The importance of strategic metals to the U.S. economy came into sharp focus last November when China cut off Japan’s rare earth metals supply over a territorial dispute and Japan immediately backed down. Since then, Americans have learned that the majority of rare earth deposits are in China, accounting for 97% of world production.

China’s action against Japan also exposed a more threatening strategy in the works‐‐ to create a two-tiered price structure with China’s manufacturers receiving rare earths at significantly lower costs than the rest of the world. Prices outside China are now 20 times what they were 2 years ago and 40% higher than inside China.

Is America confronting a situation similar to the 1970s OPEC oil embargo? No, the current situation is actually far worse. Deng Xiaoping famously noted 30 years ago that “the Mideast has oil, China has rare earths”. What he didn’t say was unlike the Mideast, China also has the means to manufacture and distribute globally every product that requires rare earths, which today includes automobiles, computers, cell phones, fluorescent lights, much of our military equipment and nearly every green technology‐electric cars, wind turbines, fuel cells, solar panels, etc. This is precisely what makes the current situation so dangerous to the long term prospects for the U.S. economy and American jobs. A two‐tiered price structure could make it impossible for American manufacturers to compete with China in the 21st Century.

A constant refrain from economists and politicians is that American innovation is our way out of the current financial dilemma. Breakthrough U.S. discoveries in the past have created whole industries such as automobiles, commercial flight and computers, generating millions of jobs and national prosperity. But what if we are unable to participate in the next great American discovery simply because we can’t get the necessary raw materials at competitive prices? The millions of jobs would blossom where the materials are available. Today, that is China.

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From the House Committee on Government Reform and Oversight:

ATF_10-04-11_Holder_memo_docs

Senator Chuck Grassley and Congressman Darrell Issa today said that Attorney General Eric Holder received at least five weekly memos beginning in July 2010, including four weeks in a row, describing the ill-advised strategy known as Operation Fast and Furious. The memos were to Holder from Michael Walther, the director of the National Drug Intelligence Center.

The Attorney General told Issa during a House Judiciary Committee in May 2011 that he had just learned of Fast and Furious a few weeks before. Yet, on January 31, in a previously scheduled meeting, Grassley personally handed him two letters about Fast and Furious. Grassley and Issa said they find it very troubling that Holder actually knew of Operation Fast and Furious much earlier, and in greater detail than he ever let on.

The memos specifically said that the straw buyers were “responsible for the purchase of 1500 firearms that were then supplied to Mexican drug trafficking cartels.”

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Tomorrow, Florida has a golden opportunity to strike a major blow for economic liberty.

The vital question is this:  Will Republican senators live up to their promises to remove job-killing regulations and red tape, or will they cave in to powerful special interests and high-paid lobbyists?

On Friday, the Florida Senate will vote on HB 5005, a House bill that removes needless licensing requirements for several harmless trades—including hair braiders, outdoor theater workers and interior designers.

But as the video above explains:

The legislature set out to [remove] unnecessary licensing laws, including one that makes is a crime to practice interior design without a college degree and a two-year apprenticeship . . . . Lobbyists for the American Society of Interior Designers are trying to derail reform efforts by stirring up trouble in Tallahassee before the legislative session ends this Friday.

The American Society of Interior Designers (ASID) represents less than three percent of all designers, but its members have designated themselves as spokespeople for the entire industry.   And for the last 30 years, ASID has spent millions of dollars on a coast—to-coast lobbying campaign designed to legislate potential competitors out of business.

This 30-year fight all comes down to the Florida Senate tomorrow.

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When you think about a highly aggressive cartel teaming up with politicians to pass protectionist laws that kick entrepreneurs out of work, you probably don’t think about interior designers.

But you should.

The American Society of Interior Designers (ASID) represents less than 3 percent of all designers, but its members have designated themselves as spokespeople for the entire industry. ASID has spent over 30 years and millions of dollars lobbying from coast to coast for interior design licensing schemes.  Not surprisingly, the schemes they propose would force all interior designers to have the exact same credentials as required for membership in ASID.

The group has worked relentlessly to enlist state legislatures in its campaign for total industry cartelization. The Institute for Justice has documented these efforts in a study titled “Designing Cartels.”

Florida is ground zero right now in this epic battle.

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Abbot Justin Brown and his fellow monks are being threatened with crippling fines and even jail time.  Their crime?  Selling caskets.

Today, they are fighting back in a big way.

In 1889, a group of monks from Indiana fulfilled their dream of establishing a monastery in the Gulf South.  The monastic lifestyle they embody is simple and contemplative.  Their creation, the Saint Joseph Abbey, has had a powerful and positive impact in Louisiana.

For several centuries, monks have supported themselves financially by excelling at common trades such as farming and brewing beer.  The monks at Saint Joseph Abbey have been able to preserve and maintain their quiet lifestyle through farming and harvesting timber.

The monks make simple wooden caskets in which to bury themselves. In the early 1990s, Bishops began requesting the caskets, which led to inquiries from other interested people.  The demand continued to build:   People were eager to share in the monks’ view of the simplicity and unity of life and death through burial in a simple monastic casket.

As Abbot Justin Brown puts it:

The monks of Saint Joseph Abbey have been making caskets for over a hundred years.  People who ask for them want to share in that noble simplicity that our coffins express. We’re not a wealthy monastery and we need the income that Saint Joseph Woodworks could generate for the health care and the education of our own monks.

On November 1, 2007, the monks opened their Saint Joseph Woodworks.  But before they could sell even one casket, they were threatened with crippling fines, jail time and even a lawsuit.

Why?

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Julie Murphy is only seven years old, but she embodies the classic American zeal for entrepreneurship.

She learned about lemonade stands after seeing one in a cartoon.  She got excited and wanted to open one of her own.  And so Julie’s mother worked with her to get everything together and set up shop at a fair in Northeast Portland, Oregon.

20 minutes after opening, a government official approached and asked for their $120 occupational license.  Of course, they had no license.

And so 7-year-old Julie, the budding entrepreneur, was told to shut down her lemonade stand or face $500 in fines.

Julie and her mother were encouraged by others to keep the stand open and ask for donations instead.  Business picked up, and the regulators returned.  This time they made Julie cry.  They also got their wish:  Julie’s mom shut down the lemonade stand.

Unfortunately, this is not an isolated case of licensing gone wild.  Rather it is a classic example of a national problem that affects countless people in America every day.  Institute for Justice President Chip Mellor wrote this week in the Washington Times:

Mired in a nationwide jobless recovery, state and local governments have the power to create jobs and transform communities if they do one simple thing: Get out of the way of aspiring entrepreneurs.

Unfortunately for small businesses, however, laws restricting economic liberty are becoming more commonplace in America. Consider that since the 1950s, the percentage of occupations in the United States that require people to obtain permission from the government in the form of a license before they can pursue their chosen occupation has grown from a mere 5 percent to more than 30 percent.

Consider a few recent IJ cases:

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Tell Chuck Norris to stand down. Invasion USA never happened.

I contacted both the Laredo Police Department and the Webb County Sheriff yesterday and debunked claims that Los Zetas gunmen from the Gulf Cartel has crossed the border from Mexico and took over two ranches in Texas. The Laredo Morning News also refuted the claim. Pro 8 News, the NBC affiliate, didn’t think enough of the absurdity to even comment on it… they found the installation of a new traffic light more newsworthy.

Absurdly, the same trio of sites that cried wolf are still sticking by their story, utter lack of credible evidence aside.

Cypress News publisher John G. Winder is sticking with the story, not because any additional evidence has been produced, but because the two sources for his version of the story, blog Digger’s Realm and Examiner.com’s San Diego (CA) County Political Buzz Examiner blogger Kimberly Dvorak are standing by their militiamen and anonymous police sources.

The original Cypress Times story? A re-publication of the original Digger’s Realm story.

The Digger’s Realm story? Two anonymous Laredo police sources and a San Diego California Minuteman named Jeff Schwilk who claims he got his information from… an anonymous Laredo PD officer.

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Price fixing is illegal in the private sector, but unfortunately there are no rules against schemes by politicians to create oligopolies in order to prop up bad government policy. The latest example comes from the bureaucrats at the International Monetary Fund, who are conspiring with national governments to impose higher taxes and regulations on the banking sector.

The pampered bureaucrats at the IMF (who get tax-free salaries while advocating higher taxes on the rest of us) say these policies are needed because of bailouts, yet such an approach would institutionalize moral hazard by exacerbating the government-created problem of “too big to fail.” But what is particularly disturbing about the latest IMF scheme is that the international bureaucracy wants to coerce all nations into imposing high taxes and excessive regulation. The bureaucrats realize that if some nations are allowed to have free markets, jobs and investment would flow to those countries and expose the foolishness of the bad policy being advocated elsewhere by the IMF. Here’s a brief excerpt from a report in the Wall Street Journal:

Mr. Strauss-Kahn said there was broad agreement on the need for consensus and coordination in the reform of the global financial sector. “Even if they don’t follow exactly the same rule, they have to follow rules which will not be in conflict,” he said. He said there were still major differences of opinion on how to proceed, saying that countries whose banking systems didn’t need taxpayer bailouts weren’t willing to impose extra taxation on their banks now, to create a cushion against further financial shocks. …Mr. Strauss-Kahn said the overriding goal was to prevent “regulatory arbitrage”—the migration of banks to places where the burden of tax and regulation is lightest. He said countries with tighter regulation of banks might be able to justify not imposing new taxes.

I’ve been annoyingly repetitious on the importance of making governments compete with each other, largely because the evidence showing that jurisdictional rivalry is a very effective force for good policy around the world. I’ve done videos showing the benefits of tax competition, videos making the economic and moral case for tax havens, and videos exposing the myths and demagoguery of those who want to undermine tax competition. I’ve traveled around the world to fight the international bureaucracies, and even been threatened with arrest for helping low-tax nations resist being bullied by high-tax nations. Simply stated, we need jurisdictional competition so that politicians know that taxpayers can escape fiscal oppression. In the absence of external competition, politicians are like fiscal alcoholics who are unable to resist the temptation to over-tax and over-spend.

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