Fraud and corruption bring big payoffs by Paul Driessen

California judges provide stage for kangaroo court justice over Roundup weedkiller

            

San Francisco area juries have awarded cancer patients some $80 million each, based on claims that the active ingredient in Roundup weedkiller, caused their cancer – and that Bayer-Monsanto negligently or deliberately failed to warn consumers that the glyphosate it manufactures is carcinogenic. (It’s not.) Judges reduced the original truly outrageous awards of $289 million and even $1 billion per plaintiff!

Meanwhile, ubiquitous ads are still trolling for new clients, saying anyone who ever used Roundup and now has Non-Hodgkin Lymphoma or other cancer could be the next jackpot justice winner. Mass tort plaintiff law firms have lined up 18,500 additional “corporate victims” for glyphosate litigation alone.

Introduced in 1974, glyphosate is licensed in 130 countries. Millions of farmers, homeowners and gardeners have made it the world’s most widely used herbicide – and one of the most intensely studied chemicals in history. Four decades and 3,300 studies by respected agencies and organizations worldwide have concluded that glyphosate is safe and non-carcinogenic, based on assessments of actual risk.

Reviewers include the U.S. Environmental Protection Agency, European Food Safety Authority, European Chemicals Agency, UN Food and Agriculture Organization, Germany’s Institute for Risk Assessment, and Australia’s Pesticides and Veterinary Medicines Authority. Another reviewer, Health Canada, noted that “no pesticide regulatory authority in the world considers glyphosate to be a cancer risk to humans at the levels at which humans are currently exposed.” Therefore no need to warn anyone.

The National Cancer Institute’s ongoing Agricultural Health Study evaluated 54,000 farmers and commercial pesticide applicators for over two decades – and likewise found no glyphosate-cancer link.

Only the France-based International Agency for Cancer Research (IARC), says otherwise – and it based its conclusions on just eight studies. Even worse, IARC manipulated at least some of these studies to get the results it wanted. Subsequent reviews by epidemiologist Dr. Geoffrey Kabat, National Cancer Institute statistician Dr. Robert Tarone, investigative journalist Kate Kelland, “RiskMonger” Dr. David Zaruk and other investigators have demonstrated that the IARC process was tainted beyond repair.

The IARC results should never have been allowed in court. But the judges in the first three cases let the tort lawyers bombard the jury with IARC cancer claims, and went even further. In the Hardeman case, Judge Vincent Chhabria blocked the introduction of EPA analyses that concluded “glyphosate is not likely to be carcinogenic in humans,” based on its careful review of many of the studies just mentioned.

He said he wanted “to avoid wasting time or misleading the jury, because the primary inquiry is what the scientific studies show, not what the EPA concluded they show.” However, IARC didn’t do any original studies either. It just concluded that glyphosate is “probably carcinogenic,” meaning studies it reviewed found limited evidence of carcinogenicity in humans, plus sufficient evidence of carcinogenicity in lab animals that had been exposed to very high doses or lower doses for prolonged periods of time. In other words, under conditions that no animal or human would ever be exposed to in the real world.

It is also instructive to look at the three San Francisco area courtroom proceedings from another angle – an additional line of questioning that would have put glyphosate and Roundup in a very different light, and might have changed the outcome of these trials. Defense attorneys could have asked:

Can you describe your family cancer history ... your eating, exercise and sleeping habits ... how much you eat high-fat foods ... how often you eat fruits and vegetables ... and your other lifestyle choices that doctors and other experts now know play significant roles in whether or not people get cancer? 

How many times in your life [Johnson is 47 years old; Hardeman 70; Alva Pilliod 77; Alberta Pilliod 75] do you estimate you were exposed to substances on IARC’s list of Group 1 definite human carcinogens –including sunlight, acetaldehyde in alcoholic beverages, aflatoxin in peanuts, asbestos, cadmium in batteries, lindane ... or any of the 125 other substances and activities in Group 1? Have you ever smoked? How often have you been exposed to secondhand smoke? How often have you eaten bacon, sausage or other processed meats – which are also in Group 1? 

How many times have you been exposed to any of IARC’s Group 2A probable human carcinogens – not just glyphosate ... but also anabolic steroids, creosote, diazinon, dieldrin, malathion, emissions from high-temperature food frying, shift work ... or any of the 75 other substances and activities in Group 2A? How often have you consumed beef or very hot beverages – likewise in Group 2A? 

How many times have you been exposed to any of IARC’s Group 2B possible human carcinogens – including bracken ferns, chlordane, diesel fuel, fumonisin, inorganic lead, low frequency magnetic fields, malathion, parathion, titanium oxide in white paint, pickled vegetables, caffeic acid in coffee, tea, apples, broccoli, kale, and other fruits and vegetables ... ... or any of the 200 other substances and activities in Group 2B? 

Pyrethrin pesticides used by organic farmers are powerful neurotoxins that are very toxic to bees, cats and fish – and have been linked by EPA and other experts to leukemia and other cancers and other health problems. How often have you eaten organic foods and perhaps been exposed to pyrethrins? 

Large quantities of glyphosate have been manufactured for years in China and other countries. How do you know the glyphosate you were exposed to was manufactured by Bayer, and not one of them? 

In view of all these exposures, please explain how you, your doctors, your lawyers and the experts you consulted concluded that none of your family history ... none of your lifestyle choices ... none of your exposures to dozens or even hundreds of other substances on IARC’s lists of carcinogens ... caused or contributed to your cancer – and that your cancer is due solely to your exposure to glyphosate. 

Put another way, please explain exactly how you and your experts separated and quantified all these various exposures and lifestyle decisions – and concluded that Roundup from Bayer-Monsanto was the sole reason you got cancer – and all these other factors played no role whatsoever.

News accounts do not reveal whether Bayer-Monsanto lawyers asked these questions – or whether they tried to ask them, but the judges disallowed the questions. In any event, the bottom line is this:

It is bad enough that the IARC studies at the center of these jackpot justice lawsuits are the product of rampant collusion, misconduct and even fraud in the way IARC concluded glyphosate is a “probable human carcinogen.” It is worse that these cancer trials have been driven by plaintiff lawyers’ emotional appeals to jurors’ largely misplaced fears of chemicals and minimal knowledge of chemicals, chemical risks, medicine and cancer – resulting in outrageous awards of $80 million or more.

Worst of all, our Federal District Courts have let misconduct by plaintiff lawyers drive these lawsuits; prevented defense attorneys from effectively countering IARC cancer claims and discussing the agency’s gross misconduct; and barred defense attorneys from presenting the extensive evidence that glyphosate is not carcinogenic to humans. The trials have been textbook cases of kangaroo court justice.

The cases are heading to appeal, ultimately to the U.S. Supreme Court. We can only hope appellate judges will return sanity, fairness and justice to the nation’s litigation process. Otherwise our legal system will be irretrievably corrupted; products, technologies, companies and industries will likely be driven out of existence; and fraud, emotion and anarchy will reign.

Jackpot-justice law firms and their anti-chemical activist allies are already targeting cereals that have “detectable” levels of glyphosate: a few parts per billion or trillion, where 1 ppt is equivalent to 1 second in 32,000 years. Talc and benzene – foundations for numerous consumer products – are already under attack. Advanced technology neonicotinoid pesticides could be next.

It’s all part of a coordinated, well-funded attack on America, free enterprise and technology, using social media, litigation, intimidation and confrontation. Our legislatures and courts need to rein it in. 

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy and environmental policy.


Comment by Charles Anderson:

Modern society with its rich choices of values and its high level of security is highly dependent on a huge number of chemicals.  There are also an abundance of naturally occurring chemical in our environment.  In many cases, a chemical necessary for the support of human life is beneficial only when it has the correct balance in our complex human system.  Too much of it or too little of it can cause the human system to fail.  Many chemicals will become harmful if they are too concentrated in the human body and many such over-concentrated chemicals are carcinogenic.  Whether a given chemical is beneficial or carcinogenic or otherwise harmful depends highly upon its concentration.  It can be devilishly difficult to establish the bounds within which a chemical is beneficial in the body and beyond which it is harmful.

This has proven very difficult for the FDA for instance in regard to the safety of many widely and commonly eaten foods even.  Study after study has taken a conclusion opposite to that of a prior study once held in high regard by the FDA.

Our ability to measure chemicals in complex mixtures to very low concentrations such as parts per trillion means we can find a host of chemicals in the human body or in the foods we eat.  The fact that a chemical that can be harmful in higher concentration is present does not at all mean that it will cause any harm at a lower concentration.  The toxicity of a chemical, or for that matter of radiation, is highly dose dependent.  For instance, selenium is an element beneficial to the body at a suitably low concentration.  It is often found in multi-vitamin tablets.  Yet, selenium at higher concentrations is very toxic.  There are many other elements which have similar toxicity characteristics.  Examples are potassium, sodium, chromium, iron, molybdenum, and zinc.  Even water is toxic if it becomes too concentrated in the human body.  People have died because they drank too much water too rapidly.

Juries and the courts are often too subject to findings that a chemical exposure has caused the disease that some unfortunate person has suffered.  They are emotionally sorry for the suffering.  They are often biased against for-profit companies.  They ogle the deeper pockets of a company than those of the suffering person as an easy means to help the suffering person.  Unfortunately, much injustice results.  By soaking an often very innocent company with fines and penalties, many people are hurt.  The company management, the owners, the employees, the companies customers, and oftentimes the companies' retirees are all hurt.  The fact that members of a jury, defense lawyers, and judges often do not know very much about science is also a great problem.  Juries and courts need to be much more rational and much more responsible.

I have served as an expert witness on scientific issues involved in court cases, as have some of my Ph.D. scientist employees at my laboratory, Anderson Materials Evaluation, Inc.  I have encountered numerous opposing expert witnesses who were ridiculously creative in the stories they told about the science pertaining to the case.  Unfortunately, juries and judges tend to understand little of what the experts tell them and as is the case with most people and the catastrophic man-made global warming hypothesis, they make their judgment based on a count of experts on each side.  In a litigation case, the count is usually even, so the scientific testimonies cancel out.  Sometimes they also assume that the company is better able to buy the favorable testimony of an expert and so their expert is more likely to be lying about the science.  The jury decision is then made on the basis of human emotions.  The suffering person is likely to win and the company is likely to lose.  This is not a valid process for achieving a just result.

Changes in the Relative GDPs of the G20 Nations over the Last 25 Years

The American Enterprise Institute has an interesting graphic on the relative GDPs of the G20 nations over the last 25 years.  Who's GDPs increased as a relative percentage of the total GDPs of the G20 nations and who's fell over that time?

Note that the European Union as a whole has a membership in G20, but not being a nation is excluded from the chart above.

What I am interested in is the change in the relative percentage of the GDP of the G20 nations over the past 25 years.  Let us look at the fraction of the 2018 percentage divided by the 1992 percentage beginning with the nations that had the highest percentages 25 years ago:

USA, 30.90/31.96 = 0.9668
Japan, 7.77/19.11 =  0.4066
Germany, 5.86/10.38 = 0.5645
France, 4.12/6.85 = 0.6015
Italy, 3.08/6.43 = 0.4790
United Kingdom, 4.18/5.77 = 0.7244
Canada, 2.63/2.90 = 0.9069
Russia, 2.51/2.25 = 1.1156
China, 19.50/2.09 = 9.3301
Brazil, 3.28/1.96 = 1.6735
Mexico, 1.83/1.78 = 1.0281
South Korea, 2.44/1.71 = 1.4269
Australia, 2.11/1.59 = 1.3270
India, 4.14/1.39 = 2.9784
Argentina, 1.02/1.12 = 0.9107
Turkey, 1.36/0.77 = 1.7662
Saudi Arabia, 1.09/0.67 = 1.6269
South Africa, 0.56/0.66 = 0.8485
Indonesia, 1.62/0.63 = 2.5714

If an underdeveloped nation is not determined to shoot itself in the foot, it can commonly make easy gains on its share of the world's GDP over time.  Similarly, the lesser developed nations of the G20 could easily have done so over the last 25 years.  Some of them have, the most remarkable one being China.  India has had the second greatest GDP surge among the G20 nations.  Third place belongs to Indonesia.  Turkey, Brazil, Saudi Arabia, South Korea, Australia, Russia, and Mexico have improved their relative positions in that order from more to less.  The gains of Russia and Mexico are actually very unimpressive.  The losers among the smaller economies of the G20 nations from biggest loser to smaller loser are South Africa and Argentina, though both were at one time relatively leading economies in the world.

Japan and the major nations of the European Union have suffered huge reductions in their significance, while the USA and Canada have seen relatively minor reductions in their relative economic significance.  The least bad performer of the major European Union nations has been the United Kingdom.  France has been the distant second least bad.  The former Axis nations of WWII have done relatively poorly with Germany being only 0.5645 as significant and Italy becoming only 0.4790 as significant.  Japan has many anti-competitive restrictions in its home economy and has a rapidly aging and shrinking population among its problems.

Both Canada and Australia have done far better than the United Kingdom, which I believe has been held back by its membership in the European Union.  If the United Kingdom simply makes a break from all of the European Union's collectivist requirements and bureaucracy, while it will likely do worse for a while as it adjusts to the new reality, it will do much better in the long run.  The United Kingdom should aim to be more like the USA as a dynamic economic power in the world and increase its trade with the USA, Canada, Australia, and India especially.  These are all nations doing comparative well, while France, Germany, and Italy are sinking rapidly.

The EU has smothered itself with many largely irrational safety and quality control policies, which I can see as such from the standpoint of being active in materials analysis and testing.  They are using these policies to suppress goods and services from outside the EU, but the effect is to increase costs and to make local companies lazy and unresponsive in an anti-competitive environment.  In addition, the EU has been following very foolish energy policies and has swallowed the catastrophic man-made global warming fraud hook, line, and sinker, with disastrous economic results.  The inability of the bigger economies of the EU to keep up in economic growth is the result.  The USA, for all of its increased regulations and the many anti-business policies of the Obama regime, has performed much better in comparison.  With Trump decreasing the burden of unreasonable regulations and following rational energy policies, the USA is improving its relative position in the world economy.  We can do even better to the extent that we can arrange truly free trade agreements with nations around the world.

Blatant Blue State Hypocrisy by Paul Driessen

From energy and spending, to climate and debate – silencing all dissenting voices is essential

You’ve got to admire the full frontal audacity of New York Governor Andrew Cuomo, New York City Mayor Bill De Blasio, and their union and pressure group comrades in arms. Their hypocrisy, fraud and tyranny are boundless, especially on fiscal, energy and climate change issues.

Amid the seventh year of a “New York is open for business” advertising campaign that has spent $354 million thus far, they are presiding over tax and regulatory regimes, mountains of debt, intransigent public sector unions, anti-nuclear, anti-fossil fuel energy policies that are anything but business friendly – and press conferences that promise more of the same for state businesses, taxpayers and pensioners.

As Wall Street Journal columnist William McGurn notes, Cuomo and his fellow warriors against Trump and Republicans will do almost anything – “except address the root problem by lowering their taxes and spending. Because to do so would require taking on the public unions that drive much of state spending and debt, and are the key constituency of the 21st-century Democratic Party.”

Across the river in New Jersey, unions resist any reforms to their payrolls or pensions just as fiercely. The NJ pension system is already $90-billion short of what it needs to pay future benefits, says the Manhattan Institute. The state will collect some $35 billion in 2018 taxes, but any new revenue will go to pension payouts and spending on new government programs. Connecticut is in the same boat.

Meanwhile, electricity prices continue to climb: In New York 18.8 cents per kilowatt-hour for families, 15.0 cents for the businesses the state is so eager to attract, and 6.2 cents for its few industries. In Jersey, 14.7, 11.4 and 9.6 cents, respectively. In Connecticut, a whopping 21.3, 16.8 and 13.5 cents per kWh!

On the Left Coast, similarly exorbitant electricity rates pummel California businesses, families, factories, farms, hospitals and schools – while neighborhoods confront monstrous mudslides, resulting from winter rains in the wake of fiery hillside-denuding conflagrations. The fires and floods have destroyed nearly 9,000 homes, killed over 60 people, and devastated entire forests and neighborhoods.

Golden State forests have 129 million dead trees, and enough dry brush to fill LA Memorial Coliseum several times. But state regulators, environmentalists and judges make it impossible to remove any. It’s more “natural,” “sustainable” and “climate friendly” to have it erupt in 1,400 to 2,200 degree F infernos.

Compare those fiscal and environmental train wrecks to results thus far of the deregulation, tax reduction, pro-fossil fuel policies of President Trump and congressional Republicans: new jobs, higher wages, nice bonuses, a coming repatriation of trillions of now overseas dollars to fuel new investment and innovation, the lowest black unemployment since recordkeeping began, and the DJIA stock market reaching a record high of 25,575 January 11, following a record 92 closing highs since President Trump was elected.

Compare that to Nobel Prize winning Blue economist Paul Krugman’s dire prediction after the election: the markets will crash and “never” recover, amid a long “global recession.” Meanwhile, multi-multi-millionaire Nancy Pelosi belittled the $1,000 bonuses as “crumbs.” Tell that to families bringing in $25,000 to $50,000 a year. The House Minority Leader is completely out of touch with average families.

The Democrats need bogeymen, scapegoats, distractions – to deflect attention away from this lunacy. That’s the best way to explain the Cuomo and De Blasio press stunts this past week.

Rather than confronting public sector unions and rabid greens – or supporting onshore and offshore drilling and fracking that would create jobs and improve economies in poor counties far from Albany and Manhattan, generate tax revenues, and reduce electricity prices – the gov railed against the new $10,000 cap on how much of their state and local taxes “the rich” NY residents can deduct on their federal forms.

Mr. Cuomo proposes to transform personal income taxes into corporate payroll taxes, or even charitable deductions! California is trying the same ploy. Friendly IRS auditors will be busy shutting that down.

Meanwhile, Mayor De Blasio went on a rant against fossil fuels – announcing that the city is suing five major oil companies for billions of dollars in “climate damages,” and insisting that the Big Apple must divest its police, teacher and other public pensions from any and all fossil fuel stocks.

Energy stocks are leading the latest US stock market rally, fossil fuels will continue providing 75-80% of US and global energy for decades to come, resurgent economies overseas are booming thanks to coal, oil and natural gas, and forecasters are predicting $80-per-barrel oil in 2018, as demand surges. So Liberal Logic says it’s time to divest from fossil fuels – and maybe switch to ideologically sympatico holdings, like subsidized wind turbines or booming economies like Argentina, Venezuela and North Korea.

Greenhouse gas emissions produced disasters like Superstorm Sandy, De Blasio railed. “I remember those days. I remember how desperate it was, how much fear and confusion there was. This tragedy was wrought by the actions of fossil fuel companies.” Now New York needs $20 billion “to build resilience against rising seas, more powerful storms and hotter temperatures.”

Nice try, Mr. Mayor. But blaming sub-hurricane-strength Sandy for the actions and incompetence of city and state officials won’t cut it. As environmental consultant Pat Moffitt and I explained in great detail in a three-part series (here, here and here) several months after the storm pounded the NYC area, fossil fuels and GHGs had zero to do with the damages – any more than they did for Harvey, Irma or other storms.

They likewise played no role in California’s wildfires and mudslides, despite Governor Jerry Brown’s scapegoating insistence that GHG emissions are responsible for that too. It’s all self-serving fraud.

Fuel oil and natural gas got millions of New Yorkers and New Englanders through the recent record cold snap, while wind turbines froze up, solar panels went AWOL, and Al Gore blamed the cold on global warming! But who are we to argue with Hizzoner da Mare about fossil fuels, dangerous manmade climate change, Sandy or divestment? He might sic his RICO attack dogs on us again.

Indeed, such prosecutions are part and parcel of the new leftist-fascist world order, under which partisans, politicians and professors shut down debate, impose uniform thinking, decree corporate policy, and even punish intolerable contrarian views with physical violence when those views threaten their “safe spaces.” 

It’s not yet as dicey as getting into a Moscow elevator. But one climate doomsayer wants to ship climate chaos skeptics to a Kerguelen Island gulag off Antarctica, where he probably assumes they could watch the entire continent melt – from GHG emissions, if not from the volcanoes and magma beneath its ice.

Antifa leftist-fascists have learned well from their predecessors and contemporaries, but are now employing their technological prowess as well. Google and Facebook use clever algorithms to steer searches and help liberal news and views reach audiences, while conservative perspectives get shunted to the “back pages.” Google now displays “fact checks” next to Daily Caller and other conservative views, though not with liberal leaning stories; Snopes says its fake news, but others say it’s absolutely true.

Twitter allegedly uses “shadow banning” algorithms to make users think their tweets have been posted, when in fact they’ve been sent to cyber oblivion. And talk show host Dennis Prager is suing YouTube for using “restricted mode filtering” to keep PragerU educational videos from reaching audiences. The LA Times and other liberal papers won’t even publish letters to the editor challenging climate alarmism.

Former Colorado Democratic Governor Richard Lamm would instantly recognize these tyrannical tactics. In 2005, Mr. Lamm said they were integral parts of an eight-step program to “destroy America.” (This audio of the talk on YouTube must have escaped their censors.)

The future of our free speech and other democratic safeguards and institutions is at stake. So is the future of sound, evidence-based science, on climate and other topics – and of reliable, affordable energy.

Blue State officials, unions and activists may be delighted with how their agenda is “progressing.” The rest of the United States … and world … are not so happy.

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of articles, reports and books on public policy.

What States Are Americans Moving To or Fleeing From?

United Van Lines does an annual assessment of the percentage of households moving to and from each of the states and Washington, DC.  It is the largest mover in the USA.  Overall, the general story of which states are most desirable and which are least desirable for 2014 is told in this map of the USA:

The ten most desirable states with the largest percentage of households moving to them are:

Oregon                       66.4% Inbound
South Carolina           61.4%
North Carolina           60.5%
Vermont                     59.4%
Florida                        58.9%
Nevada                       57.3%
Texas                          57.0%
District of Columbia  57.0%
Oklahoma                  56.8%
Idaho                         55.5%
Colorado                   55.1%

Nebraska, Arizona, California, Georgia, Louisiana, Wyoming, Delaware,  and South Dakota all had slightly more households moving in than moving out in 2014 and are listed in order.  Tennessee had 50.0% moving in and 50.0% moving out.  The rest of the states were losers in 2014.

The worst losers are:

New Jersey               64.9% Outbound
New York                 64.1%
Illinois                      63.4%
North Dakota           60.5%
West Virginia           60.1%
Ohio                         59.0%
Kansas                     58.2%
New Mexico            57.4%
Pennsylvania           56.8%
Connecticut             56.7%
Massachusetts         56.7%
Utah                        56.0%
Virginia                   55.5%
Michigan                 55.4%
Mississippi              55.2%
Kentucky                 55.0%

[Of these states, it should be noted that North Dakota and Utah were among the most stellar states in creating jobs over the entire time span from December 2007 to December 2014.  The loss of jobs in North Dakota in 2014 is likely due to the drop in the price of oil in the later part of that year.  Comment added on 20 Feb 2015.]  The remaining minor losing states are listed from worst to not so bad -- Minnesota, Indiana, Wisconsin, Maine, Maryland, Missouri, Iowa, Montana, Alabama, Arkansas, New Hampshire, and Rhode Island.

It should be noted that the United Van Lines survey is more accurate with respect to established and larger wealth households than with young people who may live with few furnishings in small apartments in major cities, such as Manhattan.

The highest fraction of households moving out for retirement reasons was the Northeast, with more than one out of four moving for retirement.  The highest fraction moving in for retirement was nearly one out of three moves into the Mountain States.

DC remains a popular moving destination due to the growth of the federal government, but the good news is that while from 2008 to 2012 it was number one, in 2013 it fell to #4, and in 2014 it fell further to #7.

With the exception of Delaware and DC, the entire Northeast from Virginia to Maine lost households due to more outbound moves than inbound moves.  The Midwest states from Ohio and West Virginia to Minnesota and Iowa also all lost population.  I believe these areas are being harmed by the anti-growth and anti-business attitudes and governmental policies particularly prevalent in these areas.  They are also harmed by insufficient warming in those areas as more and more people take the opportunity to move to areas with warmer climates.  How odd that federal government policy wishes to maintain colder temperatures in these areas, as do Progressive Elitists, yet most people voting with their feet seek warmer climates.  Apparently, the real catastrophe of warmer climates is that people view them as desirable!

When an American Multinational Company Moves Its Headquarters Abroad It Is Patriotic

Unlike Obama, I do not measure patriotism in terms of the amount of taxes paid to and the amount of paperwork prepared for an over-weaning government that uses its revenues and its ever mounting debt to suppress our individual rights.  No, I look at the issue of American multinational companies moving their domicile to other nations with lower internal taxes and which do not tax earnings in the U.S. as a very real act of patriotism. This is fully consistent with the American Principle of limited government whose only purpose is the protection of our equal, sovereign individual rights.  It is very patriotic to punish a malfeasant big government with a decrease in tax revenues.  The lower its revenues, the less mischief it can perform.  This includes a reduction in its anti-business agenda.

In most cases, changing a company's domicile does not actually mean it moves its headquarters.  This is usually very like the case in which hundreds of thousands of U.S. companies are incorporated in the state of Delaware, but have their actual headquarters in a different state.  The location of domicile is chosen for tax and legal reasons and does not imply that any or most of a company's activities will be at the location of domicile.

The federal tax rate on U.S. corporations is 35% and it applies that highest in the developed world rate to all profits made in the U.S. and to any profits a U.S. multinational corporation makes abroad.  So a U.S. multinational corporation pays the nation in which its profit is made the lower tax they levy on corporate taxes.  Then if the U.S. corporation decides to bring that profit back to the U.S. to invest it here in R&D, new facilities, new hires, or new manufacturing operations, the corporation has to pay the difference between the rate charged by the nation in which the profit was made and the higher U.S. tax rate of 35%.  This drastically reduces the amount of profits earned abroad which are brought back to the U.S.  This plays a big role in slowing down the growth of the U.S. economy, which means it slows down the growth in our standard of living.

U.S. multinational companies which do not bring back their profits from abroad also greatly reduce the burden of producing the tons of paperwork in the form of reports demanded by the IRS.  This is a very great reduction of expenses and consequently a boost to profits earned abroad relative to those earned in the uphill battle at home.

To be sure, U.S. corporations do not generally pay the full 35% tax rate on profits earned in the U.S.  There are many exemptions, tax credits, and deductions, though these come at the expense of the added paperwork to claim them.  Nonetheless, the average percentage paid on profits by American companies is about 30%, while their rivals headquartered in other countries pay an average of about 23% on their profits.  Consequently, American companies are paying about 30% more taxes on their profits than are foreign companies.  This is a very sizable competitive disadvantage.

The Burger King acquisition of Tim Horton's, a Canadian company, is a case given much attention in the news lately.  Moving the Burger King domicile to Canada, a nation with more economic freedom than the sorry present U.S., reduces its corporate income tax rate to 15%!  Canada will only tax the profit made in Canada and will not tax Burger King on its profits made in the U.S. or in any of the other many nations it operates in around the world.  This will actually allow Burger King to bring the profits it has made in those many nations back to the U.S. for investment here, because the U.S. government can no longer tax these profits made by a Canadian company.

It is essential that every American multinational company put as much pressure on the far too voracious American government to reduce its taxes on productive work and to reduce its power to coerce people in violation of their rights to earn a living and to generally pursue their happiness.  A great and patriotic way to do this is to move their headquarters abroad.  If that has the eventual effect of forcing the far too big and nasty federal government to lower its tax rates and to decrease its incredible paperwork burden, it will do much to allow Americans a future with a decent increase in our standard of living coupled with a much improved environment of economic freedoms.

Philadelphia Taxes Bloggers

Philadelphia charges local bloggers $50 a year or $300 a lifetime for a city business license if they make any money, no matter how little, from their blogging website.  This applies to money made from ads or from donations.

Cities can be very nasty.  I cannot see much to recommend Philadelphia post 1930.

Still No Jobs Recovery in the Great Socialist Recession

The January 2014 jobs report is out from the BLS.  Ignoring the unemployment rate, which is meaningless given the many people who have given up on finding a job in this never-ending Great Socialist Recession, the number to focus on is the employment to population ratio.  Let us examine the history of the employment to population ratio for Januaries going back to January 2007, before the sharp increase in energy prices and the subsequent financial failures.

Note that the lowest employment to population percentage was 57.6% in January 2011, prior to which our government was telling us that the employment situation was well into recovery from the recession which they had declared over much earlier than that in June 2009.  Now, in January 2014, the employment percentage is a miserly 58.1% according to the BLS.  In fact, it is really 58.0% on the same basis that the earlier employment numbers are given.  In March 2013, the BLS recategorized some workers who work in the home from the farm sector to the non-farm sector.  That re-categorization caused an artificial increase in the employment to population ratio, giving the government a desperately needed apparent increase in jobs.

So let us examine how far the jobs recovery has occurred in this never-ending recession.  The present 58.0% is an employment to population ratio which is only 0.4% higher than that of the worst January of the entire recession.  Since the drop in the employment ratio from January 2007 prior to the recession to January 2011 at the depth of the jobs recession was 5.0%, the extent of a jobs recovery is

0.4% / 5.0% = 0.08.

According to the National Bureau of Economic Research, the recession began in December 2007 and ended in June 2009.  In the 4.5 years since the government says the recession ended, the jobs recovery has managed only to recover 0.08 of the lost employment to population ratio.  This is pathetic.  It is a terrible misrepresentation to say we are in a jobs recovery.  We are in a deep jobs depression and for all intents and purposes the jobs situation has been stuck in a deep pit.  Perhaps a pit with a slightly sloping bottom, but so what!  Those who claim an 8% jobs recovery over four and a half years is a recovery should be scorned.  They should be laughed out of town.

The Progressive Elitists surrounding Obama and backing his anti-business policies look down upon most Americans as people who are unable to choose their own values and manage their own lives without strong controls placed on them by these same Progressive Elitists.  They are sure they know better than most of us Americans how to manage the economy and all aspects of our need to earn a living.  They hold us in scorn and look down on us in the worst possible way.  Some of them even think the recession and such problems as high energy prices are a good thing, because of their exaggerated belief that mankind's standard of living comes at the expense of the environment.

Most of us are prepared to have the results of our work judged by those we work with, work for, sell to, and compete with.  Let us hold them to a standard that measures them by the results they achieve.  If they tout their success with a 8% jobs recovery and expect us to ignore the 92% of the recovery denied to us and the private sector due to their interference, we should turn the scorn table on them.  We must evaluate them as catastrophic failures in governance.  We must see that big government cannot produce jobs as they claimed it could.  We must see the government must get out of the way or it will keep us from creating the jobs we have proven over and over that we can create for ourselves.

The Progressive Elitists and Obama keep saying "We did not build that."  Well, we used to and we will again, if only we will get them out of our way.  Throw the Bums Out!

Representative John Sarbanes Proposes Law to Control Free Speech

The Representative of my incredibly gerrymandered Congressional District in Maryland is the socialist John Sarbanes, son of the former Maryland Senator.  He has just sent out a letter to his constituents in which he complains that:

In the 2012 election cycle alone, big interests such as the oil and gas industry and Wall Street contributed hundreds of millions of dollars to Congressional campaigns and equally vast sums to lobbying groups. Meanwhile, upwards of $1.3 billion poured in from Super PACs and “dark money” groups that float outside the reaches of our campaign finance laws.

 He has just proposed the following new law:

That’s why I am introducing the Government By the People Act.  This sensible and straightforward piece of legislation will do the following.

First, it will encourage the participation of everyday Americans in the funding of campaigns by providing a refundable $25 My Voice Tax Credit.  This will bring the voices of the broad public into the funding side of campaigns and democratize the relationship between money and speech.

Second, the bill will establish a Freedom From Influence Matching Fund to boost the power of small-dollar contributions.  To be eligible for these matching funds, a candidate must agree to a limit on large donations and must demonstrate broad-based support from a network of small-dollar contributors.  Amplified by the Freedom From Influence matching fund, the voices of everyday Americans would be just as powerful as the voices of the big donors.

Third, the Government By the People Act will provide candidates with an opportunity to earn additional resources in the home stretch of a campaign so that the voices of the people are not completely drowned out by Super PACs and other dark money interests.  In the wake of the Citizens United decision, this kind of support is critical to ensuring that citizen-backed candidates have staying power.

We can pay for these changes just by closing a few of the tax and regulatory loopholes that are the decades-old legacy of special interest influence in Congress.  It’s only fair that those who are responsible for breaking the policy-making machinery in Washington should bear the cost of fixing it.

It is very strange that he did not mention such special interest groups as trial lawyers, teachers, labor unions, environmental groups, feminist groups, Black American groups, and Hispanic groups.  Will his legislation equally suppress their freedom of speech as will his attempt to make taxes more unfavorable for groups who do not always reliably support Democrats?  It is clear that the only way to get the taxes to pay for this is to attack businesses and milk them.  His legislation can hardly acquire the funding it needs from labor unions, non-profit environmental, feminist, Black, and Hispanic groups.  This proposal is a very clearly anti-business proposal and makes no attempt at all to control many special interest groups.  What it does is force businesses to fund anti-business special interests.

The reason government is controlled by special interests is because government is too large for the People to understand what it is doing and how to control it.  Special interests step into the power vacuum and take over.  The People are frustrated with this situation, yet many do not understand that inherent in excessive government is control by special interests.  Good government limits itself to protecting the rights of the individual and is much, much smaller and much, much easier for the People to understand and control.

Big Government cannot be for the people or by the people.  Many will reject it with disgust because it tries to dictate what values the individual may pursue and will micromanage their lives.  Many others will actually want it to do more for them, but will be frustrated by what it does and unable to figure out how to make it do what they think is right.  Big Government can never be loved or even tolerated by the People.  Their present disgust is entirely understandable.  John Sarbanes proposed law is nothing but a veil to hide the real problem: the excessive size and scope of governmental power.

Fraud in Unemployment Claims by State

Fraud is rampant in virtually every federal and state welfare program.  The extent to which the government has been able to determine what it is in unemployment insurance benefits is revealed in the map below:

This may be just the tip of the iceberg, with most of the fraud undiscovered.  Apparently, the highest discovered fraud was in Louisiana, though Arizona, New Mexico, Colorado, Nebraska, South Dakota, Wisconsin, Indiana, Ohio, Pennsylvania, Maine, Virginia, Tennessee, South Carolina, Alabama, and Mississippi are all made more than 14% fraudulent payments.  In Louisiana's case, the fraudulent payments were a colossal 38.67% of all payments.  Taking advantage of government programs and taxpayers has long been developed into a fine art in Louisiana.

There are many people who have no compunction about stealing money from the businesses whose only crime is to take the many risks of being in business to produce needed goods and services and of hiring people to work for them.  What is more, as a businessman, I am sure that Congress and virtually every state legislature believes I am guilty of a crime because I actually take the many risks of hiring people.  They penalize me with many taxes and most of them do not even depend upon whether my business is making a profit or whether I am able to pay myself for my many hours of work.  Quite a few of which I am required by innumerable laws and regulations to donate to local, state, and the federal government totally without recompense.  That is what you do to criminals -- you punish them.  It makes one wonder why anyone is fool enough to own a business.

Perhaps all businessmen should quite hiring others and only provide themselves with a job.  That sure would go a long way toward reforming government!  Can you imagine the howl if every taxpayer was required to file his own payroll taxes to the state and the federal government?  There would be no unemployment taxes to provide unemployment benefits.  Everyone would have to generate their own W-2 forms and send them to the governments.  Everyone would be required to provide their own Workmen's Compensation Insurance.  Everyone would have more complex personal income tax filings.  Everyone would have to pay taxes on any business facility and equipment they used to generate their income.  Everyone would have to run equipment depreciation schedules and do the personal property tax filings.  Oh, what a plaintive howl there would be!  Government would become much smaller very quickly and many taxes now hidden from the employee dominated public would become known and hated.

The Missing Jobs in June 2012 are Unchanged from June 2010

This is the monthly update on the real unemployment situation in the USA based on the Bureau of Labor Statistics June 2012 Household Survey Jobs Data.  The data I will use will not be seasonally adjusted, so we will need to compare June of this year with the unemployment of June 2010 and June 2011 to see if any jobs recovery has occurred.  We will also calculate the number of missing jobs based upon the percentage of the jobs wanted in January 2000 relative to the working age civilian population available for work.  This excludes people in jail or in institutions for those in ill health.

The recent history of missing jobs is given in the following chart:

The number of missing jobs in June 2012 is slightly lower than the number of missing jobs in June 2011, but it is slightly higher than the number of missing jobs in June 2010.  Just as with every other month so far this year, if we compare the number of missing jobs to the same month a year and two years earlier, we find that essentially nothing has changed.

In contrast, the usual unemployment rate of June 2010 was 9.62%.  It fell to 9.32% by June 2011 and still further to the June 2012 rate of 8.43%.  But, this number means little due to the ever-increasing number of discouraged job seekers.  The number of the reported unemployed fell from June 2010 to June 2011 and again to June 2012.  The number of people employed also grew from June to June to June in that time.  However, the population of working age civilians also grew, so that the 12.80% of missing jobs in June 2010 had actually increased by June 2011 to 13.30%, before falling in June 2012 to almost the same percentage as in June 2010 at 12.74%.  A 0.06% decrease in the number of missing jobs in the last two years is no job recovery at all.  This has been the story consistently for the last two and half years.

The policies of the Obama administration are so wrongheaded that they have done great damage to the private sector economy and kept companies from hiring.  Government can do little to effectively increase hiring, but it is excellently capable of destroying jobs and keeping new jobs from being created.  Obama and his Democratic Socialist Party leadership have been working overtime finding ways to make the future ever more uncertain for business and in making labor so expensive that business cannot afford to hire.

John C. Goodman, CEO of the National Center for Policy Analysis, recently testified in the House of Representatives that ObamaUncaringTax will increase the cost of an employee by $6/hour.  The EPA is causing sizable increases in our electricity costs and a decrease in electricity reliability, which will cause great harm to many businesses and will reduce the money individuals can spend on other goods and services.  Many state governments are contributing to this problem with their mandates that green energy replace fossil fuels in the electricity supply of their state.  Despite a huge supply of oil and gas in the United States, the Obama administration has done everything it can to prevent the development of new fields on federal land and offshore.  The Dodd-Frank law has created great uncertainty and it has kept financial institutions from loaning to small businesses.  Obama and his union henchmen have interfered with employer-employee relations to the detriment of business.  The looming taxes of the ObamaUncaringTax will take a huge toll, which include a tax surcharge on individuals with higher incomes and on corporations, in addition to the penalty taxes.  This punitive taxation of higher income individuals is not enough for Obama and he wants to eliminate their low percentage decrease part of the Bush tax cuts.  All this is happening in the face of the start of the Baby Boomer retirements and the continued collapse of the housing market.

Of course business is not hiring enough people to get Americans back to work with a jobs recovery to this never-ending recession.  With Obama destroying the business climate, nothing will change and nothing will change Obama.  He is a dyed-in-the-wool socialist.  He is fundamentally anti-business, with the exception of those who generously support his campaign fund.  Even then many of those companies have found him unbelievably treacherous.  The only hope for our economy and for Americans who want to be able to earn a living is the replacement of Obama with Romney.

The Federal Government Extortion of Businesses

I have often written that when government takes on the powers of illegitimate government, it becomes a threat to businesses and other special interests operating in the private sector.  Business is especially vulnerable, because that is where the money is and many people have a bias against commercial interests.  Government politicians have a hankering for their money and want to pretend to be protecting the People from some powerful threat to them.  So, politicians shake down companies by threatening them with harmful legislation and simply by using their access to and influence over the press to give businesses a bad name.

Companies, like it or not, are forced to become lobbyists.  Once they get into that, they are generally tempted, as are other special interest groups such as labor unions, public employees, trial lawyers, accountants, environmentalists, and religious groups, to take over the controls of government.  This is fairly easy to do since the government has by then become far too complex for most of the People to understand and control.  Indeed, some companies and other interest groups see how easy it is to take over the controls of government and leap to those controls without even being extorted.  It can be an easy route to power and influence and to riches.  Control of government can also be used through regulations and licensing requirements to reduce competition.  The great Institute for Justice is renowned for trying to eliminate licensing and similar restrictions that keep people from earning a living.  The Competitive Enterprise Institute tries to reduce the number of regulations designed to reduce competition.

Timothy Carney has a very interesting tale of how Orrin Hatch, Utah Republican Senator, forced Microsoft to get into the lobbying business very much against its will.  It is well worth reading.

Obama Kills Jobs and Resuscitates the Great Socialist Recession

Let us start off with a chart showing the number of jobs missing from our economy since January 2000 in thousands of jobs.  The number of missing jobs in January 2000 was equal to the number of unemployed people then who were looking for jobs or in some cases were simply taking some time off between jobs.  Jobs were plentiful then and had been for several years, so unemployment was only 4.0%.  Because of the boom and bust nature of the economy since then due to the Federal Reserve setting very low interest rates, the deficits run by our governments, increasing regulations and taxes, added energy costs due to drilling prohibitions, recent added uncertainty caused by ObamaCare and Dodd-Frank financial reform, and considerable class warfare and anti-business rhetoric, the number of missing jobs has increased greatly in the course of the last 11 years.

The number of missing jobs is calculated assuming that the same percentage of Americans would work today as did in January 2000 if good jobs were available.  The high tech bubble that burst in 2001 and 2002 had already created a situation with about 5 million more missing jobs than we had had at the beginning of the century.  In December 2007, the United States had not yet been much affected by the recession due to a sharp increase in the price of oil that was already hurting most other countries of the world.  But in 2008, companies began laying off employees and stopped hiring new employees.  This never-ending Great Socialist Recession was underway.

Since Obama occupied the White House, there has been no substantial or sustained return to normalcy.  The number of missing jobs for the last four months has been almost constant.  There was actually a small increase in the number of missing jobs in August, though the statistics are not really good enough to consider that a real effect.  What is real is that over the long term now, there has been no improvement.  This is not surprising since almost every action the Federal Government and the Federal Reserve have taken was effective in killing jobs, not in creating them.  Jobs are conserved in big businesses and many, many jobs are created by small businesses when the government does little to hurt their businesses.  The Federal Government and many state governments have worked very hard to create very tough business conditions and much uncertainty when American business already faced a world largely in recession and stiff competition from abroad.

Obama's socialist viewpoint, his servitude to labor unions, and his academic economic advisers with their belief in Keynesian economic theory, led him and the Democrats down a very wrongheaded path.  America is in misery because of this wrongheaded understanding of the economy and business by our ever more controlling central planners in Washington.  The private sector and Capitalist free market can do much better.

More Taxes to Pay the National Debt?

Do we need higher taxes and fewer tax deductions to pay the deficit of $1.597 trillion this year?  According to the Office of Management and Budget, the federal government will spend $3.771 trillion this year, which is an increase of $1.043 trillion of spending since 2007.  This is a 38.23% increase in spending in 2011 compared to 2007!   The spending increase since the 2008 Democrat Congress budget is 32.2%.

The deficit ballooned because of this spending increase coupled with a smaller $393 billion loss of tax revenue because Americans have been made much poorer now in comparison with 2007.  Many see that as the result of government shackling the private sector with higher taxes, many more regulations, the threat of still more draconian administrative regulations, the increasing requirements and expenses of ObamaCare, and the massive printing of money.  The result has been a massive transfer of wealth from the jobs-creating private sector to the jobs-devouring government sector.

If we were to start repaying this national debt today over a 30-year period in equal payments, our annual payment would be $900 billion.  Note that is almost all of the massive spending increase that has caused our present debt woes.  If we are to come up with an extra $900 billion per year to pay our debts, we already face a frightening task.  Perhaps it is so frightening that few people are willing to face the crisis at all.  If we ignore the debt until 2012, but then start to make repayments, the long-term interest rate of 5% is likely to have returned and the annual principal and interest payment will be about $2 trillion!  Imagine making debt payments equal to 73% of the total spending of 2007.  Can you imagine squeezing defense spending, medicare, medicaid, the administration of ObamaCare, and Social Security into 27% of the budget?

We must make a choice.  We must either increase taxes and slightly decrease spending as the Democrats want to do, or we must greatly decrease spending and allow the economy to grow with modest tax decreases as the Republicans mostly want to do. 

Tim Geithner, the Treasury Secretary, just told the House Small Business Committee on 22 June that the Obama administration wants to squeeze another $1 trillion out of people earning more than $250,000 a year over the next 10 years.  Most of these people are small business owners.  They are precisely those small business owners who are making enough money that they can hire more people.  Nonetheless, Geithner maintains that cutting spending by $1 trillion would have a more negative impact on the economy than will the tax increase on the "rich."  Like most people, he is ignorant of the effect this will have on company owners choosing to invest in new production-enhancing, and thus job-creating, equipment.  He does not think about the need to buy more building space to put more production capability and employees into.  Finally, he is not thinking about the fact that few employees are sufficiently productive soon after being hired to carry their own weight.  Money has to be set aside to pay them while they get enough on-the-job training to become profit centers.  Expanding a business is commonly a very expensive proposition.  Adding one person in a small business is a big incremental step in terms of the necessary addition to company income.  Rational businessmen do not expand a business without a strong sense that they will be able to make a decent profit for their risks and effort in doing so.

ObamaCare and the Dodd-Frank financial reform act raised taxes.  The inheritance tax was brought back by the Democrats as a special scourge of small businesses.  While most other developed countries have learned the advantages to reducing the corporate tax rate, the U.S. has not.  It now has the highest corporate taxes in the developed world, since Japan recently reduced its previously equally high corporate taxes. We are also one of the few countries that taxes earnings a company makes in another country.  This causes U.S. companies to invest those earnings in other countries rather than in the U.S.  Our tax policy encourages them to create more jobs abroad than at home.

As a result, more and more companies financed by Americans are being started in other countries.  Many American companies are re-incorporating in other countries with lower taxes.  Favorites for such purposes are Luxembourg, Bermuda, and the Cayman Islands.  In 2008, there were 3 U.S. initial public offerings (IPOs) by companies incorporated in tax-haven countries for every 10 that were incorporated in the U.S.  Ten years ago, only 1% of U.S. IPOs were incorporated in either the Cayman Islands or Bermuda.  In 2010, 26% of them were!  So far in 2011, 21% of new IPOs have been incorporated in these island tax-havens.

In 2004, Congress acted to limit incorporations in tax-haven countries.  Companies with a substantial change of ownership could re-incorporate in a tax-haven country, however.  This actually encouraged the sale of many companies.  The IRS changed the rule to require a complete buyout in 2009.

The venerable American company Samsonite was taken over by CVC Capital Partners and is now incorporated in Luxembourg, but headquartered in Hong Kong.  Asia is now its primary market.  The semiconductor spin-off of H-P, Avago Technologies Ltd., was bought out by Kohlberg Kravis Roberts & Co. and is now incorporated in Singapore, though its headquarters is in San Jose, CA.  It now has built extensive operations in Singapore.  Freescale Semiconductor Holdings I Ltd. went public in the U.S. last year after a buyout from Motorola Inc. which used to own it, but now it is incorporated in Bermuda.  It still has extensive operations in Austin, Texas.  U.S. investors in 2009 had so many securities holdings in Cayman Island companies that they are the fourth highest total for any country in the world!

Most other developed countries have learned either from the disasters of their own adoption of socialism and the anti-business mentality or from watching the deleterious effects of socialism in other countries, that economic growth will be stunted by soak-the-rich and squeeze businesses schemes to fund the welfare state.  Many of those countries are stuck with the welfare state, but have learned that it cannot be sustained at all without a growing economy.  The American Democrat Socialist Party has not learned this lesson.  RINOs in the Republican Party have not learned it very well either.  As a result, we are growing at a much slower rate than many countries around the world now.  We used to talk about the Old Men of Europe.  Well, we are becoming the Old Man of the World. 

This is totally unnecessary.  We have only to unshackle business and stop penalizing the so-called wealthy or the small businessman to completely change this around.  The Democrats have made it perfectly clear through Obama, Biden, Geithner, Reid and Pelosi that they have learned nothing.  Chris Van Hollen, a particularly wrongheaded Democrat from wrongheaded Maryland, is a Democrat negotiator in the Biden deficit-reduction talks and has said that Democrat principles require a tax increase on the wealthy and business owners.  He is accompanied on the Democrat side by the radical James Clyburn of South Carolina.  It is no wonder that Eric Cantor, the Republican House Majority Leader, and Senate Minority Whip Jon Kyl were compelled to leave the Biden talks.  It had become too ridiculous to work toward a compromise with these ignorant job-killers and company-killers from the Obama administration and the Democrat sides of Congress.  Earlier, Tom Coburn, Senator of Oklahoma, had similarly given up hope of a rational outcome from talks in another set of negotiators known as the Group of Six.  I have to applaud these sensible Republicans.

When the lemmings swarm over the cliff edge, sensible men refuse to follow them.  Actually, I have heard that lemmings are more sensible than Democrats.  They really do not rush over the cliff.  That is just a fable for them, but it is the everyday purpose of our Democrat political leadership.