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jurassic-world

Have you seen the new Jurassic Park movie, “Jurassic World?”

It had the biggest opening of any movie in history. The movie tells how a reckless biotech company releases dinosaurs that kill its customers. Its tale of heroes vs. villains made me think about how America has changed since our independence, the anniversary of which we celebrate this weekend.

We call the men who fought the British “heroes.” But we no longer consider the British “villains.” We don’t even seem to hate monarchs anymore. Disney princesses and royal babies are all the rage.
Hollywood needs heroes and villains, and over time those roles changed. It was once cowboys vs. Indians, then Americans soldiers vs. Nazis and “Japs,” then Russians, then Arabs, then …

Well, now Hollywood is more careful about whom it calls a villain. But one group is always eligible — businessmen. In movies and on TV, evil corporations routinely dispatch heartless goons to rough up whistleblowers, political activists and average citizens. The new anarchist drama series “Mr. Robot” on USA Network even features a company called “Evil Corp.”

Don’t Hollywood writers realize that abusing customers would be a bad business model? No. They refuse to see that it rarely happens, and when it does it’s unsustainable.

In the real world, instead of killing customers or scheming to keep them poor, companies profit by trying really hard to give us what we want, and they prefer that we stay healthy, if only so that we keep buying their stuff and to limit their insurance liability.

I say, entrepreneurs and scientists are the world’s real heroes. They save and extend lives.

The website ScienceHeroes.com estimates how many lives scientists save. Fritz Haber and Carl Bosch, whose synthetic fertilizers made food easier to grow, are credited with saving 2.7 billion lives.

Blood researchers Karl Landsteiner and Richard Lewisohn saved more than a billion by making blood transfusions possible.

Others in the site’s top 10 include the creators of water chlorination and vaccines, as well as Norman Borlaug, credited with saving at least a quarter-billion lives for creating more abundant wheat strains and sparking the so-called “Green Revolution.”

Then there are the creators of CPR, AIDS drugs, bypass surgery, pacemakers, dialysis and more, each with millions of lives to their credit.

Weirdly, few monuments honor these life-saving scientists. Instead, politicians celebrate politicians. We get the William Jefferson Clinton Federal Building, George Bush High School and Florida’s President Barack Obama Parkway.

But how many lives did those politicians save? Any? Mostly, they presided over a bureaucracy that imposed taxes and regulations that make it harder to innovate and save lives. What’s heroic about that?

In the movies, anti-business activists like Erin Brockovich are depicted as lifesavers. Brockovich, a hustler for personal injury lawyers, used her ample charm and cleavage to recruit clients who sued Pacific Gas and Electric, claiming the power company gave them cancer.

That was highly unlikely, given that the accused chemical, hexavalent chromium, causes cancer only at much higher doses. PG&E workers, despite being exposed to much more of it, live longer than average.

But Brockovich still got PG&E to pay out over $300 million, of which she got $2 million. That makes her a hero?

Part of the problem is the way our brains have evolved to spot friends and foes. A big, faceless corporation isn’t warm and friendly, but activists have smiling faces and say they want to help us.

Who has time to calculate the number of lives they’ve each saved? Our hearts embrace the ones who sound like they have good intentions but are wary of those who are out for profit.

I wish more people thought like statistician Bjorn Lomborg. Unlike many of his fellow environmentalists, he takes the time to rank the lives saved and the money spent on various projects, and he finds that the ones that inspire the most passion, like slowing global warming, aren’t the ones where lives are most at stake.

Many more lives would be saved if we poured resources into cleaning drinking water or preventing malaria, but those crusades don’t celebrate Hollywood’s heroes or punish the “villains” in business.

Jurassic World's tale of heroes vs. villains

civil-asset-forfeiture

Politicians and bureaucrats are very creative in their pursuit of bad policy. In some case, I’m not even sure how to classify their actions.

When the government squandered $224,000-plus for research on condom sizes, for instance, I thought that story easily could be classified as wasteful spending. But then I discovered the research was related to the fact that the government limits the types of condoms that manufacturers can offer, so maybe this was an example of mindless over-regulation.

Now I’m facing another quandary about how to classify a story. I’m not sure to add the following nightmare to my ever-growing list of government theft stories, or whether it belongs in my collection of stupid-drug-war stories.

Here’s some background from a report in Reason by Jacob Sullum. It’s about a robbery at an airport.

When he visited relatives in Cincinnati the winter before last, Charles Clarke, a 24-year-old college student, took with him $11,000 that he had saved from wages, financial aid, and family gifts because he did not want to lose it. He did not count on the armed robbers at the airport, who took every last cent as he was about to board a flight back to Orlando in February 2014.

So did Mr. Clarke call the cops to report the theft?

Well, not exactly.

…the thieves were cops, who justified confiscating Clarke’s life savings by claiming his luggage and cash smelled like pot.

But the cops didn’t arrest Mr. Clarke for possession of marijuana (they didn’t find any). Nor did they charge him with having smoked marijuana (I guess even cops realize that would be a pointless waste of resources).

However, they did take his money on the very tenuous (and completely unproven) proposition that it may have been connected with a drug deal.

Even more amazing, the burden of proof is now on Mr. Clarke to prove his money is innocent, so the presumption of innocence granted by the Constitution doesn’t apply!

More than a year later, Clarke is still trying to get his money back… But the federal prosecutors who are pursuing forfeiture of Clarke’s money do not have to prove he was a drug dealer. …the government keeps the cash based on “probable cause that it was proceeds of drug trafficking or was intended to be used in an illegal drug transaction,” and the burden is on Clarke to recover it.

Why is this happening?

Well, I’ve written many times that incentives matter. That’s true for taxpayers and it’s true for bureaucrats.

And true for cops as well.

…the number of seizures by police at the Cincinnati/Northern Kentucky International Airport exploded from a couple dozen a year in the late 1990s to nearly 100, totaling $2 million, in 2013. By pursuing forfeiture under federal law through the Justice Department’s Equitable Sharing Program, the airport cops can keep up to 80 percent of the loot while letting the feds do most of the work.

Yup, this is what’s called “policing for profit.”

This is so outrageous that even some folks who like big government are on Mr. Clarke’s side. Here are some excerpts from a report published by Vox.

Under federal and state laws that allow what’s called “civil forfeiture,” law enforcement officers can seize someone’s property without proving the person was guilty of a crime; they just need probable cause to believe the assets are being used as part of criminal activity, typically drug trafficking. Police can then absorb the value of this property — be it cash, cars, guns, or something else — as profit: either through state programs, or under a federal program known as Equitable Sharing that lets local and state police get up to 80 percent of the value of what they seize as money for their departments. So police can not only seize people’s property without proving involvement in a crime, but they have a financial incentive to do so.

Not only is there no presumption of innocence, the government actually puts the money on trial rather than the person.

In typical criminal cases, the government has to prove beyond a reasonable doubt that someone is guilty of a crime. But in civil forfeiture cases, the government only has to show that it’s more likely than not that the property was intended to buy drugs or obtained from selling drugs. The bar is so low in part because it’s the property itself on trial, not the person whose property was taken — and due process rights cover people, not property. So in Clarke’s situation, the case is literally called United States of America v. $11,000.00 in United States Currency. (No, this is not a joke.)

The Vox report also looks at the perverse incentives created by this system.

…under the federal program, 13 different law enforcement agencies from Ohio and Kentucky are seeking a cut of Clarke’s $11,000 — even though 11 of those agencies weren’t involved in the seizure. The competition should show how lucrative these kind of seizures are in the eyes of law enforcement: they’re an opportunity to turn a costly counter-narcotics operation into a profitable venture for the law enforcement agencies involved (or even not, in Clarke’s case).

And here’s a look at how different states approach the issue.

civil asset forfeiture percent

The darker the state, the bigger the incentive for law enforcement agencies to steal money.

There’s also good evidence that these venal laws target minorities.

A bulk of forfeiture cases also appear to disproportionately afflict minorities. Clarke, who’s black, said he felt like he was racially profiled. Of the 400 federal court cases reviewed by the Post in which people challenged a seizure and got some money back, most of the victims were black, Hispanic, or another racial minority.

This is a good opportunity to say something about race relations.

I don’t have any tolerance for racial grievance mongers like Jesse Jackson or Al Sharpton, and I don’t automatically assume racism when a black man like Eric Garner dies because of an interaction with cops.

But I do have great sympathy for law-abiding African-Americans who have to deal getting hassled for “driving while black.”

Not to mention “riding trains while black.”

And as we see from Mr. Clarke’s plight, we also have to include “flying while black.”

By the way, I’m not arguing that profiling is always illegitimate. As Walter Williams has explained, it’s sometimes just common sense.

But if profiling – or even the perception of profiling – causes resentment, then doesn’t it make sense to make sure it isn’t being used promiscuously? Shouldn’t it be reserved for situations where law enforcement is seeking to protect life, liberty, or property? Needless to say, civil asset forfeiture and the drug war are definitely not good reasons to utilize a tool with societal downsides.

P.S. Let’s shift to a different topic. I realize it might be a bit unseemly to do a victory dance in the end zone, but every so often it’s worth noting that folks on the left are spectacularly wrong in their analysis.

I wrote, for instance, about Paul Krugman’s argument that the American economywould benefit from a housing bubble. Gee, that didn’t turn out so well.

Here’s another example that’s been circulating on Twitter. It’s a snapshot on the famous economics textbook authored by Paul Samuelson. Like Krugman, Samuelson won a Nobel Prize, so he presumably had a very high IQ.

Paul-Samuelson-Communism-textbook

Yet just as the Soviet Union was about to collapse, he actually believed that the communist economy was thriving.

Just goes to show you that Thomas Sowell was very insightful when he wrote that intelligence and wisdom are not the same thing.

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Dan Mitchell on whether certain examples should

chris-christie-announcement-ap

Chris Christie arrives to speak to supporters during an event announcing he will seek the Republican nomination for president, June 30, 2015, at Livingston High School in Livingston, New Jersey. (Photo: AP/Julio Cortez)

New Jersey Gov. Chris Christie announced his run for the presidency at from a podium at Livingston High School, where he served 3 terms as class president. Standing with his wife and children in front of a jam-packed crowd, the once-considered early frontrunner hoped to use the event to mark a new beginning in his campaign, by charting a new course for the country.

“I mean what I say and I say what I mean, and that’s what America needs right now,” Christie said during his speech, which he delivered without a teleprompter. He promised to run a campaign “without spin or pandering,” and to expect him to start “telling it like it is” — which is the official theme of his campaign — “whether you like it or not, or whether it makes you cringe.”

Christie has become the 14th candidate to enter a still-growing Republican nomination field, and he’ll have a steep hill to climb. As of now, the New Jersey governor is current polling at just 4 percent in the PPD average of national polls.

Christie had choice words for both Republicans and Democrats.

“Both parties have failed our country,” he said, adding both political parties and branches of government “don’t talk with each other anymore.” Compromise, Christie said, “is now considered a dirty word.”

“If Jefferson and Adams didn’t believe in compromise we would still be living under the Crown of England,” he added.

But Christie, a former U.S. attorney who is serving his second term as governor of the Garden State, suffered as a result of the so-called “Bridgegate” scandal that severely deterioted his national profile. Despite multiple investigations clearing the governor of any wrongdoing, which alleged he ordered lane closures as retaliation against Democrats who refused to endorse his reelection, he has not been able to recover.

A recent Monmouth University Poll found his approval rating at home at an all-time low, down from the high 70s in the aftermath of Hurricane Sandy. He had enormous bipartisan appeal in 2013 and overwhelmingly defeated his Democrat opponent in 2013, carrying Hispanics, whites and nearly 25 percent of the black vote. For months, early polling found him crushing the likely Democrat nominee and former secretary of state Hillary Clinton.

But the liberal media pile on both nationwide and in the Garden State was relentless, spending nearly all of his political capital. As a result, the governor’s agenda suffered and, according to his supporters, so did the state. Under Gov. Christie, the state has seen some nine credit downgrades and faces debilitating debt from unfunded pension liabilities, despite him balancing the budget, and his pension reform efforts recently won a major victory at the New Jersey State Supreme Court.

Still, his supporters insist Bridgegate will have little impact on GOP primary voters, noting that he is the only candidate to willing to engage in “straight-talk” with the voters on unsustainable entitlements.

“The issues that other candidates have are much greater than that, when you’re talking about what Hillary Clinton has done with the emails and the deals that were made, and money,” Geraldine Finnegan, a retired teacher who lives in Manchester, N.J., told RCP. “A traffic jam in New Jersey is nothing new and the governor had nothing to do with it.”

Christie, who was born in 1962, is from a working-class family in which his father paid his way through college by working at a Breyers ice cream plant, while his Sicilian mother “set the tone” at home. He brought their stories up in his speech Tuesday, though his mother has passed away.

In 2009, Christie rose to the national scene when he defeated former Gov. John Corzine, the personification of Democrat corruption in the Garden State. In 2013, he was also elected that year as chairman of the Republican Governors Association, succeeding another presidential candidate and governor, Louisiana Gov. Jindal.

[brid video=”10524″ player=”1929″ title=”Telling It Like It Is Chris Christie Presidential Announcement Video”]

New Jersey Gov. Chris Christie announced his

manufacturing-autoworker

Surveys gauging growth or contraction in Midwest manufacturing. (REUTERS)

The Chicago Business Barometer found Midwest manufacturing activity rose in June, but remained in contraction for the second consecutive month. Also known as the Chicago PMI, the ISM survey increased to 49.4 in June, up from the abysmal 46.2 measured in May.

It marked the fourth month this year the index was below 50, which is the threshold dividing expansion from contraction.

“While the latest increase in new orders is a tentative sign of a pickup in demand over the coming months, there is no getting away from the general softness in the data,” said Philip Uglow, chief economist of MNI Indicators. “The Barometer hit a 5½ year low in Q2 and the weakness is having a detrimental impact on the level of hiring.”

Manufacturing activity continues to weaken in the second quarter after an already-depressed opening three months of the year, according to the index. While some sectors are showing relatively higher strength, it doesn’t bode well for an economy that contracted in the first quarter by 0.2 percent.

June’s increase was fueled by new orders and projection subindexes, which rose 8.8 percent and 8.7 percent, respectively. However, those were literally the only optimistic bullet points in the report.

The Chicago Business Barometer found Midwest manufacturing

consumer-spending-consumer-sentiment-reuters

(Photo: Reuters)

U.S. consumer confidence increased more than economists’ expectations in June to 101.4, according to a private sector survey released on Tuesday. The Conference Board said its index of consumer conference rose matched the revised level gauged in March and higher than a downwardly revised 94.3 in May.

“Consumer confidence improved further in June, following a modest gain in May,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Over the past two months, consumers have grown more confident about the current state of business and employment conditions.”

Economists had forecast a June reading of 97.3, according to a Reuters poll.

The May figure was initially reported at 95.4, but was downwardly revised for the second consecutive month. The Conference Board’s survey’s hard-to-get jobs index fell to 25.7 last month from May’s downwardly revised 27.2.

“In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed,” Franco added. “Overall, consumers are in considerably better spirits and their renewed optimism could lead to a greater willingness to spend in the near-term.”

U.S. consumer confidence increased more than economists'

home-prices-reuters

Home sales and home prices data and reports. (Photo: REUTERS)

Single-family home prices rose in April from a year earlier but at a slower pace than forecast, the closely watched S&P/Case Shiller survey said on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas in April increased 4.9 percent year over year.

However, a Reuters poll of economists forecast a rise of 55 percent.

“Home prices continue to rise across the country, but the pace is not accelerating,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. “Moreover, consumer expectations are consistent with the current pace of price increases.”

Denver and San Francisco saw the strongest year-over-year gains, with prices in Denver up a whopping 10.3 percent and San Francisco posting a 10 percent gain.

Meanwhile, price rises slowed in 11 cities, according to the index.

Single-family home prices rose in April from

Supreme Court Building (SCOTUS)

The U.S. Supreme Court (SCOTUS) building as viewed from across NE 1st Street.

Many people are looking at the recent Supreme Court decisions about ObamaCare and same-sex marriage in terms of whether they think these are good or bad policies. That is certainly a legitimate concern, for both those who favor those policies and those who oppose them.

But there is a deeper and more long-lasting impact of these decisions that raise the question whether we are still living in America, where “we the people” are supposed to decide what kind of society we want, not have our betters impose their notions on us.

The Constitution of the United States says that the federal government has only those powers specifically granted to it by the Constitution — and that all other powers belong either to the states or to the people themselves.

That is the foundation of our freedom, and that is what is being dismantled by both this year’s Obamacare decision and last year’s ObamaCare decision, as well as by the Supreme Court’s decision imposing a redefinition of marriage.

Last year’s Supreme Court decision declaring ObamaCare constitutional says that the federal government can order individual citizens to buy the kind of insurance the government wants them to buy, regardless of what the citizens themselves prefer.

The Constitution gave the federal government no such power, but the Supreme Court did. It did so by citing the government’s power to tax, even though the ObamaCare law did not claim to be taxing.

This year’s ObamaCare decision likewise ignored the actual words of the law, and decided that the decisions of 34 states not to participate in ObamaCare Exchanges, even to get federal subsidies, would not prevent those federal subsidies to be paid anyway, to Exchanges up by the federal government itself.

When any branch of government can exercise powers not authorized by either statutes or the Constitution, “we the people” are no longer free citizens but subjects, and our “public servants” are really our public masters. And America is no longer America. The freedom for which whole generations of Americans have fought and died is gradually but increasingly being taken away from us with smooth and slippery words.

This decision makes next year’s choice of the next President of the United States more crucial than ever, because with that office goes the power to nominate justices of the Supreme Court.

Democrats have consistently nominated people who shared their social vision and imposed their policy preferences, too often in disregard of the Constitution.

Republicans have complained about it but, when the power of judicial appointment was in the hands of Republican presidents, they have too often appointed justices who participated in the dismantling of the Constitution — and usually for the kinds of social policies preferred by Democrats.

Chief Justices appointed by Republican presidents have made landmark decisions for which there was neither Constitutional authority nor either evidence or logic. The first was Earl Warren.

When Chief Justice Warren said that “separate educational facilities are inherently unequal,” he was within walking distance of an all-black public high school that sent a higher percentage of its graduates on to college than any white public high school in Washington. As far back as 1899, that school’s students scored higher on tests than two of the city’s three white academic public high schools.

Nevertheless, Chief Justice Warren’s unsubstantiated assumption led to years of school busing across the country that was as racially divisive as it was educationally futile.

Chief Justice Warren Burger, also appointed by a Republican president, gave us the “disparate impact” notion that statistical disparities imply discrimination. That notion has created a whole statistical shakedown racket, practiced by government itself and by private race hustlers alike.

And now Chief Justice John Roberts, appointed by George W. Bush, gives the federal government the power to order us to buy whatever insurance they want us to buy. With that entering wedge, is there anything they cannot force us to do, regardless of the Constitution?

Can the Republicans — or the country — afford to put another mushy moderate in the White House, who can appoint more mushy moderates to the Supreme Court?

Many people are looking at the recent

chief-justice-john-roberts

Chief Justice John Roberts (Photo: AP)

Last week’s Supreme Court rulings on Obamacare (Burwell) and same-sex marriage (Obergefell) were enormously dispiriting for reasons beyond the substantive issues of socialized medicine and same-sex marriage.

I couldn’t be more opposed to socialized medicine, which I believe is the endgame of Obamacare, and I am opposed to the societal sanctioning of same-sex marriage, but those are not my greatest concerns with these two rulings.

In both cases, the court flouted the Constitution, the rule of law, the English language and the truth itself. People who appreciate the unique American system of government and those who value truth itself should be very concerned.

First, let’s briefly consider the Obamacare ruling. Though I was beginning to believe it was possible that the court would do the right thing in this case, I didn’t allow myself to count on it mainly because of the endless insanity we’ve witnessed over the past six years.

Mindful of the absurd lengths Justice Roberts went to in upholding Obamacare initially — the verbal contortions he disgracefully engaged in to save this wretched law — why would I assume he would do otherwise with his second bite of the apple? There was a small part of me that was hoping he realized just how severely he had sold his soul on the first decision and would be looking for redemption. But that was always a long shot.

In the first case, he redefined taxes and penalties to justify a result he’d already reached in his mind irrespective of the law, flagrantly breaching his fiduciary duty to the Constitution. We hear that he descended into this sophistry because he believed he had some higher calling to preserve the image of the court.

Of all people, he should know that in deciding cases his duty is not to preserve the image of the court, except perhaps indirectly, but to objectively evaluate the law and facts and honor the integrity of our Constitution. It was wholly improper for him to disregard the plain meaning of the statute in order to save Obamacare because he might have believed that invalidating the law would be disruptive to society and damaging to the image of the court.

For Roberts to have done so was a high-handed act of self-serving cowardice, and he needs to be called out on it. It was immoral for him to presume to attempt to save the court by fundamentally violating its operating principles. It is ironic that in the process of trying to save the court’s image he deeply wounded it.

The same exact criticisms apply to last week’s decision in equal measure. No intellectually honest person believes the law was remotely ambiguous concerning Obamacare subsidies, and he literally rewrote the law to justify saving it again. Then he had the unmitigated audacity to write a dissenting opinion in the same-sex marriage case decrying, in eloquent and explicit terms, the very sin of judicial legislation he committed twice in the Obamacare cases.

Yes, I am strongly opposed to Obamacare as a policy matter, but I am far more upset about the court majority’s undermining of the Constitution, the English language, the laws of logic and truth itself than that socialized medicine is one step closer to achieving permanency in the United States.

One of the main things that makes America unique is its Constitution, which was purposefully crafted to establish a system of government most likely to safeguard our liberties. When the court arrogates to itself the power to rewrite the Constitution, and statutes enacted by a popularly elected Congress, it dismantles the very foundation of the system that protects our liberty.

While Roberts is patting himself on the back for supposedly protecting the image of the court, he is obliterating the integrity of the Constitution, our system of checks and balances, our sacred liberties and the stability of society, because when you rule that words mean the exact opposite of what they actually mean, you are injecting intellectual and moral chaos.

If we can’t rely on the Supreme Court to honor the plain meaning of the Constitution and of popularly enacted legislation, then our liberties are on shifting sands. No matter how unique our Constitution is, it is worth no more than toilet paper if its words can be twisted to achieve any result the justices prefer.

I make no apologies for being outraged at these decisions, and I pull no punches in directing my ire at so-called conservative justices who are a part of such disgracefulness. I won’t waste my breath criticizing liberal justices in such cases, because everyone knows they believe they have a right to rewrite the Constitution at will, as long as it is in furtherance of the liberal agenda. But conservatives — constitutionalists — hold themselves out as honoring the original meaning of the Constitution. For them, there is no excuse.

Roberts obviously regards himself as one who takes seriously the integrity of the Constitution and the plain meaning of statutes, as his opinion in the same-sex marriage case makes clear. This renders him all the more culpable for his Burwell decision. No matter how much he may rationalize and engage in self-deception, he has constitutional blood on his hands.
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David Limbaugh: John Roberts obviously regards himself

Folks on the left sometimes act as if the Nordic nations somehow prove that big government isn’t an impediment to prosperity. As I’ve pointed out before, they obviously don’t spend much time looking at the data.

So let’s give them a reminder. Here are the rankings from Economic Freedom of the World. I’ve inserted red arrows to draw attention to the Nordic nations. As you can see, every single one of them is in the top quartile, meaning that they aren’t big-government jurisdictions by world standards.

Moreover, Finland ranks above the United States. Denmark is higher than Estonia, which is often cited a free-market success story. And all of them rank ahead of Slovakia, which also is known for pro-growth reforms.

To be sure, this doesn’t mean the Nordic nations are libertarian paradises. Far from it.

Government is far too big in those countries, just as it is far too big in the United States, Switzerland, New Zealand, Canada, and other nations in the top quartile.

Which is tragic since the burden of government spending in North America and Western Europe used to be just a fraction of current levels – even in nations such as Sweden.

The way I’ve described the Nordic nations is that they have bloated and costly welfare states but compensate for that bad policy by being very free market in other policy areas.

But you don’t need to believe me. Nima Sanandaji has just written an excellent new monograph for the Institute of Economic Affairs in London. Entitled Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism, Nima’s work explains how the Nordic nations became rich during an era of small government and free markets, how they then veered in the wrong direction, but are now trying to restore more economic freedom.

Here are some key excerpts, starting with some much-needed economic history.

Scandinavia’s success story predated the welfare state. …As late as 1960, tax revenues in the Nordic nations ranged between 25 per cent of GDP in Denmark to 32 per cent in Norway – similar to other developed countries. …Scandinavia’s more equal societies also developed well before the welfare states expanded. Income inequality reduced dramatically during the last three decades of the 19th century and during the first half of the 20th century. Indeed, most of the shift towards greater equality happened before the introduction of a large public sector and high taxes. …The phenomenal national income growth in the Nordic nations occurred before the rise of large welfare states. The rise in living standards was made possible when cultures based on social cohesion, high levels of trust and strong work ethics were combined with free markets and low taxes….the Nordic success story reinforces the idea that business-friendly and small-government-oriented policies can promote growth.

Here’s a chart from the book showing remarkable growth for Sweden and Denmark in the pre-welfare state era.

GDP per capita growth 1870 – 1970. 

Nordic-pre-welfare-state-growth

Source: Maddison (2010)/Daniel Mitchell. GDP per capita is shown for each country compared with levels in 1870 normalized to 100.

 

Nima has extra details about his home country of Sweden.

In the hundred years following the market liberalisation of the late 19th century and the onset of industrialisation, Sweden experienced phenomenal economic growth (Maddison 1982). Famous Swedish companies such as IKEA, Volvo, Tetra Pak, H&M, Ericsson and Alfa Laval were all founded during this period, and were aided by business-friendly economic policies and low taxes.

Unfortunately, Nordic nations veered to the left in the late 1960s and early 1970s. And, not surprisingly, that’s when growth began to deteriorate.

The third-way radical social democratic era in Scandinavia, much admired by the left, only lasted from the early 1970s to the early 1990s. The rate of business formation during the third-way era was dreadful.
Again, he has additional details about Sweden.
Sweden’s wealth creation slowed down following the transition to a high tax burden and a large public sector. …As late as 1975 Sweden was ranked as the 4th richest nation in the world according to OECD measures….the policy shift that occurred dramatically slowed down the growth rate. Sweden dropped to 13th place in the mid 1990s. …It is interesting that the left rarely discusses this calamitous Swedish growth performance from 1970 to 2000.

The good news is that Nordic nations have begun to shift back toward market-oriented policies. Some of them have reduced the burden of government spending. All of them have lowered tax rates, particularly on business and investment income. And there have even been some welfare reforms.

…there has been a tentative return to free markets. In education in Sweden, parental choice has been promoted. There has also been reform to pensions systems, sickness benefits and labour market regulations

But there’s no question that the welfare state and its concomitant tax burden are still the biggest problem in the region. Which  is why it is critical that Nordic nations maintain pro-market policies on regulation, trade, monetary policy, rule of law and property rights.

Scandinavian countries have compensated for a large public sector by increasing economic liberty in other areas. During recent decades, Nordic nations have implemented major market liberalisations to compensate for the growth-inhibiting effects of taxes and labour market policies.

Let’s close with what I consider to be the strongest evidence from Nima’s publication. He shows that Scandinavians who emigrated to America are considerably richer than their counterparts who stayed put.

Median incomes of Scandinavian descendants are 20 per cent higher than average US incomes. It is true that poverty rates in Scandinavian countries are lower than in the US. However, the poverty rate among descendants of Nordic immigrants in the US today is half the average poverty rate of Americans – this has been a consistent finding for decades. In fact, Scandinavian Americans have lower poverty rates than Scandinavian citizens who have not emigrated. …the median household income in the United States is $51,914. This can be compared with a median household income of $61,920 for Danish Americans, $59,379 for Finnish-Americans, $60,935 for Norwegian Americans and $61,549 for Swedish Americans. There is also a group identifying themselves simply as ‘Scandinavian Americans’ in the US Census. The median household income for this group is even higher at $66,219. …Danish Americans have a contribution to GDP per capita 37 per cent higher than Danes still living in Denmark; Swedish Americans contribute 39 percent more to GDP per capita than Swedes living in Sweden; and Finnish Americans contribute 47 per cent more than Finns living in Finland.

In other words, when you do apples to apples comparisons, either of peoples or nations, you find that smaller government and free markets lead to more prosperity.

That’s the real lesson from the Nordic nations.

P.S. Just in case readers think I’m being too favorable to the Nordic nations, rest assured that I’m very critical of the bad policies in these nations.

Just look at what I’ve written, for instance, about Sweden’s healthcare system or Denmark’s dependency problem.

But I will give praise when any nation, from any part of the world, takes steps in the right direction.

And I do distinguish between the big-government/free-market systems you find in Nordic nations and the big-government/crony-intervention systems you find in countries like France and Greece.

[mybooktable book=”global-tax-revolution-the-rise-of-tax-competition-and-the-battle-to-defend-it” display=”summary” buybutton_shadowbox=”true”]

Economist Dan Mitchell on why Folks on

SCOTUS-EPA

Supreme Court, right, and the Environmental Protection Agency (EPA) headquarters in Washington, D.C. (Photos: AP/PPD)

The Supreme Court Monday ruled 5-4 against the Obama administration, which sought to use the Environmental Protection Agency (EPA) to limit certain power plant emissions. The court said the agency “unreasonably” failed to consider the cost of the regulations that were allegedly aimed at curbing emissions of mercury and other hazardous air pollutants set to take effect in April.

The case was brought in front of the court by industry groups and 21 Republican-led states when the agency first decided to regulate the toxic emissions from coal- and oil-fired plants.

Writing for the majority, Justice Antonin Scalia said it was not “appropriate and necessary” for the administration and the EPA to regulate such emissions by imposing billions of dollars of economic costs in return for a few dollars in health or environmental benefits.

“EPA must consider cost — including cost of compliance — before deciding whether regulation is appropriate and necessary,” Justice Scalia wrote. One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.”

The decision is a major blow to the Obama administration, which was just celebrating a major win on the president’s signature health care law, as well as Friday’s historic ruling legalizing gay marriage nationwide.

“EPA refused to consider whether the costs of its decision outweighed the benefits,” Scalia wrote. “The Agency gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate.”

The regulations, by the EPA’s own admission, would have cost the power plants nearly $10 billion a year. For this, the agency expected to reduce the toxic emissions by 90 percent in the long term, yet the issue was whether health risks are the only consideration under the Clean Air Act.

In response, the EPA released a statement claiming it would review the decision and take “any appropriate next steps” when the review is complete.

“EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance. EPA remains committed to ensuring that appropriate standards are in place,” EPA Press Secretary Melissa J. Harrison said. “The Court’s decision focuses on EPA’s initial finding that it was appropriate and necessary to regulate these emissions and not on the substance of the standards themselves.”

She claimed that for every dollar spent on reducing pollution under these rules, “the American public would see up to $9 in health benefits.”

Scalia was joined by Chief Justice John Roberts, Justices Anthony Kennedy, Clarence Thomas and Samuel Alito. Justice Elena Kagan, who was joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor, said she was satisfied with the EPA only considering long-term costs.

“Over more than a decade, EPA took costs into account at multiple stages and through multiple means as it set emissions limits for power plants,” Kagan said.

Yet, this latest case is but one of the administration’s recent attempts to use the Clean Air Act to bury coal-burning power plants, and it won’t be the last. EPA has already drawn up additional rules that are expected to be released this summer, which target plants they say are linked to global warming. States have already challenged those rules even before they were announced, with the Republican-controlled Congress now putting together a bill that would allow states to opt out of any new rules.

A disproportionate share of the 600 affected power plants, most of which burn coal, are in the South and upper Midwest.

The Supreme Court Monday ruled against the

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