Power & Market

Have You Gained or Lost Weight? Congrats, TSA Is Now Tracking You for Suspicious Activity

07/31/2018James Bovard

If you fall asleep or use the bathroom during your next flight, those incriminating facts could be added to your federal dossier. Likewise, if you use your laptop or look at noisy children seated nearby with a “cold, penetrating stare,” that may be included on your permanent record. If you fidget, sweat or have “strong body odor” — BOOM! the feds are onto you.

Welcome to the latest profiling idiocy from the Transportation Security Administration. TSA’s Quiet Skies surveillance program is spurring federal air marshals to target dozens of Americans each day on the flimsiest of pretexts. The secret program, first exposed by Jana Winter in The Boston Globe, is security theater at its best. 

What does it take to become a Quiet Skies target? “The criteria for surveillance appear fluid. Internal agency emails show some confusion about the program’s parameters and implementation,” The Globe noted. 

Anyone who has recently traveled to Turkey can apparently be put on the list — as well as people “possibly affiliated” with someone on a terrorist watchlist (which contain more than a million names). The program is so slipshod that it has targeted at least one airline flight attendant and a federal law enforcement agent.

After a person makes the Quiet Skies list, a TSA air marshal team is placed on his next flight. Marshals receive “a file containing a photo and basic information” and carefully note whether the suspect’s “appearance was different from information provided” — such as whether he has “gained weight,” is “balding” or “graying,” has a beard or “visible tattoos” (bad news for Juggalo fans of the Insane Clown Posse). Marshals record and report any “significant derogatory information” on suspects.

TSA air marshals follow travelers targeted by this program, even writing down their license plates. Marshals must ascertain whether a “subject was abnormally aware of surroundings.” Does that include noticing the undercover G-men who are stalking them in the parking lot? No wonder the president of the Air Marshal Association, John Casaretti, considers the program unjustified.

Read the full article at USA Today
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How to Unlock the Free Market Possibilities of Net Neutrality's Repeal

06/11/2018Per Bylund

Past all the incendiary rhetoric, one of the key differences between Democrats and Republicans is the question of how far-reaching government intervention should be. Nowhere is this more apparent than in the most recent battleground over regulations: net neutrality.

Federal Communications Commission (FCC) Chairman Ajit Pai -- a Republican appointee -- championed a commission vote in December to repeal net neutrality regulation, arguing that deregulating internet service providers would bolster the economy.

Under a repeal, broadband providers would no longer be prohibited from blocking websites or charging for higher-quality service or certain content. The FCC, under Pai's leadership, says that ISPs like AT&T and Comcast will offer a better variety of niche services to enhance the customer experience if they are liberated from pesky regulations.

The issue is hardly settled: Democrats in the U.S. Senate disagreed with the FCC move and last month voted 52-47 to quash the repeal, but their bill is not expected to pass the House. And, even if it does, President Trump is extremely unlikely to sign it. As it stands, the repeal of net neutrality is set to take effect today, June 11.

The FCC’s repeal uncorked a tidal wave of outrage from net neutrality advocates, who fear a future of slower internet service, higher costs and fewer consumer choices. But those advocates should hold on -- because the loosening of regulatory hurdles actually fits into a market-oriented mindset that breeds entrepreneurial innovation. Here's how:

Read the full article at Entrepreneur. 
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How Protectionism Squanders Capital

In his early career, Mises was a vocal supporter of the free trade movement, and well involved in the policy proposals of the free trade associations in Europe. In his later years, he maintained his pure laissez-faire view of international trade, but focused more on the battle of ideas. Although scattered throughout his other works, and not collected in a volume on 'international economics', his analyses on trade and trade policy are meticulous and detailed, but clear-cut, as well as indispensable to a correct understanding of international production and exchange. 

For those reading the recent news on the escalation of protectionist measures between the U.S. and its trade partners, here's an excerpt from Mises's Epistemological Problems of Economics (pp. 237-9). The discussion is fully applicable today, 85 years after it was first published. In a short subchapter, Mises (to use one of his favorite expressions) explodes the fallacy of the infant industry argument for trade protection, and employs an original and often neglected argument that highlights the role of monetary calculation and inconvertible capital goods in production and trade.

The infant industries argument advanced in favor of protective tariffs represents a hopeless attempt to justify such measures on a purely economic basis, without regard to political considerations. It is a grievous error to fail to recognize the political motivation behind the demand for tariffs on behalf of infant industries. The same arguments as are advanced in favor of protecting a domestic product against foreign competition could also be adduced in favor of protecting one part of a general customs area against the competition of other parts. The fact that, nevertheless, protection is asked only against foreign, but not also against domestic, competition clearly points to the real nature of the motives behind the demand. 

Of course, it may happen in some cases that the industry already in existence is not operating in the most favorable of the locations that are presently accessible. However, the question is whether moving to the more favorable location offers advantages great enough to compensate for the cost of abandoning the already existing plants. If the advantages are great enough, then moving is profitable and is carried out without the intervention of a tariff policy. If it is not profitable in itself and becomes so only by virtue of the tariff, then the latter has led to the expenditure of capital goods for the construction of plants that would otherwise not have been constructed. These capital goods are now no longer available where they would have been had the state not intervened.

Every tariff under whose protection new plants come into existence that otherwise would not have been built so long as the older plants established elsewhere were still utilizable leads to the squandering of capital. Of course, the fanatics on both sides of the ocean who want to “make the economy rational” do not care to see this.

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Historical Controversies Podcast: Season 3

04/18/2018Mises Institute

Today, Chris Calton kicked-off the third season of his Historical Controversies podcast, which will recount the controversial history of the American Civil War.

The complete series (including Seasons 1 and 2) is available on iTunes, YouTube, Soundcloud, Google Play, Stitcher, Mises.org, and via RSS feed.

If you enjoy the podcast, please leave a positive rating and review.

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Hyperinflation Has Venezuelan Merchants Weighing Cash, and Now It's Breaking Their Scales

03/15/2018Tho Bishop

It is interesting to see how prices emerge in a hyperinflationary environment like  see in Venezuela. While the government finally cut its “official” exchange rate of 10 bolivars to the dollar, it continues to vastly overstate the value of its currency.

Luckily markets continue to find a way. Assisted by good old fashion corruption, military members and other government officials are able to profit off selling government supplies. Of course the question still remains: how is economic calculation is possible in a monetary climate as extreme as Venezuela?

In 2016, the Wall Street Journal published a fascinating article about a Home Depot employee named Gustavo Diaz who runs one of the most subversive websites back in his home country, DolarToday.com. The website takes information gathered from Venezuela black markets and uses it offer a real market value for the Bolivar. This information undermines the ability of the government and central banks to hide the consequences of their policies, leaving market actors better informed.

As Mr. Diaz puts it:

It’s ironic that with DolarToday in Alabama, I do more damage to the government than I did as a military man in Venezuela.

Another interesting measure has been pieced together by Bloomberg. Their Cafe Con Leche Index looks at the price of a cup of coffee in Caracas. A March 14th report has a .50 cent cup of coffee now costing 75,000 Bolivars, pushing the annual inflation rate over 4000%.

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The rising price does create other challenges though. Increasingly merchants have relied on weighing cash used for transactions, rather than counting. Unfortunately this has created some new challenges for merchants, whose scales are not capable of handling the weights now required to buy goods such as ham. As Patricia Laya writes as part of a fascinating series Life in Caracus:

The store’s deli scales run to only six digits. And ham, my Whatsapp food-hunting community tells me, is retailing nowadays for about 1,480,000 bolivars per kilogram. It didn’t matter that I wanted only a few hundred milligrams. The cost was, at this market at least, incalculable.

A similar dynamic is impeding the use of credit and debit cards. The price of a set of sheets (33,541,963), a pair of Adidas sneakers (10,500,000) or even a slice of lasagna (401,450) can’t fit on the screens of older card machines; the solution is to split one purchase into several transactions. Even the invoice printers that many businesses use for reports to tax authorities are running out of space.

So how does a country like Venezuela reverse this sort of monetary chaos? Luckily the answer there is simple. It must end the socialist policies that destroyed the country, and abandon the Bolivar. At some point the latter will be inevitable. Hopefully for Venezuelans, the former is as well.

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Happy Birthday Carol Paul!

02/28/2018Mises Institute

Carol Wells Paul, married to Dr. Ron Paul for more than 50 years, was born on February 29th in a Leap Year. So we'll wish her a happy birthday today!

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Among her many achievements— mom to 5 great kids (3 of them medical doctors), expert seamstress, wonderful cook, and world-class hostess—her devotion to liberty is perhaps the greatest.

Here is a great interview of her by Ron himself.

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Healthcare play by Bezos, Buffett, and Dimon

01/30/2018Per Bylund

Today's big news is that Amazon.com's founder Jeff Bezos has teamed up with Berkshire Hathaway's Warren Buffett and JP Morgan's Jamie Dimon to push down the skyrocketing healthcare costs in the US. One must wonder, however, if it is a serious play or but a marketing schtick. As they say in the press release, as reported by NPR and others, the new company will be "free from profit-making incentives and constraints" yet aims to "cut costs."

This sounds a bit backwards. Surely these renowned gentlemen in business are aware of how incentives affect actions, both "actions" by organizations and those taken within organizations. Without a profit motive, what is the incentive to keep costs down, to innovate, and to streamline processes and routines? One must wonder why they choose to fight an uphill battle when it is completely unnecessary.

Profit is hardly what makes healthcare expensive - regulations, especially the government-granted monopoly privileges that permeate that industry, are the main culprit. If you are in business, surely you recognize this. Just like you recognize the power of incentives.

Unless, of course, this is but a marketing ploy, and not an actual attempt to lower healthcare costs. 

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Herbener: Are We Richer and Better Off Than We Think?

01/22/2018Ryan McMaken

Last Friday, Jeff Deist and I discussed the difficulty of really comparing the current standard of living to those of the past. During the interview, I mentioned Jeffrey Herbener's discussion with Tom Woods about the CPI, the use of hedonic adjustments, and changes in the standard of living overall. Anyone who enjoyed Friday's interview may also like Herbener's detailed discussion of price inflation estimates and related issues. 

Are We Richer and Better Off Than We Think?

The overall conclusion is that there are undoubtedly ways that our economic lives are improving. There are also ways that it is getting worse. The question is, how to these two trends balance? 

Woods notes that libertarians often rebel against discussions like these, as it is assumed that with so much government intervention in daily life, it must be obvioust that we're gettign poorer. But, as woods and Herbener note, it's not that easy:

Woods: Maybe it's the case that the market economy is so resilient, that it can still generate results under the influence of a substantial state apparatus. 

Herbener: Yes, absolutely, We Have a bifurcated economy, where the government heavily interferes in healthcare and education where we see quality and declining and prices going through the roof. And then sectors of the economy where the government is basically hands off, and there we see quality improving, prices going down, we see the normal capital-accumulation, technical-innovation process of the market.

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How To Make Sure You Keep Seeing the Mises Institute in your News Feed

01/19/2018Mises Institute

Facebook continues to tinker with its News Feed options. It's unclear if this will affect how often you see Mises Institute articles in your feed, but if you want to make sure we keep coming through, here's how. 

• Go to News Feed's "Edit Preferences" option on Facebook.com or in the app.
• Choose "See First" for the pages you want to see in your news feed.

Click the top option as shown in the image below, and if you're already following us, it will allow you to choose us and one of your priority news sources. 

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Of course, if you're not already following us, you can do so here: www.facebook.com/mises.institute

Changes to Facebook's News Feed could happen at anytime, so those wishing to see posts from their favorite pages are encouraged to edit their preferences immediately.

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How to Decentralize Eminent Domain Powers

12/05/2017Ryan McMaken

In the wake of the Supreme Court's Kelo decision on eminent domain, many pro-centralization libertarians complained that the Supreme Court should have outlawed state and local government authorizations of eminent domain. 

This was the wrong approach. The correct approach is to support the decentralization of eminent domain powers — and then to outlaw eminent domain at the state and local level. 

The idea that some remote government thousands of miles away ought to be micromanaging local affairs is not a libertarian idea. Lew Rockwell explains

And yet stealing isn't the only thing libertarians are against. We are also opposed to top-down political control over wide geographic regions, even when they are instituted in the name of liberty.

Hence it would be no victory for your liberty if, for example, the Chinese government assumed jurisdiction over your downtown streets in order to liberate them from zoning ordinances. Zoning violates property rights, but imperialism violates the right of a people to govern themselves. The Chinese government lacks both jurisdiction and moral standing to intervene. What goes for the Chinese government goes for any distant government that presumes control over government closer to home.

Thus, the Supreme Court in Kelo ruled the right way. 

In the wake of Kelo, what should have happened did happen in many states. 

In Indiana, for example, the state government explicitly outlawed the kind of eminent domain that the Kelo decision allowed. Even better, this Indiana law has proven to be a key factor in a recent landgrab by a city government in Indiana: 

If there were any doubt about the illegitimacy of the City’s efforts to compel property transfers to a private developer, Indiana’s eminent-domain reform settle the matter in the favor of the Plaintiffs. In 2005, the United States Supreme Court held, in Kelo v. City of New London, that the Fifth Amendment to the Constitution permits government to take private property for the mere purpose of promoting economic development. Less than a year later, Indiana enacted a comprehensive reform statute rejecting the Kelo decision as a matter of state law. The statute prohibits the transfer of property seized by eminent domain to other private parties except under narrow and enumerated circumstances. Under the new law, the fact that property happens to be located in “an area needing redevelopment” is not a justification for transferring it to another private party… Indiana has therefore rejected the kinds of completed transfers that the City is attempting in this case.

So, it seems the intervention of the Federal government wasn't necessary after all. 

Nevertheless, whenever some special interest group has a particular pet project, it always wants the federal government to step in and throw down a nationwide ban or mandate overriding all local inclinations and concerns. This is why the slavedrivers of old wanted nationwide fugitive slave laws. It's why modern-day interventionists want a nationwide minimum wage and nationwide gun laws. 

Otherwise, an interest group might have to go around the country convincing people to adopt the laws they favor. What a hassle! When you're a huge wealthy interest group, it's much better to just have the federal government hand down a coercive mandate. Problem "solved." 

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