Here is a fascinating letter from Murray Rothbard to F.  A. Harper regarding the setting up of a libertarian institute. No wonder Murray liked the Mises Institute so much! I can’t help but think that if he were still alive today he would be an eminent scholar in residence, writing an article every day for Mises Daily and LRC.

AT&T has ceased its attempt to buy T-Mobile after—you guessed it—”the government raised concerns that it would raise prices, reduce innovation and give customers fewer choices.”

I wrote about this back in September in my article “Antitrust Is Central Planning.” Here is my conclusion: “Not only should AT&T and T‑Mobile be allowed to merge, but the Federal Trade Commission, the Antitrust Division of the Justice Department, and all antitrust law should be abolished. It is simply not the job of the government to be concerned about prices, innovation, and choices–in any industry.

The “free trade” agreement that was just signed between the US and South Korea is simply another managed trade agreement. Don’t let the name fool you; read the agreement, as I did. A real free trade agreement would take no more than a paragraph or a page at most.

What is language like this doing in a free trade agreement? “For greater certainty, a Party may: (a) raise a customs duty to the level established in its Schedule to Annex 2-B following a unilateral reduction; or (b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.”

Or this: “duties on originating goods provided for in the items in staging category H in a Party’s Schedule shall be removed in 15 equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year 15.”

And check out the current 220-page US tariff schedule.

Fed chairman Ben Bernanke fielded softball questions from reporters today. Here are the 20 questions asked.

I would like to see him answer questions from this group: Ron Paul, Gary North, Peter Schiff, George Selgin, and Joe Salerno.

Nothing has come of it, but if it was more than one paragraph then it is not a free-trade agreement—it is a managed-trade agreement.

A German company, Nordex, is expanding—in Jonesboro, Arkansas. The company plans to hire up to 700 Americans at above-average wages. I haven’t heard any conservatives denounce the action of Nordex. Yet, when a US company builds a plant in Germany and hires German workers, some conservatives go ballistic and call on the US government to “do something” to keep jobs in the US—and I don’t mean just “do something” like cut taxes and regulations that hamper American businesses—while they denounce foreign direct investment, outsourcing, and even imports.

Today on NPR’s All Things Considered there was a discussion of extending unemployment benefits. The liberal view that unemployment insurance was a good thing and that the benefits should be extended was taken for granted. Mention was made that Democrats and Republicans in Congress disagree on how to fund an expansion of benefits. Then a conservative was interviewed who talked about the need for a social safety net and fairness.

What was missing was the libertarian view: 1. It is immoral to take money from one American and give it to another American in the form of unemployment insurance. 2. The government should not be in the unemployment insurance business. 3. Businesses should not be forced to pay unemployment insurance on behalf of their employees. 4. Unemployment insurance should not be mandatory.

Too bad NPR didn’t interview Walter Block. For more on the unemployment racket, see my article on the subject from Freedom Daily.

President Obama wants US exports to double within five years. Indeed, “raising exports is a national priority.” Sounds like a Soviet Five Year Plan.

More exports are good, of course, but don’t think for a minute that Obama believes in free trade. He has created an Export Council to centrally plan his trade goal, increased tariffs on Chinese tires, doubled loans to support exports, and fought for “fair trade” at the WTO.

Not really, but Wal-Mart should consider it.

In the current class-action lawsuit against Wal-Mart that has just been certified by a federal appeals court: “The plaintiffs allege that women were paid less than, and were given fewer opportunities for promotion than, their male counterparts.”

If women are willing to work for less than men, then clearly Wal-Mart should hire only women to reduce labor costs. For more on the “pay gap,” see Walter Block.

In a recent post, I mentioned the U.S. government imposing additional duties on Chinese products because of dumping; that is, selling us cheap products. In what has got to be the ultimate case of dumping, pharmacies at Publix Supermarkets in Florida are still giving away certain prescription drugs. Evidently, this has been going on for some time.

Quick, call the Commerce Department. Publix is obviously trying to put locally-owned pharmacies out of business. Then Publix will start charging to fill these prescriptions. Soon the price will be so high that the poor will suffer. The Commerce Department will then have to intervene with price controls to ensure that the poor can get cheap drugs. We can stop this cycle now if anti-dumping duties are simply imposed on Publix today.

Thanks to complaints from U.S. ribbon companies, the United States has now imposed anti-dumping duties of up to 231.4 percent on gift-wrap ribbons imported from China. Duties of up to 4.54 percent were imposed on Taiwan. The difference was explained by the Commerce Department as due to China having a higher dumping margin of between 208.8 and 231.4 percent compared with Taiwan’s margin of 116.6 to 137.2 percent. Yet, some Chinese and Taiwanese firms were exempted from the duties.

And thanks to Washington’s decision to sell arms to Taiwan, China has imposed duties of up to 105.4 percent on U.S. chicken products.

Where do these ridiculous numbers come from? From central-planning government economists, that’s where. I liked the last line in an article about this in The China Post: “The Commerce Department will issue its final calculation of anti-dumping duties on both countries in June.” This is insane, and for two reasons. Didn’t Mises write about the calculation problem in the 1920s? Who is the brilliant economist at the Commerce Department that arrived at the figure of 231.4 instead of 231.5 percent? And secondly, a company in China wants to sell us in the U.S. cheap products and the U.S. government forbids it. The same government that talks about the benefits of NAFTA and free trade. Insane.

My article in the Winter 2009 issue of The Independent Review, “Gerrit Smith: A Radical Nineteenth-Century Libertarian,” which was originally presented at the 2007 Austrian Scholars Conference, is now online here.

NPR had a story today about a bill introduced by Rep. Thaddeus McCotter of Michigan. The Humanity and Pets Partnered Through the Years Act (HAPPY Act) would allow taxpayers to deduct up to $3,500 a year for pet care expenses. It turns out that the bill (H.R. 3501) was actually introduced on July 31.

Although this is another example of Congress doing something ridiculous, it is actually a good thing. We should be happy for any and all tax deductions, credits, and loopholes in the tax code. Since about half of Americans have a pet, this deduction actually benefits a large percentage of the population. Now we just need a deduction for auto repair expenses, food expenses, utility expenses, etc.

People from all across the political spectrum are now, more than ever, calling for some degree of drug decriminalization or legalization. There are lots of reasons for legalization but only one really great one. FULL ARTICLE

In all of Neal Boortz’s books on the FairTax (see my recent article “The Flat Tax Is Not Flat and the FairTax Is Not Fair“), he maintains that, in order to be “revenue-neutral,” the rate would have to be 23% (figured inclusively–the tax is included in the price of the product), which is actually 30% (figured exclusively; that is, normally–the tax is added to the price of the product). Yet, FairTax proponent Laurence J. Kotlikoff, a professor of economics at Boston University, in a 2006 article I was just made aware of called “Is the United States Bankrupt?” (Federal Reserve Bank of St. Louis Review, July/August 2006, 88[4], pp. 235-49), says the rate needs to be 25% (inclusive) or 33% (exclusive).

So which is it? And yes, it really matters. Since the FairTax would be paid on the purchase of goods like a new car and on services like heart surgery, the extra 2% could amount to a great deal of money.

But as I have shown in my articles on the FairTax, even the 25/33% rate would be too low. With a federal budget approaching $4 trillion, we need low tax rates (“Low rates are good tax policy”–Neal Boortz) more than we need fair tax rates. Anyone for the LowTax?

Two specific tax reform plans that some libertarians have fallen for are the Flat Tax and the FairTax. Both plans promise to invigorate the economy, increase employment, and raise everyone’s standard of living. Neither one is true to its name; neither one is an incremental step toward overall lower taxes. Both are fraught with problems and contradictions; both are revenue-neutral plans that would fund the federal government at the same obscene level that it is now. FULL ARTICLE

We all know (or should know) Rockwell’s Law: “Always believe the opposite of what state officials tell you, and the corollary, always do the opposite of what they advise you.” But here is another profound truth. This one is Richman’s Law, from Sheldon Richman, the editor of The Freeman. In his article in the March 2009 issue of Freedom Daily (not online yet) titled “The Madoff Scandal Exposes Government Failure,” Richman says: “No matter how much the government controls the economic system, any problem will be blamed on whatever small zone of freedom that remains.”

My reprint of Francis Wayland’s The Elements of Political Economy can now be seen in Scribd.

The Elements of Political Economy

Even though the federal minimum wage is scheduled to rise again this year ($7.25 on July 24), more and more states are increasing their minimum wage to an amount higher than the federal minimum. There are now twenty-seven states, plus the District of Columbia, that have a higher minimum than the federal minimum. An interactive map with details on minimum wage laws in the states is available here.

Back in 2004, when the federal minimum wage was $5.15 an hour, voters in my state of Florida approved a constitutional amendment to raise the minimum wage in Florida to $6.15 an hour, effective on May 2, 2005. I blogged about this back on January 1, 2005, and wrote about it for Freedom Daily in November of 2005. In 2005, only twelve states and the District of Columbia had a state minimum wage that was higher than the federal rate.

Well, the minimum wage in Florida just increased again. Because the Florida minimum wage is recalculated every year, based on the increase in the consumer price index during the preceding 12 months, it went from $6.15 an hour in 2005 to $6.40 an hour in 2006 to $6.67 an hour in 2007 to $6.79 an hour in 2008 to $7.21 an hour in 2009. The new rate is published in October and takes effect in January of the following year.

What we see after a minimum wage increase is the unskilled minimum-wage worker bringing home a little extra money. What we don’t see is the increase in the employer’s labor cost, Social Security taxes, Medicare taxes, unemployment taxes, and workers compensation premiums.

I usually don’t pay much attention to anything related to economics in my local newspaper, but in a recent article titled “The Florida Minimum Wage Debate: Does $7.21 an hour help or hurt small businesses?”, a local economist at the University of West Florida showed that he had more sense than Senate Republican Minority Leader Mitch McConnell, who thinks that “raising the minimum wage is a good idea.”

According to the Pensacola News Journal:

UWF economist Rick Harper said the minimum wage hike is a double-edged sword. The new wage does provide something of a financial floor for the lowest paid workers, he said. But the negative effect of the hike is that “when labor costs move up, even a little bit, employers start looking for substitutes for labor.” Harper, director of the Haas Center for Business Research and Economic Development, said that might include a fast-food restaurant owner buying an automatic fryer instead of hiring another employee to handle that particular task. When wages are forced up without an increase in productivity, “fewer people get jobs, and those most affected are young people and, disproportionately, minorities.”

He was, and is, but he is not alone. Writing in Time magazine (January 19 issue, online here), Jeffrey Sachs, in an article called “The Case for Bigger Government,” makes the case for, what else–bigger government. We need to “restore national prosperity and security with a smartly rebalanced partnership between the public and private sectors.” We also need “expanded spending by government–for health care, climate change, energy security, education, infrastructure and peaceful diplomacy.”

To pay for this government: “We’ll need to raise taxes relative to GDP over time.” Taxes like those on “carbon emissions from coal, oil and gas to hasten our transition to sustainable energy.” Instead of letting gas prices tumble: we could “set a floor on prices at the pump and collect the difference between the wholesale and retail prices in federal revenues.” Sachs proposes taxing health care because “the public will also probably accept taxes on health care if they convincingly help save even more in private outlays on health insurance.” In the end, “the U.S. will probably have to follow Europe down the path of the value-added tax.”

And of course, “the Bush tax cuts for the rich should be rolled back this year, not next,” as if the poor actually pay any taxes. Any permanent tax cut by Obama “would be a huge error.” Even “short-term tax cuts are an unnecessary risk.”

No wonder I haven’t bothered to read Time magazine for 25 years.

The only sane thing Sachs says is that “the spending on the wars in Iraq and Afghanistan should be ended, not prolonged.” But is this because they are too expensive or because they are unjust wars?