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  • Peru's Post-Earthquake Prospects

    August 20, 2007 3:53 PM

    The horrendous devastation of the recent earthquake in Peru could only have been exacerbated by government incompetence. That's my conclusion after reading Ian Vazquez's account in today's Wall Street Journal. In some parts of the country, government provision of basic services, such as clean water and education, is so bad that residents are simply giving up on the state to provide, and turning to the private sector instead. (Subscription required for Journal link.)

    One million of Lima's eight million citizens have no access to clean water.

    The water monopoly -- which loses some 40% of its water through leaky pipes or in ways otherwise unaccounted for -- is only one of Peru's monuments to government incompetence. Peruvians were reminded of another last month when the communist-led teacher's union went on strike, paralyzing schools and triggering violence across the country. The union was protesting a law requiring that teachers be tested and held accountable for competency. An evaluation earlier this year found that one-third of teachers are deficient in reading comprehension and that nearly half cannot do basic math...

    Those hit hardest by the crises in education and water -- poor Peruvians -- are not reacting with complacency, however. They are demanding private solutions. Indeed, during my visits to one of the poorest parts of Villa El Salvador in the past two years, I learned why residents began marching on government offices to demand the privatization of Sedapal, Lima's state-run water company. Community leaders and residents explained that they'd grown tired of being neglected by Sedapal. They have been joined by residents of other shanty towns surrounding Lima...

  • DDT Deniers Deny Science

    August 20, 2007 2:50 PM

    DDT-deniers—those who would rather let people die that allow DDT use to fight malaria-carrying mosquitoes—have been critiquing our blog posts on the topic lately. Last week they attacked us for highlighting recent scientific research that underscores the value of DDT in repelling mosquitoes. Apparently, they won't even be swayed by scientific data, nor do they want anyone else to be convicted by the facts. But don't be swayed by their hype. Instead, read the op-ed in today's New York Times by Dr. Donald Roberts one of the study's authors. Roberts notes:

    DDT, the miracle insecticide turned environmental bogeyman, is once again playing an important role in public health. In the malaria-plagued regions of

    Africa, where mosquitoes are becoming resistant to other chemicals, DDT is now being used as an indoor repellent. Research that I and my colleagues recently conducted shows that DDT is the most effective pesticide for spraying on walls, because it can keep mosquitoes from even entering the room.

  • The Uncreative Indestructibility of Modern Farming

    August 20, 2007 1:39 PM

    Over at the Mises Institute's website, Dan McLaughlin highlights a little-discussed pernicious effect of U.S. farm policy: the short-circuiting of the market's creative destruction. Just as mom-and-pop grocery stores gave way to supermarkets, which gave consumers better value and choice, so other businesses should be allowed to lose out to more efficient competitors. But during the 1930s, the federal government decided to step in to protect farmers threatened by the Great Depression. The result, a mind-boggling array of price supports and subsidies, is still with us today, as the current Farm Bill attests.

    Just as mom-and-pop groceries disappeared because they were inefficient high-cost operations, inefficient farms should be allowed to follow suit. That is what happens with inefficient auto mechanics, plumbers, homebuilders, or any other field of endeavor...

    A farm is a business, nothing more, nothing less. It's reason for existence is to serve society, and the sign it is doing so is measured by its profitability.

    Any business that cannot succeed without government support is unsound. It needs to change, to improve, to become more efficient, or get out of the business...

    The current Farm Bill is this year's version of the same old laws that hurt consumers and take money from my pocket and yours to subsidize an industry that is now dominated by massive agribusinesses that don't have a stitch of concern about family farmers. While there is a lot of rhetoric in the official propaganda about improving the bill, the basic foundation is built on quicksand, and no amount of reform will help it. It is enlightening to visit the USDA website (America's Farm Bill) and read what the vested interests are saying in support of it.

  • DDT Saves Africans from Malaria

    August 20, 2007 10:34 AM

    Donald Roberts has an interesting Op-Ed in the New York Times about the crucial role of DDT in preventing the spread of malaria in Africa. DDT all but eradicated malaria in the West, but was banned after it was falsely blamed for endangering various bird species.

  • In Defense of the Prix Fixe Menu

    August 20, 2007 9:24 AM

    Our old pal Peter Suderman, now writing for FreedomWorks, has a great takedown of the argument for "a la carte" cable pricing up at CNET today:

    At a recent communications forum in Aspen, Colo., Kevin Martin, chairman of the Federal Communications Commission, once again announced his support for imposing federal authority over how your video programming company packages its lineup. Martin would force providers to offer channels on an "a la carte," or per-channel basis, replacing the current system in which subscribers buy bundled packages. He claims that such a rule would aid parents in fighting objectionable content, and that it would allow consumers to pay only for the channels they want, ostensibly saving them money.

    Sounds nice, right? Too bad enacting such a law would be counterproductive on all fronts. Never mind that it's simply absurd for the government to be puttering around in America's television sets, as if there's some enumerated right to a certain type of TV. Martin's line that it's a tool to fight indecency is just a pander to interest-group outrage. And, far from being easy on consumer pocketbooks, a la carte would force consumers to pay more for less--all while barricading opportunities for the development of new channels.

    Of course, CEI has had plenty to say on the issue as well.

  • What Gives in South Carolina?

    August 17, 2007 4:23 PM

    I'm writing this from the new library in downtown Columbia, South Carolina. It's a big, open all glass building that I wouldn't want to be in during a hurricane. Thanks to a series of insurance reforms, here, however, it looks like it will get rebuilt quickly no matter what happens. South Carolina, for the most part, has taken the right insurance reform route when it comes to wind coverage while other states have gone wrong.

    Some background first: in the wake of soaring post Hurricane Katrina rates, nearly every hurricane-prone state implemented insurance reforms. In most places, these reforms involved states taking on liability for their citizens: Florida, as I write about in the current Weekly Standard, could well go bankrupt. While states like Texas and Mississippi won't go bankrupt, they will likely need to raise taxes on everyone to pay for the massive bailouts of mostly well off homeowners.

    South Carolina, on the other hand, has decided to provide some immediate relief and otherwise get out of the way. Some efforts that look like market interventions may actually speed the transition to an almost-all-private market. There was a populist outcry to do the opposite but, somehow, the political process worked and came up with a pretty decent--although imperfect--plan. Insurance rates are stable. People seem reasonably content with the plan. And, unlike other states, South Carolina may actually increase its own resistance to hurricanes.

    I've met with the governor, his chief of staff, the insurance commissioner, insurance agents, and key members of the legislature. I know what happened but I still can't really figure out why. Nothing about South Carolina indicates it would go in the correct direction but, somehow, it just did. And, in so doing, the state has secured a minor but important victory for freedom.

  • Whole Foods merger: Using Antitrust to Protect Wal-Mart

    August 17, 2007 3:53 PM

    Ivan, those are good points that Oliva makes at the Mises blog. But there is another interesting aspect that makes this an especially embarrassing case for antitrust supporters. If the Whole Foods-Wild Oats merger is stopped, the main beneficiary would be not small organic stores, but a certain company called Wal-Mart.

    Yes, that Wal-Mart! The one that everyone complains is so big and powerful. But it would benefit from anti-trust laws in this case and probably in others involving retail mergers. It is one of the biggest sellers now of organic food, as it is of many things, and if it didn't have a powerful Whole Foods competing against it, it would likely have even more of this market.

    But amazingly, the Federal Trade Commission, in its analysis of the market for "premium organic foods" specifically excluded Wal-Mart, because Wal-Mart sells other things. That's like saying a hamburger stand would dominate the market for burgers in a given area, because the little stand only sells hamburgers but McDonalds and Wendy's also sell chicken sandwiches!

    In fact, according to news reports, the FTC even argued to stop the merger specifically because the action would be anti-competitive to Wal-Mart. According to a story by the Associated Press, "the agency also revealed how Whole Foods negotiates with suppliers to drive up costs for Wal-Mart Stores Inc."

    Oh, no, can't have that! Why if this merger goes through, Wal-Mart might make only $91 billion in sales instead of $92 billion. Perish the thought!

  • Federal judge rejects FTC's arguments against Whole Foods-Wild Oats merger

    August 17, 2007 10:02 AM

    Late yesterday, a federal judge rejected the Federal Trade Commission's objection to the proposed merger between premium grocery chains Whole Foods and Wild Oats. While the decision remains sealed, it does give a tentative green light for the merger to go forward. Over at the Mises Instiute's blog, S.M. Oliva comments on the case:

    Many antitrust moderates criticized the FTC's decision to narrowly define a market for premium organic foods, but it seems to me this was a case of Commission members pandering to the hardcore base, as it were. Despite a steady diet of anti-free market activities, the Bush-era FTC lacks a signature battlefield victory a la the Clinton-era FTC's destruction of the Staples-Office Depot merger or even the limited (and Pyrrhic) victory by the Clinton DOJ over Microsoft. The current FTC's biggest target to date has been its five-year crusade against Rambus, a small California memory developer, and that case appears headed for a Titanic-like sinking before the D.C. Circuit Court of Appeals sometime next year. Whole Foods likely provided the Republican-led FTC its last chance to publicly humiliate a well-known company while expanding the scope of existing antitrust dogma.

  • Elvis on the IRS

    August 16, 2007 4:31 PM

    As we remember Elvis Presley today, on the 30th anniversary of his death, free-marketeers may find of interest a particular overlooked song Elvis sang about the woes of taxpayers subject to the heavy hand of the Internal Revenue Service.

    Elvis singing about the IRS? Not only that, but at the IRS. At least the fictional version of the agency in his 1968 movie, Speedway.

    Playing a race car driver who's just been audited, Elvis gets up and starts singing at the IRS office while waiting for the examiner. The song, "He's Your Uncle, Not Your Dad," is no "Don't Be Cruel" or "Heartbreak Hotel" but it does contain some funny zingers at the IRS's excesses and abuses. As does the movie.

    The "uncle" in the song's title refers to Uncle Sam, or the U.S. government. "So just pay, pay, pay to your Unlce Sam," Elvis sings. Then he comes to the song's most hilarious line, "Oh say can you see, is there anything left for me?"

    The movie is interesting. Amazon gives it mixed reviews. I think it's a fun movie that gets in a few shots at the IRS.

    Nancy Sinatra, in her first and perhaps only film, plays the undercover IRS agent who busts Elvis and supervises his payment agreement. Although Elvis's character and his manager did get creative with some deductions, the movie shows the agency agency bureaucracy as totally unreasonable. He is forced to live on a budget of "beans and hot dogs" while the agency collects all his winnings at the racetrack. I'm not giving too much away, if you know the formula of a typical Elvis film, when I say that Nancy Sinatra's character falls in love with Elvis and convinces her IRS bosses to be more reasonable.

  • In Brazil, a Moment of Silence against State Incompetence and Corruption

    August 16, 2007 4:24 PM

    Tomorrow, Friday August 17, at 1:00 pm (local time), our friends at Brazil's Instituto Liberdade will participate in the campaign "Worn Out," (Cansei) which will protest the Brazilian government's ineffectiveness and corruption through a moment of silence, in Sao Paulo, Brazil's largest city and commercial capital, and Porto Alegre, where IL is based.

    In the campaign video below, one of the points of complaint is the country's chaotic air traffic control system. Of course, in Latin America, fighting state corruption and incompetence of that magnitude is an uphill struggle, to say the least, so any such efforts are welcome.

    Earlier this year, CEI collaborated with Instituto Liberdade on the Issue Analysis "The Brazilian Sugarcane Ethanol Experience," authored by IL analyst Marcus Renato Xavier, which points out the many pitfalls in Brazil's much-touted ethanol program. (Thanks to IL's Margaret Tse for Brazilian links.)

    The signs in the video translate roughly as:

    Tired of....


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