Zenconomics

How Free Markets Enhance Freedom of Choice

Ludwig von Mises was careful to establish the individual actor as the basis for all economic analysis. An individual acts to improve his circumstances. To do so, he chooses among various available means in order to achieve his ends. Those ends are based on his individual values, which are subjectively established. Methodological individualism and dynamic subjectivism are distinctive features of Misesian Austrian economics.

The Importance of Economics Based on the Individual

Interventionists and Keynesians, on the other hand, use economic aggregates such as GDP and aggregate demand as their basis for analysis. By reducing economic activity to a matter of measuring aggregates, interventionists seek to justify the manipulation of those aggregates in order to establish policy goals, and to design interventionist policies that purportedly are intended to achieve those goals.

In order to manipulate such immense aggregates, Keynesians turn to powerful government institutions that, the Keynesian rationale goes, are necessary to manage such a huge economy. These institutions include not only government agencies and regulations, but also their favored partners including big banks (protected financial franchises benefiting from central bank policies and bailouts), big pharma (government-protected pharmaceutical monopolies), and big food (government-protected purveyors of government-approved diets).

This regulation and manipulation is supposedly done for the good of “the economy,” but in the face of so much government favoritism and management for the benefit of certain special interests, it is easy for individual economic actors to feel disempowered. And it’s not just a feeling. The more government intervenes to control markets, the less sovereignty the consumers have.

How Governments Destroy Competition

An example is the increasing domination of the major Wall Street banks in the US. Consumers and small businesses report in surveys that two-thirds of respondents consistently report dissatisfaction with big banks, and three-quarters say it is important to bank locally. Yet, the number of community banks has declined by 24 percent over 2000–2013, while big banks grew their share of deposits — the five biggest banks now hold 47 percent of deposits, and in some counties, as much as 75 percent of deposits. Their low consumer satisfaction scores are a result, at least in part, of higher prices. For example, Consumer Reports found that the ten largest banks charged a monthly fee of $10.27 for a non-interest checking account, compared to $7.45 at small banks and $6.00 at the ten biggest credit unions.

Professor Amat R. Admati of Stanford University stated in testimony to the Senate Banking Committee in July 2014 that Too-Big-To-Fail legislation provides an explicit subsidy to large banks in the form of a lower cost of capital, and bemoaned the “extreme opacity of large banking institutions” that grow “to inefficiently large sizes.”

Yet customers do not switch. Some of this can be explained by the convenience found in banking with a very large enterprise, but consumers also find it costly to switch to smaller banks in the face of market dominance facilitated by government protection.

Things would be different if big banks had to truly compete. In Liberty and Property Mises explained that the real power in the market lies with individual consumers who are making the choices that ultimately determine output and prices; he termed it “consumer sovereignty.” Murray Rothbard in Man, Economy, and State elevated the idea of individual economic power, emphasizing not only the right to choose, but also (and perhaps more tellingly) the right to refuse: “Economic power, then, is simply the right under freedom to refuse to make an exchange. Every man has this power. Every man has the same right to refuse to make a proffered exchange.”

To choose and refuse to make an exchange, i.e., to do business with any other economic entity, is the essence of individual economic power.

True Diversity in the Marketplace

True freedom in the marketplace can greatly shape a consumer’s entire lifestyle.

In their financial lives — if true market competition is allowed — individual economic actors can refuse to do business even with big Wall Street or global banks, and choose, instead, community banks or credit unions.

In their home lives, consumers can install solar panels or a home generator and disconnect from the regulated energy utility. This releases them from guaranteed price increases, often caused by the need for the utilities to support their excessive pension commitments, and the charges imposed by the forced redistribution of energy subsidies to low-income households.

Consumers can refuse to buy from the food companies that hide behind government food regulations and agricultural subsidies, and instead choose smaller, more local and healthier options. They can choose online education in the form of free MOOC’s (Massive Open Online Courses offered by top professors at many universities) or pay per course from online providers like Udemy, and refuse the offerings of pro-government biased content and tenured Keynesian professors. They can choose Uber and refuse the highly regulated local taxi monopoly, which is often typified by old, uncomfortable, and poorly maintained vehicles caused by the high cost of taxi regulations and lack of competition.

On the other hand, every government subsidy, every regulation, and every tax-code change that favors one group of businesses over another reduces consumer sovereignty. This interference results in monopolies and oligopolies which are typically the product of government intervention in markets.

Nevertheless, short of a total monopoly — such as those often enjoyed by the government itself in law and other areas — the individual economic actor does have freedom to refuse to do business with these government-favored industries.

A Partnership of Entrepreneurs and Consumers

Freedom of choice is best secured by allowing true freedom for both entrepreneurs and consumers.

Entrepreneurs “are at the helm and steer the ship,” Mises noted in Human Action. “But they are not free to shape its course. They are not supreme, they are steersmen only, bound to obey unconditionally the captain’s orders. The captain is the consumer.”

Not only is the exercise of individual economic power a choice, it is a powerful tool for directing change, one that we can wield with purpose. As Frank Fetter wrote in The Principles of Economics: “Every individual may organize a consumer’s league, leaguing himself with the powers of righteousness. Every purchase has far-reaching consequences. You may spend your monthly allowance as an agent of iniquity or of truth.”

Article originally posted at Mises.org.

Fruits and Vegetables May Protect Kids From Asthma and Allergies

by Neustaedter, OMD – ICPA.org:

Children in rural Crete have an especially low incidence of allergies and wheezing (asthma). The diet among this population is typically high in locally grown fruits and vegetables. These facts led researchers to examine whether there was an association between diet and allergies in these children.

What they found can reassure and inspire us all as parents to pursue a healthy whole foods diet for our children.

The study included 690 children aged 7 to 18 years living in rural areas of Crete. Parents completed a food questionnaire that rated intake on a scale of six from never to more than once per day for each category of foods. The foods in the survey included vegetables, fruits, nuts, fish, cereal, dairy products, meat, poultry, and margarine. Parents also completed a symptom questionnaire that included a current history (in the past 12 months) of respiratory and allergic symptoms.

They discovered that children with a daily consumption of grapes, oranges, apples, and fresh tomatoes had less asthma. Eating oranges, but not other fruits, was associated with less nasal allergies. Eating nuts more than three times per week was also associated with less wheezing.

Consuming margarine, however, showed a correlation with more wheezing and allergies. Other suspect food items, such as fast foods and fried foods, were not included in the study. Other studies have shown an increased incidence of asthma in children consuming fast foods.

The traditional Mediterranean diet contains a high proportion of fruits, vegetables, beans, nuts, and seeds, and is high in essential fatty acids, fiber, polyphenols from olive oil, and vitamins E and C. In this study children with a primarily Mediterranean diet had a lower incidence of nasal allergies and nighttime coughing.

The message from this study is clearly that children with allergies may benefit from eating a diet with a high proportion of fruits and vegetables, and that this type of diet may be preventive for allergies and asthma as well. Parents would do well to make fruits available to children throughout the day, pack fruits in school and camp lunches, and avoid processed foods with added sugar and corn syrup. Never use margarine. And don’t forget to include nuts in children’s diets as well (including walnuts, pecans, and almonds).

Article originally posted at ICPA.org.

How Truly Free Markets Help the Poor

by Ryan McMaken – Mises Daily:

Discussing poverty as an advocate of free markets is tricky business in today’s world. If one takes poverty seriously and points out the very real plight of the impoverished, it is often assumed that one must therefore be advocating for government “solutions” to the problem. The knee-jerk reaction of many defenders of free markets is to simply deny that poverty exists much at all, or that if the poor just try a little harder, or aren’t so lazy, they won’t be poor anymore.

This sort of reaction is natural for one who labors under the mistaken impression that the American economy is a free-market economy. Since the American economy is so free and filled with opportunity, they think, there’s really no excuse for being poor.

But, of course, the American economy isn’t even a mostly free economy. The entire financial sector is heavily subsidized and regulated. The regulatory costs imposed on small businesses are enormous. Trade of all types is regulated, and many goods are prohibited outright. Minimum wages make many entry-level jobs illegal, and one can’t even drive people around for money without facing a bevy of government regulations — and sanctions.

With all these millstones tied around the necks of poor and low-skilled workers, it’s a bit nonsensical to declare that poor people should just try harder. Perhaps they did try, and the government sent them the message loud and clear: “just give it up, because we’ve made everything you’re qualified to do illegal.”

Yes, it’s true that, to the extent markets are still free, they have led to an abundance of conveniences that even the poor can afford: air conditioning, television, household appliances, cell phones, and more. But at the same time, it would be wrong to sit back and say “they have enough” when an even greater abundance is to be had if the poor were simply given the freedom to work and own businesses without navigating a myriad of government requirements and regulations that often pose an insurmountable opportunity cost.

There are several ways that a turn to freer markets would open up a whole world to low-income families and unskilled workers immediately.

End the Minimum Wage

This is one of the worst offenders since it renders jobs illegal for the most unskilled workers, and hits the poor the hardest. As explained in the pages of mises.org, the primary effect of the minimum wage is to make the lowest-skilled workers legally unemployable. In other words, if the minimum wage is $10 per hour, and a worker only produces $8 of goods or services per hour, he will never be hired. Naturally, with a little experience, an unproductive (in the economic sense of the word) worker becomes more productive with job experience. But with a minimum wage, how is the worker supposed to get his first job? He can’t. As a result, many workers caught up in this catch-22 become long-term welfare recipients or they turn to black markets where they are branded criminals by the legal system.

Abolish All Income Taxes (Including Payroll Taxes)

Even low-income wage earners pay taxes on income. Social Security and Medicare taxes are nothing more than income taxes that go straight to the general fund — the “social security trust fund” does not exist. That claim by Mitt Romney that half the country doesn’t pay income taxes was never anything more than disingenuous political hair-splitting. Payroll taxes are income taxes, and we all know they take a big bite out of our paychecks, at all income levels.

Thus, even the poor pay taxes to finance TARP and various bailouts of the ultra-rich. As if this insult were not enough, the federal government then punishes the poor further with a central bank that punishes them for saving what little they can.

End the Fed

The Federal Reserve — and central banks in general — have in recent decades functioned largely to push down interest rates and devalue the currency.

The Federal Reserve — in addition to giving us the gift of the boom-bust cycle — has been key in bailing out huge too-big-to-fail corporations and has facilitated endless government spending on wars, corporate welfare, and social programs. Whether the amount of money poured into low-income households via social programs rivals the amount of money sucked out of them — in the form of devalued currency and below-inflation interest rates for low-income savers — remains to be seen.

What we do know is that the Fed’s commitment to low interest rates has made it almost impossible to save money through savings accounts and other low-risk traditional investments. Once upon a time, it might have been possible to put money in a savings account or CD and receive a respectable amount of interest on those funds, and at least earn an interest rate that exceeded the inflation rate. That certainly isn’t possible today. If you’re poor and try to make any returns off a savings account or CD, you’re out of luck. You’ll be very lucky to get 0.9 percent, and you’ll probably get lower than that. Meanwhile, the official low-ball inflation rate is well above that. So, your savings lose value in real terms constantly. You might as well keep that money in your mattress — where your money will also constantly lose value. On the other hand, if you have $100,000 to put in a CD right now, you might be able to get 1.5 percent at some banks. But poor people rarely have that kind of money lying around. People with more money are able to hire financial advisors and stock brokers and better keep up with an inflationary economy. The poor are just on their own.

Stop Regulating Small Businesses

Starting small businesses are often the preferred way for low-income, non-white workers to find work and build capital. Immigrants often turn to small businesses because they offer flexibility and work for people who are unattractive to larger established operations. While the wages and incomes associated with small businesses are often lower than they are in larger businesses, many turn to small business employment because they offer many non-monetary advantages over other types of income.

Governments work to crush small businesses on a daily basis. Every small business owner must deal with a myriad of government agencies from the IRS, to OSHA, to the EEOC, Obamacare, and beyond. Every new regulation and every new tax makes it harder for a small business owner to make payroll and to turn a profit. The net effect, of course, is to both restrict growth of small businesses and to restrict the number of small businesses. The decrease in competition then lessens benefits for both consumers and wage workers in the communities where these businesses are likely to spring up — in low-income communities. Instead, governments make sure that only large, well-capitalized companies can afford to open new businesses in many cases — probably miles away in higher-income areas.

Legalize Poverty

Everywhere the government intervenes to “help” we find not more choice, but less. Not more jobs, but fewer. Do you want to start up your own taxi service by driving people around? Forget about it if you have not obtained all the applicable (and costly) government licenses. Do you want to rent out your converted garage to tenants for cash? Too bad. Zoning laws don’t allow it. Do you want to get a job at five bucks per hour for your teenage son who has no skills? Sorry, that’s illegal too. Do you need a loan, but you’re a high risk borrower? Get lost. We’d have to charge you a high interest rate. That’s usury, and it’s not allowed.

We’re told every day that the only solution to poverty is more government power, more government regulation, more central planning, bigger deficits, and less freedom.

The true solution, however, is better described by a left-wing slogan: “Legalize Poverty.” The left usually says this when homeless people are being thrown off government property, but it’s better applied to the many types of free enterprise that are placed out of reach to the poor by government edicts. So many low-income workers must turn to black markets and low-wage semi-legal work because that’s all that’s open to them. It’s simply illegal for them to find entry-level work in mainstream enterprises, keep all of their meager wages, or start up small enterprises. Needless to say, these assaults on free markets help no one but the government agents paid to enforce them.

Article originally posted at Mises.org.

The Truth About Symptoms

by Author Kevin Donka, DC – ICPA.org:

Early last week, a practice member of mine named Melissa came in for her weekly check-up. I found that she was clear (i.e., didn’t need an adjustment), so I rang the well bell and congratulated her. She got up off the table with a confused look on her face and said, “But I’m sick! How can I be clear when I’m sick? Are you sure I’m clear?”

I asked her what she meant when she said she was “sick.” “Well,” she answered, “I’m congested, I’m coughing and I feel run-down – you know -SICK!” I told her that the problem wasn’t with my assessment of her nerve system, it was with her definition of the word “sick.”

You see, traditional medical thinking calls the presence of symptoms “sickness.” But the truth is that you are sick before the onset of your symptoms. The symptoms are really an indication that your body has accurately recognized an invader or toxin and is actively responding to it by creating a fever, mucus, cough, diarrhea, etc., to eliminate it from your body.

The beginning of symptoms, what we have always called “sickness,” is really your body getting WELL!

Take this short test. If two people go to a restaurant and eat some tainted fish, then one of them throws up within an hour but the other is fine until morning when he also gets sick, which of the two has the stronger and healthier immune system? Most people would say that the second was stronger and healthier because his body was able to tolerate the poisons longer before he “got sick.” But the truth is, the first man has the stronger and healthier immune system because it was able to recognize the invader and start the elimination process sooner than the second man’s was.

The first man started getting well the same night, but the second man didn’t start getting well until the next day!

So, how could Melissa be feeling so poorly and still not need an adjustment? Being “clear” simply means that there is no interference in her nerve system. This means the body is at it highest capacity to heal – it does not mean that healing is complete.

The process is just like cleaning laundry in a washing machine. When the soap and water touch the garments, the grime is loosened, and it rises to the surface. If you were to look in a washing machine during the agitation cycle, you would be repulsed and think that your clothes were actually getting dirtier. But the truth is that they are actually getting cleaner. The thick muck must be extracted and discarded before the clothes are totally clean. If we know the washing machine is working correctly, nothing more needs to be done except to let the cycle complete itself.

Similarly, as your body is “cleaning itself” of toxins and germs, it appears at first as though you are getting worse, but you are actually getting better. If we know your master control system (your nerve system) is working correctly, nothing more needs to be done except to let the cycle complete itself.

Melissa learned a valuable lesson that day about what sickness is and what wellness is. Plus, she already knows enough to trust her body and allow the clearing process to complete itself without any outside interference from medications designed to simply make her feel better. She knows that these things only stop her body’s own natural elimination and healing processes.

Hopefully you too now know the difference between getting sick and getting well. Know to trust your body and allow the natural process of healing to occur when it needs to. And finally, make sure you continue to live your life in a way that not only prevents sickness, but also actually creates health, happiness and wholeness

Article originally posted at ICPA.org.

The US Has Become a Nursing Home Economy

by Bill Bonner – Bonner and Partners.com:

The key feature of age is that it happens no matter what you think.

What does this mean?

It means the “old countries” – their assets and their institutions, at least the ones that depend on population, income and credit growth – are “fastened to a dying animal” and are not likely to survive in their present form.

Today, these countries, including the US, are victims of demography. Older people get more money from the government. And they pay less in taxes. Old people also slow the rate of GDP, for obvious reasons: They are not adding to output; they are living on it.

As people age, the whole society – its institutions, its laws, its customs, its economy and its markets – ages, too. They all become as familiar, comfortable and shabby as a well-worn shoe.

An economy is not independent of the people in it. The economy ages with them. And when they reach retirement age, the economy gets arthritis.

A Nursing Home Economy

Even the Congressional Budget Office has noticed how government debt slows growth:

Increased borrowing by the federal government generally draws money away from (that is, crowds out) private investment in productive capital in the long term because the portion of people’s savings used to buy government securities is not available to finance private investment.

The result is a smaller stock of capital and lower output in the long term than would otherwise be the case all else held equal (CBO, July 2014, p. 72).

Why does the federal government need to borrow so much? Before the invention of the welfare state, almost all large borrowing was done for war. Since the end of World War II, however, most developed countries – with the exception of the US – have borrowed heavily only to pay for social programs.

But neither debt nor spending contributes to a dynamic, innovative and growth-oriented economy. Instead, they produce an economy that looks like the people in it – old, creaky and in need of around-the-clock care.

As people age, they begin fewer new businesses. “The Other Aging of America: The Increasing Dominance of Older Firms” is the title of a major study from the Brookings Institution. Done by Robert Litan and Ian Hathaway, it showed that American business was becoming “old and fat.”

Taken together, the data presented here clearly show a private sector where economic activity is sharply concentrating in older firms – a trend that is occurring in a nearly universal fashion across sectors, firm sizes and geographies…

An economy that is saturated with older firms is one that is likely to be less flexible, and potentially less productive and less innovative, than an economy with a higher percentage of new and young firms.

Young people try to create new wealth. Old people try to hold on to the wealth they believe they have in the bag. They are less entrepreneurial. They are also, perhaps, more eager to protect their businesses and professions from competition.

Part of the reason for fewer business start-ups is that it has gotten a lot harder to launch a new company in America.

That was the conclusion of a study by John W. Dawson and John J. Seater (“Federal Regulation and Aggregate Economic Growth”). What they found was that there has been a huge increase in economic regulation and restrictions in the US since World War II. They point out that these regulations have an economic cost. Like debt and demography, regulations reduce output.

In fact, they estimate that had the level of regulation remained unchanged since the year I was born – 1948 – today’s GDP would provide every man, woman and child in America with about $125,000 more in income per year.

A Glorified Ponzi Scheme

It was Alexis de Tocqueville who observed that democracy was doomed. He said it would soon degrade into tyranny. As soon as politicians realized that they could win elections by promising the voters more of other people’s money, it was just a matter of time until they overdid it.

Had he imagined how old people would get, he wouldn’t have been so optimistic.

As things developed, politicians noticed two important things: that young people (especially those who hadn’t been born yet) didn’t vote… and old people’s votes could be bought fairly cheaply, at least so it appeared at first.

When the US Social Security program was first put in place, for example, the typical American male could expect nothing from it. He was expected to live to 61. He’d be dead before benefits kicked in. But as the 20th century led to the 21st, his life expectancy increased, and so did the burden of old people.

Early Social Security participants paid in trivial amounts and got a very good return on their money. My mother, for example, only worked a few years at a low-paying job, from which she retired in 1986. She has been collecting Social Security ever since.

“Don’t you feel guilty about getting so much more than you put in?” I teased her.

“Not at all. That’s just the way the system works.”

The way the system works would be illegal for a private annuity plan. It would be labeled a Ponzi scheme. Its promoters would be fined or put in prison. The money that goes into the system is not locked away in wealth-producing investments so that the cash will be available to finance the retiree’s pension. Instead, the contributions of new participants are used to pay benefits to old ones.

This has the obvious and fatal flaw of all Ponzi schemes – eventually, there is not enough new money coming into the system to meet its obligations. This point was reached in the US system in 2010. Since then, the system has been running an annual deficit.

You’ll see why in the chart showing the retirement-age population.

Everybody knows Social Security, the Affordable Care Act, veterans’ pensions and other support programs are dangerously underfunded. What is not appreciated is the effect that this has on GDP growth and stock market prices.

The crankshaft of age leads to the universal joint of social spending, which then goes to the axles of debt. Finally, where the rubber meets the road, the wheels turn more slowly.

This is not just a problem for government finance. Companies make money by putting out products and selling them. But when people grow old or population growth declines, so do both supply and demand.

Then, companies earn less money. Their shares are worth less. Personal incomes go down. Capital gains retreat. And tax revenues fall, too.

When this happens in an economy that is already deeply in debt, it triggers a crisis.

Article originally posted at Bonnerandpartners.com.

How We Are Making Our Children Sick

by Sean Manning, DC – ICPA.org:

The purpose of the immune system is to allow us to live in harmony with our environment. In fact, most of the trillions of foreign cells present within our body coexist peacefully, and in some cases even contribute to our health and well-being. In spite of this, chronic diseases such as allergies, asthma, and eczema, which were rare several decades ago, have risen exponentially, especially in children, quadrupling during the last two decades.

The number of asthma sufferers in the United States is expected to double by the year 2020, affecting 1 in every 14 people and outnumbering the combined projected populations of New York and New Jersey. A growing number of scientists now believe that the routine measures taken to suppress and prevent infections actually weaken certain responses of a child’s immune system, allowing other less appropriate responses to operate without control. The reduction of childhood diseases has been heralded as one of medicine’s finest accomplishments, yet there are growing suspicions that infection intervention may be having an adverse effect; as childhood infections have decreased, chronic afflictions have increased.

The immune system has two different aspects: the cell-mediated immune system and the humoral immune system. The cell-mediated immune system involves white blood cells and specialized immune cells which “eat” antigens, or foreign particles in the body. This helps drive the antigens out of the body causing symptoms such as skin rashes and the discharge of pus and mucous from the throat and lungs. The cell-mediated response is associated with the beneficial acute inflammatory illnesses of children, and represents the externalization, or driving out of the infection.

The other aspect is called the humoral immune system whereby antibodies—special defense proteins—are produced to recognize and neutralize the antigen. It is a persistent humoral response that is associated with chronic allergic-type diseases.

In order to be healthy, a child must keep a balance between the cell-mediated system and the humoral system, with the cell-mediated system predominating. The cell-mediated response is activated by the natural exposure to bacteria and viruses, in the way children are exposed by interacting with their friends. Through repeated exposure to infectious organisms a child develops a diverse repertoire of immune response patterns. It is the cellmediated response that protects a child from future illness, and develops the type of immune response we commonly associate with life-long immunity. The cell-mediated system suppresses the activity of the humoral system. The more active the cell-mediated activity is, the less active the humoral system is.

However, if the cell-mediated system is not properly stimulated it does not fully develop, leading to an abnormally high production of humoral system antibodies. A humoral system that is continually engaged will overdevelop, creating a hypersensitive environment. When infants are exposed to germs early, their immune systems are pushed to go in an “infection-fighting direction.” Without this push, the immune system’s shift to infection fighting is delayed, and it becomes more likely to overreact to allergens—dust, mold, and other environmental factors that most people can tolerate.

Early life experiences are believed to play a crucial role in the formation and patterning of a child’s immune system. Sensitization begins in utero and the first few months of life are crucial, for once cell-mediated/humoral imbalance occurs it tends to persist until specific measures are taken to shift the immune system back to equilibrium. There are several ways that pattern the reaction of the immune system toward either the cell-mediated response or the humoral response based on their timing and frequency. The important thing for a parent to understand is that their child’s immune system will react based on the way it has been patterned and programmed to react. If your child’s current immune capacity is poor, then it is possible to improve it by making better choices in the future.

Hygiene

There are numerous reports that suggest the excessive cleanliness practiced in modern society may be partly responsible for the increased incidence of allergic diseases. Repeated exposure while young to various types of bacteria and spores found in dirt, dust, and animal dander may actually protect against the development of allergies. A molecule known as an endotoxin naturally occurs in the outer membrane of bacteria. When the bacteria die the endotoxin is released into the environment. Children are exposed to these endotoxins by breathing them in, or by ingesting them when they put their hands or other objects into their mouths. The exposure to bacteria, viruses, and endotoxins is essential for the maturation of the immune system; less exposure leads to imbalanced immune responses.

Children’s early exposure to allergens and infections prime their immune systems to resist them later on. Although children in daycare seem to get sick more often than other children do, this is not necessarily a bad thing. These colds and other infections may be giving their immature immune systems a health workout, resulting in a lower incidence of asthma. Children with the highest degree of personal hygiene are the most likely to develop eczema and wheezing between the ages of two and a half and three and a half years. In 2000, a study of 61 infants between the ages of 9–24 months found that the more house dust an infant was exposed to, the less likely that they would suffer allergies.

Antibiotics

Antibiotics given in the first year of life quadruple a child’s risk of developing asthma. Children given antibiotics after age one year are still one and a half times more likely to develop asthma than children not given antibiotics. What is particularly concerning is that every course of antibiotic treatments a child increases the occurrence of allergies and that treatment with broad spectrum antibiotics, such as streptomycin, tetracycline, and Cipro®, appear to be more likely to be associated with allergy development than is ordinary penicillin.

Antibiotics enhance allergic reactions by sidestepping the normal immune system response. Whenever the immune system successfully deals with an infection it emerges from the experience stronger and better able to confront similar threats in the future. Through the process of developing and then conquering infection, the child gets rid of acquired toxins and poisons from the body and receives a boost to the immune system. If you always jump in with antibiotics at the first sign of infection you do not give the immune system a chance to grow stronger.

Antibiotics also act nonspecifically, killing infectious bacteria as well as upsetting the normal gut flora. Substances that are introduced through the mouth are normally ignored by the humoral system. But, in order for this to occur, the normal bacteria in the intestines need to be present. Alterations in the normal intestinal bacteria levels, especially in infancy, allow food proteins and other particles to pass into the blood stream before they are broken down, where the body identifies them as a threat, contributing to a persistent humoral response and the development of allergic diseases.

Vaccination

Most childhood infections are caused by viruses, and thus do not respond to antibiotics, hence the development of our current vaccine program. Infections contracted naturally are ordinarily filtered through a series of immune system defenses. Naturally-contracted viral diseases stimulate a cell-mediated response, and it appears that because of this, early viral infections are protective against allergic diseases. When a vaccine is injected directly into the blood stream, it gains access to all of the major tissues and organs of the body without the body’s normal advantage of a total immune response. This results in only partial immunity, consequently the need for “booster” shots. Vaccines stimulate a humoral response so their contents are never discharged from the body, the way they would be if the disease were naturally contracted, leaving the body in a chronic state of sensitization. In a study of 448 children, 243 had been vaccinated against whooping cough. Of these, 10% had asthma compared to less than 2% of the 205 children in the non-vaccinated group, suggesting that the pertussis vaccination can increase the risk of developing asthma by more than five times.

Dietary Fat Consumption

Chicken nuggets, potato chips, and other fried foods, while convenient for parents, are relegating their children’s immune systems to behave badly. Another factor that has been identified as a contributor to the rise in allergic diseases is the increased consumption of omega-6 fatty acids and the decreased consumption of omega-3 fatty acids. It has been known for many years that individuals with allergic conditions have disproportionately high levels of omega- 6 fatty acids in their blood. Omega-6 fatty acids actually suppress the immune system and promote inflammation, and allergic responses are, by their very nature, inflammatory. Sources of omega-6 fatty acids are corn, cotton, soybean, peanut, safflower, and sunflower. Omega-6 fatty acids are also present in most animal products.

Inversely, omega-3 fatty acids are known to enhance immunity, reduce inflammation, and protect the nervous system. Dietary omega-3 fatty acids have well documented immunological effects. Sources are flax, hemp, walnut, and cold water fatty fish, especially salmon. It is important to note though that the plant sources of omega-3 fatty acids are inadequate for infants and thus offer minimal benefit early in life. One study showed that children who regularly consumed oily fish were 74% less likely to develop asthma. Other studies show that fish oil supplementation is associated with improved asthma symptoms and reduced medication usage. The immune benefits of omega-3 fatty acids are likely greater during the critical stages of early immune development before the allergic responses are established, so it is recommended that women monitor their fatty acid intake during pregnancy and continue to do while nursing. Once the child is old enough there are omega-3 products designed specifically for children.

Subluxation

The focus of science has shifted from separate entities of the immune system and nervous system to an interactive immunology model. It is now understood that there is an intimate connection between the nervous system and the immune system, and that neurotransmitters can influence the activities of the immune system. In fact, nerve fibers physically link the nervous system and the immune system and there is a constant traffic of information that goes back and forth between the brain and the immune system.

The sympathetic division of the nervous system is the part of the nervous system that reacts to stress. It is the “fight or flight” control center. The sympathetic division of the nervous system also regulates all aspects of immune function, and abnormal activity of the sympathetic nervous system contributes to the cause of conditions where a selection of humoral versus the cell-mediated response plays a role, including allergic reactions.

Spinal movement influences the sympathetic nervous system. Changes to the relative position or movement in the spine interfere with the sympathetic nervous system causing the release of stress hormones and altering immune cell function. The result is suppression of the cell-mediated immune response, and in its absence an increase of the humoral response.

Early stress and trauma is believed to play a profound role in the development of spinal dysfunction, or subluxation, causing immune imbalance. In his research, Gottfried Guttman M.D., found that spinal injury was present in more than 80% of the infants he examined shortly after birth, causing interference in sympathetic function. Tissue injury to the spine and surrounding soft tissue results in scar tissue deposition in the muscles, tendons, ligaments, and joints. This leads to decreased motion in the joints and surrounding tissues. Neurologic changes accompany the spinal insult. This leads to chemical changes and a general shift in the body to the stress response or the “fight or flight” response. Subluxation in the infant and child has been associated with stress experienced at birth, particularly as the result of interventions, and early falls or other traumas.

Restoring proper function to the spine through chiropractic adjustments removes the interference in the nervous system shifting the body away from the sympathetic “alarm” response allowing the immune system to regain equilibrium and reducing hypersensitive reactions. In one study, 81 children under chiropractic care took part in a self-reported asthma impairment study. The children were assessed before and two months after chiropractic care using an asthma impairment questionnaire. Significantly lower impairment rating scores (improvement) was reported for 90.1% of subjects 60 days after chiropractic care in comparison to their pre-chiropractic scores. In addition, 30.9% of the children decreased their dosage of medication by an average of 66.5% while under chiropractic care. Twenty-four of the patients who reported asthma attacks 30-days prior to the study had significantly decreased attacks by an average of 44.9%.

Our children are born with an immune system that is capable of operating against anything that threatens it. Our role as parents should be to support the natural responses of their body in every way that we can; in some cases, that means giving the body a chance to overcome an infection on its own with out antibiotics. In another case, it means providing the proper nutrients to restore inner balance. Most importantly, it means realizing that when a child’s nervous system has interference, the body still knows what it is supposed to do, but is simply unable to do it. Let’s start by removing the interference from the body and then getting out of its way—appreciating that the fever and congestion and vomiting are all part of the miracle that is our child’s immune system working properly, not a sign that their body is failing. The less we focus on the eradication of germs and the more emphasis we place on creating a strong, balanced body, free of subluxation, the better off our children will be.

Article originally posted at ICPA.org.

Government Regulation is a Hidden Tax

by Brady Nelson – Mises Daily:

Perhaps due to it not being as readily quantifiable as government taxation, debt, welfare, and money creation; regulation has too often been superficially dealt with. In many ways, the largely “hidden tax” of regulation is a bigger threat to liberty, economy, and morality than other weapons of forceful government intervention.

What Is the Problem?

The total number of restrictions in federal regulations has grown from about 835,000 in 1997 to over one million by 2010, and the number of pages published annually in the Code of Federal Regulations, never substantially declined, and in fact has consistently grown. It has been estimated that regulatory compliance and economic impacts cost $1.863 trillion annually. This amounts to US households paying $14,974 annually in regulatory hidden taxes, with households thereby spending more on embedded regulation than on health care, food, transportation, entertainment, apparel and services, and savings.

However, this is just the proverbial tip of the regulatory-burden iceberg. The tangible burdens above are a quite manageable list of the more immediate impacts such as extra money spent by business to comply and government to enforce regulation. However, the intangible burdens are an almost infinite list of the less immediate impacts, such as lower performance throughout the economy in terms of entrepreneurship, innovation, growth, customer service, and jobs. The intangible burdens do not readily lend themselves to quantification like the tangible burdens do, and thus it is harder to understand the magnitude and even the exact nature of the almost infinite potential problems caused-and-effected. This is made harder due to the fact that value is always subjective (and ordinal) to each individual at any one point in time and, thus, there are no objective (or cardinal) opportunity costs and benefits of regulations as a whole that can simply be observed, calculated, and compared using cost benefit analysis (CBA).

Why Is There a Problem?

The most important of these intangible burdens of regulation are the unintended negative consequences on decentralized and dispersed knowledge and incentives. As Frédéric Bastiat pointed out: “In the economy … a law gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen.”

Thus, in terms of regulation and other policies: “[I]t almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal, and the converse.” The unintended consequences of regulation are usually even worse than this, as they usually — unlike in free markets — promote a relatively small group of private interests at the expense of a relatively large group of individuals.

From a Public Choice school perspective, the regulation problem is essentially one of government failure andrent seeking, noting that: “(1) individuals in government (politicians, regulators, voters, etc.) are driven by self-interest, just as individuals in other circumstances are, and (2) they are not omniscient.”

Worse still: “[S]pecial interests are disinclined to seek direct wealth transfers because their machinations would be too obvious. Instead, regulatory approaches that purport to provide public benefits confuse the public and reduce voter opposition to transfers of wealth to special interests.”

From an Austrian school perspective, the regulation problem is essentially one of economic calculation and bureaucracy. Ludwig von Mises explains: “Without market prices for the means of production, government planners cannot engage in economic calculation, and so literally have no idea if they are using society’s resources efficiently. Consequently, socialism [and regulatory interventionism] suffers not only from a problem of incentives, but also from a problem of knowledge.” Mises said regarding the latter that: “A bureau is not a profit-seeking enterprise; it cannot make use of any economic calculation.” And this inevitably leads to regulatory failure as: “… [t]he lack of [profit-and-loss, price and customer-oriented] standards [which] kills ambition, destroys initiative and the incentive to do more than the minimum required.” All of this is, of course, the antithesis of consumer-driven entrepreneurialism.

At perhaps a still deeper level, Murray Rothbard reasoned:

When people are free to act, they will always act in a way that they believe will maximize their utility. … Any exchange that takes place on the free market occurs because of the expected benefit to each party concerned. If we allow ourselves to use the term “society” to depict the pattern of all individual exchanges, then we may say that the free market ‘maximizes’ social utility, since everyone gains in utility.

On the other hand:

Coercive intervention … signifies per se that the individual or individuals coerced would not have done what they are now doing were it not for the intervention. … The coerced individual loses in utility as a result of the intervention, for his action has been changed by its impact. … [I]n intervention, at least one, and sometimes both, of the pair of would-be exchangers lose in utility.

What Is the Solution?

The solution is of course deregulation — as much as possible, as fast as possible. However, both special interests (as emphasized by the Public Choice school) and bad economics (as emphasized by the Austrian school) will need to be overcome.

This combination was colorfully dubbed the “Bootleggers and Baptists” phenomenon. It has been observed that:

[U]nvarnished special interest groups cannot expect politicians to push through [regulation] that simply raises prices on a few products so that the protected group can get rich at the expense of consumers. Like the bootleggers in the early-20th-century South, who benefited from laws that banned the sale of liquor on Sundays, special interests need to justify their efforts to obtain special favors with public interest stories. In the case of Sunday liquor sales, the Baptists, who supported the Sunday ban on moral grounds, provided that public interest support. While the Baptists vocally endorsed the ban on Sunday sales, the bootleggers worked behind the scenes and quietly rewarded the politicians with a portion of their Sunday liquor sale profits.

More dauntingly, Murray Rothbard reminds us that, in many ways, the history of humanity can be seen as a race between bigger government versus freer markets:

Always man — led by the producers — has tried to advance the conquest of his natural environment. And always men — other men — have tried to extend political power in order to seize the fruits of this conquest over nature. … In the more abundant periods, e.g., after the Industrial Revolution, [freer markets took] a large spurt ahead of political power [including over regulation], which ha[d] not yet had a chance to catch up. The stagnant periods are those in which [such] power has at last come to extend its control over the newer areas of [freer markets].

It will not be easy to slow, stop, and reverse the century-plus growth of the regulatory state in the US and around the world. The crucial job of pursuing deregulation cannot just be left to politicians from the top down. It will need to come more from as many voters and seceders as possible from the bottom up and every direction in between.

Article originally posted at Mises.org.

Getting Over Cold Medications

by Darrel Crain, DC – ICPA.org:

Very young children come down with colds. Agreement with this statement is universal among parents, pediatricians, drug makers, and even the Food and Drug Administration (FDA). But there is less agreement over whether or not medicine is helpful to little ones suffering from a cold.

“It’s important to point out that these medicines are safe and effective when used as directed…” said Linda A. Suydam, president of the Consumer Healthcare Products Association, quoted in The Washington Post, October 12, 2007.

“Clearly, the products don’t work and are unsafe,” said Joshua M. Sharfstein, M.D., Baltimore Health Commissioner, also quoted in The Washington Post.

Could these two views be any further apart? Both of them can’t be right, so which one is making things up, the cold medicine industry spokesperson, or the doctor?

“Take a cold remedy and get over the cold in seven days, otherwise recovery will take a week,” according to traditional folk wisdom.

The American Academy of Pediatrics tends to agree with tradition on this particular point and recommends against medicating young children to treat cold symptoms. Drug makers, on the other hand, spent about 50 million bucks last year to convince parents to buy over-the-counter (OTC) drugs to treat cold symptoms. And the advertising must be working because sales reportedly jumped 20 percent last year and were expected to climb again this year—up until last week.

Fourteen infant cold medications were pulled from store shelves across the country, just seven days before an FDA committee was slated to begin investigating the drugs.

“An FDA review prepared for next week’s meeting describes dozens of cases of convulsions, heart problems, trouble breathing, neurological complications and other reactions, including at least 54 deaths involving decongestants and 69 deaths involving antihistamines,” reports The Washington Post.

Dr. Sharfstein long ago alerted the FDA to widespread problems with the drugs after a total of 900 Maryland children under 4 years of age suffered an overdose in a single year, 2004.

“Given that there are serious consequences, including death, associated with the use of these products without compelling reason to use them, why are they being marketed for children?” Sharfstein asked. “The contrast between the state of the evidence and the displays in drugstores could not be more stark.”

“There is no evidence that the products are effective for young children, and there is evidence they can be unsafe, even at the usual doses. This is not just about misuse,” he said, noting that the dosages typically used are untested estimates based on studies in adults. “That’s why we are asking FDA to clearly label these products against use by children under age 6,” according to The Washington Post.

It is an interesting paradox that doctors are in the position of pleading with the agency in charge of drug safety to try and halt medical treatment of non-medical symptoms. Their preferred recommendations sound familiar: bed rest, lots of fluids, and chicken soup. And let’s not forget vitamin C.

“Whatever grandma recommends that’s nutritious, get the kid to eat it…It’s better than all the over-the-counter stuff,” said Daniel Rauch, M.D., director of the pediatric program at NYU Medical Center, quoted in the New York Daily News, October 12, 2007.

“These medications were never designed to cure colds but only to treat cold symptoms,” said Katherine Tom-Revzon, pediatric pharmacist at the Children’s Hospital at Montefiore in the Bronx. “In children under 2, there was little evidence they were effective, anyway,” reports the Daily News.

A robust, innate immune response in both children and adults requires expression, not suppression. The symptoms of a cold are self-limiting and benign for the vast majority of well-fed people; they are part of a lifelong process of encountering microbes in the environment and mounting an innate, short-term inflammatory response that results in cellular memory and strengthened immunity.

“This is not a situation in which pediatric data are lacking and we are unable to say one way or the other,” wrote Jay Berkelhamer, M.D., in a letter to the FDA last month. Dr. Berkelhamer is the national president of the American Academy of Pediatrics. In multiple studies, they have “been found not to be effective in this population at all,” according to Berkelhamer in an Associated Press article October 12, 2007.

Article originally posted at ICPA.org.

Employment Does Not Drive Economic Growth

by Frank Shostak – Mises Daily:

For the head of the Federal Reserve Board Janet Yellen — and most economists — the key to economic growth is a strengthening in the labor market. The strength of the labor market is the key behind the strength of the economy. Or so it is held. If this is the case then it is valid to conclude that changes in unemployment are an important causative factor of real economic growth.

This way of thinking is based on the view that a reduction in the number of unemployed persons means that more people can now afford to boost their expenditures. As a result, economic growth follows suit.

We Need More Wealth, Not Necessarily More Employment

The main driver of economic growth is an expanding pool of real wealth, gained through deferred consumption and increases in worker productivity. Fixing unemployment without addressing the issue of wealth is not going to lift economic growth as such.

It is the pool of real wealth that funds the enhancement and the expansion of the infrastructure, i.e., an expansion in capital goods per individual. An enhanced and expanded infrastructure permits an expansion in the production of the final goods and services required to maintain and promote individuals’ lives and well-being.

If unemployment were the key driving force of economic growth then it would have made a lot of sense to eradicate unemployment as soon as possible by generating all sorts of employment.

It is not important to have people employed as such, but to have them employed in wealth-generating activities. For instance, policy makers could follow the advice of Keynes and his followers and employ people in digging ditches, or various other government-sponsored activities. Note that the aim here is just to employ as many people as possible.

A simple commonsense analysis however quickly establishes that such a policy would amount to depletion in the pool of real wealth. Remember that every activity, whether productive or non-productive, must be funded. When the Fed or the federal government attempt to increase employment through various types of stimulus, this can result in the expansion of capital goods for non-wealth generating projects which leads to capital consumption instead of growth.

Hence employing individuals in various useless non-wealth generating activities simply leads to a transfer of real wealth from wealth generating activities and this undermines the real wealth-generating process.

Unemployment as such can be relatively easily fixed if the labor market were to be free of tampering by the government. In an unhampered labor market, any individual that wants to work will be able to find a job at a going wage for his particular skills.

Obviously if an individual demands a non-market related salary and is not prepared to move to other locations there is no guarantee that he will find a job.

For instance, if a market wage for John the baker is $80,000 per year, yet he insists on a salary of $500,000, obviously he is likely to be unemployed.

Over time, a free labor market makes sure that every individual earns in accordance to his contribution to the so-called overall “real pie.” Any deviation from the value of his true contribution sets in motion corrective competitive forces.

Purchasing Power Is Key

Ultimately, what matters for the well-being of individuals is not that they are employed as such, but their purchasing power in terms of the goods and services that they earn.

It is not going to be of much help to individuals if what they are earning will not allow them to support their life and well-being.

Individuals’ purchasing power is conditional upon the economic infrastructure within which they operate. The better the infrastructure the more output an individual can generate.

A higher output means that a worker can now command higher wages in terms of purchasing power.

Article originally posted at Mises.org.

Are Your Children Being Unnecessarily Medicated?

by Author William Parks, DC – ICPA.org:

These days, it seems many medical doctors’ first course of action is to recommend or prescribe drugs for any patient complaint; disturbingly, this trend seems to hold true whether the patient is an adult or a child.

An eye-opening study published in the May issue of Pediatrics revealed that many pediatricians have recommended the use of medication for children who suffer from sleep disturbances. In fact, of the 671 U.S. pediatricians surveyed, 75 percent said they had advised parents to administer an over-the-counter (OTC) medication, and more than 50 percent had prescribed a sleep aid.

Surprisingly, antihistamines were common OTC medications recommended, while a commonly prescribed sleep aid was clonidine, which is used to treat behavioral problems. Neither of these medications was specifically designed to treat insomnia; in fact, little is known about their safety and effectiveness for treating sleep-related problems. Moreover, they were administered to children who had difficulty sleeping and/or awoke frequently during the night, which most would agree is a fairly natural occurrence – especially in children.

On the flip side, many of these doctors may be overlooking more serious health problems masked as insomnia, including depression, attention-deficit/hyperactivity disorder, psychological problems, and other medical conditions. And according to the study, the practitioners themselves expressed “a range of concerns about sleep medication appropriateness, safety, tolerance and side-effects in children.”

If your child suffers from sleep-related difficulties, ask your doctor about all the options before opting for a “quick fix” with medication. There are many reasons for insomnia (in children and adults); make sure your physician determines the reason behind your child’s problem – and its severity – before deciding the best manner in which to treat it.