Farming with Mules

 Posted by on 29 May 2008 at 10:18 am  Business, Politics
May 292008

This news story — High gas prices drive farmer to switch to mules — is straight out of Atlas Shrugged:

MCMINNVILLE, Tenn. – High gas prices have driven a Warren County farmer and his sons to hitch a tractor rake to a pair of mules to gather hay from their fields. T.R. Raymond bought Dolly and Molly at the Dixon mule sale last year. Son Danny Raymond trained them and also modified the tractor rake so the mules could pull it.

T.R. Raymond says the mules are slower than a petroleum-powered tractor, but there are benefits.

“This fuel’s so high, you can’t afford it,” he said. “We can feed these mules cheaper than we can buy fuel. That’s the truth.”

And Danny Raymond says he just likes using the mules around the farm. “We’ve been using them quite a bit,” he said.

Brother Robert Raymond added, “It’s the way of the future.”

What could better concretize the damaging economic effects of government regulations strangling energy production than this return to mule power? If such exists, I can’t think of it!

For a brief sketch of just some of those government regulations restricting the supply of oil, see Alex Epstein’s recently-published op-ed on Investigate Big Congress, Not Big Oil.

(Hat tip: Robbservations.)

Coffee Capitalism

 Posted by on 27 May 2008 at 11:50 am  Business, Culture
May 272008

As everyone knows, the market for coffee products in the Seattle area is fiercely competitive. The quest for customers have led one entrepreneur to develop the “sexy espresso stand“:

Espresso drive-through stands with bikini- and lingerie-sporting baristas are popping up from Monroe to Edmonds. In the past year, at least six of these java joints employing provocatively dressed young women have opened in the county. A few owners of these roadside stands say business is so brisk, they’re hiring more employees and have plans to open new locations.

…Sometimes wearing little more than pasties and bikini bottoms, the scantily clad baristas at Wheeler’s stands have scores of well-tipping customers.

This adds new meaning to the term “fair trade coffee”… (Via Neatorama.)

Nationalizing the Oil Industry?

 Posted by on 23 May 2008 at 11:22 am  Business, Economics, Politics
May 232008

Just when you thought American politics couldn’t get any worse, Maxine Waters threatens to nationalize the oil industry, if consumer prices aren’t to her liking:

Of course, Maxine Waters wouldn’t ever support the genuine cure for high energy prices, namely the elimination of government controls on drilling for and refining oil, as well as on other forms of energy like coal and nuclear power. As any semi-conscious student in a microeconomics class knows, such controls constrict supply and drive up prices. But nevermind that mumbo-jumbo. Maxine Waters has a different kind of plan: oil company executives must find some way to magically violate the basic laws of economics — or else!

(Via Kelly McNulty on FRODO)

To Hell with Economics

 Posted by on 21 May 2008 at 11:39 pm  Business, Religion
May 212008

Oh, why bother with knowing the economics of supply and demand, when a person could just pray for lower gas prices?

Rocky Twyman has a radical solution for surging gasoline prices: prayer.

Twyman — a community organizer, church choir director and public relations consultant from the Washington, D.C., suburbs — staged a pray-in at a San Francisco Chevron station on Friday, asking God for cheaper gas. He did the same thing in the nation’s Capitol on Wednesday, with volunteers from a soup kitchen joining in. Today he will lead members of an Oakland church in prayer.

Yes, it’s come to that.

“God is the only one we can turn to at this point,” said Twyman, 59. “Our leaders don’t seem to be able to do anything about it. The prices keep soaring and soaring.”

Gas prices have been driven relentlessly higher this year by the bull market for crude oil, gasoline’s main ingredient. A gallon of regular now costs $3.89, on average, in California, while the national average has hit $3.58.

To solve the problem, Twyman isn’t begging the Lord for any specific act of intervention. He is not asking God to make OPEC pump more oil. Nor is he praying for all the speculative investors to be purged from the New York Mercantile Exchange, where crude oil is traded. Instead, he says anyone who wants to follow his example should keep it simple. “God, deliver us from these high gas prices,” Twyman said. “That’s all they have to say.”

Ah yes, giving recommendations to God would be the sin of pride, I suppose.

However, as an omniscient being, God must be already perfectly aware of the high price of gas. As an omnipotent being, he must be capable of lowering gas prices. Since he’s all-benevolent, he wouldn’t allow gas prices to remain as they are if that was an evil. Ergo, high gas prices must be all for the best.

So… Thanks, God!

(Nick Provenzo also blogged about this news.)

Astrology in the Markets

 Posted by on 4 May 2008 at 7:35 am  Business
May 042008

No comment: Britain’s biggest banks use astrology to play the markets.

Too Big to Bail

 Posted by on 23 April 2008 at 6:19 am  Business, Finance, Politics
Apr 232008

I really enjoyed Alex Epstein’s “video op-ed” explaining “how the government’s ‘too big to bail’ policy encouraged financial institutions to make billions of dollars in bad subprime investments.”

The text version of the op-ed is available on the Ayn Rand Institute web site, but it’s just soooo much better to hear Mr. Epstein speak that fabulous line about “government bailout crack”!

Trader Joe’s, Behind the Scenes

 Posted by on 17 April 2008 at 4:29 pm  Business
Apr 172008

I love Trader Joe’s — so much so that the lack of TJ’s in Colorado is my only serious regret about leaving California. I’m still enjoying the care package of Trader Joe’s goodies that Paul and I mailed ourselves while in Maryland visiting my parents. Consequently, I could enjoy this BusinessWeek article on the business model of the chain: Trader Joe’s Recipe for Success. The tagline reads, “By limiting its stock to specialty products at low prices, Trader Joe’s sells twice as much per square foot than other supermarkets.” I’m not surprised. Supermarkets are a mixed bag of good stuff and crud, but Trader Joe’s is chock full of delights!

(Yes, Paul and I do mail ourselves a care package from Trader Joe’s whenever we visit a place blessed with the store. That’s just how much we miss it.)

Business Regulation, Consumer Protection?

 Posted by on 16 April 2008 at 10:17 pm  Business, Politics
Apr 162008

In my recent letter to various public officials opposing proposed legislation on mandatory insurance, I wrote:

If your goal is to fix the genuine problems in our health care system, then you MUST advocate FREE MARKET reforms. Eliminate the tax incentive for employer-provided health care. Eliminate all mandates and other regulations on health insurance. Eliminate regulations on medical providers. Gradually eliminate welfare programs.

A few days ago, I received the following e-mail inquiry about the implications of that paragraph in particular. It said:

Do you advocate eliminating most or all business and financial regulations in addition to the medical regulations mentioned above? If objectivism and the business/economic beliefs of Ayn Rand were to be law of the land, for lack of a better phrase, how would such a government prevent abuses by businesses and protect the consumer’s rights from being trampled on?

Those are excellent questions. I’ll answer them briefly here, and I hope that others will chime in with more in-depth analysis in the comments.

Yes, I do advocate the repeal of all business and financial regulations. However, that does not imply that the law has no proper function to serve in markets. In the purely capitalist economy that I advocate, the legal system serves an indispensable role: it protects the rights of all people, particularly the rights of property and contract. If a business engages in false advertising, fails to deliver the contracted-for goods, or knowingly sells dangerously defective products, then individuals should be able to resort to the courts to remedy the violation of their rights.

In contrast, when the government establishes regulations “prevent abuses by business” and “protect consumer’s rights,” then it is actually violating the rights of both producers and consumers, not protecting them. Regulations violate everyone’s rights to acquire, use, and dispose of their property as they see fit. Regulations violate everyone’s rights to contract for mutually agreeable terms. In essence, regulations use government force to prevent people from acting according to their own best judgment. That’s morally wrong and practically disastrous.

If I’m dying of cancer with three months to live, the FDA forbids me from taking a promising experimental drug because it’s not yet been proven “safe” and “effective.” As if that matters: I’m dying! Supposedly, FDA regulations exist to protect me, the consumer.

If I lack work experience, minimum wage laws forbid a business from hiring me except for more than I’m actually worth. So I’m forced into unemployment, even though I’d be happy to gain experience and reputation as a good worker by working for less than minimum wage for a time. Supposedly, minimum wage laws exist to protect me, the worker.

If I’m a good cook looking to start a small catering business, I would be stopped dead in my tracks by the myriad regulations required to serve food and liquor. So my potential consumers have to pay more for their catering because the cost of entering the market is so high, even if they’d rather hire me. Supposedly, those health regulations exist to protect my consumers.

Government regulations of business preemptively punish all producers as would-be criminals. They treat all consumers as helpless dolts unable to choose wisely. They grant government bureaucrats unlimited power over our lives. That’s not good, to say the least.

The proper approach is to (1) punish only actual instances of force and fraud in the market, (2) treat adults like the rational creatures they are, (3) limit government power to only protecting individual rights. To do that would require eliminating all government regulation of business — and that’s why I advocate doing so.

Bad News for Philosophy Majors

 Posted by on 16 April 2008 at 12:46 pm  Business, Philosophy
Apr 162008

This graph is why parents aren’t always thrilled when their children tell them that they’ve decided to major in philosophy.

(Yes, philosophy can be a fine major. No, I don’t think that this graph says much about long-term earning potential. Many philosophy majors go to law school, and that has a good effect on long-term earnings. It’s philosophy graduate school that kills a person’s earning potential!)

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