Mindless Partisanship Gets in the Way of Fighting Big Government | Gene Healy | Cato Institute: Commentary

Mindless Partisanship Gets in the Way of Fighting Big Government | Gene Healy | Cato Institute: Commentary: "In a 1988 survey, over half of self-identified 'strong Democrats' believed inflation had increased under President Reagan, when it had actually come down nearly 10 points. Half of the Republicans in a 1996 poll believed Bill Clinton had increased the deficit, though it dropped steadily during his tenure. Political scientist Adam J. Berinsky puts it starkly: 'In the battle between facts and partisanship, partisanship always wins.'

In 2004, psychologist Drew Westen took a look at the partisan mind through an MRI scanner. He presented 15 'strong Democrats' and 15 'strong Republicans' with negative statements about their favored candidates and watched which parts of their brains lit up.

'None of the circuits involved in conscious reasoning were particularly engaged,' Dr. Westen reported — it appeared 'as if partisans twirl the cognitive kaleidoscope until they get the conclusions they want.'"

The Tempting Path of Protectionism | Jim Powell | Cato Institute: Commentary

The Tempting Path of Protectionism | Jim Powell | Cato Institute: Commentary: "By inflaming nationalist sentiment against the United States, Smoot-Hawley encouraged many governments to retaliate by enacting exchange controls that further throttled trade. By 1935, there were exchange controls in Afghanistan, Argentina, Austria, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Czechoslovakia, Danzig, Ecuador, El Salvador, Finland, Germany, Greece, Hong Kong, Hungary, Iceland, Japan, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Nicaragua, Paraguay, Poland, Romania, Uruguay, Venezuela and Yugoslavia.

American farmers, who had lobbied hard for Smoot-Hawley, were among the biggest losers from all this. They saw their exports plunge from $1.8 billion in 1929 before Smoot Hawley to $590 million just four years later."

Rethinking Intellectual Property: History, Theory, and Economics - Stephan Kinsella - Mises Daily

Rethinking Intellectual Property: History, Theory, and Economics - Stephan Kinsella - Mises Daily: "Patent law finds its origins in mercantilist monopoly grants, and even legalized plunder — letters patent were used to legalize piracy in the 16th century — making it ironic for IP to be used against modern-day 'pirates' who are not real pirates at all."

A Better Way Than the VA? | Michael D. Tanner | Cato Institute: Commentary

A Better Way Than the VA? | Michael D. Tanner | Cato Institute: Commentary: "Democrats seem more concerned about preserving 'the system' than about results. The idea of giving people a private choice rather than keeping them confined to a government system is regarded as 'radical' and 'extreme.' You see it on issues ranging from education to Social Security. Apparently, the VA system has now become another such sacred cow."

The Fallacy of "Child-Labor-Free" - Rod Rojas - Mises Daily

The Fallacy of "Child-Labor-Free" - Rod Rojas - Mises Daily: "economic development is the precursor of all things good and humane. This sometimes even includes tangible expressions of parental love — a parent who puts a child behind a loom for ten hours a day does so, not out of callous greed, but because this is what brings food to the table.

Any ban or boycott on oriental rugs, or any other product of child labor, is utterly counterproductive and potentially life-threatening to the very people we are trying to protect. Only economic development can improve the lives of these children, and nothing short of unrestricted free trade will do."

The Real Reason for FDR's Popularity - Mark Thornton - Mises Daily

The Real Reason for FDR's Popularity - Mark Thornton - Mises Daily: "December 5, 1933, was the day of final liberation [from Prohibition], following nine months of frenzy and excitement. FDR successfully claimed credit for this, achieving a reputation as a great liberator. His popularity reached astounding heights. The glow never left."

Things Are Better Than You Imagine | Jason Kuznicki | Cato Institute: Commentary

Things Are Better Than You Imagine | Jason Kuznicki | Cato Institute: Commentary: "When asked what how much an average U.S. corporation's profits were as a percentage of sales, the students gave wild overestimates — the median student guessed corporate profits were 30% of sales; the upper quartile said more than 60%. The reality? More like 4%.

Goffe's students also thought inflation for the previous year (2008) had been about 11%. The Consumer Price Index, our best measure of inflation, rose by a mere .09% during that time, a small enough change that we could plausibly dismiss it as a measuring error.

Ordinary Americans make more money, too – the median student said that 35% of all workers earned the minimum wage. The real number is more like 1.7%.

And things are improving more than they imagine. When asked how much inflation-adjusted income had risen since 1950, the median student said 25%. Really, it's more like 248%.

Finally, our economy is freer than most of them imagine – when asked, the median student believed that the government sets 40% of market prices. Numbers for this one are harder to come by, but I asked some economist friends of mine, and it's certainly nowhere near that high. Governments do set prices on state-school tuitions, on Medicaid and Medicare-financed health spending, on cigarettes, and on a few others — but in all, prices are pretty free nowadays. Formerly, the federal and local governments had regulated airfare, trucking prices, and the prices of major consumer products like gasoline and apartment rents (there are still a few rent-controlled apartments, but good luck finding them!)."

Hiding the Cost of Government Leads to Bigger Government | Christopher J. Conover | Cato Institute: Commentary

Hiding the Cost of Government Leads to Bigger Government | Christopher J. Conover | Cato Institute: Commentary: "When the federal government takes an additional dollar from taxpayers, the actual cost to society is generally $1.44. That extra 44 cents represents the deadweight loss of taxation. Every time Congress shifts another dollar from Peter to Paul, it leaves society 44 cents poorer.

The deadweight loss of taxation can be much higher, though. For example, if Congress allows income-tax rates to rise in January, as current law provides, it will cost society $1.50 for every dollar of new tax revenue. Feldstein estimates that each dollar of new income-tax revenue could cost society $2.65!"

"University of Chicago economist Harald Uhlig estimates that federal borrowing carries a much higher deadweight loss, such that every $1 of deficit spending ultimately costs society $4.40."

"The Office of Management and Budget already directs federal agencies to include the deadweight costs of federal taxes when doing cost-benefit analyses of federal spending. Congress should do the same."

Keeping the Poor in Poverty | Michael D. Tanner | Cato Institute: Commentary

Keeping the Poor in Poverty | Michael D. Tanner | Cato Institute: Commentary: "For example, few things are as important in helping people escape poverty as education."

"Yet Obama and the Democrats, in thrall to the teachers' unions, steadfastly resist proposals to give parents more control over their children's education. Washington, D.C., has a public-school system that, despite spending more per child than almost any other system in the nation, still has a dropout rate of more than 50 percent. Yet one of the first actions of the president and congressional Democrats was to kill the Opportunity Scholarship Program, which offered vouchers to permit poor children to opt out of the city's rotten public schools.

Across the country, efforts to increase parental choice are met with a wall of Democratic obstructionism. Choice, we are told, is a threat to the 'education system.' But which is really more important, the 'education system' or poor children?

And, of course, nothing is more important in fighting poverty than jobs. Yet the Obama administration is overtly hostile to the entrepreneurs and job creators in our economy. The wealthy are demonized rhetorically."

"We can't expect to create more jobs if we punish the type of activity that creates jobs. That means that if we wish to fight poverty, we must end those government policies — high taxes and regulatory excess — that inhibit growth and job creation. We must protect capital investment and give people the opportunity to start new businesses.

Along similar lines, one of the great advantages to reforming Social Security with personal accounts is that it would enable low-income Americans to save and accumulate wealth. But don't count on Democrats to lessen their opposition to the idea."

"Compassion is more than talking about the plight of the poor or giving them just enough money to make poverty a bit more comfortable. Real compassion is about creating the conditions that will enable the poor to get out of poverty."

For Orderly Dissolution of the Fed, before It Does Us Even More Harm | Jim Powell | Cato Institute: Commentary

For Orderly Dissolution of the Fed, before It Does Us Even More Harm | Jim Powell | Cato Institute: Commentary: "The Fed was established 97 years ago, and Fed officials were given considerable power over the economy as if they knew what they were doing, but they didn't. They're still winging it today.

The Fed failed its first big test in 1920 when the end of World War I was followed by the sharpest depression on record. Wholesale prices plunged more than 50%, the economy contracted by almost 24%, and unemployment doubled to 11%. This was the kind of crisis the Fed was supposed to prevent."

"in 2002, Ben Bernanke, then a Fed governor, acknowledged the Fed's role in these calamities: 'We did it. We're very sorry. We won't do it again.'"

"Intended to save our economy, the Fed has turned out to be perhaps the biggest single source of economic instability. It's the big pig at the trough, and it's unpredictable. It doesn't follow any rules consistently. When it moves, everyone else can be badly knocked around.

The very unpredictability of the Fed causes uncertainty that discourages investors and employers from making commitments for the future — an important reason why we're experiencing a sluggish, jobless recovery now.

Theoretically, the Fed might be able to work if there were perfect people, but there don't seem to be any of those around. After almost a century of the Fed's often violent roller-coaster rides, it's hard to see what might be accomplished with one more bit of tinkering such as with interest-rate targets.

It's time to begin planning for an orderly dissolution of the Fed before it does us any more harm."

No More Waiting for Superman | Neal McCluskey | Cato Institute: Commentary

No More Waiting for Superman | Neal McCluskey | Cato Institute: Commentary: "the ruin wreaked by socialized education is everywhere. Our best students do poorly compared to children in other developed nations — countries which, by the way, often embrace school choice. Worse, poor children are frequently locked into intellectual dungeons because their families are unable to afford a private school, or a house in a better district."

"Where we let freedom work, we have affordable abundance: from food, to iPods to automobiles. To get access to a decent school, in contrast, we force children to swarm around Bingo hoppers and pray that theirs will be among the few numbers called."

Tariffs Benefit Few, at Cost to All | Daniel J. Ikenson | Cato Institute: Commentary

Tariffs Benefit Few, at Cost to All | Daniel J. Ikenson | Cato Institute: Commentary: "A steel tariff of 20 per cent, for example, might enable domestic producers, through higher prices and greater market share, to increase profits by an aggregate $100 million a year. However, the typically larger costs associated with a steel tariff are borne by a mostly unwitting public, whose incentives to lobby against the tariffs are muted by the fact that those large costs are spread across millions of consumers. These costs include: higher prices for automobiles, appliances, housing, and transportation; lost export sales on account of foreigners having fewer exchange dollars or because of trade retaliation; and forgone opportunities to grow businesses that require affordable steel."

Homeowners say loan mods led them to foreclosure - FoxNews.com

Homeowners say loan mods led them to foreclosure - FoxNews.com: "the loan modification disputes are a legacy of the federal government's rush to stem the flow of foreclosures before it had adequate plans in place.

'These policymakers said, just go out and do this and don't let us worry about the details,' he said. 'These details are now what are coming to the fore in these modification cases.'

Laurie Maggiano, policy director at the Treasury Department's Homeownership Preservation Office, said banks were encouraged to offer trial modifications based on interviews with borrowers about their incomes and expenses while they sorted out the paperwork to qualify for permanently reduced payments."

"Casco said his monthly mortgage payments to Washington Mutual Inc. went up to $2,765 when he refinanced his home in 2006 to pay for a new a meat counter at his store in the industrial Los Angeles suburb of South Gate.

Chase was in the process of acquiring Washington Mutual in January 2009 when Casco said it sent a note telling him he qualified for a lower forbearance rate. The El Salvador native sent the tax returns and business documents the bank was requesting.

His payment was reduced to $1,250, where it remained for several months until Chase told him to apply for a trial loan modification.

Again, Casco said, he sent Chase the documentation they requested. His payment rose to $2,363 in June, then returned to the forbearance rate in October.

Casco said he continued paying what he was asked until August 2010, when Chase told his family that they were $50,000 behind on their payments and put them into foreclosure."