In the aftermath of the hurricane destruction caused by Katrina and Rita, much has been made about government plans for the reconstruction of New Orleans. While this may seem to be a reasonable thing at first glance, its time for a reminder that central planning cannot make efficient use of resources. We must not forget the lessons of history. Two economists, beginning in the 1920s Nobel Laureate Friedrich Hayek and the great Austrian scholar, Ludwig von Mises explained the inefficiency of central planning. Its failure in practice led to the Iron Curtains fall, and its failure is the reason China,... continue reading
Good ideas are hard to come by especially in Washington. But a good idea can stand the test of time, and it can weather the assault of its critics if it gets the opportunity to prove itself. President Bush had a couple of good ideas in his recent address on the U.S. energy situation. He said he would temporarily suspend environmental regulations on gasoline production to ease our supply crunch, and he would work toward helping refineries expand. Congress, as well as state legislatures, must follow the presidents lead and find solutions to the pressing need for increased supply and... continue reading
As with nearly every other major natural disaster, Hurricane Katrina resulted in short-term higher prices and cries of price-gouging by politicians and those who are not familiar with how the market economy works. This is a traumatic event for everyone involved, and a poor understanding of the economic forces at work only adds to the anger and confusion. One of the key aspects of a market economy is that it efficiently sends resources where they are most valued. The press does not seem to have noticed that despite a major natural disaster that shut down a substantial portion of our... continue reading
As we watch the coverage of the hurricane story, it should be a reminder of the power a mere few people can exercise each day to influence the opinions of millions of viewers worldwide. Working behind the scenes, these are the TV news and entertainment producers, documentary filmmakers and some of the other self-appointed literati. Their creations work like power steering: multiplying the opinions of each one into a much greater force and imprinting these notions about behavior and politically correct thinking on huge audiences. Hurricane Katrina is one of the major stories of the past 100 years. We deserve... continue reading
As residents of New Orleans and the rest of the Gulf Coast begin to pick themselves up from a devastating natural disaster, theyre finding lots of hands reaching out to help. Ordinary Americans and companies large and small from across the country are reaching out by the thousands to offer flood victims their time, talents and financial resources. It will take a long time for some communities to recover from Hurricane Katrina, but we are once again witnessing that the most effective compassion comes from the private sector. While Americans are reaching out, the media are pointing fingers. The media... continue reading
Tea leaves and global warming: there is no end to unintended entertainment by activists. Keep those tea leaves at hand. Its always show time and the media are there to trumpet the style and forecasts of the moment. Thundering predictions of future outcomes are always with us. It is the stock in trade of the politician, the political activist and some others who worry about all sorts of coming disasters, social or otherwise. Some appear to get involved as a hobby. Others, who are serious about their worries, will stay the course for someone apparently needs to worry. Todays seers... continue reading
Recent discussions about housing prices show confusion about what makes for correct prices. The market sets prices that are correct when the quantity that people demand of a good or service is equal to the quantity supplied. The only time we can say that the price of a good or service is too high is when there is a lot of it piling up and no one is buying it. If there is too little of the item available, so that excess demand exists, prices will rise. As the prices rise, less will be demanded while more will be supplied... continue reading
Ive been telling people around the country for months that they must think all of us are stupid. Usually, someone will come up and ask me about the mysterious they . Its a simple answer they are any political party, politician or member of the news media who underestimate the American public. Political parties are supposed to take sides and be partisans. Thats the system. The news media are another story or at least they should be. But their coverage of the Bush economy reads like a collection of Democratic Party press releases, calling a strong economy everything from struggling... continue reading
Books about tax policy arent supposed to be interesting or controversial. Theyre reliably dry, long, confusing, and heavy with jargon and convoluted graphs. Fortunately, the tax debate is about to be revived by an obscure congressman from Georgia and the High Priest of the Church of the Painful Truth. In the hopes of eliminating the income tax and making April 15 just another day, Rep. John Linder (R-Ga.) and libertarian talk radio host Neal Boortz crafted a witty and informative manifesto: The FairTax Book. Like its name, their outstanding effort is simple and straightforward. The reason most tax books are... continue reading
According to the most recent Washington Post /ABC poll, President Bushs plan to restructure the Social Security system has lost public support. What the poll doesnt tell you is that the network news has focused so much on the liberal side of this debate that the result isnt a surprise. Its a self-fulfilling prophecy. The Post story stated, 58 percent of those polled this time said the more they hear about Bush's plan, the less they like it. And what are they hearing about Bushs plan? That its a bad idea, of course. The networks have been beating up the... continue reading