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Rose Wilder Lane, b. 12/05/1886

Gary Galles at commerates the birth of Rose Wilder Lane, easily one of the most important libertarian writers of all time.

For anyone who is reading this blog, her 'Discovery of Freedom' is required reading.

Price Gouging For Dummies

Your brother-in-law is going on vacation for a week and wants to borrow your second car. No problem as your son is at college.

You note that the tank is full and send him on his way.

He comes back a week later and drops off the car with a nearly empty tank.

You fill up the tank with 10 gallons of gas which has risen from $2 to $3 a gallon in a week.

You ask your brother-in-law for $30 and he accuses you of price gouging.

Is he right?


the dummies

Traffic Enforcement

Why Is Toyota the World\'s Most Successful Car Company?

Is it the result of Intelligent Design (ID) or Evolution?

Some of both, but it is the inexorable forces of evolution in a stressful environment that have made intelligent design one of the requirements for survival. The evolutionary imperative is always 'adapt or die.'

The environmental stress that Toyota has always faced in the US market is a factor of production that only domestic car companies can buy, i.e. US politicians. Read more »

An Ironic Headline


Researchers unveil 58 pound laptop for schoolkids


17 November 2005

First $100 laptop unveiled
By John Blau, IDG News Service

Nicholas Negroponte has demonstrated the first $100 laptop computer for use in developing countries. Read more »

No Affirmative Action for the Corporation for Public Broadcasting

The Story

Public broadcasting ex-head targeted in report
Tue Nov 15, 2005 3:20 PM ET

By Deborah Zabarenko
WASHINGTON (Reuters) - The former chairman of the Corporation for Public Broadcasting, who drew fire for his conservative views, used "political tests" to recruit a new board president, inspectors reported on Tuesday. Read more »

Why the SS Trust Fund is Partly Like a Car Loan

Following up on a previous post, it may be helpful to understand the SSTF by comparing it with a car loan.

If you take out a 5 year, 60 monthly payment, loan on a new car, then your discretionary income is reduced by, say, $400 per month for the life of the loan. This is likely to be a significant financial burden.

Somewhat analogously, the US Treasury starts to have to redeem the pseudo-bonds held in the SSTF when payroll tax receipts start to fall short of the mandated SS payouts, probably in the early 2020's, plus or minus. As long as this shortfall continues, the Treasury will have to keep redeeming the SSTF pseudo-bonds as long as some remain unredeemed. This is a very significant burden on the Treasury, which must be met by the selling of new debt to the public, assuming no tax changes of any kind.

When you finally make your 60th payment, you now own the car, free and clear. You no longer face a $400 per month payment burden. This is a good thing, for you. You certainly haven't gone bankrupt. Neither has the financial institution to whom you were making payments. True, it no longer gets payments from you, but that was expected from the beginning. It got everything it was owed at exactly the right time that it was supposed to. As long as your 5 year old car continues to run satisfactorily, you're in good shape.

When the SSTF becomes exhausted, this just means that the Treasury has completed redeeming all of the pseudo-bonds in the SSTF. This is a good thing for the Treasury, by itself, since a burden has been lifted. If the unlikely happened, and payroll tax rceipts were to cover SS payout mandates for all future years, that would be the end of it. Read more »

Social Security Reform in 2009?

Finally, a politician accidently tells the truth.

U.S. Social Security overhaul unlikely before 2009

By Donna Smith
WASHINGTON, Nov 8 (Reuters) - President George W. Bush's failure to win support for individual Social Security investment accounts means the U.S. Congress is unlikely to address the retirement program's long-term financial problems before 2009, a senior U.S. senator said on Tuesday.

Charles Grassley, the chairman of the Senate Finance Committee, told a business group he is unable to win agreement for a Social Security overhaul even among his fellow Republicans on the tax writing panel. Democrats remain fiercely opposed to Bush's initiative. "I am very pessimistic about it in the future," Grassley told the U.S. Chamber of Commerce. "Probably the next bite at Social Security will come in 2009."

Why will it be any different in 2009?

One very good reason. In approximately that year, the so-called SS 'surplus' will peak. This 'surplus' is nothing more and nothing less than the amount by which current payroll taxes exceed the current mandated SS payouts. These excessive tax collections could only ameliorate the future difficulty of meeting future mandated SS payouts if they were used to reduce the Federal debt held by the public, broadly defined.

However, the reality is that the excess collections are 'borrowed' by Congress to support current spending and accounted for by creating government to government debt held in the SS Trust Fund. In fact, empirical studies have shown that every 'surplus' dollar is overspent by Congress by 1.76 times, actually making it more difficult to meet future mandated payouts as debt held by the public is increased as a result of the excessive current payroll taxes.

It seems to me a safe prediction that, in or about 2009, Congress will act to increase current payroll taxes because it will be much easier than reducing spending, which would otherwise be required as the 'surplus' peaks and starts to decline. Read more »

Forensic Drug Prices, Follow the Money

It is a near universal complaint that prescription drug prices are too high. It is hard to call such a judgment valid without some specificity about just what we mean by 'price.' Read more »

Phase Shift

I woke up at 6:30 Wednesday morning to a rather dark day, but otherwise unremarkable. I had a snack and a normal breakfast at 8 o'clock and finished up the library Dean Koontz novel I was reading, 'Midnight.'

At 8:30, I looked out the window and realized that the sun had made no progress at all. I briefly considered the possibility that this was THE day that the sun wouldn't come up, but decided that I should check the time on my computer. Confirming a growing suspicion, it said 8:30 PM. Read more »

Happiness Simulation and Encoding With Flippant Scrabble Tiles

For a background on the recent studies tying together economics and happiness, follow the links at The Austrian Economists.

Happiness is an internal human state of being. It is not a precisely defined concept and would seem to involve both physical (biochemical?) and intellectual components. Read more »

What Limits Prices?

Imagine that you live out in the country with a single next door neighbor and no-one else within miles. The next door teenager offers to shovel your snow, mow your lawn and tend your garden for a total of $200 per month over the next year. Do you accept?

It depends on your relative subjective valuations of the services provided and the money required to pay for them. Any possible alternatives and their opportunity costs also come into play. A price cannot exceed what a buyer is willing and able to pay, taking all of his known alternative possibilities into account. Read more »

Everything That Shines Is Not a State Quarter

When pulling change out of my pants pocket this evening, I was almost blinded by a silver-colored coin too small to be a state quarter. Remembering something about a new nickel design, I dropped it in my shirt pocket for later inspection.

Mint Description Link Read more »

Why Money Can\'t Buy Happiness

For a background on the recent studies tying together economics and happiness, follow the links at The Austrian Economists.

What do we know or can we deduce about happiness?

First, happiness is a state of mind.

As such, neglecting the possibilities of paranormal abilities and some parts of religion, the state of happiness must logically be encoded and contained in the physical human brain. Read more »

A Must Read From Cafe Hayek

Read This, No Excuses Allowed

"...the freedom of ordinary people to participate in political deliberation and choices is a means of protecting modern liberty. Unlike for ancient peoples, political participation is no end in itself, no significant source of gratification for we moderns as it was for ancient peoples.

The liberty that matters for us, the ultimate liberty, is individual liberty. It is the liberty that Constant rightly understood to be modern." --- Don Boudreaux