Arlington, Va.—The Ninth U.S. Circuit Court of Appeals today issued a unanimous opinion granting victory to cancer patients and their supporters from across the nation in a landmark constitutional challenge brought against the U.S. Attorney General. The lawsuit, filed by the Institute for Justice on behalf of cancer patients, their families, an internationally renowned marrow-transplant surgeon, and a California nonprofit group, seeks to allow individuals to create a pilot program that would encourage more bone-marrow donations by offering modest compensation—such as a scholarship or housing allowance—to donors. The program had been blocked by a federal law, the National Organ Transplant Act (NOTA), which makes compensating donors of these renewable cells a major felony punishable by up to five years in prison.

Under today’s decision, this pilot program will be perfectly legal, provided the donated cells are taken from a donor’s bloodstream rather than the hip. (Approximately 70 percent of all bone marrow donations are offered through the arm in a manner similar to donating whole blood.) Now, as a result of this legal victory, not only will the pilot programs the plaintiffs looked to create be considered legal, but any form of compensation for marrow donors would be legal within the boundaries of the Ninth Circuit, which includes California, Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and various other U.S. territories.

[...]

Rowes concluded, “This case isn’t about medicine; everyone agrees that bone marrow transplants save lives. This case is about whether individuals can make choices about compensating someone or receiving compensation for making a bone marrow donation without the government stopping them.”

At one point a few years ago I had noticed a link to a book Dale has written called Slackernomics: Basic Economics for People Who Think Economics is Boring. Given that I’m not the type who thinks economics is boring, but had enjoyed his blogging, I wanted to get a chance to read it. At that time, the book was only available in print at a price above $20. It took a spot on my “buy when I get around to it list”, and sat there for quite some time, but I never pulled the trigger. Then, more recently, it became avaiable for the Kindle at only $2.99 — I no longer had an excuse not to buy it. So onto the Kindle it went, and after several long months of sitting there taking up space, I’ve finally gotten around to reading it.

Slackernomics is a primer on basic economic theory that, as the title suggests, is written for people who think economics is boring. It’s written in a convivial tone, and the illustrative examples that Dale uses reminds one more of Freakonomics than of Adam Smith. Don’t let that fool you, though — the book is not a “sideshow” like Freakonomics — it gets to the heart of the matter. I liken it to be similar to Henry Hazlitt’s “Economics in one Lesson”, but written for people who may not be interested in the more formal writing style of Hazlitt. In addition, having been written many decades after Hazlitt’s book, it’s obviously much more up to date.

The book covers everything from price theory, minimum wage & rent control to monetary theory and the business cycle, Keynesianism, taxes / deficit spending, savings & investment, and economic statistics. He continues with a great defense of free trade and a bit of entrance into politics (touching a tad on public choice theory). In all, for being a relatively short book, he hits all the major notes that anyone looking for an introduction to economic thought would need to learn.

But the big question, for readers of this blog, is whether it’s worth it to buy. “Am I going to learn anything new?” And I can honestly say that despite the fact that I read economic books & blogs for leisure, and that I’ve blogged a fair bit about economics myself, I learned some new things from Slackernomics. Dale’s fourth chapter, unwinding the mess of the myriad of economic reports and statistics he’s constantly posting on Twitter, Google+, and at QandO, was wonderful. I’ve looked at many of these reports merely reading analysts *reaction* to the numbers (Higher jobless claims? How unexpected!), but rarely understood which group (public or private) was putting out certain reports nor how they all fit together. For me, a layman who is conversant on a lot of economic theory but not as perhaps on the technical reports, I have never seen an explanation of the reports that come out each week and each month as simple and readable as that chapter. That was more than worth it for my $2.99.

So my recommendation is simple: at $2.99, if you have a Kindle (or a device with a Kindle app), it’s hard to pass it up. You’re almost assured to get your money’s worth from the book. Even further, if you know someone in high school or college that may not have received good schooling in economics (which is, unfortunately, most of them), and who isn’t exactly about to tackle The Wealth of Nations, find a way to get them a copy of Slackernomics. Dale’s writing style will keep them interested.

All in all, it’s a book that lives up to its title, and goes well beyond.

One of the things that occurred to me watching this was how little true discussion is going on between the OWS movement and their critics. Notice how some of the protesters say things like “you rich people” or “you Republicans” etc. Just as its unfair for these protesters to lump everyone into these groups is a mistake, I think it’s also a mistake to assume that all of these protesters are clueless and don’t have some legitimate grievances.

Kudos to Peter Schiff for going out among the protesters and having this much needed conversation. There seems to be some common ground concerning these grievances; the real differences are what the solutions should be.

But what if I told you that there was another $11T of outstanding US dollars* out there in the world, and that everyone except the US has a say in whether they are circulated. In fact, that those dollars are sitting on foreign soil is a very good thing for the US and has been for decades, but it’s not assured it will last forever. As I said WAAAY back in 2007:

As I’ve pointed out in the past, the dollar’s status as a reserve currency has largely allowed America to inflate with very little visible burden on our own citizens. We create worthless money, use it to buy durable goods from other countries, and watch as they hold that money or reinvest it in the sinkhole that are Treasury bonds. It’s a credit card on the world, and we can print whatever we need to pay it off…

…as long as they don’t wise up. If they do, suddenly that money might come back to us, and we’ll feel the results of the inflation we’ve engaged upon.

Inflation benefits those who see the money first — in this case, Americans who used that money to buy durable goods from overseas. It has the least benefit for those who see the money last. To date, that has been forex reserves, sovereign wealth funds, etc. But should those foreign nations decide they no longer want to hold US dollars, they’ll spend them right back into circulation — and they’ll eventually want us to sell them goods in exchange for those dollars.

If that happens, the inflation comes full circle and we feel it right here at home — without the Fed ever releasing the $2.7T they have on their balance sheet.

We’ve spent the last four decades, ever since Nixon “closed the gold window”, sending dollars abroad to other nations who stick them under their mattresses. This has been the persistent trade deficit we’ve held. Sure, some of those dollars came back to be lent to our own government to finance even MORE spending that didn’t come from the American people, but much of them quite literally got shoved under the mattress.

What happens if they want to spend those dollars? Well, dollar-denominated assets and goods produced in the US will rise in price. Oil, gold, silver, food (produced in the US), etc. Look at gold, for example: In the last year, gold has increased in dollar terms by over 32%, but by less than 8% in Swiss francs. USD vs other currencies show similar (but smaller) gaps. What can explain this? Well, if nothing else, that big buyers like China and India are using their dollar surplus, rather than their reserves in other currencies, to buy gold.

Where’s the endgame if this dollar-spending widens? Well, eventually those dollars are sold to people who don’t want to buy goods from China or US T-Bills: they want to buy US exports or US assets. That sounds good, of course; everyone likes exports! But is it good? Restate it this way: a durable good (i.e. product of American workers’ output) needs to be produced to leave our shores, and it increases the circulating money supply in the USA. The good we produce here is enjoyed elsewhere, while the increased money supply makes our own goods at home more expensive.

We change from trading our paper for other nations’ hard work to trading our hard work for our own paper back.

The endgame is the end of trade deficits, where we work harder as a nation to supply the rest of the world with goods in exchange for a lower standard of living here. That doesn’t sound good to me at all.

America has enjoyed a very privileged position in the world, and that position has only been possible from two things: other nations have trusted us and they’ve had no other options. The first is eroding to the point where they’re looking for the second. If we want to continue enjoying our position in the world, we need to convince the rest of the world that holding the US Dollar as a reserve currency benefits them — and neither trillion Dollar deficits as far as the eye can see or quantitative easing accomplish that.

When the inflation comes, it’s not going to be the Fed printing money — it’s going to be other nations sending us the money printed over four decades and expecting to buy something with it.

* Difficult stat to come up with. I used wikipedia to determine that there’s ~11T total forex reserves and about 61% of them are USD, which gives me about $6.7T in USD sitting in forex reserves. Add to that about $4.4T foreign holdings of US treasury securities, and I came up with a total number of about $11T.

Now, some may say that’s a libertarian’s answer for everything. And they’d usually be right. But I’m not signing you up for a precipitous decline in federal revenue. I’m not resorting in protectionist and mercantilist policies destined to impoverish American consumers in favor of American exporters. All I’m asking — or relaying the request of Cisco CEO John Chambers and Oracle President Safra Catz, more accurately — is that the US Government make it easier to bring foreign profits back to our shores:

One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.

But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here.

The U.S. government’s treatment of repatriated foreign earnings stands in marked contrast to the tax practices of almost every major developed economy, including Germany, Japan, the United Kingdom, France, Spain, Italy, Russia, Australia and Canada, to name a few. Companies headquartered in any of these countries can repatriate foreign earnings to their home countries at a tax rate of 0%-2%. That’s because those countries realize that choking off foreign capital from their economies is decidedly against their national interests.

…

By permitting companies to repatriate foreign earnings at a low tax rate—say, 5%—Congress and the president could create a privately funded stimulus of up to a trillion dollars. They could also raise up to $50 billion in federal tax revenue. That’s money the economy would not otherwise receive.

The tax picture described is very simple, and it makes American companies make some difficult decisions. A company with overseas profits and a need to reinvest can choose to invest them abroad or here in the US. Those overseas profits can be invested overseas with little or no tax penalty, or they can be invested here with significant tax penalty. The decision becomes simple. It is only smart to invest foreign profits in the US if it is investment that simply cannot be effectively done overseas, because the cost of repatriation is enormous. It’s a trade war, but it’s aiming the artillery inward, not outward.

Anyone who has read my work knows that I am not a fan of government subsidies. I personally think that American corporations and American workers can compete quite handsomely on the world market. We don’t need our government to actively help industry here; we have an educated workforce, developed infrastructure, stable institutions and a strong rule of law. We have everything we need to make it profitable for companies to invest here. We could have a country where overseas profits are re-invested in American workers and the US economy. What we have instead are government policies actively hostile to that end. All I ask is that those policies be rescinded.

America is seen worldwide as pro-business. In many cases, that is true, but certainly not in our corporate income tax system, as described by the Cato Institute here. Rather than being a low-tax laissez-faire bastion of capitalism, we have the highest corporate income tax rate in the developed world:

Reducing the taxes on repatriated profits can be done in a revenue-neutral way. All that is necessary is to choose a tax rate that will balance the tax revenue earned on repatriated earnings at the current rate with the expected revenue earned on the much larger base of repatriated earnings at a lower rate. Some foreign cash is undoubtedly repatriated; as I said there is incentive not to do so, but that incentive in not insurmountable. However, at a lower tax rate it makes sense for more companies to repatriate much larger sums, and I think a baseline rate of 5% as suggested by Chambers and Catz is a good starting point for discussion if remaining revenue-neutral is a goal.

There is up to a trillion dollars out there that could be injected into the US economy without raising the deficit, without spinning up the printing press, and which would go immediately to the entities who have the best ability to invest it in stimulative ways — companies who are already profitable. While many in Congress may not like the idea, as they have little control over how the money is spent, I think that’s a feature — not a bug.

While I’m not a protectionist, I think we should stop government policy designed to hurt American employment and help employment overseas. Of all the policies in which our government engages, one that actively stops capital from flowing into America from overseas seems rather idiotic.

Full Disclosure: I work for a multinational electronics company, with worldwide staff, worldwide production facilities, and worldwide yearly revenue in the billions. My inspiration for this post was a discussion of the tax penalties inherent in my own employer repatriating foreign profits, but I chose to wait until the idea was publicly forwarded by heads of Cisco and Oracle before adding my own thoughts. Undoubtedly my employer would also benefit from such a policy, and I would be remiss to suggest this without disclosure. Also note that the opinions herein (and elsewhere I write on this blog) are purely my own, and are not in any way meant to represent those of my employer.

The people behind the “Just Say Now” marijuana legalization campaign (oft-Boinged Salon contributor Glenn Greenwald is one of many political thinkers on their board) want Facebook to back off its decision to pull their ads from the social networking service.

This is what Facebook’s PR says:

It would be fine to note that you were informed by Facebook that the image in question was no long acceptable for use in Facebook ads. The image of a pot leaf is classified with all smoking products and therefore is not acceptable under our policies. Let me know if you need anything further.

One key indicator that you are dealing with unapologetic authoritarians is when you’re being harshly reprimanded for violating regulations and rules that are unpredictable, undefinable and more than likely not even known by the person touting them. That appears to be the case with Facebook’s policies:

But the group points out that Facebook’s ad policy doesn’t ban “smoking products,” just “tobacco products.” Also, Facebook does permit alcohol ads, even ads featuring images of alcohol products and packaging, though alcohol ads that make alcohol consumption “fashionable,” “promote intoxication” or that “encourage excessive consumption” are banned. Just Say Now calls Facebook’s action censorship.

Perhaps Facebook goes by the old Jack Webb Dragnet school that pot consists of “marijuana cigarettes.”

There’s alot of faux outrage out there, as the Cordoba Crowds in NYC have shown us. Given the extensive cost to normal livelihoods by the continued prison construction and law enforcement funding required by prohibition, Facebook does deserve to be boycotted for trying to silence a group like Just Say Now.

Just Say Now’s Jane Hamsher, founder of Firedoglake.com, is also on the side of liberty in her fight against punitive immigration laws. Check out an appearance she did that I posted at my website Voice of the Migrant. She’s also a cancer survivor and all around political superhero. Give her support and take it away from Facebook.

From the LA Times, Anthem Blue Cross asked to justify controversial rate hikes :

The Obama administration called on Anthem Blue Cross on Monday to justify its controversial new rate hikes of as much as 39% for individual policyholders, saying the increases were alarming at a time when subscribers are facing skyrocketing healthcare costs.

In a letter to the company’s president, Health and Human Services Secretary Kathleen Sebelius voiced serious concern over the rates, which go into effect March 1 for many of the insurer’s estimated 800,000 individual policyholders.

The increases have triggered widespread criticism from Anthem members and brokers, who say the premium hikes will put health coverage out of reach for some and very costly for others.

“With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39%,” Sebelius wrote to company President Leslie Margolin.

“These extraordinary increases are up to 15 times faster than inflation and threaten to make healthcare unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

Let’s get one thing straight;  these increases are entirely due to inflation, and they are likely largely caused by the Obama administration’s stimulus plan. Anthem executives didn’t wake up one morning and say “Hey! Let’s jack up prices so that our customers can no longer afford our product!”  Rather they are increasing prices to deal with the increased costs they anticipate for the coverage they provide.  Now why would they do that?

It turns out that while California has been receiving large amounts of bailout and stimulus funds, the supply of medical service providers has stayed steady.  That new money has largely gone to the California State government’s payroll and to cover their administrative overhead costs.  One of the largest discretionary expense most government employees have is the cost of medical insurance, and the demand for the insurance is relatively inelastic.  This insurance is used to pay for a multitude of doctor’s visits etc.  Thus you have a large pool of people with freshly printed money in their pockets engaged in a bidding war trying to consume an essentially static supply.The winners pay higher prices for the scarce goods, and the losers are left out in the cold.

This phenomenon is precisely how prices increase when whoever controls the money supply engages in inflation.  It’s not mysterious.  It’s not greed.  It is merely a predictable outcome counterfeiting.

This is one favorite method used by totalitarians to justify their seizures of power.  They engage in reckless government spending financed using the printing press.  Then, when these newly printed funds lead to a bidding war between buyers that drives prices up, they use the price increases as a justification for even greater usurpations of power.

If Kathleen Sebelius is serious about reducing prices for health care in California, she should be penning angry letters to the head of the California Medical Licensing Board.  This bullying of a company trying to stay solvent despite an economic storm created by government intervention – while making for very nice populist theater – will contributed nothing positive to the problem.

As if this wasn’t bad enough, bone marrow is included as part of the ban. The act of paying an individual for his or her bone marrow is a felony which is punishable for up to five years in prison for everyone involved in the illegal transaction.

The Institute for Justice has decided to challenge this most absurd provision of this absurd bill. Below is a video from the organization explaining their lawsuit against U.S. Attorney General’s Office:

For the sake of the Flynn family, here’s hoping that the Institute for Justice wins the day.

Hat Tip: The Agitator

Canada’s six NHL teams are scrambling to find alternative travel arrangements south of the border after the U.S. Department of Transportation banned Air Canada’s charter fleet from flying between U.S. cities.

In a furious exchange with the Obama administration over the mid-August ruling, Canada has launched its own investigation and will soon close its skies to U.S. sports team charters in retaliation, warns Transport Minister John Baird.

The sticking point is an eight-year-old exemption that had allowed sports and celebrity charters to make several pit stops in American cities. Under existing open skies agreements, regular Canadian airline flights can only visit one U.S. city before returning.

…

The ruling also side-swipes musicians and other artists on tour.

The matter was pushed by the U.S. Air Line Pilots Association. It had demanded an investigation of passenger lists on the NHL flights, which found a few examples of injured players, personal trainers and team owners boarding the charter south of the border and departing at another U.S. city in a technical violation of the agreement.

Emphasis added to point out — as Jason does — that this is more about appeasing a union than anything else. This isn’t about safety. This isn’t about the NHL or Canada. This is about protecting an American union from competition. And if economic inefficiency is the result, so be it. If trade retaliation is the result, so be it. Campaigns don’t finance themselves, people! Ya gotta take care of your friends.

First of all, Obama has probably ignited a new trade tensions that may cause a trade war between the US and China. The last time a global trade war broke, well….the Great Depression was a result. The Asian and US stock markets were down this morning on the news.

More importantly, it seems that Barack Obama may be putting American lives at risk on the highway. Consumer Reports’ official blog had a writeup that was interesting to say the least.

The Obama administration on Friday imposed a new 35-percent tax on tires made in China. That includes many of the S- and T-rated tires in our recent upcoming tire test of all-season passenger car tires. More than half of the top 10-rated tires in the November issue are imported from China.

The tariff is likely to increase prices on tires for consumers at least in the short term, as China is by far the largest tire producer in the world. Also, some tire models could be harder to find temporarily if manufacturers decide to switch production to another low cost country.

China’s crime apparently was that it built low cost tires which are better in quality than tires made by Obama-supporting union thugs. The United Steelworkers Mafia couldn’t have that so they decide to try and eliminate the competition.

Average Americans may pay for this blatant act of political pandering…with their lives in some cases.

Because the tire industry is very competitive, tiremakers may not be able to pass the price whole price increase along to consumers for long. But we at Consumer Reports are concerned that the higher tariff may indirectly compromise safety by giving consumers incentive to delay replacing worn tires. The move is likely to put some pressure on consumers, but more on tire manufacturers.

In addition to the lost jobs at our ports and among our importers when China retaliates and/or as a direct result of this tax increase, in addition to higher tire prices, in addition to the economic and diplomatic damage this has caused, in addition to the clear example of old style political payback behind closed doors and without public input, this tax increase may prove fatal for some Americans who will have accidents that will be caused by worn tires that they could not replace because they cannot afford them.

“Hope and change” indeed.

“I can make a firm pledge….no family making less than $250,000 will see any form of tax increase…..not any of your taxes”-Barack Obama, September 12, 2008

Once again, President Obama has lied to the country. After raising cigarette taxes earlier this year, Obama just ordered another tax increase. This time, he raised every American’s taxes without a vote of Congress and with the simple stroke of a pen. Obama increased taxes on Chinese-made tires.

In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to “crack down” on imports that unfairly undermine American workers but risks angering the nation’s second-largest trading partner.

The decision is intended to bolster the ailing U.S. tire industry, in which more than 5,000 jobs have been lost over the past five years as the volume of Chinese tires in the market has tripled.

It comes at a sensitive time, however. Leaders from the world’s largest economies are preparing to gather in Pittsburgh in less than two weeks to discuss more cooperation amid tensions over trade.

The tire tariff will amount to 35 percent the first year, 30 percent the second and 25 percent the third.

Which means American consumers will see an increase in prices of at least 35% for their tires in the name of saving 5,000 jobs. Chinese and US companies with factories overseas are not going to pay the tariffs, they’ll pass them on to consumers. There is also the latest example of the Obama administration diplomatic ineptness of angering trade partners before major trade talks with China among other countries. Also, there was not much public debate over this, since this decision was reached behind closed doors with the help of an obscure Federal trade panel with no citizen input.

Of course with the Obama administration, there’s always someone or some group to be paid back.

Although a federal trade panel had recommended higher levies — of 55, 45 and 35 percent, respectively — the decision is considered a victory for the United Steelworkers union, which filed the trade complaint.

The United Steelworkers union endorsed Obama’s presidential bid and the Steelworkers had a massive grassroots effort that claimed credit for helping win Pennsylvania, Ohio, and Virginia; among other states.

“Hope and Change” indeed.

You HAVE TO read this.

Culture

View more presentations from Reed Hastings.

Dear Olivia Jane:

You and many readers of Daily Kos are furious that Whole Foods CEO John Mackey expressed – in the pages of the Wall Street Journal – his opposition to greater government involvement in health care.

Exercising your rights and abilities as consumers, you are therefore boycotting Whole Foods.  You’re using your freedom to avoid paying for products offered by someone whose attitude toward government you disapprove of.
Isn’t freedom wonderful?!

But I must ask: do you endorse my freedom to boycott paying for products offered by those whose attitude toward government I disapprove of?  Like you, I have very strong opinions about the proper role of government, and also as in your case, a famous chief executive is now endorsing government policies that I find reprehensible.

Will you champion my freedom to stop supporting, with my money, President Barack Obama’s services?  Will you come to my defense if I stop paying taxes to support those policies of Mr. Obama with which I disagree – policies such as the economic ’stimulus,’ more vigorous antitrust regulation, and cap and trade?  Indeed, will you defend me if I boycott – if I choose not to pay taxes to support – Obamacare?

If you will support me in my boycott, then I applaud your principle and, although I disagree with you about Mr. Mackey’s political views, fully support your freedom to boycott Whole Foods.  But if you will not support me in my boycott, then can you tell me on what principle you would stand to defend your right to boycott supermarkets if someone (say, Mr. Mackey) managed to secure legislation that obliges you to shop at Whole Foods?

I await your reply.

Donald J. Boudreaux

I couldn’t put it better myself. One quibble, even if Olivia Jane was not willing to extend us the same courtesy and support our desire to boycott Obamacare, we should applaud her principle. Just because she has reprehensible political views does not mean we should ignore the opportunity to teach her the value of a right to exit/disassociate.