On the U.S. trade deficit

I'm making this argument here for the last time.  THERE IS NO TRADE DEFICIT. 

As long as a trade isn't the result of theft, deception, fraud or government mandate (pardon all the redundancies), all trade is balanced.  There are no surpluses; there are no deficits. 

I give Starbucks $2.12 and they give me a double-espresso. 

They buy no freight or warehousing services from me. 

China provides me with fruitstand components.  I provide China with pieces of paper that have Benjamin Franklin's picture on them.  It's balanced. 

And there's only one place where you can swap Benjamins for other goods and services. 

That would be in the USA, or with someone who will eventually spend them in the USA. 

It's always balanced. 

Those who claim otherwise have ulterior motives. 

Thanks for listening. 

The top 12 things that Libertarians wish that everyone knew

Here are the top 12 things that Libertarians (IMHO) wish that everyone knew:

1)  The only Fair Trade is Free Trade.  All other arrangements are designed to protect political supporters.  And no, slavery isn't "Free Trade".  Slaves aren't free to make a choice. 

2)  You can't legislate morality.  There will always be a market for alcohol, tobacco, drugs, whores, gambling, and other things that the state doesn't like.  Prohibitions create a black market, and make the activity more dangerous.  This creates jobs for bureaucrats, which is probably the only rationale for the prohibition. 

3)  War is a racket.  Check out this rant from Medal Of Honor winner General Smedley Butler. 

4)  If you want to discourage something, tax it.  Or even threaten to tax it.  Now, take a look at our economy. 

5)  If it weren't for our arbitrary political boundaries, we wouldn't have the words "exports", "imports", "globalization", or "offshoring". 

6)  You can oppose government healthcare, education and safety standards and still support healthcare, education and safety standards.  I'm almost violently opposed to the public school system, but I like the idea of education.  Amazing, isn't it? 

7)  The "Invisible Hand", the way that markets work in a spontaneous unplanned way because of people trying to make a profit, is far more effective than any "planned economy".  See: Cuba. 

8)  There really isn't that much difference in Barack Obama and George Bush. 

9)  Gary Johnson, who spent twice as much time as governor as Mitt Romney, left his state with a budget surplus.  He vetoed more bills than all other governors combined.  He once told me that if he had been dictator of New Mexico, he could've cut government jobs and spending by 40%, and nobody would've noticed.  This would've left the taxpayers with more money to spend in the manner of their own choosing.  Gary Johnson is considered radical, and "outside the mainstream". 

10)  One day Cash For Clunkers will be linked with Mao's Cultural Revolution in lists of the most insanely destructive policies ever pursued by a government.  I might have to write the list myself, but it's gonna happen. 

11)  ObamaCare adds no doctors, only IRS agents and bureaucrats.  Therefore, it is going to be a disaster. 

12)  No private industry is as scary as any government agency.  Unless, of course, the private industry has the support of a government agency. 

Harry Browne and P.J. O'Rourke on Free Trade

Harry Browne on Free Trade - "We have only two choices.  Either you are free to buy whaterever you want from whomever you want, wherever that seller is in the U.S. or the world - or we turn over to the politicians the power to decide what you can buy.  If we do the latter, you know from all experience that what you can buy will then be decided by those who have the most political influence."

This reminds me of P.J. O'Rourke's quip that "If politicians can determine what can be bought and sold, the first thing to be bought and sold will be politicians." 

First Mexican truck to enter U.S. interior sometime soon. I hope.

From The San Diego News, via a link from Radley Balko:

SAN DIEGO -- The first Mexican carrier is set to roll into the U.S. interior within days, but American trucking union leaders and two California congressmen haven't given up on stopping the cross-border trucking program that had been stalled for years by safety concerns and political wrangling.

The stall has had little to do with safety concerns.  It is about the political wrangling and protecting the constituents of some politicians that they've bought at auction prices. 

U.S. Reps. Duncan Hunter and Bob Filner said they'll take a bipartisan stand at the border Wednesday in San Diego to voice concerns about the bilateral pilot project that will allow approved Mexican trucks to come deep into the United States. Hunter is a San Diego-area Republican, while Filner is a Democrat whose district includes California's border with Mexico.

They will join Teamsters union President James Hoffa and Todd Spencer, the owner-operator of the Independent Drivers Association, in a last-ditch effort to block Mexican trucks from being granted full access to U.S. highways.

The trucks are crossing a river, a river that has symbolic meaning because of a war we had with Mexico.  This river became known as a "boundary". 
Boundary (noun) (bound*a*ry) 1. In the geographic sense, an arbritrary listing of lines of latitude and longitude to be filled in on maps with different colors.  2.  In the political sense, the far edges of your cage.

Allowing Mexican trucking companies to deliver the goods rather than transfer them onto U.S. haulers at the border will put American jobs and highway safety at risk, the union leaders say.

Horseshit.  According to Marc Levinson, author of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger" the ancestors of these same union parasites once tried to unload and reload each shipping container as it entered U.S. "boundaries".  They didn't understand that the entire point of the shipping container was to load the thing at Point A and not have the load touched by thieving little Jimmy Hoffa hands until it was unloaded by the customer at Point B.  The unions insisted that they had a right to "strip and stuff" every shipping container, even if the load was going to be placed right back in the same shipping container.
All Jimmy Hoffa wants is to get his hands on the load.   

Washington on Friday approved the first Mexican trucking company, Transportes Olympic, nearly two decades after the hotly contested provision of the 1994 North American Free Trade Agreement set off lawsuits and a costly trade dispute between the neighboring countries.

If I want to hire Transportes Olympic to haul a load from Juarez to Fort Worth, it really isn't Jimmy Hoffa's business.  It is the U.S. government's business, unfortunately.  They own the roads.  But they've also established that it is illegal to discriminate against people for racial reasons, and that's the only angle these clowns have to fight with. 

Transportes Olympic employees were busy Wednesday finishing the preparations for its historic, maiden trip.

The long-haul truck will cross the border Friday at Laredo, Texas, and head about 450 miles north to Garland, Texas, to deliver industrial equipment, said Guillermo Perez, the transport manager at the firm in the industrial Monterrey suburb of Apodaca, about two hours south of Laredo.

The company was also the first approved under the 2009 pilot program before President Barack Obama's administration cancelled it. Mexico retaliated by placing tariffs on 99 agricultural products worth more than $2 billion annually.

As well the should have.  It's called NAFTA.  It is a free-trade agreement, kinda.  We've been in violation of the law for about 20 years. 

Mexico cut the tariffs in half this summer after Obama and Mexican President Felipe Calderon approved an inspection and monitoring program for the companies that had been approved in 2009. The Mexican government has vowed to lift the rest once the truck heads out of the border zone Friday.

"We're really excited," Perez said in a telephone interview Wednesday with The Associated Press. "Now we can provide door-to-door service so it's about a 15 percent savings for companies."

Eliminating and lowering idiotic trade barriers like this one helps you to afford the computer on which you're reading this rant.  It's how you got the clothes that I hope you are now wearing. 

Opponents say the fight isn't over.

Hunter has co-authored a bill sponsored by U.S. Rep. Peter DeFazio, D-Ore., that would require the pilot program to be ceased in three years and Congress to vote on the issue again.

"There's absolutely no upside to the program," said Joe Kasper, a spokesman for Hunter's office.

Yes there is an upside, you flak-catching hack.  If I want to hire these people to haul a load, then I get to have my way. 
That's always an upside. 
Plus, I won't have to hire Hoffa goons.  (Remember Jimmy Hoffa?  The guy who said "let's take out those sons-of-bitches", in reference to The Tea Party?)  
And I get to save money, which means that in the long run, you get to save money.

 "It's a good example of foreign interests overtaking American interests, at the expense of jobs, security and safety. The program was a bad idea when it was created under NAFTA and it's a bad idea now. It should be stopped right away."

At the expense of jobs?  If it's about saving jobs or creating more jobs, let's just mandate that loads can only cross The Rio Grande on wheelbarrows and that they can only move up Interstate 35 on hand carts pulled by the less fortunate of our society. 
If it's about security, let's end the idiotic drug war.  Safety will increase 100-fold on both sides of the river that we  currently use as a boundary, just like safety increased when we ended our alcohol war with Canada at the end of Prohibition. 
If it's about safety, take a look at one of the trucks that Transportes Olympic will use on these loads and then compare them to the rigs that haul the U.S. Mail.  Case dismissed.  There will be no comparison. 

Criminal activity has been a problem for years even within the U.S. government's strictest trusted carrier programs. Drug trafficking organizations have smuggled tons of drugs inside trucks driven by approved truckers coming from inspected and certified facilities inside Mexico.

And they do this because there is a fortune to be made in doing so.  End the monopolies that we've granted to the Mexican Drug Lords and their U.S. Enablers, and the smuggling will end.  No one ever got rich by smuggling coals into Newcastle.  Or by smuggling more bullshit into a political protectionist argument. 

"The beneficiaries of opening borders will be few and the casualties will be plenty," Spencer told The Associated Press on Wednesday. His organization represents small independent trucking businesses.

He doesn't represent all of the small independent trucking businesses, as the article implies.  He doesn't represent mine.  (I'm the General Manager of one.)
Trade runs both ways.  The outfit that I work for sells stuff in the U.S., and we sell stuff outside of Jimmy Hoffa's boundaries.  We also purchase stuff from overseas and sell it inside the Hoffa enclosure in which most of you folks live.  I don't need Hoffa and his Washington puppets in the way.  
Anything is good as long as it helps weaken the cage so jealously guarded by  U.S. Reps. Duncan Hunter and Bob Filner and union boss Jimmy Hoffa.   

Proponents say especially strict safeguards are in place: The U.S. government is paying for electronic monitoring devices to be installed in all Mexican trucks used in the program.

Mexican trucking companies had to fill out an application, pay a fee and then submit the names of any drivers who will participate so they can undergo national security and criminal background checks by the Justice Department and Department of Homeland Security.

Inspectors will check out the trucks for safety violations, verify the drivers' qualifications and administer oral English-proficiency exams.

The program's long delay has cost companies in both countries millions and hurt bilateral relations, proponents say.

"We certainly hoped that it cannot be stopped," said James Clark, director of the San Diego Regional Chamber of Commerce's Mexico Business Center. "The U.S. has been in violation of the NAFTA agreement ever since the beginning of the trucking issue. Mexican trucks have every right to come into the U.S. under NAFTA as long as the trucks are fully inspected to U.S. standards and the drivers speak English."

About 70 percent of goods from the $4 billion trade between the two nations is transported by land to its destinations according to the Mexican government.

And all of that stuff is currently being unloaded at the border and reloaded onto another trailer.  That's a total waste. 
End of rant. 
Thanks for listening. 

8 Steps For Revitalizing The U.S. Economy

Industry Week  has a piece in their online edition by Dr. Ken Mayland, an economist who covers manufacturing and business trends. 
Here are Dr. Mayland's "Eight Steps For Revitalizing The U.S. Economy".  I've been ranting about seven of these for years, and I don't even have a Doctorate in Economics.  Or a Masters.  Or a Bachelors.  I do, however, work in the shipping and logistics industry, and that qualifies me to comment on these things. 

1.  Kill the 2010 health care reform bill.

Well, duh, of course.  Nobody knows who exactly wrote it.  Nobody knows what it is supposed to accomplish.  It's too long for anyone to know what is in it.  A lot of people who lobbied for it have now been exempted from it.  But everyone fears it. 

2.  Do a "reverse course" on developing domestic energy and ease access and permitting for all forms of energy production.

Yeah.  Drill, Baby, Drill.  The Green Energy Scam is slowly being exposed.  Within a year and a half, it'll be dead as a doornail.  Drill, Baby, Drill.  Now.   

3.  Eliminate the minimum wage. Mayland said: "Economists have long know that politicians cannot legislate the productivity of a worker. If you raise the minimum wage above the basic productivity of the worker, the worker will be fired or not hired." Mayland said since the minimum wage was last raised, the biggest increase in unemployment has been among teenagers -- "exactly where you would expect a minimum-wage increase to hurt."

The minimum wage is zero.  The higher you set an artificial price floor for unskilled workers, the more of them you condemn to earning the true minimum wage - zero. 

4.  Repeal the Frank-Dodd financial reform law and Sarbanes-Oxley, which he said put U.S. businesses at a disadvantage compared to businesses in other countries.

I know absolutely nothing about this.  Some might say that this shortcoming has never prevented any of my other rants, but there you have it.  I know nothing about SarbOx.  But this guy does. 

5.  Rein in EPA and the National Labor Relations Board.

Or we could continue to allow the NLRB to tell businesses where they can and can't operate.  Pick one. 

6.  Pass free-trade agreements with Panama, Columbia and South Korea.

This is great as long as it is Free Trade and not Managed Trade.  Any Free Trade Agreement that's 900 pages long is automatically suspect. 

7.  Pare back overly generous unemployment benefits from the current 99 weeks. Mayland cited a scholarly study that if unemployment benefits were 26 weeks, the unemployment rate would be 2% to 2.5% lower.

Yep, and it wouldn't be pretty.  But combine #3 and #7, and you would rapidly approach full employment.  Companies would accomplish more with less.  But it wouldn't be fair !  So we're going to continue to borrow from our fetuses ! 

8.  Trash the tax code and install a flat tax. Mayland said once the appropriate tax rate was determined, taxpayers could fill out their tax return "on a postcard."

Go here for a picture of the Hong Kong tax postcard. 

There you have it.  If Obama and Congress knew that they were going to be propped against a wall and shot if the economy didn't improve within one year, they would implement all of Ken Mayland's Libertarian-ish suggestions tomorrow morning.  Hit the labels below if you want to read earlier rants on any of these topics.

Robert Reich is a racist

Robert Reich was Secretary of Labor in the Clinton administration. 

As best I can tell from his Wikipedia entry, he's never done anything but teach school, practice law, or help screw up the country as a government employee.  I don't think he's ever manufactured anything but regulatory burdens. 

Reich recently came up with a list of things that The Teleprompter Jesus could do to create jobs.  Half of the suggestions were the standard "give employers a tax credit for doing things that their Lords And Masters like".  The other half were the standard "take money from one group that I don't necessarily like (rich people, unborn fetuses, banks, etc.) and give it to another group". 

But the tenth proposal perfectly reflects the lunacy to which we've all descended, and that's the one that got my blood boiling.  Here goes:

10. Impose a "severance fee" on any large business that lays off an American worker and outsources the job abroad.

Before I unload on this Statist sonofabitch, let me get in some full disclosure.  I'm proud to work for an American manufacturer.  We make things in the United States, which, considering the regulatory environment, is just about impossible.  We also outsource some work to China.  We're warehousing some stuff in Canada.  We're about to get something big going with a manufacturer in Brazil. 

But in addition to bringing things in from other places, I routinely ship our American-made (and outsourced) products to stores all over the world.  Before my vacation this past week, we loaded out 5 full-sized shipping containers of freakin' fruitstands to Chile.  Yeah.  Fruitstands.  You can make fruitstands anywhere, but people in Chile like ours.  So do our customers in Mexico, Canada and Colombia.  "Trade" works both ways. 

Before we started bringing some of the simpler products in from China, our company had 300 employees in the United States.  And less than a decade after "outsourcing these jobs", in Reich's phrase, to China, we had....

600 employees. 

Yep.  We started making some things in China and this allowed us to double our U.S. workforce.  (We've cut back to around 500 since our peak a couple of years ago, but then, there's a madman in the White House.) 

To what degree should we be punished?  And who will decide how much we should have to pay for sending work to Chinese People and then hiring more American People in the United States as a result of our increased efficiency? 

Let's get to the next bit o' goofiness in Reich's proposal...   I once spent a phenomenally dull Spring welding these weld nuts into 7 3/4 lengths of steel tube. 

Before long, we had doubled the size of our metal shop, and instead of 4 employees, we had 8.  Somebody else welded those things into the steel tubes.  Then 3 people welded them.   

Next thing you know, we've got 3 shifts and 90 people working in our metal shop.  We don't have room to breathe. 

But at the same time, customers decided that they didn't want any more weld nuts tacked into 7 3/4 lengths of steel tube.  Instead of 3 people welding the things, we cut back to just one person doing the job.  Then, for a brief period of time, we occasionally set up a robotic welder to do it. 

Now we order a couple of thousand of the things from China a couple of times a year. 

How is the law firm of Reich, Rodham, and Reid going to determine what "severance fee" we should pay?  And to whom?  Especially since the metal shop has grown to 150 employees since we sent the simpler stuff to China and since no one purchases enough of them to keep an American busy full-time? 

I bet Uncle Sam would have to hire 5 Regulatory Gremlins to monitor our company alone, which is probably the goal of Reich's proposal.  Who knows.  Moving on....

Let's assume that we're succesful in our attempt at manufacturing fruitstands in Brazil.  Let's also assume that Robert Reich persuades The Teleprompter Jesus to slap a "severance fee" on any company that manufactures anything overseas. 

Do you really think that our customers in China, Colombia, Chile, Canada and Mexico will be able to continue ordering things from me at the same price?  Or will their governments turn around and slap a "severance fee" of some sort on manufacturers who purchase my component parts and complete products?

Remember, Robert Reich was educated/indoctrinated at Oxford and Yale.  He's one of the brightest and best.  God help us all. 

Next, put yourself in a company owner's position.  If there was even a remote chance that a new product could be made in China, would you ever consider making it in the U.S. if doing so meant you might one day be required to pay a "severance fee"? 

Hell no, you wouldn't. 

You would keep your U.S. workforce on your old product line.  The new product would be made exclusively in China from Day One so no one at Reich, Rodham, and Reid could ever accuse you of laying off someone and sending that job to China.  

Finally, let's get to the racial issue.  We recently put up a new Martin Luther King Memorial on the National Mall in D.C.  Here's a quote from the base of the statue:

"our loyalties must transcend our race, our tribe, our class, and our nation; and this means we must develop a world perspective."

Yeah.  What King said. 

I don't give a rip about the lines of latitude and longitude where something is manufactured.  Robert Reich wants to take that into account when HE decides what HE will allow in and out of what HE thinks of as our little cage.

I don't care about the nationality of the people my employer sells to, or the arbitrary borders on a map that show where they were born.  The ones I've met have been good folks, almost without exception.  I can say the same thing about the people oversease who we purchase from.  Robert Reich thinks that nationality matters more than "the content of their character".   

I don't give a rip about the skin color of the people making my fruitstands.  Robert Reich appears to be obsessed with it.  I wonder if Reich is disturbed that the MLK statue was outsourced to a Chinese dude....

I see no other explanation than to say that I believe Robert Reich is a racist of the worst possible sort.  (And an economic idiot.)  

John Spivey on Memorial Day

John Spivey, Chair of the Tarrant County Libertarian Party, tagged me in this EXCELLENT Facebook note. 

A Few Thoughts About Memorial Day: Our Honored War Dead and Why Many of Them Didn't Have To Die.

Recently, I've done some genealogical research and found quite a few direct grandparents that served in various capacities in many wars. They fought in European wars to the American Revolution, War of 1812, Civil War, World War I, World War II, The Korean Conflict and Viet Nam. Fortunately, no American relation of mine that I've found died during a military conflict.

Like many of you, my late father was a WWII vet and was in the Pacific Theatre. He said something to me one day that I think is very applicable to our situation today. He told me that he could have never imagined that the Japanese would've ever become one of our biggest allies and trading partners - especially after we set off two atomic weapons that killed over 200,000 non-military citizens to completely defeat them - and then occupied them.

Why did he think Japan would never be anything but an enemy, or at best a non-friend? He said that at the time he thought they were all insane and so religiously dedicated to their emperor - they called him "Heavenly Sovereign", after all - that they would voluntarily fly their planes into our strategic structures and vessels in suicide bombing missions. "There's no way, I thought, you can turn people like that around to deal with you rationally", he said.

During and after the Japanese occupation, we eased up on our trade restrictions tremendously to help get their economy going. That REALLY worked, if you haven't noticed. After all, the primary reason Japan attacked us on December 7, 1941 at Pearl Harbor is due to our oil embargo and trading prohibitions against them that severely restricted their acquisition of resources during their war in Indochina. Today we are such a strong trading partner with Japan that they could never dream of restarting a war with us.

Like many Hawks of today, my father couldn't imagine these people, who so deeply infused their political system with their mysterious religious ideology, would or could become one of our allies, much less our BFFs. After we won the war, we occupied and demilitarized Japan, got their industries up and running, liberalized their economy, democratized their government and then left. Yep, just up and left. (Unfortunately, we still do have bases there - but as an ally and not as a threatening occupier)

By the way, today Japan still has the mysterious religion of Shintoism as their primary religion and they have an Emperor who is still the head of the Shinto religion and is considered a semi-deity by some, although his governmental role is largely ceremonial today. He is still called "His Majesty, the Heavenly Sovereign" by his subjects.

This has a deja vu all over again feel to me with our current situation in the Middle East. If we could pretty much do the same thing - that is, leave - JUST PACK UP AND LEAVE AND START TRADING WITH THEM, their urge to 'kill us for our freedoms' would subside shortly after the cash really starts rolling in and life starts getting good for them. Bombing them into submission only gets them to cry "Uncle". Trading them into friendship will get them to cry "Uncle Sam - we love you!"

This weekend is a time to remember and honor our war dead that heroically fought and died for our country - unfortunately at times when free trade would've allowed us to have avoided war when our show of force and trading restrictions all to frequently pushed us into conflict.

I want to purchase 5 tires from China

From Industry Week:

The Alliance for American Manufacturing (AAM) is pointing to Continental Tires' announcement on April 28 that they are building a new plant in the U.S. as an example of trade laws working.


In September, 2009 the Obama Administration imposed duties on surging imports of subsidized tires from China. The three-year plan was designed to provide relief for U.S. tire manufacturers under Section 421 of U.S. trade law, the first time the law had been used since its inception, the group noted.

Only one year after the import duties were applied, a study by AAM found that the U.S. tire industry had already reversed a significant decline. Sales were up, and workers were being hired.


I need to buy some new tires for the truck.  Two would be nice, since the ones up front are about a month away from having steel belt poking through. 
A sane person would go ahead and replace the back ones also.  They would never pass an inspection. 
Most normal humans would go ahead and purchase a new spare.  Don't ask about the condition of my spare. 

Most of my tire budget is going to Texas A and M University, in College Station, where my little Aggie is laboring to become a critter doctor.  So I need a really good deal on tires. 

China makes some good tires, and is willing to subsidize my purchase of their tires.  China wants to get me the best possible deal on five tires !!! 

China's government subsidizes Chinese manufacturing in a number of ways.  As far as I can tell, they don't go so far as to cut checks to manufacturers, the way our silly government does for ethanol producers, farmers, or producers/researchers of ridiculous "green" products, but they help out with manipulating the RMB, import/export laws and quotas, and the like. 

I think I should be allowed to purchase five Chinese tires at the lowest price possible.  I want to call one of my friends in Xiamen, tell him what I'm looking for, and have him throw five of those bad boys on the next shipping container coming my way.  I want to swap some pieces of paper with Benjamin Franklin's picture on them for five tires.  The deal doesn't need to involve Barack Obama, George Bush, John Boehner, Goodyear, Firestone, the National Labor Relations Board, the Department of Commerce, or a gaggle of theologians asking "Where Would Jesus Shop?"

And those pics of Ben Franklin?  There's only one place where they eventually come home to be spent.  Trade deficits are based on totally bogus numbers.  I run a huge trade deficit at the Starbuck's where I'm writing this, BTW.....

I also want to purchase a new suit.  And if The Men's Wearhouse sells a suit for $800, but Joseph A. Bank has decided to take a loss on the same suit and sell thousands of them at a loss for $400, I'm going to buy the suit from Joseph A. Bank. 

But what of the jobs lost at The Men's Wearhouse? 

Most of us would say that The Men's Wearhouse needs to change its ways, or get ready to go out of business.  Or we would purchase $400 suits from Joseph A Bank until Joseph A Bank went bankrupt. The health of either organization is a secondary consideration to getting a good deal on some clothing. 

When I shop in Dallas, I don't worry about the impact of money not being spent in Fort Worth. 
Ditto for when I shop in Mississippi.  I don't want to pay an extra import tariff on things I bring across the Vicksburg bridge, just to keep it fair for East Fort Worth.  
If I want to bring a bottle of tequila, a silly hat, three tasteless T-shirts and a box of Cuban cigars back from a vacation in Mexico, its nobody's business but mine. 
The same thing goes for Chinese tires.  They should cross borders at the same tax/duty rate as everything else produced anywhere else. 

This would cause some discomfort for American politicians and bureaucrats who earn their living by selling exemptions and exceptions to the rules. 
This would eventually bankrupt China.  Or China would quickly learn not to imitate the U.S. - subsidizing pet political constituencies.  Whichever came first. 

I choose Kroger over Albertson's whenevr Kroger has the best deal on Campbell's soup and Michelob Ultra. 

All this, despite Kroger NEVER EVER using my shipping and freight services.  I have a massive trade deficit with Kroger, but I still shop with them.  Am I a silly person, or what? 

Why are we not allowed to make the same choice with everything else? 

The picture of the worn out tire came from here. 

From "The Rational Optimist" - Best book of 2010

This is from the ending of Matt Ridley's "The Rational Optimist", probably last year's best libertarian book.  The ending is pure, undiluted greatness. 
Ridley argues that the world is NOT going to hell in a handbasket, as long as people are free to freely exchange goods and services, and most important - ideas. 
The item on the left, a primitive handaxe, is one of the oldest human artifacts.  One person made it.  The item on the right is approximately the same size and was made by hundreds, if not thousands of people, each one working on a small part of the project and reflecting "multiple strands of knowledge". 
The one on the left is the result of a system with cultural, geographic and trade barriers in place.  The product on the right can only be efficiently manufactured when people are left alone to seek their own self-interest. 
Pick a side, pick a side. 

Here's Matt Ridley:

Politicians are increasingly corks tossed on the waves of public opinion.  Dictators are learning that their citizens can organise riots by text message.  'Here comes everybody' says the author Clay Shirky. 

People will more and more freely find ways to exchange their specialised production for diversified consumption.  This world can already be glimpsed on the web, in what John Barlow calls 'dot-com communism': a workforce of free agents bartering their ideas and efforts barely interested in whether the barter yields 'real' money.  The explosion of interest in the free sharing of ideas that the internet has spawned has taken everybody by surprise.  'The online masses have an incredible willingness to share' says Kevin Kelly.  Instead of money, 'peer producers who create the stuff gain credit, status, reputation, enjoyment, satisfaction, and experience:.  People are willing to share their photographs on Flickr, their thoughts on Twitter, their friends on Facebook, their knowledge on Wikipedia, their software patches on Linux, their donations on Globalgiving.com, their community news on Craigslist, their pedigrees on Ancestry.com, their genomes on 23andMe, even their medical records on PatientsLikeMe.  Thanks to the internet, each is giving according to his ability to each according to his needs, to a degree that never happened in Marxism. 

This catallaxy will not go smoothly, or without resistance.  Natural and unnatural disasters will still happen.  Governments will bail out big corporations and big bureaucracies, hand them special favours such as subsidies or carbon rations and regulate them in such a way as to create barriers to entry, slowing down creative destruction.  Chiefs, priests, thieves, financiers, consultants and others will appear on all sides, feeding off the surplus generated by exchange and specialisation, diverting the life-blood of the catallaxy into their own reactionary lives.  It happened in the past.  Empires brought stability at the price of creating a parasitic court; monotheistic religions bought social cohesion at the price of a parasitic priestly class; nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers.  The online world will attract parasites too: from regulators and cyber-criminals to hackers and plagiarists.  Some of them may temporarily throttle their generous hosts. 

....There is even a new reason for such pessimism: the integrated nature of the world means that it may soon be possible to capture the entire world on behalf of a foolish idea, where before you could only capture a country, or perhaps if you were lucky an empire. 

....Imagine if the globalised world of the twenty-first century allows a globalised retreat from reason.  It is a worrying thought.  The wrong kind of chiefs, priests and thieves could yet snuff out future prosperity on earth.  Already lords don boiler suits to destroy genetically modified crops, presidents scheme to prevent stem-cell research, prime ministers trample on habeas corpus using the excuse of terrorism, metastasising bureacracies interfere with innovation on behalf of reactionary pressure groups, superstitious creationists stop the teaching of good science, air-headed celebrities rail against free trade, mullahs inveigh against the empowerment of women, earnest princes lament the loss of old ways and pious bishops regret the coarsening effects of commerce.  So far they are all sufficiently localised in their effects to achieve no more than limited pauses in the happy progress of the species, but could one of them go global? 

I doubt it....Said Lord Macaulay, 'We see in almost every part of the annals of mankind how the industry of individuals, struggling up against wars, taxes, famines, conflagrations, mischievous prohibitions, and more mischievous protections, creates faster than governments can squander, and repairs whatever invaders can destroy.'

....The twenty-first century will be a magnificent time to be alive. 

Dare to be an optimist. 

I hope you'll check out this book when it's released in paperback.  It's greatness. 

The solution to high gas prices? Let's put in a 62 mpg mandate !!!

Derrick Z. Jackson is a typist for the Boston Globe.  He is deeply and profoundly wrong so often that I've "liked" him on Facebook just to keep in touch. 

Here's an excerpt from his latest, called "United States Must Break The Addiction To Foreign Oil". 

Unrest continues to spread, from the Middle East to the Middle West to . . . the gas pump.


The democracy uprisings against repressive regimes, many of which America propped up, has also fanned fears for the flow of oil. In response, Big Oil has jacked up its prices and gasoline is back up to $3.20 a gallon for unleaded in Massachusetts and is reportedly headed to $3.50 nationally. As the Obama administration tiptoes between popular protests and potentates who turn on our oil spigot, Americans are concerned about prices at the gas pump.

As well they should be.  What should we do?  OMG, what can we do? 

If only we had oil of our own, oil of our very own somewhere off the coasts of California, Oregon, Washington, Florida, Georgia, South Carolina, North Carolina, Virginia, D.C., Maryland, Maine, New Hampshire, New Jersey, and all those other little Yankee states in the middle where my geography is fuzzy? 

If only, if only.  

Seriously.  That part of Jackson's rant is so profoundly screwed up that it doesn't even rise to the level of being wrong.  The Middle East is in the middle of a huge upheaval, and that's going to jack with fuel prices for a while.  Everyone, and I mean everyone, has huge reserves.  Gasoline costs what it does at any given moment because that's what people are willing to pay at that moment, all other factors taken into account.

 

Competitors, especially small ones, have huge barriers to entry, all put in place by the people who stand in front of each other once a year for the SOTU speech, and rant about our addiction to foreign oil   Otherwise people would be out there drilling near the states listed above. 

One other thing....trade is a funny thing.  Both sides need each other.  Whose economy do you think can last longer without the other?  U.S. Consumers or Evil Foreign People?  That's the question our politicians never ask.  Citizens of other countries now rely on American Dollars.  They can't eat, build houses, or educate their children without them.  Have you ever had a 25% drop in sales?  It's tough, isn't it? 

And when we give our dollars to those foreigners with funny names who worship funny gods, do you know what they have to do with them?  There's only one place where they accept green pieces of paper with pictures of dead presidents on 'em. 

Back to Derrick Z. 

....Instead of whining about gas prices, Americans should be demanding that the Democrats and the Republicans make oil independence a top priority. Less than a year after the BP oil spill, energy has disappeared as a top issue of the day in current polling of Americans. This is even though energy affects everything from jobs to the environment to what wars we wage to how many blind eyes we offer to dictators who sit on fossil-fuel resources.

Like almost all other Statists, Derrick Z. can throw down an eloquent rant about how many billions of dollars we idiotically pay dictators, all in the name of "stability".  Derrick slams The Teleprompter Jesus for his response to the BP spill.  And after griping about our government's ineffectiveness, what does he want? 
What does he want? 
Derrick Z. wants more government involvement. 

Last month, the new Republican House majority, which has declared war on the Environmental Protection Agency, inspired infantile behavior from the Alliance of Automobile Manufacturers. The organization wrote Darrell Issa, the new House oversight chairman, to protest the potential cost of fuel-efficiency standards as high as 62 miles per gallon being considered by the Obama administration.

Yeah, 62 miles per gallon.  Declare it, make it so, get pro-active. That's all it takes.  Ask King Canute.   

Derrick, mandates and Congressional Performance Art won't get us anywhere. 
Building a "Fortress America", taking us back to a trading system like Feudal China's, won't get us anywhere.   We need the Evil Foreigners and they need us. 
We need for our government to leave everyone the hell alone.  Build some roads.  Referee in some disputes.  Defend the borders.  That's all. 

Absurditopia is about to declare war on Stupidia, and you are going to lose

Since our Commander-In-Chief and some of his Republican enablers seem determined to start a trade war with China, here's an excerpt from Don Boudreaux's fantasy about what it would be like if real wars were like trade wars. 

Leader of Absurditoptia (A): I say, leader of Stupidia – we demand that you stop occupying that contested strip of land. If you refuse, we’ll have no choice but to shoot our own citizens.

Leader of Stupidia (S): You don’t scare us! That land is ours. And if you do kill some of your own people, make no mistake that we will immediately – and just as cruelly – commence to killing our own people. Courage is our national motto!

(A): Ha! You’re bluffing. But I’m not. I’ve just courageously ordered my troops to mow down in cold blood ten percent of my fellow countrymen. Take that!

(S): How dare you attack you like that! You leave us no choice but to attack us. I am ordering the Stupidian army to slaughter 15 percent of innocent Stupidians here in Stupidia. How do you like them apples?!

(A): You are cruel and inhuman to damage us by killing your people. I hereby instruct all of my fellow Absurditopians to commit suicide! Only then will you nasty Stupidians get your proper comeuppance and we Absurditopians the justice that we are due!

(S): You can’t beat us, you Absurditopian you! Listen up. I’m ordering all of my fellow citizens – Stupidians all! – to commit suicide. We’ll see who emerges victorious!
….

Then a long, long silence.

Try looking at it this way.  If the top executives at Neiman Marcus could pass laws to discourage you from shopping at Target, they would do so.  If the top executives at Target could pass laws to discourage you from shopping at Neiman Marcus, they would do so.  And if you learned that those executives had written those laws, you would have them tarred and feathered.  You would be outraged. 

But when U.S. companies pass laws making Chinese tires or Canadian lumber more expensive, we roll over and take it.  Go figure that one out. 

The picture of the Trade War came from here. 

A Libertarian Contract With America

The Republicans have released their "Pledge To America".  If they honor any of it (except the pledges to continue blowing money overseas) I'll be amazed. 

The Democrats haven't released any summary of their goals and objectives since it is hard to predict the direction of an ongoing train wreck. 

One cool thing about being a Libertarian is that our platform doesn't really change. 
I own me, you own you. 
 Leave everyone alone as much as possible. 
Government should provide some infrastructure, some defense, plus enforce contracts and referee in disputes. 
That's it. 

Let me propose the following Libertarian Contract With America.  (Yes, this could probably use some crowdsourcing.)

1)  If Libertarians are elected in sufficient numbers, they will repeal ObamaCare.  They will lower medical costs for all Americans by allowing a free market approach to medicine.  Things are costly when they are scarce, and any healthcare proposal that doesn't begin with eliminating scarcity is doomed to failure. 

2) If Libertarians are elected, they will ensure that The United States is the most secure nation on earth.  However, the United States will no longer ensure this security for Europe, Korea, Japan, Taiwan, or any of our other economic competitors.  Our boys and girls will come back home. 

3) Since we will no longer be defending the borders of South Korea, Taiwan, Japan, or Europe, we will no longer need 50% of our military capability.  Our government will give some of this savings back to the American taxpayers, and apply some of it to our national debt.  Even if we cut defense by 50%, we will still have the largest military on earth. 

4) The Libertarian Party will shut down a random Cabinet-level department, partly to prove that it is serious, and partly for the sheer fun of it.  The Department of Energy has more than 100,000 employees and does nothing but consume energy.  That would be a good place to start. 

5) The government will audit the Federal Reserve and publicize the findings.  The government will limit The Fed's ability to print money to pay off government debt. 

6)  Anyone wanting a bailout will have to consult his brother-in-law.  Ditto for earmarks, grants, subsidies or other forms of pork. 

7)  As American taxpayers have a sentimental attachment to public education, we will provide parents with an education voucher for their children.  Public schools will have to compete for these vouchers since this will be their only source of funding. 

8)  Since I own me and you own you, it makes no sense to continue locking recreational drug users into steel cages with rapists and murderers.  "No harm, no foul" will be the order of the day.  The violence along the Canadian border ended when our government legalized alcohol sales, and the same approach will end the violence along our border with Mexico if marijuana prohibition is ended. 

9)  The government will no longer have an opinion on who can or cannot marry, as long as he or she has reached the age of consent.  Marriage is a religious issue.  Civil Unions are a government issue and will be available to any adult partners or groups willing to be united civilly. 

10)  Throughout history, the nations with the highest levels of trade were the nations with the highest levels of prosperity.  Therefore all protective tariffs, quotas, and import taxes will be reduced to the lowest possible levels.  When Target has a sale on jeans, we don't worry about the impact on Wal-Mart, or worry about protecting Wal-Mart from unfair competition.  The same philosophy will apply to all manufacturers and other businesses.  Protecting business equals shafting consumers.   

11)  The government will support your right to shop where you want to shop.  The government will support the rights of businesses to charge whatever they want to charge, as long as it doesn't violate a pre-existing agreement.  The government will support the rights of workers to unionize and also support the rights of employers to kick out the unions and hire someone else. 
It's called "freedom of contract", and these financial transactions are none of the government's business unless one side or the other doesn't follow through on its promises. 

12) As minimum wage laws set an arbitrary minimum threshold for employment, thereby making it illegal to hire anyone whose labor is not worth this amount, minimum wages will be abolished.  The government will no longer saw the lower rungs off of the employment ladder. 

13)  Abortion rights will be left to each state.  No federal funds will be used for abortions, or any other medical procedures. 

14)  Anyone who has paid into Social Security, Medicaid, or Medicare will be given a "cash out" option that he or she can use for retirement, for immediate needs, or to take to Vegas.  Those wishing to remain in the system can do so.  (The money IS still there, right?) 

15)  Anyone wanting to bring ghosts, goblins or gods into a school will have to start a school of his own.  Anyone wanting to pray to these spirits can do so on his own time.  Silently. 

There.  That should do it.  Does anyone want to run those savings past the Congressional Budget Office?  Would we then have some money available to save and create jobs ? 

How to explain the benefits of Free Trade

Here's how to explain the benefits of Free Trade in less than three minutes. 
The next time you hear Lou Dobbs or Nancy Pelosi griping about the "unfair advantages" of those pesky Chinese, Japanese, Messicans, or any other minority they don't like, please think of the Bastiat quote that closes this video:

"Through exchange, they are, in fact, compelled to allow us to share in those unfair advantages"



If you still disagree, think of it this way....What is the last item that you purchased because it was on sale for a great price? Did you ever consider NOT purchasing the item because it would be unfair to the retailers who couldn't offer the same low price?

Go here for more good stuff from The Atlas Network. 

The Texas Trade Surplus

From a Slate.com essay on why Texas is doing so much better than the rest of the nation:

....(Texas) surpassed California several years ago as the nation's largest exporting state. Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas' exports than petroleum does. In the first two months of 2010, exports of stuff made in Texas rose 24.3 percent, to $29 billion, from 2009.

That's about 10 percent of the nation's total exports. There are more than 700,000 Texan jobs geared to manufacturing goods for export, according to Patrick Jankowski, vice president of research at the Greater Houston Partnership. "A lot of it is capital goods that the Asian, Latin American, and African [countries] are using to build their economies."

So....should these Asian, Latin American, and African countries worry about their trade deficit with Texas? 
Heck no. 

What matters is how much "stuff" you swap, and who you're swapping with doesn't matter.  It's all about trades per hour.   
Should Fort Worth residents worry about their trade deficits with cities on the other side of Highway 360 ?
Should Texas residents worry about their trade deficits with states on the other side of the Red River?
How about countries on the other side of the Rio Grande? 
Or the Pacific? 

The lines of latitude and longitude of the factory simply...do....not....matter.  The more you restrict trade, the fewer options your manufacturers have for sourcing raw materials and for exporting finished products. 
Penalizing trade serves no purpose but to negate the gains provided to society by technology, labor, ingenuity, determination and progress. 
If Target or J.C. Penney has a sale on items that you want to purchase, would you avoid those stores because the low prices aren't fair to Wal-Mart? 

Hell, let's put tariffs in place between Fort Worth and Dallas

Don Boudreaux, economics professor at George Mason University, reminds me of an abusive husband.
Every morning of his life, he gets out of bed, takes a shower, eats some breakfast, brushes his teeth, and then kicks the living snot out of New York Times economics columnist Paul Krugman.

In his New Year’s Day column, Paul Krugman argues that protectionism can create jobs in times of unemployment. (Lots of other problems plague this column, by the way.)

If Krugman is correct, why stop at national borders? Just think how many jobs Congress could create by encouraging states to erect their own tariff walls? High-taxing and heavily regulating states would then be able to protect their workers from states with lower taxes and less-burdensome regulations. California wineries would never again lose market share to rivals in Oregon and Washington state. Michigan autoworkers would never again be displaced from their jobs by workers in Tennessee and South Carolina.

Here comes Boudreaux's Karate Kid Crane Kick:

Given Krugman’s assumption that restricting consumers’ freedom to make cross-border purchases increases the total number of jobs in economies suffering unemployment, why let all those borders between Maine and California go to waste? Turn those borders, too, into barriers to trade and watch American employment skyrocket!

Go here for another excellent post called "Nation's Don't Trade With Each Other: Individuals Do".

If that's not enough, go here, and read Fabulous Freddy Bastiat's idea for an un-railroad. (First published in 1845, BTW.) This is a railroad that would allow cheap and easy transportation between countries, so they could enjoy the benefits of each other's strengths. But the railroad would be closed in all places where it would hurt local inefficient producers. (This would create and save jobs ! ! ! !) In other words, the railroad would be closed in all the places where it was most needed.

Tariffs serve no purpose but to negate the gains provided to society by technology, labor, ingenuity, determination and progress.

You read something like this, and wonder how Paul Krugman ever won a Nobel Prize.
Oh.... Never mind.

My Starbucks trade deficit is worsening

Every morning of my life, I spend $2.11 on a Starbucks double espresso. (That's known as a doppio, in the fake pseudo-Italian language Starbucks invented.)


Starbucks spends nothing with me. Nothing. Once a week, I check to see if they need any shipments hauled someplace in the lower 48 states. The answer is always NO.

That's a $14.77 trade deficit per week.

As I understand it, Starbucks arranges all of their freight through someplace in Seattle. How should Texas freight companies respond?
Should we immediately press for tariffs on inbound shipments of Starbucks coffee beans?
Should we lobby for higher road use taxes on all shipments not carried by Texas trucking companies?
Or perhaps we should call for a quota system, where Starbucks continues to ship their beans on non-Texan scab companies, but Texas trucking companies will have to be given their fair share?

There are some who say that these measures will raise the price of coffee in Texas Starbucks stores. But isn't this the only way to achieve social justice at Starbucks?

Don Boudreaux on Free Trade

In our latest effort at re-enacting every single insane move that led to The Great Depression, we've slapped a high tariff on Chinese tires. Perhaps we believe that prosperity comes from protecting manufacturers instead of the rights of consumers.

This is from George Mason University's Don Boudreaux:

Free trade is justified regardless of the trade policies followed by other governments. A foreign-government’s restrictive trade policies or subsidies or high taxes or low taxes or screechy national anthem does not justify your home government restricting the freedom of you and your fellow citizens to trade as you choose.
Your government should take other governments’ trade and economic policies as given, much as we take consumer tastes and preferences as given.
If your neighbor offers to mow your lawn for free because his psychiatrist recommends such mowing as a sure cure for his depression, should you refuse his offer? If your neighbor offers to mow your lawn for free because he is convinced by some silly book of the wacky notion that exports are good and imports are bad, should you refuse his offer?
If your neighbor chooses to become utterly self-sufficient, refusing to consume anything produced outside of his own household, you might properly regret (1) that he and his family will likely become much more materially impoverished than your neighbor realizes, and (2) that you and other people in the economy will be deprived of the additions to total output that your neighbor would have added had he chosen not to cut himself off from the larger economy.

Ok, here comes the Karate Kid Crane Kick....

But ultimately it’s none of your business. You have no right to insist that, in the interest of a larger GDP, your neighbor must integrate himself more fully with the outside economy.

Now suppose that your self-sufficient neighbor, still refusing to consume anything not produced by his own household, offers to sell to you — say, in exchange only for a friendly smile from you — some tomatoes from his garden. You examine his tomatoes and determine them to be first-rate. Should you refuse to accept your neighbor’s tomatoes in exchange for a quick smile, on grounds that your neighbor will not, in exchange for his tomatoes, really purchase anything from you or from the outside economy? Would you make yourself richer by refusing his offer?

You may legitimately question the wisdom of your neighbor’s policies. But regardless of what you conclude, your best course of action will always be to trade freely with him, and with everyone else.

I've forgotten where I found the picture of the Karate Kid's Crane Kick, but I gave credit the previous times that I've posted it. I'm grateful that I'm not restricted to pictures produced "by my own household".

The Descent Into Tribalism

This is how it begins. Here's The Washington Post:

Ordered by Congress to "buy American" when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.

I try to explain this in online debates. I labor in vain to explain it at parties. I blog about it at least every two weeks. I point back to the causes of The Great Depression.

I get nowhere.

Let's try again....

A "Buy American" provision in a piece of legislation is no different than a "Boycott Foreigners" provision.

This pisses off the foreigners, and they pressure their governments to retaliate.

Outrage spread in Canada, with the Toronto Star last week bemoaning "a plague of protectionist measures in the U.S." and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts -- the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.

But wait, there's more ! !

Take, for instance, Duferco Farrell Corp., a Swiss-Russian partnership that took over a previously bankrupt U.S. steel plant near Pittsburgh in the 1990s and employed 600 people there.
The new buy American provisions, the company said, are being so broadly interpreted that Duferco Farrell is on the verge of shutting down. Part of an increasingly global supply chain that seeks efficiencies by spreading production among multiple nations, it manufactures coils at its Pennsylvania plant using imported steel slabs that are generally not sold commercially in the United States. The partially foreign production process means the company's coils do not fit the current definition of made in the USA -- a designation that the stimulus law requires for thousands of public works projects across the nation.

There are only two reasons we could have ignored this much history to do something this destructive.

Pick one: 1) the Swiss and the Russian owners of this company can't contribute to election campaigns, or 2) Barack Obama is a drooling idiot.

Neither choice reflects well on us.

In recent weeks, its largest client -- a steel pipemaker located one mile down the road -- notified Duferco Farrell that it would be canceling orders. Instead, the client is buying from companies with 100 percent U.S. production to meet the new stimulus regulations. Duferco has had to furlough 80 percent of its workforce.

"You need to tell me how inhibiting business between two companies located one mile apart is going to save American jobs," said Bob Miller, Duferco Farrell's executive vice president. "I've got 600 United Steel Workers out there who are going to lose their jobs because of this. And you tell me this is good for America?"

Bob, your largest client purchased cold-rolled or hot-rolled steel from you because you had the best product for the best price. This created a substantial savings for the end users, whether they were purchasing cars, knives, lawnmowers, scissors or road signs. And what did we consumers do with these savings?

We went to parties. We had fun with our children. We saw movies, lectures, Tennessee Williams plays, Verdi operas, Rogers & Hammerstin musicals, Bob Dylan concerts, and NASCAR races.

People are incredibly creative, and I'm not just talking about Tennessee Williams, Verdi, or Dale Earnhardt, Jr.

I'm talking about Russian and Swiss steel manufacturers. Canadian pop-rivet suppliers. Israeli electronics distributors, They've all allowed us to save time and money. They've allowed us to come down from the trees, take advantage of their wonderful inventions, and profit from them. And you shouldn't have to be from Russia, Switzerland, Canada, or Israel to benefit from their work.

Here's one of my favorite NickM quotes. (Nick's "Counting Cats" site is down today for some reason. Perhaps the British Blog embargo is already underway.... Otherwise, I'd link it.)

"We emerged from tribalism and through the PC mob we are returning to tribalism."

If there's a better way to explain what we're now seeing, I'm all ears.

Idiot picture from here. A tiresome prophecy where I predicted all of this can be found here. You can visit the Duferco Farrell website by clicking here. For daily updates verifying that Barack Obama is an idiot, click here.

Follow-up Hypothetical Question

Here's a follow-up to the previous hypothetical question, which I'll copy here:

Imagine you live in an apartment complex with a diverse assortment of tenants. There's a butcher, a baker, and a candlestick maker. A doctor, a lawyer, and an Indian Chief. A truck driver, a dentist, a mortician, a schoolteacher, and a mechanic.
Anything you need, you can get from the residents of your apartment. No one purchases anything from anyone outside the apartment complex. It helps to protect your apartment complex's jobs.
There's a slight problem. The schoolteacher hates kids. The truck driver is an alcoholic. The butcher is a Muslim, and won't handle pork.
Should you be allowed to trade with people who live in other apartment complexes? Even if it endangers the jobs of those in your apartments?

If someone uses the services of people living in another apartment complex, lessening the amount of potential revenue within the landlord's grasp, what percentage penalty should he/she be required to pay on those transactions?

Another hypothetical question

Imagine you live in an apartment complex with a diverse assortment of tenants. There's a butcher, a baker, and a candlestick maker. A doctor, a lawyer, and an Indian Chief. A truck driver, a dentist, a mortician, a schoolteacher, and a mechanic.

Anything you need, you can get from the residents of your apartment. No one purchases anything from anyone outside the apartment complex. It helps to protect your apartment complex's jobs.

There's a slight problem. The schoolteacher hates kids. The truck driver is an alcoholic. The butcher is a Muslim, and won't handle pork.

Should you be allowed to trade with people who live in other apartment complexes? Even if it endangers the jobs of those in your apartments?