Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

29 April 2010

Congressional Idiocentricity -- Tax Reporting Paperwork Landslide

Buried in the ObamaCare bill that had to be passed so we could learn what was in it, is a change to Section 6041 of the tax code which requires businesses to file 1099 forms with the IRS for almost any vendor they deal with and pay more than $600 in a tax year.  This means that payments for property or for services are covered by the mandate whether the company to whom the payments have been made is a corporation or not.  The paperwork and the nuisance are unbelievable.  Congress has lost its senses entirely.  This is the sort of systematic wrongheadedness combined with a complete disregard for reality that I have coined idiocentricity.  Well, Pelosi, you passed the ObamaCare bill and we just keep on learning what was in it.  No matter how idiocentric I believe Obama, Pelosi, Reid, Waxman, Franks, Dodd, and others of their ilk may be, they just keep surprising me over and over again.

Before a company submits the 1099 Form to its vendor and to the IRS, it must have its vendor fill out a Form W-9 with its address, contact information, and the company taxpayer identification number.  The total amount of work involved is huge.  As a business owner, I will be receiving many more requests to fill out W-9 Forms and I will have to fill out many 1099 Forms early in the new year when I am trying to catch up after my busiest time of the year in the Fall.  I will resent every moment spent in this way immensely.

Why did this idiot plan get foisted on us?
  • The wording changes were slipped into the unread ObamaCare bill late in the process so they would not be discovered until after it was passed in accordance with Pelosi policy.
  • Congress is desperate to eke out every last dime, no make that $0.04 given the Utah case of huge penalties and interest based on a claimed overdue payment of $0.04, to pay for its wild, drunken overspending.
  • This is an underhanded way to help the Post Office with its deficits.
  • It is a subsidy program for lumber and paper companies.
  • It is a subsidy for tree farms.
  • Transporting the billions and billions of forms will provide more income for truckers.
  • Increased truck traffic will destroy the roads and bridges faster, leading to more construction and repair work.
  • America will import more oil to operate more trucks, which will help the underdeveloped world by transferring American wealth to them.
  • It is a plan to increase man's emissions of CO2 so Congress will have more of an argument for cap and trade taxes on the increased fuel imports and use and the CO2 will help corn grow better to produce more subsidized ethanol.
  • Its a make-work project for accountants, a profession much-beloved by Congress.
  • This will make businesses much more inefficient, thereby reducing the huge advantage in efficiency of the private sector compared to the public sector.  Reducing that difference will make it easier for the government to push for more socialism.
  • Companies will try to concentrate their business on a smaller number of vendors to reduce paperwork.
  • Small businesses will be both more burdened with the owner doing this paperwork and they will be preferentially shut out of business by larger companies trying to reduce their paperwork.
Of course, it may be that Congress in its haphazard sloppiness did not think of some of these obvious effects.  It is unwise to give them too much credit for any thought, however twisted.  But, it does seem clear that this Congress has an affinity for the line of thinking of that it is a good thing when a window is broken because the repair of the window generates business.  No one in Congress ever asks what tasks did not get done because the window had to be repaired, despite Bastiat having destroyed this line of thinking long ago.  No, that would require that those who think islands float and who do not care about the constitutionality of laws to be capable of thought and then to actually do it.  What an imposition that would put on these rulers who fancy themselves the elite and the aristocrats of American society.  How unfair and unjust of us mere peasants to expect them to think about the consequences of their laws as an essential part of their service to us.

28 April 2010

An Update on the GM Loan Repayment

Ed Whitacre, has been featured in a GM ad on TV lately in which he makes the claim that General Motors has repaid its loan "in full, with interest, five years ahead of schedule."  He did not mention that this repayment was only of $5.8 billion to the U.S. and Canadian governments and that the repayment was made with funds from a line of credit under TARP.  That sounds as though the Canadian government has been repaid with U.S. taxpayer money.  Senator Chuck Grassley (R, Iowa) thinks the early repayment was made in order to avoid a proposed tax on those with unpaid bailout loans.

The government investment in GM is still $50 billion.  GM was also taken off the hook for about $6 billion of losses in its share of the losses of GMAC due to its problems selling its subprime loans.  GM owned part of GMAC, which was bailed out by the taxpayers.  Meanwhile, GM is still losing money.  Its sales have been increasing though.

What is it about taking the taxpayer's money that turns so many people into deceptive and duplicitous scalawags?  No, this is not quite the right question.  The people attracted to the taxpayer's money are probably deceptive and duplicitous by nature in the first place and they gravitate to positions in which they can get their hands on that easy money.  To be sure, once they get their hands on that money, it generally does play a role in making their deceptive and duplicitous nature even more so.

High-Risk Local Government and Bankruptcy

One recurring theme of my posts is that when governments expand their operations and powers beyond those needed to provide for the equal protection of our individual rights, they generally do a very poor job of providing the given service, they inevitably end up failing to protect our individual rights, and they fail very unequally in protecting our rights as well.  When governments fail, they often put all of that government's operations at risk.  This is the situation in such states as Rhode Island, New York, New Jersey, and California where terrible state debt and massive liabilities clearly exceed the level that taxation can support.  Higher taxes there will simply lead to more economic stagnation and the flight of many capable and often wealthier people from the state with lower tax revenues resulting.  After a point of government ineptitude, there is no way out but to drastically cut even the most legitimate services.

Here is another example of how a local government put its essential services at risk by trying to perform services which should have been left to the private sector.  Responsible local government has no business departing from the few legitimate services such as police protection and the courts, because other activities increase the need for involuntary taxes and also the risk of the failure of the government.  Businesses in the private sector fail more often than not and there is no reason to expect that city, county, and state governments can operate more efficiently than do private sector businesses.  Of course, however badly they operate a business, they can call upon a large tax base to subsidize the poor operation, which will commonly allow a government to avoid acknowledging that they are operating the business they have take on poorly.  This usually leads to further deterioration of the operation of the business with time, since incentives are missing to improve the operation.

The capital city of Pennsylvania, Harrisburg, is considering a Chapter 9 bankruptcy because it lost so much money in one operation it could have left to the private sector that the entire city government is now at risk of collapse.  This case was reported in today's issue of The Wall Street Journal.  Harrisburg incurred a debt of $288 million in an attempt to renovate an incinerator!  It owes $68 million in payments this year on this debt, but its entire annual budget is less than that amount.

Chapter 9 bankruptcy entails:
  • A municipal government can reduce its debt even if the chief creditors oppose such a reduction.
  • The settlement must have the support of at least one class of impaired creditors.
  • An automatic stay of all litigation against the city occurs.
  • The city can reject union contracts.
  • Bankruptcy prevents judges from forcing asset sales or liquidation of the municipality.
  • Pennsylvania's Community and Economic Development Dept. must approve the Chapter 9 bankruptcy and work with the city in the bankruptcy proceedings.
  • The city must expect to pay huge fees to lawyers and accountants.
  • The outcome of the request for bankruptcy is uncertain.  It could be rejected.
  • Assured Guaranty Municipal, which assured the bond payments, will have to make the payments at great loss to it.
  • Covanta Energy operates the incinerator and gave the city a loan of $25 million, which the city cannot repay in whole.
City Controller, Daniel C. Miller, favors this Chapter 9 way out of the city's predicament.   The first Pennsylvania municipality to use Chapter 9 bankruptcy was Westfall Township in Pike County.  They faced a legal claim of more than $20 million to a real estate developer.  The settlement was reduced to $6 million over a 20 year repayment period with no interest.  But, its bill from the lawyers and accountants was $600,000.  If its request for bankruptcy had been rejected, the lawyers and accountants fees would have put Westfall Township into even worse shape.

Of course a Chapter 9 bankruptcy may allow the city of Harrisburg to go on.  But, after the loses that creditors and bond guarantors will take, the city will still be in a tough situation.  First, it will still have to pay a substantial amount of money.  Second, it will have impaired its credit for quite some time.  These factors are likely to force a reduction of other services the city has provided its residents.  Some of these impaired services are likely to be its legitimate services.  In addition, the city's irresponsible actions will certainly hurt its creditors and those who invested in them.  Governments have no business causing such harm.

All of this grief could and should have been avoided by simply leaving to the private sector what is the private sector's.  Leave unto Commodore Vanderbilt what is Commodore Vanderbilt's.  Leave unto J. J. Hill what is J. J. Hill's.  Leave unto John D. Rockefeller what is John D. Rockefeller's.  When government leaves unto the private sector all functions which are not legitimate to it, any risk is taken only by those who have chosen to undertake it voluntarily and the legitimate functions of government are not put at risk.

27 April 2010

Andrew Klavan on Culture

One of the regulars on PJTV is Andrew Klavan, with his feature Klavan on Culture.  I find him pretty consistently funny as he pokes fun at the absurdities of the left.  In one recent show he reiterated a series of the untruths, which used to be called lies, that Obama has treated the docile and dumb peasants of the United States to.  Klavan noted after a few of the whoppers that Obama might as well have promised that he would "put a garage in the cheek of a caterpillar's bazooka" for all the meaning of his promises.  In another episode, he noted that the New York Times is the paper of record and prints all the news that fits, after making it clear that they only print the news that fits the socialist agenda.  He is quite entertaining and he does pack some real substance into his monologues. 

26 April 2010

Excessive Recycling

A great deal of taxpayer money is being wasted by many local governments on excessive levels of waste material recycling according to J. Winston Porter, President of the Waste Policy Center.  It turns out that excessive recycling may not only be an unwise use of your personal time, but it can be more environmentally damaging and costly than dumping waste into landfills.

From 1985 to 1989, Dr. Porter was the Assistant Administrator for Solid Waste and Emergency Response at the U.S. Environmental Protection Agency (EPA). In this capacity, he served as the national program manager for the Superfund and RCRA (Resource Conservation and Recovery Act) programs.  He set an EPA goal at that time for 25% recycling of all municipal solid waste (MSW).

Porter supports the recycling of about one-third of MSW.  This is about the national rate of recycling now.  The EPA has set a target of 35%.  In the Washington Metro area, several counties are recycling at higher rates.  Montgomery County recycles 44.2% of its MSW, Arlington County recycles 42.8%, and Fairfax County recycles 40% of its trash.

Montgomery County has a formal goal to recycle 50% of MSW and forces every county business to file a recycling report every year with the county.  It spends $18.8 million a year on residential recycling pick-ups alone.  It also runs ads in Spanish on Fox News telling Spanish speakers listening to Fox News in English that it is the law that they must recycle in Montgomery County!  Much more is spent on commercial education and enforcement, recycling center operations, and other programs.  The Montgomery County Recycling Chief, Eileen Kao, does not know what the total cost is.  This is rather reminiscent of the school board not knowing what the public school cost per student is in the county!  Taxpayer money is just too easy to come by for anyone to worry very much about how it is spent.  Recycling in the Democrat suburbs of the area is popular, even if it is carried out beyond rational levels.

Porter notes that landfills are readily available in most of the country and they are now much safer and cleaner.  They are better located, much hazardous waste is now excluded, there are methane gas and surface water controls, and nearby ground water is better monitored.  Liners and leachate collection systems are used in most new landfills.  Much of our trash can now rest peacefully in landfills with no real environmental consequences.

Kenneth Green, an environmental scientist at the American Enterprise Institute, says that recycling aluminum cans and white office paper usually makes sense.  However, recycling much of the remaining trash is neither environmentally nor economically sensible.  For instance, recycling glass, as we must do in Montgomery County, makes no sense.  Ground glass is essentially sand, so it can sit peaceably in landfills.  Recycling this heavy material with movement in trucks and processing for reuse, costs more energy than the use of sand to simply make new glass.  But, local governments that want bragging rights for their high recycling percentages, love recycling glass because it is relatively heavy and the goals are measured by weight!

According to the EPA, in 2008, about 56% of paper was recycled, 7.1% of plastic, 23.1% of glass, and 21.1% of aluminum.  About 33.2% of all waste was recycled.  The bulk of the paper is either corrugated boxes, of which 70% was recycled in 2002, or newspapers, of which 62% was recycled in 2002.  In 2002, only 54% of office paper was recycled and 47% of aluminum.  Interestingly, the white office paper that makes the most sense to recycle was less recycled than corrugated boxes and newsprint.  Another interesting observation is that aluminum does make sense to recycle, but the recycling of aluminum in 2008 was at a 21.1% level, which was less than half what was recycled in 2002 when 47% was recycled!  There is a curious inversion of logic here.  The more sense it makes to recycle a material, the less likely it is to be recycled!  Glass, newsprint, and corrugated boxes are more likely to be recycled than aluminum!  This is likely to be due to a simple fascination with bulk and weight, as opposed to economics.

Many states have set recycling goals at percentages well above rational levels.  Among these are:

At 70%:  Massachusetts, Rhode Island

At 65%:  New Jersey

At 55%:  Maine

At 50%:  California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Minnesota, Nebraska, New Mexico, New York, Ohio, South Dakota, Vermont, West Virginia

At 45%:  District of Columbia

At 40%:  Arkansas, Maryland, Missouri, New Hampshire, North Carolina, North Dakota, Texas

One area of good news is that since 1990, the generation of MSW has increased at about the same rate as the population has.  From 1980 to 1990, there was an increase of MSW by 34.9%, while the population grew by only 10.1%!  Thanks in good part to significant weight reductions in the packaging of products, the amount of waste per person has not increased since 1990.  In 1980, a 2-liter PET bottle weighed about 65 grams, but in 2002, it was only 47 grams.  An aluminum can in 1980 weighed 19 grams, but in 2002 it was down to 13 grams.  A glass soda bottle went from 255 grams to 165 grams.  A steel, tin-coated soup can went from 48 to 35 grams.  A half-pint milk carton dropped from 14 to 9 grams from 1980 to 2002.  In most cases these reductions in materials use required improved materials and improved processing of materials.  This is work my laboratory plays a role in with its materials characterization, failure analysis, and quality control services.

Government Sucks, or is that Goldman Sachs?

I am not yet sufficiently informed on the many faults of Goldman Sachs to write an extensive and knowledgeable post on its many shenanigans.  But, it is very clear that Goldman Sachs has long had much too cozy a relationship with the federal government.  The financial institutions have long been subject to extensive and intrusive regulation by the government.  As usually happens when the government regulates an industry, the government turns to people from the industry to explain what goes on in the industry and in turn winds up taking direction from industry insiders on what government policies toward the industry should be.  Even more broadly, in the case of the financial industry, the more and more active role of the government in generally trying to centrally plan the economy and to regulate it, has required the government to seek out expertise in the many arcane matters of industrial and service industry finance. Companies such as Goldman Sachs will often conclude that further growth of government involvement in the economy as regulator and central planner can be made to work to the advantage of Goldman Sachs.  Hence, it provides very generous campaign contributions to politicians who want to increase the power of government and also to pay them off so they will not increase that power at the expense of Goldman Sachs.

I find Goldman Sachs and its relationship with the government to be very distasteful.  Goldman Sachs undoubtedly performs legitimate and vital tasks in the private sector.  But, when faced some time ago with a too powerful and meddling government, Goldman Sachs decided that the combined need to protect itself from a capricious and dangerous government and the advantages of directing that government's efforts to give it a competitive advantage, made it very useful to the company to develop a cozy relationship with big government.  This is a choice that many companies have to make.  The consequences of the choice mount as the size of the company increases because government finds there is more wealth to be expropriated from large companies.  Some industries are also more under scrutiny than others, either because many depend upon it or because its business is hard to understand.  In the 1800s, the most scrutinized industry was the railroads.  Later, steel and banking, then still later electric utilities became very regulated industries.  Once the voracious government starts meddling with an industry, it becomes very hard for many companies to resist the temptation to join what they cannot beat, so they can at least beat their competition.  This is very much what Goldman Sachs did.  It has largely become a company not of market entrepreneurial effort, but one of political entrepreneurial effort.

This has clearly paid off.  Goldman Sachs played a big role in selling securitized sub-prime home mortgage bundles to other companies, which their close relationship with government probably aided with almost insider relationships with Freddy Mac and Fanny Mae.  They received bailout money, when Lehman Brothers did not.  It would not be surprising if the many Goldman Sachs ex-employees in the government, especially this one, provides its management with many useful heads-up warnings about actions the government is about to take.  It must be nice that it has people who influence future interest rates and the like.  Note that Goldman Sachs was not pressured into taking over an overvalued Merrill Lynch the way Bank of America was.  Neither was it pushed into taking over Wachovia Bank, the way Wells Fargo was.  There have been advantages in being in bed with the government.

But, this whole process is a means of broadly thieving from the American People.  And, there is no honor among thieves.  So, the Obama administration and his radical Democrat Congress are now desperate to try a populist tactic out on the American People in which they pretend to protect them from evil business interests.  They long ago ducked the greater responsibility of the government itself for this recession and they have consistently blamed that on big business and supposed failures of the Capitalist system and free markets.  This is their excuse for seeking still more regulatory authority over the financial markets which they are trying to push through Congress now.  To prove how badly this is needed and to distract the People as much as possible from the sorry state of the economy and the role of the government in making it so, the government has decided this is the time to turn upon Goldman Sachs.  To be sure, the government cannot name some of its worst offenses, since the government was involved collaboratively in many of those.  But, a series of smaller offenses can be exposed to Obama's advantage.

Obama has previously turned against other industries or constituencies which thought they had agreements with him to interfere with the markets to their advantage.  Among these are the health insurance industry and AARP.  He also has betrayed his major constituency of young adults, by forcing them to heavily subsidize the health care insurance policies of older people.  And, he has taxed, and will tax much more heavily, the middle class he pretended to champion during the presidential campaign.  Obama is a redistributionist, so he requires a constant series of victims from whom he takes wealth using the force of government and then he redistributes it to others to curry their favor.  If he did not control the government, he would universally be recognized as a thief.

Given the special interest and spoils politics that must characterize any government's actions when it begins to expand its powers beyond those limited powers needed to protect the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness, this business environment is inevitable.  The only way to keep companies from facing the decision that Goldman Sachs made to protect itself and to gain insider advantages over their rivals is to reduce the scope and power of government.  Instead, we almost always hear that the power of government must be increased so it can better regulate the Goldman Sachs of the world.  This misses the point that the Goldman Sachs of the world are made by excessive government power.  The only realistic solution to such problems is to return to the excellent vision of the Founding Fathers and the Framers of the Constitution for a very limited government and a very independent free market.  Only a very limited government can perform its legitimate function of equally protecting the individual rights of the People.  Only when one has such a government can one have free and independent markets in a fully developed Capitalist system.

Powerful government can never equally protect individual rights, because it is driven to redistribute all the good things in life.  That process is too complex for it to do so equally, even if it really wanted to do so.  Practical politics, unguided by proper Constitutional principle, will never seriously attempt to provide equal protection.  This is clearly the history we have seen of big government.  It is time to take the lessons of that history, though frankly, a little thought would have predicted such a result in any case.

24 April 2010

Government Motors Paid Back the TARP Loan?

The CEO of Government Motors (the old General Motors) has been in a TV ad in which he is on the factory floor and claiming that GM has paid back the TARP money it owed the U.S. government in full 5 years early!  Did it really?

Given that it lost $3.4 billion just last quarter, what money could it possibly have used to make the payment of such a large sum of money that so many economists and businessmen have said they will probably never be able to repay the taxpayer?  It turns out that they were allowed to use taxpayer money that the government had put into an escrow account to back up GM to pay off the loan!  In fact, it actually only paid $7 billion on a particular loan even given that subterfuge.  GM still owes the government, the taxpayers really, more than $50 billion.  So where is the achievement that the GM CEO was crowing about?  They simply handed the government money with the right hand, while receiving money in their left hand, and all of that money was our money.

It gets worse.  The GM pension plan is underfunded by a mere $27 billion.  The taxpayers, who now own 70% of GM through the government, and share it with the totally irresponsible United Auto Workers Union, are now held hostage to pay this pension bill as well.  So, the taxpayer's total liability to Government Motors is already $77 billion or more.

Just as with most other Obama administration agencies, Government Motors is now using our taxpayer money to tell us lies.  Yes, they used our money in expensive TV ads to tell us this very misleading lie that they had paid us back IN FULL as the CEO kept emphasizing.  Well yes, that particular loan was paid in full.  But, that ad was crafted with the intention of misleading every taxpayer and every voter in America into thinking that GM no longer owed us our money back and that GM was now a sound, moneymaking company.

It perhaps did improve its position with the loan repayment.  It may have a lower interest rate on the second pot of our money.  Or, it may have fewer restrictions on executive compensation.  But, any company 20% owned by labor unions, 70% owned by government, and owing more than $77 billion is surely a walking ghost.  But this ghost is walking off with our money, while giving us attitude!

DDT Opposed for Population Control

An editorial in today's Wall Street Journal noted that both Earth Day and Malaria Day occurred this last week.  DDT is highly effective in combating malaria, which kills one million people each year.  At the concentrations needed for effective control of mosquitoes in homes and close to them, any environmental effects are now known to be minimal.  The World Health Organization and the U.N. still oppose its use, however.

Biologist Paul Ehrlich opposed the use of DDT in his book The Population Bomb because it reduced the death rate from malaria too much and was therefore a contributor to overpopulation.  Ecologist Garrett Hardin opposed its use in underdeveloped countries saying "every life saved this year in a poor country diminishes the quality of life for subsequent generations."  John Holdren, Obama's Science Czar and Director of the White House Office of Science and Technology Policy; Assistant to the President for Science and Technology; and Co-Chair of the President's Council of Advisors on Science and Technology, joined with Paul Ehrlich in publications in 1969, 1971, and 1973 saying:
If … population control measures are not initiated immediately and effectively, all the technology man can bring to bear will not fend off the misery to come. 
some form of ecocatastrophe, if not thermonuclear war, seems almost certain to overtake us before the end of the century
a massive campaign … to de-develop the United States” and other Western nations in order to conserve energy and facilitate growth in underdeveloped countries. “De-development means bringing our economic system into line with the realities of ecology and the world resource situation.” “By de-development we mean lower per-capita energy consumption, fewer gadgets, and the abolition of planned obsolescence.”  "The need for de-development presents our economists with a major challenge. They must design a stable, low-consumption economy in which there is a much more equitable distribution of wealth than in the present one. Redistribution of wealth both within and among nations is absolutely essential if a decent life is to be provided for every human being."
Despite the close ties the Obama administration has with such radical environmental elements, it has, to its credit, continued the Bush administration policy of support for DDT spraying in Zambia, Mozambique, and other countries where the local people want to use DDT.  Pressure from the Pesticide Action Network and other groups has been unsuccessful in changing the U.S. policy.  Apparently having a President born in Kenya has resulted in a sufficient regard for the welfare of East Africans to give the Obama administration enough backbone not to cave on this issue.

Pelosi's Money-Saving Calculation for House Cafeteria Lighting

Nancy Pelosi called a press conference on 21 April 2010 to announce that the government had just spent $140,000 to put a new LED (light-emitting diode) lighting system into the House cafeteria in the Rayburn Building.  This new lighting system is supposed to pay for itself in a bit less than 10 years with energy use savings.  Great fanfare with all the politically correct words of energy-saving, sustainability, environment-friendly, Mother Earth, and green were used at the press conference.  It is hardly surprising to see the government spend $140,000 on something that gives it such a fine opportunity to look so green and earth-loving. 

Now, other things being equal, saving money on energy is a good thing.  However, we have to remember that the federal government is running huge deficits, which clearly are not sustainable.  We can look a little closer at this as well.  If the $140,000 lighting system pays for itself in 10 years, then the LED lights are saving about $14,000 per year.  It was noted that about 1 year ago, the light fixtures installed cost about $800 each and they cost just over $300 when the upgrade of the House cafeteria lighting system was performed.  So, in one year, the cost dropped to about 3/8 ths of what it was.  If in the next year it dropped as much, the cost per fixture would fall to about $112.50.  Perhaps the rate of the drop in price will not be as much, but it is reasonable to think it might fall to, say, $200/fixture.  If it did, the payback time would then be only about 6.67 years, or about 3.33 years less.  Since they said the payback was a bit less than 10 years, let us say the difference in payback is 3 years.

Thus, delaying the installation of the LED lighting system for one year would mean the government would pay out $14,000 more in electric bills.  Installing the $200 fixture LED system 1 year later, would save three times $14,000 in installation cost, however.  Subtracting the $14,000 not saved for 1 year in energy, means that delaying the installation for a year would have saved the taxpayer $28,000 more than installing the system will when it was installed!  Now, admittedly, I have assumed the cost of installation of each fixture is either minimal or included in the cost per fixture as given.  Perhaps this assumption is not justified and some other cost calculations need to be performed to determine the rational time at which the installation should be performed.  But, I have no confidence whatsoever that Congress performed any such rational calculations before they decided to spend $140,000 of taxpayer easy-come, easy-go money on this project.

Such rational calculations are much more likely to be performed in the private sector than they are in the public sector.  The lame media, many of the academics, and most politicians and bureaucrats are forever pointing at some failure in the private sector with harm coming to some relatively small numbers of people usually in some voluntary association with the persons or company causing the harm and claiming that if only the judgment of the government were brought into these associations and trades, events would turn out better.  This argument keeps foundering on one very important observation:  the assumption that the government will act rationally, more often than the private sector does, is demonstrably wrong.  It is very clear that the government acts less rationally and when it does, that the consequences fall upon many who have not made any voluntary choices based upon their own evaluations at all.  Government increases the number of irrational decisions and lays the sad consequences on many more people, many of them innocent of any irrational decision themselves.

The government has too little invested in other people's lives and fortunes and the money it spends comes too easily to it, for it to bother to make rational decisions even when it has adequate information at hand as we have seen from the House cafeteria lighting system decision.  In most cases in which the government wants a hand, it lacks the necessary and adequate information, which is either not available to it or takes more effort to find than it is willing and able to do.  After all, its SEC employees are too busy at Internet sex sites to have the time to gather the knowledge they need to do their job!  Frankly, even much more conscientious government employees will commonly fall short here as well.  Finally, what really matters is the press conference at which all the politically correct words can be spewed and the politicians can pretend to be paragons of virtue.  The reality is that they are commonly buffoons and wastrels.

Can a State Government Even Feed its Legislature?

While trying to look up the size of the House cafeteria which Pelosi has just had new LED light fixtures installed in at a cost of $140,000 with a so-called less than 10-year payback time, I stumbled across an article noting that the vendor, Aramark, holding the Pennsylvania State House contract to run its cafeteria service has failed another of a series of food-serving safety inspections.

The Liberals (Progressives, Socialists) and some others are constantly seeking to have governments at all levels expand their powers and the scope of their control over the lives of the People.  Usually, this is with the claim that private citizens or the private sector has had a failure of some sort.  Yet, they are never deterred in the least by the much greater number of failures of government or by the degree to which those failures are cemented in place by institutions.  Failures in the private sector usually result with individuals trying again with a lesson learned or a voluntary association such as a corporation either righting itself or being replaced by a younger and more nimble company which has done a better job of learning from its mistakes.  But, government just keeps plowing along, making the same mistakes over and over and never learning a thing.  The fact that Aramark is still running the Pennsylvania State House cafeteria is a fine micro-example.

23 April 2010

Plano, Texas Suppresses Student Speech

The Plano, Texas school district has banished all religious expression from its schools.  Religious expression is surely a form of freedom of conscience, which is the sovereign right of every individual.  It is hardly surprising that government-run schools, which are mostly controlled by the forces of big government, are now prohibiting virtually all non-verbal student speech in any school-related activities.  This has resulted in a court case, Morgan v. Plano Independent School District, hearing which the Fifth Circuit chose to uphold the school district's speech restrictions based upon the United States v. O'Brien immediate scrutiny test of "time, place, and manner."  Apparently, this test will allow schools to further erode all student speech relating to religious and political content.  The Cato Institute joined three organizations that support religious liberty to file a brief asking the Supreme Court to re-examine the Fifth Circuit's approach in favor of the alternative Tinker v. Des Moines Independent Community School District test that free speech cannot be suppressed unless that speech "materially and substantially disrupts" the educational process.

The statist authorities want to train students from an early age to give up their inconvenient freedom of speech and their freedom of conscience.  It is very important to stop this.  Of course, the best way to stop this is to end the reign of government-run schools and to promote private educations.  As we discussed recently, private schools have the added benefits of generally providing a better education and they are less expensive compared to the real costs of the public schools.

Disclosure:  I hold a grudge against Plano, Texas.  In the late 1960s, I was given a speeding ticket there for going 45 mph in a 35 mph zone.  I had exited US 75 going north, returning to Tulsa from a visit with a Brown University friend who lived in Dallas, and was driving through farmland.  I was concerned about what the speed limit was and could find no speed limit signs.  Soon, a police car pops out and pulls me over for a speeding ticket.  He hauled me into town where I had to wait for a judge to finish his checker game.  I had to pay a fine on the spot.  On returning to US 75, I searched again for a speed sign and found none.  Plano, Texas was then a small town, which it is no more, and was raking in income from unsuspecting interstate drivers.  It was their racket.  So, I have an additional minor reason for wanting to see the Supreme Court clean Plano, Texas's clock.  The need for freedom of conscience and freedom of speech are much more important, of course, but I will still have an added bonus in this if the Supreme Court makes the right decision.

21 April 2010

Declaring our Independence from the Progressive Aristocracy

The Progressive (Liberal, Socialist) elitists have become an aristocracy who rule, manage, and manipulate the remainder of Americans who are supposedly no more than organic bits of various special interest groups or factions.

The Progressives have long insisted that man's nature could evolve rapidly with proper indoctrination in the government-run schools to engineer American youth who hold socialist values.  Some of the indoctrinated would prove suitable to be selected as the new members of the aristocracy, but most would just be trained to be docile followers.  The government-run schools reflect this philosophy, with many schools being little more than holding cells to train the inmates in being members of an underclass and in doing as they are told by authorities.  Some schools have effective multiple tracks and some few produce many future Progressive elitists.  These indoctrinated youth are then to vote democratically to further enlarge government.

The old American tradition, stated in the Declaration of Independence, in which the only legitimate purpose of government is to protect the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness is the enemy of progress in their viewpoint.  This traditional American viewpoint necessitates a very limited government and a very dynamic private sector, where everyone has an equal right to exercise his choices and to find others who will associate or trade with him for a given purpose in a voluntary activity.  That limited government was provided for by the Constitution.  The Progressives claim these traditional, but radical, American ideals deny the science of history.  They have pointed to a long history of governments around the world always trying to expand their powers and usually succeeding in doing so.  They have claimed that history is a march of progress, so if many governments have succeeded in expanding their powers, this must be what progress is and progress must be good.  These governments with expanded powers need to be directed by energetic leaders who will not shrink from using force to promote the General Welfare, which is always found in the organic expression of shared democratic will.  The government tells the people what their rights are.  Those suitable for leadership are those most indoctrinated and knowledgeable about the goals of socialism.  These leaders are the graduates of the right colleges and are those who are well-connected in the network of Progressive activists.

The Progressives look down on people who produce goods and services in the free market and are paid with money.  They believe those who serve have a higher moral status, even if those who serve do so as government employees and are well paid with taxes levied mostly on the producers and taken from the producers under the threat of force.  The producers are evil because they use resources of the earth such as materials, because they change the earth, and because they pander to individuals acting on their individual goals and needs.  The Progressives believe that when the individual is subsumed by some group or other, the individual has become an organic part of a greater whole.  They believe there is some higher ideal reached whenever the individuality of the individual is diminished.  But Progressives do not have a very high regard for the ability of most people to choose their own values and then to manage their own lives in accordance with those values.  Indeed, they find the very idea of such an expression of individuality to be abhorrent.  If people were actually to do any such thing, the government would not be able to satisfy them with its central planning efforts.  The people must be taught to identify themselves with one group or even a number of different groups, so the Progressives and government can deal with the easier problem of just dealing with this much smaller number of groups.

Once the people are just so many groups or special interests, or factions, then the democratic process can be used to sort out who the winners and losers will be.  Of course, this results in quite a bit of a free-for-all, but that is why the elitist Progressives are needed as leaders and controllers of the governments.  They are the parents watching over the children squabbling over the toys in the sandbox and setting the rules of play.  The elite Progressives make the laws and regulations in government as the democratic rulers.  So, Progressives tend to flock to government positions because that is where the real action is.  They shun the private sector and they grow the public sector.  The game is in fact one of redistributing the wealth produced by the private sector through their hands in government and handing it out to grateful groups who will vote for them, give them money, and sing their praises. 

Of course, these leaders are so important to the cause of Progressivism, that it is perfectly reasonable for them to use their power to extort those in the private sector with threats to do them harm, unless the leaders are given enough money for their re-election campaigns ad nauseam.  Or, these leaders offer factions favorable legislation in exchange for re-election campaign backing, as they do to labor unions, teachers, trial lawyers, and many Wall Street investment firms.  These Progressive government employees are the new aristocracy.  Like the aristocracy of old, they control the levers of power to do whatever they want as they manipulate the peasants and give them just enough to keep them from rebelling.  At least this is how it has often worked in the past and it is how they believe it is supposed to be working now.

The Progressive elite is now furious.  Many of the peasants are revolting.  This is how they see the Tea Party protesters.  Their response has been one of utter hatred.  The hatred is so strong, that they describe the Tea Party rebels with all the words they have long associated with evil or disdain.  So, the Tea Party rebels must be racists.  They must be ignorant.  They must be trailer trash. The Progressives know this to be so, because the peasants must be evil to rebel against the progress of history and the evolution of society.

The Tea Party activists are not evil.  Mostly, they are American individualists who have finally taken notice that Progressivism is an attack upon their individuality.  It is an attempt to dictate to them what their personal values will be.  It is an attempt to micromanage their lives.  It is a refusal to recognize them as individuals.  It is a thorough-going attack upon the very idea that they have sovereign and unalienable rights which are not given to them by government.  It is an attack on the idea that legitimate government exists to protect the equal rights of the individual to life, liberty, and the pursuit of happiness.  The Tea Party protesters are sick of the attacks on the productive Americans to force them to forever subsidize less productive Americans and illegal aliens.  They are sick of the transfer of wealth from the private sector to the public sector.  They are sick of the transformation of their personal choices in the private sector to democratic and factional choices in the public sector.  They are tired of being ignored and denigrated.  They are tired of an aristocracy of bureaucrats, politicians, college professors, and media people who look upon them as peasants.  They are sure that they are competent to choose their own values.  They know they are able to manage their own lives and make their own choices.  They have awakened to the fact that it is the free market that provides them with these choices and the opportunity to express themselves as individuals.  They are coming to understand that they have made themselves the individuals they are in large part and they want to continue to be in control of the development of their own character and that of their children.

A choice has to be made about the purpose and scope of government.  Our Founding Fathers and the Framers of the Constitution chose very limited government consistent with the viewpoint that the General Welfare of the People who institute government was best served when government's function and scope was to simply protect the equal, sovereign, inalienable right of the individual to life, liberty, and the pursuit of happiness.  The individual American was seen as capable of choosing his own values and of managing his own life.  Freedoms such as freedom of speech, of press, and of assembly would allow any American to develop his knowledge, his judgment, and his character.  Americans had the freedom to work and to own property and the income from their work.  When an American individual wanted to work with others for a common goal, he could arrange that using his many freedoms of association and contract in the free market.  There he would have a plethora of choices and ample expression of his individuality.  The interests of many individuals could be worked out in great harmony in the private sector.  While our government had a measure of democracy in the choosing of its leaders, that democracy was constrained by the Constitution, which gave us a representative limited government.  This government of limited powers had a further balance of power within the branches of the government and between the federal government and the states that required a strong consensus to be developed before the federal government could act.  The power of government was to be limited, so that the warfare among factions would be limited.  Too powerful a government led to too many factions being created.  These factions then would fight too viciously for too much power.  In that environment, the rights of the individual could not be equally protected and they would not even be protected.  The General Welfare and the peace and tranquility of the nation would be damaged by such factional squabbles over the exercise of government power.  The antithesis of this American viewpoint is Progressivism, which is largely a European import.

Now consider what we have seen.  We have a Progressive government, which very little constrains itself in accordance with the Constitution.  We have top leaders who are disdainful of the People.  We have top leaders who have said they disagree with the Constitution and its limits on their power.  We have top leaders who tell us we only have the rights the government gives us.  It is clear this government is a Progressive government.  So, I ask you:
  • Have we seen government serving the best interests of the American people (the General Welfare) with minimal factionalism and a great tranquility of our society?
  • Do we see evidence that Americans have evolved such characters that they have lost their individuality and are willing to submerge themselves in a Hegelian whole of society? 
  • Have we seen solid evidence that the Progressive ruling elite is able to choose our values for us better than we can choose them ourselves?
  • Have we seen a powerful government evolve which wisely micromanages our lives?
  • Have we seen this government make centrally planned economic decisions which are wise?
  • Have we seen this government responsibly manage its finances and minimize the debt to be passed on to later generations?
  • Do we like what we see in Europe so much that we agree that their way is superior to the American way of life?
I submit to you that the answer to each of these questions is NO!!!!  From this objective evaluation, I conclude that Progressivism is a proven failure.  It is a concept of government which is wholly unacceptable.  The vision of our Founders and of the Framers of the Constitution was in fact astoundingly wise.  They were not ignorant of the essence of Progressivism.  They considered it and they astutely rejected it.  They were right to do so.  I wish to encourage every American to think these issues and choices through carefully and to chose the most beneficial concept of government function and scope of these two waring viewpoints.  If you do so, I think most of you will be wise enough to confirm the wisdom of our Founders and the Framers of the Constitution.  They were the real advanced thinkers, not these wrongheaded so-called progressives who merely added a bit of democracy to an essentially aristocrats-know-best feudal merchantilist society.

19 April 2010

Galveston - The Hurricane Damaged City We Do Not Hear About

Hurricane Ike struck Galveston, Texas on 13 September 2008 in the waning days of the Bush presidency with a Democrat Congress.  Tens of thousands of people evacuated Galveston, which is on a coastal island.  Dozens of people died.  Parts of Houston, which is not far away, went without power for weeks.

Before the storm, Galveston had a population of 57,000 people.  It now has a population of about 48,000, putting it below the important federal threshold for many benefits at 50,000.  For the next ten years, the Census will proclaim Galveston a city of fewer than 50,000 people.  Yes, the equal individual rights of Americans living in towns and cities with populations of less than 50,000 people are less equal than those of people living in the larger cities exceeding that threshold.

The people of Galveston have long been waiting for promised federal aid.  The aid is aimed at rehabilitation of the heavily damaged areas rather than compensation.  The resulting barrier of paperwork between the state government and the federal government has created long delays.  A first round of $1.3 billion of federal money is partially still held in state coffers.  In November 2009, the Department of Housing and Urban Development said it was holding up disbursing a second round of $1.7 billion requested by Texas because the state had not solicited enough community input and had not updated its fair-housing practices.

After the Katrina and Rita Hurricanes in 2005, the city of Galveston set up an emergency hurricane fund of $14 million and built caches of food and fuel.  The local banks made short-term, low-interest loans totaling $65 million to local businesses to help them reopen.  The city and the city's private sector pulled together to work on rebuilding Galveston.

Can you imagine the blame game Washington would be playing now if a Republican were President?  But, with a leftist-favored Obama presidency, the delays are completely without interest.

This post is based upon a story in The Economist of 17-23 April 2010.

The Most Naive People in America

The Pew Research Center conducted a poll released on 18 April 2010 based upon four surveys conducted from 11 March to 11 April of about 5,500 adults reached on land and cell phone lines.  22% of the people said they trust Washington almost always or most of the time.  Apparently, the most naive and gullible people in America are this 22% of the adult population!  Only 19% said they are basically content with the federal government.  So, only about one in five Americans are happy with the federal government.

Since the 1950s, there have been only two periods with similar levels of distrust.  From 1992 to 1995, the first term of Bill Clinton and following on the heels of the George H. W. Bush "read my lips" tax increases, those trusting Washington fell to 17%.  From 1978 to 1980, the last years of Jimmy Carter's administration, those retaining trust in Washington fell to a low of 25%.

Today's adults were mostly born between the Census' of 1920 and 1990.  Of course some adults born in that time-frame have died and are not included in the Pew poll.  To keep things simple, we will ignore that for the following calculation.  How many people have been born per minute on average in that time?  The answer is about 3.88 per minute.  If 22% of these people are suckers, then the old saying that a sucker is born every minute is nearly true, but Americans are a wee bit better than that.  Apparently about 0.85 suckers are born every minute.

About half the people said they wanted smaller government, which is fewer than those saying this in other recent surveys.  About 40% want government to provide more services.  The Pew Center does tend to produce results slightly more favorable to the left than many polls over the years, in my opinion.

The Environmentalists' Need for a Constant Crisis

Eli Kintisch has written an Opinion Editorial in the Los Angeles Times that says that
  • Cleaning sulfate aerosols from the air is increasing the effect of greenhouse gases and causing more warming, which the Clean Air Act required.
  • Carbon black from soot in the air has been adding to warming by about 60% of the amount caused by greenhouse gases.
He is not sure he wants to put the sulfate aerosols back into the atmosphere, but he does want a concerted effort to clean up the carbon black to reduce a warming effect to offset the cooling effect of the sulfate aerosols, which has been lost.  So, if reductions in CO2 emissions do not become severe enough, perhaps the elimination of carbon black soot will give the environmentalists another issue to campaign on.

There are a number of false statements about the science in this opinion piece, such as CO2 residing in the atmosphere for centuries.  In fact, CO2 emitted from smokestacks appears to have a half-life of less than 1 year.  Perhaps we should use this environmentalist multiplier factor of several 100s as a scale-correction factor for anything they say!  Of course, I tease a bit here.  In some cases, they are only exaggerating by a factor of ten.

I actually think that reducing carbon black from soot is a good thing, both to reduce breathing problems and to reduce visibility and staining problems.  Any slight cooling that may result is probably not too big a deal, though I do maintain that global warming is generally beneficial and that due to extra CO2 is surely beneficial to plants, the animals that depend upon plants, and the sea creatures which create shells.  In fact, we should just view increases in CO2 emissions as carbon black is reduced as a beneficial stabilization of the temperature due to decreased carbon black.  I see no reason to believe that we face a global warming crisis at this time due to any of the effects of man-made sulfate aerosols, carbon black, and CO2 emissions.  If we have any looming crisis, it may be due to the massive emissions of the Iceland volcano going on at this time.  It will be interesting to monitor the climate effects of that event.

Disclosure:  I have performed materials analysis for a client for the purpose of reducing carbon black and soot emissions.

Rahn - The Rise of the Job and Savings Killers

On 14 April, Richard W. Rahn, a senior fellow at the Cato Institute and the Chairman of the Institute for Global Economic Growth, published a commentary in The Washington Times entitled The Rise of the Job and Savings Killers.  This is a very good and hard-hitting perspective on the effort of the Obama administration to destroy the savers and job-creators of America.  Rahn says:

Responsible people are fearful. Those who save for the future increasingly understand that they are the targets of the predatory class. They see the United States and most other governments running record deficits, and most implicitly understand that this will not come to a good end. Greece and California are already serving as the canaries in the coal mine.
The Federal Reserve is holding short-term interest rates below the rate of inflation, so those who have interest-bearing savings accounts or certificates of deposit are seeing their savings erode, while at the same time, the Obama administration and Congress are increasing tax rates on interest, dividends and capital gains. Governments are expropriating (stealing) people's savings.
The U.S. and most other governments of the world are issuing debt at such a rapid rate and at such high levels, with no real plans to reverse such behavior, that it is almost a certainty they will not pay back what they owe. How will they avoid paying back the money? Well, there is always the old, tried-and-true way of inflation, whereby the central bank (the Federal Reserve in the United States) prints so much money as to erode the value of the money — so the government ends up paying (in real value) only cents on each dollar it borrowed.
 His other main points are:
  • General inflation is very unpopular in the U.S. and cost Jimmy Carter a second term.
  • The European way is often to target bankers and rich people as "greedy" and simply drop the interest rate promised on government bonds or delay their maturity date to rob those investors of their contractually agreed return on their investment.  Full bond payments are made to "politically correct" groups such as labor unions.  "Obama's rhetoric attacking "greedy" bankers and insurance companies" suggests he will do the same here.
  • The government has not taken more than 15% of gross savings in any recession in the past 30 years, with an average quarterly taking in that time of about 2%, until this recession, in which it is taking more than 37% of gross savings with its super low Federal Reserve interest rates, so savers are paid less than the inflation rate and getting negative returns on savings.
  • Savings produce new factories, buy equipment, fund R&D, and create new jobs.
  • Many savers are astute and consume more and save less when the return on savings is negative or low.
  • Obama is about to raise the maximum federal tax on interest, annuities, royalties, and more by 24%, thereby forcing less investment and savings.
  • Obama is about to raise the maximum federal tax rate on dividends by an obscene 189%, raising it from 15% to 43.4%, thereby forcing a large reduction in investment.
  • Obama is raising the maximum rate on capital gains by 59%, thereby forcing a destructive reduction in investment.
  • Many state governments plan to follow his lead with similar higher tax rates.
  • As the government's induced inflation rises, many people will be pushed into higher tax brackets, though their standard of living will be decreased, and they will be taxed more heavily, sometimes at rates greater than 100%!
  • The political class in Washington and Europe "is engaged in the most massive act of wealth destruction since World War II."
As I have said many times, the Democrats are the party of Mass Destruction, not of beneficial change.  On the issue of will Obama target bankers and the rich on their investments, in further ways than those already written into the ObamaCare law and the plan to end the George W. Bush tax cuts, we must remember how he stole the money that GM and Chrysler owed to their creditors.  We also have to remember how much he admires European socialists and how badly he wants to Europeanize the United States of America.

18 April 2010

Did you do your required federal reading today?

The annual report by the Competitive Enterprise Institute (CEI) on the state of federal regulations called Ten Thousand Commandments for 2010, written by Clyde Wayne Crews Jr. notes that:
  • The Code of Federal Regulations is now over 157,000 pages long
  • 3,503 new rules went into effect in 2009
  • That is a new regulation every 2.5 hours every day, all 365 days of the year
For the last decade, the number of pages in the Federal Registry, where new regulations are published, has averaged 73,018 per year.  This would suggest the Code of Federal Regulations should have grown by 730,177 pages in the last decade, but apparently many of the older regulations are replaced by the newer ones.  Fortunately!  The following plot comes from the CEI report:

Most of these regulations provide for fines, penalties, and even jail sentences should they be violated.  Ignorance of the law is no defense in our courts of law.  That may have made sense when the laws were simple enough that an ordinary American could be expected to know the law and the regulations, but I am betting that, like me, none of my readers have read all of these regulations.  Therefore, you and I are under constant threat of fines, penalties, and jail time for breaking regulations we know nothing about.  The situation is even worse, since our state and local governments are also busy writing laws and regulations.

Since we have not read these regulations, I suppose we are supposed to consult with a lawyer before we undertake any action at all.  In fact, we have to consult with a lawyer in many cases before we do not take any action at all!  But this volume of regulations is so large that no lawyer knows the entire width and breadth of these regulations either.  So, they specialize in portions of the regulations, such as bank regulations, or import regulations, or export regulations, or farming regulations, hiring and firing regulations, or gaseous emissions regulations.  So, before we undertake any action, we need to figure out how many lawyers with how many specialties we need to consult.

There are a lot of Americans who have not read 157,000 pages in their entire lives.  I surely have, but very, very little of my reading has been federal regulations, despite having worked for the Dept. of the Navy for 10 years and the Dept. of the Army for 19 months.  I certainly did not read my 9.6 regulations today that I should have read.  Now, some of you will say that surely we do not have to read all of these regulations.  We can just skim through their titles and judge whether they will apply to us.  After all, many of us are not farmers.  But, a regulation on the use of fertilizers aimed mostly at farmers, might in some cases affect those of us who fertilize our lawns and gardens.  Or, we might buy an item from an importer who is not allowed to import that item.  Are we then guilty of purchasing contraband and subject to penalties ourselves?  In many such cases we are at least likely to lose our investment in the item, since it can be seized by law enforcement authorities.  We are not talking about cocaine here, which we all know to be illegal.  But, you had better be careful which flowers you buy that have been imported.  A man has been in prison for two years for not filing the necessary paperwork to import some unusual flowers.  He claims he did not know he needed to do this and there is plenty of reason to believe his import effort was small enough that this was likely true.

Now behind the huge flood of regulations is the Congress that no longer listens to the American People.  It passes bills, many of which are 1,000 or even 2,700 some pages long.  Those Congressmen voting for these bills do not read them, even though their oath of office makes reading them their duty because they are supposed to only pass laws that are constitutional and also meet the requirement of promoting the general welfare.  Apparently, one of the reasons that most Congressmen do not care whether their laws are constitutional or not is because if they did care and if they did their duty to the Constitution, then they would have to actually read all of the laws they vote for!  Ugh..... how boring.  It is so much more rewarding to be wined and dinned by constituents and special interests who are imploring you not to hurt them or who are trying to bribe you into giving them a special benefit.  Yes, at those dinners the money just flows in for your next re-election campaign.  Who cares whether you have actually read the bills you vote for?  How many Congressmen have lost their re-election campaigns to-date for that reason?

Then these thousand page plus bills call on the various executive branch agencies to create the new regulations to deal with hundreds of issues.  The recent Patient Protection and Affordable Health Care Act of 2010 was more than 2,700 pages long and called upon the Secretary of the Department of Health and Human Services alone to create rules and regulations 137 times.  Many other federal agencies were given new responsibilities and many more new agencies were created.  This will call for many, many more new regulations.  Many of these regulations will presumably apply to the many Americans who will be forced to buy the mandated health insurance and who will receive the more rigidly regulated health care also mandated in the bill.  It appears inevitable that we will be held responsible for knowing all or many of these new regulations.  Since the health care industry is one-sixth of the economy, everyone in that industry will have to know a lot more about these upcoming regulations than the average patient will have to know.

Of course we are all pretty busy as it is.  So how on earth are we going to have the time to read all of these federal, state, and local regulations?  For one thing, there ought to be a law that no vehicle can have a radio or play any CD which is not encoded by the government as an official government law and regulation CD.  When driving, we shall be required to listen to audio readings of the laws and regulations of that area of the country we are in.  If we are pulled over for any reason, law enforcement should immediately check that we have the required CD in our government-mandated CD players.  Those too poor to have a CD will be required to apply for a federal subsidy for the purchase of the mandated CD player.  Before graduating from high school, every student must have read every law and regulation applicable to his area prior to two weeks before his graduation date and pass tests on those laws and regulations.  Once a year, every resident of the United States will go to the Department of the Laws and Regulations and pass a test on the body of the current laws and regulations including all new regulations and laws issued up to two weeks prior to that annual renewal date.

That, of course, is the socialist response to this problem.  My response is this:  It is perfectly clear that we have far, far too many laws and regulations.  The logical consequence of having laws and regulations is that we must read them and understand them.  If the burden of reading them and understanding them is so great that it cannot be consistent with our general welfare and it is an unreasonable infringement of our individual right to life, liberty, and the pursuit of happiness, then all laws and regulations in excess of such a reasonable limited number, must be unconstitutional for that reason even if some small fraction fall within the powers actually granted the federal government by the Constitution.  This is because any law passed by Congress must meet both of the following requirements:
  • It must be the exercise of one of the few powers given to Congress in the Constitution.
  • It must also be consistent with promoting the General Welfare.
The Constitution does not even provide for regulations issued by the executive branch.
    Of course, the interpretation of the Progressive Retrogressives differs with mine.  They say it may either be an explicitly enumerated power or it may be anything they choose to claim is for the General Welfare.  This is nonsense for many reasons, but one of them is the reason we are examining in this post.  If the power of government is to do anything it says is in the General Welfare, then the rules, laws, and regulations will quickly become unknowable, unintelligible, and overwhelming in their demands for reading time!  This is clearly inconsistent with the General Welfare being claimed.

    17 April 2010

    The IRS Ganders and Gooses

    We Americans each have one great treasure in common.  We each have an equal, sovereign individual right to life, liberty, and the pursuit of happiness.  We also have two extremely important documents in our shared American history.  The Declaration of Independence and the Constitution of the United States of America.  The Declaration of Independence declares that we each have an equal, sovereign individual right to life, liberty, and the pursuit of happiness.  It is simply recognizing that right, not granting it.  It also notes that government is legitimate only to the extent that it serves the sole purpose of protecting and preserving the individual rights of the People.  It declares any government that tramples those rights to be a tyranny which men must overthrow.  Our second great shared American document, the Constitution, provides for a very limited federal government whose purpose was limited to preserving the individual rights of the People by providing for their defense and very limited and carefully enumerated other powers for their general welfare.  Our present government has largely ignored these governing documents.

    Among many other problems, it fundamentally does not believe that we have the individual right to life, liberty, and the pursuit of happiness.  It taxes us to a much greater extent than that needed to provide for our defense, which is only 19% of the 2010 federal budget.  Such other of its legitimate functions do not even constitute a sufficient part of the pie chart of government outlays to be separated out from the 38% covering all other activities and shown in the pie chart below:


    The incredible expansion of government has led to a necessary problem that we are no longer seen as individuals with equal rights.  To have equal rights, the scope of government must be very small.  As that scope grows, the government becomes the decider on who gets the benefits of the exercise of each of those powers.  If the primary function of government is to provide for the national defense, we all benefit equally with increased security for our lives.  But when the governmental powers include crop subsidies, ethanol mandates, carbon dioxide emissions policies, export loan guarantees, home mortgage guarantees, student loans for college, medical care regulations, alternative energy subsidies, electrical grid improvements, income taxes, death taxes, dividend and interest taxes, capital gains taxes, sales taxes, education tax credits, mortgage interest deductions, sulfur dioxide emissions regulations, railroad regulations, power plant regulations, airline regulations, banking regulations, insurance regulations, and an almost infinite number of other exercised powers picking beneficiaries and losers, we are not recognized as equal.  With this expansive vision of government we cannot be treated equally.  It is impossible.  Yet, the socialists commonly claim that they want government to exercise a new power in order to make us more equal.  The opposite must be the effect, at least with regard to our rights, if not always with regard to our income.

    So, we have a society of gooses and ganders.  Some of us are ganders and most of us are gooses.  The ganders goose the gooses.  This was the way of life throughout human history until the American Founders tried to set up the government of the United States of America with a more enlightened vision.  In the early days of the republic, we fell short of the vision due to slavery and perhaps too great a role for religion.  In the past century, we have lost sight of this vision due to the obscuring vision of the Progressives who see the People as being in conflict with one another for material goods and services, which they value more than their sovereign, equal individual rights.  We too often have a materialistic viewpoint heavily laden with envy and jealousy supplanting a spiritual recognition of the equal right of every American to choose his own values and then to manage his own life in accordance with his chosen values.  The socialist vision is of two children fighting over a couple of toys with a parent, the ruler, to moderate the fight, while the American vision was of adults taking on the joys and responsibilities of living their own lives in a harmonious society of voluntary associations.

    The IRS has long had the reputation of a piranha, for its role in tax collection.  This is an American federal government agency that according to a list compiled by Richard W. Rahn, a senior fellow at the Cato Institute, does the following:
    • Unnecessarily strikes fear into the hearts of tens of millions of your fellow citizens, causing such anguish and despair that some are driven to suicide each year.
    • Requires citizens to know 10 million words of rules and regulations because the failure to do so may result in draconian fines and even jail, while at the same time no one in the agency has a full understanding of all the rules and regulations it requires others to know.
    • Routinely ignores the constitutional protections against self-incrimination and the right to the presumption of innocence.
    • Seizes the assets of citizens without obtaining court judgments.
    • Penalizes marriage.
    • Discriminates against many of the nation's most productive citizens.
    • Destroys incentives to work, save and invest, and undermines job creation.
    • Routinely protects agency personnel who have engaged in citizen intimidation, misrepresentation or worse.
    But, it also decides in other ways, which of us are ganders and which are gooses to be goosed.  Consider the case of the gander Tim Geithner, now Secretary of the Treasury, which manages the IRS.  In 2006, he was audited by the IRS, and they examined his tax records for 2003 and 2004.  They found that he had not paid his Social Security and Medicare taxes which were not paid by his employer at the time, the IMF.  They withheld his income taxes, but for some reason they did not pay the Social Security and Medicare payroll taxes.  The IMF did send out frequent reminders that their employees needed to be sure to pay these taxes themselves.  The IRS audit found that Tim Geithner needed to pay $17,230 in back taxes and interest.  What?  No tax penalty?  What's this?  If you or I paid taxes owed late, we would be hit with tax penalties that would make the interest look puny in comparison!  But not Tim Geithner.  No, he is a goose.

    While he was vetted for the nomination by Obama to become the Treasury Secretary, it was discovered by the vetters that he had also not paid his Social Security and Medicare taxes for the years 2001 and 2002.  He and his tax expert had decided he did not need to pay them even after the results of the 2006 audit, because the statute of limitations meant he had gotten away with not paying them.  But, to ease his conformation by Congress, he then paid $25,970 of taxes and interest, but no penalty.

    The vetters also found he had charged expenses for overnight camps for a child as dependent care tax deductions, though these are not allowed.  He had taken an early withdrawal from a retirement plan, a small business deduction, a charitable deduction, and a utility cost deduction on post 2004 returns which were not allowed.  He had also had an immigrant housekeeper whose papers expired while working for him.  So, he owed $4,334 of additional taxes and $1,232 of interest.  Still, he paid no tax penalties!

    We have all seen the many TV ads for the services of companies specializing in getting your past unpaid taxes paid for a small fraction of the amount owed.  They often boast of the many employees they have who used to work for the IRS.  Apparently, they call up an old buddy still with the IRS and say, "Hey, Wesley, this is your old buddy Mouch!  I've got a client who needs a bit of help with paying $20,000 of overdue taxes.  They are finding it a bit hard to pay so much money.  I want to ask you to give me a little favor and agree not to charge them a penalty, or any interest, and just take $0.35 on the dollar of the overdue amount."  "Yeah, thanks old buddy."  "Yes, the money here is good.  When you retire or want to leave the government, I'll hold a position here for you."

    Yes, despite the equal protection provision of the Constitution, some of us are more equal than others.  Many of us are gooses and some of us are ganders.  For most of us, the IRS is the beak of the gander and it is a cruel gooser.  I hope you paid all of your taxes, because those tax penalties will kill you.  It does not matter that year after year the IRS owed you money and they never, ever paid you interest on the money they held and used for maybe 9 months on average or more interest-free.  The IRS is the gander, and you are the goose.

    Besides, the great socialist leader Obama tells us it is our patriotic duty to pay him our taxes so he can buy the votes of those who like his social welfare entitlement programs and those who like his subsidies for his friends.  He chortles at the Tea Party American protesters who gathered across the country on 15 April and implies they are unpatriotic.  And so the tyrant tramples on our individual rights and calls himself and his largely fascist and Marxist socialist followers American Patriots!

    Interesting fact:  By definition, a gander is also a stupid and foolish fellow!  What an inverted society we have where the stupid and foolish fellows rule their intellectual betters.

    16 April 2010

    EPA: Do As I Say, Not As I Do

    The EPA is about to issue new standards on lead contamination in commercial buildings.  Recent testing in its Ariel Rios headquarters building showed that dust samples in the building were often much higher in toxic lead content than those allowed in commercial buildings by the new regulations about to be applied.  In one case, a dust sample was 92,500 % higher (925 times higher) than the new standard would allow.  This dust sample was taken from the floor of the new state-of-the-art control center for responding to outbreaks of toxic substances.

    The EPA says air samples were not as bad and its employees are safe.  The GSA owns and operates the building and is in charge of cleaning up the contamination.  Claims were made that the contamination was because a Secret Service shooting range is nearby.

    This was reported by the Daily Caller and briefly on Fox News.

    Can you imagine the fines that the EPA will put on any company with a commercial building with lead limits above the new requirements?  Can you imagine the orders that any company remove its employees and shut down its building if lead levels above the new limits are found?  Can you imagine the many lawsuits that will be aimed at any such company by employees concerned about their future health based upon the new limits to soon be put in place by the EPA?  Yet, the EPA has not sent its people home, because it says they are safe.  But, if they are safe at the EPA with lead levels well above their new limits, then doesn't this imply they will in many cases be safe in commercial buildings with lead contamination levels above the new limits?  Ah, what is good for the goose is not good for the gander.

    Doesn't this remind us of the IRS and Treasury secretary Tim Geithner who will not do his tax returns according to IRS rules.  Geithner paid his back taxes from 2001 up through the time of his nomination to become Treasury Secretary, under which the IRS is managed.  But, he only paid the taxes and interest.  He did not pay any penalties, which are the usual killer.  Penalties for late payments are usually many times greater than the interest for the late payment.  Apparently, Geithner and the EPA are gooses and the rest of us are treated like ganders.

    Lisa Jackson, the EPA administrator, will probably earn a large bonus this year.  The citation justifying the bonus will probably say it is because of her excellent work in putting the new, tougher lead restrictions in place and for banning CO2 gas as a pollutant.  Do as I say, not as I do.  I want to see Lisa Jackson walking about with a rebreather attached to her back so she does not emit any CO2 pollutants!  I want to see her that committed to acting as a role model for the things she says she believes in before she forces us to comply to her demands.

    On Atlas Shrugged by Ayn Rand

    In October of 1957, Ayn Rand's great novel Atlas Shrugged was published. I was not aware of it, being 10 years old. Much of the rest of the world was not aware of it for some time either, much to Rand's disappointment. Not even the truly creative builders of the world, for whom she fought so hard to bring admiration, seemed to take notice of the valiant and revolutionary defense of reason, egoism, happiness, production, and of Capitalism and free trade which she had provided in the 14 years she had labored since the publication of The Fountainhead in 1943. At the recent Atlas Society celebration of Atlas Shrugged in Washington, DC (yes, the heart of the brutal anti-individualist beast itself) on the 6th of October, Barbara Branden made very heartfelt comments on how America's businessmen had failed Ayn Rand and a rational Capitalist society when they failed to rally to the defense of Atlas Shrugged, as most of academia and the media attacked it or ignored it. Fortunately, many admirers of her work came eventually to discover Atlas Shrugged, making it the book most cited after the Bible as the work which has most influenced people's lives in America. It continues to this day to be a best-seller year after year, selling 140,000 copies a year.

    While large numbers of people who have read Atlas Shrugged love it, very many of them do not make that love known to many of their acquaintances and family. Her novel clearly rejected socialism in all of its variants and it was clearly not consistent with religious conservativism either. Consequently, both the left and the right rejected it, usually with considerable hatred. Another good fraction in the middle of the political spectrum ignored it because many of them are apathetic about philosophy, history, and politics.

    The socialists hate individualism, since no collective, communitarian scheme can accommodate the complex individuality of man. When the individualist claims that the right to his life implies that he has the right to his own body, he must exercise personal responsibility in his own health and its care. This means that he has the right to provide himself with the best medical care he chooses and to either have or not to have medical insurance. Individualists who choose not to use their money for medical insurance, but can certainly afford it, number about 18 million of those 47 million who are said to live in the United States without medical insurance. The socialists want their audience to assume the 47 million to be poor Americans in need of governmentally assured medical insurance. Other individualists want better medical care than the government will provide and they want it when they want it, not 6 months or a year later as is common in the socialized medicine nations. Still others want to smoke or drink without having to pay punitive taxes to a Nanny state. Then we individualists think we know better how to spend our hard-earned income than a democratic mob listening to demagogues lusting for power. We view the use of our earnings as an essential manifestation of our liberty and our pursuit of happiness, as did the Framers of The Constitution. If our earnings and our property are not truly ours to dispose of, then we are not free to manage our own lives. We think the socialist is utterly presumptuous in believing he can manage our lives better than we ourselves can. But, the socialist is a brute who not only thinks he knows what our values should be better than we ourselves do, but that he has the right to hire government thugs to beat us brutally until we give into his vision of what each and every individual life should be. The socialist wants to design a cookie-cutter life for each of us and does his best to use the public schools as his propaganda tool to this end. Commonly, she or he feels very maternal or paternal in helping the great unwashed masses to make the right decisions. This view holds that most people are incapable of managing their own lives and requires that every adult be continuously treated like a child, with no prospect of ever growing up.

    The religious conservative is often thought to be essentially the opposing force in our society. However, the religious conservative often shares a substantial part of the vision of the socialist. He holds that every man is a sinner and that every man needs God to help him manage his life. Man is the equivalent of a sheep, a very dumb animal, which requires the constant supervision of the shepherd. Of course, the priesthood is happy to provide the earthly portion of this shepherd function and it is their route to power and paternal presumptions. Again, the ordinary man is a child at best. Now, the government is to enforce seemly behavior according to the Bible, or the Koran, or Jewish or Hindu teachings. So, here again the individual who does not accept the authority of the Bible, the Koran or the dominant religious teachings of his region, is allowed little opportunity to manage his own life. He is thwarted in many ways from exercising his sovereign right to life, liberty, and the pursuit of happiness. The religions almost always frown upon earthly pleasures to a substantial degree. Commonly, they hold prejudices against wealth and property, many aspects of free trade, many of the many joys of sex, and any vision of man as heroic. Commonly, one's sovereignty of body is crimped sexually and a woman's right to make decisions about that part of her body which is a fetus is denied. Commonly, freedom of conscience is limited when such freedom is not consistent with the regional religious teachings. So much for the right to life which must start with the right to manage one's own body and mind. Should one be homosexual, then the freedom to enjoy an equivalent partnering contract to that offered man and wife is denied. Forget about being bisexual, a bigamist, or polyamorous if one expects equal treatment before the law. Such expressions of individuality are denied by old books. No, wait, being a bigamist or more, is actually endorsed by many of the same old books invoked to deny other freedoms, but still the modern religion holds this evil. Go figure.

    So, along came Ayn Rand. While very spiritual, it was the spirit of an earthly, rational, productive, and happiness-seeking man that she worshiped. She recognized that man lived by his rational faculty, which was his sole source for understanding reality. She reveled in the accomplishments of mind that many people contributed in their professional careers and thought that the system which most enabled these accomplishments was the Capitalist system of free trade in goods, services, and ideas. Religious tribalism or feudalism and socialism, whether of the fascist or communist varieties, squelched the mind and inhibited man's quest to thrive on this earth. She unabashedly identified the source of man's progress in the fruits of individual minds. She endorsed rationality, individuality, ethical egoism, productive achievement, and the quest for personal happiness.

    Politically, a highly limited government, such as the framer's of The Constitution attempted to give us, was necessary if man were to be able to exercise his individual right to life, liberty, and the pursuit of happiness. Unfortunately, Americans have always been ambivalent about endorsing rationality, individuality, ethical egoism, productive achievement, and the quest for personal happiness. More than any other country on earth, we tolerated, and sometimes encouraged these human pursuits, but in early times, ancient religious belief interfered and now, more and more, a cheap desire to escape personal responsibility manifests itself in socialist evasions. Along the way, our Constitution has been reinterpreted to turn a requirement that the government behave consistent with the general welfare into an opening to allow almost any government action restricting the rights of the individual if only it was claimed to be in the name of the general welfare. If this had been the intention of the Framers, why would they try so hard to enumerate the few powers that government had? If this broadening of power was not enough, many others, such as a huge broadening of the mandate to regulate interstate trade has been added. It is difficult to make an argument so convoluted and trivial that it is not held that the government has a power to restrict many human activities based upon the commerce clause. As Judge Narragansett says in Galt's Gulch in Atlas Shrugged, an amendment must be added to the Constitution saying that Congress shall make no law abridging trade and depriving the people of their property. Of course now, we must even buttress our right to free speech, which is cruelly abridged by the McCain-Feingold Act, claimed to be an election reform.

    Because of American misconceptions of political freedom, we have a society in which the members are pitted against one another on the basis of the industries they work for, the size of the companies they work for, whether they are management or labor, which quintile of income they fall into, whether they own a home or not, whether they have children in the public schools or not, whether they are man or woman, whether they are heterosexual or otherwise, whether they have bought medical insurance or not, whether they are old or young, and based upon their ethnicity. Because government uses its monopoly on the use of force to take up the part of these various groups against the interests of the opposing group, there are constant battles involving those who seek the unearned and those who seek to defend themselves. These are commonly very messy battles, since they have degenerated into very complex mixtures of the legitimate desire to protect oneself and the dastardly desire to take advantage of others. What could be uglier than parents taking advantage of their children by maintaining a Ponzi scheme social security system? What could be more disgusting than one ethnic group claiming special favors from government and discriminating against other ethnic groups. Shouldn't men be judged by their individual character rather than the color of their skin? The politicians and the media by and large encourage this constant factionalization. It gives them more power and brings them more attention and money. The philosophy is clearly to create conflict and to divide and conquer.

    If the individual is ever to recover and then to fully realize his right to life, liberty, and the pursuit of happiness, it will be critical that he understand that man can live in harmony with others only by adapting Ayn Rand's philosophy of Objectivism. If the individual is to be respected, it must be understood that he lives by the product of his rational mind. When no man provides for himself by using force to appropriate the means of their living from others who have produced wealth, income, goods, and services by using their minds, then we can earn the shear joy of living as harmoniously as do the great producers of Galt's Gulch in Atlas Shrugged. By giving us such a life-affirming and inspirational view of the possibility of so much joy in living one's own life and sharing it with worthy friends and neighbors, Ayn Rand has given us a book for the ages. Atlas Shrugged should endure as has Homer's Iliad and Odyssey for showing us man as an heroic and joyous being.


    This is a repeat of a post of 16 October 2007 of a post called 50th Anniversary of the Publication of Atlas Shrugged.