On the Blog

Understanding Bitcoin’s True Potential

Somewhat Reasonable - June 19, 2014, 10:13 AM

Bitcoin has seen remarkable success over the past year. More and more people have been using it, and more and more businesses have become willing to accept it as a payment method. As the first widespread cryptocurrency, many people in all walks of life have been paying rapt attention to the young enterprise.

It is thus fitting that Bitcoin was the subject of a recent Heartland Daily Podcast, featuring Bret Swanson, president of Entropy Economics. Swanson shared several of his insights into the potential advantages and problems of Bitcoin.

Swanson characterizes Bitcoin as “a platform for distributed trust.” In other words, the Bitcoin platform, more than just a cryptocurrency management system, serves as a mechanism for the broader establishment of trust between parties in an online peer-to-peer environment that have never met physically.

Swanson explains that the “blocked chain” program in the Bitcoin platform “stores all the transactions that have ever been made.” This is necessary in the trading of bitcoins, because it is the mechanism that prevents their duplication (ie. Counterfeiting). To Swanson, the blocked chain is even more valuable in its broader application as a means of authenticating the identity of another party in a transaction or interaction online.

The blocked chain system is a very important innovation for online commerce as it is a mechanism by which parties can establish trust, an expectation in most sophisticated financial and commercial interactions. Swanson perceives the Bitcoin platform as a way to bring banking and currency into alignmnet with the altered nature and demands of a more digital world.

While Swanson is very enthusiastic about the Bitcoin platform, he has serious, and understandable, reservations about Bitcoin as a replacement currency to more conventional, state-backed currencies. While he acknowledges that there is a certain romance and libertarian impetus to develop an economic arena outside of the clutches of governments, he points out that the Bitcoin market is very volatile, which has made economists across the ideological spectrum quite wary. He is also skeptical of the ability of Bitcoin and its ilk to remain unregulated, especially if it becomes a preferred platform for illicit transactions.

The simple fact is that currency’s worth is in its function as a store of value. The inherent volatility of Bitcoin does not lend itself to this function. While merchants may be willing to trade in it, it has more characteristics of a risky investment than of a true currency. It is also a risky currency because it could simply be superceded by another, better cryptocurrency. The advent of such a competitor could weaken the value of Bitcoin currency, or even wipe it out.

Swanson is right to view Bitcoin with a raised eyebrow. So long as the system is so volatile, people would be better off simply holding cash, or maybe gold, if they want to protect the value of their savings. Bitcoin is exciting, but people should not be blinded by the excitement. That’s how people lose money in a market.

Categories: On the Blog

Sea Levels are Never Still

Somewhat Reasonable - June 19, 2014, 9:34 AM

Sea levels have been rising and falling without any help from humans for as long as Earth’s oceans have existed.

The fastest and most alarming sea changes to affect mankind occurred at the end of the Pleistocene Ice Age. Seas rose about 130m about 12,000 years ago, at times rising at five metres per century. Sea levels then fell as ice sheet and glaciers grew in the recent Little Ice Age – some Roman ports used during the Roman Warm Era are now far from the sea even though sea levels have recovered somewhat during the Modern Warm Era.

Many natural factors cause sea levels to rise – melting of land-based glaciers and ice sheets; warming and expansion in volume of the oceans; extraction of groundwater which ends up in the oceans; and sediments, sewerage, plant debris and volcanic ash washed into the oceans by rivers, storms and glaciers. In addition, tectonic forces cause some blocks of land to rise while others fall, hence the paradox of sea levels appearing to rise on one coastline while falling on another.

Currently the world’s oceans are rising at about 1mm per year, which has not changed much with the great industrialization since 1945. Amongst all the factors moving the restless sea, man’s production of carbon dioxide is obviously an insignificant player.

Sea levels are always changing, at times very destructively. Waves move sea levels by a few metres and at places like Derby, WA, king tides can move sea levels by eleven metres. Then there are rogue waves up to 30 metres high which have sunk oil tankers, and tsunamis which can smash coastlines with a ten metre wall of water moving at over 800 km per hour.

Despite coping with all of the above, climate alarmists say we should be scared to death by the threat of seas rising gently at 1mm PER YEAR. Even a slow-moving sloth could escape water rising at that rate.

King Canute showed his nobles that no man can hold back the rising sea. It’s time the climate alarmists learned Canute’s lesson and focused on real world problems.

Even if we ceased using all carbon fuels for electricity and transport, no one could measure the effect of that huge sacrifice on global sea levels.

Categories: On the Blog

The Danger of Big Data and the Progressive Plot for Education

Somewhat Reasonable - June 18, 2014, 3:14 PM

Click image above to see original source.

With the federal government’s increasing involvement in education, advocates of this national education system claim gathering immense amounts of data is necessary for the system to properly function. This data is more than simple aggregate of test scores, but rather it is personal information about individual students, including their values and facts about their family life.

Through the implementation of the Common Core State Standards Initiative and the increasing use of technology in the classroom, the federal government has a greater capability to access individual students’ personal information. Additionally, with vast amounts of data being released and collected in comprehensive data banks, the chance that this personal information will be hacked is greatly heightened.

In addition to merely gathering overall performance standards, the government, through state and the federal education departments, desires to collect information regarding the student’s values, religion, family status, and attitudes. The purpose of collecting these types of facts is for “correcting” these alleged prejudices that parents pass on to their children.

In the Pioneer Institute study “Cogs in the Machine,” Emmett McGroarty, Joy Pullmann, and Jane Robbins argue that the government has no right to collect this massive amount of student data. Individuals have a right to their own personal information, and it should be protected as personal property. When the state desires to seize private property, it must provide a reason. In the same way, the government should provide reasons why it needs individual student data, who will be able to see this information, and for what purpose it will be used.

As the authors articulate, this data-amassing scheme dates back to the ideas of Progressives like John Dewey. Progressives believed (and still believe) that government need not be limited by the principle of individual autonomy. The Constitution, they claimed, was outdated and no longer applicable to modern society. This view maintains that the government and “experts” know better than individuals how to solve modern-day issues. Because of this superior knowledge, these experts need access to large amounts of data, including personal information, to form solutions to modern problems.

John Dewey, the famous social engineer, desired to use education as a means to liberate children from their parents’ values and the biases of religion and tradition. In his eyes, the goal of education was to quash individualism and create Progressive citizens, reliant on the government.

Later Progressives, such as Marc Tucker continued this trend in education citing the necessity of gathering data so that experts can use this information to form education in such a way that is beneficial to society. In Tucker’s view, schools exist to serve the economy and produce the kind of workers, with specific skill sets, that the economy requires. Under this model, the purpose of education is no longer to produce learned individuals capable of discerning their own career paths.

Tucker advocated implementing national standards, created by a board that forms the standards based on skills needed for particular jobs. Children would receive admittance into postsecondary education if they met the criteria and developed the skills dictated by the standards. Labor market boards would post all jobs, public and private, that the students with specific skill sets could earn. In Tucker’s system, the purpose of individuals is to serve the economy, and the economy does not exist to serve the individual. The purpose of this type of education is to create workers to drive the economy instead of to create free citizens. This shift is manifested in the Common Core, which follows the system Tucker supports.

This view of education promotes Outcome Based Learning; however, it is not based on the knowledge that students obtain but rather the attitudes they form. Progressives use “transformational” outcome based learning to engineer students into the types of workers, with the right attitudes, they deem necessary for society. Data collection is part of the Progressive master plan for government to control society through education by transforming students into human capital to fuel the economy.

This view of education fundamentally alters what America is and has always been—a free nation created by the people and for the people. This country was built on the power of the free individual, capable of flourishing into a respectable citizen and choosing what type of job serves him. The government and the economy are created by and for the use of the people; the people do not exist to serve the government.

To read the full study, please click here.

Categories: On the Blog

Obama Talks Climate Change While Iraq Implodes

Somewhat Reasonable - June 18, 2014, 1:07 PM

It is depressing beyond words that we will have to endure two and a half more years of an endless stream of lies about climate change from President Obama.

On June 14 he gave a commencement speech to graduates of the University of California at Irvine, using it to tell Big Fat Lies, not the least of which was that the Earth’s temperatures were rising when in fact they have been falling for nearly eighteen years.

It is an endless source of wonder to me that no part of the mainstream media disputes him when he says things like this. For years now they have been reporting the evidence of increasingly cold weather worldwide.

On the same day the President was lying about warming, eight inches of snow fell in Rize, Turkey. It has fallen as well in South Africa, Norway, Sweden, Finland and Russia while closer to home snow fell on several cities in Idaho with cold freezes extending into Oregon. In June!

Obama used the speech to demand that politicians take steps to acknowledge climate change which used to be called global warming until it became undeniable to everyone except the charlatans lining their pockets with utterly bogus “research” that underwrites the source of the lies, the United Nations Intergovernmental Panel on Climate Change (IPCC).

Obama continues to listen to his White House advisor, Dr. John Holdren, whose contempt for the human race is such he would happily see large parts of it disappear. In February, Holdren told reporters that all weather is impacted by climate change, but that is what climate change has done for 4.5 billion years. Not mentioned was that climate cycles are measured in centuries while weather is a short-term event. The most recent mini-ice age lasted from 1300 to 1850.

Holdren alluded to droughts affecting parts of the nation, claiming they were getting longer and drying. Two leading climate scientists, former NASA scientist Dr. Roy Spencer and University of Colorado climate scientists, Roger Pielke, Jr, called Holdren’s assertions “pseudo-science rambling.” “The idea that any of the weather we are seeing is in any significant way due to humanity’s greenhouse gas emissions verges on irrationality,” said Spencer. Pielke called Holdren’s assertions “zombie science.”

While Holdren is warning about droughts that could cause famines, James M. Taylor, the managing editor of the Heartland Institute’s monthly, Environment & Climate News, took aim at the IPCC claims, noting that U.S. and global crop production, especially the most important staple food crops, corn, rice, and wheat, “have more than tripled since 1970. During the past few years, the United States has set crop production records for alfalfa, cotton, beans, sugar beets, sweet potatoes, canola, corn, flaxseed, hops, rice sorghum, soybeans, sunflowers, peanuts and wheat, to name just a few.”

The worst part of Obama’s lies about the so-called “greenhouse gases” that we’ve been told for decades are warming the Earth is the way those lies are translated into government policies. The Obama administration, via the Environmental Protection Agency, has launched a war on coal-fired plants that produce 40% of the nation’s electricity claiming that their emissions such as carbon dioxide (CO2) are causing a warming that is not happening. What is happening is a deliberate effort to drive up the cost of electricity for everyone.

America runs on electricity and 68% of it is generated by fossil fuels, 20% by nuclear, and 7% by hydropower. So called “clean energy”, wind and solar, provides about 4% at far higher costs than the others and exists largely due to government subsidies and mandates.

Claims about increased severe storms, heat waves, and hurricanes simply have no basis in fact. In recent years there has been a record low in the numbers of tornadoes, hurricanes, no change in the rise of sea levels, but record gains in Arctic and Antarctic ice. None of this is reported by the mainstream media.

Yet Obama told graduates that rising temperatures and sea levels, as well as intensifying storm patterns represent “one of the most significant long-term challenges that our country and our planet face.” He said this even though his administration’s recent National Climate Assessment acknowledged that “There has been no universal trend in the overall extent of drought across the continental U.S. since 1900.” The report, however, is being used to justify carbon-related regulations.

While the world’s attention is on one of the greatest threats facing it, the takeover of northern Iraq by a barbaric Islamist group—one from which even al Qaeda disassociated itself—Obama is talking about non-existent climate threats to further policies that kill jobs in the U.S. and harm its struggling recovery of our economy.

While the Islamic State of Iraq and al-Sham (ISIS) seeks to expand its control of a major portion of the Middle East, Obama thought it was more important to lie about the climate to college graduates.

How much more damage Obama can inflict on the economy between now and the end of his second term in office is unknown, but what we do know is that his priorities, based on scare-mongering speeches about the climate will continue until he leaves office.

© Alan Caruba, 2014

[Originally published at Warning Signs]

Categories: On the Blog

Interactive Map Reveals the True Cost of Obamacare

Somewhat Reasonable - June 18, 2014, 12:06 PM

Today, the Manhattan Institute re-released its Obamacare Interactive Map. The map is one of the most comprehensive and useful tools for people looking to determine how Obamacare will affect their healthcare premiums. Presenting data by county, individuals can see just how costly the “affordable” care act is going to be.

Taking the map as a whole reveals a very disconcerting trend in the cost of healthcare in the wake of the Obamacare roll-out. From the data presented, just 12 states enjoy a net reduction in healthcare costs. The rest see increases of varying degrees. While most states are experiencing very significant increases to their citizens’ average premium payments, nine states face astonishing average increases of more than 80 percent!

That’s a far cry from the promises Obama has been making for years. The drastic failure of Obamacare is revealed in cold, hard evaluation of the numbers. The government can fudge its presentation all it wants, but the raw data must eventually reveal itself. That is what is happening now, and the results are staggering.

Perhaps most disconcerting is that the states enjoying reductions in their average premiums tend to be among the wealthiest in the union. New York, to take one example, is seeing a 45 percent reduction in average premiums across all age groups. Meanwhile, Kentucky has seen a comparable increase in average premiums across the board.

The idea that Obamacare would provide for the most vulnerable while keeping rates affordable for the majority has proven to be a cruel joke. As healthcare premiums continue to grow under the weight of Obamacare regulation, more and more people will find they can no longer afford their plans, thus perpetuating a vicious cycle of government dependency.

Obamacare is the perfect example of a government run amok. It was an ill-thought out policy with so many moving parts that it was impossible to determine what its actual impact would be before it was implemented. Years after the passage of the original legislation, commentators were still debating what sort of impact it would have. Now we know.

The Affordable Care Act is a trick played on the American people. Citizens everywhere need to view this map and understand the true cost they will be facing because of it. Unless we take action now, Obamacare will continue on its path of social and economic destruction.

Categories: On the Blog

Time to Move a Clean, Permanent Internet Tax Moratorium

Somewhat Reasonable - June 18, 2014, 11:26 AM

This morning the House Judiciary Committee will undertake the markup of the Permanent Internet Tax Freedom Act.  The Act would protect consumers from the increased costs in accessing and using the Internet by permanently extending the moratorium on Internet access taxes, and would prevent multiple and discriminatory taxation of Internet sales.

The legislation already boasts deep bipartisan support with 138 Republican and 76 Democrat co-sponsors. That’s 214 members of the House supporting it, and rumors of more to join soon would bring the total to more than 50 percent. The Senate version of the bill has 50 co-sponsors. So, there is already enough support for a permanent moratorium that doesn’t add extraneous elements that could cause the moratorium to fail.

The legislation also enjoys broad support of thought leaders and citizens, as was made clear in an April letter to Congress. But time to pass the measure is of the essence since the moratorium will expire on November 1 of this year. If allowed to expire, states would begin to collect taxes on Internet access, or apply other discriminatory taxes that may already be in place but which have been held at bay during the moratorium.

Scott Mackey, former chief economist for the National Conference of State Legislatures and currently a consultant to the wireless industry, has estimated that an average household’s taxes would increase by $50 to $75 a year if states decide to apply their sales or telecommunications taxes to Internet access. While that doesn’t seem like much, keep in mind that that’s about what a low-income family spends in a year on subsidized school lunches. Those who qualify for such programs are exactly those who will be most negatively affected by a lapsed moratorium.

Businesses also lose money when Congress doesn’t send a clear message. If Congress dallies—and history has proven that Congress rarely acts in time—telecommunications providers would need to prepare to collect the new taxes. That effort would be a waste of time and resources if Congress were to ride to the rescue at the last minute—a result of the cavalier attitude by government. Less economic growth and fewer jobs are the result.

Hopefully, the next step on the right path will be taken today with the House Judiciary Committee deciding that the moratorium must continue and refraining from introducing other issues designed to intentionally impede its ultimate passage in the House.

Hopefully, the next step on the right path will be taken today with the House Judiciary Committee deciding that the moratorium must continue and refraining from introducing other issues  which will end its progress  in the House.


[Originally published by the Institute for Policy Innovation]

Categories: On the Blog

Saving the American Dream

Somewhat Reasonable - June 17, 2014, 5:39 PM

The American Dream is one of the driving concepts in our country’s national story, one that occupies a special place in the national discourse. It is a sort of national ethos, born out of various statements of the Founding Fathers, particularly Thomas Jefferson’s in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Those words have meant different things to different people, but at their most basic level they all expound the ethos that opportunity for success and hard work will lead to upward personal social mobility, irrespective of racial, religious, or economic background. Yet the Dream is in trouble today.

The political left has been waging war on the idea of the American Dream. They sound off on income inequality and supposed lack of social mobility, arguing that the promise of the American Dream is an empty one. They cite data such as Pew Research’s finding that income inequality has been growing in America since the 1970s. Taken in a vacuum, such a finding would be worrying indeed. But could there be another explanation?

One credible explanation is that a foul mixture of unaffordable social programs and an overly expansive government tax regime has “produced a country of government addicts with an entitlement mentality. These twin maladies have eroded self-reliance, individual initiative and personal accountability.”

Basically, inequality is the product of people becoming “addicted” to government largesse and who become unwilling to work hard, while those who still strive and embrace the promise of the American Dream can still reach the heady heights of opportunity. Rather than worry about income inequality per se, what we should focus on is a policy that “encourages saving and wealth creation, so families can be more independent, more economically secure, and more able to pass that security on to their children.”

The left does not want to promote saving and social mobility. Instead, it favors policies that keep citizens as effective clients of their government charity. That is not the way to promote a healthy, independent citizenry. It is the way to create a nation of serfs.

The problem with a dream is that it is a fragile thing. A niggling doubt or germ of disbelief can sweep it into the wind. Americans began to question the promise of the American Dream during the last great economic downturn in the 1930s: “The Great Depression damaged the self-confidence of the young, and that is beginning to happen now, according to pollsters, sociologists and economists.”

The problem today, however, is even more intractable. America came out of the Great Depression and World War II with a rapidly growing economy and a dominant position in global commerce undreamt of in all of human history. From that tremendous advantage, the American Dream was able to gain a new lease on life.

Today, America’s economic dominance is swiftly being eroded by new rivals in the developing world. Added to that are the troubles of growing debt and an aging population. It is no wonder that faith in the American Dream is fading. That is a terrifying and tragic prospect. It has always been America’s boundless optimism and daring to take risks to achieve greatness that have made it such an exceptional country. Losing the Dream might also cause the loss of that vital dynamism.

To revitalize the American Dream, proponents of liberty must sell it. They need to reclaim the romance that made the Dream such a powerful force in the American psyche. The only way to do that is to promote self-reliance, not dependency.

It will only be through convincing the public that the Dream we cherish can be saved. For the sake of America, and for the sake of the flame of liberty and prosperity, we must succeed in saving the American Dream from oblivion.

Categories: On the Blog

Steve Stanek and Erin Shannon on Seattle’s $15 Minimum Wage

Somewhat Reasonable - June 17, 2014, 4:43 PM

Heartland’s Steve Stanek talks with Erin Shannon, director of the Center for Small Business at the Washington Policy
Center, about Seattle’s recent minimum wage increase. The Seattle City Council unanimously voted to require all employers to pay all employees at least $15 an hour. Shannon explains the detrimental results of such a policy.

Shannon begins by addressing the consequences of this policy within Seattle’s city walls. Not only will businesses be forced to downsize in order to counteract the 60% increase in payroll costs, but many will be forced to close their doors entirely. In addition to this inevitable economic downturn within the city, Seattle based businesses will no longer be able to expand into nearby locations. Shannon references a particular restaurant’s plans to open another branch in a neighboring town. The looming increase in the restaurant’s cost of operation has left it unable to expand into neighboring areas, and therefore unable to bring jobs and economics development to nearby towns. Seattle’s new policy will not only be detrimental to the city itself, but it will also hurt neighboring locations.

Stanek asks Shannon about the rising popularity of automation in businesses. Shannon goes on to explain that the increase in the mimim wage will push businesses to automate in order to offset the cost of paying employees. Self checkout at grocery stores and order-it-yourself programs at restaurants are ways in which businesses can save money by not paying an employee. Put simply, machines taking people’s jobs is bad for the economy. Seattle’s new policy forces employers to downsize, people to lose their jobs, and economic development to slow down.

Stanek goes on to bring up employee benefits. Shannon confirms his understanding that benefits like free food, free parking, paid vacation, etc. add up. Employees can not only expect to see these benefits disappear with the increased wages, but they can also expect to see less hours with equal expectations. Employers can longer afford to offer their servers free meals, free parking, or the hours they would like. In fact, there are already reports of waiters and waitresses being disappointed by the wage increase. On top of the disappearance of benefits, servers could see a reduction in tips. People know servers are now getting paid $15 an hour, so they might decide a 10% tip is good enough. Seattle’s increase in its minimum wage might prove to be just as bad for employees as it is for employers.

Steve Stanek and Erin Shannon discuss The Seattle City Council’s decision to increase the minimum wage to $15 an hour, and the detrimental consequences that come with such a policy. Seattle’s economy is undoubtedly in for a rocky ride as employers will need to continue downsizing in order to keep their businesses alive.

Categories: On the Blog

Changes in Attitudes: Competition Policy and the FCC

Somewhat Reasonable - June 17, 2014, 1:28 PM

Remember the opening line from “Changes in Latitudes, Changes in Attitudes,”one of my favorite Jimmy Buffet songs:

“I took off a weekend this month

Just to try to recall the whole year.”

Those lyrics – which I am now singing to myself, and you can too – kept coming to mind this past weekend, in this sense. There is so much happening, and so quickly, on the communications policy front that I often spend the weekends just trying to recall what happened during the past week – and trying to make sense of it all.

I am not necessarily proud to admit that this is the way I spend a good part of my weekends. It ain’t “Margaritaville,” for sure. But we are in a critical time for determining the future direction of communications policymaking, so I do so freely in the hope of changing attitudes, if not latitudes.

Here are some observations that I put together this past weekend, relying on current FSF work, regarding “Competition Policy and the Role of the Federal Communications Commission,” net neutrality regulation, and FCC Chairman Tom Wheeler’s promotion of municipal broadband systems. As you might suspect, they are all related.

First, I put “competition policy and the role of the FCC” in quotes because this is the title of the House Commerce Committee’s Third White Paper seeking public comment as part of the committee’s process to update the Communications Act. I have said many times that the Communications Act is in need of updating, and I am pleased that Free State Foundation scholars have participated actively in the House committee’s process.

A proper understanding of “competition policy and the role of the FCC” is at the core of understanding why and how the direction of communications policy needs to change. While I hope you will read the entire paper, I want to highlight and emphasize a key portion of the Free State Foundation submission:

A combination of rapid technological innovation, consumer choice, and disruptive changes in the communications market has altered forever the traditional competitive landscape. These profound structural and technological changes point to the need for a competition policy that leaves free from government regulation those market processes that continue to propel further innovation and competition for new services. Regulatory intervention is only warranted in instances where there is convincing evidence of a market failure that is likely to harm consumers. Absent such evidence of market failure, service and product suppliers should be free to exercise their informed business judgment in an entrepreneurial fashion. Their success will be shaped by how an ever more sophisticated generation of telecommunications consumers respond to their business offers.  The interaction of both sides of the market place will outperform any effort by the FCC to chart through government design the direction of future innovations in the ever larger and more complex Internet marketplace.

This statement of competition policy principle should guide Congress as it considers revising the Communications Act. And it also should be a guide for the FCC, presently, when the agency is not otherwise constrained by a contrary statutory direction.

Which brings me to net neutrality, where the Commission is certainly not constrained by the statute to take any action at all. Indeed, since the agency’s second judicial rebuff in its attempt to impose net neutrality mandates, I have suggested many times that it would be prudent to await further direction from Congress. While it may be, at least in the D.C. Circuit’s view, that the Commission is authorized to act, it is not required to do so.

But let’s assume that the Commission’s majority is determined to move forward to adopt some form of net neutrality regulation. The specific approach the Commission takes matters a lot, of course. For reasons I have delineated over and over, classifying Internet providers as common carriers under Title II almost certainly would stifle the future development of the Internet. Internet providers – and the reach could extend to so-called edge providers as well – shouldn’t be turned into public utilities like electric companies and put in the same regulatory straightjacket devised to control monopolies.

If the Commission adopts new net neutrality regulations, it should adopt the approach proposed in the rulemaking notice to the effect that it will not interfere with the Internet providers’ practices if they are commercially reasonable. If implemented properly, this “commercial reasonableness” approach could provide the ISPs the flexibility they need to experiment with offering new services responsive to changing technological capabilities and consumer demand.

Here is the way I explained proper implementation in my blog, “The FCC’s Approach to Net Neutrality: The Wrong Approach for Regulatory Presumptions,” published on June 4th.

In light of the technological dynamism and multiplatform competition that exists in the broadband marketplace – with cable, telephone, fiber, satellite, and various wireless companies all offering consumers alternative choices for Internet service – the proper approach for the Commission is to presume that, absent clear and convincing evidence of market failure and consumer harm, Internet providers’ practices, including practices involving prioritization of services, are commercially reasonable. In other words, the rebuttable presumption should run in favor of not imposing new public utility-style regulations on Internet providers.

In short, absent convincing evidence of market failure and consumer harm, “commercial reasonableness” should be presumed, not the other way around. Were the Commission to adopt this approach, it would take a step in the direction of adopting rules that, while perhaps unnecessary, represent a possible way forward. This would be a principled approach consistent with the Free State Foundation submission to the House Commerce Committee.

Now, finally, about Chairman Wheeler’s ongoing suggestions that he’s contemplating getting the FCC to act to preempt the 20 or so states that have adopted either an outright ban or some form of restrictions on municipal broadband systems.

By way of explanation for his possible support for preempting these state laws through FCC action, in line with previous statements, Mr. Wheeler simply offered this: “Being pro-competition means being pro-competition.”

Well, yes, but….

Of course, the matter is not all that simple. All so-called “competition” is not the same. For example, in the Free State Foundation’s submission to the House Commerce Committee, we focus on the importance of facilities-based, cross-platform competition as opposed to competition derived from government mandated facilities-sharing regulations. And, directly to the point here, for more than five years, we have examined some of the many failures of government-owned municipal broadband systems. Here are just some recent FSF pieces recounting the failure of many government-owned networks: Burlington Telecom’s February $10 million settlement with Citibank over loans to its ailing system, along with examples of municipal “broadband busts” includingMooresville and Davidson, North Carolina, Utah’s UTOPIA network, Provo, UtahLafayette, Louisiana, and theN.C. Eastern Municipal Power Agency.


I have never taken the position that, as a matter of policy, there may not be rare circumstances when construction and operation of municipal-owned telecom systems would be proper. If it is clear that private sector companies are unable or unwilling to offer service, then there may be a proper role for a municipal system. But these rare circumstances have little to do with proclaiming a “pro-competition” mantra or with the policy impetus behind the state laws that Mr. Wheeler now contemplates preempting.


As my FSF colleague Seth Cooper explained earlier this year in a Perspectives from FSF Scholars: “Such laws prevent local government conflicts of interest with the private sector marketplace competitors who invest tens of millions of dollars in localities to build out their broadband networks. They also protect local taxpayers from potentially devastating financial losses from poorly-run municipal broadband projects.”

In short, the tax and other documented financial advantages, along with other preferences such as permitting privileges and rights-of-way preferences, conferred upon government-owned communications networks means it is too simplistic to declare for “competition.” In order to have a serious discussion, Mr. Wheeler surely must grapple with the underlying fundamental distinction between government and non-government networks that are the impetus for the adoption of the state bans.

And aside from these policy questions, Mr. Wheeler must grapple with the legal questions, including serious constitutional questions, which arise in any discussion concerning preempting state laws restricting municipal networks. Here it suffices to refer to Seth Cooper’s excellent seminal piece on the subject, “FCC Preemption of State Bans on Municipal Broadband Networks Is Most Likely Unlawful.” In any proper conception of our federalist constitutional system, it can’t be enough to blithely suggest that the wishes of municipalities should prevail over the state sovereigns under which they are created.

After all, in our constitutional regime, we do not recognize, as a matter of legal status, “citizens” of Provo or Lafayette, but we do recognize citizens of Utah and Louisiana – and the Constitution confers upon these state citizens the authority to exert their will, through either their elected representatives or sometimes through referenda, to adopt laws that restrict municipal activities.

Well, it is another week, which I’m sure will be all too busy. But this is the way I was thinking, over the weekend, about last week. Hoping to spur, if not changes in latitudes, then perhaps some changes in attitudes.

Find more information here.


Categories: On the Blog

Scott Cleland on Broadband Utility Regulation

Somewhat Reasonable - June 17, 2014, 1:04 PM

Scott Cleland, chairman of NetCompetition, addresses the self serving and naive goals of corporate internet. Large internet companies like Google and Netflix are attempting to shift the costs of delivering their services onto the consumer. Claiming free speech violations, these companies say they should not have to pay for their internet delivery services. Cleland explains how this is nothing more than a manuever to increase their profits, which would subsequently increase the cost on the consumer.

Cleland goes on to explain how this misguided goal would result in a total lack of innovation. Broadband utility regulation is a system that simply does not foster innovation or  growth. Scott Cleland clearly and concisely explains the flaws of corporate internet’s plans.

Categories: On the Blog

The Christie-and-Kasich Tax Show

Somewhat Reasonable - June 17, 2014, 10:09 AM

There’s an interesting phenomenon playing out in both New Jersey and Ohio: Two of the country’s most prominent conservative Republican governors have proposed new taxes of a sort that haven’t appealed even to traditionally liberal, tax-hungry state legislatures in states like Massachusetts and Washington.

New Jersey governor Chris Christie and Ohio governor John Kasich have asked their legislatures to enact an excise tax, or sin tax, on the sale of electronic cigarettes (e-cigarettes). The stated goal of both governors is to equalize the tax applied to e-cigarettes with that applied to combustible-tobacco cigarettes.

While the product’s common name may be misleading, e-cigarettes are not cigarettes. They are smoke-free, tobacco-free, battery-operated devices that allow smokers to get nicotine without inhaling burning-tobacco smoke. Currently, these products are subject to sales tax, like any other consumer product, in Ohio, New Jersey, and 46 other states.

Governor Christie announced the plan in the spring but still has not actually specified the rate at which he wants to tax e-cigarette products. That hasn’t stopped his Treasury Department from somehow estimating that $35 million in revenue would result from this undefined tax hike. Indeed, his administration has refused to admit that this is a tax hike, instead describing the tax as part of a move to “level the playing field” between e-cigarettes and combustible cigarettes, the latter of which are taxed at the state level at $2.70 a pack. Putting aside the absurd notion that cigarette markets need to be protected from competition, Governor Christie’s adamant denial of the fact that he is seeking to increase taxes should worry any conservative who wants to see him in the White House.

His proposal has yet to be endorsed by a single Republican in the New Jersey legislature. Indeed, his support on this measure has come almost solely from two liberal Democratic state senators. They were so inspired by his proposal that they introduced their own bill that would tax e-cigarettes at 75 percent of wholesale price.

Governor Kasich’s Ohio plan would, over two years, raise the state’s tax on a pack of actual cigarettes from $1.25 to $1.85, tax e-cigarettes at 49 percent of wholesale price, and raise the state’s tax on smokeless tobacco to the same rate. The Kasichadministration is claiming that the estimated $850 million in revenue created by these tax increases over a three-year period would allow Ohio to cut income taxes along all brackets.

E-cigarettes are a prime example of the free-market insight that the private sector is better than government at addressing societal problems. E-cigarettes may do more good for public health by getting people to quit smoking than any tax, warning label, or self-righteous taxpayer-funded ad campaign has ever done. So we are bewildered as to why Governors Christie and Kasich would proactively seek to undermine this private-sector approach to smoking by, of all things, taxing it.

Our best bet is that it has nothing to do with public health per se, and everything to do with another kind of addiction. These proposals underscore the fact that state governments are more addicted to cigarettes than most smokers are: At least some smokers can quit — but states don’t give up tobacco taxes. Now that smokers are quitting tobacco and using the dramatically less risky alternatives, those responsible for state budgets want to keep their hands in our pockets by taxing tobacco-free e-cigarettes. The governors’ approach to the real public-health heroes who have quit smoking with e-cigarettes? Pay up.

We think sin taxes are a bad idea. But if they do exist, even for e-cigarettes, they should at least have a structure that more accurately reflects the risks of different products.

First, for decades, high sin taxes on cigarettes have been justified by pointing to the costs incurred by taxpayers in treating smoking-related illness. These costs have been overstated, but e-cigarettes, which help people quit, will reduce health-care costs, so no additional tax on them is justified.

Second, advocates for cigarette sin taxes argue that taxes help “nudge” people to behave differently. Making the cost of e-cigarettes equal to or higher than that of real cigarettes would nudge people in the wrong public-health direction — away from using the dramatically less harmful alternative to cigarettes.

Neither Governor Christie nor Governor Kasich has publicly professed a belief that e-cigarettes are as dangerous as traditional cigarettes. The chief regulator at the Food and Drug Administration’s Center for Tobacco Products, Mitch Zeller, dispelled that notion when testifying before a U.S. Senate committee in May. “If we look at a subset of smokers who are otherwise unable or unwilling to quit,” and “we could get all of those people to completely switch all of their cigarettes for one of these noncombustible products, that would be good for public health,” Zeller said. He reiterated that belief earlier this month, telling attendees at a public-health conference, “Let’s not lose sight of the bigger picture here — tobacco use remains the leading cause of preventable death and disease principally because of the ongoing use of products that burn tobacco.”

Emerging evidence suggests that e-cigarettes are helping many smokers quit. Just last month, the journal Addiction published the results of the first cross-sectional survey that sought to measure the effectiveness of e-cigarettes among those trying to quit smoking. The study covered a population of nearly 6,000 smokers in the United Kingdom who had made an attempt to quit in the prior year. It found that smokers who reported trying to quit with e-cigarettes were twice as likely to report cessation than those smokers who used nicotine-replacement-therapy (NRT) products such as the patch or gum (20 percent vs. 10.1 percent). E-cigarettes also beat unassisted “cold turkey” quitting, with 15.4 percent of the latter group of quitters succeeding.

Republican governors, especially those who may have presidential aspirations, could learn a thing or two from Vermont’s Democratic governor, Peter Shumlin, who opposed Christie- and Kasich-style taxes in his own state. “My own view on e-cigarettes is that we should be cautious about taxing a product that we think might be gettin’ some folks off of tobacco,” declared Shumlin at a press conference. We couldn’t agree more.

— Jeff Stier is a senior fellow at the National Center for Public Policy Research in Washington, D.C. Gregory Conley is a research fellow at the Chicago-based Heartland Institute.

[Originally published at National Review Online]


Categories: On the Blog

HBO Pseudo-News Anchor John Oliver Gets Net Neutrality Fundamentally Wrong

Somewhat Reasonable - June 17, 2014, 9:38 AM

So it turns out there that something doesn’t have to be true to be funny.

Many a thinking American – who knows media bias – finds the following perversely appropriate.

Young Get News From Comedy Central

Tom Brokaw, Peter Jennings, Dan Rather … and Jon Stewart?

Readers over 30 might scoff at Stewart’s inclusion – assuming they know who he is. For many under 30, the host of Comedy Central’s “The Daily Show” is, improbably, a source for news.

Looking to further ride the wave (beyond just Real Time with Bill Maher), HBO hired away Comedy Central “reporter” John Oliver to anchor a new “news” show - Last Week Tonight.  And on June 1, Oliver spent thirteen minutes on Network Neutrality.  And the pseudo-news pseudo-consumers were thrilled.

John Oliver’s Hilarious Net Neutrality Piece Speaks the Truth

Watch John Oliver’s Brilliant, Concise Primer On Net Neutrality

Still Confused About Net Neutrality? John Oliver Explains

Except Oliver doesn’t explain Net Neutrality – he gets it fundamentally wrong.

Oliver’s segment was start-to-finish Leftist rote.  Unwittingly I’m guessing, he’s carrying the water of the Internet’s bandwidth hogs.  Particularly video-streaming companies like Netflix, Google (who owns YouTube) – and, perhaps, movie channel HBO? – who want the government to mandate that they get a free ride for being bandwidth hogs.

And Oliver omits a panoply of contravening information.

Oliver begins his piece by incorrectly asserting that huge-bandwidth-using-companies paying for the bandwidth they use is the creation of an Internet “fast lane.”  Thus leaving the rest of us consigned to the “slow lane.”

Only there will be no such thing. What Oliver and Company report as brand new “fast lanes”- are in fact regular lane deals that have existed as long as has the Internet.  It is all a part of what is called peering.

Internet Peering is typically settlement-free, meaning that neither party pays the other for access to each other’s customers, reflective of the underlying notion that peering is a relationship of approximately equal value to each party.

If either party perceives that the benefit derived from peering is asymmetric, one party or the other may deny peering or suggest an alternative paid arrangement.

With the likes of Netflix – peering is anything but asymmetric.

Netflix Gobbles a Third of Peak Internet Traffic in North America

Netflix for years had no problem paying middle men for their monster bandwidth use – companies like Level 3 and Cogent.  Who are Internet Service Providers (ISPs) – just for these guys rather than us.

Then it occurred to Netflix that it made more business sense to cut out these middle men – and deal directly with our ISPs.

Netflix Signs Streaming Traffic Deal with Verizon

Comcast and Netflix Reach Deal on Service

Except Netflix suddenly, disingenuously claimed these very ordinary deals were Net Neutrality violations.

Netflix Blasts Comcast and Verizon on Net Neutrality: ‘Some Big ISPs are Extracting a Toll’

But again, Netflix has always paid someone for their bandwidth hoggishness (as well they should).  The only thing new here is their trying to get the government to mandate they no longer have to.

Netflix’ dishonesty doesn’t end there.

Netflix Error Message Blames ISP for Slow Streaming Service

Netflix Uses Social Media To Blame Verizon For Slow Downloads

Verizon Purposely Slowing Down Netflix Video Streaming, CEO Says


Verizon Isn’t Slowing Netflix

The Media is unquestioningly buying Netflix’ garbage.  Is the Barack Obama Administration?  Sadly, unsurprisingly…

(Federal Communications Commission) FCC to Examine Netflix, Other Peering Deals Between Providers

Working with thirteen minutes, Oliver never got to any of this.

So we should congratulate Oliver and his pseudo-news colleagues.  They are just as reliable – reliably Leftist – as the Jurassic Press they are slowly supplanting.


Categories: On the Blog

Can the U.S. fill the Gap of Potential Oil Losses From Iraq?

Somewhat Reasonable - June 16, 2014, 10:46 AM

While we weren’t paying attention, post-war Iraq grew into a major force in the global oil market. Reaching a 30-year high, its production and exports have climbed steadily since 2011—making Iraq the second largest producer in OPEC, the seventh globally. The International Energy Agency (EIA) has forecast that Iraq has the fifth-largest proven oil reserves.

Just one year ago, Iraq was celebrating its increased production. At a ceremony in Baghdad, Thamir Gladhban, Chairman of the Prime Minister’s Advisory Commission on Energy,touted expected production of 4.5 million barrels per day by the end of 2014. Earlier this year it wasannounced that “thanks to a small group of international oil companies developing oil fields and infrastructure,” Iraqi oil exports “shot up.” Iraq’s deputy Prime Minister for energy, Hussain Al-Shahristani, reported that average production, including exports, exceeded 3.5 million barrels per day—which he called “unprecedented.”

Iraq’s newfound ability came just in time. Last week, the EIA predicted that global oil demand will rise from 91.4 million barrels per day in 2014’s first quarter to 94 million during the last 3 quarters. Iraq has been able fill in the production gaps caused by violence in Libya and sanctions in Iran. Crude oil prices have been stable. Rebecca Patterson, chief investment officer at Bessemer Trust in New York, said: Iraq “is more important for the oil market than it has been for some time.”

The Wall Street Journal (WSJ) states: “crude volatility recently had ground down to multi-year lows.”

But that low volatility level was before rapid gains by extremist insurgents in northern Iraq put all that progress in jeopardy, raised gasoline prices, and sent “shudders through financial markets.” A barrel of oil is now trading at its highest level since September. WSJ calls the increase “an unwelcome development for the U.S. and other major economies struggling with tepid growth.”

The sectarian fighting in Iraq had already caused a 4 percent increase in world oil prices which is expected to translate to a 5 to 10 cent a gallon bump in the price of regular unleaded gasoline. WSJ reports that “by some estimates, a sustained 10% increase in oil prices is believed to shave as much as 0.5% off economic growth in a two-year period.”

Most of Iraq’s oil fields are in the south and are, so far, believed to not be at “immediate risk.” Yet, the New York Times (NYT) reports: “The collapse of Iraq would bring an international oil crisis. …It would mean crude oil would go up to $150 a barrel.” WSJ affirms the impact of the mounting unrest which will have “radical implications for oil markets at a time of growing lost production worldwide due to intensifying disorder in a growing number of petroleum-producing counties.”

“But,” NYT continues, “Oil prices have been rising modestly compared with what would be expected from a major crisis in the Middle East.” Why? According to the NYT, “growing oil production in the United States and Canada has helped cut American oil imports, helping to keep global supplies hardy.” The report states: “World oil supplies are relatively robust at the moment, which explains why oil price increases have not been significant. Global supplies are up a million barrels a day from a year ago, mostly because of North American production.”

Edward Morse, head of commodities research at Citigroup, States: “By itself, Iraq’s turmoil may have limited impact, but coinciding with Russia’s annexation of Crimea and Libya’s instability, it points to a systemic and seismic shift geopolitically.”

If Iraq’s production continues to be threatened, as it looks like it will, John Kingston global news director for industry tracker Platts Energy, asks the obvious question: “who is going to fill the gap?”

The obvious answer should be the United States—after all, North American production is credited with keeping prices relatively stable compared with what would normally be “expected from a major crisis in the Middle East.”

Unfortunately, President Obama has turned a blind eye to the unrest in Iraq—despite the fact that militants attacked and crippled a key oil export pipeline in northern Iraq a few months ago. He has chosen to cling to the White House narrative, claiming: “The world is less violent than it has ever been.” As a result, he has failed to protect America’s economic security. He could have helped cut America’s dependence on Middle Eastern oil—about 300,000 barrels of Iraqi oil are used in the U.S. each day. Instead he has listened to his environmental base that opposes all fossil-fuel development and he has presided over a decline in production on federal lands.

While U.S. production has helped blunt the short-term impact of the Iraq conflict, a recent report from the Congressional Research Service (CRS) “quantifies the Obama administration’s hostility towards America’s oil and natural gas industry,” Chris Prandoni said recently in Forbes. Prandoni continues: “a fair way to judge the Obama administration’s stance towards oil and natural gas is to compare federal production to state and private land production. According to the CRS report, oil production on federal lands actually fell 6 percent between 2009 and 2013. Over the same period of time, oil production increased by an astounding 61 percent on state and private lands.” The Daily Caller reports: “federal lands and waters hold about 43 percent of all domestic oil reserves and 72 percent of oil shale acreage.”

Addressing the CRS findings, Tim Wigley, president of the Western Energy Alliance, says: “The CRS report clearly shows that where the federal government has the most control, on federal lands, it is suppressing development of the energy that all Americans own while preventing job creation and economic prosperity.”

One of the ways energy development is suppressed on federal lands is through an excessively laborious permitting process. The CRS found that it takes 41 percent longer to process an application for permit to drill in 2011 than it did in 2006. Getting a permit on federal lands takes an average of 194 days compared to a few days to a month on state lands. The Obama administration approved the fewest drilling permits since 2002. Additionally, it has sold the lowest amount of oil-and-gas leases since 1988. As a result, U.S. oil production on federal lands has fallen to a five-year low. Pandoni quotes Congressman Steve Scalise (R-LA), vice-chairman of the House Energy and Power Subcommittee: “America can secure energy independence by developing all of our energy resources on both federal and non-federal lands. Unfortunately the Obama administration has turned its back on energy exploration on federal lands, costing us hundreds of thousands of good paying jobs and billions in potential federal revenue.”

Putting oil-and-gas development on federal lands into a “free fall,” as the Daily Caller refers to the Obama policy, is just one way the White House has made America vulnerable to oil market instability. Blocking the Keystone pipeline is another. Had it been approved as originally expected more than five years ago, it could now be bringing additional resources to market and helping stabilize supplies and filling the gap created by unrest in Iraq.

It is time to realize that the altruistic-sounding claims of environmental lobbyists do not have America’s interests at heart.

Germany is often touted as the country to follow when it comes to energy policies as it initially led the way in wind-and-solar implementation. Yet, Germany has faced high energy costs resulting in higher electricity prices, has lost jobs, and has seen an exodus of investment capital as a result of its costly shift to so-called renewable energy. According to the Financial Times (FT), a recent report found that “Germany’s exports would have been €15bn higher last year if its industry had not paid a premium for electricity compared with international competitors.” In January, the FT cited Germany’s finance minister as saying: “Germany may have gone too far in its attempts to protect the environment,” and that the government must now “rebalance its policies to ensure environmental regulations do not cost jobs.” Sigmar Gabriel, economy and energy minister, warned: Germany has “reached the limit of what we can ask of our economy.” The January 28, 2014 FT article concludes that a “rolling back of existing regulations was in order.”

But it was the realization that Germany must reduce its dependency on Russian energy that has prompted Chancellor Angela Merkel to prepare a framework for developing new sources of fuel—shale gas extracted through hydraulic fracturing. The NYT reported on June 5, 2014: “The Federal Natural Resources Agency, a government organization, has estimated that Germany has 2.3 trillion cubic meters, or 81 trillion cubic feet, of shale gas, enough to supply domestic consumption for about 30 years.” Though not widespread, hydraulic fracturing has been used for years in Germany, but was stopped because of recent rules that gave Germany time to evaluate concerns carried over from the U.S. controversy. The new legislation is expected to be discussed by the cabinet before the summer recess and put to a vote in Parliament by the end of the year.

The NYT states: “Opposition to fracking is strong in Germany… Some environmental groups are flatly opposed to shale gas and oil as a new source of fossil fuels that might detract from investment in renewable energy sources.” Yet, the NYT says: “The government is responding to pressure … to develop new sources of fuel and reduce Germany’s dependence on gas imported from Russia.

In a letter to Merkel, commending her for efforts to lift Germany’s ban on hydraulic fracturing, Senator Vitter (R-LA), top Republican on the Environment and Public Works Committee, warned about environmental activist attacks: “While Germany takes this critical step forward to reduce dependence on Russian energy resources, and bolster its competiveness internationally, inaccurate portrayals of the risks associated with this production technology will inevitably be circulated. For over 60 years, the United States has conducted hydraulic fracturing safely and effectively. Today, newer technologies in this process are providing significant economic opportunity and remain one of the bright spots in our economy.” Vitter concludes: “I do believe the decision to lift the ban on hydraulic fracturing will be both environmentally and economically beneficial. If the resources are utilized appropriately, lifting the ban will result in beneficial electricity rates for your citizens while providing the feedstock for your manufactured goods.”

In Germany, leadership is bucking environmental opposition and looking to its shale gas potential to lift its dependence on Russian natural gas—but it took aggressive action from Russia to wake Germany up from its expensive, green-energy nightmare.

In the U.S., the silver lining of the black cloud over Iraq could be a renewed public awareness of the importance of developing our own energy resources. With his phone and his pen, Obama could increase access and expedite drilling on federal lands. He could approve the Keystone pipeline. As Merkel has done, he could come out with a strong statement in favor of fracking and the benefits it provides. But that would require standing up to his environmental allies like billionaire Tom Steyer—something he’s not likely to do.

In Germany it took pressure from industry and consumers to bring about a change in policy and Merkel was receptive to doing what was best for her country. In the U.S., pressure from our citizens is less likely to have an impact on an ideologically driven lame-duck president. But Congress should hear from us. And we can vote in November. A Republican controlled Senate, along with a Republican House, can make some changes that Obama is unwilling to consider: economic security, energy production, job creation, and lower costs.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

[Originally published at Red State]


Categories: On the Blog

Gold, Government and Monetary Freedom

Somewhat Reasonable - June 16, 2014, 10:35 AM

For more than two hundred years, practically all of the leading advocates of individual liberty and free markets have assumed that money and banking were different from other types of goods and markets. From Adam Smith to Milton Friedman, the presumption has been that competitive markets and free consumer choice are far better than government control and planning – except in the realm of money and financial intermediation. They have been wrong on this important issue.

This belief in the need for political control and management of the monetary system has been taken to the extreme over the last one hundred years, during which governments have claimed virtually absolute and unlimited authority over national monetary systems through the institution of paper money.

At least before the First World War the general consensus among economists, many political leaders, and the vast majority of the citizenry was that governments could not be completely trusted with management of the monetary system. Abuse of the monetary printing press would always be too tempting for demagogues, special interest groups, and shortsighted politicians looking for easy ways to fund their way to power, privilege, and political advantage.

The Gold Standard and the Monetary “Rules of the Game”

Thus, before 1914 the national currencies of practically all the major countries of what used to be called the “civilized world” were anchored to market-based commodities, either gold or silver. This was meant to place money outside the immediate and arbitrary manipulation of governments. Any increase in gold or silver money required private individuals to find it profitable to prospect for it in various parts of the world; mine it out of the ground and transport it to where it might be refined into usable forms; and then mint part of any new supplies into coins and bullion, with the rest made into various commercial and industrial products demanded on the market.

The paper currencies controlled by governments and their central banks were supposed to be issued only as claims to – as money substitutes for – quantities of the actual gold or silver money deposited by members of the society in banks for safekeeping and the convenience of everyday business in the marketplace.

Government central banks were meant to see that the society’s medium of exchange was properly assayed and minted, and to monitor and police private banks and itself to make sure that the “rules” of the gold (or silver) standard were properly followed.

Bank notes were to be issued or deposit accounts increased in the banking system as a whole only when there had been net additions to the quantity of the commodity money within the economy. Any withdrawals of the commodity money from the banking system was to be matched by a decrease in the total quantity of bank notes in circulation and in deposit accounts payable in money.

Did government’s always play by these “rules”? Unfortunately, the answer is, “No.” But, by and large, in the half-century or so before the beginning of the First World War, governments and their central banks managed their national currencies with surprising restraint.

If we look for a reason for this restraint, a leading one was that for a good part of this earlier era the predominant set of ideas was that of political and economic liberalism. But we need to remember that at that time “liberalism” meant an advocacy and defense of individual liberty, secure private property rights, free markets, free trade, and constitutionally limited government under impartial rule of law.

But, nonetheless, these national currencies were government-managed paper monies linked to gold or silver by history and tradition, and more or less left fairly free of direct and abusive political manipulation, due to the prevailing political philosophy of the time that considered governments as protectors of individuals’ rights to their lives, liberty and honestly acquired property.

Political Paternalism and Monetary Central Planning

However, in the decades leading up to the First World War the political trends began to change. New ideals and ideologies started to appear and gained increasing hold over people’s minds. The core conception was a growing belief in the necessity for and the good that could come from political paternalism. Government’s were not simply to be impartial “umpires” who enforced the rule of law and protected people and their property from violence and fraud. No, government was to intervene into the social and economic affairs of men, to regulate markets, redistribute wealth, and pursue visions of national greatness and collective welfare.

This meant a change in the political philosophy behind the government’s control of the monetary system, as well. In the decades after the First World War, in the 1920s, 1930s, and 1940s, the government monetary managers increasingly became monetary central planners. The central bankers were to manipulate the supply of money and credit in the economy to achieve various goals: stabilize the price level; maintain full employment; peg or change foreign exchange rates; lower or raise interest rates to influence the amount and the types of investments undertaken by private borrowers and investors; and, whenever and however necessary, increase the quantity of money to fund government deficits needed by politicians and interest groups to feed their insatiable appetite for power, privilege and political plunder.

The triumph of Keynesian Economics in the post-World War II period resulted in a near monopoly of academic and public policy advocates who argued that private enterprise was inherently unstable and frequently unfair, and could only be allowed to exist and function in a wider environment of dominating government control. The consequence was a government constantly increasing in size, scope, and pervasive supervision and intrusion into every corner of personal, social, and economic life.

Big Government, Big Spending and the Monetary Printing Press

But big governments cost big sums of money. About a hundred years ago in America, in 1913, all levels of government combined – Federal, state, and local – absorbed less than eight percent of the nation’s income and output. Today, all level of government take nearly fifty percent of all that is earned and produced in the United States. That cost of government is even more if we add the financial burdens imposed on private enterprise to comply with the strangling spider’s web of regulations and controls imposed on businessmen going about their business.

Over the past five and half years under the Obama Administration, the Federal government has accumulated over seven trillion dollars in additional debt. At the same time, since 2008, the Federal Reserve – America’s central bank – had created more than four trillion dollars of new money in the financial system. In other words, the Federal Reserve has, in fact, already produced out of thin air a sum of new money equal to about two out of every three dollars the Federal government has borrowed during this period.

The economics textbooks usually sanitize this type of process with a sterile terminology that calls it, “monetizing the debt.” An earlier generation of economists and critics of political paternalism used to call this process paper money inflation and debauchery of the currency: the diluting of the value of the money in people’s pockets through monetary depreciation and currency devaluation.

Political Demagogy, Fiscal Burdens and the Danger of Inflation

As a result of the growth of the modern welfare state, America and the other major Western countries of the world have become, in the words of Nobel Prize-winning economist, James Buchanan, perpetual democracies in deficit, funded in total or in good part by, now, trillions of dollars created by government monetary monopolies – the central banks.

Today, we are reaping the whirlwind of decades of political paternalism and monetary central planning. Nations like Greece have been at the edge of financial bankruptcy and debt default. And countries like the United States, which are woven tightly with networks of special interest groups living off the redistributed plunder of other more productive members of society, seem to lurch from one fiscal crisis to another every few months or so. The current politics of redistributive paternalism seems to offer little way to stop the worsening avalanche of massive annual deficits and mounting national debt.

The demagogues and political tricksters harangue about “soaking the rich” to fund the unfunded “entitlements” of social security and Medicare through the rest of the 21st century. They demand that “big business” pay for the government “jobs to nowhere” that is promised to end the unemployment that earlier and current misguided economic policies have created and prolonged.

The politicians of plunder have also taken recourse to that last refuge of every political scoundrel: a call to “patriotism.” It is your duty as a “good citizen” to pay an increasingly higher and higher “fair share” in taxes; to cooperatively be subservient and obedient to the demands and needs of government; and to sacrifice your freedom and the fruits of your own hard-earned honest labor for “the national interest” and “the common good.”

It is worth remembering that those in the political arena who claim to know what is in “the national interest” and for “the common good” are the same ones who also assert the right to compel you to conform to their vision of a “just” and “fair” America, regardless of much you may honestly disagree or desire to peacefully go your own way.

A central tool for governments to maintain their authority in society and their control over people’s lives is the ability to make the citizenry accept and use their monopoly medium of exchange. This is a lynchpin in the government’s ability to transfer the people’s wealth and privately produced output to satisfy the “needs” of government spending.

It makes each and every citizen an existing and potential victim of government abuse of the monetary printing press, since paper currencies are no longer in anyway linked to or limited by a market-based supply of a real commodity such as gold or silver. We should not presume that runaway hyperinflations and the accompanying destruction of a society’s medium of exchange only occur in places like 1920s Germany or contemporary African nations like Zimbabwe. That, “it can’t happen here.” It can happen anywhere.

The Bankruptcy of the Welfare State and Redistributive Dependency

The fact is, the modern welfare state is bankrupt. It is bankrupt ideologically; no one really any longer believes that the Interventionist-Redistributive State will bring mankind material happiness or social harmony. Everyone knows that it is nothing more than a vast and corrupt political machine through which, as Frederic Bastiat said long ago, everyone tries to live at everyone else’s expense.

In the process, the productive capacity of the society slowly grinds to a halt, as more and more people turn from productive self-responsibility to redistributive dependency. It also generates a mental attitude and a political presumption of legitimacy to that redistributive dependence that pervades each and every income group and social category throughout the nation.

Most opinion polls show that a fairly sizable majority of the American people think that government is too big, spends too much, and taxes far too excessively. But once the questions turn to “specifics” of cutting particular government programs, it is soon seen how the tentacles of the welfare state reach into virtually everyone’s pocket.

It is not only that government taxes people in varying amounts to feed the redistributive process. It is also the case that there are few people in the land who do not have some type of money, program, or benefit put into their pockets by government. Most people cannot imagine living without their government redistributive “fix.” And, admittedly, breaking people’s addiction to their government benefits, subsidies, protections, and special favors would and will involve serious withdrawal pains.

This also means that the welfare state is rapidly reaching financial bankruptcy, as well. Neither taxation nor borrowing of private savings can or will be able to cover all the costs of current and future government spending under existing interventionist and redistributive legislation and regulation.

The government may very well, therefore, use its most important financial resource to keep moving the wheels of political spending. Those in political power may more and more turn the handle of the monetary printing press, and they may turn it faster and faster. Even if the central bank were to follow its stated “price inflation target” of two percent a year, in less than 22 years the buying power of every dollar in our pockets today will have been reduced by 50 percent in slightly over two decades.

Hyperinflations and Opting Out of Government Monopoly Money

Time after time, history has demonstrated that when serious price inflations move into disastrous hyperinflations, people first discount and then abandon the government’s monopoly money. They shift into alternative currencies of choice that they consider more stable, more predictable, and more wealth and income preserving that the increasingly worthless pieces of paper money that their own government spews out in increasing quantities.

Now such a monetary disaster is not preordained. It is not written in some “big book” in the sky. Governments and societies have in the past pulled back and stopped short of following a path leading to social and economic ruin. America, too, may yet slow down or bring to a halt the political course it is currently traveling. The future is unpredictable and trends have changed many times in the past.

But . . . forewarned is forearmed. So how might any of us be able to shelter ourselves from the possible coming fiscal and monetary storm? Central to such precautionary actions is to hedge against the possible radical depreciation and or even destruction of the government’s currency.

To the extent that one sees such a danger and has the financial wherewithal to “plan ahead,” individuals should be legally allowed to opt-out of the government’s monopoly money. In other words, every American should be free from the government’s power to compel its citizens to use and accept in trade and in settlement of debts its own monopoly money.

The Road to Choice in Currency

Everyone should be free to choose the currency or commodity they wish to hold and use as a medium of exchange without legal restriction, penalty, or political prejudice.

Monetary freedom would not only give every citizen a legal right to protect and secure his income, wealth and market transactions from abusive mismanagement of the government’s monopoly monetary printing press. It could also serve as a check on the degree of such government abuse.

More than nearly 40 years ago, in September 1975, Austrian economist and Nobel Laureate, Friedrich A. Hayek, delivered a lecture on, “Choice in Currency: A Way to Stop Inflation,” in Lausanne, Switzerland, and said:

“There could be no more effective check against the abuse of money by the government than if people were free to refuse any money they distrusted and to prefer money in which they had confidence. Nor could there be a stronger inducement to governments to ensure the stability of their money than the knowledge that, so long as they kept the supply below the demand for it, that demand would tend to grow. Therefore, let us deprive governments (or their monetary authorities) of all power to protect their money against competition: if they can no longer conceal that their money is becoming bad, they will have to restrict the issue.

“Make it merely legal and people will be very quick indeed to refuse to use the national currency once it depreciates noticeably, and they will make their dealings in a currency they trust.

“The upshot would probably be that the currencies of those countries trusted to pursue a responsible monetary policy would tend to displace gradually those of a less reliable character. The reputation of financial righteousness would become a jealously guarded asset of all issuers of money, since they would know that even the slightest deviation from the path of honesty would reduce the demand for their product.”

Taking away from the government its power of compelling the citizenry to accept money that it monopolistically controls and abuses may serve as an important legal and economic change to force the government and those who live at its spending trough to face the reality of the welfare state’s ideological and fiscal bankruptcy before it is too late to avert a complete collapse of the society.

Choice in currency may be a valuable avenue for helping to restore the American tradition and practice of individual rights, free markets, and limited government under the rule of law.

Of course, the final goal of any friend of freedom should be the total separation of money from the State. That is, the monetary system of a truly free society would be one of totally private competitive free banking with no government involvement in the monetary matters of the citizens.

Establishing freedom of choice in monetary and currency matters could well serve as an important steppingstone to ending monetary central planning in the United State and around the world. It would be a valuable contribution to the ultimate goal of all supporters and defenders of liberty – the freeing of society and the market from all political control and interference.

[Originally published at Epic Times]

Categories: On the Blog

Thorner: Taking Responsibility For Your Own Property Tax Bill

Somewhat Reasonable - June 16, 2014, 4:45 AM

When Illinois became a state in 1818, the Illinois Constitution allowed the state and local taxing districts to tax property in direct proportion to its value. The property tax is the largest single tax in Illinois, and is a major source of the tax revenue for local government taxing districts. Every person and business in Illinois is affected by property taxes whether by paying the tax or receiving services or benefits that are paid for by property taxes.

Anyone who attends public school, drives on roads or streets, uses the local library, has police protection, has fire protection services, or benefits from county services, receives services paid for, at least in part, by property taxes. Find here The Illinois Property Tax System: A general guide to the loyal property tax.

Regardless of which of Illinois’ 102 counties you live in, receiving your county’s tax bill is not an occasion one looks forward to. With this in mind, on Tuesday, June 10 the Northern Illinois Patriots featured at its monthly meeting at Austin’s Fuel Room in Libertyville: Martin Paulson, Lake County Tax Assessor and David Stollman, Lake County Board member and Republican candidate for Lake County Treasurer. Together they described the step-by-step process used to determine property tax bills and the trends of which all taxpayers should be aware.

Sales information and property data collection start in the Township Assessors’ Offices and occur also at the County and State level. Each level of government keeps records of transactions for determining individual property value and the collective township and country valuations. Property owners can appeal their assessments at each level, using either the actual recent purchase price of a property or sales of comparable properties that have occurred in the previous three years.

The Office of the Lake County Tax Assessor offers a Tax Advocate Program that is unique to Lake County. Property Tax Information is readily available for Lake County residents here. Its user-friendly site offers the ability to view videos, view all assessments and detailed parcel information for a township, and, most importantly, the ability to view comparable property assessments.

These important Property Tax Facts apply to all 102 Illinois Counties:  

  • The assessment process is used to determine each taxpayer’s overall share of the tax burden created by taxing bodies such as villages, schools, townships, park districts, etc.
  • Each taxing body determines the amount they need in property taxes, and that total is divided by the value of all the property in that taxing body’s jurisdiction.  That produces a tax rate, which is then applied to individual properties.
  • Unless taxing bodies reduce spending or lower their tax rate, tax bills will not change.  Taxing bodies are required to hold public hearings prior to adopting their tax levy.  Attending these meetings is important to have a say in the budget process.
  • Money can be saved by applying for homestead exemptions, etc.  Senior exemptions are applicable to all those who are 65 years of age.

The four Property Tax Facts listed above are self-explanatory. But as with all facts questions do arise which require further explanations, such as why the assessed value of a property may go up even though its market value has dropped. Many individuals don’t realize that assessed values are different from “property” or market” values. As township assessors are required by law to use sale prices from the last three years, the assessed value doesn’t necessarily reflect the current real estate market.

Following is a point-by-point summary of the Important information gleamed from the step-by-step presentation about Property Taxes at the Northern Illinois Patriots monthly June meeting:

1. It is the owner’s responsibility to make sure that the assessment is comparable to the assessments of similar properties in your area.

2. Application for any exemptions must be made by owners, if the homeowner’s exemption has not already been applied — a check of the assessment letter or tax bill will indicate what exemptions have been applied.

3. As mentioned previously, the only way taxes can be held in check is if budgets are reduced.  Each taxing body has a budget process and a hearing.  An alert public can insist on reductions in budgets.

4. A new 2013 law mandates that an appraiser cannot represent a petitioner before the Board of Review.  Although anyone can use an appraisal and appear on his own before the Board, it is not within an appraiser’s license to act as an advocate.  If one wants an advocate, then a lawyer must be hired.

5. Illinois has 7,000 units of local government, 40% more units of local government than in any other state, which has driven Illinois’ property tax burden to the second highest in the United States.  It’s past time to consolidate local government.

Any Lake County property owner who thinks that his property is not properly assessed can use the link provided to check that the details of his property are correct. In addition, he can also check for sales and/or assessed values of comparable properties to determine if his assessed value is fairly assessed. If either the details of his property are incorrect or the property is assessed higher than comparable properties, the owner should start at the Township Assessor’s Office for an appeal (when the assessment letter is mailed, the owner has 30 days to appeal). If unsuccessful there, an appeal may be made to the County Assessor’s office.  If unsuccessful there, an appeal may be made at the state level. The Lake County Assessor’s Office link also provides information on the appeal process.

As property taxes are necessary to provide for all services used and enjoyed, it is only right that this tax burden be shared. It is up to taxpayers, however, to make sure that tax bills do fairly reflect property values.

On Tuesday, July 8th, Northern Illinois Patriots will hold its annual fundraiser featuring Adam Andrzejewski, Open the Books Patriot of the Year recipient, at Austin’s, 481 Peterson Road, Libertyville, IL.  Visit this site for more information.

Categories: On the Blog

Obama’s Alinsky Ties Point to Danger Ahead

Somewhat Reasonable - June 15, 2014, 6:05 AM

Future President Barack Obama during his community organizing days in Chicago.

Saul David Alinsky is best known as an American community organizer and writer. Although Saul Alinsky died in 1971, his writings continue to influence those in political control of our nation today.

Generally considered to be the founder of the modern community organizing movement, Alinsky’s Rules for Radicals were practiced by President Obama when serving as a community organizer in Chicago back in the 70′s.

To deny that the tenets advocated by Alinsky in Rules for Radicals were not embraced by Obama during his time as a community organizer would indeed be fool hardy. Some might question and even find it difficult to believe how Obama can be linked to radical Alinsky.

Perhaps it has to do with their lack of understanding how deeply Saul Alinsky’s Rules for Radicals are ingrained in the thinking of the Democrat Party. Both exhibit the same ideals.

Consider what Saul Alinsky’s son, L. David Alinsky, had to say in a letter written for Obama 2008 campaign:

“Obama learned his lesson well, I am proud to see that my father’s model for organizing is being applied successfully beyond local community organizing to affect the Democratic campaign in 2008. It is a fine tribute to Saul Alinsky as we approach his 100th birthday.”

As to when Barack Obama began his Alinsky worship, it was very early in his career. According to a study on Alinsky, “in 1985 Obama began a four-year stint as a community organizer in Chicago, working for an Alinskyite group called the Developing Communities Project.”

In an article titled, “Proof That Obama is Linked to Radical,” Alinsky, stated is that article Obama spent his entire youth taking classes and later teaching workshops on Alinsky’s methods. He worked hard to follow Alinsky’s rule of “blending in.”

Later in the same same article is an account of how Obama also helped fund the The Woods Fund, a nonprofit community-organizing group on which Obama served as paid director from 1999 to December 2002. On the board with Obama at the Woods Fund was William Ayers, the founder and terrorist of the Weather Underground. The Woods Fund provided funding for yet another community organizing group, Midwest Academy, which teaches Alinsky tactics of community organizing.

Unfortunately there are many Americans who cannot admit or whose closed-minded progressive ideology prevents them from understanding the path down which President Obama is taking this nation as a Marxist Alinskyite.

Without this recognition by voters of who and what President Obama represents when choosing one to succeed Obama in November 2016, this nation could elect another Alinsky devotee in the guise of Hillary Clinton who did her senior college thesis (Wellesley College class of 1969) on Alinsky’s writings. For the eight years of Bill Clinton’s presidency it was locked away.

Hillary’s claims to fame consists of being the wife of a former president for eight years and serving as President Obama’s Secretary of State. Even Hillary was hard pressed in an interview to name her top accomplishment as Secretary of State.

Below are six of the rules Saul Alinsky advanced in “Rules for Radicals” which provide insight into why Obama does what he does:

1.  Politics is all about power relations, but to advance one’s power, one must couch ones’ positions in the language of morality.

2.  There is only three kinds of people in the world:  rich and powerful oppressors, the poor and disenfranchised oppressed, and the middle-class whose apathy perpetuates the status quo.

3.  Change is brought about through relentless agitation and “trouble making” of a kind that radically disrupts society as it is.

4.  There can be no conversation between the organizer and his opponents.  the latter must be depicted as being evil.

5.  The organizer can never focus on just a single issue.  He must move inexhaustibly from one issue to the next.

6.  Taut one’s opponents to the point that they label you a “dangerous enemy” of “the establishment.   Republicans are now implying this rule to those of their own party.

It was Saul Alinsky who taught Obama to say one thing and to do the opposite (to flip-flop). Alinsky believed that it was fine “to present oneself as a moderate, even a centrist, for the purposes of securing power.” Once power was obtained it was “perfectly acceptable to revert back to who (and what) you really are.” Alinsky merely simplified Vladimir Lenin’s original scheme for world conquest by communism under Russian rule. Stalin described his converts as “Useful Idiots.”

Useful Idiots have destroyed every nation in which they have seized power and control. It is presently happening at an alarming rate in the U.S.A.

You need to be prepared to make an informed, educated decision when you enter the polling booth in November of 2016. I strongly recommend you read the books on both lists below, regardless of your political views. In so doing you will be better prepared to defend your own political positions and educate others.

These recommended books will also show you how long it has taken for socialism/communism to creep into the United States and the insidious way it infiltrates every fiber of our lives. And of most concern, how difficult it will be to stop and eliminate it.

For those of you on the Left:

For those of us who studied socialism and communism when we were in school and actually lived through the Cold War with Russia and China, some of this may be a refresher course. For those of you who are younger and have not been taught any of this in school – or, have been taught a white-washed version of it – you need to read these books first, then read the Levin books below.

As far as Obama is concerned, you need to read his books now, before you vote in November because what he sold himself to you in 2008 and who he actually is are two quite divergent things. These books will give you a clearer picture of why our country is in such turmoil – and, danger. Read them and learn something.

The Communist Manifesto, 1848, Karl Marx. (What you need to know about the philosophy of socialism/communism.

Rules For Radicals, 1971, Saul Alinsky. (What you need to know about the implementation of socialism/communism and how Obama is installing it).

Dreams From My Father, 1995, Barack Obama. (What you need to know about the president and why he thinks the way he does).

The Audacity of Hope, 2006, Barack Obama. (What you need to remember about his promises to see how he’s broken them).

For those of you on the Right:

There are lots of political books and authors, but I chose four books by Mark Levin because I listen to him every week night from 9-12:00 p.m. on 890, WLS. He really is a constitutional lawyer (as opposed to Obama), is a conservative and tells it like it is.

His legal organization, Landmark Legal Foundation, helped prepare the arguments for the Supreme Court for Obamacare. Out of all the talk show hosts I listen to (including liberals), Levin makes the best points and matches my feelings about what’s going on in the country today, and what’s coming for us if we don’t make a radical turn in the road in November of 2016.

What I recommend below is not pap-writing. You will have to think and use your head. All four books have been on the best-seller lists upon their issuance. Read them and learn something.

Men in Black, (2005), Mark Levin. (The story of how the Supreme Court came to be the way it is.)

Liberty and Tyranny, A Conservative Manifesto, (2009), Mark Levin. (An analysis of the attack on our Constitution and the growth of Big Government.)

AmeritopiaThe Unmaking of America, (2012), Mark Levin. (Where America is headed and why.)

The Liberty Amendments:  Restoring the American Republic, (2013), Mark Levin. (Guidance to restore the American Republic as envisioned by our Founding Fathers and the Constitution.)

The election that will determine the course our nation is but two years away. Start reading. There is no time to waste. Share this information with others so informed choices can be made at the polls If otherwise, uninformed and confused voters could rule the day by electing one who will continue to destroy the very foundation upon which this nation was conceived and then presented to future generations of Americans by our Founding Fathers to keep and preserve.

[First published at Illinois Review.]

Categories: On the Blog

Jack O. Roeser, R.I.P.

Somewhat Reasonable - June 13, 2014, 7:39 PM

Jack O. Roeser: 1923 – 2014.

A gentle giant just fell. Every person living in Illinois owes him an enormous debt of gratitude. The state’s business leaders, politicians, and reporters should hang their heads in shame for not having followed his lead.

Jack O. Roeser passed away today at the age of 90. I was on his radio show a few months ago, followed by a hugely enjoyable lunch, and I talked with him about scheduling another appearance on his show again just a couple weeks ago. I never got the follow-up call.

Jack was a successful businessman, turning the Carpentersville, Illinois-based Otto Engineering into a highly regarded and successful business designing and manufacturing precision instruments for demanding customers around the world. He successfully handed the family-owned business off to his son, Otto, one of the highest accomplishments any businessman can attain, and perhaps the achievement in a life full of them that he was most proud of.

Jack transformed Carpentersville, too, by supporting the purchase, renovation, and re-sale of hundreds of homes in the community. Entire neighborhoods were given a second life due to his vision and generosity. I doubt there is another businessman in the world who did as much for his local community.

The contributions made by Jack that touched the most lives were in the realm of politics and public policy. Jack was a conservative who put his money, time, and reputation behind his convictions. If you live outside Illinois and are reading this, you probably cannot imagine how rare, even precious, he was. The number of business leaders in Illinois with courage and conviction can be counted on one hand.

For twenty-five years Republicans controlled the governor’s mansion in Springfield and doled out favors and protection to their business friends. During those years, business leaders saw no need to support free-market ideas, or candidates who promised lower taxes or less regulation, or even to get engaged in grassroots politics. They sat on the sidelines and watched corruption spread through government and apathy destroy the Republican Party. The “Reagan Revolution” completely bypassed the State of Illinois.

By the time Democrats captured the governorship in 2003 (and ever since), there was little to stand in the way of the wave of corruption, union-dictated legislation, irresponsible borrowing, and massive tax hikes. A decade later, the state is an economic basket case. Men of integrity rightly fear getting involved in politics. Conservatives – indeed, idealists of any ideological stripe — are scorned and ignored.

Jack Roeser was the exception. He poured millions of dollars of his own money into conservative candidates, devoted thousands of hours to trying to steer the Republican Party away from the swamp of corruption and appeasement, educated millions of people through his nonprofit organization (Family Taxpayers Foundation) and more recently Champion News. He showed up, spoke out, and was willing to fight.

I met Jack back in 1984, shortly after The Heartland Institute was founded. We worked together on school reform and came close to getting school vouchers enacted… a reform that would have transformed the lives of millions of Illinoisans by now, if only the state’s political establishment had the courage and vision to follow Jack’s lead. In 2000, The Heartland Institute recognized Jack with our Heartland Liberty Prize, which he proudly displayed in his Carpentersville office for many years afterwards.

Jack was everything you would expect a great man to be: stubborn, smart, strategic, principled, and honest. As a younger man he could be imperious, controlling, and quick to anger. He was entitled to all these things. Illinois needed it. Young kids like me needed to see it and learn from it. As he got older, he also got kinder, turning into a warm and talkative friend, a mentor, and a font of wise aphorisms and funny jokes.

Illinois lost a giant today, a leader, and a conservative. Who will take his place?

Categories: On the Blog

Another Big Lie from Obama, This Time Over Mass Shootings

Somewhat Reasonable - June 13, 2014, 6:41 PM

President Obama has spewed a lie so brazen, so easily debunked, it’s hard to believe a man supposedly so smart — and in such a high position of power — can speak so recklessly.

But here he is just a couple of days ago, speaking of mass shootings and saying:

We’re the only developed country on Earth where this happens.

A 10-second Google search shows the United States is by no means alone. Incidents like these are happening and have been happening around the world, including in countries where they have strict gun control laws and none of the so-called “gun culture” that Obama and his ilk so often deride to slander America.

This timeline of mass shootings around the world since the 1980s through 2012 includes these incidents:

SOUTH KOREA – A police officer went on a drunken rampage in Sang-Namdo with rifles and hand grenades, killing 57 people and wounding 38 before blowing himself up.

BRITAIN – A 27-year-old gunman rampaged through the English town of Hungerford, killing 16 people and wounding 11 before shooting himself.

FRANCE – A French farmer shot and killed 14 people including members of his family in the village of Luxiol, near the Swiss border. He was wounded and captured by police.

CANADA – A 25-year-old war movie fan with a grudge against women shot dead 14 young women at the University of Montreal, then killed himself.

NEW ZEALAND – A gun-mad loner killed 11 men, women and children in a 24-hour rampage in the seaside village of Aramoana. He was killed by police.

FRANCE – A 16-year-old youth ran amok with a rifle in the town of Cuers, killing 16 people and then himself after an argument with his parents.

BRITAIN – A gunman burst into a primary school in the Scottish town of Dunblane and shot dead 16 children and their teacher before killing himself.

AUSTRALIA – A gunman unleashed modern Australia’s worst mass murder when he shot dead 35 people at the Port Arthur tourist site in the southern state of Tasmania.

NEPAL – Eight members of the Nepalese Royal family were killed in a palace massacre by Crown Prince Dipendra who later turned a gun on himself and died few days later. His youngest brother also died later raising the death toll to 10.

GERMANY – In Erfurt, eastern Germany, a 19-year-old gunman opened fire at a school, killing 12 teachers, a secretary, two students and a policeman before killing himself.

FINLAND – A student opened fire in a vocational school in Kauhajoki in northwest Finland, killing nine other students and one staff member, then killed himself.

GERMANY – A 17-year-old gunman dressed in black combat gear killed nine students and three teachers at a school near Stuttgart. He also killed one other person at a nearby clinic. He was later killed in a shoot-out with police.

BRITAIN – A gunman opened fire on people in towns across the rural county of Cumbria. Twelve people were killed and 11 injured. The gunman then killed himself.

NORWAY – A gunman blew up a government building in Oslo and then opened fire at a youth summer camp of Norway’s ruling political party, on the holiday island of Utoeya, killing 77 people.

There’s also this list of shootings around the world, which includes many of the above incidents as well as these:

— March 11, 2012: Sixteen Afghan villagers, including nine children, are killed during a predawn attack in which Army prosecutors have charged Staff Sgt. Robert Bales, 39.

— April 30, 2009: Farda Gadyrov, 29, enters the prestigious Azerbaijan State Oil Academy in the capital, Baku, armed with an automatic pistol and clips. He kills 12 people before killing himself as police close in.

— Nov. 7, 2007: After revealing plans for his attack in YouTube postings, 18-year-old Pekka-Eric Auvinen fires kills eight people at his high school in Tuusula, Finland.

Not only are there mass shootings around the world, there are mass stabbings. In August 2012, a teenager in China killed eight persons and wounded five others in a knife attack. On December 14, 2012, the same day as the infamous shooting at the Sandy Hook elementary school in Connecticut, a man in China stabbed 22 school children and an adult. In 2010, nearly 20 children were killed and 50 injured in knife attacks at schools in China.

President Obama declares:

“Right now, it’s not even possible to get even the mildest [firearms] restrictions through Congress, and we should be ashamed of that.”

I’m old enough to remember when the Sears Christmas catalog was filled with firearms a person could buy through the mail. The firearms didn’t need to go through a federally licensed firearms dealer because there was no such thing as a licensed dealer. There was no Bureau of Alcohol, Tobacco and Firearms. There were no background checks or waiting periods. There were no age limits. Nearly every little hardware store sold guns and ammo that a person could buy, no questions asked.

I’m old enough to remember when many public schools had shooting teams. Many Scout groups also had them.

How is that school shootings were almost unheard of when there was no age limit to buy guns, no licensing of gun dealers, and no such thing as a background check or waiting period? Could the problem be people and not guns, which, after all, are inanimate objects? Do knives compel us to stab? Do baseball bats compel us to bludgeon? Do pills compel us to poison?

But this gets us into an area that many people, especially on the left of the political spectrum, don’t want to get into because they don’t like pointing fingers – unless those fingers are pointed at the overwhelming majority of peaceful sportsmen whose hobby they detest.

I live in suburban Chicago. Within five miles of my house there are at least eight gun stores and three shooting ranges. The last firearms-related murder in my town occurred in 2001. Why does my little hometown, filled with gun stores and shooting ranges, go decades at a time with no firearms-related murders?

There are no gun stores or shooting ranges in Chicago, yet parts of the city are a shooting gallery. Notice I said parts. Some parts of the city are as safe as any place else. The laws against shooting and killing people apply equally and everywhere in Chicago. The laws regarding possession of firearms apply equally and everywhere. Why are some parts of Chicago dangerous and others safe?

The Heartland Institute is based in Chicago. President Obama lived in Chicago. The Mayor of Chicago used to be on Obama’s chief of staff. Surely someone in Chicago could send this article to the president. I’d love for him to answer my questions and respond to my refutation of his laughable claim that “We’re the only developed country on Earth” where mass shootings happen.

Categories: On the Blog

The Long Term: Metro America Goes From 82% to 86% Suburban Since 1990

Somewhat Reasonable - June 13, 2014, 2:59 PM


The major metropolitan areas of the United States experienced virtually all of their overall growth in suburban and exurban areas between 2000 and 2010. This is the conclusion of an analysis of the functional Pre-Auto Urban Cores and functional suburban and exurban areas using the Demographia City Sector Model.

The City Sector Model

The City Sector Model classifies zip code areas in the major metropolitan areas based on urban form (Note 1). These include four classifications, one of which replicates the urban form and travel behavior typical of the pre-World War II urban cores. These areas were typically higher density and dependent on transit and walking. The City Sector Model has three other classifications, Pre-Auto Urban Core, Auto-Suburban: Earlier, Auto-Suburban: Later and Auto-Exurban.

For simplicity the City Sector categories are referred to as urban core, earlier suburban, later suburban and exurban. The City Sector Model is described in a previous article, and illustrated in Figure 1, which is also posted to the internet.

The model makes it possible to analyze metropolitan areas based on smaller area functional classifications, rather than on jurisdictional (historical core municipality) borders, which among other things, mask as core large areas of suburbanization.

Suburbanized Core Municipality Examples: San Jose and Charlotte

This suburbanization in the historical core municipalities is illustrated by examples like San Jose and Charlotte. The City Sector Model indicates that neither of these metropolitan areas has a pre-auto urban core. This is because neither metropolitan area has a large enough concentration of houses with a median construction date of 1945 or before or sufficient area of 7,500 population density per square mile (2,900 per square kilometer) with a transit, walking and cycling work trip market share of at least 20 percent. As a result, virtually all of both metropolitan areas is automobile oriented suburban, including virtually all of the core municipalities.

This is true in Charlotte despite its development of one of the most impressive new central business districts in the nation, with high employment densities. Yet at the same time the  core city of Charlotte itself is very low density (2010), at 2,500 per square mile (950 per square kilometer), less than the suburban area average for large US urban areas (2,600 per square mile or 1,000 per square kilometer). Charlotte, however, could develop the equivalent of a pre-auto urban core if its central population density rises enough and enough commuters use transit, walking and cycling.

The core city of San Jose is far more dense than Charlotte, at 5,800 per square mile (2,200 per square kilometer). However, it is less dense than the suburbs of Los Angeles (6,400 per square mile or 2,500 per square mile). Like Charlotte, the core city of San Jose is virtually all automobile oriented suburban and has a transit work trip market share a full third below the major metropolitan area average.

Overall Population Trend: 2000-2010

These phenomena reflect national trends, All major metropolitan area growth between 2000 and 2010 (100.9 percent) was in the functional suburbs and exurbs.

Between 2000 and 2010, the percentage of major metropolitan area population in the urban cores declined from 16.1 percent to 14.4 percent. The urban cores lost approximately 140,000 residents (a loss of 0.6 percent), despite strong gains very close to the centers of the historical core municipalities. Consistent with these findings, Census Bureau analysis showed that the focused gains in the cores of the urban cores were more than negated by losses in surrounding urban core areas (described in: Flocking Elsewhere: The Downtown Growth Story).

The earlier suburban areas gained only modestly, adding 280,000 new residents, for a 0.4 percent increase. These areas have median house construction dates between 1946 and 1979. The largest increase was in the later suburban areas, which added the most new residents, 11.4 million, for a gain of 33.4 percent. The later suburban areas have median house constructions of 1980 or later. Exurban areas added 5.0 million residents, for a gain of 21.3 percent. Exurban areas are located outside the principal urban areas (Figure 2).

Overall, the later suburban and exurban areas gained 16.4 million residents, compared to the combined gain of 130,000 in the urban cores and earlier suburban areas. Thus, more than 99 percent of the population growth in the major metropolitan areas was in the later suburban and exurban areas (Figure 3).

During the decade, the exurban areas overtook the urban cores in population, rising from 15.4 percent of the major metropolitan area population to 16.8 percent (Figure 4).

Contrast with 1990-2000 Population Trend

Despite all of the talk of an urban core renaissance, the 2000 to 2010 decade was less favorable for urban cores than the 1990 to 2000 decade. In the earlier decade, the urban cores (as defined in 2010) added 960,000 residents, for a growth rate of 4.0 percent. This compares to the 140,000 urban core loss between 2000 and 2010 (Note 2).

Virtually all of the difference was attributable to urban core population trend reversals in New York, Boston and Chicago, which combined experienced a drop in growth of 1.1 million. Between 1990 and 2000, the urban core of New York added 779,000 residents, far more than the 190,000 added between 2000 and 2010. Boston’s 1990-2000 urban core growth was 296,000, but fell to 27,000 in the last decade. Chicago’s urban core dropped from a gain of 139,000 to a loss of 175,000.

Over the past twenty years, the population of urban cores has diminished relative to that of major metropolitan areas. In 1990, the urban cores represented 18.1 percent of the population, but fell to 14.1 percent in 2010. Auto-oriented areas (suburban and exurban) have increased their combined share from 81.9 percent of the major metropolitan area population in 1990 to 85.6 percent in 2010 (Figure $$$).

Summary of Individual Metropolitan areas

In 30 of the 52 major metropolitan areas, all or more of the population growth was in suburban and exurban areas between 2000 and 2010. This includes the metropolitan areas that do not have Pre-Auto Urban Cores.

Chicago had the largest share of suburban and exurban population growth, at 148 percent. This occurred because of the substantial urban core population losses. The suburbs and exurbs of Providence captured 131 percent of its growth, slightly more than the 126 percent suburban and exurban share in St. Louis. Baltimore, Rochester and Milwaukee had more than 110 percent of their growth in the suburbs and exurbs. Cincinnati, Indianapolis, Louisville, and Kansas City rounded out the largest suburban and exurban growth shares, all over 105 percent.

Despite the substantial decline in its urban core growth in the last decade, New York had the lowest share of population growth in the suburbs and exurbs (meaning that it had the highest share of population growth in the urban core). The suburbs and exurbs of New York captured only 69 percent of the metropolitan area growth, well below second place, Virginia Beach – Norfolk (81 percent). Boston was next at 83 percent, followed by San Francisco – Oakland, at 88 percent. The bottom 10 in suburban and exurban growth share also included Seattle, Washington, Philadelphia, Richmond, Hartford and Portland. Even so, each of these six metropolitan areas had more than 90 percent of their growth in suburban and exurban areas (Figure 6).

Jurisdictional Analyses: Suburbs Masquerading in Cities

The functional analysis based on urban form and behavior reveals substantially different trends compared to the conventional jurisdictional analysis that compares historical core municipalities, principal cities or primary cities to the balance of metropolitan areas. For example a jurisdictional analysis shows that core municipalities added 1,290,000 residents between 2000 and 2010. In contrast, the urban cores, as indicated in the functional analysis, lost 140,000 residents. This indicates the extent of to which municipal boundaries can mislead in the analysis of urban form within metropolitan areas. The expansive city limits of most core cities masks the substantial automobile oriented suburbanization within their own borders.


Note 1: The City Sector Model is generally similar to the groundbreaking research published by David L. A. Gordon and Mark Janzen at Queen’s University in Kingston Ontario (Suburban Nation: Estimating the Size of Canada’s Suburban Population) with regard to the metropolitan areas of Canada. Gordon and Janzen concluded that the metropolitan areas of Canada are largely suburban. Among the major metropolitan areas of Canada, the Auto Suburbs and Exurbs combined contain 76 percent of the population, somewhat less than the 86 percent found in the United States.

Note 2: Changes in zip code definitions and boundaries could result in minor differences in comparability between the three censuses.


Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

Photo:  Later Suburbs in New York Urban Area (Morris County, New Jersey), by author

Originally published at newgeography. 

Categories: On the Blog

Google Skybox Spy-Satellites: Big Brother Inc. Always Watching

Somewhat Reasonable - June 13, 2014, 12:28 PM

Who does Google think they are fooling?

Google just bought Skybox Imaging for $500m to gain access to its capability to take real-time, high-resolution satellite images/videos of the whole world daily. Last week Google sources told the WSJ that Google was planning to spend $1-3 billion on “180 small, high capacity satellites at lower altitudes than traditional satellites” to enable two-way Internet access. In April, Google bought Titan Aerospace – which makes solar-powered, high-flying drones that Titan calls “atmospheric satellites” — for Internet access to remote areas and for disaster relief. And in March Google CEO Larry Page shared his ambitions that Project Loon “could build a world-wide mesh of these balloons that can cover the whole planet.”

Google’s Cover Story

Google’s public rationale for all these recent endeavors has been altruism, to supply Internet access to the two-thirds of the world that is not online. About Skybox, Google said: “Skybox’s satellites will help keep Google Maps accurate with up-to-date imagery. Over time, we also hope that Skybox’s team and technology will be able to help improve Internet access and disaster relief — areas Google has long been interested in.”

Never mind that Google Inc. was caught secretly wiretapping hundreds of millions of Gmails before they were delivered for three years without anyone’s knowledge via an NSA-PRISM-like device called Content One Box.

And never mind that Google was also caught secretly wiretapping the personal WiFi signals of tens of millions of households in 33 countries over three years.

Google now wants us to believe that Google will not be doing any secret surveillance, spying or illegal data collection when it builds a new worldwide, high-capacity, satellite grid with two-way, tracking, monitoring, and high-resolution video capabilities?

And the company that has long maintained publicly that any broadband access with less than Gigabit speeds are inferior, is now claiming it wants to offer inferior, slow-speed, satellite Internet access to the whole world?

Even if one believes Google’s incredible cover story for a moment, that they will use their world-wide satellite network primarily to supply internet access where there is none, what does one surmise that Google Inc. will do with the unused surveillance capability in all the many geographies where there is already superior Internet access and where all Google’s monetize-able customers routinely operate? And wouldn’t it be more profitable and make more business sense to densely pack more satellites over-top of where most of Google’s users and devices are?

Acquiring Military-Grade Capability

Importantly, SkyBox’ produces dual-use technology that can be used for both military and civilian purposes. More importantly, SkyBox’ technology offers military-grade capability. “No one outside the military has ever been able to access data like this: Theoretically, one could follow individual people from spaceper Business Insider.

SkyBox’ cutting edge SkySat satellite circuitry is phone book size and uses the power equivalent of a ~100 watt light bulb. The satellites also provide real-time high resolution video images. SkyBox current commercial value proposition is selling satellite surveillance of foreign company logistics to help estimate when certain business activities will occur. Interestingly, the Economist reports the prices for chipsets for nanosats like SkyBox’ SkySat satellites are approaching just $25 a piece.

In a post-Snowden world, expect the rest of world to have big concerns about the growingmilitarization of Google as a leading DOD contractor for mapping analyticssoldier-roboticsartificial intelligence and now satellite production, operation and application.

Google’s Superstate Ambitions

As the Internet’s lone superpower, will Google’s latest big move into military-grade satellite services make foreign governments and foreigners think that Google will become more valuable to, and a closer partner and technology supplier to NSA and the U.S. intelligence community than before?

Will Google’s eye-in-the-sky ambitions make those who fear that Google has become an unaccountable “digital superstate”  even more fearful that Google is becoming all-powerful and effectively digitally colonializing the world’s data and private/secret information on Google’s terms?

Could Google Big Brother Inc. covet the surveillance potential of a Google-owned-and-operated satellite network that could fill in the gaps where Google currently cannot yet surveil, watch and track people in real-time, because Google does not yet have a fully omnipresent satellite capability that is potentially real-time, continuous, high-resolution, and targetable to tracking individuals or groups of individuals’ movements at any time?

That outcome is not what Google Chairman Eric Schmidt would have people believe. On CNBC April 30th Mr. Schmidt reassured the world that Google does not spy or surveil: “We actually don’t track people. We are very very careful to respect people’s privacy. We disclose exactly what we do.”

Google’s Eye-in-the-Sky, Sky-Eye, or Sky-Spy YouTube Channels?

As almost always, Google is way ahead of everyone here. Long term Google sees the potential for Google Earth and Google Maps to meld with its satellite capability to immediately film in real-time for YouTube any event of interest in the world, whether it be a natural disaster, terrorist attack, plane/train/car crash, boat sinking, political demonstration, battle/war-in progress, crime-in-progress, shooting, hostage taking, car chase, concert, sporting event, celebrity island wedding, etc.

What Google realizes that others do not is the commercial and business dominance value of being the only entity that can constantly surveil, spot, and then immediately respond with a live video feed in real-time to any breaking development or news of interest to some or many of its users.

One can imagine that many foreign governments will not be thrilled with Google having the new capability to broadcast live via YouTube a foreign government’s dirty laundry via its soon-to-be constant aerial surveillance videos of their country, or to choose to give what it finds secretly to the NSA or another foreign government. The editorial, political, and military power of this dominant commercial surveillance capability could be staggering.

Like Google dominates mapping with Google Earth, StreetView, and Maps, a Google owned-and-operated satellite network integrated with all of Google’s other dominant surveillance services: search, data, advertising, mobile, video, browser, etc. provides Google with the opportunity to globally dominate aerial surveillance as well.


In closing, it is telling that Google’s latest satellite investment binge discussed above coincides with a another Google buying binge of eight military robotics companies several months ago, and also a targeted hiring and acquisition effort to bolster Google’s leadership in artificial intelligence just a few months ago; (Google bought ethics-concerned, DeepMind, an acquired company that scarily-required Google to establish an Ethics Board as a condition for Deepmind being bought by Google.)

On top of this creepy predicate, Google’s Head Futurist, Ray Kurzweil, told the Guardian in February that he had long thought the ‘singularity’ — the time when computers’ artificial intelligence will overtake human thinking — will be 2029, and that “by 2045 computers will be a billion times more powerful than all of the human brains on Earth.”

Fans of science fiction, and the Terminator movies in particular, will surely see the creepy parallels between Google’s concentrated efforts over the last several months and the dystopian “Terminator movie future” where a satellite-enabled, artificial-intelligence named “SkyNet” becomes “sentient,” i.e. smarter than humans, and then proceeds to see humans as a threat, and then proceeds to try and wipe out the human race.

Google’s purposeful determination and actions over the last several months indicates that Google may be anticipating Kurzweil’s “singularity” and wants to be sure that any future SkyNet artificial intelligence and robot army is Google owned, programmed… and controlled.

Forewarned is forearmed.

[Originally published at Precursor Blog]

Categories: On the Blog
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