Philadelphia's Soda Tax Was a Win for Politicians, A Loss for Everyone Else
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Philadelphia's Soda Tax Was a Win for Politicians, A Loss for Everyone Else
I’ve periodically opined about why politicians should not try to control people’s behavior with discriminatory taxes, such as the ones being imposed on soda.
And I’ve cited some examples of how these taxes backfire.
The big drop in soda purchases after a tax on sugary drinks was imposed in Berkeley.
The big drop in soda sales after a big tax on sugary products in Mexico.
The big drop in soda purchases expected to occur following Seattle’s new tax.
If the following headlines are any indication, we can add Philadelphia to that list.
For instances, this story from the Philadelphia Inquirer.
Or this story from the local CBS affiliate.
These examples reinforce my view that it is not a good idea to let meddling politicians impose more taxes in an effort to control people’s behavior.
Some of my left-leaning friends periodically remind me, however, that there’s a difference between anecdotes and evidence. There’s a lot of truth to that cautionary observation.
To be sure, I could simply respond by saying a pattern is evident when a couple of anecdotes turns into dozens of anecdotes. And when dozens become hundreds, surely it’s possible to say the pattern shows causality.
That being said, it is good to have rigorous, statistics-based analysis if we really want to convince skeptics.
So let’s look at the results of some new academic research from scholars at Stanford, Northwestern, and the University of Minnesota. We’ll start with the abstract, which nicely summarizes their findings about the impact of Philadelphia’s big soda tax.
We analyze the impact of a tax on sweetened beverages, often referred to as a “soda tax,” using a unique data-set of prices, quantities sold and nutritional information across several thousand taxed and untaxed beveragesfor a large set of stores in Philadelphia and its surrounding area. We find that the tax is passed through at a rate of 75-115%, leading to a 30-40% price increase. Demand in the taxed area decreases dramatically by 42% in response to the tax. There is no significant substitution to untaxed beverages (water and natural juices), but cross-shopping at stores outside of Philadelphia completely o↵sets the reduction in sales within the taxed area. As a consequence, we find no significant reduction in calorie and sugar intake.
Here are some of their conclusions.
We draw several lessons about the effectiveness of local sweetened-beverage taxes from these analyses. First, the tax was ineffective at reducing consumption of unhealthy products. Second, in terms of revenue generation, the tax was only partly effective due to consumers substituting to stores outside of Philadelphia. Third, low income households are less likely to engage in cross-shopping, and instead are more likely to continue to purchase taxed products at a higher price at stores in Philadelphia. The lower propensity for low income households to avoid the tax through cross-shopping leads to a relatively larger tax burden for those households. In summary, the tax does not lead to a shift in consumption towards healthier products, it affects low income households more severely, and it is limited in its ability to raise revenue.
If you’re wondering why consumers responded so strongly, here’s a chart from the study showing the price difference after the tax was imposed.
The bottom numbers in Figure 3 show that some sales still occurred in the city, but a persistent gap between city sales and suburban sales appeared.
And here’s what happened to sales inside the city (taxed) and outside the city (untaxed).
Wow. This data makes me wonder if suburban sellers will start contributing to the Philadelphia politicians who have generated this windfall?
Others have noticed how the tax is hurting rather than helping.
The Wall Street Journal opined about the failure of Philly’s soda tax.
When Philadelphia became the first major U.S. city to pass a soda tax in 2016, Mayor Jim Kenney said it would improve public health while funding universal pre-K. Two years in, the policy hasn’t delivered on that elite ideological goal. But the tax has come at the expense of working people… On Jan. 2, Brown’s Super Stores announced the closure of a ShopRite on Haverford Avenue. The supermarket is close to the city limit, and customers discovered they could avoid the soda tax by shopping outside Philly. …the once-profitable store began losing about $1 million a year. …That means fewer opportunities for workers with a criminal record. Mr. Brown’s supermarkets employ more than 600 of them, with the majority in Philadelphia. Some of the ex-cons have become his most-valued employees.
And Kyle Smith explained in National Review how the tax backfired.
Philadelphia’s outlandish soda tax is what Democratic-party politics looks like when it lets its freak flag fly. So many classic elements are there: (failed) social engineering and “think of the children!” on one side, paid for with a punitive tax on poor people and destroyed businesses, which means destroyed jobs, which in turn means lives upended. …Now that beer is, in some cases, cheaper than soda in Philadelphia, alcohol sales are up sharply. …the total loss attributable to the tax in sales of all items was $300,000 a month per store. Other, untaxed drinks also suffered sales declines within the city, suggesting people were simply saving up their shopping trips for when they left town.
I don’t feel compelled to add much to what’s been cited.
Though I will cite a headline from the Seattle Times to reinforce one of the points in the academic study about consumers bearing the cost of the tax rather than the soda companies.
And my one modest contribution to all this analysis is this comparison of the winners and loser from Philadelphia’s new tax.
For what it’s worth, similar comparisons could be developed for just about every action by every government. Academics call this “public choice” while ordinary people realize it’s just common sense.
Originally published at International Liberty
It Turns Out Ukraine Isn't "Munich, 1938" After All
Since the very early days of the Russian invasion of Ukraine in 2022, advocates of war between between NATO and the Russian Federation have repeatedly invoked the so-called "lesson of Munich." The "lesson" is that any sort of military aggression by a non-NATO state requires an aggressive military response from the United States and its allies.
When they invoke "Munich," politicians and pundits are referencing the notorious Munich conference of 1938, when UK prime minister Neville Chamberlain (and others) agreed to allow Adolf Hitler's Germany to annex the Sudetenland in Czechoslovakia as a way to avoid a general war in Europe. The "appeasement," of course, failed to prevent war because Hitler's regime actually planned to annex much more than that.
Now, more than eight decades later, we are to believe that Moscow's invasion of eastern Ukraine must be viewed as analogous to Hitler's invasion of Czechoslovakia. Anything else is "appeasement" enabling the next Hitler.
Thus, back in March 2022, Ukrainian legislator Lesia Vasylenko accused Western leaders of appeasement during Moscow's invasion of Ukraine, stating, "This is the same as 1938 when also the world and the United States in particular were averting their eyes from what was being done by Hitler and his Nazi Party." The week before that, Estonian legislator Marko Mihkelson declared, "I hope I’m wrong but I smell 'Munich' here. "
Little has changed in this respect over the past eighteen months of war. In September, President Biden made the Munich claim without using the word:
But I ask you this: If we abandon the core principles of the United States [sic] to appease an aggressor [i.e., Russia] can any member state in this body feel confident that they are protected? If we allow Ukraine to be carved up, is the independence of any nation secure? ... We have to stand up to this naked aggression today and deter other would-be aggressors tomorrow.
It's the same old story over and over again. Every new war is another Second World War, and every foreign head of state who runs afoul of the US State Department is the next Hitler. This claim is often further supplemented by discredited, crackpot theories like "the domino theory" invoked by American hawks for decades.
We are coming up on the second anniversary of the Russian escalation in 2022, and it's now more clear than ever that the cries of "Munich 1938!" were never plausible. The idea that Russian tanks would roll through Warsaw, Vienna, and Berlin after finishing off Ukraine have always been preposterous. It is now abundantly clear that Russia can barely hold on to areas with sizable minorities of ethnic Russians in eastern Ukraine. This is true even though the much-hyped Ukrainian "counter-offensive" is an abject failure, and Kiev continues to send men into the meat grinder in vain.
Nor is it plausible that Moscow would have conquered much of eastern Europe had Washington not fleeced the American taxpayers for more than $100 billion in the name of deterring Moscow. Moscow has never possessed the kind of manpower necessary to carry out a military occupation in any place that does not already contain at least a sizable minority sympathetic to Moscow. The Crimea, for instance, is majority ethnic-Russian, which is why Russia's effort to annex the peninsula succeeded so quickly.
But even if it were ever true that Russia was planning to "reestablish the Soviet Union"—as some Eastern European hawks claimed—that's obviously not the reality now. Any attempt in 2023 to call in—yet again—the lesson of Munich smack of desperation or deception.
The crankery of the "Munich!" battle cry is now so abundantly clear, in fact, that neither the voters, nor a Congressional majority are enthusiastic about handing over another $100 billion to Kiev. In spite of the Administration's claim that the war in Ukraine "advances our national security interests," few are buying it anymore.
And thank goodness. Had the Poles and the Lithuanians had their way, the US would have imposed a no-fly zone over Ukraine, shipped countless jet fighters and other offensive weapons to Ukraine, possibly provoking a direct conflict between Washington and Moscow. Not even a threat of nuclear war was a deterrent to countless corporate media pundits who insisted that global nuclear war is a risk everyone ought to be willing to make.
Such bravado now looks downright absurd. Rumors now swirl that American and European officials are beginning to come to terms with reality and pressuring Kiev to negotiate a peace settlement. Many are realizing that fantasies of a total Ukrainian victory, promoted largely by Volodymyr Zelensky, has done little except prolong the war and the bloodshed in eastern Ukraine. The US involvement in the war is winding down. The regime has no intentions of actually cutting back its limitless spending on the US war machine, but the regime will gradually come up with justifications for the spending other than Ukraine. American spending on the conflict will gradually fall to the below-the-radar kinds of spending that continues in Syria and Iraq. Unless the Europeans step up their own spending on the war, the war itself will wind down as Russian consolidates its territorial gains and Ukraine gives up. The time has come for Washington to declare victory, pack up, and move on. Kiev has probably seen it coming. The US now has a tradition of encouraging its allies to invest themselves in unwinnable wars. Then, when the writing is on the wall, the Americans bail. There's no reason why the Ukrainians will get any better treatment than the Kurds.
Exactly how this will all unwind is unclear, but one thing that is abundantly clear is that the cry of "Munich" and "appeasement" is increasingly tired and has long been the stuff of fantasy. Let's hope that many remember this, so that next time the warmongers invoke this supposed "lesson," the taxpayers don't fall for it, yet again.
Read More:
- "A Brief History of Pundits Encouraging Nuclear War"
- "We Must Now Learn the Lesson of 1914, Not the Lesson of 1938."
- "What Would Happen If the US Stopped Supporting Ukraine?"
Just How Vampiric Are The ‘Vaunted’ Israel Defense Forces?
In their recent military campaigns, America and Israel have waged what to the inexpert, keen observer is largely old-fashioned, Third-Generation Warfare—a blitzkrieg, by any other name, against civilian populations.
The ostensible use of “tanks, mechanized infantry, and close air support” to “collapse an enemy's defenses” are really unthinking, disproportionate shows of brute military force, reliant on massive amounts of materiel.
Yet when military mavens predicted and depicted the next form of warfare; it was the contours Fourth-Generation Warfare that they were tracing. Fourth-Generation Warfare was to be the distinguishing characteristic of the modern military. Boosted by technology, “advanced” armies would be relying on “small, highly mobile elements, composed of very intelligent soldiers, armed with high technology weapons.” These precision units and attendant weapons were expected “to range over wide areas seeking critical targets.”
In addition to technology; predicted and depicted was a military whose central impetus was augmented by ideas. In America, the controversial changing of hearts and minds, historically, has included fomenting coups around the world with the connivance afforded by psychological operations.
Near as I can tell, Fourth-Generation war was meant to be smart; to see Mind dominate and direct materiel.
What is underway in Gaza, at 2023’s end, however, is the very opposite. I see madness for what it is. Dead in the ruins of Gaza is the Israeli collective conscience—together with thousands-upon-thousands of Gaza’s civilians; dead or displaced for decades to come. The razing and ethnic cleansing of Gaza by Benjmain Netanyahu, abetted by Joe Biden, his Uniparty accomplices and a complicit West: This appears to capture the kind of Third-Gen “capability” delivered by the modern, standing, Woke military.
By an odd reversal, the Gaza offensive will do nothing to eradicate Hamas, for Hamas is not ISIS (Islamic State). ISIS is an international terrorist organization. Hamas is not. Dimly, Israeli propagandists like Dan Gillerman—former ambassador to the UN—have implied that Hamas was the same as ISIS. This particular agitator bamboozled an American news anchor, on November 30, by rasping at him that, “We are fighting for you as well as for us.” Contra Gillerman, however, Hamas had no global aspirations. While ISIS is an international terrorist organization, like it or not, Hamas is indigenous—it is of the Palestinian People, by the Palestinian People, and for The Palestinian People, at least as these people perceive it
Israel’s blithe butchering of Gazans may change that. “Operation Swords of Iron” in the Gaza Strip not only guarantees Hamas recruits in Gaza and the West Bank for posterity; but may just see Hamas go global, given the Western world’s refusal to stop 58 days and counting of depravity.
Most Republicans and Democrats, Israel Firsters all, deploy a squalid little phrase—our “democratic values”—to allay the American taxpayer’s misgivings over the fact that we’re funding the destruction of the lives of millions of defenseless people.
The Israel Defense Forces is a deserving military partner, they intone at us, because Israel shares America’s “democratic values” (my tongue here is firmly in my cheek). Into this category falls a pillar of American virtue known as Woke. The Israeli military is Woke alright. To wit, right after October 7, the Knesset quickly minted new legal rights for gay partners, who will forthwith enjoy the financial windfall that comes with being widowed. Omer Ohana can now claim a widow's benefits from the Israeli military following the tragic October 7 death of his betrothed partner, Sagi Golan.
Indubitably, Israel would never deprive any Palestinian man of marrying another. So far, however, the due-process rights of Palestinian detainees are spectral. In the wind, perhaps?
Most of the Palestinian prisoners released, reports the intrepid Nima Elbagir, “were held under a murky military justice system that theoretically allows Israel to hold people for indefinite periods without trial or a charge. Israel has been operating two distinct justice systems in the West Bank since it captured the area in 1967. Palestinians living there fall under the jurisdiction of Israel’s military court system, where judges and prosecutors are uniformed Israeli soldiers. Meanwhile, Jewish settlers there are subject to civilian courts.”
Have I come among lunatics? For how does indefinite “Administrative Detention,” absent due process of law, comport with the values instantiated by the Fifth Amendment to the U.S. Constitution?
Force-fed the fiction of the IDF as the most ethical fighting force in the universe; I set about to conduct a proportional, if limited, comparison. I compare like with like, albeit in limited but significant theatres of war: Israel’s offensive in Gaza against “Hamas,” in late 2023, to America’s onslaught in Fallujah against the Iraqi resistance, in 2004.
The battle in Fallujah is considered “the deadliest battle involving U.S. Marines since Vietnam.” “Eighty-two U.S. servicemembers died during the street-by-street, house-by-house effort to clear Al Qaeda from the city.” Officially, it is described as a “battle to retake the key city of Fallujah from a violent insurgency that was taking root across Iraq after the U.S. ousted Saddam Hussein.”
Before the American invasion of Iraq, Fallujah was a compact city of about 400,000 people. “Around 700 Iraqi civilians were killed over the course of the 2004 fight for Fallujah.”
Gaza’s population is about 2.4 million strong. The administrative chaos in war-time Gaza would hamper accurate records-keeping. That considered—and not counting individuals buried beneath the rubble—approximately 15,000 Gazans have been killed by Israel. (Haaretz, Israel News, Friday, December 2, 2023)
Let’s extrapolate:
Were Fallujah as populated as Gaza (2.4 million), the United States Marines would have killed approximately 4,200 Iraqi souls. This is a far cry from the Israel Defense Forces’ butcher’s bill of 15,000 civilians dead in Gaza—and climbing.
Were Gaza as small as Fallujah (400,000); the Israelis, befitting their butcher’s bill so far, would still have killed at least 2,500 souls to our Marines’ 700. Ceteris paribus, naturally.
Let that sink in.
On the numbers, I have been exceedingly charitable to the Israelis, given that their victims, buried beneath the rubble, are still mostly unaccounted for, and considering that the IDF resumed hostilities against civilians on December 1.
Both the Israeli and the U.S. militaries come in here for rough treatment. The fulminations of the Israel Firsters stateside aside, however, some American patriotism is owed amid the sorrow over Israel’s barbaric blitzkrieg.
Damning with faint praise though this may be, Americans, in the persons of our U.S. Marines in Fallujah—in the dubious theater of another unjust war—were righteous, compared to the monstrous Israel Defense Forces in Gaza.
The 2024 Republican Primary and Ron Paul’s Continued Relevance
Last night’s fourth Republican Presidential debate offered the most substantive outing so far of 2024’s political circus. It was also a debate outside the confines of the traditional corporate press. Broadcast on the up-start NewsNation and headlined by the moderation of podcast host Megyn Kelly, the debate touched on topics that outlets like Fox News and NBC refused to touch, including the victims damaged by covid-19 vaccines.
The narrowed debate field, featuring only four candidates: Ron DeSantis, Nikki Haley, Vivek Ramaswamy, and Chris Christie, once again illustrated a common theme of the primary cycle, a the divide between the neoconservative old guard committed to the American empire, and a new wave of conservatives more skeptical of foreign entanglements and general hostility to the professional political class of Washington.
Given Christie’s withering polling numbers, it was Haley who faced the greatest scrutiny as the modern-face of the Bush-era GOP. Ramaswamy, her most aggressive and combative foil, frequently attacked the former UN Ambassador for connections to the military-industrial complex and the underlying corruption that has infected US foreign policy, at one point stating "This is a women who will send your kids to die so she can have a bigger house." If nothing else, Ramaswamy has made the term "neocon" into nothing short of a slur in Republican politics.
While the demand for leveraging debate performances into viral social media moments have long theatricality over substance, the focus of figures like DeSantis and Ramaswamy is worth noting. While campaign rhetoric should be best viewed from a cynical lens of political opportunism, the deliberate choices made by candidates seeking to elevate themselves out from the shadow of Donald Trump reflects their own beliefs of Republican voters desire.
In recent years, there has been a targeted crusade among elements of the “conservative movement” to dismiss the appeal of libertarian ideas. Elements of the national conservative movement have joined forces with progressive critics of free markets, lambasting free market capitalism as “failed neoliberalism” and absurdly suggesting that the modern failures of the Republican Party is the result of the GOP’s “capture” by libertarians (if only!) Others have advocated for replacing “woke” big government policies with their dream of a “conservative” administrative state. While this cynical rejection of America’s founding values has gained traction among a certain segment of intellectuals and think tanks, there seems to be little to demonstrate that it is gaining much traction among the Republican’s targeted electoral base.
Unsurprisingly, it was recently revealed that certain organizations at the forefront of this anti-libertarian right have themselves been beneficiaries of progressive financiers. American Compass, who has led the charge to revive Hamiltonian economic policy in the political right, was revealed to have received over a third of its funding from left-wing patrons.
This is not a surprise. As I noted in an article earlier this year, contrasting paleoconservativism from the economic nationalist right:
It is worth noting the differences in the stated goals of paleoconservatives and of the economic nationalists of American Compass. Paleoconservatives often voice a desire to protect the provincial life of rural and agrarian societies in the Jeffersonian tradition. Modern economic nationalists, in contrast, favor more ambitious plans for national industrial power and are far more comfortable in cosmopolitan company.
While one is far more likely to see quotes from Austrian economists shared by Elon Musk lately than offered from a Republican debate stage, many of the go-to targets from DeSantis and Ramaswamy echo a Rothbardian-hatred for Washington. Both call for the abolition of government agencies. Both have attacked the Federal Reserve. Both have highlighted the weaponization of the regime against political opponents and connect this to their concerns about Central Bank Digital Currencies. For good measure, Ramaswamy has included in his pitch calls to abolish the FBI.
Following last night’s debate, in an interview with Kelly, Ramaswamy was asked what he saw as a potential path to victory, he identified one his target demographics for Iowa and New Hampshire: "We are seeing a lot of people coming to our events...many of them are coming with Ron Paul shirts."
Again, while these rhetorical appeals to voters who shared the same libertarian instincts that helped propel Ron Paul’s campaigns in 2008 and 2012 should not be viewed as a committed dedication to same principles that motivated Dr. Paul, and while current polling shows little chance of a candidate like Ramaswamy of taking his message to the general election, what it does show is that the appetite for such messaging is far greater than many in the national conservative orbit would want to believe.
There is no Ron Paul running in 2024, but the movement he inspired is still one that candidates have to reckon with.
QJAE: Étatisme as the Root of Development Economics
Abstract: Development economics has invested substantial effort in formulating policies aimed at initiating development in underdeveloped countries, with a notable emphasis on the role of government. This article focuses on the transition from early intellectual forerunners such as John Locke, David Hume, and Adam Smith to the subsequent theories of development. Previous examinations, notably by Lewis (1988) and Sen (1983), have argued that if growth is taken as the definition of development, then Petty, Hume, and Smith are predecessors of development economics. However, a gap exists between this observation and the subsequent trajectory of development economics. This article investigates the prevalent role of the state in shaping development strategies, exploring the maturation of state duties based on modern political concepts from the seventeenth and eighteenth centuries and investigating the transformation in the twentieth century of government’s responsibilities, specifically in the context of the United States’ progressive movement. By tracing the historical evolution of state involvement, this article shows that the concept of “étatisme,” advocating robust state engagement in economic affairs, emerges as a pivotal but often overlooked factor in the emergence of development economics. This finding illustrates why development economists’ policies historically place such significant emphasis on government intervention in the market in underdeveloped countries.
Read the full article in the Quarterly Journal of Austrian Economics.
JLS: Toward a Free Market Approach for Describing and Measuring Literary Archetypes and Tropes
ABSTRACT: This research proposes a free market approach to describing and measuring popular culture archetypes and stereotypes that result from the contemporary political culture of digital communications and an economic system of transmedia narratives. First, an historic overview of libertarian literary theory is given. Three existing systems of measuring archetypes and tropes are then described: crowd-sourced wiki projects (e.g., TV Tropes), academic classification systems (e.g., Aarne-Thompson index), and corporate marketing research (e.g., Neilsen PRIZM). Each system is evaluated based on (1) division of labor, (2) voluntary exchange, (3) gains from trade, and (4) openness to spontaneous order.
Read the full article at the Journal of Libertarian Studies.
Fred Glahe, R.I.P
Unfortunately, I'm only finding out about this now:
Fred Glahe, who was an economics professor at the University of Colorado for many years, passed away on April 19, 2022. Fred was a longtime member of the editorial board of the Quarterly Journal of Austrian Economics, and was the author (among many other things) of some very useful texts on business cycles and the Hayek-Keynes debate. Specifically, he co-authored with John Cochran (also, R.I.P.) The Hayek-Keynes Debate: Lessons for Current Business Cycle Research, (reviewed in QJAE here). He edited Keynes's "The General Theory of Employment, Interest, and Money", A Concordance, and also authored economics textbooks including Macroeconomics: Theory and Policy.
His obituary, posted by the family, reads in part:
Fred graduated from Purdue University in 1957 with a BA in Aeronautical Engineering and worked briefly at the Allison Engines division of General Motors on jet engine design and testing. Fred went on to receive his masters and PHD in Economics at Purdue in 1964 and became a Professor of Economics at the University of Colorado in 1965. At CU Fred founded The Economic Institute for Research and Education (EIRE) as well as authoring multiple textbooks and articles. Fred retired from CU in 2006. ... Some of Fred’s interests included anything mechanical especially cars and airplanes. He loved British television, classic movies, model cars, and was active in his church. Fred was a fixture at the Village Coffee Shop, eating breakfast and reading the Wall Street Journal.
When I was at CU in the late 1990s, Fred taught intermediate macroeconomics and ECON 4999 known as "Economics and Film," which required us to apply economic theory to analyses of various films. Naturally, the course drew on his extensive knowledge of film. I took both of these classes, and Fred became something of an academic advisor to me. He is the reason I attended Mises University in 1998—based on his recommendation. For most economics students at the University of Colorado, Fred was surely the only exposure most of us would have to the Austrian School at the University. For some of us, it stuck!
Fortunately, his family has also posted some photos online, including one with a guy named Murray Rothbard some readers will recognize:
His campus office contained lots of good Austrian materials. Note the images of Mises and Hayek (and Menger) on the wall:
Like Lew Rockwell, he owned some New Deal propaganda artifacts, such as this NRA poster. Those who spent any time in his office will recognize the image below the poster as a map of the Gulag archipelago:
Visiting the home of Adam Smith:
Fred was a fellow practicing Catholic. Requiescat in pace!
EU-China Leadership Summit: Protectionism on the Agenda
On December 7, the European Union and China are having their first in-person summit in four years, with the presidents of the European Commission and European Council, Ursula von der Leyen and Charles Michel respectively, flying to China for the event. Playing the role of trapped-in-the-middle in the US-China trade war, EU rhetoric has these gallant diplomats riding off to Beijing to restructure the bilateral trade relationship. However, their statements have made it clear that they don't care about European prosperity at all and that Europe's biggest threat is far from China's "unfair trade practices," but the protectionism pushed by EU officials themselves.
Protectionism and Mercantilism from Brussels
Von der Leyen and Michel are going to China with a heap of demands utterly at odds with good economic policy, not to mention the free-trade spirit and philosophy of the European Union. Here are some of the demands:
· Ending Chinese "Overcapacity"
Aggregate domestic demand has decreased in China in the last few years, but Chinese factories haven't decreased production accordingly, instead exporting to Europe at prices that EU firms can't compete with. If China does not stop overproducing, the EU will be forced to institute tariffs to preserve "a level playing field."
This point is horrific for two reasons. Not only do European officials want to deprive their citizenry of more affordable products in order to support non-competitive firms, but apparently, they're willing to take advantage of China's command economy to control global production. The EU presumes to have a "market economy," but evidently that only applies within European borders. Getting a foreign government to control the production of goods based on bureaucratic whims rather than market demand is no problem.
· Reducing the Trade Deficit
EU diplomats are going to go to Beijing and demand that Xi Jinping himself decrease the European trade deficit with China, specifically by increasing the purchase of European exports. Here we see that despite several centuries of evidence against it, EU officials are still pushing mercantilism.
· Raising Electric Vehicle Prices
In an utterly baffling move, von der Leyen and Michel plan to propose "price undertaking" to Xi Jinping and Li Qiang. In other words, they'll ask that Chinese firms raise the prices of electric vehicles exported to Europe to bring them in line with domestic prices. This is in the same summit during which the very same diplomats will be pressuring China for more participation in "multilateral efforts against climate change."
The top three nations for EV purchase subsidies are all in the EU: France with 5,000€, Germany with 4,500€ and the Netherlands with 2,950€. [5] In other words, the EU massively distorts the prices for EVs under market value yet will now simultaneously distort it in the other direction by statutorily increasing EV imports by 20 percent.
And again, this is European indirect price control. EU politicians mostly avoid controlling prices within the EU, but they apparently have no problem getting a communist dictatorship to do it for them by setting prices on exports.
Motivation for These Demands
Of course, you can guess the official reason for this protectionism: jobs. The diplomats in question have been pretty candid, too. They need to save jobs in the face of Chinese competition in the EU market ahead of the June 2024 European Parliament election.
Economists know this reasoning rings hollow. There isn't a finite number of jobs. If a Chinese firm outcompetes a European EV manufacturer, a handful of jobs are lost. For example, let's say that lower prices on Chinese EVs managed to drive Volkswagen, the EU's largest manufacturer of EVs, completely out of business, laying off its roughly 500,000 European workers. That would still be less than 0.2 percent of the entire EU working population.
Meanwhile, Chinese firms, state-run or not, cannot sell EVs to Europe for free. They will trade for something, and new industries will form providing new jobs.
The numbers tell the whole story. According to economist Thomas Sowell, all the EU's protectionism saves the bloc around 200,000 jobs at a cost of $43 billion per year, or some $250,000 per job. [6] Considering the average EU job barely pays a 10th of that, the consequences of protectionism are quite palpable.
It's clear that von der Leyen and Michel aren't trying to save jobs, they're trying to save companies. In other words, they're trying to prop up wealthy businessmen who have failed on the market.
What About Market Fairness?
Europeans are generally well enough educated to know that free trade benefits them and the jobs argument is bogus. Therefore, modern politicians like von der Leyen and Michel must tack on the myth that trade must be "fair." Presumably, Chinese firms do not provide goods at lower prices because they have any kind of comparative or absolute advantage but rather because the Chinese government conducts "unfair trade practices," such as:
- Subsidizing Chinese firms;
- Failing to protect European intellectual property;
- Purposefully weakening the Yuan to promote exports;
- Providing barriers to foreign investment, leading to a trade surplus.
The Chinese government does do all of these things, but they are only "unfair" to the Chinese people—and a handful of European business owners. In some cases, a Chinese firm may outcompete a domestic European firm not due to a real advantage, and that is unfortunate for the owners. However, they still represent a very small constituency compared to the hundreds of millions of Europeans who benefit from lower prices paid for by Chinese citizens whose taxes go to subsidization and who cannot use their weak currency to buy superior imports.
In the end, this justification falls as flat as "jobs." In reality, EU diplomats are transparently working at the behest of European corporations, not European consumers.
Results of These Initiatives
What will happen if von der Leyen and Michel get their demands? In short, Europe will become slightly more impoverished. Prices will rise and prices will be distorted, leading to a misallocation of resources. The real purchasing power of every European will drop.
If that sounds severe, it only goes to show that it isn't China's so-called unfair trade practices that are harming Europeans. It's our government.
The Real Problem With Our Foreign Policy
Over the weekend Defense Secretary Lloyd Austin explained to the American people what’s really wrong with US foreign policy. Some might find his conclusions surprising.
The US standing in the world is damaged not because we spent 20 years fighting an Afghan government that had nothing to do with the attacks on 9/11. The problem has nothing to do with neocon lies about Iraq’s WMDs that led untold civilian deaths in another failed “democratization” mission. It’s not because over the past nearly two years Washington has taken more than $150 billion from the American people to fight a proxy war with Russia through Ukraine.
It’s not the military-industrial complex or its massive lobbying power that extends throughout Congress, the think tanks, and the media.
Speaking at the Reagan National Defense Forum in California’s Simi Valley, Austin finally explained the real danger to the US global military empire.
It’s us.
According to Secretary Austin, non-interventionists who advocate “an American retreat from responsibility” are the ones destabilizing the world, not endless neocon wars.
Austin said the US must continue to play the role of global military hegemon – policeman of the world – because “the world will only become more dangerous if tyrants and terrorists believe that they can get away with wholesale aggression and mass slaughter.”
How’s that for reason and logic? Austin and the interventionist elites have fact-checked 30 years of foreign policy failures and concluded, “well it would have been far worse if the non-interventionists were in charge.”
This is one of the biggest problems with the neocons. They are incapable of self-reflection. Each time the US government follows their advice into another catastrophe, it’s always someone else’s fault. In this case, as Austin tells us, those at fault for US foreign policy misadventures are the people who say, “don’t do it.”
What would have happened if the people who said “don’t do it” were in charge of President Obama’s decision to prop-up al-Qaeda to overthrow Syria’s secular leader Assad? How about if the “don’t do it” people were in charge when the neocons manufactured a “human rights” justification to destroy Libya? What if the “don’t do it” people were in charge when Obama’s neocons thought it would be a great idea to overthrow Ukraine’s democratically-elected government?
Would tyrants and terrorists have gained power if Washington did NOT get involved? No. Tyrants and terrorists got the upper hand BECAUSE Washington intervened in these crises.
As Austin further explained, part of the problem with the US is democracy itself. “Our competitors don’t have to operate under continuing resolutions,” he complained. What a burden it is for him that the people, through their representatives, are in charge of war spending.
In Congress, “America first” foreign policy sentiment is on the rise among conservatives and that infuriates Austin and his ilk. He wants more billions for wars in Ukraine and Israel and he wants it now!
And our economic problems? That is our fault too. Those who “try to pull up the drawbridge,” Austin said, undermine the security that has led to decades of prosperity. Prosperity? Has he looked at the national debt? Inflation? Destruction of the dollar?
There is a silver lining here. The fact that Austin and the neocons are attacking us non-interventionists means that we are gaining ground. They are worried about us. This is our chance to really raise our voices!
Abraham Lincoln—War Criminal
We frequently read today about war crimes, such as bombing hospitals. In World War II Britain bombed civilians in Dresden and the US dropped atomic bombs on Hiroshima and Nagasaki. In war, we are told, “anything goes.” Abraham Lincoln followed this barbaric policy, and those who treat him as a “hero” have much to answer for.
In his definitive book War Crimes Against Southern Civilians (Pelican 2007), the historian Walter Brian Cisco blames Lincoln for a brutal campaign of Terror against the South:
“A Review of War Crimes Against Southern Civilians by Walter Brian Cisco (Pelican, 2007).
Walter Brian Cisco is a lifelong scholar of American Civil War history, a professional writer, and researcher with many respected publications on the subject including States Rights Gist: A South Carolina General of the Civil War, Taking a Stand: Portraits from the Southern Secession Movement, Henry Timrod: A Biography, and Wade Hampton: Confederate Warrior, Conservative Statesman. In his latest book War Crimes Against Southern Civilians, Cisco writes on a subject that many historians have avoided, war crimes committed by the Union forces on the civilian population of the South beginning in the early years of the Civil War.
In his book, Cisco does a commendable job of uncovering historical records from the time period in citing from sources that include accounts from enlisted Union soldiers that were involved in the events, official reports, letters, diaries, and various other testimonials from civilians that tell of the monstrosities committed against Southern population throughout the Civil War. Early in his book, Cisco clearly states Lincoln had adopted the “black flag” policy and this policy was executed by several Union commanders in dates far preceding the better known Sherman’s March to the Sea. “Warring against noncombatants came to be the stated policy and deliberate practice in its subjugation of the Confederacy. Abraham Lincoln, the commander in chief with a reputation as a micromanager, well knew what was going on and approved” (pg. 16). Several pieces cited support this claim and are presented throughout the book.
The evidence offered supporting the “black flag” policy adopted by the Lincoln administration is done in numerous ways. A few examples presented are incidents such as the 1861 St. Louis massacre in which twenty-eight civilians lay dead in the streets of St. Louis and seventy-five others were wounded by the hands of a force of between six and seven thousand Union regulars and German volunteers commanded by Capt. Nathanial Lyon (pg. 22 and 23). The 1862 occupation of New Orleans in which Maj. General Benjamin Butler, establishes martial law whose “decrees were worthy of a czar” and in one infamous order, commanding Union soldiers to treat the ladies of the town as prostitutes which could be “construed as a license for rape” (pg. 65). Other accounts are crimes committed against non-combatants were the attacks on Southern pacifist religious refugees, in which Sheridan’s army robbed, plundered, poisoned wells with dead animal carcasses, and burned their houses to the ground during the Shenandoah Valley campaign of 1864 (pg. 124). Cisco cites several instances in which slaves and free blacks were robbed, raped, and killed by the hands of Union soldiers. Cisco’s book is filled with damning evidence of the war crimes committed by the Union forces on the South. Any reader of this book has to question how a soldier in the U.S. military could justify the inhumane actions that were taken against a civilian population which included the elderly, women, children and slaves. The accounts of Union aggression stated seems surreal and brings forth a question of fallacy that has been planted in the minds of generations of Americans far from what the Union cause truly was about.
War Crimes Against Southern Civilians chapters are organized by engagements recorded from 1861-1865 and follows the timeline very closely. The organization of the chapters is done in a manner that it is easy for a reader to follow and creates a clear account of how these events progressed throughout the war. The author also does a good job citing sources in the book and those that are used are accurate, but the format used in citing the information are not very user friendly. The pages within the text are void of footnotes and somewhat of a nuisance for readers who want quick access to citations presented on the page they are reading. Cisco does not include any footnotes in the book or endnotes at the end of each chapter, but instead lists all notes at the end of the book. Even though the book is well written, improvements could be made through the way notes are arranged and should do so if an updated version of the book is ever released.
Without question, the author writes from a Southern perspective in presenting the atrocities Southern citizens were subjected to by Union forces. Many historians might discount Cisco’s work for representing only the Southern viewpoint of the war in this book. However, through writing in a Southern viewpoint, Cisco has brought forth a piece of history that is unknown to many readers of Civil War history. The majority of books written about the Civil War give a very limited account of the events that took place with the intent of glorifying the actions of the Lincoln administration and the Union army. Cisco’s contribution of the historical accounts of the Civil War is commendable and he meets a difficult subject matter head-on that other authors have purposely neglected. The facts Cisco presents, instills his readers with facts that contribute a more complete understanding of events that forever changed the course of a nation.
Can Libertarians Win in Georgia? (The Country, Not the State)
While much of the attention is now focused on Argentina and Javier Milei's electoral triumph, we can also discover some success stories in other parts of the world, most notably in the republic of Georgia, where a libertarian party called "Girchi" has been fighting for freedom since 2015.
Georgia has harsh drug laws, and in many situations, the penalties are harsher than those for crimes like theft, rape, and robbery. Girchi, as a party pushing for individual autonomy and personal freedom, has been lobbying for more liberal drug laws. This campaign culminated in a civil disobedience act on New Year's Eve in 2016, when Girchi leaders and supporters openly planted the cannabis seed at the Girchi office premises.
Their efforts in 2017 ended in the Georgian Constitutional Court ruling in Girchi's favor, stating that the criminal punishment for cannabis use is unconstitutional, essentially decriminalizing cannabis use in Georgia. Later, on the same grounds and in favor of Girchi, the Constitutional Court abolished all administrative fines for personal consumption of marijuana, making Georgia the first country in Europe and the ex-Soviet area to achieve such an expansion of personal freedoms.
Girchi is opposed to most private-sector regulations and has spoken out against them on numerous occasions. In 2019 Girchi established Shmaxi, a ride-sharing firm, as an act of civil disobedience in response to enacted regulations for taxicabs to be exclusively painted white. Up to 500 people joined the campaign and registered to drive their cars through Shmaxi. Despite the fact that the company was registered as an academic institution on wheels, teaching passengers libertarian ideology, numerous drivers still got fined for breaking the taxi regulations.
Georgia still maintains mandatory military service, which limits thousands of people's autonomy and forces them to serve the government against their will. However, Georgian legislation exempts clergy from mandatory military duty. To utilize this loophole, Girchi's church, the Christian Evangelical Protestant Church - 'Biblical Freedom', was officially registered in 2017. The loophole was employed by 'Biblical Freedom' to assist young men who did not want to serve in the army.
Those who do not intend to join the army are given certificates indicating that they are “priests” of the Church. It effectively exempts individuals from compelled military service, allowing them to spend their lives according to their own free will. Ordination takes only a few minutes and costs $17; after that, individuals are exempt from the draft until the following year, when they can be ordinated again. The government also offers the 1-year postponement, but it is for $675 and now to be increased to $1685. Since its inception, the church has managed to rescue around 50,000 people from this sort of modern slavery.
Girchi won four seats in the parliament in the 2020 parliamentary elections, and while four deputies may not seem like much, they have managed to expose hundreds of wicked regulations to the public while the media's attention was drawn to other nonsense and absurd mainstream narratives. Three unjustly imprisoned inmates were also liberated because of Girchi's involvement and activity in parliament.
Libertarian MPs have also been embroiled in heated parliamentary debates over an immoral conscription law that aimed to eliminate Biblical Freedom. After many hours of filibuster attempts and even brawls with government MPs, the legislation was only passed after 9 months (ordinarily, the government passes laws in a matter of weeks).
And even then, it proved ineffective because Biblical Freedom continued to exempt individuals from the army, as priests are allowed to demand alternative non-military service. Since there were no vacant positions for hundreds of people who now demanded alternative service, the government was left helpless, and they are now once again planning to amend the law to close this loophole.
Girchi, like Milei, calls for the abolition of the central bank and the adoption of a multi-currency system that allows people to use the currency that they deem to be the best. Girchi also believes in free banking and the gold standard. Girchi's politicians openly declare that taxation is robbery and inflation is theft, so they intend to implement a single tax system and reduce plundering to the biblical 10 percent.
Georgia, as a post-Soviet country, has yet to transform into a Western capitalist-style country in terms of property. As much as 80 percent of all land and resources remain in public property and thus are kept outside of all economic activities. Girchi is in favor of privatizing and restituting all state assets, including public companies, public lands, forests, and natural resources.
Girchi's Internet platform is unique in that it promotes self-nominated political candidates interested in becoming politicians and spreading libertarian values. Candidates compete on the site, and users vote and rank them to create the final party list for the elections, which will be arranged with Girchi's digital currency, the Georgian Dollar (GED). Members can also use the platform to finance the party, its candidates, and its projects for which they receive GED.
Girchi's current funding comes from its projects and voluntary contributions from members via the platform, making it unique among Georgian political parties. Girchi prefers a meritocracy system over democracy, so the party's structure and ruling are based on the merit each user has brought to the party, which is indicated by the number of GED they own.
Girchi is a fiscally conservative party that consistently supports spending cuts and tax cuts. It advocates for the abolition of all income and corporate taxes, as well as import duties. Girchi is a vocal critic of budget deficits and national debt. The party also advocates for complete deregulation of private education and parental freedom to homeschool their children. Girchi also supports the legalization of gun ownership, describing it as "the acknowledgment that all people are free and have the complete right to protect themselves and their property."
The party is also a vocal opponent of the present woke agenda and gender identity politics. Girchi even sought a Constitutional Court ruling against gender-based election quotas and introduced a bill to replace all references to "gender" in all legislation with "male and female".
Girchi also argues that government bureaucracy is not only financially costly, but it also imposes economically harmful policies. As a result, Girchi has promised to make the transition of 250,000 individuals employed in the public sector to the market economy as fast as possible by firing government officials on the condition that they preserve their pay for three years.
Georgia will hold pivotal parliamentary elections next year, and Girchi's approval rating is rising month by month. Following Milei's success, we hope to achieve similar results and expand libertarian representation in parliament and the government.