The Freedom Bulletin

The town of Concord, MA now holds a dubious distinction: it is the first in the U.S.A. to ban the sale of bottled water. Over 700 residents gathered to vote on the issue last night, and the ban passed 403 votes to 364.

This is the third attempt to pass such a law, spearheaded by 84-year-old grandmother and environmental activist Jean Hill. The first time, the law was passed, but the Attorney General’s office repealed it (due more to technicalities than the substance of the law), and the second time, it was defeated by the voters.

Starting at the beginning of 2013, any store found selling plastic water bottles of 1 liter or less will be punished with a warning for the first “offense,” a fine of $25 for the second, and $50 for subsequent ones.

I agree with Concord resident Adriana Cohen, who told the Herald:

“These bans are very serious because they open up Pandora’s Boxes to allow special interest groups to ban anything. People’s freedoms get stripped away when this happens… I see the writing on the wall. If you ban one thing, you can ban anything.”

Concord did not (yet), however, manage to pass a much-debated leash requirement for cats. Yep, that’s right, leashes for cats. Read about the reasoning behind that one here.

For a long time, I didn’t quite get why Ron Paul and his supporters made such a big deal about the Federal Reserve. I’ve never been a fan of inflation, and returning to the gold standard always seemed like a decent idea to me, but I place much more importance on direct and severe violations of our liberty, such as the Durham-Humphrey Amendment, full-body scanners, and the individual health insurance mandate.

I recently read Paul’s book End the Fed, in which he logically explains that inflation (increasing the money supply) causes high prices, which penalize saving by decreasing money’s purchasing power. This is essentially equivalent to taxation or even stealing.

Additionally, Paul argues that central banks, and their power to print new money, make possible the financing of big government and its accompanying violations of our liberty. If the Fed was abolished, all anti-freedom laws and programs would eventually crumble as well, because the only ways to finance them would be through taxes and debt, which would be unacceptable to the people and therefore to Congress.

One of the greatest passages from Paul’s book:

“When you think about it, debasing a currency is counterfeiting. It steals value from every dollar earned or saved. It robs the people and makes them poorer. It is the absolute enemy of the workingman. Inflation is the most vicious and regressive of all forms of taxation. It transfers wealth from the middle class to the privileged rich. The economic chaos that results from a policy of central bank inflation inevitably leads to political instability and violence. It’s an ancient tool of all authoritarians.”

(p. 134)

I heartily recommend End the Fed. It is a great introduction to economics from a libertarian perspective and an excellent explanation of the relationship between the Fed, the economy, and personal liberty.

By now you have probably heard of Steven Slater, the JetBlue flight attendant who was so fed up with his job, and a particularly nasty passenger, that he yelled at her over the intercom, grabbed beer from the refreshments cart, and slid down the emergency inflatable slide.

Altlhough many people consider Slater a hero, there has been a backlash against his dramatic exit, with at least one person (Dr. Keith Ablow) saying that he needs a mental evaluation.

Overall, I am more sympathetic to Slater’s defenders. First of all, by all accounts, it seems that the passenger was abusive, swearing at him and either letting her luggage fall on his head or hitting him with it deliberately. Flight attendants are paid to help passengers, but no one is obligated to put up with abuse.

Second, Slater’s act of rebellion did not hurt anyone. He is charged with criminal mischief and reckless endangerment, felony charges that could get him up to 7 years in prison. This is excessive, especially considering that some people avoid jail for crimes as serious as sexual assault. If you really hate swear words or are easily scared, Slater’s profanity-laced rant or his deployment of the emergency slide might be a little upsetting…but he did not violate anyone’s rights or jeopardize anyone’s safety, since the plane was taxiing on the runway when he made his exit.

In this dismal economy, with many workers being subjected to more stress than ever before, Slater is easy to relate to. In my opinion, the sympathy for him is justified, as were his actions. He does not need to go to therapy or jail; he just acted the way that people have a right to act when faced wtih unreasonable situations.

President Obama recently gave a speech praising the recently passed version of health insurance reform and warning insurance companies not to use the new law as an excuse to raise prices. But unless strong measures are taken to prevent this, “Obamacare” will actually cause the price of health insurance to rise.

I oppose Obamacare, primarily because it requires all Americans to have health insurance. In my opinion, this violates everyone’s rights because people have the right to decide how they want to spend their own money, as long as they don’t do anything that violates the rights of anyone else. But according to economic theory, the individual mandate has a bad side effect as well – it makes the cost of health insurance go up.

If you haven’t studied economics before, here are the basics:

Usually, the higher the price of a good, the less the demand. Makes sense, right? Also, the higher the price of a good, the higher the supply, because producers are more willing to make a product if they can sell it for a high price. The supply and demand curves (or lines) can be shown on a graph. The point where the two lines intersect is called the equilibrium. This represents the quantity and price that will be produced in a free market.

However, by requiring everyone to purchase a product (in this case health insurance), the government stops demand from responding naturally to price. The degree to which demand for a good responds to price is called price elasticity of demand. People will buy necessities such as food, water, or insulin for diabetics regardless of their price. In economics-speak, the demand for these goods is inelastic. The demand for things such as lattes, CDs, and stuffed animals is elastic, because people can live without them and therefore tend to buy less of them if the price goes up. When demand is perfectly inelastic, the demand curve looks like a vertical line.

By forcing everyone to buy health insurance, the government makes the demand artificially inelastic. The problem with this is that when demand is perfectly inelastic, price basically approaches infinity. If consumers are going to buy something no matter what it costs, you can bet that producers are going to charge a lot.

Bottom line: according to traditional economics, the individual mandate will make the cost of health insurance go up.

Have you seen this New York Times article about how unpaid internships might be illegal? According to federal law, unpaid internships at for-profit companies must be similar to school or training, must not directly benefit the company, and must not displace paid workers. The requirements are more lenient for nonprofit organizations. In California, Oregon, and other states, law enforcement is investigating and fining employers for having internships that violate these laws.

I think that stricter enforcement of minimum wage laws is a great idea. I wouldn’t have a problem with banning unpaid work for nonprofit organizations, either. Working as an unpaid intern is not, in practice, a voluntary decision. Just take a look at the comments of people interviewed in the article: 

“It’s so expected of me to do this for free. If you want to be in the music industry that’s the way it works,” one student said.

“Internships have become the gateway into the white-collar work force. Employers increasingly want experience for entry-level jobs, and many students see the only way to get that is through unpaid internships,” said someone else.

Although college students aren’t required by law to do unpaid internships, it is getting to the point where people have almost no chance of getting a job without them. Since you need a job to make money and you need money to live, our society has made it so that people have little choice but to do unpaid internships. Given the tremendous social pressure to obtain an internship, unpaid internships are essentially slave labor. If every student feels that they need an internship in order to have any chance of getting a job, companies have no incentive to pay interns, because they know that there will be huge numbers of applicants for every position, no matter how badly interns are treated or how little they are paid.

Additionally, working for no pay drives down the price of labor. Having volunteer labor means that companies and organizations have to hire fewer workers. In this economy, that is something we should be trying as hard as possible to combat.

De facto coercion to do unpaid internships is a defect in the market, much like inelastic demand, and the government needs to step in to make sure that companies do not trample on people’s rights. If someone works for a company or organization, they should be paid, especially if they are coerced by social pressure into working.

On Monday, the Credit Card Accountability Responsibility and Disclosure Act of 2009 went into effect. Lots of media outlets are portraying the new law as a victory for consumers. In my opinion, although the act might help people who carry credit card debt, it unfairly punishes people who pay off their balance every month.

Among the provisions in the CARD Act:

• People under 21 are no longer allowed to get a credit card without a co-signer. This is paternalistic and punishes people under 21 by restricting their freedom. How could you say that it helps people to forbid them from getting a credit card when they might want one?
• Credit card statements must tell you how long it will take to pay off your balance if you only make the minimum payment each month, as well as include the phone number of a credit counseling service. This is unnecessary and also paternalistic. People can figure out themselves how long it will take to pay off a balance, or how to find a credit counseling service. Everyone shouldn’t have to have this information cluttering up their statement.
• The act forbids credit card companies from (among other things) raising interest rates retroactively, making payments due on weekends or holidays, or raising your rates without 45 days notice. While this might help people slightly, especially people who carry a balance, it will reduce companies’ profits, which will likely result in companies increasing fees for paper statemens, inactivity, or simply having a credit card. I would much rather have a high interest rate and have my payment due on a weekend or holiday than have to pay an annual fee to have a credit card.

Basically, although the new credit card rules provide slight benefits to consumers, they are mostly paternalistic and more harmful to consumers than helpful. People have the right to decide (within the rules that credit card companies have set) how and when to pay off their balance. Some people choose to pay off the whole thing every month, and some people choose to carry a balance. I never carry a balance, because paying interest is throwing money away. But people have the right to decide that buying something immediately outweighs the downside of throwing money away on interest. Credit card companies don’t force people to carry balances, so they aren’t wronging anyone by increasing interest rates. I oppose the CARD act because it treats people like we are stupid. The law lessens the financial hardship on people who choose to amass debt at the expense of everyone else, who will be hit with increased fees just for having a credit card. That is not a good trade-off.

Sources: 

• CNN: New rules, traps for credit cards
• CNN: Countdown to credit card changes

I just watched the State of the Union Address. My verdict? Well, I have to admit, the first half was pretty good. President Obama actually seemed moderate and reasonable. I like his idea to reward companies that hire new workers or raise wages and to eliminate the capital gains tax on small businesses.

But the second half of his speech…not so great in my opinion. One thing that I strongly disagree with is Obama’s idea to double the child tax credit. Child tax credits are unfair and discriminatory. Why give tax breaks only to people who have children? It would be a lot simpler and fairer to just reduce the federal income tax, since that would help everyone, both people who have children and people who don’t.

Although he started off with a strong emphasis on jobs and the economy, I knew that Obama would eventually mention health reform. I have written a lot about health insurance on this blog, so you probably know that I’m no fan of Obama’s reform plan. He spoke a lot tonight about the rights of people who can’t afford insurance or are denied it because of pre-existing conditions, but I wish he would pay more attention to individuals’ rights to decide how they want to spend their own money, a right that would be violated by the individual mandate to purchase health insurance, which is part of the “reform” plan that Obama supports.

And while Obama’s idea of a three-year freeze on the federal budget sounds like a step in the right direction, it cracked me up when he said something to the effect of, “spending on national security, Medicare, Medicaid, and Social Security will not be affected.” Those four things are most of the federal budget!

On a side note, Biden’s facial expressions were too funny, nodding solemnly at everything Obama said. It was hilarious when he broke into a huge grin and started laughing. I also loved how all the Republicans laughed when Obama said that the budget freeze won’t go into affect until next year because of the recession (“that’s how budgeting works!”).

Obama invited anyone who has a better health reform idea to share it with him. I have one, which I have mentioned before in bits and pieces but have never explained all together in one essay. Soon I will do just that. Maybe I’ll even send it to Obama, too!