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Month: May 2015

Microaggressions and Microwonders – Are Mountains Out of Molehills Proof the World’s Getting Better? – Article by Steven Horwitz

Microaggressions and Microwonders – Are Mountains Out of Molehills Proof the World’s Getting Better? – Article by Steven Horwitz

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The New Renaissance Hat
Steven Horwitz
May 27, 2015
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A recurring theme of recent human history is that the less of something bad we see in the world around us, the more outrage we generate about the remaining bits.

For example, in the 19th century, outrage about child labor grew as the frequency of child labor was shrinking. Economic forces, not legislation, had raised adult wages to a level at which more and more families did not need additional income from children to survive, and children gradually withdrew from the labor force. As more families enjoyed having their children at home or in school longer, they became less tolerant of those families whose situations did not allow them that luxury, and the result was the various moral crusades, and then laws, against child labor.

We have seen the same process at work with cigarette smoking in the United States. As smoking has declined over the last generation or two, we have become ever less tolerant of those who continue to smoke. Today, that outrage continues in the form of new laws against vaping and e-cigarettes.

The ongoing debate over “rape culture” is another manifestation of this phenomenon. During the time that reasonably reliable statistics on rape in the United States have been collected, rape has never been less frequent than it is now, and it is certainly not as institutionalized as a practice in the Western world as it was in the past. Yet despite this decline — or in fact because of it — our outrage at the rape that remains has never been higher.

The talk of the problem of “microaggressions” seems to follow this same pattern. The term refers to the variety of verbal and nonverbal forms of communication that are said to constitute disrespect for particular groups, especially those who have been historically marginalized. So, for example, the use of exclusively masculine pronouns might be construed as a “microaggression” against women, or saying “ladies and gentlemen” might be seen as a microaggression against transsexuals. The way men take up more physical space on a train or bus, or the use of the phrase “walk-only zones” (which might offend the wheelchair-bound) to describe pedestrian crossways, are other examples.

Those who see themselves as the targets of microaggressions have often become very effective entrepreneurs of outrage in trying to parlay these perceived slights into indications of much more pervasive problems of sexism or racism and the like. Though each microaggression individually might not seem like much, they add up. So goes the argument.

I don’t want to totally dismiss the underlying point here, as it is certainly true that people say and do things (often unintentionally) that others will find demeaning, but I do want to note how this cultural phenomenon fits the pattern identified above. We live in a society in which the races and genders (and classes!) have never been more equal. Really profound racism and sexism is far less prominent today than it was 50 or 100 years ago. In a country where the president is a man of color and where one of our richest entertainers is a woman of color, it’s hard to argue that there hasn’t been significant progress.

But it is exactly that progress that leads to the outrage over microaggressions. Having steadily pushed back the more overt and damaging forms of inequality, and having stigmatized them as morally offensive, we have less tolerance for the smaller bits that remain. As a result, we take small behaviors that are often completely unintended as offenses and attempt to magnify them into the moral equivalent of past racism or sexism. Even the co-opting of the word “aggression” to describe what is, in almost all cases, behavior that is completely lacking in actual aggression is an attempt to magnify the moral significance of those behaviors.

Even if we admit that some of such behaviors may well reflect various forms of animus, there are two problems with the focus on microaggressions.

First, where do we draw the line? Once these sorts of behaviors are seen as slights with the moral weight of racism or sexism, we can expect to see anyone and everyone who feels slighted about anything someone else said or did declare it a “microaggression” and thereby try to capture the same moral high ground.

We are seeing this already, especially on college campuses, where even the mere discussion of controversial ideas that might make some groups uncomfortable is being declared to be a microaggression. In some cases this situation is leading faculty to stop teaching anything beyond the bland.

Second, moral equivalence arguments can easily backfire. For example, if we, as some feminists were trying to do in the 1980s, treat pornography as the equivalent of rape, hoping to make porn look worse, we might end up causing people to treat real physical rape less seriously given that they think porn is largely harmless.

So it goes with microaggressions: if we try to raise men taking up too much room on a bus seat into a serious example of sexism, then we risk people reacting by saying, “Well, if that’s what sexism is, then why should I really worry too much about sexism?” The danger is that when far more troubling examples of sexism or racism appear (for example, the incarceration rates of African-American men), we might be inclined to treat them less seriously.

It is tempting to want to flip the script on the entrepreneurs of microaggression outrages and start to celebrate their outrages as evidence of how far we’ve come. If men who take the middle armrest on airplanes (as obnoxious as that might be) are a major example of gender inequality, we have come far indeed. But as real examples of sexism and racism and the like do still exist, I’d prefer another strategy to respond to the talk of microaggressions.

Let’s spend more time celebrating the “microwonders” of the modern world. Just as microaggression talk magnifies the small pockets of inequality left and seems to forget the larger story of social progress, so does our focus on large social and economic problems in general cause us to forget the larger story of progress that is often manifested in tiny ways.

We live in the future that prior generations only imagined. We have the libraries of the world in our pockets. We have ways of easily connecting with friends and strangers across the world. We can have goods and even services of higher quality and lower cost, often tailored to our particular desires, delivered to our door with a few clicks of a button. We have medical advances that make our lives better in all kinds of small ways. We have access to a variety of food year-round that no king in history had. The Internet brings us happiness every day through the ability to watch numerous moments of humor, human triumph, and joy.

Even as we recognize that the focus on microaggressions means we have not yet eliminated every last trace of inequality, we should also recognize that it means we’ve come very far. And we should not hesitate to celebrate the microwonders of progress that often get overlooked in our laudable desire to continue to repair an imperfect world.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Microfoundations and Macroeconomics: An Austrian Perspective, now in paperback.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

The Pathway to Faster Cures – When It Comes to Life-Saving Drugs, We Need More Than Modest Reform – Article by Bartley J. Madden

The Pathway to Faster Cures – When It Comes to Life-Saving Drugs, We Need More Than Modest Reform – Article by Bartley J. Madden

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Bartley J. Madden
May 26, 2015
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Rob Donahue used to ride horses. He was a modern-day cowboy until he was stricken with amyotrophic lateral sclerosis (ALS). Now his muscles are weak. He can’t ride horses anymore. And his condition is worsening quickly. ALS will degenerate Donahue’s neurons and nervous system, and he will probably die in less than five years.

Another ALS sufferer, Nick Grillo, is trying to change all that. He’s put together a petition on Change.org to urge the FDA to fast-track approval of a new drug, GM-604, that would help people like Donahue and others like him.

“People can’t wait five, ten, 15 years for the clinical trial process,” said Grillo. “Things need to happen much quicker.”

But ALS is just one illness, and GM-604 is just one medicine. There are thousands of Americans suffering — many with terminal illnesses — while waiting on the FDA approval process.

Paradigm change

A paradigm change is essential because FDA culture has led to a situation where it costs an average of $1.5 billion and 12 or more years of clinical testing to bring a new drug to market. Medical innovation cannot thrive when only very large firms can afford to research and develop new drugs.

Another problem is that the FDA’s first goal is not to maximize innovation, but to minimize the chances that an FDA-approved drug leads to unanticipated adverse side effects and negative publicity. In particular, the FDA’s efficacy testing requirements have resulted in an ever-increasing load of money and time on drug developers. We can’t count on FDA bureaucrats to fix the broken system they created.

Even Congress, whose cottage industry is to regulate, admits that the current FDA system is a roadblock to fast-paced innovation. Congress’s own 21st Century Cures Initiative has led to many good ideas for delivering medical treatments, but even if successful, these ideas would bring only incremental improvements.

Americans deserve a bold plan to achieve genuine large-scale change enabling us to live longer, healthier, and more productive lives. And most importantly, we need a mechanism for allowing patients to exercise choice consistent with their own preferences for risk.

Congressional hearings: the missing seat at the table

The missing seat at the table is for someone who represents freedom — that is, the right of patients, advised by their doctors, to make informed decisions as to the use of not-yet-FDA-approved drugs.

Freedom in response to suffering and subjugation is a powerful rallying call. The Women’s Right to Vote constitutional amendment in 1920 and the Civil Rights Act of 1964 were not about incremental improvements; each was a paradigm change that brought forth a different and better future.

Absent from the congressional hearings over health care, however, has been a freedom agenda, specifically one designed to eliminate the FDA’s monopoly on access to new drugs.

Venture capitalists, where have you gone?

We hear very little about those who suffer and die because they were not able to access drugs stuck in the FDA’s testing pipeline, or about drugs that were never brought to market because FDA procedures made the development costs too high. There is an invisible graveyard filled with people who have died because of drug lag and drug loss.

The FDA’s deadly over-caution is why venture capitalists shy away from investing in biopharmaceutical startup firms. Venture capitalists are willing to take big risks on ideas that may fail. But failure due to regulatory risk is just too big a hurdle to overcome. Capital providers have other opportunities, even if those opportunities don’t involve cures for disease.

High costs and slow innovation are the hallmark of a monopoly. And, as medical science continues its rapid pace of innovation, the cost of lost opportunities for better health will increase even faster. The solution is to introduce consumer choice and competition.

Free to choose medicine

Three self-reinforcing principles are needed to bring rapid innovation to the biopharmaceutical marketplace.

First, we need a free-to-choose track that operates independently of the FDA and runs alongside the conventional FDA clinical testing track — a competitive alternative. After a new drug has successfully passed safety trials and shows initial effectiveness in early clinical trials, a drug developer could request that the drug be available for sale. Such an arrangement would allow for new drugs to be available up to seven years earlier than waiting for a final FDA approval decision.

Second, free-to-choose treatment results, including patients’ genetic data, would be posted on an open-access database. Patients and their physicians would be able to make informed decisions about the use of approved drugs versus not-yet-approved drugs. The resulting treasure trove of observational data would reveal, in real time on the Internet, which subsets of patients do extremely well or poorly using a particular new drug. This broad population of users — in contrast to the tight similarity of clinical trial patients — would better inform the biopharmaceutical industry, yielding better R&D decisions and faster innovation.

Third, some drug developers would want to provide free-to-choose drugs in order to quickly demonstrate that their drugs were effective, thereby enhancing the ability to raise needed capital. For patients who need insurance reimbursement and for developers seeking formal FDA recognition of their drugs’ safety and effectiveness, another kind of incentive is needed. That is, FDA observational approval would be based on treatment results reflected in observational data posted on the open-access Internet database.

In the foreword to my 2012 book, Free to Choose Medicine: Better Drugs Sooner at Lower Cost, Nobel Laureate economist Vernon Smith wrote, “These three design components for patient/doctor control of medical treatment are both innovative and soundly based. With this conceptual blueprint, legislation could be crafted to promote both expanded consumer choice and the discipline of choice to the long-term benefit of society.”

Opposition

FDA proponents would bolster the fear that “unsafe” drugs could flood the marketplace. But the FDA cannot define what is “safe.” Only patients with their unique health conditions, treatment profiles, and preferences for taking risk can define what is safe for them. That is what freedom is all about: individual choice. Keep in mind that the likely large number of free-to-choose patients with widely varying health conditions would yield uniquely useful safety data superior to safety readouts from clinical trial data.

The free-to-choose medicine plan is voluntary and would not disturb those who want to use only approved drugs. A reasonable implementation schedule would first allow the new system to be used by patients fighting a life-threatening illness, as they are the ones most in need of access to the latest drug advancements.

Biopharmaceutical firms likely to oppose such a plan would include larger firms who consider their expertise in dealing with the FDA bureaucracy as an especially valued competitive advantage over their smaller competitors. We should expect support from firms with a high level of scientific skill, but limited skill and resources in dealing with FDA bureaucracy. Nevertheless, even those firms initially opposed should question their current business models, which produce sky-high prescription drug prices and the very real chance that government at some future point will impose price controls. Why not set into motion an alternative that can lead to radically lower development and approval costs with concomitant lower prescription drug prices while maintaining industry profitability levels?

Trial lawyer organizations will be expected to contribute mightily to defeat any freedom-based legislation. They do not want Americans legally taking personal responsibility by way of voluntary contracts, even if there are life-saving benefits to be had.

Patients are the ultimate beneficiaries of competition, and they are a powerful force for those who want a fundamental restructuring of the FDA. Right-to-try state laws are designed to allow those dealing with life-threatening illnesses access to not-yet-approved drugs. These laws’ enormous popularity indicates that a well-run campaign could generate similar support at the federal level for free-to-choose medicine.

Freedom should be part of the national debate on 21st century medical legislation. For that to happen, we need to give freedom lovers and chronic sufferers a seat at the table.

Every American should have the right to make informed decisions that can improve health or save lives. Freedom is not something to fear; it is the best route forward to a more innovative, efficient, and humane medical system.

Bartley J. Madden is a founder of Tomorrow’s Cures Today.  His website is www.LearningWhatWorks.com.
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This article was originally published by The Foundation for Economic Education.

The Bait-and-Switch Behind Economic Populism – Article by Nicolás Cachanosky

The Bait-and-Switch Behind Economic Populism – Article by Nicolás Cachanosky

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Nicolás Cachanosky
May 26, 2015
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Argentina will hold elections this year, and a number of provinces will be electing governors. Buenos Aires, the capital city, is holding elections for mayor, and Mauricio Macri, who is stepping down as mayor, is a favorite to become the next president. Toward the end of the year, a presidential election will be held and Cristina Kirchner, after two consecutive mandates, will have to step down because she cannot be re-elected.

Like Chávez and Maduro in Venezuela, Argentina can be described as a country that fell victim to extreme populism during the Nestor and Cristina Kirchner administrations, which began in 2003. Twelve years later, this populist political project is about to end.

The economic policy of populism is characterized by massive intervention, high consumption (and low investment), and government deficits. This is unsustainable and we can identify several stages as it moves toward its inevitable economic failure. The last decade of extreme populism in Argentina can be described as following just such a pattern.

After observing the populist experience in several Latin American countries, Rudiger Dornbusch and Sebastián Edwards identified four universal stages inherent in populism in their article “Macroeconomic Populism” (1990). Even though populism can present a wide array of policies, certain characteristics seem to be present in most of the cases.

Populism usually fosters social mobilization, political propaganda, and the use of symbols and marketing practices designed to appeal to voter’s sentiments. Populism is especially aimed at those with low income, even if the ruling party cannot explain the source of its leaders’ high income. Populist rulers find it easy to use scapegoats and conspiracy theories to explain why the country is going through a hard time, while at the same time present themselves as the saviors of the nation. It is not surprising that for some, populism is associated with the left and socialist movements, and by others with the right and fascist policies.

The four stages of populism identified by Dornbusch and Edwards are:

Stage I

The populist diagnosis of what is wrong with an economy is confirmed during the first years of the new government. Macroeconomic policy shows good results like growing GDP, a reduction in unemployment, increase in real wages, etc. Because of output gaps, imports paid with central bank reserves, and regulations (maximum prices coupled with subsidies to the firms), inflation is mostly under control.

Stage II

Bottleneck effects start to appear because the populist policies have emphasized consumption over investment, the use of reserves to pay for imports, and the consumption of capital stock. Changes in sensitive relative prices start to become necessary, and this often leads to a devaluation of the exchange rate, price changes in utilities (usually through regulation), and the imposition of capital controls. Government tries, but fails, to control government spending and budget deficits.

The underground economy starts to increase as the fiscal deficit worsens because the cost of the promised subsidies need to keep up with a now-rising inflation. Fiscal reforms are necessary, but avoided by the populist government because they go against the government’s own rhetoric and core base of support.

Stage III

Shortage problems become significant, inflation accelerates, and because the nominal exchange rate did not keep pace with inflation, there is an outflow of capital (reserves). High inflation pushes the economy to a de-monetization. The local currency is used only for domestic transactions, but people save in US dollars.

The fall in economic activity negatively affects tax receipts increasing the deficit even more. The government needs to cut subsidies and increases the rate of the exchange rate, depreciation. Real income starts to fall and signs of political and social instability start to appear. At this point the failure of the populist project becomes apparent.

Stage IV

A new government is swept into office and is forced to engage in “orthodox” adjustments, possibly under the supervision of the IMF or an international organization that provides the funds required to go through policy reforms. Because capital has been consumed and destroyed, real wages fall to levels even lower than those that existed at the beginning of the populist government’s election. The “orthodox” government is then responsible for picking up the pieces and covering the costs of failed policies left from the previous populist regime. The populists are gone, but the ravages of their policies continue to manifest themselves. In Argentina the expression “economic bomb” is used to describe the economic imbalances that government leaves for the next one.

Economic Populism is Alive and Well

Even though Dornbusch and Edwards wrote their article in 1990, the similarities to the situation in countries like Venezuela, Bolivia, and Argentina is notable. In recent years, to keep populist ideas going in the minds of voters, Venezuela created the Ministry of Happiness, and Argentina created a new Secretary of National Thought.

These four stages are actually cyclical. The populist movement uses the fourth stage to criticize the orthodox party, and argues that during the populists’ tenure, things were better. The public opinion discontent with stage IV allows the populist movement to win new elections, receive an economy in a crisis or recession and the cycle starts over again from stage I. It is not surprising that populist governments usually appear following the hard times caused by economic crisis. A more bold populist government could avoid stage IV by finding a way to remain in office, calling off elections, or creating fake election results (as was the case in Venezuela). At such a point, the populist government succeeds in turning the country into a fully authoritarian nation.

Nicolás Cachanosky, a native of Argentina, is assistant professor of economics at Metropolitan State University of Denver.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Why Do We Celebrate Rising Home Prices? – Article by Ryan McMaken

Why Do We Celebrate Rising Home Prices? – Article by Ryan McMaken

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Ryan McMaken
May 26, 2015
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In recent years, home price indices have seemed to proliferate. Case-Shiller, of course, has been around for a long time, but over the past decade, additional measures have been marketed aggressively by Trulia, CoreLogic, and Zillow, just to name a few.

Measuring home prices has taken on an urgency beyond the real estate industry because for many, home price growth has become something of an indicator of the economy as a whole. If home prices are going up, it is assumed, “the economy” must be doing well. Indeed, we are encouraged to relax when home prices are increasing or holding steady, and we’re supposed to become concerned if home prices are going down.

This is a rather odd way of looking at the price of a basic necessity. If the price of food were going upward at the rate of 7 or 8 percent each year (as has been the case with houses in many markets in recent years) would we all be patting ourselves on the back and telling ourselves how wonderful economic conditions are? Or would we be rightly concerned if incomes were not also going up at a similar rate? Would we do the same with shoes and clothing? How about with education?

With housing, though, increases in prices are to be lauded, we are told, even if they outpace wage growth.

We’re Told to Want High Home Prices

But in today’s economy, if home prices are outpacing wage growth, then housing is becoming less affordable. This is grudgingly admitted even by the supporters of ginning up home prices, but the affordability of housing takes a back seat to the insistence that home prices be preserved at all costs.

Behind all of this is the philosophy that even if the home-price/household-income relationship gets out of whack, most problems will nevertheless be solved if we can just get people into a house. Once someone becomes a homeowner, the theory goes, he’ll be sitting on a huge asset that (almost) always goes up in price, meaning that any homeowner will increase in net worth as the equity in his home increases.

Then, the homeowner can use that equity to buy furniture, appliances, and a host of other consumer goods. With all that consumer spending, the economy takes off and we all win. Rising home prices are just a bump in the road, we are told, because if we can just get everyone into a home, the overall benefit to the economy will be immense.

Making Homes Affordable with More Cheap Debt

Not surprisingly, we find a sort of crude Keynesianism behind this philosophy. In this way of thinking, the point of homeownership is not to have shelter, but to acquire something that will encourage more consumer spending. In other words, the purpose of homeownership is to increase aggregate demand. The fact that you can live in the house is just a fringe benefit. This macro-obsession is part of the reason why the government has pushed homeownership so aggressively in recent decades.

The fly in the ointment, of course, is if home prices keep going up faster than wages — ceteris paribus — fewer people will be able to save enough money to come up with either the full amount or even a sizable down payment on a loan.

Not to worry, the experts tell us. We’ll just make it easier, with the help of inflationary fiat money, to get an enormous loan that will allow you to buy a house. Thus, rock-bottom interest rates and low down payments have been the name of the game since the late 1980s.

We started to see the end game at work during the last housing bubble when Fannie Mae introduced the 40-year mortgage in 2005, which just emphasized that when it comes to being a homeowner, the idea is not to pay off the mortgage, but to “buy” a house and just pay the monthly payment until one moves to another house and gets a new thirty- or forty-year loan.

It Pays To Be in Debt

On the surface of it, it’s hard to see how this scenario is fundamentally different from just paying rent every month. If the homeowner stops paying the monthly payment, he’s out on the street, and the bank keeps the house, which is very similar to the scenario in which a renter stops paying a landlord. There’s (at least) one big difference here, however. It makes sense for the homeowner to get a home loan rather than rent an apartment because — if it’s a fixed-rate loan — price inflation ensures the real monthly payment will go down every month. Residential rents, on the other hand, tend to keep up with inflation.

But why would any lending institution make these sorts of long-term loans if the payment in real terms keeps getting smaller? After all, thirty years is a long time for something to go wrong.

Lenders are willing and able to do this because the loans are subsidized and underwritten through government creations like Fannie Mae (which buys up these loans on the secondary market), through bailouts, and through a myriad of other federal programs such as FHA. Naturally, in an unhampered market, a loan of such a long term would require high interest rates to cover the risk. But, Congress and the Fed have come to the rescue with promises of bailouts and easy money, meaning cheap thirty-year loans continue to live on.

So, what we end up with is a complex system of subsidies and favoritism on the part of lenders, homeowners, government agencies, and the Fed. The price of homes keeps going up, increasing the net worth of homeowners, and banks can make long-term loans on fairly risky terms because they know bailouts of various sorts will come if things go wrong.

But problems begin to arise when increases in home prices begin to outpace access to easy money and cheap loans. Indeed, we’re now seeing that homeownership rates are going down in spite of low interest rates, and vacancy rates in rental housing are at a twenty-year low. Meanwhile, new production in housing units is at 1992 levels, offering little relief from rising prices and rents. Obviously, something isn’t going according to plan.

Who Loses?

The old debt-based tricks that once kept homeownership climbing and accessible in the face of rising home prices are no longer working.

From a free market’s perspective, renting a home is neither good nor bad, but American policymakers long ago decided to favor homeowners over renters. Consequently, we’re faced with an economic system that pushes renters toward homeownership — price inflation and the tax code punishes renters more than owners — while simultaneously pushing home prices higher and higher.

During the last housing bubble, however, as homeownership levels climbed, few noticed or cared about this. So many renters became homeowners that rental vacancies climbed to record highs from 2004 to 2009. But in our current economy, one cannot avoid rising rents or hedge against inflation by easily leaving rental housing behind.

This time around, the cost of purchasing housing is going up by 6 to 10 percent per year, but few renters can join the ranks of the homeowners to enjoy the windfall. Instead, they just face record-high rent increases and a record-low inventory in for-sale houses.

There once was a time when rising home prices and rising homeownership rates could happen at the same time; it was possible for the government to stick to its unofficial policy of propping up home prices while also claiming to be pushing homeownership. We no longer live in such a time.

Ryan W. McMaken is the editor of Mises Daily and The Free Market. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. 

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Janet Yellen is Right: She Can’t Predict the Future – Article by Ron Paul

Janet Yellen is Right: She Can’t Predict the Future – Article by Ron Paul

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Ron Paul
May 25, 2015
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This week I found myself in rare agreement with Janet Yellen when she admitted that her economic predictions are likely to be wrong. Sadly, Yellen did not follow up her admission by handing in her resignation and joining efforts to end the Fed. An honest examination of the Federal Reserve’s record over the past seven years clearly shows that the American people would be better off without it.

Following the bursting of the Federal Reserve-created housing bubble, the Fed embarked on an unprecedented program of bailouts and money creation via quantitative easing (QE) 1, 2, 3, etc. Not only has QE failed to revive the economy, it has further damaged the average American’s standard of living while benefiting the financial elites. None other than Donald Trump has called QE “a great deal for guys like me.”

The failure of quantitative easing to improve the economy has left the Fed reluctant to raise interest rates. Yet the Fed does not want to appear oblivious to the dangers posed by keeping rates artificially low. This is why the Fed regularly announces that the economy will soon be strong enough to handle a rate increase.

There are signs that investors are beginning to realize that the Fed’s constant talk of raising rates is just talk, so they are looking for investments that will protect them from a Fed-caused collapse in the dollar’s value. For example, the price of gold recently increased following reports of stagnant retail sales. An increased gold price in response to economic sluggishness may appear counterintuitive, but it is a sign that investors are realizing quantitative easing is not ending anytime soon.

The increase in the gold price is not the only sign that investors are interested in hard assets to protect themselves from inflation. Recently a Picasso painting sold for a record 180 million dollars. This record may not last long, as an additional two billion dollars worth of art is expected to go on the market in the next few weeks.

Another sign of the increasing concerns about the dollar’s stability is the growing interest in alternative currencies. Investing and using alternative currencies can help average Americans, who do not have millions to spend on Picasso paintings, protect themselves from a currency crisis.

Congress should ensure that all Americans can protect themselves from a dollar crisis by repealing the legal tender laws.

Congress should also take the first step toward monetary reform by passing the Audit the Fed bill. Unfortunately, Audit the Fed is not a part of the Federal Reserve “reform” bill that was passed by the Senate Banking Committee. Instead, the bill makes some minor changes in the Fed’s governance structure. These “reforms” are the equivalent of rearranging deck chairs as the Titanic crashes into the iceberg. Hopefully, the Senate will vote on, and pass, Audit the Fed this year.

The skyrocketing federal debt is also a major factor in the coming economic collapse. The Federal Reserve facilitates deficit spending by monetizing debt. Congress should make real cuts, not just reductions in the “rate of growth,” in all areas. But it should prioritize cutting the billions spent on the military-industrial complex.

Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system. A return to a true free-market economy will greatly improve the lives of the vast majority of Americans.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Spiral Tower, Op. 79 (2015) – Musical Composition and Video by G. Stolyarov II

Spiral Tower, Op. 79 (2015) – Musical Composition and Video by G. Stolyarov II

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G. Stolyarov II
May 25, 2015
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This piano composition by Mr. Stolyarov evokes an ascent up a spiral skyscraper. Each passage builds and introduces variations upon the last while remaining within the overall pattern describing the climb. The spiral ascent can be seen as a metaphor for incremental but rigorous and goal-directed progress toward a brighter future.

Download the MP3 file of this composition here.

See the index of Mr. Stolyarov’s compositions, all available for free download, here.

Photographs in this video are of the F&F Tower in Panama City and were taken by Muribeg, Mariordo (Mario Roberto Durán Ortiz), and Rubydiazmendez. They can be downloaded here and are licensed under the Creative Commons Attribution Share-Alike Unported 3.0 License or the Creative Commons Attribution Share-Alike International 4.0 License.

This composition and video may also be freely reproduced using the Creative Commons Attribution Share-Alike International 4.0 License.

Remember to LIKE, FAVORITE, and SHARE this video in order to spread rational high culture to others.

Universal Physical and Moral Laws, With No Lawgiver – Video by G. Stolyarov II

Universal Physical and Moral Laws, With No Lawgiver – Video by G. Stolyarov II

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G. Stolyarov II
May 20, 2015
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Mr. Stolyarov endeavors to refute the common argument that any law, be it a physical law or a law of morality or justice, requires a lawgiver – an intelligent entity that brought the law into being. While some laws (termed manmade or positive laws) do indeed have human lawmakers, a much more fundamental class of laws (termed universal or natural laws) arise not due to promulgation by any intelligent being, but rather due to the basic properties of the entities these laws concern, and the relations of those entities to one another. To the extent that positive laws are enacted by humans, the purpose of such positive laws should be reflect and effectuate the beneficial consequences of objectively valid natural laws.

References

– “Universal Physical and Moral Laws, With No Lawgiver” – Article by G. Stolyarov II –

– Formula for the Universal Law of Gravitation: F = G*m1*m2/r2, with F being the force between two masses, m1 and m2 being the two masses, r being the distance between the centers of the two masses, and G being the universal gravitational constant.

– “Commonly Misunderstood Concepts: Happiness” – Essay by G. Stolyarov II

– “Commonly Misunderstood Concepts: Happiness” – Video by G. Stolyarov II

– “Indiana Pi Bill” – Wikipedia

Fantasy Bookstore Fights Fantasy Economics – San Francisco Sci-Fi Lovers Do Battle With the Minimum Wage – Article by Gary McGath

Fantasy Bookstore Fights Fantasy Economics – San Francisco Sci-Fi Lovers Do Battle With the Minimum Wage – Article by Gary McGath

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The New Renaissance Hat
Gary McGath
May 18, 2015
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Borderlands is an independent bookstore in San Francisco with an enthusiastic following among science fiction fans. It’s not just a place to buy books, but in the words of its mission statement “a social and professional center for readers, writers, publishers, reviewers, artists and other individuals with a strong interest in the fields of Science Fiction, Fantasy, Horror and Macabre Fiction.” Authors frequently appear there, and readers meet for discussions.

Like other bookstores, Borderlands has found staying in business difficult. It nearly closed early in 2015, and management put the blame for this on the city’s increase in the minimum wage. On February 1, it announced:

In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018.

Although all of us at Borderlands support the concept of a living wage in principal [sic] and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage.

Consequently we will be closing our doors no later than March 31st.  The cafe will continue to operate until at least the end of this year.

Thanks to sponsorship from its community, Borderlands was able to avoid closing and is still in business, at least for now. Still, its crisis graphically shows one of the damaging consequences of minimum wage laws.

If the cost of something goes up, people will buy less of it, or if they can’t, they’ll make up for it in some other way. This applies to employees as much as to anything else. Some businesses can raise their prices to meet increased labor costs, but books are a highly competitive market, and consumers are very sensitive to price changes.

Small businesses in general have fewer options. A large operation may be able to absorb the cost or find ways to pass it on. It can reduce hours, require extra duties, or replace people with machines. These options don’t work well when the staff is small and the love of what they’re doing is a big reason they stay there.

Borderlands is hardly a unique case. The management was careful not to take a position against the minimum wage, but zero dollars for unemployed workers isn’t a “living wage,” and it’s meaningless to say that putting low-wage employees out of work is “good for San Francisco.” It is individuals, not a city, who have to get food and a place to live.

A paid sponsorship program was the key to Borderlands’ short-term survival. Science fiction fans are heavily networked, and many work in well-paying jobs, so the store benefited from a community with money to spare.

Well-known authors like Seanan McGuire and Cory Doctorow helped publicize the cause. Borderlands deserves credit for its innovative approach, but other businesses aren’t always so lucky, and they will fold without being widely noticed or mourned. Fans of bookstores realized, perhaps too late, that for the industry to survive as a whole, the bookstore must be profitable as a business venture, rather than a charity case.

Minimum-wage increases aren’t magic money. Any cost increase has to come out of something, and low-paying jobs that can’t justify the increase are the first place they’ll come out of. Thinking it happens for free is just fantasy.

Gary McGath is a freelance software engineer living in Nashua, New Hampshire.

This article was originally published by The Foundation for Economic Education.
New Military Spending Bill Expands Empire But Forbids Debate on War – Article by Ron Paul

New Military Spending Bill Expands Empire But Forbids Debate on War – Article by Ron Paul

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The New Renaissance Hat
Ron Paul
May 18, 2015
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On Friday the House passed a massive National Defense Authorization for 2016 that will guarantee US involvement in more wars and overseas interventions for years to come. The Republican majority resorted to trickery to evade the meager spending limitations imposed by the 2011 budget control act – limitations that did not, as often reported, cut military spending but only slowed its growth.

But not even slower growth is enough when you have an empire to maintain worldwide, so the House majority slipped into the military spending bill an extra $89 billion for an emergency war fund. Such “emergency” spending is not addressed in the growth caps placed on the military under the 2011 budget control act. It is a loophole filled by Congress with Fed-printed money.

Ironically, a good deal of this “emergency” money will go to President Obama’s war on ISIS even though neither the House nor the Senate has debated – let alone authorized – that war! Although House leadership allowed 135 amendments to the defense bill – with many on minor issues like regulations on fire hoses – an effort by a small group of Representatives to introduce an amendment to debate the current US war in Iraq and Syria was rejected.

While squashing debate on ongoing but unauthorized wars, the bill also pushed the administration toward new conflicts. Despite the president’s unwise decision to send hundreds of US military trainers to Ukraine, a move that threatens the current shaky ceasefire, Congress wants even more US involvement in Ukraine’s internal affairs. The military spending bill included $300 million to directly arm the Ukrainian government even as Ukrainian leaders threaten to again attack the breakaway regions in the east. Does Congress really think US-supplied weapons killing ethnic Russians in eastern Ukraine is a good idea?

The defense authorization bill also seeks to send yet more weapons into Iraq. This time the House wants to send weapons directly to the Kurds in northern Iraq without the approval of the Iraqi government. Although these weapons are supposed to be used to fight ISIS, we know from too many prior examples that they often find their way into the hands of the very people we are fighting. Also, arming an ethnic group seeking to break away from Baghdad and form a new state is an unwise infringement of the sovereignty of Iraq. It is one thing to endorse the idea of secession as a way to reduce the possibility of violence, but it is quite something else to arm one side and implicitly back its demands.

While the neocons keep pushing the lie that the military budget is shrinking under the Obama Administration, the opposite is true. As the CATO Institute pointed out recently, President George W. Bush’s average defense budget was $601 billion, while during the Obama administration the average has been $687 billion. This bill is just another example of this unhealthy trend.

Next year’s military spending plan keeps the US on track toward destruction of its economy at home while provoking new resentment over US interventionism overseas. It is a recipe for disaster. Let’s hope for either a presidential veto, or that on final passage Congress rejects this bad bill.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Mr. Stolyarov Cited in The Heartland Institute’s Articles on E-Cigarettes, Medicaid Estate Recovery, and Doctors Withholding Treatment

Mr. Stolyarov Cited in The Heartland Institute’s Articles on E-Cigarettes, Medicaid Estate Recovery, and Doctors Withholding Treatment

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The New Renaissance Hat
G. Stolyarov II
May 17, 2015
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My remarks have been cited in three new articles from The Heartland Institute regarding health policy issues.

* FDA Moves to Regulate E-Cigarettes – Article by Matthew Glans

As a nonsmoker, I do not have any attraction to e-cigarettes, but I am opposed, on both moral and practical grounds, to any attempts to restrict them. This article by Matthew Glans cites my remarks with regard to recent FDA attempts to limit the availability of e-cigarettes to young people.

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Excerpt:

FDA’s push to regulate e-cigarettes may invite unintended health consequences, says Gennady Stolyarov, editor-in-chief of The Rational Argumentator. Although many nonsmokers have absolutely no attraction to e-cigs or tobacco products of any sort, for some individuals, e-cigs may work as a substitute for traditional tobacco products or as a part of a transitional approach toward the cessation of smoking.

E-cigs lack the high levels of more than 40 carcinogenic byproducts found in traditional tobacco smoke, and they also minimize the harm caused by secondhand smoke, says Stolyarov. If somebody wishes to smoke, it is better for that person’s health and the health of others if the person smokes an e-cigarette.

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* California Seizes Estates of Deceased Medicaid Patients – Article by Kenneth Artz

This article by Kenneth Artz cites my remarks in opposition to the Medi-Cal “estate recovery” program, whereby California Medicaid recipients’ homes can be expropriated from them upon their deaths.

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Excerpt:

Stolyarov says the estate recovery program is an example of an extremely hardhearted government program that forces people to suffer because of family members’ prior debts or health care needs.

“A person should not lose the family home because one of his or her deceased parents had little or no income and took recourse to Medicaid to pay for treatments for terminal cancer or another terrible disease,” Stolyarov said. “This is especially true given the fact most Medicaid recipients have no easy way of knowing their estates are put in jeopardy when they sign up for the program.”

This situation also sends a cautionary message about socialized health care arrangements purporting to provide “free” medical care, Stolyarov says.

“There is always a cost, and there are always strings attached when any aspect of health care is centrally planned,” said Stolyarov.

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* Dutch Doctors Withholding and Withdrawing Treatment from the Elderly – Article by Kenneth Artz

It is essential to treat all medical patients as human beings with decision-making autonomy, whose lives are worth living. In particular, a decision to shorten life by forgoing medical treatment should never be made by anyone except the patient him/herself. This article by Kenneth Artz cites my remarks regarding a recent study in the Journal of Medical Ethics is that withholding treatment from certain patients (particularly the elderly) appears to be becoming a default decision by doctors in the Netherlands in many cases – rather than a decision deliberately opted into by patients.

While people ought to have a right to voluntarily refuse medical treatment, it is also the case that they should have the right to insist on any and every measure that could possibly prolong their lives, even if their chances are remote. If a patient wishes to try a treatment that has a remote chance of succeeding, but where the alternative is a certain death, that patient’s desires should not be overridden by a central authority or even a medical expert.

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Excerpt:

It is extremely important to respect the liberty of patients to make choices regarding their medical care and the aggressiveness with which they want to fight for their lives, says Gennady Stolyarov, editor-in-chief of The Rational Argumentator.

“What is disturbing about the findings of this study is that withholding treatment from certain patients—particularly the elderly—appears to be becoming a default decision by doctors in many cases, rather than a decision deliberately opted into by patients,” Stolyarov said. “The culture of medicine should always be guided by the premise that taking action to save life is the default, and only the patient should be able to make a different decision.”

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