economic freedom heritage foundation insider information crony capitalism

America is 10th on the Heritage Freedom list
liberty equality of opportunity duty of landholding

Crony Capitalism Day Kits, At Your Request

Three DC organizations work for freedom for you. We trim, blend, and append four 2012 articles from: (1) Downsizer Dispatch, Jan 16, on US’ rating by P. Willis (Co-founder, DownsizeDC.org); (2) Weekly Wastebasket, Jan 20, on log-rolling by TCS; (3) SFL e-newsletter, Jan 26, on crony capitalism; and (4) Institute for Ethics and Emerging Technologies, Jan 25, on true economic freedom by Edward Miller.

by Perry Willis, by Taxpayers for Common Sense, by Students for Liberty, and by Edward Miller

Nine other nations are more economically free than the United States. That’s America’s standing in the latest Index of Economic Freedom, compiled by the Heritage Foundation and the Wall Street Journal (to see the survey, click here ).

To see the whole article, click here .

JJS: Most economies are hampered by taxes and regulations but those result from the deals between politicians and business people, deals that make both sides pretty rich -- at the expense of everyone else.

Eight years ago, a group of academics wondered if lawmakers were using their special access to sensitive information to make money on the stock market. They studied the returns from the common stock investments of members of the U.S. Senate between 1993 and1998. In December 2004, they reported their findings in the Journal of Financial and Quantitative Analysis:

"Cumulative abnormal returns for the portfolio of stocks bought by Senators...suggest that Senators knew appropriate times to both buy and sell their common stocks...We find that stocks purchased by U.S. Senators earn statistically significant positive abnormal returns outperforming the market by 85 basis points per month on a trade-weighted basis as a further indication that Senators use their informational advantage."

The best and most obvious solution is to prevent members of Congress and other federal staff from acting on insider information gained through their day job by requiring them to put their financial holdings into a blind trust. Right now, there are no restrictions on members or staff owning shares in companies regulated by their committees. Rep. Bachus, perhaps feeling the heat, has introduced legislation that would do just that, in H.R. 3549.

Congress can't stop there, however. Not surprisingly, an entire marketplace has developed for insider information that can be legally obtained through Congressional sources immune to the same standards as the general public. So-called political intelligence consultants squeeze Congressional sources for information they can feed back to hedge funds to make better investing decisions. This is as bad as it sounds, and Congress needs to put a plug in that leak, too.

Last year, the same group of scholars repeated their study of abnormal stock market returns, this time for House members. It turns out portfolios of House members also outperform the market by 55 basis points per month or 6 percent annually. We have known insider trading has been going on in Congress for almost a decade. It's time to do something about it.

To see the whole article, click here .

JJS: To do something about it, we could change who gets to spend public funds. Instead of letting politicians do it, as favors for their friends, we could do it ourselves. That is, government could distribute a goodly portion of public revenue to the citizenry equitably. If politicians could not or spend in ways to benefit special interests, then they’d no longer have any favors to sell to business people. In fact, businesses would contribute far less to electoral campaigns, so winning would become cheaper, so a different quality of candidate could run and win. Such candidates who’re less beholden to the elite might appreciate a new campaign for reform.

This Valentine's Day you have the opportunity to participate in a national event to end crony capitalism! February 14, 2012 is National Expose Cronyism Day on college campuses across the country. This national campaign, organized by Crony Capitalism = Phony Capitalism, will expose the love between big business and big government to college students. If you would like to join in this event we will provide tabling kits, free of charge, for your student group. To request a kit, click here . Requests must be filled out by tomorrow, January 27, at 12 Noon.

The International SFL Conference is the premiere event of the year for students dedicated to liberty and advancing freedom on campus. The world’s largest crowd of pro-liberty students will gather for a weekend of learning about liberty from contemporary leaders in liberty, discussing best practices for promoting liberty on campus, and getting more involved in the larger movement for liberty. Register by February 3! To register, click here .

JJS: The key missing ingredient to freedom, both economic and political, is the proper treatment of land, locational value, and social surplus. As long as those are up for grabs, then economies get distorted, polities get distorted, and people can not be free. For freedom to reign, then society must recover the values that it generates and share them fairly.

I’m talking about a revolution: a revolution of liberty, of prosperity, of human relationships, of ecological relationships. We can eliminate taxes and debt, poverty and special privilege. Contrary to the dour pronouncements from the curators of the dismal science, we can have it all.

The commodification of land itself is not the issue. The issue is who gets the benefits of the access rights. Anything less than an equal share is a violation of the Law of Equal Liberty, for any exclusive claim over natural opportunities necessarily reduces the opportunities available for everyone else. There is only one way to ensure equality of opportunity: for the community to recapture the value of land.

It is for these reasons that virtually all the notable classical liberal political economists supported the idea of the community recapturing the land values, using the discourse of taxation.

Landholding ought not be seen as a no-strings-attached sovereignty. A true libertarian position recognizes that landholding comes with obligations: obligations to internalize negative externalities, and obligations to respect the Law of Equal Liberty. Sure, both of those things may be difficult to do, and may not be accomplished perfectly, yet we must try to achieve them one way or another.

That we have obligations when we take on the duty of landholding might come as a shock to some, but it is the only position consistent with liberty, and key to our success.

Inequality is dangerous to liberty, and can enable vicious feedback loops of rent-seeking, which sets the stage for corporatism on one hand and state socialist counter-reactions on the other. Vast fortunes should not be worshipped by those who love liberty. They should be looked at skeptically, and seen as a red flag that something is amiss. Most great fortunes are not the result of voluntary interactions in the market, but by direct or indirect state intervention on behalf of the powerful. The mother of all those privileges is land speculation.

To see the whole article, click here .

JJS: And one can not be free unless one has free time. Fortunately, leisure time would result from a free and fair economy. While no place has adopted the entire system, all of the places that have adopted some have benefited impressively.

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Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

The Global Economy's Corporate Crime Wave
http://www.progress.org/2011/gross.htm

US aid rules in Somalia are impossible, says UN envoy
http://www.progress.org/2010/somalia.htm

ClawBack details tax bias for big business ...
http://www.progress.org/2011/galbrait.htm

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