Oil Prices (Whose Fault?)

Democrats were quick to blame Bush (and the Republicans) on the high prices at the pump? Does that mean that Bush is now responsible for the low prices at the pump?

(Sorry for the long stream of "anti-Democrat" posts, I will be sure to get some "anti-Republican" posts on here soon so as not to appear partisan.)

Equality Under the Law

One of the main components of a liberal democracy is rule of law. A government must be able to enforce the law in order to maintain order within its borders. However, a more controversial but extremely important concept of rule of law is the notion of "equality under the law," or legal egalitarianism. America and France were the birthplace of this concept. As this goes, a free society cannot truly be free if the law is used to coerce people into material equality; thus, they must be allowed legal equality, even though this will inevitably lead to material inequality.

One of the places where equality under law is absent would be tax law. Based on your income (or other forms of wealth), you can be taxed more than someone less "well off" than you. Why are taxes an acceptable area to have inequality under the law? Should free speech not be the same for the rich? Should the rich not have a right to a fair trial? Why do laws against theft count for others trying to steal from the rich (unless of course that other is the government)?

The main questions that need to be answered are a.) Does redistribution of income create a net benefit to society? and b.) Regardless of the benefits, should redistribution of income be a legitimate facet of a free society?

Economists Don't Like Obama's Economic Plan

A recent petition signed by 100 economists, including some big names, finds much fault with Barack Obama's economic plan. Here is the full text:

Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession (emphasis mine). It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package.

Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production.

We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.

After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.

In sum, Barack Obama's economic proposals are wrong for the American economy. They defy both economic reason and economic experience.

What are your thoughts on the damaging potential of Obama's economic policy? How come there was no endorsement of the McCain economic plan in this letter?

The Most Libertarian Candidate for President...

Here is Alex at Marginal Revolution, explaining why Obama would be the best choice for libertarian supporters. At ReasonOnline, though, Radley Balko suggests that Sarah Palin, governor of a state big on individual freedoms, might be the best choice for those seeking freedom and liberty whenever possible.

My personal view is still a bit convoluted. I agree that the Republicans probably need to go out of power for a few years - this would help them re-focus on their core values. However, the idea of an Obama Administration with a heavily Democratic Congress is still a bit scary. There is a lot of legislation that could be passed if one party has a strong majority in the legislature and controls the executive branch. As Karl Rove points out, however, Obama isn't running against Palin and shouldn't try to run against her. She will be the Vice President and no matter what her personal views are, she will not be the primary policy-maker. Even if Palin would be a strong supporter of libertarian values, as the Vice President it still wouldn't show up in many government policies. I'll be curious to see if Alex runs another segment, but it seems to me that Obama is the stronger choice for America's community of libertarians.

The (Lack of a) Case Against Immigration

Fueled by Lou Dobbs and his army, the issue of illegal immigration has become a hot topic in American political discourse. Yet, the objective evidence does not give those who blame all the ills of the U.S. (like Global Warming and high oil prices) on illegal immigrants a leg to stand on.

First, despite what is often said, illegal immigrants have a negligible effect on U.S. wages. In most cases, these immigrants are not directly competing with American workers. The only group of workers that would see a “significant” (3-8%) wage increase from decreased immigration would be low-skill high school dropouts. If immigrants completely stopped competing with this demographic, dropouts would see an extra $25 per week.

As well, illegal immigrants have an insignificant effect on unemployment rates. The number of jobs that are taken by illegals in favor of Americans are balanced out by the jobs created by the immigrants’ demand. This leads to a net impact of near zero.

Add on to this the fact that almost all immigrants speak English very well and their descendants speak English as their primary language, marriage rates are higher and divorce rates lower among immigrants, and the descendants of immigrants are closing the educational and income gap with whites, and it appears as if Mexicans do quite a good job of assimilating to America.

In addition, the Mexican immigration rate is actually lower than the immigration rate of ethnic groups in the past (i.e. Irish immigrants in the mid-1800s, German immigrants in the mid to late-1800s).

And just to deliver the final blows to the anti-immigration crowd, areas seeing the heaviest rate of immigration are actually seeing a decrease in violence.

In summary, immigrants don’t lower American wages, don’t lead to more unemployment, they share American values of the English language, family, and hard work, they are coming here at a lower rate than past ethnic immigrants, and they commit fewer crimes than natives. So, why was it that we don’t want to allow more immigration?

Voluntary Government

My very creative and anarchist professor Peter T. Leeson talked about condominium associations as voluntary governments yesterday. He said that government is force, and unjust in the sense that we never signed a constitutional agreement with the American government, yet the IRS takes our money and does many things that don't directly benefit us. He then presented his condominium association, with the association fee he hates but agreed to when he signed his contract as an example of voluntary government.

But is this a distinction without a difference? Leeson talked of how condominium fees go only to condo improvements, where taxes provide numerous government services he never asked for. But a road built on the far-side of a condo complex seems about as useful to a near-side resident as a bridge to nowhere.

Leeson also mentioned that the "if you don't like it, move" argument does not imply consent to government because it places the burden on people simply for living where they are born. But certainly a son who grows up in a condo and then inherits it from his parents would likewise be expected to pay the condominium fees unless he sold his childhood home to move somewhere else.

Further, what about people who immigrate? Consider a person from the Alaskan tundra, unknown to the IRS, living in complete negative liberty. If he finds himself tired with wilderness life and wishing to move to New York, would his migration imply consent? Could his choice to move be viewed as a constitutional moment where he agrees to pay local, state and federal taxes?

It seems to me like real difference between the federal government and a condominium association is simply their size. It is easier to opt out of a condo than a country which is why the association fees seem voluntary and American taxes involuntary.