Category Archives: Economics

The lesson that we should draw from the results of the Telecommunications Act of 1996 is that efforts to partially privatize the industry are likely to retain those elements of regulations that benefit concentrated interests in business most.

If this point is not immediately evident to you, I highly recommend you read “The Question of the Cable Monopoly“

Check out these Satellite photos of North Korean prison camps.

Then read this: Death, terror in N. Korea gulag.

Check out this blog from initium:

In 1977, Congress passed the Hart-Scott-Rodino Act, a law intended to make life easier for FTC and Antitrust Division officials in deciding which mergers to prosecute and stop. Under HSR, all mergers worth at least a certain value (approximately $50 million under the current law) must be reported to the government prior to consummation. This “pre-merger notification” grants the government a waiting period to decide whether they wish to act against the merger. In most cases, the waiting period is terminated early, and no official action is taken. In a handful of cases-less than 2%-the FTC or Antitrust Division will seek conditions to allow the merger or attempt to stop it outright. Such official action generally results in a “consent agreement,” where the merging companies agree to surrender a portion of their assets to a third-party chosen by the government.

Every Hart-Scott-Rodino “notification” must be accompanied by a filing fee. For mergers valued at less than $100 million, the fee is $45,000; for mergers of more than $500 million, the price is $280,000. The fee is non-refundable, and the monies collected from said fees are what finance the $330-plus million of the FTC and Antitrust Division budgets not financed by direct appropriation.

In other words, the government is forcing businesses to pay for the very antitrust enforcement that is targeted directly against their interests. This is a classic racketeering scheme. A business is forced to pay protection money to a thug who could turn against them at any time.

Interesting article on Marxism at the Economist.

Here is the conclusion:

Anti-globalism has been aptly described as a secular religion. So is Marxism: a creed complete with prophet, sacred texts and the promise of a heaven shrouded in mystery. Marx was not a scientist, as he claimed. He founded a faith. The economic and political systems he inspired are dead or dying. But his religion is a broad church, and lives on.

For my econometrics class, I am comparing the relationship between economic freedom and prosperity, and I just got my first regression results for 2001 for 155 nations. The results are very preliminary, but the evidence is clear: there is an extremely high correlation between economic freedom and prosperity, explaining over 73% of the variation in wealth. This means that 73% of the difference between the wealth of nations is explained by the economic policies of their government, with only 27% accounting for differences in natural resources, location, climate, culture, other nations, etc.

This fact alone is not very surprising (unless you’re a socialist, in which case you’re probably ignoring these results), but it is interesting to see which specific factors affect per capita GDP the most. Not surprisingly, property rights and the fiscal burden (taxes) of government have the greatest effect, and significantly monetary policy (inflation) -which shows that (as Lenin said) the best way to destroy capitalism is to go after the currency. Factors which (to my surprise) do not affect prosperity individually are foreign investment and regulation – which may not be true if these variables are significant jointly -I’m not sure yet.

After my analysis of economic factors is complete, I am going to see what effect non-economic factors such as political freedom, government welfare, and population control have on prosperity.

(Note: while the black market correlation is highest, this is more a result of government regulation than a cause, which is why I don’t consider it a factor. Data comes from the 2001 CIA Factbook and 2001 Heritage Inst. Economic Freedom Index. The 2001 data was used because 2002 GDP’s are not available for all nations yet.)

Here is the regression output:

Model 3: OLS estimates using the 155 observations 1-155
Dependent variable: indGDP

VARIABLE	COEFFICIENT	STDERROR	T STAT	2Prob(t>|T|)
const	20723.3	2201.61	9.413	<0.00001	***
Trade	-1186.36	434.009	-2.733	0.007042	***
FiscalBu	1538.63	467.05	3.294	0.001238	***
Governme	1003.78	583.324	1.721	0.087407	*
Monetary	-627.609	326.967	-1.919	0.056873	*
BK	-793.975	646.082	-1.229	0.221083
Wagesand	1420.41	650.191	2.185	0.030513	**
Property	-2108.96	663.036	-3.181	0.001794	***
BlackMar	-2899.29	522.668	-5.547	<0.00001	***

Mean of dependent variable = 8854.32
Standard deviation of dep. var. = 9169.89
Sum of squared residuals = 3.43936e+009
Standard error of residuals = 4853.58
Unadjusted R-squared = 0.7344
Adjusted R-squared = 0.719847
F-statistic (8, 146) = 50.4624 (p-value < 0.00001)
Durbin-Watson statistic = 2.13614
First-order autocorrelation coeff. = -0.0694149

Excluding the constant, p-value was highest for variable 11 (BK)
(Variables are explained here: htp://www.heritage.org/research/features/index/2002/chapters/chap5.html)