Ted Kennedy’s contributions to freedom

by Roger Koppl

Friends of liberty should be kinder and gentler toward the memory of Edward Kennedy. He was the poster boy for the American “liberalism” that exaggerates the power of government to act in socially beneficial ways. He has thus drawn acerbic commentary from some liberals in the old fashioned sense of free exchange and individual liberty. Some conservatives have been unkind as well. I suppose the conservatives have nothing to thank Kennedy for beyond being a convenient target of vituperation. But liberals in the good old fashioned sense have a few things to thank Kennedy for and they should therefore be kinder and gentler to his memory. I wouldn’t comment on Kennedy’s overall legacy, but I would like to point to some important ways in which he helped to increase liberty in America and the world.

The High Line Park: Turnstyles Anyone?

by Bill Butos

The recently opened High Line Park in the hip Chelsea area on New York’s West Side is all the rage.  The High Line sits on a stretch of a defunct elevated freight railway along 10^thAvenue from Ganesvoort St. (which is just south of 14^th St.) to 20^th street.  The City plans to extend it to 34^th St.   A green urban advocacy group, Friends of the High Line, has steered this part of the project to completion.  It’s become a tourist destination and a favorite platform for celebs and fashionistas.  And it fits perfectly into the nearby Meatpacking and Chelsea areas with their trendy eateries, late night clubs, and designer clothes shops.  By all accounts it purports to represent the future of urban eco-friendly planning and judging by the number of visitors (about 20,000 per week), it’s a grand success.  (See here and a video appreciation by supporters here.)

After my second walk-through, my appreciation turned slightly positive.  It is fun walking above the streets and catching new perspectives of the City from 30 feet above.  But the empty-lot weeds masquerading as (carefully maintained) indigenous flora still look ugly and many of the views are rather uninspiring.  And I am also a taxpayer.

Auction Markets and Optimally Sticky Prices

by Joseph T. Salerno

Keynesian macroeconomists, old and new, have long criticized their classical and contemporary opponents for ignoring reality and treating the market economy as a giant auction in which prices are “perfectly flexible,” responding instantly to changes in supply and demand.  This charge is wrong on two counts.  First, all markets for outputs and inputs function precisely like auctions; and, second, auctions are not characterized by perfectly flexible prices but by an optimal degree of stickiness in prices that is determined by the market itself.

In this post I will deal with second point, because it has been generally neglected in responding to the Keynesians.  To illustrate this point I will use the example of a one day on-site auction of 49 unsold condominiums at a 73-unit complex that recently took place in Auburn, Alabama and which I also happened to attend.

Howard Dean Endorses War Communism

by Gene Callahan

I heard Howard Dean on the radio yesterday morning (CBS AM, for those who care to look for a transcript — I tried but could not locate one) talking about why health co-ops won’t work. “You see,” he said (and I quote from memory — see no transcript note above), “our private health care system is inefficient — not because private enterprise is inherently inefficient, but because the insurance companies are owned by investors, so they need to take some of the premiums and pay out a return on investment. Private insurance only pays about 80 cents on the dollar to actual medical care, while Medicare pays about 97.”

Dean is apparently not aware that most “private enterprises” are owned by investors. The argument he gave is, in fact, a straight up Marxist argument for the inefficiency of capitalism. (Yes, “socialism” and “communism” get tossed around too freely in this debate, but in this case I’m merely being factual.)

So why isn’t Dean in favor of nationalizing the entire economy? Couldn’t we get bread, and computers, and automobiles more efficiently if we just cut out those useless profits? (Oh, forget that last item — I forgot that we are nationalizing the auto industry.)

Healthcare Bias

by Chidem Kurdas

Proponents of the new medical entitlement program claim that it will improve the quality of healthcare by putting treatments to the test. Yet they ignore what’s already tested, and at great cost. This is part of a long-time pattern. Much of the political elite and the media routinely discriminate against the most useful medical technologies in existence, namely pharmaceuticals and biologics.

Pharmaceuticals are rigorously tested. Their quality and effectiveness are documented in randomized clinical trials that are the gold standard for testing treatments. They undergo a lengthy review by experts before being allowed to go on the market. No other medical technology is subjected to such extensive regulatory scrutiny.

The regulatory system imposes horrendous hardship on people who would benefit from certain medications that are kept out of the market, as well as a huge expense on everybody. Still, the fact remains that pharmaceuticals are better tested and proven than any other type of treatment.

That sharp difference is routinely ignored in public discourse.  The prescription drug industry is so demonized that it’s politically incorrect to say anything good about it.

Rose Director Friedman, RIP

by Mario Rizzo

Rose Friedman, wife of Milton Friedman, insighful economist in her own right, has died today. She lived a very long life. But when a person has been so positive an influence even these years are not enough.

See an obituary here.

Ave atque vale.

The Calculus of Consent II

by Gene Callahan

In Chapter 5, “Organization of Human Activity,” Buchanan and Tullock discuss what constitutes a “rational” choice concerning social arrangements. They write, “We have assumed that the rational individual, when confronted with constitutional choice, will act so as to minimize his expected costs of social interdependence, which is equivalent to saying that he will act so as to maximize his expected ‘utility from social interdependence’.”

They then create three categories of costs, “(1) purely individualistic behavior, a; (2) private, voluntary, but jointly organized behavior, b; and (3) collective or governmental action, g.”

They then analyze all possible orderings of a, b, and g. This is all well and good, but it strikes me as rather empty of oomph. If these “costs” are defined narrowly, then the analysis is plainly false — I may use method b to organize my BBQ because I like socializing, despite the fact it would be far “cheaper” to just cook dinner for myself. But if one defines the costs broadly enough, so that we include the “cost” of not having friends around, the analysis becomes vacuous — all that is being said is that people pick the things they prefer, and all of the ordering business becomes pointless.

Special Interest Hypocrisy

by Mario Rizzo 

President Obama is complaining that the “special interests” are threatening his as-yet uncertain healthcare proposals. (Recall there is no Senate bill and nothing says that House bill won’t change significantly.)   

There is an interesting lesson here. What is meant by “special interests” and “general interests”?

Not Prediction But Explanation

by Mario Rizzo

Her Majesty Queen Elisabeth II asked why economists did not predict the current economic troubles. The British academic community (and some in the American) is using this opportunity to discuss views on the nature and limits of contemporary macroeconomics. This is very useful.  

Peter Boettke over at The Austrian Economics summarizes and discusses some of the main issues. I shall not repeat what he says in my post. Everyone should read Pete’s.  

It is convenient for those of us who never thought much of contemporary macroeconomics to support the complaints that the financial crisis and recession was not “predicted” by the Macroeconomics Top Brass. But, as tempting as it is, it would be a mistake.

Neither Charity Nor Truth, Part 3: The Attack on Classical Liberalism

by Mario Rizzo  

In this final installment of my analysis of the papal encyclical letter Caritas in Veritate I turn my attention to Benedict XVI’s positive ideas on globalization.  (I put the encyclical section numbers in parentheses.)  

Do not expect clear-cut statements or precise recommendations for policy. Do not even expect consistency. (There are actually some good parts as in Sections 57 and 58.)  

The encyclical bears the mark of a committee’s work, presumably approved by the pope. There are individual sections that stress different, and contrary, attitudes so it is difficult to come away with a clear picture. Anyone looking for real guidance will have to seek it elsewhere.  

Nevertheless, a certain grand vision is revealed about society. The pope seems to be an enemy of the idea of beneficial spontaneous ordering forces.