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.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

27 December 2010

Our Unfair, Discriminatory, Growth-Inhibiting Income Tax

Obama wants to have a discussion about income inequality and increasing the discriminatory nature of the income tax rate structure to reduce income inequality.  He claims he will win that debate.  He clearly believes the American People are merry thieves and covet their neighbor's income if not his wife, his house, his manservant or maidservant, his ox or his donkey, or anything else that is his.  I hope he is wrong and that most Americans will resist the Obama lure for free government goodies and services paid for by soaking the rich.

An increasing number of Americans, especially Tea Party Americans, do seem to think there is nothing wrong with others becoming rich and they even wish them the best.  Many have dreams of becoming rich themselves.  Unfortunately, the young Americans coming out of our government-run school systems have generally been indoctrinated in the idea that income inequality is a great social injustice that transcends such trends as a generally improving lifestyle for all income groups.  They have been taught that those with high incomes have somehow deprived the poor or that they must give back what they have created because, well they somehow could not have created it but for the poor?  Or, in some cases, the rich are pictured as actually having taken more of their share of the dwindling resources of the planet and added more than their share of pollution, so therefore they must be made to pay back the poor whose share of resources and clean air and water they took!  This is nonsense that comes from static thinking and environmental misconceptions I have discussed elsewhere.

The Progressive Socialist Elitist likes to point at the fact that the very wealthy are becoming wealthier at a faster rate than most Americans have been becoming wealthier.  He commonly claims this growing wealth on the part of the very rich is due to the Bush II tax cuts.  He does not point out that the rate of the increased share of total income going to the wealthiest 10% of Americans grew just as fast from 1994 to 2000 under Bill Clinton.  He does not point out that the share of total wealth of the top 10% has risen since 1978, which was back in Jimmy Carter's administration!  Let us look at the historical data of Piketty and Saez (2003) and the update by Saez through 2007 for the share of total income held by the top 10% of tax filers including wages and salaries, pensions received, profits from business, dividends, interest, rents, and capital gains, but excluding Social Security retirement benefits, unemployment payments, and other government transfer payments:

In 2007, the bottom income for the top 10% in income was $109,630, so we are hardly talking about really wealthy or really high income families here.  Saez' 2007 update provides a further breakdown on how the shares of those between the 90th and 95th percentiles ($109,630 and $155,400 in 2007), those between the 95th and 99th percentiles ($155,400 and $398,900 in 2007), and the top 1 percentile with annual income above $398,900 fared historically:

We see that those with incomes in the 90th to 95th percentile range actually lost share in the total national income from 2003 to 2007 following the Bush tax cut and overall had no greater share than they did in about 1970, though they were better off than in the 1940s and 1950s.  So, if income inequality actually were a legitimate issue of social justice, there is no reason to increase tax rates on this group.  If we then examine the group from 95% to 99% of income, we see they increased their share somewhat from 1982 to 1995, but have been rock steady ever since at the same fraction of the national income.  There sure is no reason to increase taxes on this group based on some specious argument that the Bush tax cuts caused them to become proportionately wealthier.  This would argue that tax rates for those earning up to about $400,000 should not be increased based on the specious argument that that would serve social justice by eliminating an increasing wealth inequality!  We are left with only the top 1% of income earners as the sole group of the "rich" whose share of the national income has increased.  They are the sole group making the entire top 10% of earners look as though they have increased their share of the national income.  Their income share has generally increased since 1978, though recessions cause sharp reductions in their share.

So, what is Obama talking about when he diatribes on the social justice need to increase tax rates for those families with incomes greater than $250,000 a year or those single filers with incomes above $200,000 per year?  Apparently, he just wants more of their money so he can exercise the power that comes with distributing it as he pleases for maximal political payback.  We can understand this greed and power lust, but we need not label it as virtue.  The Obama and the Progressive Socialist Elitist game is one of simple power lust.  It is an effort to dangle government goodies before a majority of the population who do not pay their fair share for the goodies they are to receive.  Indeed, let us examine the share of taxes paid compared to the share of national income earned by income groups to evaluate fairness on a more meaningful scale.

Now we can see that the top 1% of income earners had a 22.8% share of total income in 2007, but paid a far larger share of total income taxes at 40.4%.  The 95% to 99% group of top earners had a 14.6% share of total income, but also paid a share of income taxes which was much larger than that at 20.2%.  Our tax code clearly discriminates against them, even though we saw above that their share of total income has not increased since 1995 when Bill Clinton was President and still in his first term of office.  The group of earners between 90% and 95% had equal shares of total income and of total income taxes at 10.6% of each.  All but the top 10% of earners paid less into income taxes than their share of the national income!  In effect, they all received a subsidy paid for by the top 5% of income earners.  This was especially true for the bottom 50% of earners who paid only 2.9% of the total income tax amount in 2007!  Basically, they can vote for just about any wasteful and illegitimate government program because it will be using someone else's money.  They have no stake in the game.  This is by design and exactly how the Progressive Socialist Elitist wants it.  They want this half of the electorate to believe in free lunches, which is what this tax system gives them, except insofar as any of them may realize that hurting the higher income groups actually does hurt the economy.

The unfairness we are actually dealing with in America is the unfairness of stealing the earnings of those who have worked hard and effectively to create wealth, which allows them to be paid well or to use a part of that created wealth as income from their businesses and investments.  These activities do contribute greatly to the growth of the economy and to the decreasing cost of many necessary, or at least desired, goods and services.  With high taxes, we force the higher income earners to move their investments from the highest yielding investments into those with tax protections such as municipal bonds or we force them to hold unto their investments longer so they will pay capital gains taxes more infrequently.  Higher tax rates have always slowed down growth rates by making investment less efficient and by taking more of the time of the high earners due to their having to find ways to minimize loses to taxes.  The net result in tax revenues is that whatever the marginal tax rates are set at, the actual federal government revenues do not rise above about 19% of GDP.  This limit is called Hauser's Law.

Increasing tax rates on the wealthy may make a Progressive Socialist Elitist feel good, but it does not actually increase tax revenues.  This, in a rational society, would keep them from claiming they are increasing rates on the wealthy in order to do more to help the poor and the needy with additional government programs.  Interestingly enough, Obama seems to understand this at times and is more inclined to use the argument that he simply hates the wealthy having so much income and he is eager to do anything he can to take more of it from them.  He covets their income and thinks most voters do also.

Simple fairness would have tax marginal rates the same for everyone with income above about the 20% level.  Most of us are fine with the idea that government should not take food and other necessities out of the mouths of the poorest among us to fund government programs.  Of course those who are rational also want a much, much smaller government exercising only constitutional powers and serving only to protect individual rights.  With a legitimate government being about one-quarter its present size, the tax burden on everyone would be much lighter.  It would be easy to have no deficits and to pay off the national debt, thereby eliminating the interest payments on that debt.  It would be easy to eliminate business taxes, so businesses could much more readily compete internationally and hire many more Americans.  With lower taxes, everyone, most especially the hardest and most efficient earners would be able to create more wealth and grow the economy.  This would make it easier by far for every segment of the population to improve its standard of living, just as has clearly occurred in America from its founding and especially since after the Civil War.

It is important to remember that if you are truly interested in raising the general standard of living in the United States, that growth rates make a huge cumulative difference.  When governments do not interfere with the individual's effort to make his life better, the growth rate of the economy can be increased substantially.  Let us examine the effect on the size of the economy relative to its start size at the end of 20 years for the following growth rates:

2.0% growth yields an economy 1.49 times its initial size.

2.5% growth yields an economy 1.64 times its initial size.

3.0% growth yields an economy 1.81 times its initial size.

3.5% growth yields an economy 1.99 times its initial size.

4.0% growth yields an economy 2.19 times its initial size.

4.5% growth yields an economy 2.41 times its initial size.

5.0% growth yields an economy 2.65 times its initial size.

The only thing keeping the American economy from averaging 5% growth rates is the excessive size and interference of our local, state, and federal governments.  The excessive services and waste is a sad substitute for the robust economy we would otherwise have.  That economy would offer us many more choices tuned to our uniquely individual characters than does the retarded economy of a mixed socialist and capitalist system.  Free capital and entrepreneurial talent and we will prosper in ways that governments cannot compete with the private sector to provide.  What is more, we would then have a moral system allowing every individual to exercise the freedom of his own choices of values and exercising the personal control to manage his own life responsibly and in accordance with his personal values.

Substituting government coercion and threats of brutal force for the free individual choices of the free market and private sector is both immoral and impractical.  Wise men find that moral behavior is favorably linked to practical flourishing in life!  Some rational morality with respect to income tax fairness will yield a robustly growing economy and a better life for almost everyone.  The few left out by the economy will easily be handled by a more robust charitable concern by free men and women.

22 December 2010

The Immoral Estate Tax

The estate or death tax is simply immoral.  When an individual has spent a lifetime building wealth, he or she should be able to give that wealth in whole to whomever they wish.  It is particularly obnoxious that some people would stand between the dead and their own families or other loved ones.  The building of wealth is often motivated in good part by a desire to leave a significant estate to one's family in order to provide them with security.  Of course the Progressive Socialists Elitists do not want anyone to be provided with security unless they choose to have the government provide it to some select group among whom the family members may or may not be numbered.  The Elitist, who fancies himself god-like, thrives on making these choices and on having the chosen dependent upon his goodwill.

The Progressive Socialist Elitist commonly claims that the estate tax in not levied on the individual who died, but on the heirs.  Barney Frank just recently made such an often quoted claim:
Rich people should have a large chunk of their remaining estate confiscated by the government when they die because their heirs have done nothing to "earn" it themselves.
Strangely enough, the tax cut, to be 35% in 2011 and 2012, is made before and not after the money or property is put in the hands of the heirs.  The tax is made on the transfer of the estate, which really means before the transfer of the estate.  Thus it is more correct to say it is made on the dead than on the heirs.  Either way, this tax is made on those who generally did not choose to engage in an estate transfer, the dead usually not choosing to die and the heirs generally wishing their parent or other loved relation might have lived longer.

Unfortunately, the re-imposition of the death tax on 1 January 2011 for estates of $5 million or more has put dying people in the dilemma of choosing to die before then.  It is highly immoral that the federal government is forcing people to make such a choice.  Studies have shown that people do make the choice to die earlier in such cases.  Imagine yourself dying, but fighting to hang on to spend a last few days or weeks to say goodbye to those you love and allowing them to say goodbye to you and having to make this choice to cut off that incredibly important process.  You may have family members thousands of miles away who would wish to come to your side and spend a few last hours with you remembering the good times you have shared.  Imagine how important it is to hear one last time that you were a great father or mother and that your children will miss you greatly.  On the other hand, if you just stop fighting through the pain of dying, the business you spent a lifetime building may survive and your the employees you care about and trusted will continue to have jobs.  Maybe one or more to those who will continue to have jobs will be your children.  No one should ever be forced by a callous government run by Progressive Socialist Elitists to make such choices.

The Barney Frank claim begs several questions.  For one, it is simply assumed that the heirs did nothing to earn the estate.  Perhaps the children gave up many hours of time with their parent as the parent worked hard to accumulate the wealth.  Despite this, the children may have encouraged or given strength to the parent with their love to be so dedicated to his work and wealth-building.  In such cases, it is also often the case that the parent loved the work he or she did and the child understood that.  If, as is often the case, the wealth was accumulated from a business owned by the parent, the children may well have worked in the business as children and may still be working in the business as adults.  As adults working in the business, they may be the managerial succession plan of the business.

Yanking 35% of the business away from them at the difficult moment of transition may kill the business, causing much human grief as employees lose their jobs and as customers who have come to depend upon the business lose that relationship.  These are losses to which the power-grubbing likes of Barney Frank are blind and insensitive.  It may also be the case that the business owner had been retired for years and the business was in fact being run by his children for many years.  His children may already have greatly enhanced the value of the business.  One very important value enhancer is that a business gains value simply by having good managers it can count on for years to come, including tough recession years such as those of the Great Socialist Recession.  Family members are often just such valuable managers.  It cannot be correctly assumed that the children will not provide an even better manager and wealth creator than the family founder.  Or, the founder may have found the formula for success in a business after years of trial and error and passed it on to the children who will have much more time to use that formula, with such modifications as they will have to introduce themselves, to further build the business.  Destroy the business with taxation and the formula may also be destroyed.

Becoming an entrepreneur is a very difficult process.  The successful entrepreneur may have had, and probably did have, a long struggle to learn how to be successful.  One of the difficulties in becoming successful is the very fact that we already soak high income earners.  The top 1% of high income earners paid 38.02% of income taxes in 2008.  The top 5% of income earners paid 58.72% of all income taxes.  The successful entrepreneurial wealth-builder is just the person whose wealth will be again outrageously taxed at 35% on his death, with the frequent collapse of his business with all of his highly trained employees.  Such organizations are a wonder and should be highly valued in our society.  They represent incredible numbers of hours of hard prior work and difficult decisions, which are rarely appreciated at all by the all-knowing Progressive Socialist Elitist.  The founder or the heirs of the founder have built and maintained this organization.  In either case, its destruction or the act of harming it does harm to our society.  It has to be remembered that society generally is more benefited by the growth of the private sector than by the growth of government.  We must maintain rational priorities, despite Barney Frank's desire for us to irrationally further continue the transfer of private sector wealth to the government.

Of course there are cases we all know about in which the children are undeserving wastrels.  This is not really relevant, since it is the parent who built the wealth who has the right to decide where that wealth will go.  It is not our decision to make.  Neither is it the decision of government to make.  WE know the 35% cut the government will take will be spent foolishly and unconstitutionally for the most part.  In fact about 75% will be spent unconstitutionally, making the proper government spending out of the 35% tax a mere (1 - 0.75) (35%) = 8.75%.  This is a wastrel record which most wastrel children cannot match.  Their spending, while unwise, may easily be less unwise than that of the government.  Besides, the wasted part of the government spending very commonly goes to the undeserving poor or to the corrupt parasites of big business, labor unions, and other special interest groups, such as trial lawyers and public employees, who take advantage of the general taxpayer to live large.  In these days in which half the voters pay almost no taxes and the high income earners pay an outrageous fraction of all taxes, the wealth accumulator in many cases spent a lifetime supporting wastrels with his tax payments and upon dying is to once again forced to support those same wastrels with another 35% of his wealth.  You can hardly get more immoral than to demand that.

The Death Tax is highly immoral because it is a very discriminatory tax.  It strikes a very hard blow against businesses which are capital intensive.  Farming, for instance, is very capital intensive, since farmland has a very high value in the aggregate when enough acreage is held to make a farm profitable and a farmhouse and barn must be a part of the capital investment package as well.  A tractor and truck and many farm implements are other capital investments needed in our high-productivity farming environment.  The plight of farms due to the death tax has been often discussed and yet this important issue is of no concern to the Progressive Socialist Elitists such as Barney Frank.  There are many other American businesses which are also capital intensive.  In fact, for Americans to maintain their high standard of living in a global economy of intense competition, it is critical that many businesses achieve a very high labor productivity by being very well-equipped and by having other appropriate capital investment.  But, the death tax is a tax aimed at the destruction of exactly these competitive types of business with high capital investment because they also have high asset value upon the death of an owner.

Our all-knowing Progressive Socialist Elitists have long been dead-set on damaging the private sector, particularly our productive businesses, with completely stupid policies such as:
  • The Death Tax to destroy businesses with high capital investment.
  • The highest corporate tax in the world, designed to cause many U.S. corporations to build more facilities abroad and keep more of the profits of those facilities abroad, while decreasing their ability to compete in world markets from production in facilities in the U.S.
  • High personal income taxes on those with relatively high incomes which hurt the accumulation of cash to be re-invested in many small businesses, thereby decreasing their growth rates and the numbers of employees they have.  Of course, high marginal tax rates at moderate to high incomes also decrease the incentive of productive people to work hard and produce as much wealth and as many jobs as they otherwise would.
  • High company personal tax rates by counties and states which hurt capital intensive and therefore asset-intensive businesses.
  • High power costs owing to wrongheaded supports for expensive ethanol fuel, electric wind generation and solar power subsidies and mandates, and restrictions on oil and natural gas production.  The electric power supply dependability has already been harmed and will suffer much more as these policies are expanded.
  • Some pollution controls have exceeded rational cost benefit ratios.  Those on carbon dioxide are clearly such a case since carbon dioxide does not cause the global warming attributed to it by some all-knowing Progressive Socialist Elitists.  Despite this, great expense is already incurred in the name of CO2 reductions and the expenses are to ramped up drastically if the Obama EPA has its way in raping the U.S. economy.
  • Many safety controls and regulations are expenses on business with little to no benefit.  Food inspection, drug regulations, FCC controls on broadcast and now Internet information and entertainment, anti-trust, railroad regulations, the first-class postage monopoly, and many more costs have been imposed on businesses and individuals more for government control and power and to protect big industries selectively while punishing other industries than makes rational sense.  All such schemes were advanced by Progressive Socialist Elitists.
  • Tariffs and many irrational trade prohibitions still restrict international trade which is only carried out when two parties are benefited.  These restrictions are harmful.
  • The minimum wage law creates higher unemployment and keeps many under-educated young people from receiving necessary on-the-job training and a start to their careers.
  • Government favoritism toward unions makes labor too expensive in some industries, suppressing the competitiveness of those industries and pulling down other industries dependent upon those industries.
  • Restrictions on the freedom of information exchange harm the economy, as does the introduction of government propaganda on economic issues critical of Capitalism through our government-run education system and by the Progressive Socialist Elitist media.
  • Subsidies and mandates favoring some industries distort our economy and greatly harm the efficient utilization of capital and brainpower.
  • Policies by the government favoring some races and women over men create an impediment to the efficient use of human brainpower.
  • The huge transfer of wealth from the private sector to governments for unconstitutional purposes moves that wealth generally from production to non-productive uses.

19 December 2010

Last Gasp Socialist Omnibus Spending Bill Defeat Gives Hope for New Era of Responsibility

This last week was quite a momentous one for individual rights and more legitimate government, with the continuation of almost all of the lower tax rates of the Bush presidency, the declaration by Judge Hudson that the individual mandate and the penalties in ObamaCare are unconstitutional, the end of the ignoble Don't Ask, Don't Tell Policy in the military, and the defeat of the last gasp effort of the Progressive Socialist Elitists to fund their program for the next year in an Omnibus Spending Bill.

The Democrats had completely neglected to fund the current fiscal year's federal government with the normal 13 appropriations bills, each to be studied, discussed, and debated by responsible adults in the Congress.  Instead, they proposed, in the manner this Congress has become accustomed to, to wrap the whole process into one massive, take it or leave it bill to be passed in the most rushed and ill-considered way possible.  Indeed, as with other bills in this Congress, this was a You Must Pass the Bill in Order to Find Out What Is in It kind of bill.  It was another Trust Us, We Know What is Best for You Bill.  The Omnibus Spending Bill had barely numerable evils embedded in it:
  • 1,924 pages which few members of Congress had read and which were not debated appropriately.
  • Total spending of about $1.27 trillion, which was way beyond the government's expected tax revenues.
  • About 6700 earmarks costing about $8.3 billion, with the usual extra concentrations of earmarks for members of the Appropriations Committee.
  • One year's worth of funding for ObamaCare so the coming Anti-ObamaCare House of Representatives would have no opportunity to defund ObamaCare for a year.  This socialist government wants to get a good start hiring those extra IRS agents to make sure everyone buys very expensive government-approved health insurance and that all businesses fill out and submit their 1099 Forms for every transaction or sum of transactions totaling more than $600 in a year with any vendor.
  • The Legal Services Corporation would have its budget increased to $440 million so it could once again engage in class action lawsuits, which it had previously so abused that it was forced to stop class action lawsuits in the 1980s.  It says it now wants to force banks to stop predatory lending, which would just mean that more people would turn to payday lenders who charge up to 500% annual interest as banks are forced to bring down their interest rates.  Presumably the Legal Services Corporation would also presumably return to suing landlords and other targets it had previously chosen to harass and extort.
This sort of package deal with thousands of unrelated provisions is a strong bias toward wasteful and wrongheaded spending of the taxpayer's money.  The appropriate bias of Congress should always be against spending the taxpayer's money.  But just as our present-day interpretation of the Constitution is biased toward nearly unfettered governmental powers rather than toward maximal individual rights, the entire appropriations procedure of Congress has become biased toward thoughtless spending of the taxpayer's hard-earned money.  It is noteworthy that Senator Mitch McConnell actually marshalled the opposition of the Republicans to this bill, despite their own many earmarks in it, by correctly stating that this was no way to do business.  He noted that the bill was too expensive and that it was a grab-bag of junk provisions that flew in the face of the voters who made their disdain for such legislation only too well known in the November election.

Senator McConnell proposed a 60-day extending budget resolution, which I believe should have been a 30-day extension.  This would have been just enough time to let the incoming Congress deal with as much as possible of the 2011 fiscal year budget.  Unfortunately, I just heard that the continuing budget resolution will carry the government's excessive spending binge into March.  This will make the 2011 federal deficit much larger than it should be.  Socialism carries a very high price tag in lost individual freedom and the excessive spending of other people's money.

14 December 2010

The Good and the Bad in the Lame Duck Congress Bill to Avoid a Huge Tax Increase

The Lame Duck Congress bill about to be approved by the Senate to prevent a huge tax increase mixes good measures with bad measures.  In evaluating the overall desirability of the bill, we need to remember that this is a Congress whose complete record is one of huge overspending and micromanagement of individuals and the economy by central planners.  The recent election will change the character of the incoming Congress in January, but did nothing to change the individual characters of the members of the Lame Duck Congress.  They remain at heart taxers who will spend still much more than tax revenues will allow.  The great news is that the big spenders will be constrained in the next Congress by a dose of more spending-responsible Congressmen.  In the meantime, this bill is much less bad than one would expect from this Lame Duck Congress, though far short of what it should be.

Some of the bill provision evaluations I will make below are not based on the model of a truly legitimate government.  They are based on the situation we live in with a federal government having tax and spending levels about three or four times what they would legitimately and constitutionally be.  They are also based on the fact that the reason we are in a deep recession still owes in large part to the Obama and the Progressive Socialist controlled present Congress.  These judgments are made in the context of these facts and out of concern for the present suffering of many Americans.

The Good:
  • Extension for 2 years of the income tax brackets of the Bush tax cuts.
  • Extension for 2 years of the reduced capital gains and dividends taxes of the Bush tax cuts.
  • Extension of adoption expense tax credit.
  • Continuation of the American Opportunity Tax Credit for college tuition for 2011 and 2012. Context dependent.
  • Extension of the Child Tax Credit.
  • Extension of the increased amount of the alternative minimum tax exemption and for nonrefundable personal credits.
  • Continued elimination of the death tax on estates of less than $5 million.
  •  100% expensing for small business investment up to $125,000 in 2012 and up to $25,000 thereafter.
  • Deduction of State and local sales taxes, which rights wrongful discrimination against states with no or low income taxes.
  • Research credit for businesses.
  • 15-year depreciation for some leasehold improvements, restaurant buildings, and retail improvements.
  • Mortgage insurance premium tax deduction extension through 2011.

The Bad:
  • Extension of unemployment benefits for up to 99 weeks for another 13 months, thereby ensuring that businesses under strain pay for unemployment to remain higher than it otherwise would be.  Companies are not responsible for people being unemployed up to 99 weeks.  Anyone unemployed that long is lacking severely in self-initiative.
  • 2% reduction in the 12.4% Social Security tax bringing it down to 10.4% and further underfunding the highly underfunded Social Security Ponzi Scheme.  This is almost a toss-up evaluation since the Social Security tax money is really treated as though it is general fund money.  It has been a fiction that it is dedicated to the Social Security program and this contributes to revealing that fiction.
  • A 35% tax on estates valued at $5 million or more, which will badly damage many businesses and immorally attacks the results of many years of productive labor.
  • Extension of the Earned Income Tax Credit through 2012, which is unearned income.
  • Increased gift taxes.
  • Incentives for biodiesel and renewable diesel.
  • Credit for refined coal facilities.
  • New energy efficient home credit.
  • Tax credits and subsidies for alternative fuel and fuel mixtures.
  • Extension of the cash grants of 30% for renewable energy projects with no profits due to lack of economic usefulness.
  • Extension of ethanol production supports, which is a numskull program.
  • Energy-efficient appliance credits, which should need no credits if they make sense.
  • Alternative fuel vehicle refueling property tax credit extension.
  • Exclusion from income of employer benefits for mass transit use and parking.
  • Indian employment tax credit, which is clearly racial discrimination.
  • Accelerated depreciation of business property on Indian reservations.
  • Tax incentives for investments in the District of Columbia.
  • Tax credits dedicated to Puerto Rico, the Virgin Islands, and American Somoa.
  • Work Opportunity Credit to business for hiring certain favored groups with high unemployment.
In addition to these provisions, there are many more.  Since the bill itself consists of a list of how a line or phrase in a previously passed law is changed, it is very difficult to assess just what the effects of many provisions are.  This is the studied way in which our Congress makes its activities transparent!  This practice keeps both citizens and Congressmen alike from reading the bills before the Congress.  We are really governed by the staff of the Congressmen and the lobbyists who assist them with the writing of these obscure documents.

This bill is loaded with nonsense that should not be in it.  At the same time, there are also many good provisions.  Compared to what we have seen in the prior actions of this Congress, this is a good bill.  It has too many additional spending components such as the extension of unemployment benefits and a continued commitment to the uneconomic and foolish alternative energy projects.  If it is passed as such, it will not be as good a bill as one which would likely be passed in January when the new Congress begins its session.  There are advantages to letting everyone know next year's tax rates, but this bill also has some sad pork in it.  At this point, I think it is pretty much a toss-up whether this bill is passed now or a better bill is passed in a few weeks. 

I am leaning marginally toward the somewhat better bill in a few weeks in the next Congress though.  That is also not without its problems.  The main problem is that one would like the new Congress to get right to work on spending cuts.  Unfortunately, the Progressive Socialists still control the Senate and occupy the White House, which means the improved Congress is not likely to be able to make cuts in previously funded programs.  Fortunately, this now Lame Duck Congress has not done its budget approval job and the new Congress will be able to do much more to constrain the current fiscal year spending than would otherwise be the case.  If the present bill to stop the massive tax increase is passed in this Congress, the next one will be able to more quickly get down to business on spending cuts.  It also needs very badly to cut the highest in the world American corporate tax rate.  That is not too bad an alternative situation.

12 December 2010

Building the Progressive Socialist Train from Nowhere to Nowhere

California has long wanted to build a 500-mile long high speed passenger train, a so-called bullet train, from San Francisco to Los Angeles, through the Central Valley.  California voters approved a bond ballot measure for $9.95 billion in 2008 for the project, ten years in the planning, which they were told would:
  • Cost $40 billion.
  • Have a ticket cost of $55 to travel from San Francisco to Los Angeles.
  • Transport 94 million passengers a year.
  • The time of travel would be 2.5 hours.
  • The rail line would operate with a surplus and no subsidies would be needed.
  • 450,000 sustainable jobs would be created.
The Progressive Socialist federal government of the first half of the Obama administration has approved money to assist California in this effort.  The federal and state monies presently approved will build a 65-mile long segment of the railroad for $4.15 billion.  It will go from Corcoran, CA, with a population estimated to be about 25,000, to Borden, CA.  Borden is a tiny suburb of Madera, whose population is about 57,000.  Corcoran is on the less populated side of the Central Valley with complete desolation to its south and west and the small city of Tulare, population 58,000, about 19 miles to its northeast.  Corcoran is best known for the state prison there.  It probably needs bullet train service so the prisoners released from California prisons, because California cannot afford to keep them in prison, can leave the area quickly.

With the Republicans about to take over the money appropriations control in the House of Representatives, there will be no more federal tax money going to this project for quite some time.  I think we can be sure there will be no more for at least the next 6 years, if not for the next 10 years.  The short segment of the rail to be built will not be operated until more is built.  This is likely to help guarantee that if a bullet train is ever built from San Francisco to Los Angeles, the short segment will be obsolete and the route may well be changed.  It will be better if it were never built even in part.  It will be good if it is abandoned even after this segment from nowhere to nowhere is built.  The California authority that planned this line and two years ago made the claims above before the voters approved the bond measure, now says in the best bait and switch fashion:
  •  The cost will be $42.6 billion.
  •  The one-way ticket cost has increased to $105.
More realistic estimates are:
  • The construction cost will be somewhere between $62 billion and $213 billion.
  • The one-way ticket cost will be about $190.
  • At least $19 billion of federal money will have to be provided if there is to be any hope that the train will not have to be subsidized by California taxpayers, even though the authorizing legislation forbids that.
  • The 450,000 sustainable job workers are twice as many as the California government's active work force.  How realistic is it that so many jobs might be created by this rail line? 
The only bullet train railroads in the world having substantial segments of their systems able to operate without subsidies are in Japan and France.  Both are in much more densely populated areas than the comparatively low density Central Valley of California with its farming industry.  As we can see, California's Progressive Socialist central planning bureaucrats are about as competent as central planners always are.  They have done an excellent job of setting California's taxpayers up for a huge fall.

Meanwhile, the Central Valley of California has suffered from severe water shortages for the last several years.  Central planners have a lot to do with this problem also.  California has two major water projects controlled by central planners.  The Central Valley Project of 1933 is a creature of Franklin D. Roosevelt's New Deal.  The State Water Project of 1960 began under Democrat Gov. Pat Brown.  These two programs caused agricultural land use to increase from 4.9 to 8.6 million acres.  This huge increase in agricultural water use was based on water subsidies, water user fees rather than prices that fluctuate with supply and demand, water monopolies by the government, and a lack of water property rights.  All of these factors cause the uneconomical use of water.  This generally means that water will of course be used carelessly and wasted.  The effect is not unlike the use of the hard-earned money of California and American taxpayers to pay for a short bullet train track segment from Nowhere to Nowhere which will never be used.

Meanwhile, it is worth our noting that the newly elected Republican governors of Ohio and Wisconsin, have announced that they were returning the high speed train grants given to their states by the Progressive Socialists.  The returned Wisconsin money was for a train route from Milwaukee to Madison and the Ohio line was to go from Cleveland to Columbus to Cincinnati.  Secretary of Transportation LaHood has given the returned $1.2 billion to 13 states that want to build these taxpayer blood-sucking high speed trains.  John Kasich and Scott Walker have no doubt saved the states of Ohio and Wisconsin a fortune in wasted capital expense and subsequent train subsidies.

The returned money is going to the Democrat states of California, Illinois, New York, Washington, Vermont, Maine, Massachusetts, Oregon, North Carolina, and Iowa.  The toss-up states of Florida, Missouri, and Indiana are also getting money.  It is really hard to imagine how Maine, Oregon, North Carolina, Iowa, Missouri, and Indiana will find areas with dense enough populations to make their high speed trains pay.  The otherworldly winner of this nonsense has to be Vermont.  Its high speed train will go from St. Albans in the northwest corner of the state to Vernon in the southeast corner of the state.  St. Albans has a population of 7200 and Vernon's population is 2,000.  The biggest city in Vermont is Burlington, with a population of about 39,000.  Yes, this is the state that gave us Howard Dean and Bernie Sanders.  What can you expect.  The 13 states taking the high speed train money will rue the day they did.  No, not the damn politicians, it is the weary and overloaded taxpayer mules who will do the ruing.  At least most of these non-ruminating mules are Democrat asses.

08 December 2010

The Deception of the Reduced Employee Share of Payroll Tax

I am sure there are many employees who are delighted that the government has decided to make the total 2.0% reduction in the rate of the Social Security tax in the employee's contribution and not in the employer's contribution.  In fact, this is a nearly meaningless distinction, except that it plays well with those who have not thought the problem through.  I can tell you from my experience with mostly quite intelligent employees that very few people have thought this issue through.

In view of this ignorance, the ploy makes great political sense.  First, there are many more employees than there are employers, so it wins more votes for the politicians.  Second, the disappointed Progressive Elitists who so badly wanted to raise taxes on those guilty of being productive enough to earn more than $200,000 or somewhat less or couples earning more than $250,000 together or somewhat less are likely to feel that the reduction of the Social Security tax only on employees making less than $106,800 helps to equalize their disappointment in not getting to soak the rich.  They are also getting even with those rich, exploitative employers by not letting them have a share of the tax break for 2011 offered by this Social Security tax reduction.  Progressive Elitists hate business, profits, and businessmen, so this plays well.  But then this little triumph is entirely based on their own ignorance of employee compensation, which they display in many ways in addition to the present case.

Why is the distinction of employee and employer shares of the Social Security and the Medicare taxes meaningless?  On one level, it is because they are both paid by the employer.  The employee does not take his paycheck home and then send his Social Security withholding of 6.2% and his Medicare withholding of 1.45% in to the IRS.  His employer does that, unless he is self-employed, in which case he sends 12.4% in Social Security tax and 2.9% in Medicare tax.  But while this fact is important, it is not the hard part to understand.  Let us get to that.

An employer hires an employee because he wants the employee to help him produce goods and services and hiring the employee is calculated to produce enough more goods and services that the employer can cover all the costs of hiring the additional employee and make some profit as well.  The employer and the employee make a deal that the employee will be so productive that the employer can rationally afford to keep him employed.  There are two sides to this issue that need to be considered.  What will the employee add in company income and what he costs the employer.  For our purposes here, we will mostly consider what the employee costs the employer.

Adding an employee will generally require more work space and more equipment.  Workman's Compensation Insurance payments will go up.  The company may need to do more advertising to bring in more customers for the employee to provide goods or services for.  There will be an incremental increase in liability insurance in many cases.  There will be generally added expenses for business cards, office supplies, pollution controls and other regulation compliance, and the materials and goods the employee must use to make the company's finished goods or provide services.  There will also be overhead expenses due to the added work in doing payroll and keeping records for the IRS and reporting to them and other government agencies on tax and labor issues, and to provide and keep track of benefits.

Finally, there is the matter of providing the compensation package to the employee.  His compensation cannot rationally be greater than his additions to the company's income minus the many expenses of the previous paragraph.  If they are, for more than a brief training period, he should be fired.  Now every company is also in a bidding war with every other employer and even with the employee's potential thoughts of being self-employed, so that he has little leeway on the downside as to what he can offer in a compensation package.  He may increase that leeway somewhat by providing a nice work environment, good people to work with, good customers to work with, extra freedom in hours worked, and interesting work to do.  But one way or another, he is still in a stiff competition to keep desirable employees, who are likely to be desirable to other employers as well.  But most important of all, the employee's total compensation has a strict upper bound determined by what he adds to the company income minus the expenses associated with his doing so.

The compensation package is usually considered to be his wages or salary plus the costs of his benefits such as health insurance, retirement plans, vacation, sick leave, etc.  One could say that the employer's share of the Social Security tax and the Medicare tax, that state and federal unemployment taxes, and Workman's Compensation costs are all overhead expenses.  But if you do, the employer still needs to consider them as part of the costs of adding an employee and the employee still has to cover those costs or lose his job.  But, unlike added equipment, office or warehouse space, advertising, and other common overhead expenses, these taxes, which Workman's Compensation also is for all intents and purposes, are very easy to attribute to each particular employee and most rational employer's will do just exactly that.  They are part of your compensation package then.  Sure, most employees do not think of them as such, but that is the real case.

Why is this?  It is because the employer would have been just as happy to have given these tax monies to you as to give them to various governments or insurance companies.  If you are employed, you are worth the sum of these taxes, your take-home pay, the other taxes fictionally paid by you though he pays them for you, and all of your benefits.  In fact, if the employer could hand all of this money to you he should be happier.  He probably likes you and he would surely be very happy not to have go to all the trouble of separating the amount you are worth into separate piles with all the associated record keeping, report filings, and payments needed to
  • Withhold income taxes for the state.
  • Pay unemployment insurance to the state.
  • Withhold income taxes for the federal government.
  • Withhold Social Security taxes for the federal government.
  • Withhold Medicare taxes for the federal government.
  • Pay unemployment insurance to the federal government.
  • Pay Workmen's Compensation insurance.
I can certainly vouch for the fact that I would love to give all this money to my employees and if any of these taxes had to be paid, I would be delighted if they would relieve me of all the tedious work involved and do it themselves.  Of course, I have a devious motive.  I know that that would create so many very angry voters that we would soon have a much simpler tax system and much smaller governments.  Many more people would pay more attention to how much they were paying in taxes.  The present system is designed to fool them into underestimating the amount of taxes they pay.  That deception works with most people.

Now, let us consider the case of a tax increase.  It does not matter a bit whether the tax increase is designated as paid by the employer or the employee.  The employer is still the one who is actually going to make the payments, though the employee is involved in some minor adjustments on the income tax.  Let us suppose that either the Social Security or the Medicare tax goes up.  If it does, the employer will have to do one of a few things:
  • If he has many employees, he can easily fire one or more of the least productive employees to compensate for the cost increase.
  • He may crack the whip and say all employees must work harder.
  • He may defer pay increases until increases in worker productivity match the increased tax cost.
  • He probably will be loathe to take on new workers who will not be able to match their cost of employment for an initial period of time as they learn the job.
  • He may cut back on benefits.
  • He might have to decrease wages or salaries, though this is usually psychologically a tough choice for everyone.
The employer has options and he will have to exercise them.  Losing money is not a choice he can handle for long.  But, you should note that such compensatory actions are harder on small businessmen than on big companies.  If your costs go up 2% and that wipes out your profit, but you have four employees, firing one causes you to lose 25% of your income.  That is most often not an option.  So you have to use the remaining options or go out of business altogether.  The going out of business option is very frequently exercised by small businesses, especially since they are usually already working very hard and productivity increases are often harder for them to come by.

Now let us return to the 2% decrease in the employee share of the Social Security tax.  Each employee gets to now take that 2% home and spend it as he wishes.  But, what would have happened if the 2% decrease had been in the employer's share of the Social Security tax?  Well, perhaps for a few weeks the employer might have had a few extra dollars to reinvest in his company or to call net income and to be taxed, but there would be a very rapid readjustment in the marketplace in which employers found that they must offer employees 2% more to retain them or to get them to come to work for them.  Why?  Because the worker in question has already proven that his labor is worth that extra 2%.  That is why he had a job in the first place.

Good, productive employees are a scare resource.  There is always an active bidding process for their services, just as there is a market for plumbers, accountants, gold, wheat, pork, televisions, and other goods and services.  The inescapable Law of Supply and Demand applies here as it generally does in life.  Governments often pretend that they are above the Law of Supply and Demand, but all they do is shift the equation is some way, usually some bad way, but some new Supply and Demand equilibrium ensues.

In the case of the 2% reduction from 6.2% to 4.2% in the employee share of Social Security, there will be more money available in the short run for people to spend.  Generally, I favor reductions in taxes.  However, this reduction is going to make the financial straits of the Social Security system all the worse.  The Baby Boomers are about to start retiring in large numbers.  The politicians have been unwilling to face that program's severe underfunding.  The Ponzi scheme is about to collapse upon us all.  The best solution is simple, but few will yet accept it.  The problem is the size of the Baby Boomer wave and the fact that retirees are living a long time.  The life expectancy of the 65 year old in 2006 was 18.5 years.  That is a long time in retirement, particularly given that many people aged 70 are now in good enough health to be working.  The retirement age should be at least age 70.  I expect to work at least until I am 75 and longer if my health allows, which it probably will.

Given that the federal government has long been using Social Security tax revenues to generally pay for the obscenely excessive spending of the government, either major retirement age increases or major tax increases will be required.  Taxes are already much too high and they are already very much degrading the health of the private sector.  What we generally need are massive government spending decreases.  They are coming because the People will not put up with higher taxes and they are coming to understand the fatal nature of government deficit spending.  The process by which the necessary spending decreases will occur is going to be very interesting to observe.  Because a simple problem has so very long been ignored, its solution will now be all the tougher and may be catastrophic for some.

05 December 2010

Missing Jobs Increase Again in November 2010

Continuing the trend since July, the number of missing jobs in the United States increased again in November 2010.  As usual, I will present the jobs statistics using those without the seasonal adjustments from the Bureau of Labor Statistics and add in the data from the November Unemployment Report.  I calculate the number of missing jobs based upon the percentage of Americans who were or wanted to be in the workforce in January 2000, near the end of a period of several years in which that percentage had been high and fairly constant.  I do not believe that Americans are yet lazier than they were then, though the easy availability of long-term unemployment insurance might be changing Americans into more dependent people.  But the overriding assumption here is that if the economy were healthy, it would produce enough jobs of high enough quality that 67.49% of Americans would want to work now, as they did in January 2000.

The number of employed Americans fell by 334,000, while the working age population grew by 185,000 people, of whom about 67.49% or about 125,000 would be expected to want jobs.  As a consequence, the number of missing jobs grew by 459,000 in a single month.  This is approaching a half-million more missing jobs in one month.  This is another human disaster.  The real unemployment rate is 13.47%, not the commonly touted 9.8%.  Despite this, the Wall Street Journal of 4-5 December 2010 has a top front page graphic showing that 39,000 jobs were added in November.  Their number was only for the non-farm payrolls.

Despite the early elation of many small business owners that the outcome of the mid-term election would ultimately work to diminish the anti-business climate in the halls of the Federal Government, the uncertainties about next year's tax rates, the escalating awareness of the costs and overhead of ObamaCare, worries about the EPA's rulings on CO2 emissions, increased costs and paperwork coming due to the new FDA regulations just passed through the lame duck Congress, continued worries about the sustainability of the federal debt and that of many state and local governments, and fears of inflation due to the massive printing of money are among the many factors keeping businesses from hiring.  Large businesses have many of the same worries and face a world of competitors in which they will pay the highest corporate taxes in the world this next year.

03 December 2010

The Effective TSA - Al Qaeda Collaboration

I was wondering what the reduction in air travel passenger numbers would be as a result of the new very intimate and unconstitutional everybody searches.  I did not find statistics more recent than August 2010, so I could not answer that question yet.

But I did find this interesting note of the U.S. Travel Association at

Air travel hassles: A June 2008 study by the U.S. Travel Association revealed a deep frustration among air travelers that caused them to avoid an estimated 41 million trips over the past 12 months at a cost of more than $26 billion to the U.S. economy. Air travelers expressed little optimism for positive change, with nearly 50 percent saying that the air travel system is not likely to improve in the near future. The effect of avoided trips cost airlines more than $9 billion in revenue; hotels nearly $6 billion and restaurants more than $3 billion. Federal, state and local governments lost more than $4 billion in tax revenue because of reduced spending by travelers. (Source: Air Travel Survey, 2008)
According to the National Highway Traffic Safety Administration, there are 1.13 fatalities per 100 Million Vehicle Miles Traveled, seeing

We can estimate the number of added deaths due to the foregone air travel due to the hassles back in 2007 and 2008 before the very intimate full body searches of the TSA caused by the switch to less safe driving. If the average drive were 300 miles, then the added number of deaths per year would be about 139. The new intimate searches will cause still more people to switch to driving. It would not be at all surprising if the result will turn out to be an expected increase in driving deaths of 200 to 250 a year.

We also have to add a great many business losses to this. Some people do not make trips at all that they otherwise would, which hurts the airlines, hotels, and restaurants. The businesses that send their employees on trips also lose new business opportunities. According to one study, one dollar spent on business travel generates $12.50 in additional company revenue and $3.80 in new profits.  The added employment due to eliminating the TSA hassles of travelers would be very substantial.

I would say that Al Qaeda has been hugely successful in damaging American society, even though it has not caused any further aviation deaths since 9/11/2001. But, thanks to the effective collaboration of the TSA, it is causing many deaths each year, causing many business losses, making many unhappy travelers, keeping children, parents, and grandparents from visiting one another, and seriously infringing our individual rights while we once again ignore the Supreme Law of the Land, our Constitution.  Instead of intimately searching everyone, we should be doing targeted searches, which would greatly reduce the hassle on most air travelers, while re-affirming the right to travel.

02 December 2010

The Mad Political Cabal Illustrated - Eliminating ObamaCare Spending Tax Reports

For years now when I want to illustrate a federal government policy which is a mad kowtowing to special interests at the expense of most Americans, I point at the subsidy to convert food and precious water resources into ethanol to be added to gasoline.  Originally, the subsidy was justified as a means to reduce pollution and to add to our energy supply with a fuel produced in America.  Studies made since then have discovered that neither claim is true.  The result is that we are forced by mandate to use watered down and more expensive fuel, corn and other displaced crops are more expensive for food purposes, meat and eggs from livestock fed on corn is more expensive, farmland is more expensive, and water supplies are wasted.  Despite the knowledge for years now that this is so, Congress has not put an end to the harmful ethanol subsidies and we are still bombarded by ads from the special interests that they are doing something noble for the rest of us.  The reason is that Congress likes the bribe it is getting so much, that it chooses to ignore the loss of the justifications for the General Welfare it once gave for the subsidies.

In constructing the Potemkin Village of costs for ObamaCare, a provision was inserted in that bill that if a company spent as much as $600 in a year with another company, it had to report that spending on a Form 1099 to the IRS and to that firm.  This presents a huge burden of paperwork for companies.  It is much worse than just the paperwork.  The company has to know the proper reporting address of every company it does business with.  For instance, if the company buys $600 of gasoline from a Shell station on Laurel Road, it has to know whether the station is owned and operated by Shell or whether that particular station is owned by someone with a Shell franchise.  If it is a franchise, the company must report to the owner of that particular station when the company's purchases exceed $600.  Perhaps that same owner owns another station the company buys gasoline at, in which case the combined purchases must be reported when they total $600.  These days that may be about 12 tank-ups worth of fuel.  The time to properly take care of this reporting burden has to be borne by a small business owner who is already working 80-hour weeks, the fate of the small business owner.  Of course, this means that he cannot use that time to earn income.  But, no one in Congress had enough sense to take note of the absurdity of this in the ObamaCare bills they never bothered to read, to think about, get advice on, or to discuss!

The provision was envisioned as adding $17 billion of unreported tax revenues to offset the massive, but stoundingly understated costs of ObamaCare.  Just doing the paperwork will cost companies more than that per year.  To understand this, in a $14 trillion economy, $17 billion of time is one part in 824.  The diversion of productive labor into producing this paperwork will be far more than 1 part in 824, particularly for small businesses.  Worse yet, the flood of paperwork upon the IRS will be so massive that the IRS will not be able to make use of it in any case, at least not unless it spends about $17 billion more a year to do so.  Of course it does not mind spending that money, but that is just another burden of the already crushed taxpayer.  In other words, there is no way this provision made any sense at all.  Only some otherworldly, unthinking or dishonest, and very lazy bums could ever have thought it would.  Those people fill the staffs of our Democrat Socialist Congressmen.

So now we have a situation causing every small business owner to howl, most Republicans in Congress siding with them, and even a number of Democrat Socialists admitting that they may have gone too far in this case.  Even Obama agreed that this may need revision.  Despite that, the Senate has had two votes in repealing the provision and both failed to pass.  For some reason only known to our out-of-touch politicians, the Senate agreed that repeal of the provision would take 67 votes, not a majority vote of 51 votes.  Go figure.  So, a Democrat plan to repeal the $600 tax form provision was voted down 44 votes for to 53 votes against.  A Republican plan was voted down with 61 votes for and 35 votes against.  The issue of contention is over how to treat the fictitious $17 billion of extra tax revenues this stupid provision was scored to bring in and therefore how it will affect the deficit.

Frankly, I do not care how the repeal of this tax reporting provision affects their fictitious budget numbers.  Get it out before the new year starts and then when the new Congress comes in, start cutting government spending left and right with machetes, Bangalore torpedoes, XM25 rifle rounds, Abram Tank rounds, or whatever it takes.  Put some Navy SEALS on the job.  Send them to all the bureaucracies of the government and have them break arms until the damn bureaucrats prioritize that 30% of their budget that they could do without.  There is not a government agency that does not have 30% of its employees in the form of deadwood.  I know this because I worked for the Dept. of the Navy in the 1980s and the that was one of the better run government agencies.  It and every other government agency have only gotten more lazy and inefficient in the years since.  The deadwood employees have only become more protected and coddled since.  When that waste and abuse is eliminated, the House can get serious about refusing to fund the many activities which are simply unconstitutional.  We have no right to enslave businessmen to this paperwork nightmare and we have no right to enslave ourselves, our children, and our grandchildren to government debt and obligations.

Note:  Most readers probably thought that I left the starting 'a' off of stoundingly in the first sentence of the third paragraph above.  Stoundingly is an adjective based on stounding.  Stounding has the following meanings:
  1. benumbing
  2. smarting, acutely painful
  3. stunning, astounding
Each of these meanings applies very well in the context of the understated costs of ObamaCare, including the astoundingly meaning.

29 November 2010

Global Warming Alarmism Again Pushed in The Economist

The most recent issue of the Economist, 27 November - 3 December 2010, is once again pushing the catastrophic man-made global warming thesis as the United Nations Framework Convention on Climate Change is starting in Cancun, Mexico today.  The cover, the first commentary, and a 4-page article push the global warming agenda, but with some indications that they actually do now realize that the understanding of the issues required to make useful long-term climate projections is deficient.  Of course, those concessions to the truth were hidden well into the main long article after the commentary and the initial article have taken great pains to raise the alarm due to man's CO2 emissions causing drastically rising temperatures, rising oceans, floods and droughts, human and species migrations and deaths, crop failures, and the spread of diseases.

In fact, adding CO2 to the atmosphere has no such consequences.  As I have shown in my article, Do IR-Absorbing Gases Warm or Cool the Earth's Surface?, published in the book Slaying the Sky Dragon - Death of the Greenhouse Gas Theory, adding CO2 and methane to the atmosphere actually cools the surface of the Earth during the daylight hours and that cooling exceeds any possible warming during sunlight-deficient times of the day.  CO2 and similar greenhouse gases moderate the Earth's temperature variations between day and night, which is generally not a hardship creating effect.  This moderation of the daily temperature range is observed and is among the many failures of the CO2 warming computer models.

Despite this reality, The Economist lead commentary hysterically claims that:
Even if the currently moderate pace of emissions reduction steps up, the likelihood is that the Earth will be at least 3C warmer at the end of this century than it was at the start of the industrial revolution; less warming is possible, but so is more, and quicker.   Heatwaves that now set records will become commonplace.  Ecosystems will find themselves subject to climates far removed from those they evolved in, endangering many species.  Rain will fall harder in the places where it falls today, increasing flooding; but in places already prone to drought things will by and large get drier, sometimes to the point of desertification.  Ice will vanish from Arctic summers and some mountaintops, permafrost will become impermanent, sea levels will keep rising.
Now logically the first sentence in The Economist statement is true.  It is actually a statement with no content, except its clear intent to frighten.  Yes, the temperature may possibly go up by a few degrees, or maybe it will not.  What is more, the start of the Industrial Revolution was also essentially the end of the Little Ice Age, a time which was certainly cooler than other warmer periods such as the Medieval Warm Period, the Roman Warm Period, and the Minoan-Mycenaean Warm Period.  In any period of about 150 years, heatwaves will set records, even in an Ice Age.  Species that have evolved over hundreds of thousands of years and even tens of millions years are not so fragile as to actually disappear due to a temperature increase much smaller than that since the last Ice Age.  Not surprisingly, ice coverage is down and sea levels are up since the end of the Little Ice Age.  Arctic ice melts during the warmest part of the summer day, which is when increased atmospheric CO2 absorbs more incoming solar radiation in the atmosphere well above the sea surface and therefore cools the arctic ice surface.  This Economist diatribe is all sound and fury.

The article itself talks about a 40% increase in atmospheric CO2 concentrations and a 0.7C temperature increase in the last century.  It does not note that CO2 atmospheric concentrations generally do increase whenever the oceans warm since they evolve large amounts of CO2 then.  It notes that the International Energy Agency (IEA) says our use of fossil fuels will cause a temperature increase of 3.5C by 2100.  It notes that the IEA says the reduction in carbon per unit of GDP was 1.4% in the last decade, but if the temperature is not to rise more than 2C, it will have to decline at a rate of 2.8% this decade and from 2020 to 2035 it will have to decline by 5.5%.  It is finally dawning on many who think that greenhouse gas emissions are a big problem that their theory requires declines so severe that they are very unlikely to happen.  The article then completes a picture of direful consequences, before another interesting admission pops up:
It is tempting to imagine that adaptation decisions might wait for models that can provide greater certainty about what might happen where.  This is a forlorn hope.  Faster computers and new modelling techniques might well provide more details and finer distinctions.  But they will not necessarily be more accurate, or capable of being shown to be so: if different models become more precise and as a result their disagreements grow rather than shrink, which are you going to trust?  Decisions about adaptation will be made in conditions of pervasive uncertainty.  So the trick will be to find ways of adapting to many possible future climates, not to tailor expectations to one future in particular.
This actually admits that the over 20 climate models they have referred to earlier do not have a very useful predictive capability.  In fact, it has been observed, consistent with CO2 causing daylight cooling and night warming, that the daily temperature range is contracting and these computer models based on CO2 causing net warming do not yield that as a result!  They have the basic physics wrong and they have no predictive capability,  In fact, CO2 concentrations have continued to rise in the last 12 years, but the temperature has not continued to rise.  Yes, the highly tampered with ground surface temperature record shows the temperatures staying about constant, but the ocean temperature record, which covers much more of the Earth, is less tampered with, and is not affected by the urban heat island effect is now showing some cooling.

The article then discusses how man can adapt to the climate changes they are predicting.  It turns out that the adaptations they suggest do not seem so tough.  They certainly seem a lot easier than cutting way back on fossil fuel use.  In fact, they advocate the desirability of becoming richer, not poorer, so we will have more adaptability options.  What is more, there is little need to act before any climate problems actually begin to appear.  Interesting.  That is exactly what man has always done.  He has adapted to the many natural climate changes he has been faced with over hundreds of thousands of years and during the last 2,500 years which are pretty much in the historical record.

28 November 2010

The Right to Travel and the Illegimate TSA

As I have often observed, our Declaration of Independence defines legitimate government as government limited to the protection of the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.  The protection of our property and the ownership of our own bodies and minds is implied as among those legitimate functions of government.  Any powers exercised by government which do not serve to protect the individual rights of the People are illegitimate and tyrannical in nature.  This establishes the standard by which we are to judge the recent actions of the TSA with its random, warrantless intimate searches of individual's bodies.

The federal government has been under the total control of very committed Progressive Socialist Elitists for nearly two years now.  Early in their tenure, Joe Biden, in a manner consistent with Progressive Socialist dogma going back to the turn of the 20th century, made the very explicit claim that the People only have those privileges which the government chooses to allow them.  This was an explicit rejection of the idea that the individual has sovereign natural rights.  It was a rejection of the Declaration of Independence, which the Progressives have always found to be a particularly objectionable document.  They do not believe it has any place in American law, though in fact, the U.S. Constitution can only be understood in the context of the Declaration of Independence with its claim that the individual has equal, sovereign rights to life, liberty, and the pursuit of happiness and that the purpose of legitimate government is to protect, under the mandate of the individual Americans, these individual rights.  The Progressive agenda requires a government of very strong powers and one which is not at all limited by a respect for the equal, sovereign rights of the individual.  Indeed, they hate the very idea of individual rights.  They replace our sovereign and equal rights with a much smaller set of privileges assigned to the chosen by government officials on as unequal a basis as they wish.

John Pistole, the head of the Transportation Security Administration or TSA, had this to say about the recently enhanced intimate search methods being used on airline passengers:
I see flying as a privilege that is public safety issue. So the government has a role in providing for the public safety and we need to do everything we can in partnership with the traveling public, to inform them about what their options are.  I clearly believe that passengers have a number of options as they go through screening. But the bottom line is, if someone decides they don’t want to have screening, they don’t have the right to get on the plane.
Is it legitimate for the government to claim that traveling by air is a privilege which the government is free to deny?

The local government does have the police power to protect people in general from violence.  It is, however, a stretch of the Commerce Clause of the Constitution to argue that the federal government has a role in providing this security.  But, for the sake of this argument, it will be accepted that government in some form has the job of providing travelers with freedom from violence.  The question is whether the TSA is in violation of individual rights and the principle of legitimate government with its intimate random search policy without warrant.  Actually, the latter part of that question is actually obvious.  The TSA is clearly in violation of Amendment IV of the Bill of Rights which states:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Warrants issued upon probable cause and upon Oath before a judge are clearly missing in the TSA procedure.  Whatever protection of travelers from violence is to be provided must be done, as it otherwise is in all other aspects of our lives, in accordance with the Bill of Rights.

Note that it cannot be argued that government is saving lives with this intimate search program in violation of the Constitution.  This is because the effectiveness in reducing deaths of these procedures is not really known and because many people will be driven to driving long distances they would have chosen to traverse in the air and driving is much less safe.  It is highly likely that the net number of deaths from the TSA policies will actually increase.  This is not important to the government.  All that is important is that the Progressives will not be blamed for the many additional driving deaths.  It is therefore more important to them to prove that they are serious about American security by putting on a big show in our airports.  This is all about public relations and not at all about real safety.

Is flying a privilege?  Does an individual have a right to travel or not?  If he has a right to travel, is there some reason why that right does not extend to air travel?  As the title implies, I argue that the individual has the right to travel and that right surely extends to travel by air.

To live, man must use his mind to survive and to flourish.  He must be able to produce clothing, housing, food, and many other goods and services to survive and to flourish in life.  This is not an easy enterprise and it is hugely aided if a man can associate freely with others and trade goods and services and other values in his life with them on a voluntary basis.  His life is more secure and enhanced when he can travel to trade goods and services, to visit friends and relatives, or to gather knowledge and trade ideas with others.  Travel has proven to be extremely important as a contributor to man's increasing body of knowledge, not to mention as a means to trade with people who have resources or the means to make products which were not found in other locales.  Adam Smith in the Wealth of Nations understood this well. 

Thomas Jefferson, Ben Franklin, John Adams, Robert R. Livingston, and Roger Sherman of the draft committee to write the Declaration of Independence understood this.  When that document stated that legitimate government was limited to the purpose of protecting the equal, sovereign right of the individual to life, liberty, and the pursuit of happiness, they definitely believed that man had a right to travel.  If I am denied the right to travel by plane from Maryland to Oklahoma to see my mother periodically, my pursuit of happiness is greatly impaired.  My right to earn a living is certainly impaired if I am not allowed to fly to Connecticut to testify as an expert witness in a trial on intellectual theft.  My right to earn a living is also impaired if a customer with a critical materials development issue, or a materials process control issue, or a dubious materials vendor cannot visit my laboratory from Utah or California to participate in the analysis of his materials.  These are not matters of privilege which a legitimate government is free to deny or allow.  These are essential rights of mine by virtue of my requirements to live my life in a state of liberty and for the purpose of my happiness.  It is precisely to secure these equal, sovereign rights that We the People of the United States ordained and established the Constitution for the United States of America and the government it set up and controls.

But the Progressive Elitists do not believe man has a right to travel.  One merely has the privilege to travel, which is about to become more clear because this administration is moving to require intimate, warrantless random searches of travelers by bus, train, trolley car, van, and taxicab.  Well, maybe not by taxicab.  Until these other searches are begun, they may pretend that they are only denying our right to travel by air.  But on what basis?  They have not bothered to tell us.  I am sure it is because they know that their argument will not hold water as many Americans assess it.  They will probably just say that air travel has something to do with interstate commerce and the government has any power it wishes to claim based on the Commerce Clause.  The federal courts have largely allowed them to get away with such arguments, but the argument is absurd in the context that the Framers of the Constitution were trying to set up a government of very limited powers which had no powers that would interfere with our equal, sovereign individual rights.  They were trying hard to help the People to ordain and establish a legitimate government as that was defined by the Declaration of Independence.

But, while the Progressive Elitists have some reservations, usually, about telling the American People they rule that they feel free to ignore both the Constitution and the Declaration of Independence, many a politician recently bloated with power lust in having near dictatorial powers over the lowly ruled classes, has been very explicit in saying before the camera that he cares not a fig for these great American documents.  Indeed, they snort and laugh at them.  If we examine the literature they trade among themselves we find a combination of derision for the very idea of natural individual rights and limited government powers and many a rationale for interpretations of the Constitution and the purpose of government which circumvent any limits on the development of a tyrannical government.  Of course, while I see this government they seek as tyrannical, they often see it as the Nanny State and think of the People as Children who cling to religion, guns, fatty and sweet foods, fears, and bigotry.  This anti-individual rights literature of the Progressive Elitist movement goes back at least into the 1880s in pretty recognizable forms relative to many of the ideas still held by Progressives today.  Their great admiration of the Prussians then is now mute, as is their claim, acted on by Teddy Roosevelt and Woodrow Wilson, that war was very transformational for the production of big government. 

The denial of a right to travel is not the only denial of a fundamental right by the TSA.  The passage of ObamaCare established that this illegitimate Progressive Socialist Elitist government laid claim to the ownership of each American individual's body.  That tyrannical legislation required each of us to acquire health insurance acceptable to the government or pay a large fine or even go to jail for five years.  This was a draconian claim to the ownership of our bodies.  But, that claim, while made, has not yet come to the point where the government is actually touching us yet and subjecting us to specific treatments defined by the insurance they will require us to buy.  Many of the more draconian mandates of ObamaCare are yet to be implemented.  Perhaps to train us to submit docilely to the future death panels of ObamaCare and the long waits in pain for treatment, they are now implementing this slightly smaller scale intimate body search which will assert their claim to the ownership of our bodies.  They are conditioning us now to a state of subjugation.

It is very important to notice that the agenda of the Progressive Socialist Elitist is not just to expand government's powers to allow the next program under discussion.  The real agenda is the eradication of the very idea that man has an equal, sovereign individual right to life, liberty, property, the ownership of his body and mind, and the pursuit of happiness.  They wish to destroy the individual by belittling his very individuality and his ability to choose his own values and to manage his own life.  There is no more fundamental hatred of human beings than this.  That this is so is made all too clear in their many calls to depopulate the world, which they try to justify on the basis of saving the "environment", "man-made global warming", or "sustainable resources."  John Holdren, Obama's science advisor, is among the many who have called for programs to depopulate the world.  One has to expect that one of the purposes of ObamaCare is to cull the American population, given all the Progressive Elitist claims that there are just too many people.  We should expect that it is those of us who are not with them that they wish to cull.  That is, they wish to cull those who proclaim and defend their equal, sovereign individual rights.  For now, they will deny us the right to travel by air.