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Jan 07 2012
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Government, Politics, Rational Thinking, Taxes, USA, Voting

Misdirected Arrows

Having just seen last year all of the occupy demonstrations, my wish for the new year is that more people worldwide, and especially in the USA, will realize that the economic problems we are seeing in the world stem not from Capitalism but from Government and government intervention in what should be free markets.

While I get the beef the occupiers have, I have it too (anger at crony business for example), but so many people have their anger focused on the wrong place.  It is ignorance in the most caring sense of the word.

The occupy crowd (and the population in general) should not be upset at Capitalism or at the too easily contrived “fat cats”, they should go to the source of the problem which is Government.

Markets naturally self-regulate.  Why?  Because Buyers and Suppliers of anything have to both agree before any product or service can be bought or sold.  If one or the other cheats, lies, or otherwise doesn’t offer value they will naturally be eliminated or otherwise ignored.   The good and the bad word gets out.

The minute an outside party to the transaction gets involved and alters the relationship (screws with the free market) it is no longer a free market but a manipulated market.  Look around – do you not see Government intervention and manipulation in markets almost everywhere?  Housing, Health Care, Food, Labor, Stocks, Banking and on and on.

Look at the United States – we have a Constitution, a founding document of the nation that sets forth not what the Federal Government can do but rather what it cannot do.  This is somewhat unique to the USA and what has up until now set the USA apart from the rest of the world by levels of degrees when it comes to economic productivity.  The first job of the government is to protect your liberty, life, and property rights, and the first job of the President is to defend the Constitution.  We have a Congress that passes laws that regularly interfere  with your liberty and property rights and a current President that routinely tramples on the Constitution.

The problems we’re seeing in the USA and in many parts of the world are not stemming from Capitalism – on the contrary – its the lack of Capitalism that is pushing everything down.  When Capitalism flows freely the markets would take care of themselves.  If Government would get out of the way of interfering in markets so many of the nations economic issues would naturally resolve themselves.  Resolving economic issues leads to resolving many social issues.

Do you really need a far-away Federal bureaucrat deciding for you what you should buy, when, and for how much?  If you support this sort of a world, maybe there are a few countries for you where you could relocate, but the Constitution in the United States lays out the terms and conditions of the country.  It is clear that many people also confuse the role of the Federal government with the role of the States (ex. Dept of Education).  So many people lose their minds when you say we should get rid of the Federal Dept of Education – but think about it, what business does the government have being in the business of educating children?  That is not a role of the Federal government.  (As a side note, if you think about it again, you’ll realize why the Federal government like to have a hand in education.)

So while nobody like crony capitalism (hardly a free marketplace either), the occupy Wall Street Crowd and most Liberal Democrat voters have their arrows and frustrations pointed in the wrong place.  They should really take a clearer look at from where these problems stem and if they want to occupy something they ought to direct their energy at voting out people in the Federal government that are creating the policies.   The Federal government is the entity creating the problems then coming forth with “solutions” for the problems they create.  Enough – just vote out the wrong people and do your best to vote in the right people.  When you elect people like Barney Frank, Chris Dodd, Chuck Schumer, Harry Reid, Dick Durbin, Barack Obama, and the like, you get what we have now.  I’ll even throw in George W. Bush because he too abandoned free market principle as she said “to save the free market“.

So in this theme, spend 15 minutes checking out the above insightful video from Peter Schiff who went down to one of the occupy protests to see if he could have a dialogue with the people there.  You can see in the video that the crowd wants to just spout out quick slogans or blame zillionaires for making too much money, but Schiff sympathizes with them, calmly shoots straight with them, and shows them that their anger really needs to be put squarely on Washington DC and the politicians who create policies that do not let markets self regulate.  He is fair in his analysis and I hope here in 2012, in what is easily the most critical election year of your lifetime, more people everywhere understand that free Capitalism is the solution, not more Government.

Remember that at least in the USA the government governs at the consent of the governed.  How many Americans no longer consent to the current state of the Federal government and will vote out the wrong people this year?

Video from Reason.tv

Dec 15 2011
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Current Affairs, Government, Politics, Thought

Language and Politics

For a while now it has seemed to me that in the USA (and perhaps to some degree in other countries) the two main political parties, Republicans and the Democrats, have been using almost the exact same language to describe the other party and themselves.  Republicans come to the arena with the idea of less government and less taxation while Democrats generally show up with the idea of larger government and higher taxes. Then there is the Tea Party that comes in to the Right of Republicans and advocates MUCH less government and MUCH less taxes. These are very different schools of thought but nonetheless when I hear Republicans and Democrats talk, they all seem to be packaging themselves and the other side using virtually the exact same language.

Language is important to keep in mind in a time when anybody can manipulate almost anything to be in favor of or against even using the same set of data:

Look at these words and try to tell me if they are used by the Republicans or Democrats when describing the other:

decay… failure (fail)… collapse(ing)… deeper… crisis… urgent(cy)… destructive… destroy… sick… pathetic… lie… liberal… they/them… unionized bureaucracy… “compassion” is not enough… betray… consequences… limit(s)… shallow… traitors… sensationalists…

endanger… coercion… hypocrisy… radical… threaten… devour… waste… corruption… incompetent… permissive attitudes… destructive… impose… self-serving… greed… ideological… insecure… anti-(issue): flag, family, child, jobs… pessimistic… excuses… intolerant…

stagnation… welfare… corrupt… selfish… insensitive… status quo… mandate(s)… taxes… spend(ing)… shame… disgrace… punish (poor…)… bizarre… cynicism… cheat… steal… abuse of power… machine… bosses… obsolete… criminal rights… red tape… patronage

 

Now look at these words and tell me who is describing themselves:

share… change… opportunity… legacy… challenge… control… truth… moral… courage… reform… prosperity… crusade… movement… children… family… debate… compete… active(ly)… we/us/our… candid(ly)… humane… pristine… provide…
liberty… commitment… principle(d)… unique… duty… precious… premise… care(ing)… tough… listen… learn… help… lead… vision… success… empower(ment)… citizen… activist… mobilize… conflict… light… dream… freedom…

peace… rights… pioneer… proud/pride… building… preserve… pro-(issue): flag, children, environment… reform… workfare… eliminate good-time in prison… strength… choice/choose… fair… protect… confident… incentive… hard work… initiative… common sense… passionate

 

Who said what?  If you bend toward the Republican/Conservative school of thought you likely thing the first set was said by Republican about Democrats and the second set by Republicans about Republicans.  If you lean towards the Democrat/Liberal mentality you probably see those words in set one as perfect describers of the Republicans and the second set as a valiant choice of words to describe the Democrats.

In the end it’s marketing and packaging.  In order to cut through the noise you have to have a solid understanding of reality, or what works and what doesn’t at it’s most basic level.  More importantly when it comes to politics I think what you really need to understand is the concept of unintended consequences because politicians are big on pushing ideas that often in the end actually have the opposite effect of what they intended because they forget to factor in human behavior.  I let you try to figure out which party I’m generally talking about.

By the way – have you ever taken the world’s smallest political quiz?  Takes 30 seconds.  I’d bet no matter what you think you are you all come down on the same result.

Sep 25 2011
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Current Affairs, Government, Liberty, Politics, Rational Thinking, Taxes, Voting

The Social Contract

 

There is this myth out there that Conservatives are only for “the rich” and Liberal Democrats are always fighting for the “working class”.   Even though Liberals claim to be for the poor, or as they say the “less priviledged” and the “less fortunate”, it seems to me that Liberal Democrats don’t give a damn about the poor.  If they did, they wouldn’t continue to push policies that keep people down.

The policies that Liberals have put in place – and continue to push for do nothing but keep the poor poor.  When it comes to economics, Liberal policies and ideas do absolutely nothing to help the poor because all these policies do is maintain the poor.  Liberals are extraordinarily hypocritical – If anyone is for the “rich”  and priviledge it’s Liberals – just as long as they’re one of them.  Barack Obama is a perfect example – he’ll deride fat cats all day long then go meet them for dinner to collect cash.

But something Liberals tend to bring up over and over is this concept of the “Social Contract”.  Liberals want to engage in a system where people that have earned something are somehow obliged under some nebulous “social contract” to give up a portion of their wealth to others that don’t have wealth.

Look at Elizabeth Warren talking about this.  She’s just outraged that people that have produced something of value for their fellow men have not given a hunk of their wealth to the people.

She claims that “you built a factory out there?  good for you!“

But then she says she “wants to be clear” talking to the presumed factory owner:

“You moved your good to market on the roads that the “rest of us” built.”

“You hired workers the “rest of us” paid to educate.”

“You were safe in your factory because of police forces and fire forces that the “rest of us” paid for.”

Then she goes on to say..

“Now look, you built a factory and it turned into something terrific or a great idea, God bless…keep a big hunk of it, but part of the underlying “social contract” is you take a hunk of that an pay forward for the next kid that comes along.”

Are you kidding me?  First of all who is Elizabeth Warren to decide on behalf of anyone what “hunk” of their business they can keep?

Second of all, just what “social contract” is in place anyway?  A contract implies two or more parties coming together and AGREEING to terms of which all parties CHOOSE to participate.  Forcing one party to hand over some “hunk” of their efforts, brains, ingenuity, or otherwise when they have not agreed to do so is confiscation and there is no “social contract”.

Third of all she keeps saying “that the rest of us paid for“.  Really?  Has she seen who is paying Federal taxes in the USA?

Liberals love to tell you all about the rich and how much money they make, that it’s “disproportionate” and not “fairly distributed“. The somehow always forget to include the part of how much in Federal income tax is paid by the people that produce the wealth.

According to the IRS a few years ago the Top 50% of income earners pay 96.54% of all income taxes.  Last reviewed in 2010 it went up to 97.41%.  Here is the data (click the matrix for full view):

So if we are going to discuss income earned then we also need to discussed taxes paid.

With that in mind, let’s come back to this concept of a “social contract”.  Liberals always want to come at this this from only one direction.

  • What about the social contract where people who can’t afford health insurance rearrange their priorities to not purchase cool toys before taking care of the basics?  Sure it’s expensive but these are choices in life.  Part of the social contract is not obliging your fellow citizen to cover your butt because you chose not to.
    • What about people getting off this idea that someone else is going to pay for their mortgage and gasoline:
  • What about the idea of all American citizens paying something in taxes even if only a little.  When 50% of the country’s population pay absolutely nothing in Federal income taxes, they , as Ms. Elizabeth Warren likes to say so much are living in a society that the “rest of us paid for“.

The “Social Contract” is a two way street. If people of means would agree to “hand over” a hunk of their earned wealth, would it be too much to ask that those on the receiving end not abuse it and do everything possible to stand on their own two feet as best as possible?

The person that started his or her factory and did well did so because he or she delivered something of value to their fellow man who chose to purchase it in the free market – and yes Ms. Warren, the roads those product were delivered on were paid for in a much larger part by the same people that had the ideas, built the factories, and even employed others.

In short, the productive people of this world not only provide value to their fellow citizens, not only provide jobs to their local communities (and sometimes long distance communities), not only indirectly create whole new economies in the towns where they place their factories and offices, but they also paid almost all of the costs of putting the roads there, educating the workforce, and paying the taxes that provide local police and fire protection.

I have watch Elizabeth Warren’s announcement video and in all sincerity it’s pretty good, and she’s welcome to do what she thinks is right fighting for “working families” and fighting big lobby interests, but to attack productive people saying their goods were delivered on roads paid for “by the rest of us” is just factually incorrect.  The people setting up factories and other business are just as much a part of the working class as anyone – maybe even more so as there is no 9 to 5 in the world of the entrepreneur.

For Elizabeth Warren to come at this any other way is only to stir up false rage in some attempt keep class warfare alive.  Good luck up there in Massachusetts.

Sep 01 2011
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Current Affairs, Europe, Government, Greece, Immigration, Interviews, Personalities, Politics, Rational Thinking, Thought, UK, USA

An Interview with Daniel Hannan

Q. I’ve seen your speeches and have heard you presenting facts and sounding the alarms.  However it seems to me Europeans (politicians and citizens alike) just trod along as if the house is not actually on fire.  Is anybody listening to you over there in Europe where it counts?

A. No one is listening at all – except the majority of the electorate. A rift has opened up between politicians and people on the issue of the EU. Almost every time there is a referendum on closer integration, in pretty well any country, people vote ‘No’; yet their parliaments are usually in favour by around 80 per cent. Britain is typical. According to most opinion polls, roughly 60 per cent of voters want to leave the EU, but that position is shared by only 3 per cent of MPs. Why the division? Because politicians make the mistake of believing that, since the Brussels system has been kind to them personally, it must be good for their constituents. As Upton Sinclair once observed:’It is difficult to get a man to understand something when his job depends upon not understanding it’.

Q.  Why do the Eurocrats insist on bailing out Greece?  Do they really think that the Greeks are going to change their view of the world or their behavior simply because some Eurocrat in Frankfurt or Belgium demands they do so? (or the Italians, the Spanish and so forth) or is something else going on here?

A. The priority here is not to bail out Greece, but to bail out the euro. The people in Greece don’t believe that they’re being rescued. They understand perfectly well that the bailout money will go to European bankers and bondholders, but the repayment will come from ordinary Greek taxpayers. No wonder they are protesting. They – and the Irish, and the Portuguese – are being sacrificed in order to keep the euro going.

Q.  What’s the worst that could happen if we simply dissolved the Euro and went back to Francs, Drachmas, Lire, Guilders, and Marks ? – They were more romantic anyway.

A. More romantic and more efficient, since they allowed each country to set its interest rates and exchange rates according to its own needs. There are some technical difficulties in returning to national currencies – people would rush to put their savings in whatever money they thought less likely to devalue – but a partial and orderly unbundling of the euro is clearly a lesser evil than the generational poverty which keeping it going implies.

Q. What’s so good about Socialism?  Why is it that proponents of Socialism refuse to see its inherent problems?

A. Socialism has always struck me as being more about intention than outcome, about showing what a nice person you are rather than affecting real change. The survey that said it all was the one that showed that people who wear awareness ribbons and wristbands are less likely to give to charity than people who don’t. There’s always been an element of that in socialism. ‘Whaddaya mean, why don’t I give to charity? I’m already calling for higher taxes!’

Q.  Two of the best things to come out of the ascent (and failure) of Barack Obama is that more and more Americans are seeing (many for the first time) what it really means to have a man like this as President and many are now revisiting the question of exactly what is government supposed to do and what is it not supposed to do.  It reminds me a little of what happened in Spain with the Socialist Jose Luis Zapatero and his Socialists getting hammered in elections.  Is this a sign of hope for all of us?  Are the voters of the world finally realizing that Socialism simply doesn’t work or are we doomed to fight this charade forever?

A. I’m afraid it’s cyclical. Right-of-Centre governments generally win office when the other lot have left the treasury empty. They then patiently rebuild the nation’s credit, whereupon the electorate says: ‘Great – crisis over. Let’s have those nice, caring Lefties back again’.

Q.  Speaking of Obama, in 2008 Barack Obama won the American Presidency with millions of followers thinking he would deliver utopia.  Europeans swooned over him even thinking America had finally come to its senses and placed a “reasonable” man into the White House.   Not that is matters at all in our elections, but out of curiosity how do you think Europeans see Obama today now that he’s actually been in the White House for almost three years?

A. All American presidents end up being unpopular with the European Left. The same charges are thrown at Obama that were thrown at all his predecessors: the US is still in Afghanistan, Guantanamo is still open, the climate change treaties still unratified etc etc. The truth is that no country wins popularity by emulating its critics. You win respect by outperforming them. Or, at least, you did until your present leaders decided to spend, tax and borrow the US to ruin.

Q.  An England question.  England used to be a polite, mannered place with proud people.  Is it just my impression or does England seem rougher, more cynical, more tabloid.  What has changed in British culture over the past 25 years?

A. We’ve never been as polite as Americans think. We’re an earthy, violent, Hogarthian people, whose manners are simply a way of keeping our native bellicosity in check. One thing that has changed, though, is the expansion of welfare dependency. It has made us less independent, more whiney, less responsible. I hope, though, that that’s a remediable problem, and the current government is doing some useful things to free people from the squalor of reliance on benefits.

Q.  What open advice would you offer to American voters that think the European model of social welfare is the way to go?

A. It’s fine in the short term: long vacations, maternity and paternity leave, generous welfare entitlements. What’s not to like? The trouble is that, after a couple of decades, the money runs out. That’s the point we’ve reached now. In 1974, Western Europe accounted for 36 per cent of the world’s GDP. Today it’s 25 per cent. In 2020 it’ll be 15 per cent.

Q.  It seems to me Europe is cannibalizing itself.  With birthrates across Europe in decline, what kind of Europe are we looking at one or two generations from now?

A. We face a choice between massive depopulation and massive immigration. The former option needn’t be as calamitous as people think. Yes, the ratio of pensioners to working people will become harder to manage, but it’s much easier for a 70-year-old to carry on sitting in front of a computer screen than it was a hundred years ago for a 70-year-old to carry on mining coal. And, once that demographic bulge has passed, I can see advantages in Europe drifting back to the population level it enjoyed in the early twentieth century. My own constituency in South East England has become very crowded. Property prices are ridiculously high, people are having to commute for longer and longer, there is massive demand for schools and hospitals, the green spaces are disappearing under concrete. I could live with a slight easing of the population pressure!

Thank you Mr. Hannan for taking the time to sit for the Anthidote.com interview.  Poignant comments and please keep pushing.

Daniel Hannan is a writer and journalist, and has been Conservative Member of European Parliment for South East England since 1999. He speaks French and Spanish and loves Europe, but believes that the European Union is making its constituent nations poorer, less democratic and less free.  His latest book is “The New Road to Serfdom – A Letter of Warning to America“

Aug 20 2011
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Current Affairs, Economics, Government, Liberty, Politics, Rational Thinking, Thought, USA, Voting

A Rebuttal to “How Rich is Too Rich” by Sam Harris

Sam Harris wrote a piece on August 17 on his blog entitled “How Rich is Too Rich?“.  It was a genuinely thoughtful piece with some great points but he lost my hope when he used the line “how much wealth can one person be allowed to keep“.  Allowed?  By whom?

And what about the other side of the “How Rich is Too Rich” coin such as “How Much Stealing is the Right Amount?” or maybe “How Much Waste is There in Government” or even “How Lazy Can You Be?

When it comes to private individuals generating wealth (even one dime) by performing a legal service or selling a legal product, the profit generated after belongs not to society but to the individuals and stakeholders that took the initiative to make it happen.

If we want to start throwing around the “allowed” word the very first place we should put that word is with the federal government.  We should not be asking how much Steve Jobs should be allowed too keep, but rather how much should the government be allowed to have from the taxpayers generating the wealth.

The US Government holds its position at the consent of the governed, and people are mad because government is using billions of dollars in taxpayer money to go way beyond the core purposes of government.  By and large Americans don’t have a problem with the concept of paying taxes, they have a problem with paying taxes when the tax revenue gets squandered.

Taxpayers who have trouble making ends meet are not thinking about Steve Jobs, Bill Gates, or anyone else like that, they’re thinking about their mortgage, their gas bill, groceries, medical bills, and other items that they could purchase if they only were “allowed” to keep more of their income.

They get mad because of the sheer waste all around them, such as this $600,000 gurgling toad sculpture.  How many tax paying households had to chip in to pay for this?  Don’t you think whatever monies were taxed and redistributed to purchase this commissioned work could have been put to better use by the people that earned that money?  There is an almost limitless supply of examples of government waste we could discuss – here’s 50.  It’s government that is “allowed” to keep too much money not individuals.

Sam posits a question and gives his answer.

“How many Republicans who have vowed not to raise taxes on billionaires would want to live in a country with a trillionaire and 30 percent unemployment? If the answer is “none”—and it really must be—then everyone is in favor of “wealth redistribution.” They just haven’t been forced to admit it.”

What about framing the argument this way?

How many Democrats who have vowed to raise taxes on anyone making over $250,000 would want to live in a country where employment goes to 30% because business owners limited to $250,000 in income have no incentive to grow past that – because anything over that amount would simply be confiscated?

Which do you think is a more likely scenario?  Clearly the second because nobody is close to an individual wealth of a triilion bucks, but we have all kinds of Democrats wanting to raise taxes on people who generate over $250,000 in income.

In Mr. Harris’ blog post, he brings up the news about Warren Buffett’s op-ed wherein he mentions he’s taxed at a lower rate than his secretary (and that many Conservatives pretend not to find this embarrassing).

This is comparing apples and oranges.  One is capital gains taxation and the other is ordinary income taxation. Mr. Buffett could always choose to pay himself ordinary income.  Why doesn’t he?  Mr. Buffett instead of pledging his billions to the Gates Foundation could choose to disperse with his wealth in some other way that’s not maybe as tax efficient.

Moreover, as this article points out, even if you flat out took all the money the super wealthy had you wouldn’t even put a dent in the problem. The root issue is not how much private people earn, it is the amount government spends.  This tired argument of taxing the hell out of rich people simply because they have it does not solve the problem.  Government must shrink.

And anyway, does anyone need a trillion dollars?  Of course not, but that’s not the point.  The point is does a need on my part create an automatic obligation on everyone elses?  If the answer is “yes”, then those people answering that way are in favor of stealing, they just haven’t been forced to admit it.

The problem we’re facing in the USA (and indeed the world) is that for many people the answer is “to hell with property rights, I want my stuff”.  They call this “social justice”.  But what is “just” about taking from your neighbor simply because you deem him to be more than satiated?

We’re all looking down the barrel of ugly arguments and scenarios these days not because of productive, job-giving, wealth creating entrepreneurs, but because of government fools who get in the way of free markets efficiently delivering solutions to people.  The very people government claims to help and champion are the very people that get wiped out by government.

Are free markets perfectly efficient?  No but they are far more efficient and “fair” than centrally planned economies where a few people pick winners and losers and there are only but a few winners. Remember fairness is a two lane highway.

In the USA we do have “crisis of inequality” and on a global level it’s even worse, but government interference, corruption, and waste only exacerbates the problem.  Americans (and likely most people in rich countries) do not want to live in a society with huge “inequalities” in wealth but the difference between Conservatives and Liberals is how we achieve that.  One could also easily point out that we have a crises of inequality in effort put forth by many people.

Offering 99 weeks unemployment checks or incremental welfare subsidies for every baby you have while on welfare only keeps people down when they might otherwise get up on their own.

The brutal truth is some politicians would have it no other way.  Until we elect people that limit government to what it is supposed to do instead of all of these superflous programs it won’t change too much.

If there is one place we should be pointing the “how rich is rich” question it is not at private individuals, it is at government.

Photo by Stuck in Customs

Jul 27 2011
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Current Affairs, Government, Politics, USA

Choices

 

With all of the talk in the USA about the debt ceiling and pending devastation if we don’t lift it, let us remember a few things.  The Congress makes the laws and the President decides what he wants to sign or not.  Yes the USA has raised the debt ceiling before, but the problem this time is that in the past 18 months Presdient Obama has spent trillions of dollars and has pushed the country to the extremes of what it can handle. He says Bush spent to much (which he did) and then proceeds to quadruple down on Bush’s spending.

President Obama caused all sorts of additional debts and damage (his spending) then comes to the citizens of the country lecturing us on how we have to get our fiscal house in order – all the while he continues to spend and resist cuts (real cuts). 

As I write this, the US House of Representatives has passed a measure to cut and cap spending and balance the budget.  If that Bill makes it to the President, the choice is his and his alone to sign it or to not sign it.

If nothing happens and the USA does in fact hit the debt ceiling, it is not the beginning of the problem – it’s actually the beginning of the end of the problem because it will be at that point that the USA has no choice but to start actually cutting spending.  The law of tha land will be the debt ceiling level and if Obama chooses to exceed it on his own or otherwise, he bears the responsiblity.  When Obama comes out and says that seniors won’t get their checks, or that military people won’t get paid, this is a.) his choice and b.) blantant pandering.

The President can CHOOSE to start cutting useless spending and keep critical spending in place.  He can easily make sure the interest on the debt gets serviced first, that medicare and the like get covered, and that military families are covered – but unfortunately the programs for Cowboy Poetry that Harry Reid thinks are so critical (see above video) are just going to have to go.  That and the literally tens of thousands of other wasteful programs that government has no business being in.

As far as I’m concerned, the House has done it’s job and has passed a bill that cuts spending.  If we go to the brink, it will be because the President of the USA wants to.  He comes to the American people everyday telling us about the looming catastrophe, but when he is presented with a solution to avoid it he refuses it.

 






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