation and Parks have 138 items that were purchased at least 1 year ago, still in warehouses or staging areas. These items are worth $237,000, and some were purchased over 7 years ago.

—Some of the items not placed into service included 9 microwaves, 1 deep fryer and 2 television sets by the Recreation and Parks Department and various computer equipment by ITA.

Obama USDA hiding farm subsidy data

EWG:

Our 2007 database used previously unavailable records to uncover nearly 500,000 individuals who had never been identified as farm subsidy recipients. Many had been shielded by their involvement in byzantine mazes of co-ops and corporate entity shell games. For example, the database revealed that Florida real estate developer Maurice Wilder, reportedly worth $500 million, was pulling in almost $1 million a year in farm subsidies for corn farms he owns in several states.

Unfortunately for our 2010 update, the data that provided such a revelatory account of just who receives the billions paid out in the maze of federal farm subsidy programs is no longer available to us.

[...]That’s because Congress changed the wording of the 1614 provision in the 2008 farm bill from USDA “shall” release such data to USDA “may” release such data. USDA has since decided not to release the information. According to USDA officials, the database can cost as much as $6.7 million to produce, and Congress did not appropriate money to compile the database.

On the VAT

Reason on student loans

Reason:

Student borrowing has more than doubled since the end of the 20th century, according to the College Board, with $85 billion in loans in 2008, up from $41 billion in 1998. And as the rising rate of defaults indicates, borrowers in aggregate are not making the kind of money—i.e. twice as much as a decade ago—they would need to pay those loans back.

What I think should have won for the EPA's contest for promoting regulations

What are the most dangerous jobs?

Lew Rockwell:

But aren’t public safety jobs among the most dangerous in America? Not really. Here’s the list of most dangerous jobs, as complied by the Bureau of Labor Statistics:

1. Fishing-related workers.
2. Logging workers
3. Pilots and flight-related workers
4. Iron and steel workers
5. Taxi cab drivers
6. Construction workers
7. Farmers and ranchers
8. Roofers
9. Electrical power workers
10. Truck drivers and sales-related drivers
11. Garbage collectors
12. Law enforcement

How did Basel II affect banking?

Bloomberg:

Negotiations over Basel II, which took six years to complete, lowered capital requirements by as much as 29 percent for some banks, according to a 2006 study by the Basel committee. The change represented a paradigm shift: Instead of relying on standardized formulas, Basel II let the largest banks use internal models to calculate the risks of their assets in determining the capital charges against them.

More on Hoover

Lew Rockwell (Murray Rothbard):

Featured in Hoover's plan were increased inheritance taxes, public dams, and, significantly, government regulation of the stock market to eliminate "vicious speculation." Here was an early display of Hoover's hostility toward the stock market, a hostility that was to form one of the leitmotifs of his administration.[4]

[...]The conference – which included "forward-looking" industrialists like Julius Rosenwald, Oscar Straus, and Owen D. Young, labor leaders, and economists like Frank W. Taussig – recommended wider collective bargaining, criticized "company unions," urged the abolition of child labor, and called for national old-age insurance, fewer working hours, "better housing," health insurance, and government arbitration boards for labor disputes. These recommendations reflected Hoover's views.[6]

[...]As Hoover recalls:

We developed cooperation between the federal, state, and municipal governments to increase public works. We persuaded employers to "divide" time among their employees so that as many as possible would have some incomes. We organized the industries to undertake renovation, repair, and, where possible, expand construction.

[...]As a direct result of Hoover's conference, twice as many municipal bonds for public works were floated in 1921 and 1922 as in any previous year; federal highway grants-in-aid to the states totaled $75 million in the autumn of 1921, and American opinion was aroused on the entire subject.

Was Hoover a non-interventionalist?

Herber Hoover (via Lew Rockwell):

We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action.... No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times.... For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered.... They were maintained until the cost of living had decreased and the profits had practically vanished. They are now the highest real wages in the world.

Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for ... "the common run of men and women." Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom.... We determined that we would not follow the advice of the bitter-end liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction.

Unemployment during the 30's

This guy honestly rambles until 22:30, then it gets into the 1930's.

Two quotes

Without censorship, things can get terribly confused in the public mind.
~ Gen. William Westmoreland


What luck for the rulers that men do not think.
~ Adolf Hitler

Chris Christie for President?

Ok, Ron Paul for President, but Chris Christie doesn't seem bad.

Gov Christie calls S-L columnist thin-skinned for inquiring about his 'confrontational tone'

How banks have changed over the years

Doug French (14:30):

Jim Grant, who writes Grant's Interest Rate Observer, was reminscing about National Citibank recently. He wrote that back in 1954 that National Citi only lent out 41% of their deposits, and they had less than 1% of their portfolio in real estate loans. Now, by the middle of this year (2009), the total loan/deposit ratio of US banks was 84%, and 61% of all loans are classified as real estate security.

What banks have done is as FDIC insurance has increased, they've lent more of their deposits and they've lent them on riskier, more long-term projects.

Stossel on deregulating airlines

Second Life as a military recruiting tool?

Federal News Radio:

Over a year ago, the U.S. Army announced it was using a simulated island in the popular virtual worlds social media site, "Second Life" as a recruitment tool, appealing to young people. It was also studying virtual worlds technology for long-distance training.

Now, the military services have moved beyond Second Life as a virtual recruiting station to an actual collaboration environment called "MilLands".

Debt in the UK

Business Insider:

Right now the public debt of the U.K. is "only" at 68 percent of GDP, but three years ago it was sitting at about 40 percent, so as you can see the national debt of the U.K. is absolutely exploding in size. In fact, it is now being projected that the public debt of the U.K. will exceed 100 percent of GDP within the next three years. Considering the fact that citizens of the U.K. are some of the most highly taxed people in the world already, there just is not much room for raising more revenue.

Costs of the drug war

AP:

His first drug-fighting budget was $100 million. Now it's $15.1 billion, 31 times Nixon's amount even when adjusted for inflation.

Using Freedom of Information Act requests, archival records, federal budgets and dozens of interviews with leaders and analysts, the AP tracked where that money went, and found that the United States repeatedly increased budgets for programs that did little to stop the flow of drugs. In 40 years, taxpayers spent more than:

- $20 billion to fight the drug gangs in their home countries. In Colombia, for example, the United States spent more than $6 billion, while coca cultivation increased and trafficking moved to Mexico - and the violence along with it.

- $33 billion in marketing "Just Say No"-style messages to America's youth and other prevention programs. High school students report the same rates of illegal drug use as they did in 1970, and the Centers for Disease Control and Prevention says drug overdoses have "risen steadily" since the early 1970s to more than 20,000 last year.

- $49 billion for law enforcement along America's borders to cut off the flow of illegal drugs. This year, 25 million Americans will snort, swallow, inject and smoke illicit drugs, about 10 million more than in 1970, with the bulk of those drugs imported from Mexico.

- $121 billion to arrest more than 37 million nonviolent drug offenders, about 10 million of them for possession of marijuana. Studies show that jail time tends to increase drug abuse.

- $450 billion to lock those people up in federal prisons alone. Last year, half of all federal prisoners in the U.S. were serving sentences for drug offenses.

At the same time, drug abuse is costing the nation in other ways. The Justice Department estimates the consequences of drug abuse - "an overburdened justice system, a strained health care system, lost productivity, and environmental destruction" - cost the United States $215 billion a year.

[...]The dealers who are caught have overwhelmed justice systems in the United States and elsewhere. U.S. prosecutors declined to file charges in 7,482 drug cases last year, most because they simply didn't have the time. That's about one out of every four drug cases.

[...]The United States has in recent years rounded up thousands of suspected associates of Mexican drug gangs, then turned some of the cases over to local prosecutors who can't make the charges stick for lack of evidence. The suspects are then sometimes released, deported or acquitted. The U.S. Justice Department doesn't even keep track of what happens to all of them.

[...]In Ciudad Juarez, the epicenter of drug violence in Mexico, 2,600 people were killed last year in cartel-related violence, making the city of 1 million across the Rio Grande from El Paso, Texas, one of the world's deadliest. Not a single person was prosecuted for homicide related to organized crime.

[...]A full 10 percent of Mexico's economy is built on drug proceeds - $25 billion smuggled in from the United States every year, of which 25 cents of each $100 smuggled is seized at the border. Thus there's no incentive for the kind of financial reform that could tame the cartels.

[...]Obama is requesting a record $15.5 billion for the drug war for 2011, about two thirds of it for law enforcement at the front lines of the battle: police, military and border patrol agents struggling to seize drugs and arrest traffickers and users.

About $5.6 billion would be spent on prevention and treatment.

[...]In 1914, The New York Times reported that cocaine caused blacks to commit "violent crimes," and that it made them resistant to police bullets. In the decades that followed, Mena said, drugs became synonymous with evil.

More on the 'Consumer Protection' agency

OC Register:

The Consumer Financial Protection Bureau. It would collect data, especially on consumer transactions.

The data are supposed to be "scrubbed" of individual identifiers, so your privacy would be protected. But that might not work, Mark Calabria told us; the director of financial regulation studies at the Cato Institute formerly was a member of the senior professional staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs.

"If you can link the data to courthouse records of housing sales," he said, then anyone can find data on others. "Much of this goes beyond what banks do now" to keep data. Under the new law, the government would detail "your charges at Macy's and car payments. It would be fairly detailed information."

San Diego council man on reforming local government

History of unions and racism

Unbroken Window:

David Henderson describes in his book, the Joy of Freedom, a passage from F. Ray Marshall’s, The Negro Worker. Marshall was Jimmy Carter’s Secretary of Labor. In the book, he documents a list of unions that barred blacks from joining in 1930:

American Federation of Express Workers

American Federation of Railway Workers

American Train Dispatchers Association

American Wire Weavers Protective Association

Boilermakers, Iron Shipbuilders and Helpers Union

Brotherhood of Dining Car Conductors

Brotherhood of Locomotive Firemen and Enginemen

Brotherhood of Railroad Trainmen

Brotherhood of Railroad Carmen

Brotherhood of Railway Station Employees and Clerks

Brotherhood of Railway and Steamship Clerks

Commercial Telegraphers

International Association of Machinists

National Organization of Masters, Mates and Pilots of North America

Neptune Association

Order of Railway Expressmen

Order of Railway Telegraphers

Order of Sleeping Car Conductors

Railroad Yard Masters of America

Railway Mail Association

Swicthmen’s Union of North America

And these were just in the railroad sector. And not only did these organizations make it hard for blacks to find jobs in those sectors, union members were not averse to beating and killing black workers who tried to compete against them. There is ample evidence cited by both Henderson and Marshall of this.

Is Sweden really socialistic?

Cato on unemployment benefits

Cato:

Why did the unemployment rate rise so rapidly — from 7.2 per cent in January to 10.2 percent in October? It was clearly the administration's "stimulus" bill — which in February provided $40 billion to greatly extend jobless benefits at no cost to the states.

As Larry Summers, the president's top assistant for economic policy, noted in July, "the unemployment rate over the recession has risen about 1 to 1.5 percentage points more than would normally be attributable to the contraction in GDP." And the rate has moved nearly a percentage point higher since then, even though GDP increased. Countries with much deeper declines in GDP, such as Germany and Sweden, have unemployment rates far below ours.

Summers knows why the US rate is so high. He explained it well in a 1995 paper co-authored with James Poterba of MIT: "Unemployment insurance lengthens unemployment spells."

Libertarians love Mozart!

Or I just think this video is funny. One or the other.

More on Microsoft and IP

Scroogle:

"Microsoft didn't want a lot of other companies writing code that could compete. It wanted to keep the barriers to entry very high. The idea, in fact, was to keep raising the bar, putting in more layers of software and APIs, which developers would then have to support. Microsoft wanted to make it so gnarly that anybody who couldn't devote a team of one hundred programmers to every Windows application would be out of the game."

Charts on how our debt levels have been revised

Here.

Pirate radio in Spain

Radio Survivor:

For Americans it may be hard to believe that Spain only this year passed a law that gives a new Spanish central radio authority the ability to pursue and shut down unlicensed radio broadcasters. Back in January the Spanish radio industry group AERC complained that 3000 pirate stations are operating in the country and need to be shut down.

[...]I know relatively little about radio broadcasting in Spain, although I have often heard that the radio dial is more chaotic than in other European countries. For instance, apparently 504 of the unlicensed stations are operated by municipalities. (Just imagine if your local city or town government ran its own pirate radio station!) Additionally, some 124 ostensibly licensed stations operate on a frequency other than the one they were assigned.

Do spending cuts help the economy?

Reason:

A 2009 study by Harvard University’s Alberto Alesina and Silvia Ardagna...examined 40 years of debt reduction plans by advanced economies and found that “those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases.” They’re also associated with higher economic growth. But spending cuts alone are probably not enough.

What I do in my free time

Don't knock it unless you've tried it.