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And the tanker and drone ‘engagements’ continue with Iran

Liberty Unyielding - 2 hours 31 min ago
Twilight confrontation keeps rolling along.

House votes to wipe out jobs by doubling minimum wage

Liberty Unyielding - Fri, 07/19/2019 - 6:35pm
Same bad idea, same bad consequences.

Support for $15 minimum wage plummets when Americans are told about its economic impact

Liberty Unyielding - Fri, 07/19/2019 - 1:34pm
By Jon Miltimore Minimum wage laws, I’ve noted, are popular with the public. This no doubt explains why House Democrats passed a bill Thursday that would raise the federal minimum wage to $15 an hour. Yet the minimum wage’s apparent popularity might be political pyrite (fool’s gold). A newly published Business Insider survey found that support for the minimum wage wilts when […]

Elizabeth Warren’s Dirigiste Plan for Wall Street

Center for Freedom and Prosperity (CF&P) - Fri, 07/19/2019 - 12:59pm

I’m constantly surprised by what happens in the world of politics. I didn’t think Donald Trump had any chance of winning in 2016, yet I was obviously wrong.

I also thought Elizabeth Warren’s political career would be crippled after people found out she fraudulently claimed Indian ancestry to gain special preferences in hiring at law schools. Yet she’s now a serious candidate to be the Democratic nominee in 2020.

So, instead of political prognosticating, I’ll stick with policy analysis, which is what I do in this clip from an interview about Sen. Warren’s plan to give Washington more power over capital markets.

If you want specifics on her plan, this Politico story has lots of detail, and this CNN report also has plenty of information.

I’ve previously written about some of the provisions, such as Glass-Steagall and carried interest, so today I want to focus on the broader point from the interview.

Every single economic theory agrees that saving and investment play a key role in long-run growth and higher living standards. But who controls and directs how capital is allocated?

prefer competitive markets, which reward decisions that make us more prosperous.

The socialists, by contrast, think government can directly control how capital is allocated. At the risk of understatement, that approach doesn’t have a good track record.

Elizabeth Warren prefers an indirect approach, which involves lots of regulation, taxation, red tape, and intervention. This cronyist approach also is misguided. Her corporatist agenda unavoidably will hinder the efficient (i.e., growth maximizing) allocation of capital and also reduce the overall level of saving and investment.

And that translates into less income for workers.

By the way, my disagreement with Sen. Warren’s policy agenda does not mean I have a pro-Wall Street perspective.

In the past, I opposed the TARP bailout and the Dodd-Frank regulatory expansion, both of which were supported by the big players on Wall Street.

And I currently oppose the Fed’s easy-money policy and also want to remove the tax code’s preference for debt, which again puts me on the other side from the big players on Wall Street.

The bottom line: I support economic liberty, not big business.

P.S. I strongly recommend Kevin Williamson’s analysis of Warren’s fake populism.

P.P.S. And I recommend my own work on Warren’s mistaken viewpoints on corporate taxation and corporate governance.

Ilhan Omar stonewalling hometown paper on marriage controversy, editor says

Liberty Unyielding - Fri, 07/19/2019 - 10:52am
Omar’s brief congressional career has been dogged by accusations — which she has denied — that she married a male relative, possibly her brother. Omar and her current husband, Ahmed Hirsi, filed joint tax returns while Omar was married to another man, Ahmed Elmi.

Bad Government Policy Begets Worse In U.S. Aluminum Market

Center for Freedom and Prosperity (CF&P) - Fri, 07/19/2019 - 10:37am

Originally published by RealClearMarkets on July 16, 2019.

To benefit large brewers, U.S. Sens. Cory Gardner (R-CO) and Tammy Baldwin (D-WI) recently introduced the Aluminum Pricing Examination Act (APEX Act), which would give the Commodity Futures Trading Commission “exclusive jurisdiction over the setting of reference prices for aluminum premiums.” This is a misguided attempt to subject market prices to the approval of government bureaucrats.

Markets for commodities purchased at high volume like aluminum operate a bit differently than those for typical consumer goods. It’s not like buying a product off the shelf. However, the fundamentals are still basically the same; it comes down to supply and demand.

To provide transparency and help facilitate commodity markets, independent reporting agencies provide price benchmarks for sales and deliveries in certain regions. For the domestic aluminum market, the U.S. Midwest Transaction Premium published by S&P Global Platts reflects both costs from the shipping and storing of aluminum, as well as the state of domestic supply and demand. Their methodology is public and relies on surveys of buyers, sellers, and other market participants. Most importantly, no one is required to pay the benchmark any attention unless they find it useful.

All of this is important because proponents of the legislation are citing “irregularities” in the premium price, while paying lip services to free market principles, to justify the entrance of government into the market. However, what really irks them is that prices have increased. Everything else is just an attempt to disguise cronyism as a noble endeavor.

The thrust of their complaint is that the premium hasn’t fully returned to its pre-tariff rate after Trump’s steel and aluminum tariffs on imports from Canada and Mexico, which led to sharp price increases, were lifted in May. But tariffs aren’t the only relevant market factor affecting price. Demand is also up, while supply has tightened thanks to a union lock-out at a Canadian smelter, forcing greater reliance on imports from nations subject to a 10% duty. Uncertainty over future trade conditions are also likely to be playing a role.

Attacking or launching investigations into those monitoring the market and providing benchmark prices amounts to shooting the messenger. They aren’t controlling the factors that determine prices; they are just reporting them.

S&P Global Platts has no financial stake in whether the reported prices are high or low, but they and other assessment companies have a lot more incentive than the government would have to provide accurate information on the state of a market. The APEX Act would not only substitute the judgment of bureaucrats for market participants, but open benchmarking to political influence, inviting corruption and market distortions.

The goal is clearly to put downward pressure on aluminum prices to benefit those, like beverage makers, whose supply chains rely heavily on aluminum purchases. That might provide a short-term benefit to brewers and other aluminum consumers but would only harm the market in the long run. When prices reflect political dynamics instead of underlying market realities—as is always the case with the imposition of price controls, or even just political pressure that falls short of explicit price-setting—markets are unable to function properly.

My colleague, economist Dan Mitchell, has a saying: “bad government policy begets more bad government policy.” That’s what is happening here. Bad trade policy raised the costs of aluminum and continues to plague markets in a variety of ways. Rather than fix that problem at its source, some now want to compound it with more government power to interfere in the market. But attempts to cloak cronyism in the principles of free market economics shouldn’t distract from the fact that interfering in the market to selectively benefit a business or industry is an illegitimate use of governmental power.

 

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Image credit: homw | Pixabay License.

Cartoon of the Day: Lost leader

Liberty Unyielding - Fri, 07/19/2019 - 10:26am
Antifa

Ocasio-Cortez: Trump’s ‘violent rhetoric’ is putting ‘millions of Americans in danger’

Liberty Unyielding - Fri, 07/19/2019 - 10:20am
Says the woman whose own violent rhetoric (think 'Nazi-run concentration camps on the border') has inspired one act of violence against Americans and has become the rallying cry of leftists extremists whose actions could jeopardize millions more.

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