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Do Food Stamps Reduce Corporate Labor Costs?
Friday September 21, 2018 | Robert Murphy

On a recent segment of his popular Fox News program, conservative pundit Tucker Carlson took aim at the elite billionaires Jeff Bezos, the Walton family, and Travis Kalanick, arguing that their giant corporations rip off the taxpayers. Carlson claimed that Amazon, Walmart, and Uber underpay their workers—who must turn to government programs just to survive—and use regulations to stifle their competitors. Although I agree that some corporations (such as Amazon) benefit from cozying up to the government, the basic economic logic in this popular critique is backwards: the food-stamp program tends to raise wage rates by giving workers more bargaining power. Worse, Bernie Sanders’s proposal to impose a 100 percent tax on large employers for every dollar their employees receive in government assistance would directly hurt these very same workers by punishing the companies that hire them. (more…)

Ten Years after Lehman—Will It Happen Again?
Thursday September 20, 2018 | Alvaro Vargas Llosa

Robert Murphy has reminded us, ten years after the collapse of Lehman Brothers, what the real lessons of the financial crisis were. It now looks as if, having learned the wrong lessons, we might be headed for something nasty once again. The original sin was the manipulation of money in the form of artificially low-interest rates following the bursting of the dotcom bubble. In the context of a fractional reserve banking system and of a world accustomed to easy money since the beginning of the 1980s, the incentives for too much leverage were irresistible. Artificially low-interest rates had another perverse effect—asset-price inflation. The credit binge and the asset inflation related to mortgages and real estate in particular because, due to political incentives for the lowering of lending standards, a large part of the action was concentrated in that sector. Everything else people usually associate with the financial crisis of 2008, such as the explosion of securitization or the failure of regulation, was a symptom, not a cause. Given the prevailing system, the incentives were for bankers (both commercial banks and “shadow banking” institutions) to issue short-term debt and invest in long-term securities. Since assets were constantly rising in value, it was assumed refinancing short-term debt against all that collateral would never be an issue. Moreover, the excessive investment in long-term debt also had the effect of lowering long-term rates, creating in turn incentives for malinvestments that would eventually play a key part in the Great Recession. (more…)

Real Women Don’t Want the Government to Get Them in the Boardroom
Wednesday September 19, 2018 | Mary Theroux

Women, as well as all shareholders and debt-holders of California firms, should be flooding California’s Governor Jerry Brown’s InBox and Voicemail with calls to veto the recently-passed Senate Bill 826, mandating quotas for women on corporate boards. Specifically, SB 826 would: 1) Provide for gender diverse representation on corporate boards by requiring each publicly-held corporation headquartered in California to have at least one woman on its board of directors by the end of 2019. 2) Beginning July 2021, the bill requires a minimum of 2 women directors on boards with 5 directors and at least 3 women on boards with 6 or more directors. Women should be rightly against it because the sole effect will be for existing board members to assume new women board members are only there as quota-fillers who are by definition less qualified than they. I can’t imagine a woman of substance wanting a board seat under such circumstances. (more…)

The Last Refuge of Payment in Kind
Tuesday September 18, 2018 | K. Lloyd Billingsley

Football season is in full swing, and on Saturdays college teams rule the television sports channels. The television deals rake in big money for the National Collegiate Athletic Association (NCAA), which in 2018 will generate $857 million from CBS and Turner Broadcasting alone. NCAA boss Mark Emmert bags a salary of $2.4 million, and Alabama football coach Nick Saban rakes in $8.3 million. Everybody makes big money except those the people pay to watch, the players. They are paid nothing and even barred from endorsement deals. Apologists of the system claim this policy preserves the spirit of amateurism, and that the various colleges pay the players’ tuition. Examples of payment in kind are rare, but here is an illustration.  (more…)

Gratitude in an Unfree World
Tuesday September 18, 2018 | Robert Higgs

Everyone who knows me knows that I loathe government as it now exists everywhere. For fifty years, my professional activity has pertained in large part to awful actions that governments at every level have taken. Because governments have been such a pervasive part of social and economic life in the past century or more, bringing into being the welfare/warfare/surveillance/therapeutic/police state under which most people in the world now live, specializing as I have is bound to leave one with a jaundiced view not only of the state but of much of society as well. And such an outlook does not make for personal happiness. But yesterday, as I set out to walk Fly Boy down the road through the jungle as usual, I was struck by what a beautiful day it was, and I determined to count my blessings. They are too many to enumerate here, but let me simply mention some of the greatest. (more…)

Constitution Day
Monday September 17, 2018 | William Watkins

Today, by statutory law, is Constitution Day. It is more a wake for the dead than a celebration for one that is living. Actually, the Constitution is dead because so many have insisted on it being a living and breathing document. A Constitution should be a lighthouse, a beacon for the people to gaze upon to ensure their liberties are not wrecked upon the rocks by reckless government officers. To perform such a task it must be firmly fixed. If not, then one can never be sure just where the danger lies. The demise of our Constitution is evident in the recent confirmation fight with Judge Brett Kavanaugh. The fixed nature of originalism so scares the Left that the nominee must be stopped at all costs. The Left depends on a living Constitution to promote and allow various expansions of national power. So, on this day let us raise our glasses to the good old written Constitution. It is dead, because the Left made it living.

*** William J. Watkins, Jr. is a Research Fellow at the Independent Institute and author of the book, Crossroads for Liberty: Recovering the Anti-Federalist Values of America’s First Constitution.

The Silence of the Deficit Hawks
Monday September 17, 2018 | Craig Eyermann

The U.S. government did something in August 2018 that it has never done before. It spent $433 billion in taxpayer and borrowed dollars in a single month! For the U.S. government’s 2018 fiscal year to date, which will end on September 30th, the cumulative amount of spending it has done is well ahead of where it was at this point in 2017, while the amount of money it has collected in taxes is, perhaps surprisingly, slightly ahead of where it was at this time last year. You might think this dubious fiscal achievement would attract howls of disapproval on Capitol Hill, but you would be wrong. According to reporting by Damian Paletta and Erica Werner of the Washington Post, there is bipartisan approval for spending even more money, with the only disagreements being over what. (more…)

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