Carpe Diem

Quotations of the day on socialism….

…. are from Ludwig von Mises, writing in Human Action.

1. A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.

2. Every socialist is a disguised dictator.

HT: Dennis Gartman

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United States of SWAT – watch 11-member SWAT team raid the house of a 68-year old grandmother using stun grenades

In the 10-minute helmetcam video above, you’ll witness an 11-officer, paramilitary SWAT raid on the home of 68-year old grandmother in Evansville, Indiana on June 11, 2012 (go to about 3:00 when the actual SWAT raid starts). This video and story provide a perfect example of everything that is wrong with the excessive militarization of America’s law enforcement. The video shows an extremely unnecessary amount of military-level force being used that appears to be way out of proportion to any possible threat posed to the warrior cops conducting the combat-style SWAT team by the residents in the home: a 68-year old grandmother Mrs. Louise Milan and her 18-year old adopted daughter Stephanie Milan. There was no evidence that there were any weapons, explosives or guns in the house, and no evidence that any threatening suspects were present. Here are some details:

1. The 11-officer SWAT team executed a “knock and announce rule” warrant (not a “no knock warrant”) which generally requires that a police officer “must first knock, identify himself or herself and his or her intent, and wait a reasonable amount of time for the occupants to let him or her into the residence.” In this case, the paramilitary SWAT team waiting only a few seconds and then used a battering ram to shatter a glass storm door. The warriors cops also broke other windows and detonated two flashbang grenades inside the house before entering. With assault rifles drawn, the paramilitary SWAT team ordered Mrs. Milan and Stephanie Milan on to the floor at gunpoint, and they were handcuffed and later led outside and taken into police custody.

2. Ira Milan, who has owned the house for 30 years and raised six children there with his wife Louise, was not home when the SWAT raid took place, but told the local media in Evansville that the front door was actually open and complained that the excessive use of force, including the use of stun grenades, was therefore unnecessary and unwarranted. No one has ever been arrested at the couple’s home during the three-decade period that they have resided there, and there was no evidence that any threatening suspects would be present at the home. In fact, the search warrant did not list the names of any specific suspects.

3. What was the 11-member SWAT team looking after aggressively and violently entering the Milan’s home in a combat-style raid with stun grenades and battering rams? Computer equipment, which local police thought was allegedly used to make anonymous online threats against police and their families on an online discussion forum at the website The IP address used to make the threats was traced to the Milan home, but the family was wrongly targeted because it was actually a neighbor who made the threats after remotely accessing the Internet using the family’s wireless signal, which was not password-protected. The neighbor was later arrested by the FBI and pleaded guilty to charges of using forbidden speech.

4. According to court documents from a lawsuit filed on behalf of Mrs. Milan, the Evansville Police Department conducted the SWAT raid at the wrong address, since there was no evidence to suggest that either Mrs. Milan or Stephanie Milan were in any way involved in the online threats. Mrs. Milan is suing the Evansville Police Department for violating her rights protected by the 4th and 14th Amendments of the Constitution, for their use of unreasonable and/or excessive force to carry out the search and seizure and falsely arresting and/or detaining her. Further, Mrs. Milan is suing the city of Evansville and its Police Department for “negligent training and supervision” for conducting the SWAT raid with a “callous and deliberate indifference to the rights of the Plaintiff and other individuals who are harmed by police conduct.”

In response to the lawsuit, Evansville city attorneys argued the force used to execute the SWAT raid with an 11-member paramilitary force that included the use of flash grenades was “objectively reasonable” and that the city’s law enforcement officials are “immune from liability.”

You can find additional information from news reports here, here and here.

MP: Just in case you thought that you could never be the victim of an unjustified SWAT raid in your own home, the case of Mrs. Milan provides yet another example of how even innocent Americans are being increasingly victimized by the escalating militarization of US law enforcement – “warrior coppery” as CD regular Morgan Frank calls it. In a more enlightened future, I predict future Americans will look back on this period in US history and wonder how we ever allowed law enforcement to become paramilitary organizations, where cops act more like soldiers in combat than keepers of the peace and in the process erode our liberties and freedoms.

To understand how far we’ve gone down the road towards a heavy-handed military police state, watch the video below of the first episode of Dragnet in 1967 where detectives Joe Friday and Bill Gannon make a drug bust at a house where a group of young adults are using LSD and marijuana. I realize that it’s just a TV show and may not accurately reflect the reality of police activities in that era, but it’s still instructional just the same because drug suspects are arrested with no tanks, no stun grenades, no assault rifles, no military equipment, no camouflage outfits; in fact they don’t even have any guns or handcuffs!

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The ‘Tide theft phenomenon’-Why has the laundry detergent become such a hot commodity among thieves at drugstores?

TideI took the photo above yesterday at my local CVS store in DC, showing the anti-theft devices on each bottle of $12 Tide laundry detergent. There are a lot of items at CVS that are much smaller and much more expensive than bottles of Tide — and therefore much easier to shoplift — and yet none of those items have anti-theft devices attached to them. At a nearby CVS store in DuPont Circle, the bottles of Tide detergent are actually locked up behind glass, according to this March 2012 NY Daily News report, which explains the “Tide theft phenomenon” as follows:

WASHINGTON, D.C. — When police in suburban Washington raided the home of a suspected drug dealer last fall, they found the cocaine, all right, but also something unusual on the man’s shelves: nearly 20 large bottles of liquid Tide laundry detergent.

It turns out his customers were paying for drugs not with cash but with stolen Tide, police said. Tide has become a hot commodity among thieves at supermarkets and drugstores in at least some parts of the country.

For a variety of reasons, the detergent in the familiar flame-orange bottle is well-suited for resale on the black market: Everybody needs laundry detergent, and Tide is the nation’s most popular brand. It’s expensive, selling for up to $20 for a large bottle at stores. And it doesn’t spoil.

One Safeway supermarket in Prince George’s County, Md., was losing thousands of dollars’ worth of Tide a week before police made more than two dozen arrests. In St. Paul, Minn., a man pleaded guilty to stealing more than $6,000 worth of the stuff from a Walmart and was sentenced to 90 days in jail. Police in Newport News, Va., and other cities around the country have reported a spike in thefts.

In the Washington D.C. area, some CVS pharmacies have been attaching electronic anti-theft tags to bottles (see photo above). A clerk at a busy, 24-hour CVS in northwest Washington, has seen too many Tide thefts to count. “It’s a hot item! It’s gotten out of hand,” Charlene Holton said. “They usually take maybe four, whatever they can carry out the door. We have to fight for that. It’s rough!”

The store has put electronic tags on its Tide, but that doesn’t stop the thieves, Holton said. They run out of the store with the detergent and remove the tags later with wire cutters.

Tide shoplifters often work quickly. Surveillance videos from a Safeway in Bowie, Md., showed crews of two or three people entering the store, loading up shopping carts and rushing outside, where they loaded the detergent into a waiting car. Police made nearly 30 arrests when they broke up the theft ring last fall.

It’s not clear how new the Tide theft phenomenon is, but organized theft has been a growing problem for U.S. retailers, costing them $3.53 billion in 2010, according to the National Retail Federation.

Here’s some more background information on the “Tide theft phenomenon” from a New York Magazine article “Suds for Drugs” and a Priceonomics article “Why Thieves Steal Soap.”

And as I commented on a previous CD post in April about this issue, it appears that Tide laundry detergent has emerged as an alternative currency or “medium of exchange, something like a ghetto version of Bitcoin?

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The tide is turning as investors switch from high-cost, actively managed funds to index funds for lower costs, higher returns

stocksThanks in part to some investment advice from Warren Buffett in March, the tide has turned this year in favor of passively managed index funds as investors are increasingly shunning high-cost actively managed stock and bond funds in favor of low-cost index funds, according to a front-page article in today’s Wall Street Journal. So far this year through July, Morningstar data reveal that passively managed, indexed funds have captured an impressive 88% of the net inflow into stock mutual funds this year. In dollar terms, passively managed stock funds have seen a net inflow of $128.4 billion this year, more than seven times the net inflow of only $18 billion for traditional, actively managed funds (see chart above). As I have reported before, 70% of US investors didn’t own a single index fund last year, making this unprecedented shift towards index funds especially noteworthy.

Here’s an excerpt from the WSJ article “Investors Pile Into Vanguard, Eschewing Stock Pickers“:

Investors are pouring money into Vanguard Group, the epitome of the hands-off approach to investing, flocking to funds that track market indexes and aren’t run by stock pickers or star managers. The inflow has pushed the mutual-fund giant to almost $3 trillion in assets under management for the first time. The surge is part of a sea change in the fund business in which investors are increasingly opting for products that track the market rather than relying on managers to pick winners.

Vanguard got a huge boost when Warren Buffett gave it a public stamp of approval in March. The billionaire wrote in his closely watched letter to shareholders of his company, Berkshire Hathaway, that he believed most people would be well-served by following the investing instructions in his will. Mr. Buffett advised his trustee to “put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.).”

n the five months that followed, investors poured $5.5 billion into the Vanguard fund, or about three times more than during the same period the previous year. Vanguard, based in Malvern, Pa., credits Mr. Buffett with the surge of money.

His recommendation wasn’t the only recent milestone for Vanguard. Its Total Stock Market Index fund is now the biggest mutual fund in the world with almost $300 billion in net assets. Vanguard’s ascent is notable because its plain-vanilla index funds are often derided by more adventurous investors who believe in trying to do better than the overall market.

The company is a pioneer in the accelerating shift toward so-called passively managed products like index funds and exchange-traded funds that track baskets of stocks or other assets. These funds typically promise diversification and are relatively inexpensive compared with traditional mutual funds.

MP: The disproportionate flow into index funds this year may reflect the fact that many investors are starting to realize that in addition to typically generating higher returns over long periods than actively-managed funds, the 0.10% average expense ratio of index equity funds at firms like Vanguard, the industry leader in index investing, is 13 times lower than the 1.3% expense ratio for the average actively managed stock fund. For a $100,000 investment, that’s the difference between $1,300 in annual expenses and fees for an active stock funds versus only $100 annually for a Vanguard index fund. The combination of higher returns and lower fees on average, especially over long holding periods, is an attractive combination that makes investing in index funds a “no-brainer” for most investors. And it sure doesn’t hurt when investment guru Warren Buffett endorses the superiority of index investing, and confirms to the masses what should be a pretty obvious and self-evident investment strategy.

Carpe Diem

Markets in everything: Peer-to-peer marketplace for storage

The website Roost is a new marketplace that connects people who have extra space to neighbors who need storage or parking. Hosts can earn extra income by renting out parking spaces or the unused storage space in their garage or attics, and renters can find convenient, nearby low-cost storage or parking spaces.

From a review by Tech Crunch:

The idea behind Roost is not that different from any of those other marketplaces: I’ve got something you can use, you pay me to use it. In this case, we’re talking about storage space, specifically storage space that can be found in your neighbor’s basement, or garage, or attic, or what have you.

Like Airbnb, the platform handles all payments, including recurring payments for long-term rentals, and makes sure they are automatically deposited into hosts’ bank accounts.

To start, Roost is launching in the San Francisco Bay Area, and admittedly there aren’t a ton of listings there right now. However, the company hopes to use its hometown as a testbed before opening up into other major urban markets like Boston, Chicago, Seattle, New York City, and Washington, D.C.

MP: Another example of how the “sharing economy” is providing new opportunities to engage in “peer-to-peer” transactions through websites, platforms, apps and marketplaces like Roost that bring buyers and sellers together. The growing popularity of “collaborative consumption” is changing the economy in very profound and important ways, and we can expect a lot more of this exciting “creative destruction” in the future.

Carpe Diem

Quotation of the day on the minimum wage…..

…. is from Liya Palagashvili and Rachel Mace writing in today’s WSJ:

When you raise the cost of hiring, companies will do less of it. Until there’s a sound theory for why raising the price of low-skill labor doesn’t lessen employers demand for it, and until that theory is confirmed by serious, empirical analysis based on adequate data, the only legitimate minimum-wage stance is that it shrinks the employment options for the very workers it ostensibly intends to help: the poorest of the low-skilled.

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Who-d a-thunk it? Game ranching and private ownership of wildlife for hunting, tourism and meat are saving rhinos, etc.?

There’s a pretty interesting and stark contrast between two completely different approaches to saving wildlife in Africa (rhinos, elephants, lions, leopards and African buffaloes, etc.): a) ban the private ownership and all commercialization of wildlife except for eco-tourism vs. b) allow the private ownership of wildlife and legalize commercial activities relating to wildlife like private game ranching. Most African countries like Kenya take the first approach – individuals are not allowed to own or profit commercially from wildlife. A change in South Africa’s law in 1991 legalizing private ownership of wildlife and private game ranching provides a natural experiment to compare the two approaches.

A recent Bloomberg article provides these details:

1. South Africa’s private game-ranching is a $1.1 billion a year industry and growing at 10 percent annually. Foreign hunters, about 60 percent of whom came from the U.S., spent $118.1 million on licenses to hunt in South Africa in 2012.

2. Private game ranches have increased fivefold to 10,000 since South Africans were allowed to own and profit commercially from wild animals. The game ranches cover 20 million hectares, or about 16 percent of the country’s land.

So what’s happened to the number of wild animals in South Africa?

3. The private game industry is largely responsible for boosting the country’s large mammal population to 24 million, the most since the 19th century, and up from 575,000 in the early 1960s. For example, South Africa now has more than 20,000 white rhinos, 80 percent of the world’s total, up from 1,800 in 1968 when limited hunting was first introduced.

4. South Africa’s law change has also led to a commercial trade in wild animals with captive-bred species ranging from sable antelope to wildebeest sold at wildlife auctions.

And what about the situation in Kenya?

5. Kenya has lost 80 percent of its wildlife since it banned hunting in 1977 and large-mammal numbers are declining by 4.2 percent a year. The country’s elephant population has dropped 76 percent since the 1970s, while rhinos are down 95 percent.

MP: As counter-intuitive and paradoxical as it might seem, the best way to save African elephants, lions, leopards and rhinos from extinction is to kill them and eat them – in limited numbers of course. That is, by allowing private ownership and game ranching in South Africa, wild animals like the rhino have a commercial value that naturally results in greater conservation and protection efforts (“sustainability”) than in countries like Kenya, where wildlife naturally and predictably decline in numbers as victims of the “tragedy of the commons.”

As Steven Landsburg reminds us in The Armchair Economist, “Most of economics can be summarized in four words: People respond to incentives. The rest is commentary.” It shouldn’t be surprising then that wild animals are increasing in numbers in South Africa and decreasing in Keyna – private property rights, commercial use, market pricing, and the profit motive are the incentives that make all the difference in the world.

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Hasn’t law enforcement become more dangerous, justifying the United States of SWAT? No, it’s actually safer than ever

policeHere’s a shortened version of Daniel Bier’s excellent article in The Freeman, “By the Numbers: How Dangerous Is It to Be a Cop?”:

Defenders of police militarization such as that on display in Ferguson, Missouri, often claim that it’s necessary to provide military gear to cops, given how dangerous law enforcement has become.

Indeed, in the name of the War on Terror and the War on Drugs, the federal government has provided thousands of pieces of military-grade body armor, mine-resistant armored personnel carriers, assault rifles, grenade launchers, helicopters, and night-vision goggles to local police and sheriffs. Almost every county in America has received equipment from these programs.

But has policing really become so dangerous that we need to arm peace officers like an invading army? The answer is no. It’s never been safer to be a cop. In fact, 2013 was the safest year for American policing since 1875 (see chart above).

Policing doesn’t even make it into the top 10 most dangerous American professions. Logging has a fatality rate 11 times higher, at 127.8 per 100,000. Fishing: 117 per 100,000. Pilot/flight engineer: 53.4 per 100,000. It’s twice as dangerous to be a truck driver as a cop—at 22.1 per 100,000.

Another point to bear in mind is that not all officer fatalities are homicides. Out of the 100 deaths in 2013, 31 were shot, 11 were struck by a vehicle, 2 were stabbed, and 1 died in a “bomb-related incident.” Other causes of death were: aircraft accident (1), automobile accident (28), motorcycle accident (4), falling (6), drowning (2), electrocution (1), and job-related illness (13).

Even assuming that half these deaths were homicides, policing would have a murder rate of 5.55 per 100,000, comparable to the average murder rate of U.S. cities: 5.6 per 100,000. It’s more dangerous to live in Baltimore (35.01 murders per 100,000 residents) than to be a cop in 2014.

The data do not justify the kinds of armor, weapons, insecurity, and paranoia being displayed by police across the country. Short of an outbreak of land-mine-related crimes in America’s heartland, there’s no reason to deploy mine-resistant vehicles and .50 caliber machine guns to rural sheriffs departments.

Instead of hiding behind gas masks, how about putting cops back on the beat and talking to the community? Instead of M16s and grenade launchers, how about dashboard and body cameras, which have been shown to reduce excessive force and improve officer safety.

MP: It’s also pretty interesting to observe what happened to the number (and rate) of police deaths caused as a direct result of the War on Alcohol Otherwise Peaceful Americans Who Ingested Plant-Based Intoxicants Proscribed by the US Government.

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A Mississippi hairbraider challenges state cosmetology cartel and wins victory for economic freedom and entrepreneurship


Hairbraider Melony Armstrong just wanted to earn an honest living. Armstrong had learned how to braid hair from an renowned expert in Atlanta, and she had the drive to open her own salon in Tupelo, Mississippi. What she didn’t have was a state license to practice cosmetology. Before Armstrong could open her business, the Mississippi State Board of Cosmetology required her to attend a board-approved school for a 18 months at a cost of about $10,000.

Without the money to get a license, Armstrong took her passion and channeled it into a legal challenge against the cosmetology board. Her successful struggle would permanently change the way business was done in Mississippi, removing arbitrary barriers that stood in the way of hundreds of other aspiring entrepreneurs who wanted to enter the business of braiding hair.

The documentary film, ‘Locked Out: A Mississippi Success Story’ traces every step of Armstrong’s long fight to change the law, from her humble hair salon to the statehouse. In the video above, Reason TV’s Nick Gillespie spoke with filmmaker Sean Malone and Melony Armstrong at FreedomFest in Las Vegas about how she sparked statewide reform.

The full 26-minute documentary appears below:

Important Point: Filmmaker Sean Malone points out in the video above that the membership of the Mississippi State Board of Cosmetology is dominated by owners, managers or employees of the state’s cosmetology schools, creating an obvious and serious conflict of interest when the state “hair cartels” are challenged by hairbraiders.

HT: Steve Bartin

Carpe Diem

Wednesday morning linkage, Interesting fact edition

Some interesting facts……..

1. Overall, 57% of Americans think only winning players should receive trophies, while 40% say all kids on a sport team should receive a trophy according to a recent Reason-Rupe poll. By political affiliation, 66% of Republicans want only the kids who win to receive trophies, while only 48% percent of Democrats want just the winners to receive a trophy.

2. The dollar value of the oil and gas production in Texas last year ($122.5B) was about the same as the entire GDP of the state of Arkansas ($124B) and the entire GDP of the country of Hungary ($132B).

3. You can buy this 3-bedroom house in Detroit for $200, which is less than the cost of the average college textbook.

4. The average price of a house in Detroit ($28,000) is less than the average price of a new car ($32,500).

5. The Federal Reserve Bank of Cleveland reported yesterday that its latest estimate of 10-year expected inflation is only 1.89%.

6. The Auburn-Alabama game leads college football’s most expensive tickets this year ($535), followed by Michigan-ND at $525.

7. Oil-rich North Dakota led the US with the highest state GDP growth rate in Q4 2013 of 8.4%, three times the US average for Q4 of 2.8%, according to the BEA’s report today on state GDP.

8. Natural gas production has increased tenfold in Ohio’s Utica shale play since 2012.

9. The tattoo removal business is booming as inked teens grow up.

10. Georgia County refuses to pay medical bills for the toddler who was seriously injured by a flash grenade during a May SWAT drug raid that found no drugs.