Nothing to do with economics, but...

So I was on YouTube and I found this video:
http://www.youtube.com/watch?v=_Qsz1gykZBI
It's a flash mob doing a dance routine! I was actually there that day.

Jeffrey Sachs on decreasing extreme poverty and deprivation in Africa

In this youtube video, Columbia University economist Jeffrey Sachs, one of the world's foremost scholars on poverty reduction, offers his insights on reducing the pervasiveness of extreme poverty, especially in Africa, within the next decade.
www.youtube.com/watch?v=CEJCWQZvTCM

One interesting claim he makes is that the use of mobile phones helps, at least to a certain extent, to eliminate such widespread poverty. I agree with him on this matter, and the veracity of this claim will be verified as the events of the next decade unfold.

Smoking a Toke May Be Legalized and Regulated Soon Enough

In a recent issue of The Economist magazine, there was an article describing the the results of a poll in regards to people's news about marijuana.
The question was:
Marijuana should be legalised, taxed and regulated.
The responses were as follows:
Agree
Disagree
Don't Know

When excluding the people who responded with "Don't Know," the great majority-roughly two-thirds of the entire surveyed population-said they agreed.

For one of my presentations for a class, I argued that the war on drugs has not been successful, and that policy makers should focus on being more proactive rather than reactive. This means that instead of severely punishing people indicted for drug use, policies should focus more on prevention.

People who do not agree might believe that when drugs like marijuana are legalized, havoc will be brought upon society and tearing apart the fabric that holds society together. I ask, what is so different between smoking cigarettes, drinking alcohol, and smoking marijuana?

As someone who does not smoke marijuana, I truly believe that the illegality of marijuana does more harm than good. Cigarettes are severely taxed, raising revenue for other projects such as public works, and because cigarette consumption is more elastic for younger populations, heavy taxation on tobacco products has deterred many young people from smoking.

The same policies could be implemented should marijuana be decriminalized. I also believe that the legal drinking age should be lowered, but that is a topic for another time.

Check out this article:
http://economics.about.com/od/incometaxestaxcuts/a/legalize_pot.htm

For a compelling case by Nobel Laureate Milton Friedman of the University of Chicago, check out the following video:
http://www.youtube.com/watch?v=nLsCC0LZxkY&feature=related
The most interesting quote I believe from this video is:
"Crack would never have existed...if we had not had drug prohibition."
Non-economists might question the veracity of this claim, but should it prove to be true, then the drug prohibition was counterproductive on this front as well: Crack cocaine is considered one of the single most damaging products introduced to American society, especially amongst African Americans. Thus, the drug prohibition had devastating effects that extended well beyond the simple use of marijuana.
For more information about the damage of crack cocaine on society, check out this article by  

The Ban on FourLoko: What is Seen and What is not Seen

     In French economist Frédéric Bastiat's commentary on economic sophisms, Bastiat emphasizes his assertion that the only difference between a good economist and a bad one is that the good one is able to foresee consequences that are not immediately visible. While it may be a stretch to say this is the only difference, Bastiat does make an important point: Oftentimes, policy makers enact policies that have results extending far beyond what was originally intended. These unforeseen consequences should be taken into account when making policies.
     Therefore, I ask that we carefully reconsider the ban on the FourLoko drink.
     Fourloko, invented by three Ohio State University graduates in 2006, is an alcoholic drink with a twist: It is also an energy drink. The dangers of mixing alcohol and caffeine are immediately visible. For example, one University of Florida study found that people who mixed caffeine (a stimulant) and alcohol (a depressant) together thought they were capable of operating motor vehicles more often than those who only drank alcohol.
      While at first the ban looks like a great idea, federal and state legislation need to carefully reconsider the effects of their actions. Thus, I have the following questions to ask to legislators:
     1) Do many college students drink underage already?
     2) When Fourloko is banned, do you believe that students will find substitutes for attaining the same level of euphoria or enjoyment from this caffeinated alcoholic drink? Possible substitutes include other forms of hard alcohol, mixing their own drinks made from alcohol and caffeine, prescription drugs, and hard drugs.
     3) Economists believe that people are rational. While I agree that when intoxicated, people are not exactly in a completely rational state, the purchase of the fourloko occurs before any consumption. Why, if Fourloko is so bad, do the students still select to drink it?

     I believe that we should focus on prevention rather than punishment (this is the same argument I made for an essay I wrote on why the war on drug is failing, but that is beyond the scope of this post). Policy makers should have the option of this beverage available to college students and others, but they should encourage these young consumers to select other, healthier choices. I therefore believe the ban on Fourloko is actually counterproductive, and having more options available will only make the general underage drinking population safer.

     For further insights, check out this youtube video: Fourloko Ban. Though it is a rather humorous video, it does indeed highlight many good points.

Frederic Bastiat Legacy Essay Contest

http://beforeitsnews.com/story/363/415/Bastiats_Legacy_Essay_Contest_Winners.html

http://studentsforliberty.org/news/bastiats-legacy-essay-contest-winners/

These are the winners for the contest. The essays are downloadable and viewable straight from these websites.

Also, check out this article written by a former economics professor of mine, Mr. Allen Sanderson. His article is about the same topic and shares similar sentiments as the winning essay for the aforementioned contest.

http://www.chicagolife.net/content/politics/JOBS_JOBS_JOBS

The Chinese Exclusion Act of 1882 and Its Impact on North American Society

This is an essay I wrote, focusing primarily on the economic impact of the Chinese Exclusion Act of 1882.

The Chinese Exclusion Act of 1882 and Its Impact on North American Society

The Impact of the Stimulus Bill on the Labor Market: Does It Work, or Doesn’t It?

The Impact of the Stimulus Bill on the Labor Market:

Does It Work, or Doesn’t It?

         The rallying cry of “Buy American!” can be heard pervasively across the nation, stirring nationalist sentiments as America trudges along the path of economic recovery from the worst recession since the Great Depression. One of the most sharply divided debates in public policy is the one about the stimulus bill implemented in February 2009 called The American Recovery and Reinvestment Act.

         The American Recovery and Reinvestment Act’s controversial Buy American provision stipulates that if a project is on a public work, then all the iron and steel used in the project must be produced domestically. This provision aims to preserve or create at least three million manufacturing jobs for Americans. Will this policy retain jobs for Americans and spur economic growth, or will it ultimately diminish the welfare of the nation? In the short run, protectionism indeed preserves jobs for protected industries. However, as indicated by the 19^th-century French economist Frédéric Bastiat, protection through free-trade restriction is an economic fallacy; in the long run it will slow down economic progress and represents a sheer loss to society.

         Frédéric Bastiat, in his influential commentary on economic sophisms “What is Seen and What is Not Seen,” reveals the fallacies contained in the argument for protectionism as a method of stimulating economic growth. Without limitations on trade, consumers can enjoy lower prices for the goods they consume. His essay outlines the argument of “Mr. Protectionist,” who asserts that by eliminating foreign competition, domestic firms can profit more through higher prices.  When firms charge higher prices, they help stimulate the economy by employing more workers and other resources. In turn, the incomes of resources owners will increase, and they will then consume more, thus fostering economic activity across the nation.

         Though Mr. Protectionist’s arguments are not false, they fail to account for economic consequences not immediately visible, as is the case with supporters of the stimulus plan. Bastiat reasoned that a law restraining free trade involves three key players. The first two are directly involved in the transactions as the buyer and seller. They are seen. The third could have been involved as the seller of whatever goods or services the consumer would have purchased from had it not been for the trade restriction; this third figure is not seen. At same time, this third player could have had more money to spend had it not been for the protectionist policy.

         Supporters of the stimulus plan may wonder, “How is it possible for anyone to have more spending power when jobs are being ‘outsourced?’”

         The consumers who would have paid less for building materials could have spent the money they saved elsewhere. Additionally, they could have purchased something else and gained enjoyment from the consumption of what they purchased. However, restrictions such as the Buy American provision result in consumers losing the value of whatever goods they could have purchased when free trade and competition resulted in lower prices before the protectionist policy. The double loss of the consumers offsets the gains made by the manufacturers and sellers of steel and iron.

         In applying Bastiat’s central theme to the Buy American provision of the stimulus plan, the three million jobs created or saved in the United States’ manufacturing industry are undeniable; because steel and iron cannot be obtained from abroad for public construction, they must be produced domestically, which means manufacturing jobs for Americans. This is seen.

         The not seen are the jobs that would have been created in other industries, as well as the enjoyment that would have been obtained from the consumption of the goods and services provided by non-Americans.  Frédéric Bastiat’s concept of unseen consequences does not simply exist in theory. For example, in the 1930’s the Smoot-Hawley Tariff Act imposed taxes on over 20, 000 imported goods, which distorted and limited free trade. Economists now widely believe that this tariff greatly exacerbated the severity of the Great Depression.

         To echo the sentiments of Harvard economist Dr. Nicholas Gregory Mankiw in his 2009 New York Times article, this is no time for protectionism. Both the arguments presented by Frédéric Bastiat and lessons learned from public policy history demonstrate that protectionist policies lower the overall economic well-being of the nation and serve only to impede economic growth. The Buy American provision is therefore counterproductive; it defies economic wisdom and undermines the very economy it seeks to help recover.