Medical Marijuana decision

Too bad we don’t have more doubting Thomases on the Supreme Court. Here is a portion of Justice Clarence Thomas’s dissent:
“Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything and the Federal Government is no longer one of limited and enumerated powers.”
The Commerce Clause has enabled activist judges to make up the rules as we go along. So much for the Constitution.
See more thoughtful discussion here.

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Another Government Failure: Ethanol

From NCPA:
Ethanol’s advocates have long argued that increasing the amount used in
gasoline would be a boon to the economy, reduce our dependence on
foreign oil and improve air quality.
Yet, more than two decades and tens of billions of dollars in subsidies,
tax credits and fuel mandates have done little other than enrich the
agribusinesses that produce ethanol, says H. Sterling Burnett, a senior
fellow with the National Center for Policy Analysis.
Indeed, the economic impact of ethanol subsidies is negative. One report
by the U.S. Agriculture department determined that every $1 spent
subsidizing ethanol costs consumers more than $4.
There are several reasons for this, says Burnett:
o Every bushel of corn devoted to ethanol production leaves less
for human consumption and animal feed — thus people pay more for
corn, beef, poultry and pork than they would absent the
subsidies.
o And prices for other goods are also higher since farmers, in
pursuit of lucrative subsidies, devote more acreage to corn
rather than other, unsubsidized, produce.
o Additionally, the costs of growing, distilling and blending
ethanol into gasoline makes it cost 51 cents more per gallon to
produce than regular gasoline.
The clamor for increased use of ethanol also raises the specter of the
current problems surrounding the use of MTBE, the fuel additive that oil
producers began blending with gasoline in the mid-1990s to meet stricter
clean-air standards. Although not carcinogenic in humans, MTBE has
caused huge problems recently because it leaks from storage tanks and
contaminates local water supplies.
Absent federal subsidies and mandates, ethanol would likely disappear
from the marketplace. Like so much of the pork Congress bestows upon
special interests, ethanol is bad for the economy, consumers and the
environment, says Burnett.
Source: H. Sterling Burnett, “Ethanol benefits makers, legislators who
support their cause,” Billings Gazette, June 5, 2005.

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No Central Planner Left Behind

Chuck Muth expresses my sentiments better than I ever could:
“For all its purported virtues, the Bush/Kennedy ‘No Child Left Behind’ law is perhaps the biggest threat to state sovereignty this side of the Rio Bravo today. The federal NCLB law tells states how they MUST run their re-education camps…er, public schools…or else.
Up ’til now that “or else” has been a threatened cut-off of federal funds to states who refuse to ‘get with the program.’ But now that Utah has gone on record as telling Uncle Sam to take his money and shove it, the feds are getting significantly more cranky. In fact, Nina Rees from the Education Department announced at a Cato Institute forum on Tuesday that, ‘We’re going to take a hard line against states that blatantly violate the law.’
So when the carrot doesn’t work, the feds are more than happy to whip out the ol’ stick to compel state compliance with the diktats of the omnipotent federal government. 10th Amendment supporters should be outraged. More states should follow Utah’s lead. Congress should repeal NCLB. And the federal Department of Education ought to be eliminated, just as Republicans proposed back in 1994…BEFORE they actually became the party of power.”

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Don’t Worry about the Trade Deficit

Walter Williams explains why you should not worry about the trade deficit.
I wish politicians were as economically literate as Professor Williams. But they are not:
“Some politicians gripe about all the U.S. debt held by foreigners. Only a politician can have that kind of audacity. Guess who’s creating the debt instruments that foreigners hold? If you said it’s our profligate Congress, go to the head of the class. If foreigners didn’t purchase so much of our debt, we’d be worse off in terms of higher inflation and interest rates.”

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Long knives, short common sense

Can you believe this? What’s next: blunt instruments or plastic bags?
I wonder why they don’t just get it over with and recommend banning criminals.
(Thanks to NCPA for the link.)

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“Living Wage” follow-up

Wishful thinkers advocating the minimum wage refuse to acknowledge that the empirical evidence does not support their claims. Here is the follow-up statement I sent to Albuquerque City Council today:
“Living Wage” Hurts the Poor
Subsequent to my statement of May 20, 2005 I have seen several more empirical claims that the living wage will not hurt the poor. These claims constitute voodoo economics in the extreme.
Many factors (such as tax climate, regulatory climate, education, local entrepreneurial opportunities, what is happening in other states and localities, what is happening in other countries, business cycles and so forth) in addition to the “living wage” determine whether a local economy expands or contracts. In order to tease out an economically sound estimate of the effect of the “living wage,” the empirical economist must account for all the factors. Empirical studies that purport to show that the “living wage” does not hurt the poor and perhaps even expands employment and helps the poor do not account for all factors.
Studies that do account for all factors show overwhelmingly that wage floors hurt the poor. And those hurt are the least effective interest group in society (minorities, low skilled, relatively uneducated). They have no voice in the matter. All many of them know is that there is no job available when they go looking. For them the legal living wage becomes ZERO.
An excellent summary of the history and all the empirical evidence of wage floors may be found in: David Neumark in his research summary “Raising Incomes by Mandating Wages.” It may be found online here.
There are lots of things we can do to help the poor. The “living wage” idea is not only ineffective; it is counterproductive.

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Corporate Welfare I

Corporate welfare does not create jobs. It makes us all worse off. Look here for a great explanation with lots of links.
Check here for my 2003 estimate of the costs of the economic development lies in New Mexico.

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