Sunday, October 31, 2010

Peter Schiff on CNBC Fast Money 10/25/10

“We are the world's biggest debtor nation and we're giving economic advice to the creditor nations… It's like an 'F' student giving advice to honors students on how to improve their grades.”

Peter Schiff gives all kinds of important economic analysis. Check out his columns and his brand new radio show and archived internet broadcasts!

Relief for Young Entrepreneurs

Remember my "Killing Kid Start Ups" post? Well, there is good news for young entrepreneurs. According to Child Labor Bulletin 102:
Young entrepreneurs who cut their neighbor’s lawn or perform babysitting on a casual basis for farmers are not covered under the FLSA.

Thank God!

Now if we could only get rid of those "compulsory school attendance" laws! (Big emphasis on compulsory) Hey, at least they don't pretend to not be authoritarian.

Vindicated! How Ron Paul's Life Proves My Point

No later than two days--TWO DAYS--after I posted my last blog, which is the latest in my Libertarian Views of Law series, I came along a passage in End the FED that proves my point about the unnecessariness of regulation in starting and running a business:

"My first job, and that of my brothers, was to assist my dad in a small dairy run out of our basement. Even at the age of five, the incentive system was instilled in me. Our job was to make sure all the glass bottles, which had been hand washed, were clean. It was bad for business if a customer saw a black spot in the bottom of a milk bottle. For each dirty bottle we found as we removed them from the conveyor belt and placed them into the wooden case, we were rewarded a penny. It didn't take long for us to know when a certain uncle was washing the bottles, since more dirty bottles were found on those days." End the Fed, Chapter 4 "My Intellectual Influences", p.33-34

Paul's anecdote touches on topics that I didn't think about at the time, and it agrees with various points I made in my Suzy Q argument. "It was bad for business if a customer saw a black spot" touches on the idea that cleanliness is necessary to expect transactions to occur. Dirtiness, in contrast, is repugnant to many customers and is an instant transaction-stopper! In fact, no transaction would come into existence in the first place.

Notice that this idea is also an extension, or better yet application, of the Golden Rule. Doing unto others in this case would be preparing a clean home (as in the Suzy Q story) or having spotless milk bottles. Who would really think they can sell milk with grime on the sides, spots in the inside, and cracks near the lid?

Also noteworthy is the fact that this business was run out of their basement. There is a surprising connection between Suzy Q's hairstyling business run out of her home and the Paul family's business run out their home. It is bootstrap capitalism: "a person or group of persons collaborated and started a business and within years it was successful."

The current laws under the U.S. Fair Labor Act actually allows "work in businesses owned by their parents (except in mining, manufacturing or hazardous jobs)", so the young Ron Paul and our young Suzy Q would not be in jeopardy of losing their right to earn a living. But many other kids are in jeopardy of, if not prohibited from, losing their right to earn a living. The current law "sets 14 as the minimum age for most non-agricultural work."

This also prompts me to admit that my title "Why You Can't Legally Braid Your Neighbor's Hair" is slightly a misnomer, slightly. A mother can braid her child's hair; a child can braid her friend's hair; but operate a Hair Salon out of your home? Oh, you can't do that. That would be against the law!

Still, what if the only "non-agricultural work" is the only work in town? Should kids under 14 have to be deprived of their right to work? Furthermore, what if they aren't skilled at agricultural work, but very skilled at "non-agricultural work" should they be denied the right to make money doing what they are skilled at? And how can they learn?

Paul touches on something that I was aware of but failed to illustrate: working at age five gave him incentive; and I'd add that working young gives a sense of dignity as well. How can kids get work experience needed for greater, more skill-specific jobs, if they can't even get experience in less specialized jobs? They are legally barred from doing so.

The funny thing is that I was just conjecturing about the libertarian/biblical application of ethics when I wrote the previous post. I never actually had any real examples. In fact, I didn't even read the laws (until today). Then I came across the passage in "End the Fed", and I jumped (not literally) when I saw it.

From these last few Libertarian Views of Law posts, the observant reader will be able to make valid inferences about the law, and the humorous paternalism guiding them all: the grocery store laws, the agricultural laws, and every other law enforced by the State.

Wednesday, October 27, 2010

Libertarian Views of the Law: A response to the Hair Post

The Right to Earn A Living, by Timothy Sandefur, Released September 2010

This is a response to a comment on September 16th's Libertarian Views of Law, "Why You Can't Legally Braid Your Neighbor's Hair"

Someone left the following comment:

I would take a middle of the road approach.
The above example was definitely an example of "over regulation". That being said, I am not in favor of no regulation.

In this case, I believe that if the business was
a) conducted in a safe and sanitary manner
b) incorporated or otherwise legally formed in that jurisdiction
c) workers were legal citizens being paid employed legally and paid legally

That where the regulation should stop.
Technique, style, etc. do not need to be regulated.

What this person didn't say was whether businesses that don't comply with these regulations should be allowed to come into existence or not. I will assume they meant to disallow the business to come into existence without compliance to these regulations. Let me offer this scenario and show why the business owner's best interests will lend to self-regulation of the business:

The Story of Little Suzy Que

Little Suzy Que was down on her luck. One day, she decided she wanted to earn a living doing her friends hair. She was only in the 7th grade when she wanted to get started on her new hairstyling endeavors.

It is day one and she anticipates her first customer.

The first customer arrives at Suzy's home mid-afternoon. Suzy, being the great customer service provider she is, and wanting her customer to return for more business, greets her.

Lana, the first customer, looks around Suzy's home. It is clean, sanitary, and even has the smell of incense in the air. Suzy knew that Lana is a picky person and an uber-germophobe, so she kept the place clean in preparation for Lana. If she didn't Lana wouldn't have entered Suzy's home and Suzy would have lost a sale. Suzy's best interests to gain customers kept her workplace tidy and organized; and kept business conducted in a safe and sanitary manner.

The Moral of the Story

Because Suzy wanted customers, she had to have the type of place that attracted customers. She couldn't have a hell-hole for a salon.

This not only applies to hair salons, it applies to the food industry as well.

For instance, let's imagine how McDonald's would have had to have act in its earlier stages to develop its initial customer base. Well, since it was a new restaurant, it had to be clean. It couldn't not be clean--say have roaches and mice scurrying around--because that would be unattractive to customers (who are quite the clean freaks); they would lose sales every time from someone who would otherwise eat there if it were clean. In order to retain customers, Mickey D's had to be clean and it had to serve good food (in other words, food that people want).

A possible objection could be that customers can see the immediate dining area, but they can't see behind the counter, including all those areas where the food is being made. Well, once again, I think, the problem is solved by the manager's, workers', and cooks' self-interest.

If the place is unsanitary, workers may be fired for not following their own-internal regulations and keeping their stations clean and managers would lose business if people are sick. (If customers do become sick because of the food, then I would not discourage a lawsuit.) The ultimate price to pay for their unscrupulousness is business failure.

Another possible objection could be "what if they don't have any internal regulations?" Well, then surely a lawless business would not last long. It would possibly put itself out of business from all the nausea-heartburn-indigestion-upset-stomach-diarrhea-having-Pepto-Bismol-needing customers filing lawsuits.

The next objection I can think of, at this point, is that there needs to be a regulation pressing for them to prevent these people from becoming sick somehow, which is just a rehashing of both a) and b) above. All I can say to that is, what if the company is allowed to come into existence and one uneventful day they accidentally get someone sick? The company can investigate the causes and change their behavior (which would be pressing since things like this are easily leaked to local media outlets within hours). (In light of this, how would someone prevent a business from coming into existence anyway? Cooking tests? Licenses? The licenses question is answered by the word-of-mouth / competency answer that was whole point of the original hair post. We have made a complete circle.)

All of this is to say that people operating within their best interests are inclined to provide good quality services. No regulator needs to tell them that if they are serving out of a hell hole they need to fix the place up. No self-respecting customer would go there. If they go there, then they aren't really all that self-respecting.

"But shouldn't we protect people from their own stupidity if they decide to eat there?" Well, not exactly. We deprive them of the experience to learn from their mistakes - they aren't learning to be scrupulous, aware citizens when we prevent them from shopping at a certain establishment.


There a plenty of things that people do without licenses that can be done for money. If a college student wants to cut hair, or braid hair, or cook food, to maintain himself or herself during his or her college years, shouldn't he or she be able to do so? (To push this logic to the extreme, would we suggest putting hair salons out of business just because we decide to allow mothers to style their daughter's hair? Or would we not allow people to cook for their families if they didn't have a license?)

People who want licenses for everything really don't want to put people out of work, they just want confidence that a person can effectively do the work they were hired to do. But don't block a job from coming into existence simply because they don't have a license.

Find out how in the tentatively-titled (and yet to be published) "The Heart of the Matter: Why You Have a Problem with Human Nature (and not with Capitalism).

George Reisman: A Free-Market Program for Recovery

In November of 2009, George Reisman gave this speech that articulated how we can get out of this current mess. I have watched this speech three times since then; the main reason is because, well, I fell asleep each time. Mr. Reisman sounds a lot like Jimminy Cricket, or at least some soothing narrator you would hear in an old Disney film. And although this speech is only 41 minutes, about four minutes shorter than a university lecture, the speaker is boring enough to put you to sleep.

Nevertheless, it is an important speech. And just like how we may have that one professor who puts us to sleep, it is during those times when we are falling asleep in class that the professor may be saying some of the most important things.

Listen to the professor.

And on a blog named after him, you can read this entire speech. I'd recommend, to stay awake, following the above video and reading the speech at the same time.

Try it out! You might learn something.

Sunday, October 24, 2010

Chris Hedges on the New Atheism

Excerpted from Chris Hedges book on "The New Atheism":

"There is nothing in human nature or human history to support the idea that we are morally advancing as a species or that we will overcome the flaws of human nature. We progress technologically and scientifically, but not morally. We use the newest instruments of technological and scientific progress to create more efficient forms of killing, repression, economic exploitation and to accelerate environmental degredation. There is a good side and a bad side from human progress. We are not advancing towards a glorious utopia."

~Chris Hedges, When Atheism Becomes Religion: America's New Fundamentalists

Douglas Wilson on Secularism and the Cult of American Exceptionalism

In "The Machete of Curiousity" the Proprietor metes out his views of Christian Government (Mere Christendom), and eludicates his views of Radical Islam, Secularism, and American Exceptionalism.

The paragraphs on Islam are agreeable, especially when he recognizes that Islam is forceful mainly because it recognizes itself as vehicle for administering and enforcing truth claims, whereas Christians have bought into the myth of religious neutrality. The "Separation of Church and State" crowd will definitely be on defense with this one.

Oh, and the current theo-political pulpit that American exceptionalists preach from are completely recognized as such ("quasi-sacramental" "blasphemous and silly").

My favorite passage from this post is excerpted below:

Secularism refers to the idea, popular for the last few centuries, that it is in fact possible for nations to be religiously neutral. This impressive trick is managed by having everyone pretend that secularism does not bring with it its very own set of ultimate commitments. But it does bring them, and so secularism has presented us with its very own salvation narrative, in which story the Enlightened One arose to deliver us all from that sectarian strife and violence. The horse and rider were thrown into the sea, and this is why you can't put that Christmas tree up in the county courthouse.

American exceptionalism is the idea that America is a more of a creed than a nation. This kind of American exceptionalism makes a certain kind of civic religion possible, a quasi-sacramental approach which all consistent Christians reject as, in equal turns, blasphemous and silly. American exceptionalism in this sense is currently the high church form of secularism.

Looks like Douglas wants nothing less than the fall of the high church of humanism.

Ron Paul On D.L. Hughley Breaks The News 03/07/09

As I was reading the course description for History 575 (The Great Centralizer: Lincoln and the Growth of Statism) it reminded of the fact that Abraham Lincoln "ignored how most of the rest of the world ended slavery peacefully." As Ron Paul reminds us in the above video, instead of fighting the civil war...well...I'll just let Ron tell you.

Here is part of the transcript, excerpted from
D.L. Hugley: So you were against George Bush’s big spending too?

Ron Paul: Oh, absolutely. And certainly I was against his foreign policy and his violation of personal civil liberties. The privacy that he was invading and the secrecy of government… I didn’t like any of that. I am sort of an old-fashioned conservative that believes in the constitution.

And here the other part that I thoroughly enjoyed:

D.L. Hugley: Ron, you are too human to be a Republican. Now, I was on Bill Maher about a year and a half ago or so, and you came on by satellite, and you were explaining about the Civil War and how it didn’t need to be fought. And I was at first like, ‘Is he saying that it didn’t need to be fought?’ But when you explained it to me, I thought it was one of the most pragmatic, reasonable things I have ever heard a politician say.

Ron Paul: Well, you know the other nations in the West that had slavery all got rid of slavery without a civil war. The motivation behind the Civil War had more to do than just the slavery issue. So we lost 600,000 Americans and there is lot of residual, probably some left over today. There is still residual. So you could have, with a small fraction of the money and no deaths, just bought the slaves, you know, and freed the slaves. That’s what Britain and some other nations did and that just makes a lot more sense than fighting a war and killing each other. I know I don’t like this war as a solution to our problems.

Friday, October 22, 2010

Black Conservatives Blast Liberal Policies

I ran into this video accidentally. I didn't type "black conservatives" in the search engine, or even "Al Sharpton" as the title of the video may suggest. I found it here.


This young lady took a stand for what she believed in: rights for the unborn (which is not, she argues, absurd). She also believes that Democrats are responsible for the destruction of the black community for many years. It was just yesterday when I was thinking about the topic of African-Americans and their virtual allegiance to the Democratic Party--and especially Barack Obama.

Yes, assuming what the woman said is true, how is it that the conditions of black folk aren't any better off than before, even after all these years of being run by Democrats?

How come before the New Deal in the 1930's and the arrival of the Welfare State black folk were better off financially?

By the way...

...if you think that libertarianism necessitates a commitment to the pro-choice position (the Ayn Rand types) think again. There are those who believe that protection of the unborn is philosophically consistent with libertarianism. And no, they aren't all Christians either.

Thursday, October 21, 2010

Peter Schiff on Fox Business 10.14.10

Theology Digest

A friend of mine is the Associate Editor under his Bishop and writes an article for each issue.

Empirical Case against Stimulus

The interesting thing about this debate--and indeed all debates recently--is that two sides can be facing off against each other in what seems like an everlasting shouting match; two opponents ardently and consistently square off against each other in seemingly perennial disagreement.

For example, today on Hardball with Chris Matthews Pennsylvania Governor Ed Rendell, will shout "the stimulus is working"(to be fair, Rendell is a very nice fellow, and he speaks enthusiastically and passionately, although mistakenly, about the stimulus. He was not, as I sarcastically put it, "shouting"); on the other side a Republican will shout "the stimulus is not working."

Both parties usually go on to give support for their arguments, as Rendell does within the first 30 seconds of the above video.

And while a Republican--or any third or fourth party--is no where to be found but in the audience, we can imagine the argument they will give: the stimulus has yet to bring unemployment down; they just increased the federal deficit, etc.

Which one is right? They are two contradictory claims.

The reason of a post of this nature is to (1) ask why are people coming up with different conclusions with the same data and (2) how are people reasoning to come to these conclusions--if there is any difference between the two questions.

In a recent essay, Robert P. Murphy takes on Paul Krugman. He almost sounds--dare I say it--Republican. Whatever he sounds like, he speaks like a true free-market economist (or "Anti-Keynesian"):

Do you notice the pattern? The anti-Keynesians point to actual success stories as evidence of the potency of their policies. The Keynesians, in contrast, point to awful economies and claim that they'd be even worse were it not for the Keynesian "medicine."

Ok, so this isn't my best post. It's 1:28 AM and I merely wrote all that because I wanted you to read the rest of Murphy's essay. It's much more well written than this post. Ok, ok, ok. So all I really wanted you to do is see how people reason. (I know, why didn't I just say that in the first place.)

Peter Schiff: Markets, China rate hike, gold, Geithner, Fisher, France

Sunday, October 17, 2010

Gary North on Social Security

And I've recently written about social security here.

The Funniest Political Speech (In a While)

P.J. O'Rourke on His New Book

P.J. O'Rourke on Economics

Excerpted from Don't Vote - It Just Encourages the Bastards:

"The free market is not a creed or an ideology that political conservatives, libertarians, and Ayn Rand acolytes want Americans to take on faith. The free market is simply a measurement. The free-market tells us what people are willing to pay for a given thing at a given moment. That's all the free market does. The free market is a bathroom scale. We may not like what we see when we step on the bathroom scale, but we can't pass a law making ourselves weigh 165. Liberals and leftists think we can."

P.J. O'Rourke's new book can be purchased here. He can be seen live and in person in Washington D.C. on Wednesday November 3, 2010. Oh, and it's absolutely free. For more information about this event click here.

Wednesday, October 13, 2010

Libertarian Views of the Law: Fair Labor Standards Act

A few weeks ago I grumbled about how congress often passes legislation that is inimical to their goals and the goals of the United States citizens. This week, I would like to take another look at another legislation which was first implemented in the 1930’s—the Fair Labor Standards Act.

Many libertarian and conservative economists often blame the minimum wage laws for increasing unemployment among low-skilled workers, including teenagers. Even seems to hint at it when they say that “low-skilled, youth workers stand to gain, under the assumption they are currently employed. However, for unemployed teen workers, job prospects look grim.”

As the language indicates, only people who already have jobs while the minimum wage rate increases will benefit. But what about those without jobs, what do they gain?

The rationale behind legislating the minimum wage law was that it was supposed to protect workers from being exploited by their employers. However, like any price control, there will always be a shortage of goods. In this case, those goods in shortage are the labor of low-skilled workers.

There is a patent absurdity in the minimum wage law. Are workers whose sole position is to push carts, should they be making the same minimum wage as the cook at McDonalds, or the cashier in the same store?

Clearly, different jobs require different skills. Yet the minimum wage laws treat all jobs as they are the same.

It also keeps those jobs that are worth less than the minimum wage from coming into existence. Instead of hiring low-skilled workers to do the job, employers will resort to keeping who they have on staff and have them double up on tasks—tasks that can slow them down if they weren’t relegated to another worker (this also effects customer service as well).

One may think that employers trying to find a loophole around this law by not hiring people and paying them at this price are being unfair. But what is so fair about paying people at a price their work isn't worth? This leads us to the question of the function of profits, which will be answered in a later post.

Tuesday, October 12, 2010

Meltdown | Thomas E Woods, Jr.

I am currently reading Meltdown, the book on which this lecture is based. After reading most of this book, I understand exactly why it received an endorsement from Ron Paul. It is clearer than The Alpha Strategy, and less dense than Crash Proof 2.0: How to Survive from the Coming Economic Collapse. I wholeheartedly recommend it to everyone, and to everyone's senators!

How Not to Deal with Economic Depression | Thomas J. DiLorenzo

How (and Why) Washington Lies About Everything | Thomas DiLorenzo

~This is from the lecture series "The Economic Recovery: Washington's Big Lie"

Dan Mitchell on the Deficit

Pay attention to the last 40 seconds of this clip.

The guy from the Center for American Progress: "I'm sorry but that is such a minority point of view. It is really important to point out that Dan is in the extreme minority here. It's really important for everyone to understand that nobody else except for Dan and the Cato Institute think that that's true!

Yea, and the more the majority keeps pushing Keynesian economics, the more the free-market minority looks credible when they are proven right.

Jeff Miron on Extending Unemployment Benefits

A Revolution in Checks and Balances: Cops on Camera

Dollar, commodities, national security, Schiff haters

Sunday, October 10, 2010

Yes, Social Security is in Crisis

The Problems

Mark Walsh of The Left Jab is wrongly skeptical of the future $28 deficit that will be created because of Social Security. Dan Mitchell is right. Last April I uploaded a picture showing the figures for 2008. If you think those are big numbers, just look at the cost of Social Security and Medicare combined. Gary North recently pulled a statistic (the picture is below) saying the new total for unfunded liabilities is $100+ trillion dollars. That's a big jump from two years ago.

If you watched the above video you will notice that Dan calls Social Security a "Ponzi Scheme." He was alluding to the fact that Social Security takes in more than it pays out and that it is broke.

What he didn't say was how long it has been broke? Social Security has been bankrupt for over 30 years.

An old copy of Biblical Economics today from Oct/Nov 1978 attests to the statistical bankruptcy of social security over 30 years ago. I quote:
The Social Security System is actuarialy (statistically) bankrupt. It's only a question of when it will go under, and the form of bankruptcy it will take. Without massive monetary inflation, there is no way that someone entering the program today will ever be repaid for the heavy taxes he will shell out. In order to postpone the statistically inevitable, Congress in late 1977 enacted the heaviest peacetime tax increase in U.S. history. Anyone doubting the magnitude of this tax burden need only turn the page and examine the table prepared by Huggins & Co., consulting actuaries. The table is based on the government's own figures.

The rest of the newsletter can be downloaded here. If the link doesn't work, then leave a comment saying so.

If you want to believe that social security is fine, go ahead. But at least take a look at the numbers below.

The Solution

There is a solution to social security - and it is called privatization. It is not mean. It is not cruel. It is fiscally responsible and completely moral. What isn't moral are the defenses politicians on the left give for social security such as "the public safety net" argument, or the "you wanna put social security in the hands of Wall Street" argument, all while pretending that the current way of doing this is okay. (Who mentioned Wall Street anyway?)You must understand that social security is one of the many failed policies that the left has rammed through Franklin Delano Roosevelt's New Deal of the 1930's. The policy doesn't provide social "security" but rather "insecurity" because it is bankrupt.

As Dan Mitchell said in the above video, "they [the people of Chile and other countries now have privatized social security systems] know that it's better to have real assets that you can pass on to your children, than to rely on politicians. And a good example is the U.S. System. Mark keeps talking about 'oh 2041, we have a trust fund.' The trust fund is filled with I.O.U.'s. The politicians have already spent the money."

Jose Pinera, the "architect of Chile's private pension system for retirement accounts," discusses how to go about doing that below.

Thanks to Calvary Church of God in Christ

I just wanted to thank everyone who accepted my business cards today at Calvary Church of God in Christ.

Here are two starter blog posts.

The Alpha Strategy

6 Online Movies to Help Understand the Economic Crisis

WCF Chapter One "Of Holy Scripture" Sunday School (Sept.-Oct. 2021)

Our text for Sunday School (also "The Confession of Faith and Catechisms") Biblical Theology Bites What is "Biblical Theology...