And then there were none

Whoomp, there it is. A self-contained experiment in credit expansionism gone wrong.

I think this article from the Mises Institute describes the situation fairly well, and while it is indeed a cop-out to writing a full post, it is Christmas season, so I get off the hook easily (let's start with a bang in January, say, free apartments in Burj Dubai to all who suscribe?)

However, I would like to add two things to the LvMI article.

No. 1. The article raises an interesting point, but leaves it undeveloped. Judicial institutions will now be extremely important in the UAE and the perception the world will have of Dubai will depend heavily on how it will manage the fact that its most attacked defendant will be the State itself.

The lesson here is that the judicial system is extremely important for the market to develop its self-corrective forces. I don't want to sound statist, I am convinced that any sort of judicial system is favorable (though I do vouch for the existence of a state-run judicial system coexistent with private means of arbitration), so the important thing is a clear headed system that protects property rights and is not afraid to lay the blame where it should rest.

No. 2. Hey, invest in Dubai. No, no, I'm not being paid to fuel another bubble. But asset-price correction is driving the cost of Dubai homes and estates down like crazy. Maybe by mid-2010 the properties will be accessible to non-institutional investors in the int'l marketplace. Mortgage liquidation procedures will definitely help.

What better way to aid the ailing Dubai economy and at the same time find a great, luxury estate at an at-cost price than relocating to Dubai?

Fellow bloggers, am I wrong in this prediction?

World Domination By Taxing The Air You Breath

This type of news gives me the creeps. It makes me think that the future could make Rand's Atlas Shrugged look like a walk to the park. My unnerving mood arises from various very grave reasons. To name a few:

-That the EPA (Environmental Protection Agency) can ORDER cuts in emissions without the approval of Congress...surely paves the way for a SUPRANATIONAL MONSTROUS ENTITY aiming to control our lives through the environmental case.

-That they're saying using cap-and-trade as a more efficient way of reducing emissions doesn't pay it off for me. This is an artifitially created market in which they do mess around with the way resources are assigned.

-How they dare to categorically say "The US government has declared that greenhouse gases threaten human health" and then add "the EPA's "endangerment finding" was needed to allow the agency to regulate carbon dioxide and five other greenhouse gases released by vehicles, power plants and factories under the federal Clean Air Act." What?! This means that you no longer are allowed to breath for free because carbon dioxide comes from where...? Yes, you got ir right: your own breathing.

I mean, haven't you just read how very important raw data and econometric models had been manipulated to fit the EPA's claim and tricking people into believe this is all true. Notice the marketing effort on making it all seem necessary by portraying the picture of pipelines in the midst of the work. Now, to me what this image represents is the picture of progress for everyone in this planet.

The picture is from the BBC News site and you can read the full report here

Candidato Libertario podría forzar una segunda vuelta electoral en Costa Rica

¡Saludos a todos nuestros lectores! Mi nombre es Felipe Echandi Lacayo y soy el tercer autor de este blog (que hasta ahora se incorpora al la discusión). Soy costarricense de nacimiento y panameño naturalizado y creo firmemente en la libertad individual en todas sus manifestaciones. Junto con Susette y Alfonso estaré subiendo noticias y posts relacionados con las ideas que defendemos.

Como primera participación mía, quiero compartir una noticia que salió en el diario La Nación de Costa Rica el día 1 de diciembre de 2009: Otto Guevara duplica apoyo y emerge opción de 2a ronda. En esta noticia, se presentaron los resultados de una encuesta que revela que el candidato del Partido Movimiento Libertario, Otto Guevara Güth duplicó su apoyo desde el mes de septiembre de este año contando con una intención de voto del 30%. Este resultado lo posiciona como segunda fuerza política detrás de Laura Chinchilla, del partido socialdemócrata Liberación Nacional quien cuenta con un 43% de la intención de voto.

La Constitución Política costarricense requiere que para que un candidato presidencial sea elegido, éste debe obtener al menos un 40% de los votos válidos. Por este motivo, el hecho que Chinchilla haya reducido su apoyo de 63% a 43% desde el mes de septiembre podría significar que luego de las elecciones de febrero del año que viene, los costarricenses tengamos que acudir a una segunda ronda entre Chinchilla y Guevara.

En lo personal, esta noticia me ha alegrado muchísimo. El Movimiento Libertario es el partido que representa de manera más fiel el ideal liberal que defiendo como modo de vida. Entre las propuestas de Guevara figura hacer apertura económica unilateral, dolarizar la economía (eliminando el Colón), eliminar trámites que entorpecen la creación de empresas, y desregular ciertos sectores que se encuentran fuertemente intervenidos por el Estado.

¡Se puso emocionante la contienda electoral en Costa Rica! Especialmente considerando que podría ganar un gobierno libertario.

THANKSGIVING for Private Property

On this National Holiday in the USA, there is a wide range of news on Thanksgiving telling ways in which several of its citizens have decided to celebrate it. From college kids who are planning a 4 day-hard-core party-time to those who find it as a way to share with their dear families.

However, very little, tiny, minuscule attention is given in the mainstream media to the real origins of this celebration. Standard school text books say, it is a way to celebrate the sharing of a good crop, back in the days the Pilgrims came to this continent. However, it is my suspicion, such books might suffer from Alzheimer -or something along the lines, because they constantly forget to tell how such crop came to be. They initially tried common property under the motto "from each according to his ability, to each according to his need". However as this Bloomberg columnist, Caroline Baum, reminds us: “young, able-bodied men resented working for others without compensation.” They thought it an “injuestice” to receive the same allotment of food and clothing as those who didn’t pull their weight. What they lacked were appropriate incentives.”

To read an entertaining article on how Thanksgiving is really a celebration of how the establishment of private property in the USA paved the way for progress and freedom, go here.

Fluffy Regulation leads the way for Political Banking

For very long, it has been said that private business and politics should not mix. Like that old saying of “don’t mix business with pleasure”. I have my doubts about the accuracy of the old saying...but of the former I have none. It is indeed tragic when such a mix takes place. It is far worse than teens wearing Ugg boots in heated summer! Yes, that bad!!!

Now, the Public Choice School explains that although in both economics and politics it is the same people who act, they are moved by different incentives in each case. In the political arena the concern is maximizing election votes. So, they tend to fulfill the short-term requests of pressure groups to achieve this goal. Alas, in economics the concern is to generate as much profit as possible, which in a free economy is achieved only by fulfilling the consumer demands.

Ever since the present crisis was unveiled it is been said that more, puffier, fluffier, stronger (no, I’m not talking about 80’s overly sprayed hairdos) regulation is the much needed solution to prevent it from happening ever again. Think again and get back at your history books, wasn’t it the regulators with endless baloney regulation who got us there in the first place?!

BBC had reported that several banks “saved” by the “Stimulus Package” are now undergoing a politization process. As if it wasn’t enough of responsibility been accountable to the company’s stakeholders, the report also adds “...it has become clear that the banks will have to negotiate with more and more lobbyists, unions and campaign groups as government-owned companies are forced to become more responsive to issues in the public interest.” The sole more important responsibility of a private enterprise is to make profit for its owners (this, by no means imply it will be done through unethical behavior, so hold your guns anti-profit people!)

However, given the banks accepted the taxpayer’s money to bail them out of their mistakes, they will have to deal with claims as ridiculous as this: “Royal Bank of Scotland Plc has been targeted by indigenous groups from Canada. They aim to stop RBS from lending money to companies that invest in oil sand extraction in northern Canada.” On the Cadbury hostile bidding by Kraft, the bank is receiving the following claim “Trade unionists and Labour Party politicians have demanded to know why a bank that is majority-owned by the U.K. people is helping out with the dismemberment of a fine old local company.”

There is an underlying and unfortunate issue here. This very same lobbying process that is seeing bankers act like polititians, will see bankers in a future crises turning to polititians to save them again. They won’t be taking their lending decisions based on productivity, but instead in social groups complains. They will be lending money to people who won’t be fit to pay and -Yes, you have guessed that right- a new chain of insolvency will come our way…yet again.

Read the full report here...wait no, I meant here!

Right, so, finally?

The situation in Honduras seems to be coming to an end after most political parties which had threatened not to participate in the late 2009 elections, well, had a change of heart.

It's good to see that the candidate from Zelaya's own party, Elvin Santos, has declared that 21st century nonsense socialism has no place in Honduras. Let's see if hopefully he can take the lessons he has acquired through his life as a businessman and let the market forces salvage the Honduran economic system.

Regardless, this Sunday Honduras will vote and the Zelaya - Micheletti quandary will be put to an end.

I hope.

Environmental Debate reaches CATACLYSMIC Proportions

There is indeed a debate going, a debate of CATACLYSMIC PROPORTIONS -just so we get into the environmental lingo-. The debate could be labelled as the “debate for environmental concerns” and it had been taken to several differing -contrasting levels. It is discussed in politics, economics and academic research (nothing unusual about that).

However, we see the debate had reached other rather dissonancing grounds: such as school groups where kids are asked to join save-the-environment-groups if they want to show they’re moral beings. The entertainment industry had identified it as a major source of getting mass attention and we hear how almost every single entertainer who claims to defend the “right things” is an environmentalist. You can get a glimpse of that as they go errands around Tinseltown running their environmental-friendly-cars. They’re also very vocal about their concern and let you know through concerts, public speeches, marches, charity events, galas, movie premiers…the list is endless.

However, taking the debate to its more fundamental grounds, it seems it is not even near to be clear out. For a lot of years now, there are scientists who claim the planet will perish to the hands of the ruthless destroying behaviour of human beings. And there are those scientists (the minority) who claim the earth had gone through dramatic climate change throughout all its history and the impact of human beings is very infinitesimal.

These two sides are clearly identified in two videos. One is the massive promoted video by Al Gore’s “An Inconvenient Truth” and the other is the BBC produced “The Great Global Warming Swindle” (TGGWS). The first states as a major claim that the alarming increased levels of CO2 had been produced by the contaminating industries of irresponsible industrialists. While the TGGWS rejects this and states CO2 is just a very-tiny-part of the green-house gases and that most of it is produced by natural processes (decomposition, breathing…mind you).

So, we have the public left without really knowing which side is telling the story right. To spice up the debate a little bit, the Wall Street Journal reported how “Hacked Emails Show Climate Science Ridden with Rancor” and it states “In several of the emails, climate researchers discussed how to arrange for favorable reviewers for papers they planned to publish in scientific journals. At the same time, climate researchers at times appeared to pressure scientific journals not to publish research by other scientists whose findings they disagreed with”. Ohhh, how very interesting, the reports continues “the tension between those two camps is apparent in the emails. More recent messages showed climate scientists were increasingly concerned about blog postings and articles on leading skeptical Web sites. Much of the internal discussion over scientific papers centered on how to pre-empt attacks from prominent skeptics, for example.”

Read the story for a full scoop here

Medical MELTDOWN

There are so many lessons all over the World on how mandatory health care insurance had not contributed to decreased poverty; or improve access to medical services of low-income people. Still, many politicians in the US insist on passing a 2,074-pages bill to make it mandatory

This is a clear example of how government officials think of the citizens as handicapped creatures that need to be told what to do with their own lives.

It is true not all cases are the same. However, health care reforms that demand more government intervention are doomed to fail. This is so because the success of such reforms depends on the accuracy of the planning done by central planners. It had been stated that the three biggest employers in the world are the Indian State Railways, the Chinese Army and England’s National Health System (NHS). Of the latter one, about 1 out of 23 English workers are in the NHS; and of those about half the employees are administrative. This means a large percentage of the budget goes to pay for bureaucracy rather than medical services. This makes it extremely inefficient: i.e. cancer survival in the UK reduces to 77% as opposed to a 100% in the US.

In those countries where there's massive government health care, waiting lists become mortal and medical tourism becomes the norm. Except that with this bill -you see- medical tourism will be over since many countries have adopted similar reforms. So much for your "inexpensive-access-to-all public-health-system". Review this piece by John Stossel for a more in-depth analysis.

My Corner of the Universe.

Hi, I’m Susette and I confess I’m a hard-core advocate of the Individual and the system which allows him to be the best he can be: Capitalism.

So, after that smooth preamble, I state it is my intention for Libertarium to be a witty, updated source of knowledge by analyzing news -and endless ways in which people communicate- from a libertarian point of view.

Economics, business, politics, art, science, entertainment, education and even your-very-random-everyday-little-stuff are all more related than you might think. They all fall within the realm of human action which implies decision-taking, and whether this decision-taking should be left to the individual or to a higher-collective entity.

Now, before we get into business, I am pleased to say it is indeed a thrill to contribute to this space along with the witty minds of both Alfonso and Felipe. Because we share principles but continually challenge our own arguments, this shall be a fun place to stick around!

Small Victory for Free Markets

The European Union has announced that it will reduce the tariffs it imposes on the importation of bananas, which strikes an amazing deal for both European consumers (less costly) and regional producers (more profits).

More here.

The PARLACEN Affair

Panama is leaving the PARLACEN, and may I add, finally. The Minister for Foreign Affairs reported recently that should those countries that oppose the departure (by PARLACEN rules, if one single country opposes the exit of another member state, the latter is barred from quitting) do not withdraw their objections, Panama would leave the organization unilaterally.

Now, the process through which Panama would do that is highly dubious. The Government would be invalidating the original bill through which Panama’s National Assembly ratified the PARLACEN treaty.

Regardless, this is a momentous occasion. The PARLACEN has shown, in my opinion, to be needless bureaucracy and as far as I can tell, my life as a citizen of Panama is no better after our adherence to the PARLACEN than before.

Now, I ask, could we please get the money we will stop paying PARLACEN members back as a tax rebate. Rather than waste that money in unnecessary government expenditure, why not hand it back and let the private economy deal with it in the most efficient way?

Most likely it won’t happen, but that’s alright. In my opinion, leaving the PARLACEN is good news for all Panamanians.

Hello, World!

My name is Alfonso Grimaldo and I am one of the contributors to (the?) Libertarium. The purpose of this blog, for me, is to spread economical and political knowledge from the point of view of classical liberals and free marketeers.

It will be a great way to engage in discussions with other like-minded people, in particular, the two great and really smart people who will be also contributing to this blog.

To conclude rapidly, I hope we can keep this place brimming with interesting stuff, new points of view and great and intelligent debate, and keep you coming for more!