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International Foundation
Dale Ogden |
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I want Free Minds
& Free Markets Dale Ogden for Governor “Small Government is
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“I cannot undertake to lay my finger on
that article of the Constitution which granted a right to Congress of
expending, on objects of benevolence, the money of their
constituents...” --James Madison “Any alleged ‘right’ of one
man, which necessitates the violation of the rights of another, is not and
cannot be a right.” — Ayn Rand “Dependence begets subservience and
venality, suffocates the germ of virtue, and prepares fit tools for the
designs of ambition.” --Thomas Jefferson, Notes on Virginia, Query 19, “Manufactures”
[1781] “The whole aim of practical politics is to
keep the populace alarmed, and hence clamorous to be led to safety, by
menacing it with an endless series of hobgoblins, all of them
imaginary.” – H.L. Mencken “The
greatest dangers to liberty lurk in insidious encroachment by men of zeal,
well-meaning, but without understanding.” — Judge Louis D.
Brandeis “Only when the state is restricted to the
administration of justice, and economic creativity thus freed from arbitrary
restraints, will conditions exist for making possible a lasting improvement
in the welfare of the more miserable peoples of the world.” —
Karen Kwiatkowski, “The Wolf You Feed” [August 31, 2010] “The
term bipartisan usually means some larger-than-normal government deception is
taking place.” – H.L. Mencken “Eternal vigilance is the price of
liberty.” — Wendell Phillips “Life
is infinitely less important than freedom. A free man has a value to himself
and perhaps to his time; a ward of the state is useless to himself — useful
only as so many foot-pounds of energy serving those who manage to set
themselves above him” —
Walter Lippmann |
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9/30/2010: Jon
Stewart attacked by Brady Campaign by John Pierce As Jon
Stewart continues to grow into his role as “America’s
most trusted news anchor,” he appears to be becoming more libertarian
in his views regarding the Second Amendment. On his Thursday,
August 19th, 2010 show, after pointing out that millions of peaceful
Muslims should not be damned for the sins of the extremists, Stewart
proceeded to say; “If only someone could step up and cut through all
this political posturing, and fear mongering, and remind us what America is
all about.” He then
cut to moving video of former NRA President and beloved civil right activist
Charlton Heston speaking out about the call from
the political left in 1999 for the NRA to not hold their scheduled annual
convention in Denver out of respect for the families of those who lost loved
ones in the Columbine tragedy. After the
inspiring words of Charlton Heston explaining why
we should not allow tragedies to drive us into abandoning the fundamental
freedoms that define us as a nation and which bind us together as a people,
Stewart admitted to having been one of those who called for the convention to
be cancelled and then he did an astonishing thing. He apologized. He said
the apology was for “connecting irresponsibly the actions of two
psychotics to an entire group of reasonable people expressing their
Constitutional rights... the point is, I was wrong and Heston
was right.” There are
few things that take greater courage than facing one’s own words and
admitting that we were wrong. And I applaud Stewart for being willing to do
so. But
that’s not all. Last Tuesday, September 21, 2010, Jon Stewart was a
guest on Oprah to promote his Rally to Restore Sanity.
During the interview, the topic of school shootings arose and Stewart
proceeded to proclaim that “Guns are not the problem… crazy is
the problem” to thunderous applause from Oprah’s audience. You
may watch the relevant excerpts in the attached video, but he goes on to make
a truly profound statement; “We cannot legislate our society to the craziest
amongst us.” Speaking
of which… Paul Helmke at the Brady Campaign
(described tongue-in-cheek in a previous
Daily Show Episode as a ‘Well funded hate group’) was
quick to react to Stewart’s comments, chiding him for daring to
disagree with the Brady’s plan to legislate the Second Amendment out of
existence. In an Opposing Views column, Helmke
repeatedly asked ‘Really Jon?’ as he trotted out his tired and
failed arguments about why Americans should be stripped of their civil
rights. Now…
I am sure that Stewart agrees with the Supreme Court holding in Heller that
the Second Amendment is not an unlimited right. But I am equally sure that
Stewart recognizes the fact that if Helmke and his
ilk had their way, it would be no right at all. And it appears that Stewart
see that as part of the insanity that is driving a wedge between us as a
nation. I think I speak for all of us (except the Brady Campaign of course) when I say Restore the Sanity folks… and have fun doing it! Cost Of State Regulations On California Small Businesses
Study Sanjay B. Varshney, Ph.D., CFA Professor of Finance and Dean - College of Business
Administration California
State University, Sacramento Dennis H. Tootelian, Ph.D. Professor of Marketing – College of Business
Administration California
State University, Sacramento …CONCLUSIONS This study
measures and reports the cost of regulation to small business in the State of
California. It employs an original and unique approach using a general
equilibrium framework to identify and measure the cost of regulation as
measured by the loss of economic output to the State’s gross product,
after controlling for variables known to influence output. It also measures
second order costs resulting from regulatory activity by studying the total
impact – direct, indirect, and induced. The study finds that the total
cost of regulation to the State of California is $492.994 billion which is
almost five times the State’s general fund budget, and almost a third
of the State’s gross product. The total cost of regulation results in
an employment loss of 3.8 million jobs which is a tenth of the State’s
population. Since small business constitute 99.2% of all employer businesses
in California, and all of non-employer business, the regulatory cost is borne
almost completely by small business. The general equilibrium framework yields
the following results: •
The total loss of gross state output for California each year due to direct,
indirect, and induced impact of the regulatory cost is $492.994 billion. •
In terms of employment this total output loss is equivalent to the loss of
3.8 million jobs for the state each year. A loss of 3.8 million jobs
represents 10% of the total population of California. In terms of labor
income, the total loss to the state from the regulatory cost is $210.471
billion. Finally the indirect business taxes that would have been generated
due to the output lost arising from the regulatory cost is $16.024 billion. •
The total regulatory cost of $492.994 billion is four to four and a half
times the total budget for the state of California, and almost five to six
times the general fund alone. Further, given the total gross state output of
$1.6 trillion for California in 2007, the lost output from regulatory costs
is almost a third of the gross state output. •
The indirect business taxes lost could have helped fund many of the
state’s departmental budgets. As an example, the indirect business
taxes lost are 60 times the budget of the Office of Emergency Services, and
would have paid for almost half the budget of the Department of Education. •
The total cost of regulation was $134,122.48 per small business in California
in 2007, labor income not created or lost was $57,260.15 per small business,
indirect business taxes not generated or lost were $4,359.55 per small
business, and finally roughly one job lost per small business. •
The total regulatory cost of $492.994 billion translates into a total cost
per household of $38,446.76 per household, or $13,052.05 per resident. The
total cost per household comes close to the median household income for
California. This
study provides the most comprehensive and complete analysis of the total
regulatory burden in California. The study and findings have implications for
policymakers and those in charge of the regulatory environment. The results
also suggest that future research should attempt to understand how to
minimize the intended and unintended costs of regulation. Since small
businesses are the lifeblood of California’s economy constituting 99.2%
of all employer businesses, efforts to make the regulatory environment more
attractive will make California a more attractive state for doing business.
This in turn will improve the state’s output, employment, labor income,
indirect business taxes, economic climate, quality of life, living standards,
and growth prospects… [Download the entire article (PDF)] 9/28/2010: Politics
Versus Gold by Thomas Sowell One of
the many slick tricks of the Obama administration was to insert a provision
in the massive Obamacare legislation regulating people who sell gold. This
had nothing to do with medical care but everything to do with sneaking in an
extension of the government's power over gold, in a bill too big for most
people to read. Gold has
long been a source of frustration for politicians who want to extend their
power over the economy. First of all, the gold standard cramped their style
because there is only so much money you can print when every dollar bill can
be turned in to the government, to be exchanged for the equivalent amount of
gold. When the
amount of money the government can print is limited by how much gold the
government has, politicians cannot pay off a massive national debt by just
printing more money and repaying the owners of government bonds with dollars
that are cheaper than the dollars with which the bonds were bought. In other
words, politicians cannot cheat people as easily. That was
just one of the ways that the gold standard cramped politicians' style-- and
just one of the reasons they got rid of it. One of Franklin D. Roosevelt's
first acts as president was to take the United States off the gold standard
in 1933. But, even
with the gold standard gone, the ability of private individuals to buy gold
reduces the ability of the government to steal the value of their money by
printing more money. Inflation
is a quiet but effective way for the government to transfer resources from
the people to itself, without raising taxes. A hundred dollar bill would buy
less in 1998 than a $20 bill would buy in the 1960s. This means that anyone
who kept his money in a safe over those years would have lost 80 percent of
its value, because no safe can keep your money safe from politicians who
control the printing presses. That is
why some people buy gold when they lose confidence in the government's
managing of its money. Usually that is when inflation is either under way or
looming on the horizon. When many people start transferring their wealth from
dollars into gold, that restricts the ability of politicians to steal from
them through inflation. Even
though there is currently very little inflation, purchases of gold have
nevertheless skyrocketed. Ordinarily, most gold is bought for producing
jewelry or for various industrial purposes, more so than as an investment.
But, at times within the past two years, most gold has been bought by
investors. What that
suggests is that increasing numbers of people don't trust this
administration's economic policies, especially their huge and growing
deficits, which add up to a record-breaking national debt. When a
national debt reaches an unsustainable amount, there is always a temptation
to pay it off with inflated dollars. There is the same temptation when the
Social Security system starts paying out more money to baby boom retirees
than it is taking in from current workers. Whether
gold is a good investment for individuals, and whether the gold standard is
the right system for a country, are much more complicated questions than can
be answered here. But what is clear is that the Obama administration sees
people's freedom to buy and sell gold as something that can limit what the
government can do. Indeed,
freedom in general cramps the government's style. Those on the left may not
be against freedom in general. But, at every turn, they find the freedoms
granted by the Constitution of the United States hampering the left's agenda
of imposing their superior wisdom and virtue on the rest of us. The
desire to restrain or control the buying and selling of gold is just one of
the many signs of the inherent conflict between the freedom of the individual
and the left's attempts to control our lives. Sneaking a
provision on gold purchases and sales into massive legislation that is
supposedly about medical care is just one of the many cynical tricks used to
circumvent the public's right to know how they are being governed. The
Constitution begins, "We the people" but, to the left, both the
people and the Constitution are just things to circumvent in order to carry
out their agenda. 9/27/2010: Big Doin's
in Juarez Things
change. They change. I arrived in Mexico some seven years ago amid dire
warnings from all and sundry that I would instantly die of foul disease,
trampled by burros, and splashing sanguinary crime. All of this I regarded as
nonsense, because it was. The State Department issued travel warnings and
similar alarums, but State would regard Massachusetts as hazardous. There was
little to fear. Expats traveled at will and walked the streets without
concern. Things
change. While crime is hardly epidemic where we live, and in most places
mostly involves narcos killing narcos,
and takes place mostly away from the agringada
regions rife with Americans, these days there is more of it. Before, you
could walk home from a watering hole after midnight without worry. Now, no.
There’s not a lot of worry, but more than before. The local
people remain as decent as always, small towns tending to be law-abiding
everywhere on the planet. The problem is the growing reach of the drug
cartels, causing a weakening of the fabric of law. When one variety of
violent crime gets out of control, every other kind more easily flourishes. If Mexico
were not next to the world’s most ravening drug market, it would be a
corrupt, but functioning and reasonably successful upper Third-World country.
If this were not so, Mexico would not have the huge number of Americans who
have come here to retire. But the country cannot withstand a drug business
that, by a common figure, brings the traffickers forty billion dollars a
year. The money means that the cartels can buy heavier armament than can the
government, as well as buy heavier officials on either side of the border.
(It is an American conceit that corruption exists only in other countries.
Tell me another story, Grandpa.) It is
getting out of hand. The killing of policemen, judges, and mayors is now
common. Journalists die in droves. After the murder of another of its
reporters, El Diario, the major paper of Ciudad
Juarez, published the following editorial, addressed to the drug lords: “We
bring to your attention that we are communicators, not mind-readers.
Therefore, as workers in information, we want you to explain to us what you
want of us, what you want us to publish or stop publishing, what we must do
for our security. “These
days, you are the de facto authority in the city, because the legally
instituted authorities have been able to do nothing to keep our co-workers
from continuing to fall, although we have repeatedly asked this of you.
Consequently, facing this undeniable fact, we direct ourselves to you,
because the last thing we want is that you shoot to death another of our
colleagues.” This is
astonishing. It is worse. A blue whale singing Aida would be merely
astonishing, but here we have the editors of the major newspaper of a
substantial city stating candidly, with perfect clarity, that the narcotraficantes, not the national government, exercise
sovereignty over the city. The federal government understandably denounced
the editorial. No capital wants to be told that it does not control its
territory. But this is exactly what the paper said. Why is
this happening? The root of the chain of causation is plain enough: that
Americans want drugs, want them intensely, at almost any price—but the
federal government doesn’t want Americans to have drugs. Lots of
gringos want dope: We are not talking of a few ghetto-blasted crack-heads and
William Burroughs types sticking needles in their arms in rat-infested
alleys. These don’t have forty billion dollars. The users are college
students, high-school kids, Ivy League profs, pricey lawyers, Congressmen,
bus drivers, cosmetologists, and American presidents (though they don’t
inhale). All God’s chillun wants drugs. Or at
least enough of them do to make fortunes for those who sell the stuff. Let’s
admit it: Americans are drug-mad. Legal, illegal, smokable,
injectable, edible—hit don’t matter.
They would inject plaster of paris if nothing
better were available. When I was in Washington, at least half—at the
very least, half—of the single women I knew for whom the clock ticked
were on lithium, Depacote, Prozac, Xanax, Zoloft, all the gobbled M&Ms of the quietly
unhappy. Shrinks regularly prescribed drugs for high-school girls miserable
over divorce and uncertainty. Boys were forced to take Ritalin. My parents
generation survived on Miltown and Equanil. In the Sixties, hippies took drugs. Now
it’s everybody. We have democratized chemistry. But
Mother Washington doesn’t want Americans to have drugs. Nor does it
want to imprison half of Yale for droppin,’ poppin,’ and tokin,’
as we once said. In effect the feds protect the consumption (through low
penalties and slight likelihood of being caught) while penalizing the sale,
thus keeping prices high. The War
on Drugs is, of course, a farce, having accomplished less than nothing over a
half-century. Somewhere the other day I saw a story saying that consumption
in the US has just risen by seven percent. This is not surprising since, as a
society decays, the escape market prospers. And, despite excited hype about
having killed this or that drug lord, there is no hope, no hope at all, of
eliminating a business that lets impoverished third-worlders
drive BMWs. None of
this would matter if it weren’t causing copious bloodshed in countries
like Mexico, and threatening the anarchy that is often called
“destabilization.” Absent this creeping hecatomb clotting in the
streets, everyone would be happy. The narcos would
get their money, consumers their drugs, officials their bribes, and DEA types
their salaries. All good. But the bloodshed exists. Intelligent
Mexicans of sound mind, to the extent that humans can approximate the
condition, worry that all hell may break loose. Not “will,” but
“may.” There is a sense here, as there is in the United States,
that something is wrong, and that something will happen. Mexico cannot defeat
the traficantes. These are bad, bad boys, willing
to ambush police convoys, kill federal judges, and rule towns. By comparison
the Italian Mafia was a basket of puppies. The US had
better think about what it wants on its borders. As long as drugs are
illegal, they will flow and the gringos will buy and the narcos
will roll in dough. Nothing will stop or impede this. American colonels with
steely gaze and firm handshakes and the comprehension of flatworms have told
me that the Merida Initiative will rid Mexico of corruption, and then the Federales will clean house on the narcos.
Is there an adult in the house? I
understand that Americans have no interest in Mexico other than to give jobs
to illegals and then complain that they have them. And of course to buy drugs
and then complain that Mexicans sell them. But a bit of attention, even of
realism, might have its virtues. Afghanistan is somewhere else. Mexico
isn’t. The
Trouble with Public Sector Unions by Daniel Disalvo When Chris Christie became New Jersey's governor
in January, he wasted no time in identifying the chief perpetrators of his
state's fiscal catastrophe. Facing a nearly $11 billion budget gap — as
well as voters fed up with the sky-high taxes imposed on them to finance the
state government's profligacy — Christie moved swiftly to take on the
unions representing New Jersey's roughly 400,000 public employees. On his first day in office, the governor signed an
executive order preventing state-workers' unions from making political
contributions — subjecting them to the same limits that had long
applied to corporations. More recently, he has waged a protracted battle
against state teachers' unions, which are seeking pay increases and free
lifetime health care for their members. Recognizing the burden that such
benefits would place on New Jersey's long-term finances, Christie has sought
instead to impose a one-year wage freeze, to change pension rules to limit
future benefits, and to require that teachers contribute a tiny fraction of
their salaries to cover the costs of their health insurance — measures
that, for private-sector workers, would be mostly uncontroversial. The firestorm that these proposals have sparked
demonstrates the political clout of state-workers' unions. Christie's
executive order met with vicious condemnation from union leaders and the
politicians aligned with them; his fight with the public-school teachers
prompted the New Jersey Education Association to spend $6 million (drawn from
members' dues) on anti-Christie attack ads over a two-month period. Clearly,
the lesson for reform-minded politicians has been: Confront public-sector
unions at your peril. Yet confront them policymakers must. As Christie
said about the duel with the NJEA, "If we don't win this fight, there's
no other fight left." Melodramatic as this may sound, for many states,
it is simply reality. The cost of public-sector pay and benefits (which in
many cases far exceed what comparable workers earn in the private sector),
combined with hundreds of billions of dollars in unfunded pension liabilities
for retired government workers, are weighing down state and city budgets. And
staggering as these burdens seem now, they are actually poised to grow
exponentially in the years ahead. If policymakers fail to rein in this
growth, a fiscal crack-up will be the inevitable result. New Jersey has drawn national attention as a case
study, but the same scenario is playing out in state capitals from coast to
coast. New York, Michigan, California, Washington, and many other states also
find themselves heavily indebted, with public-sector unions at the root of
their problems. In exchange, taxpayers in these states are rewarded with
larger and more expensive, yet less effective, government, and with elected
officials who are afraid to cross the politically powerful unions. As the
Wall Street Journal put it recently, public-sector unions "may be the
single biggest problem...for the U.S. economy and small-d democratic
governance." They may also be the biggest challenge facing state and
local officials — a challenge that, unless economic conditions
dramatically improve, will dominate the politics of the decade to come... In 1943, a New York Supreme Court judge held: "To tolerate or recognize any combination of
civil service employees of the government as a labor organization or union is
not only incompatible with the spirit of democracy, but inconsistent with
every principle upon which our government is founded. Nothing is more
dangerous to public welfare than to admit that hired servants of the State
can dictate to the government the hours, the wages and conditions under which
they will carry on essential services vital to the welfare, safety, and
security of the citizen. To admit as true that government employees have
power to halt or check the functions of government unless their demands are
satisfied, is to transfer to them all legislative, executive and judicial
power. Nothing would be more ridiculous." ...When it comes to advancing their interests,
public-sector unions have significant advantages over traditional unions. For
one thing, using the political process, they can exert far greater influence
over their members' employers — that is, government — than
private-sector unions can. Through their extensive political activity, these
government-workers' unions help elect the very politicians who will act as
"management" in their contract negotiations — in effect
handpicking those who will sit across the bargaining table from them, in a
way that workers in a private corporation (like, say, American Airlines or
the Washington Post Company) cannot. Such power led Victor Gotbaum, the leader of District Council 37 of the AFSCME
in New York City, to brag in 1975: "We have the ability, in a sense, to
elect our own boss." …Public-sector unions thus distort the labor market, weaken
public finances, and diminish the responsiveness of government and the
quality of public services. Many of the concerns that initially led
policymakers to oppose collective bargaining by government employees have,
over the years, been vindicated… [Read
the entire article and become more depressed] 9/27/2010: A New
Low for Obama
9/26/2010: The
Very Dangerous Folly of Obamanomics by
Austin Hill I have
this certain sound byte in my computer, and I use it frequently on my daily
talk shows. The audio
is over two years old -which means it might just as well be a half-century
old, by contemporary electronic media standards – yet it is incredibly
relevant today and will still be relevant in November. The sound
was derived from a video report of former Senator Barack Obama, campaigning
for the presidency back in August of 2008. Speaking before a stadium full of
energized fans and supporters, our future President begins to talk about a
subject that was “top of mind” for most Americans two summers ago
– the fact that the cost of gasoline was, at that time, approaching
five dollars a gallon. Shaking
his head in disgust and disbelief and with a disdainful chuckle in his voice,
Mr. Obama says, in part: “…You’ve
got oil companies making record profits…no… no companies in
history have made the kind of profits the oil companies are makin’ right now…they..they…….one
company, Exxon Mobil, made eleven billion dollars…billion, with a
“b” ….last quarter….they made eleven billion dollars
the quarter before that…makin’ money
hand-over-fist…makin’ out like bandits…” From
here, then-Senator Obama went on to introduce his new “energy”
proposal. As a remedy for rising gasoline prices, he wanted to raise taxes on
oil companies, and use that “extra” tax revenue to give
“working Americans” a thousand-dollar voucher that they could use
to make gasoline purchases. I played
this sound byte several times on my daily talk show back in the summer of
2008, and pondered lots of questions about the Senator’s comments.
“Why is Senator Obama so outraged about a company being successful and
making a profit?” I asked my talk radio audience back then. “Will
raising taxes on oil companies really make the price of gasoline drop, or
might it make the price of gasoline rise?” “Why does Senator
Obama compare the Exxon Mobil corporation to ‘bandits’– has
the company stolen something?” “How will Mr. Obama define
‘working Americans,’ and how will he determine who qualifies a
gasoline voucher?” “Who in America really ‘deserves’
free gasoline, and who does not?” Back
then, many Obama supporters responded to my questions about the
Senator’s proposed “energy policy” with calls and email
telling me that I was a “racist.” My questions and ideas
obviously had no merit, and the only reason I didn’t approve of what
Mr. Obama was proposing was because he is black, and I am white. By the
time Mr. Obama took office in 2009, the cost of gasoline had already begun to
decline, which meant that, fortunately, discussions about his “gasoline
voucher” program ended. But unfortunately for America, the same kind of
illogic and childish assumptions that undergirded candidate Obama’s
economic rhetoric in 2008 seem to have also guided President Obama’s
fiscal and economic policies for the past twenty months. This is really
“bad news” for America, and it is the reason why the Obama
Democrats are so horribly disliked today. From the
campaign trail, Senator Obama liked to cast economic discussions into
“the good guys versus the villains” scenarios. Thus, without any
regard for what Exxon Mobil’s balance sheet looked like, with no
consideration of the amount of capital that was risked and invested in any
given quarter, without any consideration for the number of hours of human
labor and toil deployed in any given quarter, and without any discussion
about the fact that American oil companies are at the mercy of global oil
prices, Senator Obama simply portrayed the Exxon Mobil company as a
“villain” for earning a “record profit,” and he was
going to be the “good guy” who would legislate money away from
the oil company and give it to “us.” Tragically,
the rhetorical assumptions that drove Mr. Obama’s presidential campaign
also seem to have driven the Obama Democrats’ legislative goals
regarding healthcare. Just as candidate Obama demonized and vilified oil
companies two years ago, President Obama and his party in Congress have
successfully demonized healthcare providers and insurance companies, and we
are now experiencing the devastating results of legislative attempts to force
these allegedly villainous companies to be “nice.” There’s
no doubt that American health insurance companies can behave very badly,
refusing to provide coverage to clients when they should. But the Obama
Democrats have conveniently ignored the one thing that can incentivize
insurance companies to behave better – if the insurance market was
truly open and “competitive,” and insurance companies truly had
to compete for clients, they would be forced to treat their clients better
– and instead, the Party of Obama has legislated a mandate for
companies to be “nice.” The
mandate to be “nice” is already driving-up the price of health
insurance – insurance companies that are now forced to provide coverage
to their clients’ “adult children,” are making-up for the
additional costs they are incurring by charging more for all their policies.
Thus, the Obama Democrats’ best effort to make health insurance
“more affordable” is already failing. Americans
are learning once again that campaign rhetoric is no substitute for sound
economics. And any American President who promises to make your life better
by vilifying your fellow countryman, is a very dangerous character indeed. 9/25/2010: Czech president
tells UN to stay out of economics * Klaus opposes
calls for increased UN role in economics * Says more
regulation is wrong way out of crisis UNITED
NATIONS, Sept 25 (Reuters) - Czech President Vaclav Klaus on Saturday
criticized U.N. calls for increased “global governance” of the
world’s economy, saying the world body should leave that role to
national governments. The
solution to dealing with the global economic crisis, Klaus told the U.N.
General Assembly, did not lie in “creating new governmental and
supranational agencies, or in aiming at global governance of the world
economy.” “On
the contrary, this is the time for international organizations, including the
United Nations, to reduce their expenditures, make their administrations
thinner, and leave the solutions to the governments of member states,”
he said. Klaus
appeared to be responding to the address of the Swiss president of the
General Assembly, Joseph Deiss, who said on
Thursday at the opening of the annual gathering of world leaders in New York
that it was time for the United Nations to “comprehensively fulfill its
global governance role.” Deiss suggested the world body should get more involved in
economic and financial issues and not leave them solely in the hands of forums
like the Group of 20 club of key developed and developing nations. Klaus, a
free-market economist who oversaw a wave of privatization in the 1990s after
communism collapsed in his homeland, also said the world was “moving in
the wrong direction” in combating the economic crisis. “The
anti-crisis measures that have been proposed and already partly implemented
follow from the assumption that the crisis was a failure of markets and that
the right way out is more regulation of markets,” he said. Klaus said
that was a “mistaken assumption” and it was impossible to prevent
future crises through regulatory interventions and similar actions by
governments. That will
only “destroy the markets and together with them the chances for
economic growth and prosperity in both developed and developing
countries,” he said. The Czech
president, a vocal skeptic of global warming, said the United Nations should
also keep out of science, including climate change. U.N. Secretary-General
Ban Ki-moon has made fighting climate change one of
his top priorities. (Editing by Paul Simao) 9/22/2010: Profit
Versus Nonprofit by Walter E. Williams “Philadelphia
Scandal Underscores Pitiful State of Public Housing Oversight,” read
Jonathan Berr’s Aug. 28 report in the Daily
Finance. It was a story about Carl Greene, the embattled director of the
Philadelphia Housing Authority (PHA). He was put on paid leave while the
board investigates charges that he settled four sexual harassment claims
against him without notifying the PHA, doled out work to politically
connected law firms and pressured employees to donate to his favorite
nonprofit. Greene is also being investigated by the U.S. Attorney General
Office for the Eastern District of Pennsylvania and HUD’s Office of
Inspector General. They have yet to bring criminal charges against him. People
always act surprised by revelations of political corruption but the
Philadelphia Housing Authority corruption is highly probably in nonprofit
entities such as government. Because of ignorance and demagoguery, being
profit-motivated has become suspicious and possibly a dirty word. Nonprofit
is seen as more righteous. Very often, people pompously stand before us and
declare, “We’re a nonprofit organization.” They expect for
us to believe that since they’re not in it for money, they are somehow
above self-interest and have the public interest as their motivation.
There’s little much further from the truth. People
are always self-interested. It’s just when they manage a nonprofit
organization such as the Philadelphia Housing Authority, government entities
in general, universities and charitable organizations, they face a different
set of constraints on their behavior. The fundamental difference between
nonprofit organizations and their profit-making counterparts is that
nonprofits tend to take a greater portion of their compensation from easier
working conditions, more time off, favors and under-the-table payments.
Profit-making organizations take a greater portion of their compensation in
cash, except those that are highly regulated. In the
profit-making world, there is much greater monitoring of the behavior of
people who act for the organization. Profit-making organizations have a
financial bottom line they must meet, or sooner or later, heads will roll.
Not so with nonprofits, who have no bottom line to meet. On top of that,
incompetence for nonprofits means bigger budgets, higher pay and less oversight.
That description aptly fits one the nation’s largest nonprofit
organizations -- the public education establishment. Profit is
vital to human well-being. Profit is the payment to entrepreneurs just as
wages are payments to labor, interest to capital and rent to land. In order
to earn profits in free markets, entrepreneurs must identify and satisfy
human wants and do so in a way that economizes on society’s scarce
resources. Here’s
a little test. Which entities produce greater customer satisfaction: for-profit
enterprises such as supermarkets, computer makers and clothing stores, or
nonprofit entities such as public schools, post offices and motor vehicle
departments? I’m guessing you’ll answer the former. Their
survival depends on pleasing customers. Nonprofits, such as public schools,
post offices and motor vehicle departments, survival depends mostly on
pleasing politicians. When a
firm fails to please its customers and thereby fails to earn a profit, it
goes bankrupt, making those resources available to another who might do
better. That’s unless government steps in to bail it out. Bailouts
permit a business to continue doing a poor job of pleasing customers and
husbanding resources. Government-owned nonprofit entities are immune to the
ruthless market discipline of being forced to please customers. The same can
be said of businesses that receive government handouts. It’s
this ruthlessness of market discipline that forces firms to please customers,
economize on resources and thereby earn profits or go out of business and
goes a long way toward explaining hostility toward free market capitalism.
And much of the hostility toward free market capitalism is held by
businessmen. Adam Smith recognized this in his “Wealth of
Nations” when he said, “People of the same trade seldom meet
together, even for merriment and diversion, but the conversation ends in a
conspiracy against the public, or in some contrivance to raise prices.”
Their co-conspirator is always government. 9/18/2010: California
Schools: Monuments to Mediocrity On
Monday, the Los Angeles Unified School District (LAUSD) opened the most
expensive school in American history: the $578 million Robert F. Kennedy
Community Schools complex. As reported in the Wall Street Journal, the
24-acre complex costs roughly $140,000 per student. Parts of the school were
designed to replicate historic buildings on the grounds where the school was
built, including the Cocoanut Grove nightclub. In the warped logic that
justifies so many government decisions, somehow a nightclub seemed the
perfect environment for a student to learn mathematics and history. The
shocking sticker price for the Los Angeles school grabbed headlines across
the nation. But in Southern California, at least some teachers weren’t
expressing outrage about such wasteful spending on buildings at the expense
of students. Less than 48 hours after the opening of LAUSD’s
extravagant school structure, members of the United Teachers Los Angeles
union were outside the Los Angeles Times building, protesting the
newspaper’s recent publication of a database which evaluated teacher
performance in the school district. According
to the Times, the online database ranked 6,000 third- through fifth-grade
teachers “by their effectiveness in improving students’ scores on
standardized math and English tests during a seven-year period.” The
paper also explained that the “value-added method looks at previous
student test performance and estimates how much a teacher added to or
subtracted from a student’s progress.” Teachers howled that this
was unfair, since teachers are “more than test scores.” The
United Teachers Los Angeles pronounced it “the height of journalistic
irresponsibility to make public these deeply flawed judgments about a
teacher’s effectiveness.” Since
when is it flawed or irresponsible to demand accountability? When taxpayers
pour billions into the public education system every year, doesn’t it
make sense to determine whether that money is being spent effectively and
efficiently? One
teacher even vented, “The Times has reneged on its mission of telling
the truth.” Really? It seems like the LA Times is finally living up to
its journalistic responsibilities by offering the facts and letting readers
decide. Another teacher claimed that some of her peers were “despondent
over the rankings.” Is there any consideration of the feelings of
students trapped in the classrooms of these “despondent”
teachers—the students not being equipped with the skills necessary for
a prosperous future? The
teachers shouldn’t be too worried about the Times’ exposé
since their union is now defending their shameful ineptness at instructing students.Union protection of its bloated, inefficient
bureaucracy has reached ghastly levels in the Golden State. The same unions
that are protesting a newspaper reporting on the quality of their members are
among the biggest political players in California. One of their key focuses
this election year is Proposition 25. Proposition
25, which will appear on the November ballot, would remove the two-thirds
legislative vote requirement for passing a budget—and passing tax
increases. Instead, a simple majority of the legislature, or the controlling
political party, could pass whatever budget they want without any input from
the minority party. California’s
budget is often passed long after its constitutional deadline. In just a few
days, the legislature will set a new record for failing to pass a state
budget on time. Proposition 25 backers claim that a simple majority vote
would ensure the budget is passed on time. But in a legislature dominated by
Democrats, Proposition 25 would give the controlling party carte blanche when
it comes to feeding the unions and expanding bureaucracy—all at
taxpayer expense. Always
eager to guard their more-than-fair-share of the government budget, teachers
unions are among the biggest donors to the Yes on Proposition 25 campaign.
The California Federation of Teachers donated $1.25 million, California
Teachers Association donated $250,000, the California Faculty Association
donated $100,000, and the California School Employees Association donated
$450,000. It’s
common for teachers unions to throw around huge dollars in political
campaigns just to safeguard their interests. But ridding the state
constitution of the added taxpayer protections in a two-thirds budget vote
would clear the way for unions to get whatever they want—including the
kind of wasteful spending found in LAUSD. Keep in mind LAUSD is currently
grappling with deficit of $640 million. The $578 million school could have
covered almost the entire deficit. Although bond measures financed the
school’s construction, such wasteful spending is not uncommon
throughout the school system. Big
unions are the biggest hindrance to the education reforms so desperately
needed. Bankrupt school districts and the union leeches can keep building their
monuments to mediocrity. But eventually, their work product won’t have
the education or skills necessary to keep financing such vapid opulence. 9/17/2010: The
Grasping Macroeconomic Managers A tax cut
for the top 2 percent is “just not a good use of limited
resources.” That’s
what Treasury Secretary Timothy Geithner said on television the other day.
Sorry, but I can’t get my mind off taxes. So even though I wrote about
them two weeks ago, I must do it again. Call me a masochist, or a sadist. Geithner
was talking about Barack Obama’s wish to let the 2001 and 2003 tax-rate
cuts expire for individuals making over $200,000 and families making over
$250,000 a year. I’ll resist wisecracking about Geithner’s
enacting his own personal tax cut until he was nominated to be Treasury
secretary. It’s
worthwhile dissecting his statement because it’s typical of
Washington-think. If we are ever to get ourselves free, we will need to teach
people why they should be furious at such words. Let me
preface this by saying that in the current context I have no automatic
sympathy for “the rich.” In theory I like the idea of people
getting rich. I’d like to be rich (and not just nominally). But where
and how one gets rich makes a difference. In a freed market one might get
really (relatively) rich — apart from inheritance or gambling —
by having an extraordinary combination of entrepreneurial prescience and good
luck. Someone might imagine a blockbuster consumer product about which no one
else had a clue. Of course in a market economy unencumbered by
anticompetitive privilege, extraordinary profits would get competed away. I need
not remind readers, however, that we don’t live in a free market. Our
economy is encumbered by an array of anticompetitive privileges that can
produce monopolistic returns. Intellectual “property” laws, the
differential effects of regulation, and government contracting are just a few
ways that fabulous wealth can be obtained with political help. Not everyone
who makes a fortune does so that way. But enough do. About Taxes But this
article isn’t about the rich. It’s about taxes. If people are
able to gain unjust returns in a corporatist economic system, the appropriate
redress is to abolish the privileges, not raise taxes, for reasons that
should become clear if they aren’t already. Look at
Geithner’s statement again: A tax cut for the top 2 percent is
“just not a good use of limited resources.” I see
four pernicious assumptions right off the bat. Geithner assumes: 1)
Incomes are a common-pool resource the use for which is properly the
government’s province, thus 2)
Cutting taxes – that is, leaving additional money in the pockets of
those acquire it – is a form of government spending. 3)
Whether a sum of money is to be left in someone’s pocket is properly
determined according to politicians’ and their court economists’
estimate of its effect on the macroeconomy. 4)
Politicians know better what to do with the money than do those who will
receive it through their transactions. Balderdash.
All of it. Here is
Geithner’s reason for thinking tax cuts are a bad use of limited
resources: “It’s
asking us to go add another $700 billion to our nation’s debt over the
next 10 years to extend tax cuts which have a terrible record in helping
economic growth and helping spark business investment.” He wants
to know how the government can “spend” that much money on tax
cuts when it could be used to reduce the budget deficit that is running at
more than a trillion dollars a year. As a
matter of fact, extending the tax cuts need not add to the debt because
there’s another way to adjust for the “lost” revenue: Cut
spending by $700 billion over ten years. Notice how that is not worthy even
of consideration. Heck, $70 billion a year is less than 2 percent of a $4
trillion budget. You mean to tell me they can’t cut that piddling
amount? The military occupations cost far more than that. As the
Cato Institute reminds us, candidate Obama promised to do some serious
cutting: “We will go through our federal budget — page by page,
line by line — eliminating those programs we don’t need.” And as a
Cato newspaper ad says, “With all due respect, Mr. President,
we’re still waiting.” Well no
one really believed he would do that. It’s what you say when you need
independent votes to get elected. Besides “need” is a highly
subjective criterion. Tools of Policy Geithner’s
premise that our incomes are mere tools of government macroeconomic policy is
really quite offensive. When high-ranking officials believe that, you can be
sure we have a managed economy. This barb is aimed at tax-cutters too,
incidentally. I like tax cuts but I am not comforted by politicians who
condescend to let me keep my money because they believe it’s good for
the economy. In any event, whether the top 2 percent will spend or save the
money is really none of Obama’s or Geithner’s business. (The
Keynesian notion that if the people in that category don’t spend it on
consumer goods, they’ll stuff it in their mattresses is too ridiculous
to respond to here.) Finally,
even if all that I’ve said were invalid, there remains the unalterable
fact that if the tax cuts expire, politicians will control the money. They
say they will pay down the debt, but who in his right mind believes that?
They’re more likely to bail someone out. Government as we know it is a
transfer machine. Sen. John
Kerry says this is no time to “reward” – with tax cuts
– people who have done well financially. His alternative is to reward
the politicians who have made such a mess of things. That his suggestion
fails to evoke universal scorn only shows what bad shape this country is in. 9/15/2010:
“This is about electing people who are going to get the Federal
government to stop pressing the handle that has been flushing America’s
wealth, ingenuity, and capacity for hard work down the toilet bowl of history
by promising more and more to people who have produced less and less until no
one has anything.” —Rich Galen, Mullings 9/14/2010: from Best
of the Web • “The
social fabric is fraying. Human capital is being squandered. Society is
segmenting. The labor markets are ill. Wages are lagging. Inequality is
increasing. The nation is overconsuming and underinnovating. China and India are
surging.”--David Brooks, New York Times, Sept. 14 •
“The middle class is finally on its knees. Jobs are scarce and good
jobs even scarcer... With so much of the middle class and the rest of working
America tapped out, there is not enough consumer demand for the goods and
services that the U.S. economy is capable of producing. Without that demand,
there are precious few prospects for a robust recovery. If matters stay the
same, with working people perpetually struggling in an environment of
ever-increasing economic insecurity and inequality, the very stability of the
society will be undermined.”--Bob Herbert, New York Times, Sept. 14 9/14/2010: The
Money of Fools by Thomas Sowell Seventeenth
century philosopher Thomas Hobbes said that words are wise men’s
counters, but they are the money of fools. That is
as painfully true today as it was four centuries ago. Using words as vehicles
to try to convey your meaning is very different from taking words so literally
that the words use you and confuse you. Take the
simple phrase “rent control.” If you take these words literally--
as if they were money in the bank-- you get a complete distortion of reality. New York
is the city with the oldest and strongest rent control laws in the nation.
San Francisco is second. But if you look at cities with the highest average
rents, New York is first and San Francisco is second. Obviously, “rent
control” laws do not control rent. If you
check out the facts, instead of relying on words, you will discover that
“gun control” laws do not control guns, the government’s
“stimulus” spending does not stimulate the economy and that many
“compassionate” policies inflict cruel results, such as the
destruction of the black family. Do you
know how many millions of people died in the war “to make the world
safe for democracy”-- a war that led to autocratic dynasties being
replaced by totalitarian dictatorships that slaughtered far more of their own
people than the dynasties had? Warm,
fuzzy words and phrases have an enormous advantage in politics. None has had
such a long run of political success as “social justice.” The idea
cannot be refuted because it has no specific meaning. Fighting it would be
like trying to punch the fog. No wonder “social justice” has been
such a political success for more than a century-- and counting. While the
term has no defined meaning, it has emotionally powerful connotations. There
is a strong sense that it is simply not right-- that it is unjust-- that some
people are so much better off than others. Justification,
even as the term is used in printing and carpentry, means aligning one thing
with another. But what is the standard to which we think incomes or other
benefits should be aligned? Is the
person who has spent years in school goofing off, acting up or fighting--
squandering the tens of thousands of dollars that the taxpayers have spent on
his education-- supposed to end up with his income aligned with that of the
person who spent those same years studying to acquire knowledge and skills
that would later be valuable to himself and to society at large? Some
advocates of “social justice” would argue that what is
fundamentally unjust is that one person is born into circumstances that make
that person’s chances in life radically different from the chances that
others have-- through no fault of one and through no merit of the others. Maybe the
person who wasted educational opportunities and developed self-destructive
behavior would have turned out differently if born into a different home or a
different community. That
would of course be more just. But now we are no longer talking about
“social” justice, unless we believe that it is all
society’s fault that different families and communities have different
values and priorities-- and that society can “solve” that
“problem.” Nor can
poverty or poor education explain such differences. There are individuals who
were raised by parents who were both poor and poorly educated, but who pushed
their children to get the education that the parents themselves never had.
Many individuals and groups would not be where they are today without that. All kinds
of chance encounters-- with particular people, information or circumstances--
have marked turning points in many individual’s lives, whether toward
fulfillment or ruin. None of
these things is equal or can be made equal. If this is an injustice, it is
not a “social” injustice because it is beyond the power of
society. You can
talk or act as if society is both omniscient and omnipotent. But, to do so
would be to let words become what Thomas Hobbes called them, “the money
of fools.” The
Money of Fools: Part II by Thomas Sowell Words are
supposed to convey thoughts, but they can also obliterate thoughts and shut
down thinking. As Justice Oliver Wendell Holmes said, a catchword can
“delay further analysis for fifty years.” Holmes also said,
“think things, not words.” When you
are satisfied to accept words, without thinking beyond those words to the
things — the tangible realities of the world — you are confirming
what philosopher Thomas Hobbes said in the 17th century, that words are wise
men’s counters but they are the money of fools. Even in
matters of life and death, too many people accept words instead of thinking,
leaving themselves wide open to people who are clever at spinning words. The
whole controversy about “health care reform” is a classic
example. “Health
care” and medical care are not the same thing. The confusion between
the two spreads more confusion, when advocates of government-run medical care
point to longer life expectancies in some other countries where government
runs the medical system. Health
care affects longevity, but health care includes far more than medical care.
Health care includes such things as diet, exercise and avoiding things that
can shorten your life, such as drug addiction, reckless driving and homicide. If you
stop and think — which catchwords can deflect us from doing — it
is clear that homicide and car crashes are not things that doctors can
prevent. Moreover, if you compare longevity among countries, leaving out
homicide and car crashes, Americans have the longest lifespan in the western
world. Why then
are people talking about gross statistics on longevity, as a reason to change
our medical care system? Since this is a life and death issue, we need to
think about the realities of the world, not the clever words of spinmeisters
trying to justify a government takeover of medical care. American
medical care leads the world in things like cancer survival rates, which
medical care affects far more than it affects people’s behavior that
leads to obesity and narcotics addiction, as well as such other things as
homicide and reckless driving. But none
of this is even thought about, when people simply go with the flow of
catchwords, accepting those words as the money of fools. Among the
many other catchwords that shut down thinking are “the rich” and
“the poor.” When is somebody rich? When they have a lot of
wealth. But, when politicians talk about taxing “the rich,” they
are not even talking about people’s wealth, and what they are planning
to tax are people’s incomes, not their wealth. If we
stop and think, instead of going with the flow of catchwords, it is clear
than income and wealth are different things. A billionaire can have zero
income. Bill Gates lost $18 billion dollars in 2008 and Warren Buffett lost
$25 billion. Their income might have been negative, for all I know. But, no
matter how low their income was, they were not poor. By the
same token, people who have worked their way up, to the point where they have
a substantial income in their later years, are not rich. In most cases, they
never earned high incomes in their younger years and they will not be earning
high incomes when they retire. A middle-aged or elderly couple making
$125,000 each are not rich, even though politicians will tax away what they
have earned at the end of decades of working their way up. Similarly,
most of the people who are called “the poor” are not poor. Their
low incomes are as transient as the higher incomes of “the rich.”
Most of the people in the bottom 20 percent in income end up in the top half
of the income distribution in later years. Far more of them reach the top 20
percent than remain in the bottom 20 percent over the years. The grand
fallacy in most discussions of income statistics is the assumption that the
various income brackets represent enduring classes of people, rather than
transients who start at the bottom in entry-level jobs and move up as they
acquire more experience and skills. But if we
are going to base major government policies on confusions between medical
care and health care, or on calling people “rich” and
“poor” who are neither, then we have truly accepted words as the
money of fools. The
Money of Fools: Part III by Thomas Sowell Among the
many words that don’t mean what they say, but which too many of us
accept as if they did, are those staples of political discussion,
“liberals” and “conservatives.” Most
liberals are not liberal and most conservatives are not conservative. We
might be better off just calling them X and Y, instead of imagining that we
are really describing their philosophies. Moreover, like most confusion, it
has consequences. The late
liberal Professor Tony Judt of New York University
gave this definition of liberals: “A liberal is someone who opposes
interference in the affairs of others: who is tolerant of dissenting
attitudes and unconventional behavior.” According
to Professor Judt, liberals favor “keeping
other people out of our lives, leaving individuals the maximum space in which
to live and flourish as they choose.” That is
certainly in keeping with the dictionary definition of liberalism and with
most contemporary liberals’ vision of themselves. But, if we follow
Justice Oliver Wendell Holmes’ admonition to “think things, not
words” and look beyond the label to the tangible realities of the
world, we find almost the exact opposite of what the word
“liberal” is supposed to mean. Most of
us would probably regard the current administration in Washington —
both the White House and the Congress — as “liberal,” even
though the word “progressive” may be more in vogue. Does the
sweeping legislation empowering federal officials to tell doctors, patients,
hospitals, and insurance companies what to do, when it comes to medical care,
sound like leaving individuals the maximum space to live their lives as they
choose? Communities
that have had overwhelmingly liberal elected officials for decades abound in
nanny state regulations, micro-managing everything from home-building to
garbage collection. San Francisco is a classic example. Among its innumerable
micro-managing laws is one recently passed requiring that gas stations must
remove the little levers that allow motorists to pump gas into their cars
without having to hold the nozzle. Liberals
are usually willing to let people violate the traditional standards of the
larger society but crack down on those who dare to violate liberals’
own notions and fetishes. Our
academic institutions are overwhelmingly dominated by liberals. They feature
speech codes that punish politically incorrect statements. Even to apply to
many colleges and universities, students must have spent time as
“volunteers” for activities arbitrarily defined by admissions
committees as “community service.” As for
conservatism, it has no specific political meaning, because everything
depends on what you are trying to conserve. In the last days of the Soviet
Union, those who were trying to maintain the Communist system were
widely— and correctly— described as “conservatives,”
though they had nothing in common with such conservatives as William F.
Buckley or Milton Friedman. Professor
Friedman for years fought a losing battle against being labeled a
conservative. He considered himself a liberal in the original sense of the
word and wrote a book titled “The Tyranny of the Status Quo.”
Friedman proposed radical changes in things ranging from the public schools
to the Federal Reserve System. But he is
remembered today as one of the great conservatives of our time. Great, yes.
But conservative? It depends on what you mean by conservative. Conservatism,
in its original meaning, would require preserving the welfare state and
widespread government intervention in the economy. Neither Milton Friedman nor
most of the other people designated as conservatives today want that. Liberals
often flatter themselves with having the generosity that the word implies.
Many of them might be shocked to discover that Ronald Reagan donated a higher
percentage of his income to charity than either Ted Kennedy or Franklin D.
Roosevelt. Nor was this unusual. Conservatives in general donate more of
their income and their time to charitable endeavors and donate far more
blood. We are
probably stuck with having to use words like liberal and conservative. But we
can at least recognize them as nothing more than political flags of
convenience. We need not accept these words literally, as the money of fools. The
Money of Fools: Part IV by Thomas Sowell One of
the many words that sound so attractive, to people who do not think beyond
the word, is “disarmament.” Wouldn’t
it be better to live in a world where countries were not armed to the teeth,
especially when they are armed with nuclear weapons? Of course it would. But the
only country we can disarm is our own. The only countries we might be able to
persuade to disarm are countries that intend no harm in the first place.
Those countries that do intend to harm others — and we know all too
well that they exist — would be delighted to have all their victims
disarmed. What if
we can just get nuclear disarmament? Again, we
need to think beyond the word to the realities of the world, so that we do
not simply accept words as what Thomas Hobbes called the money of fools. Had there
been no nuclear weapons created during World War II, that would have given an
overwhelming military advantage in the postwar world to countries with large
and well equipped armies. Especially after the U.S. Army withdrew from
Europe, following the end of World War II, there was nothing to stop
Stalin’s army from marching right across the continent to the Atlantic
Ocean. The
American troops that remained in Western Europe were not enough to stop the
Soviet army. But they were enough that their slaughter by the Russians would
have risked nuclear war with the United States. Western
Europe has had one of its longest periods of peace under the protection of
the American nuclear umbrella. Japan, one of the biggest and most cruel
conquerors of the 20th century, has become a peaceful nation after Hiroshima
and Nagasaki. In the
real world, the question of whether nuclear disarmament is desirable or
undesirable is utterly irrelevant because it is simply not possible, except
in words — and we would truly be fools to accept such words at the risk
of our lives. Even if
every nuclear weapon on the planet were destroyed — and how could we be
sure that that had happened? — this would still not destroy the
knowledge of how to make nuclear weapons. Those
countries with aggressive intentions towards other countries need only choose
the time when they would put their knowledge of nuclear weapons to use, and
have the world at their mercy. Once they
had nuclear weapons, they could threaten annihilation to any other nation
that started to produce offsetting nuclear weapons. Why then
is President Barack Obama pursuing an international nuclear disarmament
agreement? It cannot be because he thinks it will work. Even if he were
foolish enough to believe that, virtually anybody in the Pentagon can tell
him why it won’t. His
political advisors, however, can tell him how great that can be for him
personally — if he doesn’t already know that. It would be
“historic” and an “achievement,” just like ObamaCare. His
political base — the young, the left and the thoughtless — would
be thrilled and energized. That can translate into money donated to his
campaign coffers and people willing to walk the precincts to get out the vote
for him in the 2012 elections. It is by
no means an irrational thing to do, from Obama’s self-centered
perspective. But what
does it say about those who take his words literally, who accept those words
as, in Thomas Hobbes’ words, the money of fools? First of
all, there may be more of such people today than in the past, as a result of
the dumbing down of education and the politicizing of education at all levels
with anti-nuclear propaganda, along with other propaganda of the left. International
disarmament has long been a favorite crusade of the left, before as well as
after the age of nuclear weapons. The period between the two World Wars were
full of popular disarmament agreements and renunciations of war. In fact,
such pious agreements contributed to the outbreak of war. Because some
nations adhered to these agreements and others did not, the military
advantage swung to the latter, who started the war — in which tens of
millions of human beings died. What a
price to pay for accepting words as the money of fools. To find out more about Thomas
Sowell and read features by other Creators Syndicate columnists and
cartoonists, visit the Creators Syndicate web page at www.creators.com.
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford
University, Stanford, CA 94305. His Web site is www.tsowell.com. COPYRIGHT
2010 CREATORS.COM 9/13/2010: Texans
Against the War on Drugs The resolutions
offered by El Paso’s city council to end prohibition are quashed by
fear of retaliation by Washington. In the
national debate about the efficacy and morality of the U.S. war on drugs, it
is not uncommon for prohibitionists to accuse their opponents of harboring
libertine motives. But as opposition to current policy increases in places
like this culturally conservative and predominantly Catholic border city,
that charge isn’t sticking. The
growing tendency here to question U.S. drug policy has nothing whatsoever to
do with ideology or an affinity for drugs. Rather, it is an acknowledgment
that while the “war on drugs” has done nothing to curb the U.S.
appetite for mind-altering substances, its unintended consequence has been to
empower organized crime networks. These gangs, which aggressively target
children as customers and low-level employees on both sides of the border,
are undermining the economy and the quality of life in the binational El
Paso-Juárez metropolitan region. As a
result, over the last two years the city council here has been growing more
vocal about the need for an alternative to current policy. But thus far it
has been rebuffed by Washington politicians, many of whom are allied with the
special interests, such as the Drug Enforcement Agency, that the drug war has
spawned. In the 40
years since Richard Nixon declared war on drug suppliers abroad—because
American consumers had consistently demonstrated that they had no interest in
curtailing demand—illicit drug use in rich countries has remained
fairly constant. Only preferences have shifted. A report
released in June by the United Nations Office on Drugs and Crime found that
“drug use has stabilized in the developed world.” Cocaine use in
the U.S. has dropped in recent decades, but there is “growing abuse of
amphetamine-type stimulants and prescription drugs around the world.”
The report also said that “cannabis is still the world’s drug of
choice.” In other words, billions of dollars in warring has left us
about where we started, except, according to the report, that the indoor
cultivation of cannabis is now a major source of funding for criminal gangs. Meanwhile,
Juárez is dying. Since the beginning of this year, more than 2,200
people in the city have been murdered. Since 2008, the toll is almost 6,500.
On a per capita basis this would be equivalent to some 26,000 murders in New York
City. Drug warriors play down these numbers by claiming that some 85% of the
dead were themselves involved in trafficking. But that claim is dubious since
in many of the murders—more than 90% of cases this year—there
hasn’t even been an arrest. And what about the hundreds of innocents,
the other 15% of the victims, that the government admits were not criminals? Because
organized crime corrupts institutions, impunity is also flourishing. This has
encouraged an epidemic of kidnapping and extortion which has sent
entrepreneurs and investors running for their lives. Thus the city’s
economy has collapsed and the municipal government is broke. I visited
Juárez last week and saw the vacant buildings and empty taco joints. Thirty-seven-year-old
El Paso City Council member Beto O’Rourke, a
father of three, told me that before witnessing the slaughter of his
neighbors and the economic decline of his city, he’d never really given
the drug war much thought. But in 2008, after more than 1,660 murders, the
city council sponsored a resolution condemning the violence with an amendment
he offered “calling for an open and honest dialogue on ending the
prohibition in this country.” The resolution passed 8-0, but the mayor
vetoed it on the grounds that it would make the city look bad in Austin and
Washington. When the
council tried to override the veto, Mr. O’Rourke says council members
received phone calls from Democratic Congressman Sylvester Reyes that
“basically threatened [the city] with loss of federal funds if we continued
with this resolution.” Mr. Reyes’s office says it only sent a
message that in a moment when the congressman was trying to garner stimulus
funds for El Paso, the resolution “wasn’t helpful.” The
override failed by two votes. In 2010,
the council offered another resolution. Mr. O’Rourke told me that this
one was “much more sharply worded and included a call for the
regulation, control and taxation of marijuana in the U.S., given that 50%-60%
of cartel revenues are marijuana sales to U.S. consumers. That was $8.6
billion in 2006 alone according to White House Office on Drug Control
Policy.” The vote
was 4-4 and the mayor broke the tie by voting against it. But Mr.
O’Rourke says he is confident that a growing number of people here can
see prohibition isn’t working. He tells me that after speeches to
Rotary Clubs and civic organizations he is invariably approached by many
individuals who say they agree though they don’t want to say so
publicly. Feedback from his own constituents also runs heavily in favor of changing
the policy. Perhaps
it is time to stop using character assassination and the power of the federal
purse to quash this conversation. Write to
O’Grady@wsj.com 9/11/2010: Gun-Carrying Neighbors
Save Women From Dog Attack FAIRFIELD,
Calif. -- Two women were still recovering Saturday after a vicious dog attack
the morning before that didn’t end until neighbors shot the dogs. Witnesses
said that at about 6 a.m. Friday, three loose dogs pounced on 52-year-old
Janelle Dalson, who was on a jog through her
neighborhood. The woman’s screams woke one neighbor, who came outside
to find her fending off the three dogs, which collectively weighed nearly 300
pounds... Fortunately,
Paquet came out of his house armed with his Walther
PPK Handgun... Neighbor
John Bettencourt also came outside armed with a handgun... “In
speaking with the officers on the scene, they said that they truly felt that
had the neighbors not interfered and come to their aid, that at least the
first victim would not have survived,” said Fairfield Police Officer
Kathryn Sommerdorf... “I
was really glad both Gary and John had gun skills. Because if there was a
place on this block where this could have happened, these are the two guys who
could take care of it,” said Diana Paquet... 9/8/2010: A
Non-Prediction by Thomas Sowell When
people learn that you are an economist, they often want you to predict which
way the economy is going. There seem to be more than the usual number of
calls for such predictions lately. But an economist should be more aware than
others are of how hazardous such predictions can be. One
reason is that what happens in the economy is affected by what politicians do
in Washington-- and who can predict what politicians will do? However,
let me go out on a limb, and try to predict what politicians will not do. What
would probably get the economy recovering fastest and most completely would
be for the President of the United States and Congressional leaders to shut
up and stop meddling with the economy. But it is virtually impossible that they
will do that. Think
about telling all the millions of people who have lost their jobs, their
homes or their businesses: “I really messed you up but, hey,
nobody’s perfect. So I’m going to leave things alone now.”
In fact, that would be hard even to tell yourself. If the
stimulus isn’t working, the true believers have to believe that it is
only because it hasn’t been tried long enough, or with enough money
being spent. There are
always calls for the government to “do something” when things are
going bad. Those who make such calls have almost never bothered to check out
what actually happens when the government does something, as compared to what
happens when the government does nothing. It is not
just free market economists who think the government can make a mess bigger
with its interventions. It was none other than Karl Marx who wrote to his
colleague Engels that “crackbrained meddling by the authorities”
can “aggravate an existing crisis.” The
history of the United States is full of evidence on the negative effects of
government intervention. For the first 150 years of this country’s
existence, the federal government did not think it was its business to
intervene when the economy turned down. All of
those downturns ended faster than the first downturn where the federal
government intervened big time-- the Great Depression of the 1930s. There are
two conflicting assumptions about what happened during the Great Depression.
The most popular assumption, especially among politicians, is that the market
failed and the government had to intervene to save the economy. Another
assumption is that the market went down and was on its way back up when
federal intervention sent it down again and led to massive unemployment. If
you don’t let facts get in the way, you can just pick whichever
assumption you like-- and the first assumption wins that popularity contest,
hands down. But, if
you look at the facts, they go like this: Unemployment never hit double
digits in any of the 12 months following the big stock market crash of 1929
that is often blamed for the massive unemployment of the 1930s. Unemployment
peaked at 9 percent, two months after the October 1929 crash, and then began
drifting downward. Unemployment
was down to 6.3 percent by June 1930, when the first big federal intervention
occurred. Within six months, the downward trend in unemployment reversed and
hit double digits for the first time in December 1930. What were
politicians to do? Say “We messed up”? Or keep trying one huge
intervention after another? The record shows what they did: President
Hoover’s interventions were followed by President Roosevelt’s
bigger interventions-- and unemployment remained in double digits in every
month for the entire remainder of the decade. There is
another set of facts: The record that was set in 1929 for the biggest stock
market decline in one day was broken in 1987. But Ronald Reagan did nothing--
and the media clobbered him for it. Then the
economy rebounded and there were 20 years of sustained economic growth with
low inflation and low unemployment. Can you
imagine Barack Obama doing another Ronald Reagan? I certainly wouldn’t
predict that. from the October
2010 issue of Liberty Magazine Split decision — In Arizona, where I live,
the battle over immigration law has become hysterical. People are flinging
charges like “racist” at one another in the way orangutans at the
zoo fling dung. When society is in “scream” mode, we pretty much
scream at everything. But if words like “racist” are devalued to
the point where they lose their meaning, can we be said to have abolished
racism as a fact? How can a
country with no standards for citizenship survive? Are immigrants not coming
here for a reason? If we destroy the very reasons for which they come, why
should they bother? And if refugees from tyranny and corruption can’t
come to America any more, where can they go? Are we really even asking these
questions? Not
everyone, of course, comes for the same reason. Those who retain faith in the
human individual recognize this, and suggest withdrawing all the freebies,
now given at taxpayer expense, and letting people come as long as
they’re here to work hard and contribute. For that, the Left thinks
we’re “mean,” and the Right calls us “soft.” But
why not consider this option? Two
mothers came to Solomon to settle a dispute. One’s baby was dead, the
other’s was still alive — and of course, both wanted the living
baby, so each claimed it for her own. Solomon called for a sword, and ordered
the living child cut in half, with one half given to each woman. The one to
whom this solution seemed good showed she was not the baby’s mother,
whereas the real mother — whose primary concern was for the well-being
of her offspring — agreed to let her rival have him so that he could
live. Those who
care about this country’s wellbeing want it healthy and whole. Those
who don’t are perfectly willing to see it pillaged by freeloaders, or
starved of fresh and eager workers. Libertarians need to call for the
proverbial sword. Those content with one half of a dead baby must be revealed
for what they are. As in the
story of Solomon, the solution stands ready at hand. By all means, the baby
must survive. This is the only way that our sad soap opera can be transformed
into a story from which future generations can draw wisdom for the centuries
to come. — Lori Heine 8/27/2010: from the
Daily Reckoning In the
real world, the economy is always making mistakes...and always correcting
them. Making mistakes...and correcting them. And
markets are always discovering what things are worth. They figure out what
one thing is worth, conditions change...and they change their minds. There are
times when the economy makes a big mistake - especially when it is given the
wrong signals from the Fed[eral Reserve]. And there
are times when markets change their minds dramatically. Investors
don’t like it much when the economy and the markets turn down. It makes
them look like morons...which they usually are. Businessmen don’t like
it much either. Falling sales or failing businesses make them look
incompetent and reduce their compensation. The average person doesn’t
like it because he loses his job...and sometimes his savings. And the
politicians don’t like it because they pretend to have everything under
control; when things seem to go wrong, voters blame them. So, the politicians
- with their lackey bureaucrats and stooge economists - take action. They do
something! Newspaper columnists and TV commentators argue about whether they
do the right thing or the wrong thing...too much or too little...too soon or
too late. But actually, anything they do will be wrong - unless it is merely
removing some previous “improvement.” “Wait
a minute... Are you saying that all these recovery programs...and raising and
lowering interest rates...and providing support for key industries...and help
for people who are unemployed... Are you saying all that is a waste of
money?” Oh no,
we’re not saying that. We’re saying it is worse than a waste of
money. It makes people doubly poorer - first because of the actual cost of
the recovery programs themselves...and second because the programs interfere
with the economy’s efforts to correct its mistakes and find proper
prices. Even the
most apparently benign - and some would say, humanitarian - government
interference is far more harmful and costly than people realize. Take jobless
benefits, for example. At least they don’t do any harm, right? Wrong!
Jobless benefits rob Peter to pay Paul because Peter has a job and Paul
doesn’t. Why do that? Paul might take his time finding a new job. There are
no new jobs, you say? Don’t be ridiculous. There are always things that
need to be done. Jobs are like anything else; you just have to find the
market clearing price. If wage rates were low enough everybody would have two
jobs. But who wants to work for substantially lower wages? No one. Most
people will only do so if they have to. As long as he is getting unemployment
compensation, Paul doesn’t have to. “Whoa...this
is radical...sounds almost subversive. You’re saying government
shouldn’t be involved at all.” “Oh
no... We don’t give advice here at The Daily Reckoning. We’re
just saying that if people want to be poorer they should invite as much
government meddling as possible.... Get government to make lots of rules and
then change them often... Put everyone on the government payroll; turn them
all into zombies...” When Helping People Backfires by
Bill Bonner “Here
in France, we always seem to start out with the right idea,” continued
our friend last night. “At least, it doesn’t sound bad.
We’re trying to correct a problem or make people’s lives better. “So
we require towns to have a place where people traveling in trailers can spend
the night. Some people live like that. They live in trailers or motor
homes...and travel around. And they were causing a lot of problems because
they didn’t have clean places with water and electrical hookups. So now
every town is required to have one of these parks. “Well
it didn’t take the gypsies long to figure out that they could live
permanently in these parks. So they set up encampments and they live there.
And if you believe the press reports, they deal in drugs and stolen property.
And when the police went into one of these parks the gypsies fired on them
with guns. “Sarkozy
decided it was time to get rid of them. But now the gypsies are protected
because they’re a minority. “That’s
the way it works. Every time you try to do something to help people - like
setting up these travel parks...or preventing people from discriminating
against minorities - it eventually backfires. People always find a way to
twist these things to their own advantage. “And
now I’ve got a situation that really makes me mad. I rented a small
house to a young guy who seemed nice enough. He pays almost no rent. But he
stopped working almost immediately. And then he brought his girlfriend to
live with him. They don’t do anything but lie around all day and use
drugs, I think. And play loud, awful music. So, I wanted to get rid of them.
But they went to some legal counselor - paid for with my taxes, probably. He
told them that the house I rented was not up to legal standards...and that
they can force me to put them up in a hotel while I make the repairs. And
then I can’t kick them out because it will be considered retaliation
for their causing me to bring the house up to European rental codes. “I’m
sure that housing codes and protecting renters all sounded like good ideas.
But they always find some way to twist them against you.” 8/27/2010: We Need A Revolution, Not A
Movement by Chuck Baldwin The
elections of 2008 (and the early elections of 2010) produced two significant
phenomena: the “Ron Paul Revolution,” and the “Tea Party
Movement.” And, mark it down: both of them will have profound effects
upon the upcoming November elections–and upon the 2012 elections as
well. Call them what you want, however, America doesn’t need another
movement; it needs a genuine revolution. The Tea
Party movement, while still a force with which to be contended, has already
been diluted and compromised. The primary elections plainly reveal the
reality of this fact. The high spots so far are the defeats of Arlen Specter
in Pennsylvania and Bob Bennett in Utah. The low spots so far are the
reelection of John McCain in Arizona and the election of Dan Coats in
Indiana. John
McCain’s election, in particular, demonstrates how many conservatives
and “revolutionaries” still don’t get it. If any State in
the union should have an up-close-and-personal look at what we are up
against, it would be the people of Arizona. After all, they are on the front
lines in the fight of one of the most important battles currently being waged
in our country: illegal immigration. And John McCain is one of the worst
offenders in terms of facilitating and encouraging this illegal invasion. Yet
the people of Arizona reelected McCain to the US Senate. (It would
interesting to know how many illegal aliens voted for McCain, would it not?) Then
again, John McCain received the enthusiastic endorsement of former Alaska
governor, Sarah Palin. This endorsement obviously brought McCain thousands of
Tea Party votes that otherwise would have gone to his principal opponent,
J.D. Hayworth. McCain is not the only Big-Government globalist neocon to
receive Palin’s endorsement. Many of Palin’s endorsees are
neocons; which leads to one of the biggest problems with any so-called
conservative movement: allowing celebrity-type “conservatives” to
become the de facto leaders and spokesmen for what should be a true grassroots,
people-generated rebellion. Sarah Palin and Glenn Beck are the two biggest
culprits in this regard. Mark my
words: Palin and Beck may see themselves as part of a conservative
“movement,” but they want nothing to do with an old-fashioned,
honest-to-God, Patrick Henry-style revolution. In fact, they are doing
everything in their power to keep such a revolution from taking place. This does
not mean that Palin and Beck do not contribute some good things to
freedom’s fight. They do. The problem is, for every good thing they contribute
they counterbalance it by supporting establishment principals, such as John
McCain and Newt Gingrich, and attacking non-establishment players and ideas,
which serves only to keep the Big-Government power structure firmly ensconced
in Washington, D.C. Get real,
folks, and start thinking for yourselves. Ask yourself why Fox News never (or
hardly ever) invites non-establishment patriots to appear on their network.
Why do you not see former Assistant Secretary of the Treasury Paul Craig
Roberts on Fox News? Why do you not see former Georgia congressman and
Presidential candidate Bob Barr on Fox News? Why do you not see former
Minnesota governor Jesse Ventura on Fox News? Why do you not see former
Director of the US Office of Economic Opportunity and Presidential candidate
Howard Phillips on Fox News? Why do you not see Presidential candidate Chuck
Baldwin on Fox News? The list is endless. Fox News
is not “fair and balanced.” It is as controlled and manipulated
as any other media news network. The only thing it balances is the other
networks’ infatuation with the Democrat Party, by promoting Republican
candidates and ideas. What it does not do is educate and inform the American
people with the truth as to what both major parties are doing to destroy our
country. But remember, Fox News is owned by Keith Rupert Murdoch, the same
man who helped finance Hillary Clinton’s campaign for the US Senate,
and who is as much of a globalist as anyone in Washington, D.C., or New York
City. As an
aside, and speaking of Hillary Rodham, I predict that she will replace Vice
President Joe Biden BEFORE the 2012 elections. I’ve said that in
private for many weeks, and now say it in this column–remember, you
heard it here. The Clinton-Bush Crime Syndicate (CBCS) needs Hillary in the
White House badly, and Obama has readily accepted a subservient role in the
criminal affairs of CBCS (for very profitable reasons, no doubt). And with
the CBCS bosses pretty much running things at the White House (they
don’t worry about domestic or social issues, providing that these do
not interfere with their international criminal activities), is it any wonder
that Obama has already taken more vacations than most Presidents take during
an entire term? And it is
the influence of globalists and neocons upon national and international
politics that the likes of Sarah Palin and Glenn Beck simply do not
get–or do not want to get. And because many Tea Partiers are so
enamored with these two (and allow them to do much of their thinking for
them), they remain clueless as well. Ladies
and gentlemen, America is in the throes of socialist and Marxist political
upheaval. The curtain could fall at any time. The American people need to
wake up to this truism: a “conservative” movement–even a conservative
Tea Party movement–will not save us. The only thing that will save us
is an old-fashioned State revolt. Arizona
had the opportunity to become a modern-day version of 1775 Massachusetts. But
Arizona has probably forfeited that leadership role by 1) reelecting John
McCain, and 2) being willing to allow federal courts to dictate law to a
sovereign State. Instead of taking its case to the federal courts, Arizona
should simply tell the federal government that it will enforce its own State
laws (including the newly enacted anti-illegal immigration law) regardless of
what any federal court says or doesn’t say. At some point, that is
exactly what some State (or group of states) in this union is going to have
to do, or liberty will be forever lost. As long
as freedom lovers are content to remain satisfied with the status quo by
allowing party politics and media celebrities to dominate their efforts,
there will be no stopping this socialist avalanche that is crashing down upon
us. The Tea Party movement of 2010 (if left free of Big-Government neocons)
could certainly translate into positive developments this November; that is
for sure. A revival of the “Ron Paul Revolution” in 2012 could
also make a significant contribution, but it is going to take a State revolution
to seal the deal. I, for one, am ready. (c) Chuck
Baldwin 9/7/2010: Political
Fables by Thomas Sowell President
Barack Obama boldly proclaims, “The buck stops here!” But,
whenever his policies are criticized, he acts as if the buck stopped with
George W. Bush. The party
line that we are likely to be hearing from now until the November elections
is that Obama “inherited” the big federal budget deficits and
that he has to “clean up the mess” left in the economy by the
Republicans. This may convince those who want to be convinced, but it will
not stand up under scrutiny. No
President of the United States can create either a budget deficit or a budget
surplus. All spending bills originate in the House of Representatives and all
taxes are voted into law by Congress. Democrats
controlled both houses of Congress before Barack Obama became president. The
deficit he inherited was created by the Congressional Democrats, including
Senator Barack Obama, who did absolutely nothing to oppose the runaway
spending. He was one of the biggest of the big spenders. The last
time the federal government had a budget surplus, Bill Clinton was president,
so it was called “the Clinton surplus.” But Republicans
controlled the House of Representatives, where all spending bills originate,
for the first time in 40 years. It was also the first budget surplus in more
than a quarter of a century. The only
direct power that any president has that can affect deficits and surpluses is
the power to veto spending bills. President Bush did not veto enough spending
bills but Senator Obama and his fellow Democrats in control of Congress were
the ones who passed the spending bills. Today,
with Barack Obama in the White House, allied with Harry Reid and Nancy Pelosi
in charge in Congress, the national debt is a bigger share of the national
output than it has been in more than half a century. And its share is
projected to continue going up for years to come, becoming larger than
national output in 2012. Having
created this scary situation, President Obama now says, “Don’t
give in to fear. Let’s reach for hope.” The voters reached for
hope when they elected Obama. The fear comes from what he has done since
taking office. “The
worst thing we could do is to go back to the very same policies that created
this mess in the first place,” he said recently. “In November,
you’re going to have that choice.” Another
political fable is that the current economic downturn is due to not enough
government regulation of the housing and financial markets. But it was
precisely the government regulators, under pressure from politicians, who
forced banks and other lending institutions to lower their standards for
making mortgage loans. These
risky loans, and the defaults that followed, were what set off a chain
reaction of massive financial losses that brought down the whole economy. Was this
due to George W. Bush and the Republicans? Only partly. Most of those who
pushed the lowering of mortgage lending standards were Democrats-- notably
Congressman Barney Frank and Senator Christopher Dodd, though too many
Republicans went along. At the
heart of these policies were Fannie Mae and Freddie Mac, who bought huge
amounts of risky mortgages, passing the risk on from the banks that lent the
money (and made the profits) to the taxpayers who were not even aware that
they would end up paying in the end. When
President Bush said in 2004 that Fannie Mae and Freddie Mac should be reined
in, 76 members of the House of Representatives issued a statement to the
contrary. These included Barney Frank, Nancy Pelosi, Maxine Waters and
Charles Rangel. If we are
going to talk about “the policies that created this mess in the first
place,” let’s at least get the facts straight and the names
right. The
current policies of the Obama administration are a continuation of the same
reckless policies that brought on the current economic problems-- all in the
name of “change.” Fannie Mae and Freddie Mac are still sacred
cows in Washington, even though they have already required the biggest
bailouts of all. Why?
Because they allow politicians to direct vast sums of money where it will do
politicians the most good, either personally or in terms of buying votes in
the next election.
9/5/2010: Rasmussen
Daily
Presidential Tracking Poll
9/4/2010: Freedom’s
Just Another Word by Frank Rich AMONG the
few scraps of news to emerge from Barack Obama’s vacation was the
anecdote of a Martha’s Vineyard bookseller handing him an advance copy
of Jonathan Franzen’s new novel,
“Freedom.” The book has since rocketed up the Amazon best-seller
list, powered by reviews even more ecstatic than those for Franzen’s last novel, “The
Corrections.” But I doubt that the president, a fine writer who draws
sustenance from great American writers, has read “Freedom” yet.
If he had, he never would have delivered that bloodless speech on Tuesday
night. What was
so grievously missing from Obama’s address was any feeling for what has
happened to our country during the seven-and-a-half-year war whose
“end” he was marking. That legacy of anger and grief is what
“Freedom” mainlines to its readers. In chronicling one Midwestern
family as it migrates from St. Paul to Washington during the 9/11 decade, Franzen does for our traumatic time what Tom
Wolfe’s “The Bonfire of the Vanities” did for the
cartoonish go-go 1980s. Or perhaps, more pertinently, what “The Great
Gatsby” did for the ominous boom of the 1920s. The heady intoxication
of freedom is everywhere in “Freedom,” from extramarital sexual
couplings to the consumer nirvana of the iPod to Operation Iraqi Freedom
itself. Yet most everyone, regardless of age or calling or politics, is at
war — not with terrorists, but with depression, with their consciences
and with one another. This mood
has not lifted and may be thickening as we trudge toward Year 10 in Afghanistan.
But Obama only paid it lip service. It’s a mystery why a candidate so
attuned to the nation’s pulse, most especially on the matter of war,
has grown tone deaf in office. On Tuesday, Obama asked the country to turn
the page on Iraq as if that were as easy as, say, voting for him in 2008. His
brief rhetorical pivot from the war to the economy only raised the question
of why the crisis of joblessness has not merited a prime-time Oval Office
speech of its own. That
Obama did consider Iraq worthy of that distinction — one heretofore
shared only by the BP oil spill — was hardly justified by his tepid
pronouncements of progress (“credible elections that drew a strong
turnout”) or his tidy homilies about the war’s impact. “Our
unity at home was tested,” he said, as if all those bygones were now
bygones and all the toxins unleashed by this fiasco had miraculously
evaporated once we drew down to 50,000 theoretically non-combat troops. Americans
are less forgiving. In recent polls, 60 percent of those surveyed thought the
war in Iraq was a mistake, 70 percent thought it wasn’t worth American
lives, and only a quarter believed it made us safer from terrorism. This sour
judgment is entirely reality-based. The war failed in all its stated missions
except the toppling of Saddam Hussein. While we
were distracted searching for Iraq’s nonexistent weapons of mass
destruction, Iran began revving up its actual nuclear program and Osama bin
Laden and his fanatics ran free to regroup in Afghanistan and Pakistan. We
handed Al Qaeda a propaganda coup by sacrificing America’s signature
values on the waterboard. We disseminated untold billions of taxpayers’
dollars from Baghdad’s Green Zone, much of it cycled corruptly through
well-connected American companies on no-bid contracts, yet Iraq still
doesn’t have reliable electricity or trustworthy security. Iraq’s
“example of freedom,” as President Bush referred to his project
in nation building and democracy promotion, did not inspire other states in
the Middle East to emulate it. It only perpetuated the Israeli-Palestinian
logjam it was supposed to help relieve. For this
sad record, more than 4,400 Americans and some 100,000 Iraqis (a conservative
estimate) paid with their lives. Some 32,000 Americans were wounded, and at
least two million Iraqis, representing much of the nation’s most
valuable human capital, went into exile. The war’s official cost to
U.S. taxpayers is now at $750 billion. Of all
the commentators on the debacle, few speak with more eloquence or credibility
than Andrew Bacevich, a professor of history and
international relations at Boston University who as a West Point-trained
officer served in Vietnam and the first gulf war and whose son, also an Army
officer, was killed in Iraq in 2007. Writing in The New Republic after Obama’s
speech, he decimated many of the war’s lingering myths, starting with
the fallacy, reignited by the hawks taking a preposterous victory lap last
week, that “the surge” did anything other than stanch the
bleeding from the catastrophic American blundering that preceded it. As Bacevich concluded: “The surge, now remembered as
an epic feat of arms, functions chiefly as a smokescreen, obscuring a vast
panorama of recklessness, miscalculation and waste that politicians,
generals, and sundry warmongers are keen to forget.” Bacevich also wrote that “common decency demands that we
reflect on all that has occurred in bringing us to this moment.”
Americans’ common future demands it too. The war’s corrosive
effect on the home front is no less egregious than its undermining of our
image and national security interests abroad. As the Pentagon rebrands
Operation Iraqi Freedom as Operation New Dawn — a “name
suggesting a skin cream or dishwashing liquid,” Bacevich
aptly writes — the whitewashing of our recent history is well under
way. The price will be to keep repeating it. We
can’t afford to forget now that the single biggest legacy of the Iraq
war at home was to codify the illusion that Americans can have it all at no
cost. We willed ourselves to believe Paul Wolfowitz
when he made the absurd prediction that Iraq’s oil wealth would foot
America’s post-invasion bills. We were delighted to accept tax cuts,
borrow other countries’ money, and run up the federal deficit long
after the lure of a self-financing war was unmasked as a hoax. The cultural
synergy between the heedless irresponsibility we practiced in Iraq and our
economic collapse at home could not be more naked. The housing bubble,
inflated by no-money-down mortgage holders on Main Street and high-risk
gamblers on Wall Street, was fueled by the same greedy disregard for the laws
of fiscal gravity that governed the fight-now-pay-later war. Our
attitude toward the war’s human cost was no less cavalier. We were all
too content to let a volunteer army fight our battles out of sight and out of
mind, on a fictional pretext yoked to a military strategy premised on a
cakewalk. For too long we looked the other way as the coffins arrived in
Dover off camera in the shroud of night, as the maimed endured inhumane
treatment in military hospitals at home, and as the Iraqi refugees who aided
Operation Iraqi Freedom at their own peril were denied the freedom to seek a
safe haven in our country. Both
President Obama and Glenn Beck, in his “Restoring Honor” rally in
Washington last weekend, were fulsome in their praise of the troops, as well
they should have been. But the disconnect between the civilian public,
including the war’s die-hard advocates on the right, and those doing
the fighting remains as large today as ever. As one Iraq war vet e-mailed to
me after hearing Beck’s patriotic sermons: “What does gathering
in D.C. do for the troops?” He was appalled at the self-regard of those
who thought their jingoistic rally would help returning troops abandoned by
the military’s “criminally poor mental health care” or save
any soldier who was “two seconds away from getting his leg blown off by
an I.E.D.” The other
American casualties of Iraq include the credibility of both political
parties, neither of which strenuously questioned the rush to war and both of
which are still haunted by that failure, and of the news media, which barely
challenged the White House’s propaganda about Saddam’s imminent
mushroom clouds. Many pundits, quite a few of them liberals, stoked the war
fever as well. Some eventually acknowledged getting it wrong, though in most
cases they stopped short of apologizing for their failures of judgment and
their abdication of journalistic skepticism about the government’s case
for war. Even now
those think-tank types who kept seeing light at the end of the Iraqi tunnel
are ubiquitous on television and op-ed pages making similar stay-the-course
prognostications about Afghanistan. Their embarrassing track records may have
temporarily vanished into the great American memory hole, but actions do have
consequences, and there must be an accounting. America does have a soul, and,
as Franzen so powerfully dramatizes in
“Freedom,” when that soul is violated, we are paralyzed until we
set it right. And yet
here we are, slouching toward yet another 9/11 anniversary, still waiting for
a correction, with even our president, an eloquent Iraq war opponent,
slipping into denial. Of all the pro forma passages in Obama’s speech,
perhaps the most jarring was his entreaty that Iraq’s leaders
“move forward with a sense of urgency to form an inclusive government
that is just, representative and accountable.” He might as well have
been talking about the poisonous political deadlock in Washington. At that
moment, there was no escaping the tragic fact that instead of bringing
American-style democracy and freedom to Iraq, the costly war we fought there
has, if anything, brought the bitter taste of Iraq’s dysfunction to
America. 9/3/2010: 120 Days
to Go Until the Largest Tax Hikes in History In just
120 days, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves on January
1, 2011: First Wave: Expiration of 2001
and 2003 Tax Relief In 2001
and 2003, the GOP Congress enacted several tax cuts for investors, small
business owners, and families. These
will all expire on January 1, 2011: Personal income tax rates will
rise. The top
income tax rate will rise from 35 to 39.6 percent (this is also the rate at
which two-thirds of small business profits are taxed). The lowest rate will
rise from 10 to 15 percent. All the rates in between will also rise. Itemized
deductions and personal exemptions will again phase out, which has the same
mathematical effect as higher marginal tax rates. The full list of marginal
rate hikes is below: - The 10%
bracket rises to an expanded 15% - The 25%
bracket rises to 28% - The 28%
bracket rises to 31% - The 33%
bracket rises to 36% - The 35%
bracket rises to 39.6% Higher taxes on marriage and
family. The “marriage penalty”
(narrower tax brackets for married couples) will return from the first dollar
of income. The child tax credit will be cut in half from $1000 to $500 per
child. The standard deduction will no longer be doubled for married couples
relative to the single level. The dependent care tax credit will be cut. The return of the Death Tax. This year, there is no death
tax. For those dying on or after January 1 2011, there is a 55 percent top
death tax rate on estates over $1 million. A person leaving behind two homes
and a retirement account could easily pass along a death tax bill to their
loved ones. Higher tax rates on savers and
investors. The
top capital gains tax will rise from 15 percent this year to 20 percent in
2011. The top dividends tax rate will rise from 15 percent this year to 39.6
percent in 2011. These rates will rise another 3.8 percent in 2013. Second Wave: Obamacare There are
over twenty new or higher taxes in
Obamacare. Several will first go into effect on January 1, 2011. They
include: The Tanning Tax. This went into effect on July
1st of this year. It imposes a new, 10% excise tax on getting a tan at a
tanning salon. There is no exemption for tanners making less than $250,000
per year. The “Medicine Cabinet
Tax”
Thanks to Obamacare, Americans will no longer be able to use health savings
account (HSA), flexible spending account (FSA), or health reimbursement (HRA)
pre-tax dollars to purchase non-prescription, over-the-counter medicines
(except insulin). The HSA Withdrawal Tax Hike. This
provision of Obamacare increases the additional tax on non-medical early
withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative
to IRAs and other tax-advantaged accounts, which remain at 10 percent. Brand Name Drug Tax. Starting next year, there will
be a multi-billion dollar tax assessment imposed on name-brand drug
manufacturers. This tax, like all excise taxes, will raise the price of
medicine, hurting everyone. Economic Substance Doctrine. The IRS is now empowered to
disallow perfectly-legal tax deductions and maneuvers merely because it
judges that the deduction or action lacks “economic substance.”
This is obviously an arbitrary empowerment of IRS agents. Employer Reporting of Health
Insurance Costs
on a W-2. This will start for W-2s in the 2011 tax year. While not a tax
increase in itself, it makes it very easy for Congress to tax
employer-provided healthcare benefits later. Third Wave: The Alternative
Minimum Tax and Employer Tax Hikes When
Americans prepare to file their tax returns in January of 2011, they’ll
be in for a nasty surprise—the AMT won’t be held harmless, and
many tax relief provisions will have expired. The major items include: The AMT will ensnare over 28
million families, up from 4 million last year. According to the left-leaning
Tax Policy Center, Congress’ failure to index the AMT will lead to an
explosion of AMT taxpaying families—rising from 4 million last year to
28.5 million. These families will have to calculate their tax burdens twice,
and pay taxes at the higher level. The AMT was created in 1969 to ensnare a
handful of taxpayers. Small business expensing will be
slashed and 50%
expensing will disappear. Small businesses can normally expense (rather than
slowly-deduct, or “depreciate”) equipment purchases up to
$250,000. This will be cut all the way down to $25,000. Larger businesses can
expense half of their purchases of equipment. In January of 2011, all of it
will have to be “depreciated.” Taxes will be raised on all types
of businesses.
There are literally scores of tax hikes on business that will take place. The
biggest is the loss of the “research and experimentation tax
credit,” but there are many, many others. Combining high marginal tax
rates with the loss of this tax relief will cost jobs. Tax Benefits for Education and
Teaching Reduced.
The deduction for tuition and fees will not be available. Tax credits for
education will be limited. Teachers will no longer be able to deduct
classroom expenses. Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed. The student loan
interest deduction will be disallowed for hundreds of thousands of families. Charitable Contributions from
IRAs no longer allowed. Until this year, a retired person with an IRA could contribute up to
$100,000 per year directly to a charity from their IRA. This contribution
also counts toward an annual “required minimum distribution.”
This ability will no longer be there. 9/4/2010: Daily
Presidential Tracking Poll
9/4/2010: from the Daily Reckoning, Weekend Edition ...some important stats from the Small Business
Administration (SBA). Small businesses: * Represent 99.7% of all employer[s] * Employ just over half of all private-sector employees * Pay 44% of total U.S. private payroll * Have generated 64% of net new jobs over the past
15 years * Create more than half of the nonfarm private
gross domestic product (GDP) * Hire 40% of high-tech workers (such as
scientists, engineers and computer programmers) * Are 52% home-based and 2% franchises * Made up 97.3% of all identified exporters and
produced 30.2% of the known export value in FY 2007. * Small firms produce 13 times more patents per
employee than large patenting firms; these patents are twice as likely as
large-firm patents to be among the 1% most cited.” One of the many benefits of being “on the
road” is that one has little time to pay attention to the regular news.
We are reminded once again of the inimitable Mark Twain’s words:
“If you don’t read the newspaper, you’re uninformed. If you
read the newspaper, you’re misinformed.” Across the nation, Big Government is doing all it
can to prevent any real, honest progress from taking hold. What the central
planners can’t seem to grasp is that, in the same way a teenager must
suffer and, in turn, learn from his own mistakes, sometimes an economy must
take a few steps backward before it can stride forward again with the renewed
confidence and wisdom only experience can bring. The Fed’s “protect
growth at all costs” policy either misses or ignores this point
entirely. Either way, the result is the same. Mistakes are not corrected.
Incompetence is rewarded with bailouts, not punished by bankruptcies. Bad
debts are piled up, not paid down. Instead, they are left to form the bedrock
of future building site collapses. “We don’t know how many mistakes there
were,” Bill Bonner, our Reckoner-in-Chief
admitted this week. “We don’t know how far GDP SHOULD go down.
And we don’t know what would have happened if willing buyers and
sellers had been allowed to sort themselves out in the age-old ways - by
panic, default, bankruptcy, restructuring, and reconstruction. “We don’t know,” continued Bill.
“We’ll never know. But there is no reason to think we’d be any
worse off if we’d found out a year ago. A 12% drop in GDP might have
been just what we needed. We could be on the road to prosperity now, rather
than looking at another 5 to 15 years of stagnation, decline, and
desperation.” Joseph Shumpeter coined
the phrase “creative destruction” to describe the selective,
evolutionary process of a naturally correcting marketplace. The weak must be
allowed to fail if there is going to be room for the strong to succeed. The
powers that be obviously misunderstood the concept, choosing instead to
simply destroy the opportunity for creation. As far as the Coast to Coast Correction goes, real
recovery begins only where Recovery Act signs stop...
Police
kill Discovery building gunman
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Read Blogs from Prior Months |
Other Information about Dale F. Ogden
Dale F. Ogden for Governor
of
California 2010
www.dalefogden.org
Dale F. Ogden & Associates
Actuaries
& Management Consultants
www.usactuary.com
Dale F. Ogden, Libertarian, for
California
Insurance Commissioner, 2006
Dale F. Ogden, Libertarian, for
California State Senate, 2004
Dale F. Ogden, Libertarian, for
California
Insurance Commissioner, 2002
Dale F. Ogden, Libertarian, for
California State Assembly,
2000
Dale F. Ogden, Libertarian, for
California
Insurance Commissioner, 1998