Don't Federalize the Gun Laws

Don't Federalize the Gun Laws

12/06/2017Ryan McMaken

The GOP-controlled House of Representatives is set to further federalize gun laws and gun regulations. 

They're doing it, though, under the guise of what sounds like a harmless bill designed to guarantee property rights:

The House is poised to pass a bill that allows concealed carry permit holders from one state to legally carry their guns in any other state — legislation the National Rifle Association has called “their highest legislative priority” in 2017.

But the problem here is that what the House is doing is not reciprocity. Reciprocity, properly defined, is a matter of agreement among the states. It does not involve the federal government. The new bill seeks to further insert the federal government into gun laws by forcing reciprocity on all the states. We explored this important distinction here at mises.org in August: 

This issue can be addressed from both a legal and Constitutional standpoint, and from a general philosophical decentralist view:

Suzanne Sherman at the Tenth Amendment Center has already weighed in against the idea on Constitutional grounds, based on two main arguments: 

1. Reciprocity laws are compacts made among the states, and are not imposed by the federal government.

2. The Bill of Rights Doesn't apply to the states. 

On the first matter, Sherman notes that the proposed legislation would impose reciprocity on the states. This, Sherman notes, is a departure from what we usually mean by reciprocity, which denotes compacts that two or more states have voluntarily entered into. 

Sherman writes:

Many advocates of forced National Reciprocity point to the “Full Faith and Credit Clause” found in Article IV, Section 1 of the Constitution. Such application is likewise problematic because it deviates from the original intent of the clause, lifted directly from the Articles of Confederation without any change to its meaning. This clause, as ratified, simply ensured citizens in one state could own land or property in another with the full rights of a citizen of that state. It in no way implied that one state had to recognize the institutions or licensing of another state. Driver’s licenses are acceptable for passing through various states, but it is, like CCW licensing, by mutual assent of the states. In other words, there is no federal statute mandating that one state must honor another state’s driver’s licenses.

In other words, the sort of "reciprocity" imagined by the backers of nationwide forced reciprocity is a new kind of reciprocity that substitutes federal policy for decentralized state-level policy. 

The enormous downside to this is that it federalizes what has long been recognized as largely the domain of state and local governments. Further federalizing gun policy may look like a fine idea right now, but as Sherman notes, it only takes a couple of new anti-gun appointments to the Supreme Court for the whole idea to blow up in the faces of pro-gun advocates. It's far more prudent, Sherman contends, to work against any increase in federal involvement in gun policy. 

Sherman is correct. 

The second point is about the Bill of Rights. As Lew Rockwell points out, 

[T]he purpose of the Bill of Rights was to state very clearly and plainly what the Federal Government may not do. That's why they were attached to the Constitution. The states, under the influence of skeptics of the Constitution's limits on the central power, insisted that the restrictions on the government be spelled out. The Bill of Rights did not provide a mandate for what the Federal Government may do. You can argue all you want about the 14th amendment and due process. But a reading that says it magically transforms the whole Bill of Rights to mean the exact opposite of its original intent is pure fantasy.

Of course, even if the Constitution explicitly gave the federal government the power to regulate guns, it would still be a bad idea to do so at the federal level. As is the case with all types of policy, the federal government is primarily the domain of millionaire politicians who are nearly impossible to influence — or even get a meeting with — unless one is extremely wealthy or has the backing of a large nationwide special interest group. It is unwise to grant those people even more power. 

Moreover, if the federal government is going to make new federal laws in this matter, that means it must also enforce them. Will this be done through a new national bureaucracy? Or perhaps through the federal courts? Either way, the federal government will be more involved in crafting, regulating, and overseeing state policy. Republicans claim to be against this sort of thing. 

Also key to understandign the importance of decentralization is the fact that decentralization offers a multitude of choices between different regimes in the face of government restrictions and persecution. If only one huge government has been granted the power to protect rights, to where will one go when the government fails to do its prescribed task? On the other hand, when a wide variety of smaller governments are charged with protecting rights, the failure by one regime is not nearly as catastrophic since the offending regime can be far more easily avoided through emigration and boycott than can a large centralized regime. 

Thus, it might sound nice to put the federal government in charge of protecting gun rights, but the potential downside is immense given that federal policy can change easily, and then be imposed nationwide. 

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60 Years of 'Government - An Ideal Concept'

11 hours agoGary Galles

In 1958, Foundation for Economic Education guiding light, Leonard Read, presented a series of lectures in Argentina against the backdrop of an economy decimated by mis-government which shares a great deal with the same country six decades later. The lectures became a small book-- Why Not Try Freedom?—an excellent encapsulation of Read’s thought.

Particularly interesting is his first chapter, “Government—An Ideal Concept,” because in a world where “each man must actually live his own answer to the challenges posed by his existence,” knowing the appropriate ideal for government is an indispensable guide to growth and social cooperation. Sixty years later, that deserves revisiting, as the ideal is almost unrecognizably distant from current reality.

The problems of man, society, and government are approached most constructively…within a moral and spiritual frame of reference.

Man’s purpose is…to come as close as he can to the realization of those creative potentialities peculiar to his own person.

Any behavior, personal or collective, which tends to retard man in his pursuit of the ideal life is, in my judgment, ipso facto bad, evil or immoral. Any behavior, personal or collective, which tends to promote or complement this objective is, in my judgment, ipso facto good, virtuous or moral.

Any person has a moral right to inhibit the destructive action of another or others. However, no person has a moral right to forcibly direct or to control what another shall invent, create, or discover; no right to dictate where he shall labor, how long he shall work, what his wage shall be, what and with whom he shall exchange, or what thoughts he shall entertain. No single person has any such moral right. No combination of persons has any such moral right. No agency, political or otherwise, has any such moral right.

There are no moral sanctions for government to intervene in any manner whatsoever with productive or creative actions. The moral sanction for establishing government springs from the right of the individual to inhibit or prohibit or restrain the destructive actions of others.

It is necessary to know why government should exist--what it is for--in order to gain an awareness of what it is not for. We must know government and its purpose…to limit it to its purpose.

An ideal theory of government and liberty is to be derived from the necessity for the free, uninhibited flow of all creative human energy .

We are all dissimilar. However, we have …one common necessity if we are to live and progress. It is that prohibitions against, or restrictions upon, the release and exchange of our creative energies be at the lowest minimum possible…this removal of inhibitory influences--the kind imposed by man on men--serves to benefit all of us in common.

Each individual in his own upgrading…builds only upon free will and volition.

Inhibitory influences are fraud, violence, misrepresentation, and predatory practices. All are immoral, be they done legally or illegally. The problem here is to remove inhibitory actions. This can be accomplished by restraining aggressive force.

No individual has the moral right to use aggressive force against any other individual. He has the moral right to use only defensive or repellent force.

If a person has a right to life…he has a right to protect and to sustain that life, the sustenance of life being nothing more nor less than the fruits of one’s labor—one’s honestly acquired property…the rights to the fruits of one’s own labor involves the restraint or the removal of obstacles to…one’s own exchange, but also the obstacles to other people’s exchange.

If one has a right to life and livelihood, every other person has a similar right… the requirement that life and livelihood be protected are coterminous with society .

The source of all creative and variable human energy…rests in…the individual, in such voluntary and cooperative actions as he may freely choose to take. This is the province of the individual and not of society. This is the vast, unlimited area of liberty, of self-reliance, and of self-discipline.

If the purpose of man on earth is self-realization…it follows that the law, the book of rules and prohibitions for social administration, can logically serve only the purpose of deterring man’s destructive actions for the sake of giving full flower to his creative actions…no just object beyond removing social obstacles to the release of the human spirit. An organized arm of society, within its proper bounds, can be but the handmaiden of liberty; government, within its proper bounds, can be but the protective servant of all individuals equally against antisocial marauders.

Cooperation for creative purposes must be left to voluntary action. Men can cooperate to use force, but they cannot be forced to cooperate…However, cooperation for creative purposes requires, as an auxiliary, cooperation to annul destructive purposes. Cooperation for creative purposes requires that inhibitory influences against creative action be neutralized.

Society’s political apparatus…[is] to inhibit, repel, restrain, penalize. [Members] can do everything else better outside the apparatus than in it. What should be inhibited, restrained, penalized? Those actions of man which are characterized by aggressive force, namely, those actions which themselves inhibit, restrain, destroy, or penalize creative effort. Defensive force may be used to neutralize aggressive force, and such a use of forces serves a social end. This use of defensive force should be the guiding principle of the political agency.

Cooperation is required among members of society to perform the negative function of prohibiting obstacles to production, communication, and exchange… limited to those actions which have a common benefit to creative effort. Ideally, the only dissenters would be those who want to live by predation.

Any logical and just organization by society derives its existence from…the common need for every man to protect himself against those who would limit his creative opportunities. Every human being is born with as much right to live his life creatively as any other man. Man, however, is incapable of protecting his life as a personal, individual project, and at the same time of realizing his human potential…By reason of this social circumstance, he is committed, in principle, to cooperating with his fellow men in the protective project…that should make no distinction whatever as to persons…where all ought to be regarded as equal… where special privilege should be unknown.

In short, the law’s limitation inheres in its justification. Force is a dangerous thing. Therefore, society's organized arm is a dangerous instrument. It is not, as some assert, a necessary evil. When limited to its proper defensive scope, it is a positive good. When exceeding its proper limitations and becoming aggression, it is not a “necessary” but a positive evil.

Aggressive force…is always evil. There are no exceptions. No man has any moral right to use aggressive force against any other man. Nor have any number of men, in or out of societal organizations, any moral right to use it.

One of the most distressing fallacies having to do with government and liberty is the assumption that the State, an agency presumably of the people, has rights beyond those possessed by the people…no reasonable person can logically believe that any such control belongs to a multitude of citizens…It has no derivation. It is an arrogation.

Any person has the natural and moral right to use repellent or defensive force against any other person who would aggress against him. No person on this earth has any moral right of control over any other person superior to the defense of his own life and livelihood.

Every living human being…has a vested interest in the creative emergence of every other human being…in the free, uninhibited flowing and exchange of the energies thus released; the true interests of all, therefore, are in harmony…every individual has a vested interest in common with all other men in restraining all inhibitory influences to creative energy and creative energy exchanges. All else is individual, voluntary, and cooperative as individuals may choose; for all else is creative.

Leonard Read provides a valuable touchstone—the universal liberty to grow or emerge--to understand what should ideally characterize a government of self-owning individuals. That, in turn, reveals a sharp contrast with “What Is and What Should Never Be,” (apologies to Led Zeppelin) about government and its impositions in our lives. We have, in many ways, moved farther from the ideal in the 60 years since Read articulated it. But he continues to offer us the wisdom necessary to retrace our mis-steps and reopen “the vast, indeed, the infinite, area of emergence” that is possible to us. And we have a lot to gain if each of us would convert our “massive potential for growth,” as Bill Murray put it in Stripes, into reality.

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Forget Security Clearance, John Brennan Should Be Prosecuted

08/16/2018Tho Bishop

In the year 2018, it is not remotely shocking to see media attention shift seamlessly from reality show villains to former CIA directors. The Trump Administration’s announcement that it has revoked the security clearance for John Brennan, America’s former Communist-sympathetic spymaster, naturally resulted in a race to see who among the professional political class could be most dramatic in their condemnation.

Many, including Brennan himself, bizarrely argued that the Trump Administration’s action was a “1st Amendment violation.” As Jim Bovard quipped on Twitter, “Can someone show me the asterisk in the First Amendment that says that former govt. officials have a divine right to confidential inside govt. info in perpetuity?”

Most entertaining was the response from ex-VP and amateur masseuse Joe Biden, who tweeted:

Biden Tweet Brennan.png

In Washington, you can always identify how dependable an ally is by the size of the lies they are willing to tell in your defense.

After all, Brennan’s tenure at the CIA was rampant with dishonesty, unaccountability, and hypocrisy – and that’s before looking at Brennan’s long record of support for war crimes.

It was Brennan’s CIA, after all, that was found guilty of spying on Senate computer servers and threatened to prosecute Intelligence community staffers investigating CIA interrogation practices. He then lied about it repeatedly until investigation into the matter made doing so indefensible.

The conduct of Brennan’s CIA wasn’t limited simply to the Senate. Though in his current capacity as an MSNBC contributor, Brennan is now a passionate defender of the 1st Amendment and free press, his agency also hacked and spied on American journalists reporting on CIA torture.

As the McClatchy reported at the time:

The CIA got hold of the legally protected email and other unspecified communications between whistleblower officials and lawmakers this spring, people familiar with the matter told McClatchy. It’s unclear how the agency obtained the material.

Of course it is understandable that Brennan was so interested in keeping CIA torture practices as hidden as possible, particularly since he himself was an advocate for them. These included waterbordering, rectal feeding, beatings, and other sometimes fatal practices. Additionally the CIA’s conduct during this period was without any sort of accountability, keeping other government agencies and even the White House in the dark. Inevitably many innocent people became ensnared by the actions of America’s rogue spy agency.

Naturally the media and the anti-Trump left would now treat a defender of these practices as a moral defender of American democracy.

If Trump really wanted to act on the Deep State, he wouldn’t settle for simply revoking John Brennan’s security clearances. He should move to strip his pension and have him prosecuted for his past actions. While it's fair to question whether the current legal system would actually allow anything to happen to Brennan, doing so would force renewed focus on his past actions and help highlight the dangers of leaving the CIA unchecked. Trump is a fan of spectacles, let this one play out for the nation to see. 

Then he should do the same for James Clapper.

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Bake the Cake: The State of Colorado Is Still Persecuting Baker Jack Phillips

08/15/2018Ryan McMaken

The Colorado Civil Rights Commission is at it again. It's going after Masterpiece Cake Shop owner Jack Phillips for refusing to "make a cake with a pink inside and a blue outside, celebrating a gender transition from male to female."

This comes only months after the US Supreme Court ruled against the Commission's regulatory attack on Phillips for not baking a cake for a gay wedding.

Although the Supreme Court ruled in Favor of Phillips, it nevertheless took a very narrow view.

Instead of criticizing the very existence of laws that trample on property rights by mandating that people be forced — under threat of state violence — to provide services for certain privileged groups, the Court only took issue with the reasoning employed by the Colorado Civil Rights Commission when it ruled against Phillips.

When the ruling came down, I commented on the specifics of the Court's narrow ruling:

The US Supreme Court today ruled 7-2 in favor of a Denver small business owner who has been threatened, sanctioned, and ultimately driven out of business by the Colorado Civil Rights Commission. The controversy arose when the cake shop owner, Jack Phillips of Masterpiece Cakeshop, refused to bake a cake for a gay wedding, claiming to be motivated by religious beliefs.

The cake shop was hauled up before the Colorado Civil Rights Commission where the commission ruled that the shop must "change its company policies, provide 'comprehensive staff training' regarding public accommodations discrimination, and provide quarterly reports for the next two years regarding steps it has taken to come into compliance and whether it has turned away any prospective customers."

Justices Kennedy, Roberts, Alito, Breyer, Kagan, Gorsuch and Thomas all voted to overturn the earlier appeals court's decision to uphold the Commission's ruling against Phillips. Only Ginsburg and Sotomayor dissented.

In the decision , authored by Justice Kennedy, much of the reasoning centered on the fact that the Colorado Civil Rights Commission had demonstrated an apparently obvious bias against religious people, even though "neutrality" is legally required in such cases. The ruling states:

As the record shows, some of the commissioners at the Commission’s formal, public hearings endorsed the view that religious beliefs cannot legitimately be carried into the public sphere or commercial domain, disparaged Phillips’ faith as despicable and characterized it as merely rhetorical, and compared his invocation of his sincerely held religious beliefs to defenses of slavery and the Holocaust.

The SCOTUS ruling also noted that both the Commission and the appeals court largely ignored and glossed over the fact that the Commission had on three prior occasions ruled in favor of bakers who had refused to bake cakes with anti-gay slogans on them. There was an enormous double standard at work.

As Kagan notes in her concurring opinion, the Civil Rights Commission was abandoning neutrality in favor of making decisions “based on the government’s own assessment of offensiveness.”

In other words, the Commission was deciding, based on the members' own personal prejudices and biases, who shall be forced to bake cakes, and who shall not.

With this ruling, the court took a small step in the right direction by taking exception to the Commission's claim that freedom of religion doesn't exist. As noted by Justice Kennedy, the Commission essentially dismissed the very idea that religious conviction could be a valid reason to claim an exemption from the Commissions rules and regulations.

The Court came back and slapped down this reasoning, but it left the Commission plenty of leeway to rule against Phillips using different reasoning.

Thus, as long as the Commission can manufacture a different rationale for ruining Phillip's business, it is free to do, as far as the US Supreme Court is concerned.

The court's limited approach here illustrates the problem with the Court's strategy on the matter of anti-discrimination law has always been problematic.

By limiting Philipp's free use of his property only to cases in which he can prove some sort of religious conviction, the Court — and the law in general — relies essentially on mind reading in determining whether or not Phillips should be allowed to use his property as he sees fit:

This has led to a number of absurd legal and legislative acrobatics in which property owners must prove that their business decisions are motivated by artistic choices or religious conviction, but not by some other motivating factor. Thus, government commissions and courts are required to read the minds of business owners and determine whether or not their internal feelings and religious views fall under some government-approved motivation for refusing some sort of business service.

Proving or disproving internal motivations, of course, has always been an extremely sketchy way of doing things. After all, the Colorado Civil Rights Commission concluded that Phillips was using his religious views to justify unlawful discrimination. This, of course, requires that the commission members somehow have certain knowledge about the thoughts in Phillips's head.

This sort of reasoning also has the habit of working against business owners who hold views that are held only by small minority or otherwise might be considered especially idiosyncratic. One might argue that one is religiously opposed to providing some sort of service. But unless those views are recognizable to judges and bureaucrats as part of a known religious movement, the business owner is likely to be accused of simply making up an ad hoc religion to "mask" unlawful discrimination.

Ultimately, this sort of subjectivity invites just the sort of corruption and bigotry we see on the Colorado Civil Rights Commission.

There's a far less complicated way of protecting rights in these cases, however, we should stop talking about "freedom of religion," and focus on ordinary property rights instead. In practice, freedom of religion can only be truly protected by protecting property rights overall. After all, all rights — including freedom of speech and freedom of religion — depend on the ability to exercise control of one's own body and property.

As Murray Rothbard has demonstrated, rights to religious expression and speech are simply types of property rights. Consequently, religious liberty and free speech can be protected with a more general respect for property rights. By saying that Phillips ought to be forced to bake a cake, the Commission is asserting that Philipps does not enjoy ownership over his own body, or the shop and tools he acquired by using his body to perform labor.

Having refused to acknowledge these property rights, though, the Supreme Court has empowered the Colorado Civil Rights Commission to continue its war against small-time bakery owners who are no threat to anyone and impose their views on no one. The Commission already knows how it's going to rule. Its hostility to Phillips is apparent, and there's not reason to believe the Commission will stop until it has succeeded in ruining him. The challenge the Commission faces, however, is in reverse engineering a ruling that can survive a legal challenge. I'm sure that with the help of a sufficient number of taxpayer-funded lawyers, the commission can succeed in this endeavor.

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Congress Has Become Very Good at Spending Money

08/15/2018

This week President Trump signed the 2019 National Defense Authorization Act, increasing America’s war budget to a whopping $717 billion. For comparison, this is roughly equal to the next 11 highest military budgets combined.

Military Spending_815.png

In fact, the $107 billion increase from last year alone is roughly equal to the total military spending of Russia and Germany together.

Congress isn’t done spending taxpayer money yet though. Next up is a spending bill that will fund the Departments of Labor, Health and Human Services, Education, and Defense, because the Pentagon apparently can’t get by with a humble $717 billion. This will be the third “minibus” to pass Congress  in 2018, the result of which has been the US running its highest deficits in years.

Of course reckless Federal spending isn’t anything new. What is particularly noteworthy about Congress’s recently behavior is that it has now become extremely efficient at passing these spending bills.

Congressional budgets are broken up into 12 different bills. When this next package clears the Senate – as expected – it will have passed 9 of the 12. As Axios notes, the Senate “has already passed the majority of spending bills by early August for the first time since 2000.” Should Congress continue on this pace and complete all 12 budgets by October, it will be the first time this has occurred since 1996.

None of this is surprising. As Ryan McMaken noted prior to the 2016 election, no one spends money more liberally than a Republican-controlled Federal government. Ideas like fiscal responsibility (and political decentralization) makes for great rhetoric in a political minority, but are extremely inconvenient when in a position of political power.

What makes this all the worse is that the GOP’s fiscal irresponsibility will inevitably result in blow back for some of its better policy victories, such as last year’s tax cuts.

Already progressive outlets are trying to peg last year’s reforms as the reason for historically high deficits, even though tax cuts have (unfortunately) increased government revenue. As such, when the Democrats next find themselves in political power, we can count on a push for tax increases to address America’s fiscal ills – likely while advocating for a new list of new government programs.

This cycle will continue to play out until the power to spend is taken away from Washington. The question is whether it will be due to a debt and monetary crisis, or pro-active restraints placed on it from the states.

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The Mission of the Mises Institute, In One Paragraph

08/14/2018Jeff Deist

The mission of the Mises Institute, as presaged by Ludwig von Mises in his 1962 review of Murray Rothbard's Man, Economy, and State: 

If we want to avoid the destruction of Western civilization and the relapse into primitive wretchedness, we must change the mentality of our fellow citizens. We must make them realize what they owe to the much vilified "economic freedom," the system of free enterprise and capitalism. The intellectuals and those who call themselves educated must use their superior cognitive faculties and power of reasoning for the refutation of erroneous ideas about social, political and economic problems and for the dissemination of a correct grasp of the operation of the market economy. They must start by familiarizing themselves with all the issues involved in order to teach those who are blinded by ignorance and emotions. They must learn in order to acquire the ability to enlighten the misguided many.

The entire review is fantastic, and demonstrates the degree to which Mises considered the young Rothbard an eminent and pioneering economist — nothing less than an "epochal" contributor to the science of praxeology. High praise indeed.

h/t Bob Robert.

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Trump vs. His Own Administration?

08/13/2018Ron Paul

Are President Trump’s senior cabinet members working against him? It’s hard not to conclude that many of the more hawkish neocons that Trump has (mistakenly, in my view) appointed to top jobs are actively working to undermine the president’s stated agenda. Especially when it seems Trump is trying to seek dialogue with countries the neocons see as adversaries needing to be regime-changed.

Remember just as President Trump was organizing an historic summit meeting with Kim Jong-Un, his National Security Advisor, John Bolton, nearly blew the whole thing up by making repeated references to the “Libya model” and how it should be applied to North Korea. As if Kim would jump at the chance to be bombed, overthrown, and murdered at the hands of a US-backed mob!

It seems that Trump’s appointees are again working at cross-purposes to him. Last week, Secretary of State Mike Pompeo announced that he was invoking a 1991 US law against the use of chemical weapons to announce yet another round of sanctions on Russia over what he claims is Putin’s involvement in the poisoning of a former Russian spy and his daughter in the UK.

The alleged poisoning took place in March and only now did the State Department make its determination that Russia was behind it and thus subject to the 1991 sanction law. Was there new information that came to light that pointed to Russian involvement? According to a State Department briefing there was none. The State Department just decided to take the British government’s word for it.

Where do we get authority to prosecute Russia for an alleged crime committed in the UK, by the way?

President Trump’s own Administration is forcing him to accept the State Department determination and agree to sanctions that may well include, according to the 1991 law, a complete break of diplomatic relations with Russia. This would be a de facto declaration of war. Over unproven allegations.

Trump has authority to reject the imposition of new sanctions, but with his Democrat opponents continuing to charge that he is in league with the Russian president, how could he waive sanctions just before the November US Congressional elections? That would be a windfall for the Democrats seeking to take control of the House and Senate.

The only way Russia could avoid the second, most extreme round of these sanctions in November is to promise not to use chemical weapons again and open its doors to international inspections. What government would accept such a demand when no proof has been presented that they used chemical weapons in the first place?

Certainly it is possible that President Trump is fully aware of the maneuverings of Bolton and Pompeo and that he approves. Perhaps he likes to play “good cop, bad cop” with the rest of the world, at the same time making peace overtures while imposing sanctions and threatening war. But it certainly looks like some of his cabinet members are getting the best of him.

If President Trump is to be taken at his word, that he welcomes dialogue “without pre-conditions” with leaders of Russia, North Korea, Iran, and elsewhere, he would be wise to reconsider those in his employ who are undermining him every step of the way. Otherwise, it is hard to believe the president is sincere. Let’s hope he does choose dialogue over conflict and clips the wings of those under him attempting to push him in the other direction.

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"FDA Approval" is a Monopolist's Scheme to Limit Competition

08/13/2018Hunter Lewis

Charging the price of an expensive car for a garden-variety amino acid, one we eat every day.

A year ago, the Food and Drug Administration ( FDA) approved a “drug” called Endari to treat sickle cell disease, which afflicts about 100,000 Americans of African descent and around 25 million more outside the US. Price tag: $28,000 a year.

So what is Endari? Anything approved by the FDA legally becomes a “drug.” But some have noted this “drug” is just a higher dose of L-glutamine, a common amino acid that is in our food and that our bodies also make. Indeed, The agency itself describes this “drug”  as "L-glutamine oral powder.” Amino acids are the building blocks for protein and we also use them for other purposes.

So here we have a “drug” intended to help Americans of African descent, but because it has been approved by the FDA, now costs more than $500 per week. Normally “drugs” benefit from two government monopoly grants: first a patent and then FDA approval. That ensures no competition and the ability to charge more than would be the case without a government-restricted market.

Glutamine, being a natural substance, cannot be patented stand alone, but the FDA approval still guarantees a monopoly, because nobody else will want to pay the cost of entering the market. The total cost of gaining approval averages in the billions. Even Endari, approved under the “Orphan Drug Act,” would have cost enough to keep a competitor out, and in addition the FDA would not look well on a second application under that Act. FDA approval is also crucial because Medicaid and Medicare and Veterans will then pay for it. They will not pay for a supplement, even if it is the same thing, even if it costs less than a tenth as much.

There is still an existing drug for sickle cell disease called hydroxyurea, which also costs less than a tenth as much as Endari, but which has serious side effects. The insert warns of anemia and leukemia, and in addition it may not work. Nevertheless, some insurance companies are telling doctors to continue to use hydroxyurea first. They are not of course telling doctors to do the logical thing which is to use the supplement form of glutamine.

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Facebook Censored Me, Criticize Your Government and It Might Censor You Too

08/09/2018James Bovard

Responding to Russian-funded political advertisements, Facebook chairman Mark Zuckerberg declared last month that “we will do our part to defend against nation states attempting to spread misinformation.” But Facebook is effectively sowing disinformation by kowtowing to foreign regimes and censoring atrocities such as ethnic cleansing in Myanmar. In the name of repressing fake news and hate speech, Facebook is probably suppressing far more information than Americans realize.

Facebook blocked a post of mine last month for the first time since I joined it nine years ago. I was seeking to repost a blog article I had written on Janet Reno, the controversial former attorney general who died last year. I initially thought that Facebook was having technical glitches (no novelty). But I checked the page and saw the official verdict: “Could not scrape URL because it has been blocked.”

“Pshaw!” I said, or some other one-syllable epithet. I copied the full text of the article into a new blog post. Instead of using “Janet Reno, Tyrant or Saint?” as the core headline, I titled it: “Janet Reno, American Saint.” Instead of a 1993 photo of the burning Branch Davidian compound in Waco, Texas, I substituted an irreproachable official portrait  of Reno. Bingo — Facebook instantly accepted that crosspost. I then added a preface detailing the previous blockage and explaining why I sainted Reno. The ironic headline attracted far more attention and spurred a torrent of reposts by think tanks and other websites.

I contacted Facebook’s press office to learn why the initial post was blocked. Facebook spokeswoman Ruchika Budhraja checked into the matter and notified me that I would be permitted to post that link. "But why was it blocked?" I replied. She responded: “There was an image in the post that incorrectly triggered our automation tools. That issue has been corrected.”

So when did showing the home of more than 70 people engulfed in flames after a FBI assault become beyond the pale? Facebook presumably blocked everyone who sought to share that image from the most vivid law enforcement debacle of the 1990s.

This was not the first time Facebook erased an iconic image that the U.S. government would be happy to see vanish. Facebook likely deleted thousands of postings of the 1972 photo of a young Vietnamese girl running naked after a plane dropped napalm on her village.  After coming under severe criticism last year, Facebook announced that it would no longer suppress that image. Unfortunately, Facebook is unlikely to disclose a list of the images it bans. Because most Americans are clueless about current events and recent history, they will have little idea of what vanishes into the Memory Hole.

Read the full article at USA Today
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Republican Congressman Charged with Insider Trading, Which Shouldn't Be a Crime

08/08/2018Tho Bishop

New York Republican Congressman Chris Collins was indicted today on a variety of charges stemming from an investigation of insider trading. Prosecutors allege that he, along with son and soon to be son-in-law, is guilty of trading on non-public information concerning the results of a drug trial. Collins traded stock in Innate Immunotherapeutics Limited, a company where Collins is a board member, in order to avoid over $768,000 in losses. 

While there is undoubtedly numerous actions Collins has taken as a Congressman that warrants him being criticized by society, insider trading is not one of them. This news story is a good opportunity to revisit an article by Bob Murphy on the subject, explaining how insider trading actually has social value and why laws cracking down on the practice open the door to the heavy hand of government going after all sorts of profitable activity.

Excerpted from Is Insider Trading Really a Crime? 

We Want People Trading on Unique Knowledge

To understand the social benefits of insider trading, we have to first realize that stock prices mean something. They reflect real facts about the world, such as the assets and liabilities of a particular corporation and how effectively its current management is using resources to satisfy customers.

If a computer glitch suddenly swapped the prices randomly on all corporate stocks, the result would be disastrous, and it would affect "Main Street" as much as Wall Street. For an exaggerated example, if the share price of Microsoft fell from its current level of around $25 down to $1, a "corporate raider" might find it very profitable to borrow money, buy a controlling share in the company, and sell off all company assets to the highest bidders. The high price of $25 per share fends off such efforts to break up the successful company. The assets currently owned by the Microsoft Corporation are best deployed by Microsoft, rather than being integrated into different organizations around the world.

In general, speculators perform a useful social service when they are profitable. By buying low and selling high (or by short-selling high and covering low), stock speculators actually speed up price adjustments and make stock prices less volatile than they otherwise would be.

In this context, we can see the absurdity of the general view of "insider trading." There is a whole literature on the economic analysis of the subject, and economist Alex Padilla's 2003 dissertation defended the practice from a specifically Austrian angle. In a nutshell, insider trading is beneficial because it moves market prices closer to where they ought to be. Those profiting from "inside knowledge" actually share that knowledge with the rest of the world through their buying and selling.

Insider Trading: Who Is the Victim?

Above, we acknowledged the fact that obtaining information in illegal ways obviously had actual victims. But the mystique behind "insider trading" suggests that somehow if a person financially profits from special knowledge, that he or she is bilking the general public.

In general, this analysis doesn't hold up, as Murray Rothbard has pointed out. For example, suppose a Wall Street trader is at the bar and overhears an executive on his cell phone discussing some good news for the Acme Corporation. The trader then rushes to buy 1,000 shares of the stock, which is currently selling for $10. When the news becomes public, the stock jumps to $15, and the trader closes out his position for a handsome gain of $5,000. Who is the supposed victim in all of this? From whom was this $5,000 profit taken?

The $5,000 wasn'ttaken from the people who sold the shares to the trader. They were trying to sell anyway, and would have sold it to somebody else had the trader not entered the market. In fact, by snatching the 1,000 shares at the current price of $10, the trader's demand may have held the price higher than it otherwise would have been. In other words, had the trader not entered the market, the people trying to sell 1,000 shares may have had to settle for, say, $9.75 per share rather than the $10.00 they actually received. So we see that the people dumping their stock either were not hurt or actually benefited from the action of the trader.

In fact, the only people who demonstrably lost out were those who were trying to buy shares of the stock just when the trader did so, before the news became public. By entering the market and acquiring 1,000 shares (temporarily), the trader either reduced the number of Acme shares other potential buyers acquired, or he forced them to pay a higher price than they otherwise would have. When the news then hit and the share prices jumped, this meant that this select group (who also acquired new shares of Acme in the short interval in question) made less total profit than they otherwise would have.

Once we cast things in this light, it's not so obvious that our trader has committed a horrible deed. He didn't bilk "the public"; he merely used his superior knowledge to wrest some of the potential gains that otherwise would have accrued as dumb luck to a small group of other investors.

To repeat, stock-market speculation is not a zero-sum activity. Even though we can look at any particular transaction and tally up the "winners" and "losers," the presence of speculators enhances the overall functioning of the stock market. For example, the market for any particular security is more liquid when there are rich speculators who will quickly pounce on a perceived mistake in pricing. If an institutional investor (such as a firm managing pensions) suddenly has a cash crunch and needs to dump its holdings, speculators will swoop in and put a floor under the fire-sale price. This is good for the beleaguered pension fund, and for the stock market in general.

Laws against Insider Trading Give the Government Arbitrary Power

Crackdowns on insider trading are harmful because they chill the cultivation of superior knowledge and speculative correction of market prices. Beyond this loss of general economic efficiency, insider-trading laws are insidious because of the arbitrary power they give to government officials.

In the specific case of Rajaratnam, prosecutors for the first time relied extensively on wiretaps to prove their allegations of insider trading. Legal experts predict that the government will expand its eavesdropping on the financial community in light of this courtroom "success."

More generally, Murray Rothbard argued that every firm on Wall Street is technically engaging in "insider trading." If they literally relied only on information that was available to the public, how could they make any money? Thus, the government has the statutory authority to harass or even shut down anybody in the financial sector who doesn't play ball. In Making Economic Sense, Rothbard declared,

There is another critical aspect to the current Reign of Terror over Wall Street. Freedom of speech, and the right of privacy, particularly cherished possessions of man, have disappeared. Wall Streeters are literally afraid to talk to one another, because muttering over a martini that "Hey, Jim, it looks like XYZ will merge," or even, "Arbus is coming out soon with a hot new product," might well mean indictment, heavy fines, and jail terms. And where are the intrepid guardians of the First Amendment in all this?

But of course, it is literally impossible to stamp out insider trading, or Wall Streeters talking to another, just as even the Soviet Union, with all its awesome powers of enforcement, has been unable to stamp out dissent or "black (free) market" currency trading. But what the outlawry of insider trading (or of "currency smuggling," the latest investment banker offense to be indicted) does is to give the federal government a hunting license to go after any person or firm who may be out of power in the financial-political struggles among our power elites. (Just as outlawing food would give a hunting license to get after people out of power who are caught eating.) It is surely no accident that the indictments have been centered in groups of investment bankers who are now out of power.

To drive home just how arbitrary and non-criminal "insider trading" really is, consider this scenario: Suppose someone had been planning on buying shares of Acme, but just before doing so, he caught wind of a bad earnings report. In light of the new information (which was not yet public), the person refrained from his intended purchase. Should this person be prosecuted for insider non-trading?

 

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