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Volume 13, Issue 34: August 23, 2011
- Downgrading Americas Politicians
- Government Crackdown Inspires Lemonade Freedom Day
- Bolivias San Pedro Prison: A Model for Prison Reform?
- Benjamin Powell on the New Financial Regulations
- New Blog Posts
1) Downgrading Americas Politicians
Standard and Poors downgrading of Uncle Sams credit rating reflects the quality of Americas politicians more than the U.S. economy. According to Independent Institute Research Fellow Emily Skarbek, the United States can recover from the current mess only by enacting deep cuts in entitlements and defense spendingand by demonstrating a principled commitment to smaller government. By showing that the era of Big Government is really over, Washington would create an economic climate friendly to private investment and job growth.
The bailouts, quantitative easing, stimulus, and excessive spending have done little, if anything, to ease our economic woes, Skarbek writes in the Sacramento Bee. What they have done is add political uncertainty, and that is ruining the economy.
In a separate op-ed for the Daily Caller, Independent Institute Research Editor Anthony Gregory notes that recent polls show how low public regard for the White House and Congress has sunk. A Gallup poll put President Obamas rating at 39 percent, and Rasmussen Reports found that only 6 percent of those polled said Congresss performance was either good or excellent. It is an all-out crisis of legitimacy, Gregory writes. While a majority of the political class believes the government has the peoples consent, 77 percent of mainstream voters do not.
Downgrading Americas Politicians, by Emily Skarbek (The Sacramento Bee, 8/17/11)
Obamanomics on the Defensive, by Anthony Gregory (The Daily Caller, 8/18/11)
What will Washingtons spending spree cost you? Find out at MyGovCost.org.
Beyond Politics: The Roots of Government Failure, by Randy T. Simmons
2) Government Crackdown Inspires Lemonade Freedom Day
Saturday marked the occasion of Lemonade Freedom Day, created to protest reported government crackdowns of children operating lemonade stands without a permit. The lemonade stand is an iconic rite of passage for young entrepreneurs. It teaches kids the basics of how a business operates while enabling them to earn a few bucks in the process. But, as Independent Institute Research Fellow Art Carden explains, the government crackdown also teaches valuable lessons.
When government intervenes in commerce, it invariably creates winners and losers. For example, business owners who are better adept at jumping through regulatory hoops may be able to outlast competitors who are better at offering their customers good products at low prices, but who do a poor job of cutting through bureaucratic red tape. Thats a pretty advanced lessonone likely to divert kids attention away from the basics of how market-based entrepreneurship works. Lemonade Freedom Day also teaches a valuable lesson, according to Carden.
It may not seem like much, but Lemonade Freedom Day is a small-but-important exercise in civil disobedience, Carden writes. I look forward to seeing how it goes.
Lemonade and Liberty, by Art Carden (Forbes.com, 8/18/11)
Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II
3) Bolivias San Pedro Prison: A Model for Prison Reform?
Prison life isnt known for exemplifying social harmonyfar from it. A life of internment seems to better fit philosopher Thomas Hobbess description of human existence before government, in the mythic state of nature: nasty, brutish, and short. But San Pedro Prison in La Paz, Bolivia, is an anomalya fascinating experiment that shows how, even in prison, the creation and enforcement of property rights can reduce conflict and foster a cooperative, entrepreneurial spirit.
San Pedro Prison operates like a self-contained, self-governing city, as economist David Skarbek has explained in The Independent Review. Its inmates are allowed to open restaurants, offer carpentry services, and operate commissaries that serve nonprisoner visitors and any wives or children who may live with them. They also purchase their own prison cells from each other, provide for their own medical care and often their own meals, and adjudicate their own disputes, leaving the prisons administrators with little more to do than to keep the prisoners from escaping.
San Pedro Prison isnt Nirvana, of courseits a prison that metes out harsh punishment to those who would try to break its rules, including the norms fostered by the inmates themselves. But because the inmates possess property rights, San Pedro Prison provides a stark contrast to a more famous but less harmonious example of self-governance in a prison environment: the Andersonville prison camp in Georgia during the U.S. Civil War. At a time when governments are saddled with escalating costs of incarceration, San Pedro Prison offers an alternative model worthy of study andwith modificationsadoption, at least on a limited test basis.
Self-Governance in San Pedro Prison, by David B. Skarbek (The Independent Review, Spring 2010)
Changing the Guard: Private Prisons and the Control of Crime, edited by Alexander T. Tabarrok
To Serve and Protect: Privatization and Community in Criminal Justice, by Bruce L. Benson
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4) Benjamin Powell on the New Financial Regulations
How have new financial lawsespecially the year-old Dodd-Frank Wall Street Reform and Consumer Protection Actaffected the U.S. economy? Last month Independent Institute Senior Fellow Benjamin Powell addressed this question, along with investment analyst Liz Peek and Montclair State University Political Science and Law Professor Brigid Harrison, on Fox Business. See Powell discuss Dodd-Frank and its impact on the U.S. economy, here.
Video: Benjamin Powell on New Financial Regulations (Fox Business, 7/19/11)
The Dilemma of Bailouts, by Roy C. Smith (The Independent Review, Summer 2011)
5) New Blog Posts
From MyGovCost News & Blog:
The Independent Institutes Spanish-language blog is available here.