Archives: 04/2008

Evil Exxon

Bill Dunkelberg, a professor of economics at Temple University and former dean of the Fox school of business there, periodically issues random thoughts on public policy as it relates to his arena of academic interest. His April 24 “Notes on the Economy” includes this gem regarding that Great Economic Satan, Exxon Mobil:

Some presidential candidates have decided that Exxon is a symbol of what is wrong with America. Recent ads complain of Exxon’s 40 billion in profits as if Exxon is some evil entity. First of all, Exxon is not a person, it is millions of owners owning over 5 billion shares in their investment portfolios. Vanguard holds over 160 million shares for its clients, Fidelity over 100 million shares. Taking Exxon’s profits for hair-brained government schemes will just mean millions of people will have to work longer to accumulate their retirement assets. And, doesn’t return on investment count? 40 billion may not represent a particularly good return on the capital invested in the company. Size is not the issue, the percentage return is what counts.

And the government takes over 40 cents a gallon in tax, far more than the profit per gallon made by refiners. And the government doesn’t make any gas for you.

Hopefully voters will catch on to this sham. The last thing we need is government confiscating private sector profits and driving stock prices down. No help for our retirement and no help for the economy.

Couldn’t have said it better myself. And in case you’re curious, Cato receives no money from Exxon Mobil … although we’d be happy to take a big check if they were to offer one.

Yon Goicoechea Named Recipient of the 2008 Milton Friedman Prize for Advancing Liberty

Yon Goicoechea, leader of the pro-democracy student movement in Venezuela, has been awarded the 2008 Milton Friedman Prize for Advancing Liberty. Under Goicoechea’s leadership, the student movement organized mass opposition to the erosion of human and civil rights in Venezuela and played the key role in defeating Hugo Chávez’s bid for a constitutional reform that would have turned the country into a dictatorship. Goicoechea’s vision of optimism, tolerance, and modernity has breathed new life into efforts to defend basic freedoms in Venezuela and elsewhere in Latin America where freedom is threatened.

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Texas Nightmare

Good column on the seizure of 400+ children from the FLDS ranch in Texas. (HT: Volokh).

As I said in this Cato podcast,  I think it is telling that no young adult or child has been found saying “Thank you so much for rescuing me!  It is nice to be in a place where I am not beaten up!”  The absence of proof is now considered evidence of massive “cult” brainwashing.  If a child says “I love my parents and want to go home,” it means he has been brainwashed by the “cult.”  And if a child says “I like my foster parents a lot.  They give me candy and the video games are awesome,” it means the child’s actual parents are unfit.

State authorities talk a lot about rape and forced marriages, but 300 children are ages 4 and below.  They should be sent home because there is no evidence of abuse.  All the boys should go home because there’s no evidence of abuse.  As for the remaining girls, they have been held for 3 weeks already … the judge should give the police one more week to present evidence or they should be going home too.   The investigation can continue, but 3+ weeks in custody is enough already.  

When it comes to separating children from the parents, the burden of proof must be borne by the state. 

No Student Is an Island

John Donne wrote that “no man is an island, entire of itself…any man’s death diminishes me, because I am involved in mankind.”

Yesterday, Thomas Sowell struck a variation on this theme, reminding readers that no man is an economic island, and whatever aid government gives to college students it takes from other people, and whatever it subsidizes distorts the prices that keep us all connected:

The general thrust of human interest stories about people with economic problems, whether they are college students or people faced with mortgage foreclosures, is that the government ought to come to their rescue, presumably because the government has so much money and these individuals have so little.

Like most “deep pockets,” however, the government’s deep pockets come from vast numbers of people with much shallower pockets. In many cases, the average taxpayer has lower income than the people on whom the government lavishes its financial favors.

Costs are not just things for government to help people to pay. Costs are telling us something that is dangerous to ignore.

The inadequacy of resources to produce everything that everyone wants is the fundamental fact of life in every economy — capitalist, socialist, or feudal. This means that the real cost of anything consists of all the other things that could have been produced with those same resources.

Sowell’s is a lesson that everyone should learn who thinks that even the hint of a student-loan crunch means that government should come to students’ rescue. Perhaps even more importantly, as John Merrifield points out in his new policy analysis, prices are a crucial piece missing from our socialized K-12 education system—and many school choice programs—leaving us utterly unable to tell the relative value of any school, program, or teacher.

It’s absolutely true that no man is an island. Too bad no one in politics seems to read John Donne — or Thomas Sowell.

Even Argentina’s Good Policies Undermine Its Rule of Law

Much as I hate to rain on my colleague Juan Carlos Hidalgo’s understandable happiness at the decriminalization of personal consumption/possession of small amounts of drugs, this doesn’t exactly represent a ray of hope in Argentina’s otherwise gloomy policy mix.  Not because I believe in the War on Drugs – I can’t imagine anybody at Cato does – but because it was a court that reached this decision instead of a policymaking body.

Imagine the outcry if the U.S. Supreme Court simply decreed a policy it didn’t like to be unconstitutional – I know, with Justices Stevens and Kennedy at the apogee of their powers, it’s not a far stretch.  Better yet, recall the poison the Court injected into our legal and political systems when it short-circuited the political process by inventing a right to abortion in Roe v. Wade (again, I’m not saying anything about the underlying policy arguments).

So it is here: Instead of having the Argentine Congress change the law, the nation’s Supreme Court (by a vote of 4-3) simply decreed that criminalizing drug use is unconstitutional.  Reports are still sketchy, but this sounds like precisely the kind of judicial fiat developing (or any) countries need to avoid if they want to strengthen the rule of law.

Argentina Decriminalizes Drug Consumption

This just in… A federal court in Argentina has decriminalized the personal consumption of drugs in that country. According to the court’s ruling, punishing drug users only “creates an avalanche of cases targeting consumers without climbing up in the ladder of [drug] trafficking.”

Last month at a UN meeting in Vienna, Argentina’s Minister of Justice, Aníbal Fernández, said that the policy of punishing drug consumers was a “total failure.”

Finally one piece of good news from Argentina.

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