More on who owns the fruit of your labors – raisin edition

The Wall Street Journal editorial page has a few more comments on the Supreme Court ruling that when the Department of Agriculture ‘takes’ a portion of the crop from raisin farmers, the farmers have to be paid for the ‘taking’: Raisin Owners in the Sun. Previous discussion of the ruling is here.

Editorial points out the law authorizing the feds to take whatever amount of agricultural crops they want and pay whatever little amount they want was passed in 1937, which is 78 years ago. This case centers on crops that were seized in 2003 and 2004. The later of those two attempted seizures was 11 years ago.

That makes eight decades for the Supreme Court to get around to reading the Constitution and just over a decade for this case to work its way through the legal system.

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More on stealing raisins. Oops. I meant to say, more on implementing the New Deal.

The New Deal policy of confiscating a portion of raisins from farmers every year in order to drive up prices to consumers has been previously discussed here, here, and here.

The Wall Street Journal provides more background on this foolishness that is being considered in the Supreme Court today: The Incredible Raisin Heist / A property-rights challenge to federal marketing orders hits the Supreme Court.

(Cross-post from my other blog, Outrun Change.)

I’ve been wondering what the Raisin Administrative Committee does with all those raisins after they are surrendered by the farmers. Editorial points out the government may sell the raisins on the open market, ship them overseas, or just give them away.

I have to find someone far brighter than me to explain how selling the raisins or giving them away stabilizes prices. Seems that would drop prices to what would otherwise be equilibrium or even lower.

The WSJ editorial outlines the progress of the case through the federal courts. I promise you this is a paraphrase of the editorial and not the outline of a dystopian political novel I’ve been mulling over.

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Supreme Court to hear arguments whether feds can continue to take raisins without compensation

For reasons that defy logic, common sense, and basic morality, the federal government still has in place a New Deal era policy that raisin farmers must turn over some percentage of their crop to the federal government without compensation.

The purpose of the program is to increase prices to consumers.

No, this isn’t an April Fool’s Day post.

No, I’m not making this up.

George Will points out in his April 17 article, Shriveled grapes, shriveled liberty, the Supreme Court will finally hear oral arguments next Wednesday (4/22) on a case that has been in court for years.

(Cross-post from my other blog, Outrun Change.)

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Frauds are a cancer destroying capitalism

My previous post described a comment by Sam Antar during his CPE session that the fines arising from of a long list of financial fiascos are essentially a tax on illegal behavior.

He made another comment in that session that I wanted to describe in detail. He said these frauds are a cancer destroying capitalism.

I had opportunity to visit with him a few weeks ago and asked him to expand on this idea. I will summarize what we discussed.

This discussion is cross-posted from my other blog, Attestation Update, since it directly affects freedom, capitalism, and morality.

Cancer destroying capitalism

He indicated the foundation of capitalism is reliability of financial information. If you can trust financial information you read then we can do business with each other.

He says the extent of frauds we have seen are leading people to lose faith in financial information. That leads to loosing faith in their counterparties. Therefore people have less trust. In financial terms that means the risk premiums for transactions go up. The interest rate built into a transaction increases and the return drops.

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Huge fines are a tax on illegal behavior

Several weeks ago I listened to a continuing education class presented by Sam Antar, current felon and formerly CFO of Crazy Eddie.

In the session, he made two comments that caught my ear. First, the fines we read about as a result of various financial scandals are just a tax on illegal behavior. Second, those fiascos are, he said, a cancer destroying capitalism.

After the session, I had opportunity to interview him by phone and follow-up on both of those ideas.

(This discussion is cross-posted from my other blog, Attestation Update, because this is not capitalism and I don’t think the underlying issue furthers freedom.)

Fines are a tax on illegal behavior

He indicated that essentially no one has been implicated in any of the disasters we’ve read about, which I have discussed extensively on my blog.

He said corporations don’t commit crimes. People commit crimes.

And the people who committed crimes aren’t going to jail.

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Protectionism – Can someone explain to me how that can be moral ?

Protectionism is the idea that the government can protect me from foreign companies that want to sell me something at a lower price that the government thinks is fair. As a result, I pay more than I would otherwise.

Professor Don Boudreaux published a letter to Wall Street Journal editor explaining why protectionism is immoral. Here’s his letter, quoted in full since it is an open letter to the editor,with the key paragraph expanded into bullet points: (more…)

Appeals court says devastation from New Deal is still okay; We lost a hero who also suffered at the hands of the New Deal

Did you know the enlightened wizards of the New Deal worked out a plan that raisin producers had to turn over a percentage of their crop to the government and not get paid for the raisins?

Yes, that was actually a plan developed back in the ‘30s.

Did you know that plan is still in place? Eighty years later?

(Cross posted from my other blog, Outrun Change.)

I discussed that a year ago – Economic destruction from the New Deal just keeps rolling on.

The lawsuit I mentioned back then involved farmers who were told to give 47% of their ’02 crop and 30% of their ’03 crop to the government without compensation.  The case went to the Supreme Court, which ruled the farmers did actually have standing to sue the government. The case went to the 9th Circuit Court for consideration of their claims.

Guess what?

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The minimum wage made unemployment worse during the Great Depression

Minimum wage laws also extended the Depression. That from Amity Shlaes, in The Minimum Wage Makes Depressions Worse. (cross post from Outrun Change.)

In a lousy economy, forcing wages above the value of the output makes employment worse. When there is currency deflation the effect is compounded. Adding another layer of minimums every couple of years and slowly gathering more employers into the minimum wage rules further compounds the effect.

If you can’t afford the staff you have, and you can’t reduce wages, what options are left? Lay off more employees. Shrink your company.

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