Thursday, April 30, 2015

Colorado is the size of New Zealand, with a GDP comparable to Thailand

Sometimes, it's easy to forget how large many American states are. Colorado, for example, is the size of New Zealand. Here's a helpful map for all states:


But that's just comparing by physical size. If we compare by GDP, Colorado is the size of Thailand, which is not tiny. Of course, this is not per capital GDP. Per capital GDP is much higher in Colorado than in Thailand. Indeed, with five million people, Colorado generates a similar GDP to Thailand's population of 64 million people. The map:

We can also compare based on population size, in which case Colorado is similar to the small African country of Eritrea.

Friday, April 17, 2015

Year-End 2014 Foreclosure Report for Metro Counties in Colorado

Foreclosure stats for Colorado's metro counties up through the end of 2014:

Monthly Foreclosure Report Dec 2014 No Logo

'Commie Cowboys' Now Available Online for Free

Having become so fabulously wealthy on royalties, I've decided to make my book Commie Cowboys available online for free. I posted it here, where you can download it in PDF. If you like it, be sure to review it at the book's Amazon page. If you prefer a physical book, you can certainly still buy it on Amazon for a measly $5.99. There's an even cheaper Kindle version, also.

It's a book that details how the so-called "classic" Westerns of the post-WWII period hardly deserve their reputation for being pro-capitalist symbols of freedom. In fact, the old silent Westerns and the more modern "cynical" Westerns like Unforgiven and The Good, The Bad, and the Ugly are vastly superior, from a laissez faire perspective.

 Lew Rockwell and I talk about the book here.

Thursday, April 16, 2015

Some New Library Books

The great Professor John Cochran, retired Dean of the business school at Metropolitan State College of Denver, and author of many fine scholarly articles on monetary policy and banking,  has kindly donated much of his personal library to my personal library. Included are numerous economics and history books. I'm most happy about the Henry Hazlitt books. These are just some of them:

Citi Economist: Time to Abolish Cash

Also published at Mises Wire.

We often focus on the fact that abolishing cash abolishes the last remnants of financial privacy. But of course, abolishing cash also increases the Fed's ability to manipulate the economy.

Bloomberg reports that Citi economist Willem Buiter has called for the end of paper currency based on the benefits such action would bring to central banks. Specifically, the existence of cash limits a central bank's ability to manipulate the ecomomy with negative interest rates:
In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. 
Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?
Cash therefore gives people an easy and effective way of avoiding negative nominal rates. However, if you abolish cash, there is no escape from negative interest rates. All your money must be in an institution that can then punish you for saving any cash. There are half-way measures such as taxing currency, too.  Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis." Sure, some people will protest the abolition of cash, Buiter concedes, but overall the arguments in favor of cash "seem rather weak."

My Mother and Me in 1978

In San Marino, California, which at the time was a middle-class neighborhood:

Tuesday, April 14, 2015

On Immigration and More: Some Gov't Intervention Does Not Justify More Government Intervention

First published at Mises Wire.

For many years, advocates of mandatory “life and safety” regulation (i.e., legislated smoking bans, helmet laws, seat belt laws, bans on sugary drinks, etc) have claimed that they are justified on the grounds that, since so many health-care services are taxpayer-funded, it is both necessary and legitimate that the government mandate more safe and healthy behavior. In other words, since someone who doesn’t wear a seatbelt may end up in a taxpayer-funded hospital, the government has a “right” to lower healthcare costs by mandating seatbelts. By the same token, it is held that the government has an obligation to ban or discourage smoking or the eating of fatty goods, lest such a person drive up Medicare costs. This may be extended in another direction as well. Since nearly all highways and roads are government-funded, they claim, then the state has the “right” to regulate everything that occurs on them. Hence, you must wear your seat belt, submit to roadside DUI checks, wear helmets, etc.

There’s right-wing version of this also. Advocates of a more robust police state in the form of more deportations of suspected foreign nationals and more prosecutions against employers and landlords who hire or rent to foreign nationals (i.e, illegal immigrants), use an analogous argument. The fact that employers have freely invited such people to live on their property or work in their establishments matters not at all, we are told, because the presence of “public goods” justifies more ICE agents, a border wall, and more federal agents to raid factories and issue fines to landlords. Another variant of this is the argument that drug laws (applicable to everyone) are necessary to keep welfare-recipients off drugs or drugs out of the public schools. (Drug laws also keep health-care costs down too, — or so it is claimed — so there’s a nice overlap here with the left on this issue, also.)
Now, I see that the same argument is being extended to the “anti-discrimination” debate. For example :
Think you should be able to segregate your business’ water fountains or reject service to black people as a matter of conscience? Too bad! The law is clear: if you use public roads and other public services to do business then you have to provide service to the public. [NB: This author is writing this without irony.]
The law doesn’t quite say what the author here thinks it says. (He seems to be confusing his argument with the “common carrier” argument.) But the point is made. If you use government roads or government sewage (or whatever) you have essentially surrendered your property rights. Any you do retain are at the discretion of the legislature and courts.

In all of these cases, the appropriate response, at least for the advocate of laissez-faire, is to lessen the size and extent of so-called “public” goods while lessening the monopolistic aspects of such goods through decentralization of government power.

For example, if it is a problem that unhealthy people use Medicare, then the answer is to lessen spending on Medicare, constrict eligibility, or to eliminate Medicare altogether and lower barriers for private-sector competition. The answer is not to empower government to manage everyone’s dietary habits as a “cost-saving” measure. Such schemes also necessitate enforcement, which of course brings with it new and bigger government agencies, more government agents, and more red tape.

Likewise, if foreign nationals are using public schools or public roads, the answer is to lessen spending on such government-owned amenities and to allow for private-sector competition with public sector services. The answer is not to outlaw the renting of apartments to foreign nationals or to outlaw voluntary contracts with such people. Nor is the answer to pay more federal agents, build border walls, or increase the bureaucracy to “solve” a problem created by government intervention in the first place. In contrast, the free-market response is to restrict access to, or eliminate, such amenities (e.g., Prop 287), while allowing competition.

Similarly, if a business is using government roads to transport goods or is using the postal service, this is no way then leads us to the conclusion that the state therefore has the right to control everything the business does. In fact, the correct solution is to diminish the role of the state in the daily business of the establishment in question by allowing for private-sector options in transportation, utilities, package delivery, and so on.

Note that in most of these cases, the person who is now supposedly subject to greater regulation because he “benefits” from public amenities, doesn’t even have a choice in the matter. Seniors may not refuse Medicare. Business owners and workers must use public roads in most cases.

Now, for the leftists, there is no ideological conflict here. They are perfectly happy that roads, utilities, and other aspects of daily life are government-owned. The fact that the existence of "public" goods can be used to further regulate daily life is a bonus for them. For the “free-market” advocate who is also the advocate of more “enforcement” of laws, however, the situation presents a conflict.

“But we’ll never get rid of public roads or public schools or Medicare in my lifetime! Therefore businesses who hire illegal aliens must be punished, drugs must be outlawed, and we must create a robust border patrol and DEA as a second-best solution,” they may say.

But if the presence of government-owned amenities justify greater intervention in one case, they justify it in other cases, too. If we argue that it is appropriate for the federal government to regulate who meat packers can hire because immigrants use public roads to get to the plant, then the presence of government-owned amenities also justifies regulation of a “discriminatory” cake-baking establishment that uses the public roads, or which relies on public roads for customer access.

If the public roads are a type of subsidy to the baker, the meat packer, and the immigrant workers, then the “free-market” solution is to eliminate the subsidy, diminish its extent, or eliminate the monopolistic aspects the subsidy; not invent new ways for government to regulate the lives and property of everyone who has no choice but to use the government’s roads and “services” in the first place.

How Aggressive Foreign Policy Subsidizes American Nut Farmers

A friend cheekily reminds me that today is National Pecan Day and innocently suggests that I might want to "discuss the connection between pecans and the California drought." True, enough, there's a connection. But water is just one factor — albeit a large one — propping up the lucrative nature of farming in the California desert. International trade policy is a major subsidy for many growers as well.

Although pecans are native to the American South, it could be that they might be even more productive somewhere else in the world. Maize, for example, grows amazingly well in Iowa, even though it's native to Mexico. But if pecans could be grown more productively elsewhere, it's unlikely we'll ever know. Experience tells us that American trade barriers would likely be erected to hobble any entrepreneurs who attempted to compete with domestic growers.

Much has been made of tree-nut growing in California during the current debate over the drought. Almonds have been especially targeted, but pistachios are an important crop as well, and while domestic almonds and other tree nuts certainly benefit from tariff policy — here's a tariff schedule for those who are interested — pistachio growers in the US have the added benefit of bellicose American foreign policy.

In a 2013 article at Mondoweiss, Yash Levine examined the effect of the US embargo against Iran on the pistachio industry, through the experience of one particularly wealthy farming couple, Lynda and Stewart Resnick:

For as long as anyone can remember, Iran had been the world’s main supplier of pistachios. But Carter’s 1979 embargo on the country effectively cut off Iranian pistachio growers from the American market and created a need for alternative pistachio production, which was virtually nonexistent in the United States. 
Seeing a massive opportunity, the Resnicks began to snap up thousands of acres from Mobil Oil and Texaco in order to create pistachio and almond orchards. They steadily bought up more and more acreage all through the 1980s for rock-bottom prices because of a long period of drought. By the end of the decade, the Resnicks had amassed enough farmland to rival Oligarch Valley’s biggest and oldest billionaire farmer clans: 100,000 acres—nearly 160 square miles—growing cotton, pistachios, almonds, oranges, lemons and grapefruit. 
They didn’t just grow the crops, but packaged, processed and distributed them as well. Economic sanctions against Iran were renewed and intensified under every single president after Carter, and all the while America’s domestic pistachio farming exploded. In the past thirty years it has grown from a couple of hobby farmers to an industry generating close to $1 billion...
Economic sanctions are what have allowed the Resnicks to create their pistachio empire, which would suffer a severe blow if relations with Iran were ever normalized. Iran’s pistachios are considered to be superior to America’s, so much so that Israelis still buy Iranian pistachios shipped in through Turkey. Surely the Resnicks would never be able to compete with Iran on the pistachio free market. And so the Resnicks did what any smart and ruthless American would do: they made common cause with oil companies, Islamophobes, neocons and Likudniks, and began funneling money to think tanks and political advocacy groups that take a hardline approach with Iran. Economic sanctions, sabotage, vilification—all these things worked in the Resnicks’ interest. Bombing some of Iran’s pistachio fields wouldn’t be so bad, either…