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Price-gouging?
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Newspaper Article

Price-gouging?

BY Richard W. Rahn

If you bought a home 10 years ago for $100,000 and just sold it for $300,000, have you engaged in price gouging? Most people would say "no," provided there were willing buyers and sellers of both sides of the transaction merely responding to the market at the time. As a result of hurricanes Katrina and Rita, some politicians have demanded prosecution of "price gougers." In many states, like Florida, "price gouging" is illegal. The Florida statutes say, "It is illegal to charge unconscionable prices for goods or services following a declared state of emergency."

09/29/2005
Feeding the kitty for Katrina
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Newspaper Article

Feeding the kitty for Katrina

BY Richard W. Rahn

Assume you were a regular blood donor but had an accident in which you lost a considerable amount of blood. Do you think you should increase or decrease the size and frequency of your blood donations until you recover?

09/21/2005
Britain slowly sinking
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Newspaper Article

Britain slowly sinking

BY Richard W. Rahn

LONDON, England. From the time of the Thatcher reforms in the early 1980s, Britain has been the star economic performer among the major European nations. The British went from having the lowest per capita income of the European big four (Germany, France, Italy and Britain) to having the highest one, but now there are signs the economic sickness in "old Europe" is beginning to infect the British.

09/16/2005
Spooked by the obvious
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Newspaper Article

Spooked by the obvious

BY Richard W. Rahn

If you suddenly learned the government had reduced taxes on interest, dividends and capital gains, would you save and invest more or less? Most people would say more, because saving and investing would be more profitable with lower tax rates. As obvious as this seems, much of the Washington establishment is shocked the deficit is falling rapidly due to surging tax revenues, despite the "massive" Bush tax cuts.

08/28/2005
Who's afraid of scientific methods?
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Newspaper Article

Who's afraid of scientific methods?

BY Richard W. Rahn

People who consider themselves very rational argue that most disputes about what is true and what is not can be settled by calmly looking at the evidence and letting it guide them to the proper conclusion. However, many who claim to be adherents of the scientific method seem to lose their "scientific objectivity" in some of the great debates of the day.

08/21/2005
Why do we regulate?
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Why do we regulate?

BY Richard W. Rahn

Should government regulate business? I expect most people would answer "yes" to that question, but if you ask them why, I expect these same people will have a harder time giving an answer that makes sense. Some may say, "in order to prevent businesses from engaging in fraud or misrepresentation." But we do not need regulation to do that; there are already many federal, state and local statutes against fraud and misrepresentation, and businesses that behave badly can be dealt with through normal civil and criminal legal means. Others who are a bit more sophisticated might argue that we need to regulate business in order to protect people from "market failures." However, the empirical evidence is that there are far fewer "market failures" than commonly imagined, and many of these so-called market failures are actually a result of misguided government policy or regulation. For a minute, try to imagine a world without government regulation, but where all of the standard laws against theft, fraud, misrepresentation and bodily injury still exist. Under such a scenario, what do you think would happen if we had no food and drug administration to tell us what was safe to consume? No financial regulators to protect us from bank failures and financial scams? No health and safety regulators to protect us from unsafe products? Would we all die? Not likely, because the judicial system, coupled with private standard setting associations, would likely give us an equal, if not a higher, level of protection than we have now. More than a century ago, when electrical appliances were first being developed and sold, there was a problem in that many of the new products shocked their customers and/or started fires. The electric appliance industry quickly understood this situation was dangerous and not good for business and thus started an industry sponsored organization to test products to make sure they were safe and reliable. The organization was called Underwriters Laboratories. It still exists today to ensure that electrical products bearing the UL seal are safe, and its mark has become the standard. In the absence of regulation, virtually every industry would do the same thing, because legitimate enterprises know that being known for selling faulty products would ruin their reputation and put them out of business. Unfortunately, as a result of ceaseless propaganda from pro-government interest groups, most Americans have been brainwashed into thinking they need regulatory agencies to protect them. A most provocative paper has just been published by the American Enterprise Institute, written by former U.S. Treasury General Counsel Peter Wallison, entitled "Why Do We Regulate Banks?" Mr. Wallison argues that "it is difficult to identify a sound policy reason for regulating banks. Most of the conventional explanations -- inherent bank instability, deposit insurance, the Federal Reserve's role as lender of last resort, or the Fed's role in the large-dollar payment system -- turn out on examination to be either unfounded or based on risks that the government need not take in order to foster growth of the economy." Mr. Wallison goes on to detail "the huge costs to the taxpayers and the economy" caused by bank and S&L failures that have been due to regulation. Finally, Mr. Wallison, who has had major regulatory responsibility, concludes as to the question, "Why do we regulate banks? That we do so because we want to, not because we must." In an excellent paper dealing with the telecom industry by Stephan B. Pociask, titled "Wireless Substitution and Competition," published by the Competitive Enterprise Institute, the author finds "convincing evidence that wireless services are strong substitutes for wireline services." His analysis concludes that "the nature of competition has changed, and it also means that price and service regulation is largely unneeded, since market forces are sufficient to hold prices in check." The point of these above examples is that we have more and more evidence that much of government regulation is not only not needed but is non-productive and destructive. It is now estimated that this year our total regulatory burden will be $913 billion, or roughly eight percent of the U.S. gross domestic product. Unneeded and harmful regulation has very real costs to people that shows up in fewer jobs, less international competitiveness, less freedom, and a lower standard of living for most people. It is time for us to fundamentally rethink the regulatory state. Your local supermarket does not need the government to tell it to sell only safe food, because if it doesn't its customers will go elsewhere, and it will also be sued. A free market system with few barriers to entry for new competitors, coupled with a strong legal system that penalizes neglect and misbehavior, is more likely to protect the citizen with lower costs than whatever number of regulatory agencies can be developed by the government class.

08/11/2005
Bush to tout 'ownership society'
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Bush to tout 'ownership society'

BY Donald Lambro

With signs that the economic recovery may be cooling, President Bush and his advisers have decided to refocus his campaign on proposals he will champion under the banner of an "ownership society," said Republican strategists close to the White House. Mr. Bush will begin touting economic incentives he wants to enact in a second term, including private Social Security investment accounts, the promotion of homeownership and perhaps further tax cuts, said Republican officials who have participated in White House strategy sessions.

08/12/2004
Oregon voters reject tax increase
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Oregon voters reject tax increase

BY Steve Miller

Oregon voters Tuesday turned back a proposed $800 million tax increase that was passed last year by state legislators, which bodes well for opponents of tax increases in several other states, including New Hampshire, Ohio and Nevada. Voters rejected the measure by a 3-2 margin, spurning lawmakers call for more funding for public schools and social services agencies. The tax package's failure automatically triggers $544 million in spending cuts on May 1.

02/05/2004
Bush to propose spending freeze
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Bush to propose spending freeze

BY Joseph Curl

President Bush will propose an increase of less than 1 percent for federal programs not related to defense or homeland security, effectively freezing discretionary spending in the next budget, after coming under fire from conservatives to control runaway spending. But the president will propose increasing governmentwide homeland security funding by 9.7 percent in the fiscal 2005 budget, and the military budget is expected to increase by a small amount.

01/23/2004
Republicans test airwaves to break judicial impasse
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Republicans test airwaves to break judicial impasse

BY Charles Hurt

Republicans and their supporters are taking the debate over President Bush's stalled judicial nominations directly to voters in an untested effort to find out whether people actually care about the increasingly politicized issue. Television advertisements have gone up in South Carolina; radio ads are running in Michigan and Republicans scheduled 30 straight hours of debate next week on judicial nominations that will be broadcast live on C-SPAN 2.

11/09/2003

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