Monday, February 22, 2016

Fwd: China

''China's South China Sea military deployments are no different from U.S. deployments on Hawaii, the Chinese Foreign Ministry said on Monday, striking a combative tone ahead of a visit by Foreign Minister Wang Yi to the United States this week.

The United States last week accused China of raising tensions in the South China Sea by its apparent deployment of surface-to-air missiles on a disputed island, a move China has neither confirmed nor denied.

Asked whether the South China Sea, and the missiles, would come up when Wang is in the United States to meet Secretary of State John Kerry, Foreign Ministry spokeswoman Hua Chunying said Washington should not use the issue of military facilities on the islands as a "pretext to make a fuss".

"The U.S. is not involved in the South China Sea dispute, and this is not and should not become a problem between China and the United States," Hua told a daily news briefing.

China hopes the U.S. abides by its promises not to take sides in the dispute and stop "hyping up" the issue and tensions, especially over China's "limited" military positions there, she said.

"China's deploying necessary, limited defensive facilities on its own territory is not substantively different from the United States defending Hawaii," Hua added.

U.S. ships and aircraft carrying out frequent, close-in patrols and surveillance in recent years is what has increased regional tensions, she said.

"It's this that is the biggest cause of the militarization of the South China Sea. We hope that the United States does not confuse right and wrong on this issue or practice double standards."


Wednesday, February 17, 2016

Copy of post to Facebook.

I've been asked my opinion about how government should deal with monopolies.

Before I address the issue of monopolies, I want to talk about core beliefs.  Before I do that, I have a question to ask.

By my caculation, the level of government spending in 2015 is about 37.5% of GDP.  In recent years the figure was closer to 40%.  To me the figure is actually worse because all  of government spending is included in the GDP calculation.  So my question is at what point would government spending have to rise before people on the left would have to say enough is enough?  Would it be 50% GDP?  How about 60 or 70 percent?  The same thing could be asked about taxation.  Is 90% taxation fair?  (I could make the same argument about immigration, because I honestly believe hundreds of millions of people would come here if they could, so we have to set some sort of limit to make it reasonable.)

I ask this question because there doesn't seem to be any limit on how much people want to raise government spending or increase government control of our lives.

If we take the two extremes of government, comparing countries that spend 100% of the GDP, like the former USSR or North Korea who don't prosper very well, with countries that have temporarily had little or no government and also did very badly because there were no laws or courts to maintain order, we see that both far extremes don't work.  But as we move away from the far extremes, things improve.  Things improve more quickly on the low end than they do the high end.  Studies have shown that GDP growth tends to peak around 20 to 25% of spending GDP of government, although some have argued that because we lack examples of less than 20%, that less than 20% is even better.  

For this reason, it is my belief that minimizing government leads to greater prosperity, less poverty and even less disparity of wealth.

The Libertarian Principle is that everyone has a right to do what they want so long as they don't interfere with the same right of others.  This includes being able to own property, engage in business, and make decisions without government getting in the way.  If Walmart is one of the richest companies in the world, it is because people choose to shop there.  Likewise people choose to work at Walmart.

The issue of monopolies is such a nonexistent problem that I am surprised that it still comes up.  I have had discussion with people about this for decades.  At one time you could have said that Netscape had a monopoly on the internet browser, Microsoft had a monopoly on operating systems, and Lotus had a monopoly on the computer spreadsheet, but look at how those have changed.

At one time Opec seemed to have a monopoly on oil production, but that has also changed.

Traditionally monopolies have been granted by governments.  If you go back centuries, governments gave people exclusive rights to certain types of businesses and markets.  In more recent history the phone company was an example, and currently all my utility companies have a monopoly.  Often times government regulation is used to keep competitors from entering the business, and the industries that want to maintain control sometimes encourage such regulation.

The theory is that in a free market as one business starts to own too much of a particular market, it becauses more profitable, but that will make others want to to enter that business.  Even if others don't enter the business right away, the threat of competition can keep things in line.  For example, we have known for many years that artificial fuels can be created for about $5.50 per gallon.  Opec has publically stated that they were pricing oil at a level would not make alternatives profitable.

There has been much myth about the late 19th century and monopolies.  The late 19th century was one of the greatest times of economic growth that this country has seen.


Fwd: Sowell

Minimum wage discussion.

Fwd: Sowell

'Many people of mature years are amazed at how many young people have voted for Senator Bernie Sanders, and are enthusiastic about the socialism he preaches.

Many of those older people have lived long enough to have seen socialism fail, time and again, in countries around the world. Venezuela, with all its rich oil resources, is currently on the verge of economic collapse, after its heady fling with socialism.

But, most of the young have missed all that, and their dumbed-down education is far more likely to present the inspiring rhetoric of socialism than to present its dismal track record.

Socialism is in fact a wonderful vision -- a world of the imagination far better than any place anywhere in the real world, at any time over the thousands of years of recorded history. Even many conservatives would probably prefer to live in such a world, if they thought it was possible.

Who would not want to live in a world where college was free, along with many other things, and where government protected us from the shocks of life and guaranteed our happiness? It would be Disneyland for adults!'

Fwd: Court

'In July, a three-judge panel of the United States Court of Appeals for the D.C. Circuit issued a ruling that threatened the future of President Obama's Affordable Care Act. By a vote of two to one, the court held, in Halbig v. Burwell, that the insurance subsidies that allow millions of Americans to buy health insurance were contrary to the text of the law and thus were illegal. If such a decision had been made earlier in Obama's tenure, lawyers for his Administration would have been left with a single, risky option: an appeal to the politically polarized, and usually conservative, Supreme Court.

This year, the lawyers had another choice. When President Obama took office, the full D.C. Circuit had six judges appointed by Republican Presidents, three named by Democrats, and two vacancies. By the time of the Halbig decision, Obama had placed four judges on the D.C. court, which shifted its composition to seven Democratic appointees and four Republicans. In light of this realignment, the Obama Administration asked the full D.C. Circuit to vacate the panel's decision and rehear the Halbig case en banc—that is, with all the court's active judges participating. The full court promptly agreed with the request, and the decision that would have crippled Obamacare is no longer on the books. Oral argument before the full court is now set for December.'


Monday, February 15, 2016

Political discussion on Facebook

Terry Hsu Any thoughts about wealth and income inequality and how to address it? (I'm sure you know where I'm going, but I'll leave it at that, I'm not going into an extended political discussion but am curious if you think it's an issue)
John Coffey
John Coffey Everywhere in the world, the wealth of nations is for the most part inversely proportional to how much government they have. Those extremely few countries with small governments and minuscule welfare states have been the most prosperous. For this reason I think that had our government been smaller, and less inclined to war, everyone in our society would be more prosperous and we would be less worried about inequality.

Having a large government also means having a government that you can exploit. Usually the greater the government, the greater the disparity of wealth because a few smart people learn how to exploit their political system.

A prosperous free enterprise system often produces great disparity of wealth. This is one of the signs that it working, because it allows a few people to achieve really great things. This actually benefits other people in the process.

Socialism tends to make everyone equally impoverished. Except for the leaders.

"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." - Winston Churchill.
Like · Reply · 18 hrs
Terry Hsu
Terry Hsu Interesting thoughts, I guess we are sort of launching into a political discussion. Do you think that socialist countries like Denmark are doing poorly? The Soviet Union could certainly be described as a communist state that did poorly for its citizens, but I'm curious if you could name a socialist country that is not helping its citizens. I suppose it would also be fair to say that not all democracies are equally prosperous or successful...
Like · Reply · 17 hrs
John Coffey
John Coffey If you look at the overall trend you will find that GDP growth is inversely proportional % of GDP government spends. For example, I have heard over the years many people say we should be more like Europe, but the average income in Europe is half that of the United States. This is not something I want to emulate.

There may be some countries that don't fit the overall trend. 

I was expecting you to mention Sweden, because that is the usual argument, but Sweden started out as a prosperous nation before it went socialist, and later had to cut back on its tax rates because it was hurting their economy. This is referred to as the myth of Swedish Socialism. 

I can't speak for the history or factors on the Denmark economy, but on paper they seem to be doing well. They also have one of the highest tax rates. That is not what I want for here.
Like · Reply · 15 hrs · Edited
John Coffey
John Coffey Take two countries that have very limited governments, Liechtenstein and Luxembourg, and their GDP per capita is astonishing. Hong kong has no welfare state (not that I want to abandon the welfare state), very limited resources and does very well and has low unemployment.
Like · Reply · 15 hrs
John Coffey
John Coffey The question is, do you want to be a slave to the government? The purpose of government was to protect your rights, not to steal your money from you and give it back to you, or to give to someone else. If people legitimately need help then I say sure let's help them, but let's not expand the government out of control when we are already headed for bankruptcy.
Like · Reply · 14 hrs · Edited
John Coffey
John Coffey "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."
Like · Reply · 15 hrs
Terry Hsu
Terry Hsu Typically, the candidate that raises the most cash, wins. And who funds the candidates - big business. 

Issues that the public wants end up getting obfuscated with political ads paid for by big business - and these issues often lose. For example, the GMO labeling bill in California was a 4:1 winner, until Monsanto and other companies made up a bunch of carefully worded misinformation and outspent the opposition 7:1. The GMO labeling bill lost by a few percentage points.
Like · Reply · 14 hrs
Terry Hsu
Terry Hsu Interesting article by Walter Williams. But if the wording was changed from "lawn mowing" to "food stamps" one might come to a different conclusion.
Like · Reply · 14 hrs
John Coffey
John Coffey Seems like a separate issue as to whether we are going to support Bernie style socialism.
Like · Reply · 14 hrs
Terry Hsu
Terry Hsu Sure, probably so.
Like · Reply · 14 hrs
John Coffey
John Coffey We have a portion of the population dependent on public charity. Nobody wants throw these people out into the cold. Certainly I don't. The goal here is to have fewer people dependent on the government and not more. I don't think that it had to be this way. A more prosperous economy can be achieved by having the government consume less resources. 

The issue is how much do you want to expand the government? 

We both probably could agree (like Trump) that we don't need to be paying for the protection of other countries. I say cut the military spending in half. At most we should probably only fight one war at a time, and then only if we are directly threatened.
Like · Reply · 14 hrs
Terry Hsu
Terry Hsu I agree with reducing military spending.
Like · Reply · 14 hrs
Terry Hsu
Terry Hsu I dislike superPACs, I do think that the banks should be broken apart and should not have been bailed out. I dislike that companies such as Boeing paid $0 in taxes due to tax loopholes and offshore bank accounts.
Like · Reply · 14 hrs
Terry Hsu
Terry Hsu The health care and insurance industry is so convoluted that simply paying for everyone's health care would be both simpler and cheaper. And it would protect those people who need it the most and probably have the worst healthcare - those who can't pay for healthcare. I really dislike how agribusiness has manipulated science on nutrition so much that we can't figure out what's good for us to eat.
Like · Reply · 14 hrs
John Coffey
John Coffey It is hard for me to have commonality with people who think that the purpose of government is to steal from me and that this is legitimate. I don't think that this is legitimate. If someone can take my money and give it to someone else, then I become a slave to that person. 

The only legitimate purpose of government is to protect our rights, which includes protection our borders, and I will gladly pay taxes for this.

I understand that we cannot abandon many of the charitable things the government does because people are too dependent upon it. But I think that the goal should be to have a system where there is less need for this. I think that we should (slowly) transition away from this.

Third party payer programs are the reason why health care costs have skyrocketed. It is the tragedy of the commons. When people spend money that is not their own, then the incentive is to spend as much as possible, and there is no incentive to compare costs or control costs. (Best wishes, John)
Like · Reply · 13 hrs
Terry Hsu
Terry Hsu I think the term stealing is a bit strong. 

There are things that need to be public to function properly. Transportation, city planning and development, pollution and waste management, military, prisons. Establishing guidelines for what would be considered harmful behavior. Setting an environment that enables government to function properly including fair taxes. Setting the environment for business to function.

And, as you say, we cannot abandon many of the charitable things the government does. What kind of society do we have if we allow people to die, live in squalor, become malnourished? I'm not talking about providing opulent splendor for a layabout, but as the wealthiest country in the world, we shouldn't have the number of impoverished people we do. Even worse is the number of incarcerated people that we have - greater than any other country on earth - speaking of inefficiency! 

For someone who didn't intend to get into a political discussion, that's quite a mouthful. It's your post John, I'll give you the last word.
Like · Reply · 12 hrs
Terry Hsu
Terry Hsu I'd be curious what you think of this...then I promise that I really will sign off.
Like · Reply · 12 hrs · Edited
John Coffey
John Coffey I agree with having laws, courts, police, and military to protect us. I agree with consumer and worker safety, and reasonable environmental protection. All of this is to prevent people from harming each other.

The United States used to have private fire fighters. Right now I have no choice on who I can use for my utilities and I feel like the government granted monopolies are gouging me. The phone company used to be a government granted monopoly and look how that has changed.

I don't see roads becoming private. We could chalk that up to interstate commerce. Most road construction should be local and not funded federally. It might make sense to have the interstate highway system funded federally, although I am not sure; locally funding might work. It turns out that gasoline taxes are a fair way to pay for roads. You have the free choice to drive as much or as little as you want, and pay appropriately.

Being poor in the United States is doing quite well compared to many other countries. According to one study, the average poor person has a cell phone, TV, microwave, and a vehicle.

I believe that having excessive government has been counter productive in regard to the poor. I believe that we could have been more prosperous than we are now. For example, rather than give me 2% or less return on Social Security, which the government doesn't have the ability to pay, had I invested my social security money I would be quite wealthy right now. Instead they are going to give me a pittance, and I am going to have to rely on the money I invested myself, which fortunately did really well. This is a Ponzi scheme since the government is only going to have 80% of the money to pay me when I retire. This scheme was dependent on a steady stream of new contributors in order to pay back the money that they stole from me.

With less government to drag the economy down, there would be fewer poor, instead of the perpetual cycle of dependency that we see now. Private charity and families could take care of the rest. Americans are some of the most generous people in the world and lead the world in charitable contributions.

How is it that Hong Kong can function with no welfare state? They have thriving economy that puts people to work.

We both agree that we could start by cutting the military and focus just on the defense of our country.

I would agree with emergency measures to help people in cases like The Great Depression. We don't want people to suffer. 

Everything the far left proposes is to have the government take more from us and offer us more freebies. This creates more dependence on government and removes incentives for people to work and be productive. Bigger governments tend to be more corrupt as people learn how to profit from the system.

Where I have no commonality with the left is that I think that the word "steal" is a correct description. I don't give my money to the government freely. They have to take it from me by force, or more correctly, the threat of force. I don't want to be a slave to another person and I don't want other people to be a slave to me.

Do we want to live in a society where we are free to make choices? Should I be free to donate to charity as I see fit, or is government going to force me to do so at the point of a gun?

The type of government that I believe in is the type of government that the founding fathers believed it. It is the type of government that the Constitution believes in, since we have far exceeded the limits on government imposed by the enumerated powers clause of the Constitution. It is also the type of government that will create the most prosperity.

"A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." - Thomas Jefferson

It has been good talking with you. I am sorry that we don't agree and have completely different visions of what government should be.
Like · Reply · 2 hrs
Terry Hsu
Terry Hsu Nice talking to you too John. Thanks for your thoughts and hope to see you one day again soon. smile emoticon Terry
Like · Reply · 1 hr
John Coffey
John Coffey I may not be totally honest here. In reality I am torn between two ideals, one of which is Minarchist and the other is Welfare Statist. Minarchist says that you only do what is necessary to protect your citizens. Welfare Statist says that Free Enterprise is good, and you can make all the profit you want, but you still have to provide for those who can't provide for themselves.

The idealist in me wants to believe in Minarchy as this is the most consistent with removing government coercion from our lives. The pragmatist in me doesn't know if this will work and thinks that maybe some welfare state will always be necessary. 

Needless to say I think that we have too much government now, too much military and too many wars. I certainly don't want to expand the role of government.

Best wishes,

John Coffey

​This was preceded by ...

Capitalism is an economic system that allows private ownership of the means of production. The opposite of capitalism is Socialism or Communism. The definition of Socialism as people use the term these days seems pretty fluid, but technically Socialism means that the means of production is "socially" owned. In reality, this means the government owns or controls the means of production. In reality this means that your right to own and produce property and engage in commerce is removed or diminished.

A free market simply means that people are free to make choices. Almost all forms of government interference in the market takes away free choices. The one area I agree with government interference is to protect people's health and safety, as I see the government's role to prevent people from harming one another.

For about a hundred years we have been losing freedom in this country by way of slow incrementalism that few people have noticed. We have reached a point where ideas and candidates that would have previously considered unfathomable are now being seriously considered.

Prior to the election of the current president, the extreme left had been content with making slow gradual changes. With the election of this president they have become emboldened. They think that we have reached the ten yard line and can go for a touchdown. However, America is not so crazy to elect someone like Bernie Sanders.

In short, we can't afford it. We can't afford the government we have now. We are headed toward bankruptcy and will go the way of Greece if we don't do something. We can't even make Social Security solvent.

What some people see as extremism on the right is just a backlash to having gone too far left. The American people know that we have gone too far. We have lost our heritage as a free nation and people want it back.