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Richard Rahn

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SMOKESTACK-FREE BLUE SKIES

Did you ever see some old stock certificates from more than a half-century ago?

Many of them would have an engraving of a factory spewing smoke from one or more chimneys. This was meant to imply industrial might with an enterprise that employed many workers.

Now, if you drive around America or fly over the country, you rarely see any factory or power plant emitting black or gray smoke. The white plumes coming from power plants and factories are for the most part nothing more than water vapor condensing when it meets the colder air of the atmosphere.

From 1970 to 2017, the aggregate U.S. emissions of the six primary pollutants — nitric oxide, ozone, particulate matter, sulfur dioxide, carbon monoxide and lead — have declined by 73 percent. Ambient concentrations of these harmful pollutants have declined an average of 64 percent since 1990. Since 1970, real GDP increased almost 400 percent.

Each year, most of the country has fewer days with “hazardous air” and, in many places, it is now zero. Fifty years ago, many of America’s rivers and waterways were unsafe to swim in or to consume the fish from — including the Potomac.

That has all changed;

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DELETING HISTORY INSTEAD OF BEING THANKFUL FOR IT

thomas-jefferson-memorial

Thomas Jefferson Memorial, Washington DC

It would be difficult to visualize some of the great world capitals — Rome, Paris, London and Washington — without the statues and monuments celebrating the lives of political, military, religious leaders, as well as great artists, scientists, etc.

To the extent that the statues and monuments are tributes to real people, they necessarily represent flawed people because no one is perfect.

The operative question is, after a full life, was the world better or worse off as a result of the existence of any individual?

Currently, we are witnessing a movement to remove statues and monuments to historic figures because something they did or said during their lives now offends one or more people.

Last week, the City of Charlottesville, Virginia, decided to no longer mark Thomas Jefferson’s birthday as an official holiday.

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DEMOCRAT PLANS FROM FANTASYLAND

democrat-fantasyWhen we were small children, before we had learned the laws of physics and economics, we thought everything was possible. Fantasyland could be real, so we thought.

Twenty of the declared Democrat candidates for president have held their first debate which demonstrated, with the possible exceptions of Gov. John Hickenlooper and Congressman John Delaney, that they have not outgrown Fantasyland.

These same politicians also say that U.S. citizens have a “right” to free medical care. Where did this “right” come from?

Answer:  it came from Fantasyland.

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THE BIGGEST HOAX OF ALL TIME

socialism-to-destructionMankind’s penchant for hoaxes goes back at least as far as recorded history. Some hoaxes are harmless and funny, but others do great damage, including causing massive loss of life.

Among the harmless and funny was the “Naked Came the Stranger” hoax back in 1969. The book spent 13 weeks on The New York Times best-seller list. The hoax was soon revealed. The nation got a good laugh, and no harm was done.

This is in contrast to the two-year “Russian collusion hoax,” which has been very costly to the country. This hoax was to get rid of the nation’s duly elected president, by whatever means necessary. The details of who did what will be revealed by prosecutors over the next few months.

Yet even that pales in comparison to the biggest hoax of all time.

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MEDIA HOAXES AND DUE DILIGENCE

hoaxPeople are easily taken in by scientific, literary, financial and political hoaxes, particularly when they want to believe.

When we search for “truth,” we tend to rely on authority and whether information supplied by the source has been accurate in the past. Serious newspapers, magazines, journals and electronic media sources historically took pride in getting the story right. Reputations could be destroyed and markets lost when a story was shown to be wrong because of a hoax or carelessness.

Nothing illustrates the decline of serious journalism more than the fact that many of the major media, particularly CNN and MSNBC, have participated (and to some extent continue to participate) in massive hoaxes which would have been easily disproved with basic due diligence.

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PUTIN IN A BOX

Trump explaining reality to Putin

Trump explaining reality to Putin

Sensible people make sure they understand the exit strategy when making an investment. Too often, people lock themselves into investments, like timeshares, vehicle loans, real estate purchases, etc. for far longer than they wish they had. The same is also true for personal service contracts, like exclusive arrangements with agents, movie studios, sports teams, etc.

One of the beauties of democracy over other forms of government is that the voters normally “hire” (elect) the politicians for fixed and limited terms. If we are dissatisfied, we can always throw the “bums” out during the next election.

One of the many problems with dictatorships is that there is no simple way to get rid of a ruler who has trampled over basic rights and is unpopular. At the same time, the dictator also has a problem — there may be no simple way to say, “I quit” and then pick up his marbles and go home.

Dictators come in all stripes.

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HAVE NO FEAR – THE END IS NOT NEAR!

end-of-daysFor most people, particularly in the United States, things have never been better. Yet, the newspapers and airwaves are filled with stories of impending disaster.

Many of the doomsday scenarios have been around for some time but doomsday has yet to arrive.

We were told by The New York Times, The Washington Post, CNN, MSNBC, etc. that the Trump election would be an economic calamity and that we would be in major new wars by now.

It wasn’t and we’re not.  For the past three or four decades, we have been told by environmental zealots that the end of the world is near.  It isn’t, not even remotely close.

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EUROPE SLIDES INTO THE POOR HOUSE

europe-in-the-poor-houseAthens, Greece. Europe’s most significant contribution to the world economy at the moment is serving as a bad example.

Much of Western culture and law can trace its origin back to this city of 2,500 years ago. The ancient Athenians learned that democracy is fragile and can lead to bad outcomes — not that other governing systems have proved to be more successful over the long run.

One of the fatal flaws of democracy is the recurring irrationality of the people to vote themselves benefits that they are unwilling to pay for. The idea of getting something for nothing is so powerful that politicians have used the same con everywhere on the planet for thousands of years.

The end is always the same. The music stops when the cupboard is empty.  Greece is now Exhibit A in Europe, with others soon to follow.

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THE RETURN OF SLAVERY

socialism-slaveryThere are some plagues that mankind seems to be incapable of fully destroying. One of these plagues is slavery, which has existed since man moved from being a hunter-gatherer to agriculture.

By 1900, most of the “civilized” world had abolished slavery and serfdom. But then a more lethal variant emerged under the more benign names of socialism, fascism and communism.

The implementation of these ideologies resulted in governments causing the deaths of somewhere between 100 and 200 million of their own citizens in the 20th century.

Yet, here we are, three decades after the fall of the Berlin Wall, with allegedly serious American politicians calling for the re-imposition of socialism as if history had not happened.

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HOW CAN PRESIDENT TRUMP KEEP OUR ECONOMY GROWING?

keep-it-growingWill the economy grow in the next two years?

President Trump had a plan to grow the economy when he took office — cut tax rates and get rid of many counterproductive regulations. It worked. The economy grew at a 3 percent rate last year, and employment grew to the point where there were more jobs available than workers to fill them.

The world economy is slowing, particularly in Europe. This slowdown will have a negative effect on the U.S. economy as the global demand for U.S. goods and services will be lessened. The Trump administration needs a new economic game plan or growth will diminish.

Without new pro-growth policies, economic growth will wane, for the following reasons.

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CONNECTING THE DOTS OF DEEP STATE CORRUPTION

corrupt-deep-state-exposedYou may have noticed that there have been a number of people in the top ranks of the FBI and Justice Department — like Robert Mueller, James Comey and Andrew McCabe — who have had powerful jobs regardless of whether the administration is Democrat(Clinton/Obama) or Republican (Bushes).

They are put there, in part, to protect the financial interests of the Washington establishment. The U.S. government dispenses tens of billions of dollars to foreign governments and entities each year, and Washington interests receive billions from foreign countries.

President Trump was an outsider who appeared to be willing to take on the corrupt status quo; so, in the minds of those on the international gravy train, he must be eliminated. Hence, the phony Mueller Russian-collusion investigation. There are dozens of examples, but the following three are illustrative.

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THE GOOD, THE BAD, AND THE UGLY

three-states-comparison-chartLast week, there was the pitiful scene of Gov. Andrew Cuomo of New York begging President Trump to restore a tax provision which unfairly benefitted New Yorkers.

It seems that many high-income New Yorkers have been moving their tax homes to Florida, undermining the New York tax base.

Those who live in New York City may be paying state and local income tax rates, in addition to the federal tax, of over 12 percent, giving some an overall tax burden of approximately 50 percent.

Florida imposes no state and local income taxes in addition to the federal income tax — yet Florida is booming, with a budget surplus, while New York is mired in debt. Only 50 years ago, New York had four times the population of Florida, and now Florida is larger than New York.

New York was the great “Empire State” for well over a century.  It’s flipped from being the Good state to the Bad, replaced by Florida. As for Virginia…

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THE REAL GLOBAL CRISIS IS DEBT, NOT WARMING

the-real-global-crisis“Mankind is doomed!” Headline writers have been writing that headline since the invention of printing — and someday it may come about.

For about four decades, that headline has most often been applied to the threat of global warming. Every couple of years, some notable comes out with a pronouncement that the governments of the world only have 5 or 10 years to make fundamental changes or we are all toast. The deadlines come and go, without action, and most people carry on with life as they always have.

Today, a number of Democrat politicians are telling us we have only 12 years to get rid of airplanes, farting cows and other hazards. Al Gore, of course, endorsed the policy proposals. Let’s thank them for sharing.

Meanwhile, there is a real crisis that is much more likely to adversely affect most people’s lives much sooner and with greater consequences than climate change, and that is the rise in government debt as a percentage of GDP in many of the major countries.

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WISDOM AND FOOLISHNESS, CAPITALISM AND SOCIALISM

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way…”
These are the first words of Charles Dickens’ A Tale of Two Cities.  They refer to the era of the French Revolution a little over two centuries ago, but they could equally apply to today.

Times have never been better for most Americans. Incomes are at a record high. Jobs are plentiful. People are living longer and better due to both medical advances and increased prosperity.

Yet despite the better life that the free-market capitalist system has enabled for billions of people, there are increased numbers of political voices and their media allies demanding socialism. Given the centuries of failure and mayhem resulting from socialism, for all to see, the new socialists are treated as if their ideas are sensible, rather than ludicrous.

Why would people choose foolishness over wisdom?  Are they stupid, ignorant, mean-spirited, or all three?

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WHO IS PAYING ROBERT MUELLER’S BILLS AND FOR WHAT REASON?

no-spend-limit-muellerHow many agents should a law enforcement organization send to arrest a highly visible, older, non-violent man, who is not a flight risk, for allegedly lying to Congress — particularly, when the individual has appeared numerous times on national TV saying he expects to be arrested and was obviously making no attempt to avoid law enforcement officials?

Yet, last week, special counsel Robert Mueller sent 29 highly armed agents in 17 vehicles to Roger Stone’s home in Ft. Lauderdale, Florida, in a predawn raid to arrest him. Such action smacks of the Gestapo or the KGB.

CNN had been obviously tipped off by the Mueller people so they were there to film the raid. All of this was not only highly inappropriate, but a huge waste of taxpayer money.

One of the many problems with the special counsel set up is that Mr. Mueller operates without a specified budget. He merely draws upon Department of Justice and FBI resources, including personnel, as he sees fit.  Who is authorizing this and why?

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WHY DO DEMOCRATS ROMANTICIZE SOCIALIST SLAVERY?

capitalism-vs-socialism-ownershipWho should pay for your health care? For your education? For your retirement?

“Socialism,” we are told by the pollsters, is gaining in popularity at least the romanticized versions of it. It would be a world without poverty where people have everything they need, and all are equal.

Advocates for socialism have a problem naming the specific person who is supposed to pay their medical, school, and food and shelter bills. They often say the “rich” — as if there were millions of random rich people floating around just waiting to have their wealth plucked by some student or snowflake.

Jeff Bezos is the world’s richest man (at least until his divorce is finalized), and some claim that he is not a particularly nice person — but that is not illegal. Alexandria Ocasio-Cortez and many other well-known Democrats want to make Mr. Bezos their slave — despite the fact that he supports them with his Washington Post.

It's critically important to state that people such as Ms. Ocasio-Cortez are advocates of slavery, nothing less.

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GENOCIDE, SLAVERY, IMMIGRATION, AND UNEDUCATED LIBERALS

tired-americansMy New Year’s wish for 2019 is for more of my fellow Americans and others to learn some basic history and try to get a grip on reality.

Such as someone who writes for The New York Times under the name of Michelle Alexander, who wrote a column published December 21, “None of Us Deserve Citizenship

One of her choice sentences: “But for slavery, genocide, and colonization, we would not be the wealthiest, most powerful nation in the world — in fact, our nation would not even exist.” Hmm.

Both North and South America were colonized by European countries that practiced slavery, and the United States was not the last country in the Americas to abolish slavery.  That would be Brazil in 1888.

Ms. Alexander fails to explain to us why the United States became the wealthiest country, when the “genocide” she blames occurred mostly before the English colonization (that is, prior to the mid-1600s) and that slavery was common all through the Americas until the mid-1800s, not long before or after the United States abolished it.

She fails because she failed to get a decent education.

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BUREAUCRATS, FROGS, AND FREEDOM

tax-liberty-income-chart Zurich, Switzerland.  What do the Paris riots, Brexit, the election of Donald Trump, the dusky gopher frog, and Peter Wallison’s new book “Judicial Fortitude” all have in common?

They are all signs that the peasants have had it with the bureaucratic state and the smug elitists who have been ruling the globe. Despite never-ending attempts to quash it, the basic human desire for liberty keeps re-emerging.

Kings and assorted tyrants have attempted to rule their fellow man from the beginning of time. Democracy was created as a way of allowing the people to express their grievances and obtain change without violence. Constitutional republics, such as the United States and Switzerland, were created as a way of restraining government’s ability to diminish the liberties of the people.

The forces of control retaliated by empowering bureaucracies to ignore the will of the people.  Yet they seem impossible to stop smothering our freedom, much less get rid of them.  How do we do this?  There is a way.

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THE DUMB COURTSHIP OF AMAZON

welcome-amazonWould you vote for a politician who promised to both increase traffic congestion and increase your taxes — and yes, I wrote “increase.”

For those of us who live in Northern Virginia that is precisely what happened last week, when our state and local government officials announced with considerable fanfare that they had bribed Amazon — with billions of taxpayer money — to build one of its new headquarters in Virginia.

With great pride, they also told us that they paid a much smaller bribe to Amazon per promised new job than did the New York governor and mayor. (Virginia Motto: “We are not as dumb as New Yorkers.”)

New York politicians — notably Gov. Andrew Cuomo and Mayor Bill de Blasio — are even worse than the Virginians. They have not only paid more per promised job, but are giving Amazon benefits not available to existing businesses in New York. How is that for fairness?

No wonder New Yorkers are protesting vociferously.  How dumb is it to give bribes to businesses if they move into the state, which are financed by higher taxes on the workers and businesses that already live there?

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A SHORTER PATH TO PROSPERITY THAN TO ILLEGALLY INVADE OUR COUNTRY

success-chart-of-countriesAs I write this, there are so-called “caravans” of several thousand people coming north, primarily from El Salvador, Guatemala and Honduras with the intent of illegally invading the United States.

Despite 200 years of independence, these three countries never developed the institutions and policies to give them prosperity and liberty. They are functioning democracies, but with considerable corruption.

The United States, the World Bank, the Inter-American Development Bank, and other foreign and multilateral institutions have provided considerable foreign aid to these countries for decades, with the goal of making them sufficiently prosperous so their citizens would no longer desire to flee to the United States.

These programs have not only failed but many times actually led to more corruption.

There now appears to be a way out that is not dependent on enlightened and competent leadership or traditional foreign aid programs.

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GOVERNMENT BULLIES ARE DEDICATED TO DESTROYING OUR FREEDOM

ocean-polluting-countries

California is putting people in jail for using plastic straws because they pollute the ocean

The modern idea of individual liberty and the right to own and control property is of very recent vintage.

It was not until England’s Glorious Revolution in 1688 that as many as 12 percent of the English population actually had voting rights and clear title to property.

And it was not until the passage of the American Constitution in 1789 that property and voting rights were extended to all males (except for slaves) — which was unique for the world at the time.

Democracy, liberty and property rights expanded in much of the rest of the world from the two centuries from the birth of the United States through the collapse of the Soviet Union in 1991.

Unfortunately, there has been some retrogression in liberty and property rights in the past two decades as a new class of bullies has emerged in many parts of the world and the United States.

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PROSPERITY, THE RULE OF LAW, AND MR. MUELLER

Will Chinaits-mueller-time overtake the United States as the world’s largest economy?

Perhaps, because it has about four times as many people as the United States. But U.S. per capita income will still be far greater unless China can institute a rule of law equal to that of the rich nations – or the rule of law continues to weaken in the United States.

The level of economic prosperity is closely tied to the rule of law.

In June, the World Justice Project (WSJ) issued its 2017-2018 Rule of Law Index. There are 113 countries listed.  The United States ranks #19, while China ranks #75.

The United States is no longer in the top 10 countries when it comes to the rule of law. The two main reasons are the administrative state – and corruption in the U.S. Justice Department and the FBI.   Of which the Mueller investigation is Exhibit A.

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WHY WE SHOULD EAT ENDANGERED SPECIES

gods-creatures-signYellowstone, Wyoming. Why are bison no longer endangered?

Yes, the park rangers here insist on calling them “bison” instead of buffalo.  They don’t appreciate being asked if Bill Cody should be renamed Bison Bill.

There are an estimated 5,000 bison in Yellowstone National Park owned by the government. An estimated almost 100 times as many, from 300,000 to 500,000, are in herds that are privately owned. A century ago, the bison was almost extinct in the United States, and only a few hundred were alive.

Bison, like chickens and cattle, are now abundant because private owners are allowed to own them and sell the meat for food, as well as other parts of the animals. That is, the owners have a strong economic incentive to raise many healthy animals.

The Trump administration has proposed reforms to the Endangered Species Act (ESA), which predictably has caused outrage among some self-identified environmentalists. Winding its way through the courts is The Case of the Invisible Frog — aka, the “dusky gopher frog.”

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THE SECOND BEST OPTION FOR DESTRUCTIVE BUREAUCRACIES

bureaucracy-status-quoThere are a number of international organizations and U.S. government agencies that should be abolished because they both destroy wealth and liberty.

Officials of the Trump administration understand the problem but do not have the ability to take the corrective measures because of the lack of political will in Congress to do the right thing.

Given the situation, the administration has opted for the second-best choice, and that is to select highly experienced and qualified individuals to lead reform efforts in the organizations and agencies they have been appointed to head.

Here are four examples – and note, all four of the President’s appointees are women.

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ARE US ENVIRONMENTALISTS BEING BRIBED BY CHINA AND RUSSIA TO SUPPORT THEIR POLLUTION?

the-dealTwo of the world’s biggest polluters are China and Russia.

You would think that U.S. environmental groups would be major critics of these countries; yet, the reality is some take money from entities controlled by these governments and disseminate their propaganda.

Over the last several years, many articles have been written (including mine on TTP here, here, and here) documenting how Russian groups funneled money into U.S. environmental organizations, which, in turn, was used to oppose fracking in the U.S. and the construction of new pipelines.

The environmental groups used the Russian monies to lobby against U.S. consumers and support their Democrat allies.

This past week (6/05), the Chairman of the House Committee on Natural Resources and Chairman of the Subcommittee on Oversight and Investigations wrote a six-page letter to the president of a major environmental group — the Natural Resources Defense Council (NRDC) — asking for information regarding its relationship with the Chinese government.

It looks like the Chinese are copying the Russians with bribes to environmentalists to support their pollution.

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IMAGINE A WORLD WITHOUT GOVERNMENT MONOPOLY MONEY

monopoly-moneyThe problems with the existing government monopoly monetary systems are well known to most economists and financial markets experts; hence, the quest for alternatives to government monies in the search for stable money substitutes.

Cryptocurrencies, using tools like blockchains, appear to many to hold the greatest promise. The noted economist F.A. Hayek crisply explained why nongovernment money, such as those backed by a basket of privately held commodities, is likely to be superior in his landmark book, “Denationalization of Money,” published in 1976.

Mr. Hayek wrote long before the Internet, blockchains and highly secure, easy-to-use encryption. With the new technologies, his arguments have increasingly become a practical reality.

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OUR ENEMIES ARE ECONOMIC PYGMIES AND OUR PRESIDENT KNOWS IT

rrchart-051518The GDP of North Korea is less than half that of Fairfax County, Virginia, and only a little more than half of Vermont’s, which has less than 3 percent of the population of North Korea.

Iran has a GDP smaller than either Virginia (despite having 10 times the population) or Belgium (with seven times the population).

Russia has a GDP which is smaller than that of Italy, Texas or South Korea. The GDP of California is more than twice that of Russia, even though the Russian population is three-and-a-half times that of California.

The Trump administration has made a bet that it can reach agreements with each of these three countries (North Korea, Iran and Russia) to reduce military tensions because it understands that it is dealing with economic pygmies, whose economies are going nowhere.

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THE BEATLES WERE RIGHT – IT’S GETTING BETTER ALL THE TIME

In 1914, just over a century ago, the average American worker had to work about three hours to buy a bushel of wheat. Today it takes five minutes.

The real (inflation-adjusted) price of aluminum is now about one-fifth of what it was in 1914. These ongoing, real price declines are characteristic of almost every agricultural and industrial commodity.  And that is going to now accelerate, because:

The Trump administration has been undertaking a massive deregulation effort in order to get rid of regulations that are counterproductive and do not meet reasonable cost-benefit tests. This will reduce the direct regulatory expenses made by government but will cause a far larger reduction in private business and personal expenses made to support regulations.

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WILL THE MEDIA EVER STOP SELLING EMOTION RATHER THAN ACCURACY?

Q: Which is the hunting rifle and which is the assault weapon? A: Both are both, the only difference is cosmetic

Q: Which is the hunting rifle and which is the assault weapon? A: Both are both, the only difference is cosmetic

Fuzzy and fact-free thinking are too kind as definitions for much of what has passed as public policy analysis this past week. The discussions regarding the Parkland school shooting, the Russian political investigation, and the immigration debate triply illustrate the problem.

The FBI, the local sheriff’s office, the local school officials and the local mental health officials all had been made aware that the school shooter was likely to do exactly what he did.

The people in these government agencies failed to do their jobs. Rather than discuss what punishment should be handed out to each of those who failed in their responsibilities, most of the media’s and others’ attention was incoherently directed at attacking the NRA and “assault weapons.”

The so-called “assault weapons” normally are painted black and have a pistol grip as part of their design but are no more or less lethal than any other semiautomatic rifles — which have been standard hunting firearms for decades.

Banning “assault weapons,” as has been shown by past bans, is likely to do nothing to prevent mass shootings. Putting government officials in jail for not fulfilling their responsibilities is likely to be far more effective.

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WHY GOVERNMENT WRONGDOING IS NEVER PUNISHED LIKE IN PRIVATE BUSINESS

govt-wrong-never-punishedThis past week, 17 people were killed by a high-school shooter after the FBI failed to act on recent explicit warning messages. It could be argued that the FBI officials who failed to responsibly respond to the warnings may also be guilty of negligent homicide.

If the FBI were a private organization, the families of the Florida high-school victims would be able to sue both the organization and the individuals who failed to do their jobs for wrongful death.

If the Justice Department and FBI were public companies, the SEC would likely prohibit them from investigating themselves, as is now happening.  Neither the families nor the SEC can do this.  Why?

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MEDIA BIAS VS. REALITY

reality-bats-last

Why is it that those who have been right in the past are often ignored, while great attention is paid to those who have been wrong?

Many “politically correct” forecasters’ words are accepted as gospel by the media despite dismal records. New York Times economic columnist Paul Krugman, who has a long record of gross error, said immediately after Donald Trump won the presidency a year ago: “If the question is when markets will recover, a first-pass answer is never.”

His forecast was off by a mere $5 trillion (the rise in the value of the market since Election Day), and those who followed his advice are poorer — but Mr. Krugman still has his job, because he works for a fake news outlet rather than a profit-making investment group.

The debate about climate change, the minimum wage and the proposals for tax reform illustrate why so many get it wrong.  Yet rather than admit error, many forecasters and their media allies double down instead of lauding those who were closer to the mark.  Why do you think?

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WE CANNOT AFFORD NOT TO CUT TAXES

can-we-afford-tax-cutThe folks in Washington have a knack for almost always asking the wrong question, and then coming up with an answer that makes things worse.

The current debate about tax reform is a prime example.

Many Democrat critics, some Republican critics (mainly from the conservative side), and many in the media argue that we cannot “afford” a tax cut.

In reality, we cannot afford not to cut tax rates.  Here’s why.

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THERE REALLY IS AT LEAST ONE FREE LUNCH

With one exception, Dr. Friedman

With one exception, Dr. Friedman

There are a few actions one can take that have no downside, only an upside.

Economists teach students, “There is no free lunch,” meaning an action that might be beneficial to some may well be harmful to others. An example would be an increase in the minimum wage, which is beneficial to those receiving it, but harmful to all of those who do not get jobs or are laid off because employers either cannot or are unwilling for competitive reasons to pay the mandated higher wage.

Yet there are “free lunches” that result from merely stopping something harmful — e.g., eating too much sugar. There are many harmful government policies, such as regulations that have more costs than benefits. Thus, merely eliminating them will cause a net gain.

There are a number of taxes with rates above both the maximum revenue-raising rate and the growth-maximizing rate, notably the tax on long-term capital gains.  Which is why President Trump’s tax reform features it.

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DRAINING THE GLOBAL SWAMP

the-global-swampAre government-created institutions so out of control they’ve gone rogue?  For the truth is that many hide scandalous behavior behind noble causes.

Government institutions become particularly dangerous when they have police powers or sufficient funds that they can spend to threaten or intimidate critics.

They often create walls to protect their own, including members of the media who receive favors in one form or another by looking the other way or attacking those who have the audacity to raise legitimate concerns.

These corrupt members of the governing class not only reside in Washington, but in Paris, Brussels, Moscow, Beijing and numerous other places, from where they collude globally.  It’s a Global Swamp that has to be drained.

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IRONY – FORMER COMMUNIST COUNTRIES LEAD US IN ECONOMIC FREEDOM

economicfreedom-growth-chart-101717Once again, there is more evidence that economic freedom leads to success. Many of the former communist countries of Central and Eastern Europe and the Soviet Union have made enormous economic progress from the time they became free almost three decades ago.

The first few years after the collapse of communism (1989-92) were very difficult as the countries struggled to make the transition to a capitalist free-market economy, which many had largely achieved by 1995.

The irony is there are some lessons for the United States from some of the successes of the former communist countries.  Here they are.

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WHY ARE TRUMP’S TAX REFORM CRITICS STUCK ON STUPID?

tax-cutsWhat do you call someone who keeps making the same mistake over and over and fails to learn from others who have made a similar mistake?

If one doesn’t know history and basic math, and the fact that people adjust their behavior on the basis of incentives, then one should not prove ignorance by commenting on the likely effects of tax changes.

Much of commentary on the President’s proposed tax cut legislation leads one to think that 1980s never happened, and the basic laws of economics have been repealed. It should be easy to understand that a percentage change in a tax rate and a percentage change in tax revenue are not the same thing.

Many in the media appear to be know-nothings either because they are or they have a political agenda.  Here’s why they – and the Congressional Budget Office – are stuck on stupid.

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RESCUING PUERTO RICO

rescuing-puerto-ricoThe disastrous hurricanes that struck Puerto Rico might provide the excuse for the necessary, fundamental reform on the island.

Puerto Rico has spent most of the past 12 years in recession, leading to its current bankruptcy. The bankruptcy was caused by gross fiscal mismanagement over the last few decades.

Only during the term of Gov. Luis Fortuno (2009-13) was any serious attempt to right the ship, but Mr. Fortuno was ultimately defeated by the government unions.

Puerto Rico now has a federally appointed oversight board to try to sort out the mess. The task was difficult before the latest hurricane, but now it will require even more radical measures.  Here’s what’s needed to rescue Puerto Rico.

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BERNIE SANDERS HATES FREEDOM AND LOVES TYRANNY

Ideological Twins

Ideological Twins

It is a fair bet that Sen. Bernie Sanders (and most of his followers), unlike tens of millions of othes, never read George Orwell’s “Animal Farm” or Friedrich von Hayek’s “The Road to Serfdom.”

Why do so many embrace a system — socialism — that has always failed, whether it was a form of state socialism or the various utopian communities started in the United States and Europe over the last couple of hundred years?

We praise the benign socialism that is practiced within the family, churches, some social or civic groups where the members look out for each other in case of need. It works as long as it is voluntary and members are free to leave.

In contrast, government socialism is coercive and denies the fundamental right to opt out, no matter how repressive or incompetent it becomes.  This is what Bernie Sanders wants.  Let’s review the steps by which he and his ilk are taking to achieve it.

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PRUDENCE AND HURRICANES

chart-of-death-from-major-hurricanesHurricanes Harvey and Irma were as powerful as the big South Florida hurricanes of 1926, 1928, and 1935, but the death toll was very small compared to the earlier hurricanes in the area, even though the population is now more than 10 times the size.

The Great Galveston hurricane of 1900 is estimated to have cost 6,000 to 12,000 lives. The hurricanes that have hit the U.S. in the last 50 years have resulted in relatively few lives lost, with the exception of Hurricane Katrina where an estimated 1,833 died.

The reason so few people die now is the better forecasting, the development of weather satellites, and much better infrastructure. The Katrina disaster was not the fault of the weather forecasters but the fault of state and local government leaders.

Since the end of the last ice age about 8,000 years ago, sea levels have been slowly rising at about 1/8 of an inch or 0.3 centimeters per year (i.e., a foot every 120 years). The rise in sea levels has been slow enough that it has been easy for mankind to adapt. Most buildings and infrastructure are rebuilt every 30 to 70 years, so building the new structures higher is done as a matter of course.

Despite the alarmism coming from some, there is no evidence that sea levels are rising faster than the historic rate – nor has the Arctic ice cap melted, nor has the Earth’s temperature risen at the rate forecasted by virtually all of the major climate models.

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THE PROBLEM OF PAUL RYAN

paul-ryanHave you ever known someone who was exceptionally smart, very personable and highly accomplished, but was not particularly good at managing a large number of independently minded people? I have. His name is Paul Ryan.

President Trump, who is not as nice as Mr. Ryan but a get-it-done fellow, made a deal with the Democrats, which would have never been necessary if Mr. Ryan and Mr. McConnell had done their jobs.

Students, members of the military, and workers in the private sector are usually penalized, or worse, for not meeting critical deadlines. Why should members of Congress and their leaders get a free pass?

Both Mr. Ryan and Mr. McConnell are too beholden to the traditional way of doing things, unlike their opponents.

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