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The Christie-and-Kasich Tax Show

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

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

Except:

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?

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

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

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

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.

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

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

June 13, 2014, 2:59 PM

www.newgeography.com

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.

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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

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.

SkyNet?

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

Politicians Do Not Deserve Privacy

June 13, 2014, 11:18 AM

The right to privacy is enshrined in constitutions and law around the world. But does it have limits? The United States Constitution does not provide for any general right to privacy, though it is a right recognized with varying degrees of power in federal and state laws. Politicians frequently claim this right, contending that the public has no right to know about their private affairs. Is that a fair request?

Given their proclivity for diminishing the rights of citizens generally, as well as the peculiar power and trust placed in them, there is a strong case to be made that politicians should not be free of personal scrutiny.

Stepping into the Spotlight

When an individual seeks elevation to public office, he or she must accept that the role is a special one in society. As the representative of the people, the politician is more than just the holder of a job appointed by the people, but is the elected servant, whose duty is to lead.

Leadership includes leading by example as well as simply directing policy. It is a strange relationship, and it is one that demands the utmost confidence in the holder. But confidence can only be developed through increased scrutiny and transparency. This means understanding the private life of the politician, since it so often informs their public life. Thus, when citizens place their political power in the hands of an elected representative, they gain the reciprocal right over that representative to have his or her life and character laid bare for their approval. This is the only way true representativeness may be achieved.

The Right to Know

It is also important to understand the nature of representatives as stand-ins for the citizens who elect them. Politicians are basically surrogates. Their duty is to represent the people in public life across all issues and policies. Yet it is impossible to ascertain the desires of the citizens on all issues in the course of an election campaign.

Even harder is to understand political decision-making in a context that had not existed at the time of the election. For example, if a war was to begin suddenly in a country that had not expected any conflict and had not elected representatives on the basis of how they stood on fighting this war. But that is exactly why politicians are elected as much for who they are as for what their avowed policy aims are.

We elect politicians who we believe will act best under such changing conditions; the ‘3 am phone call’, how a candidate will react in a crisis, is often a major issue in U.S. presidential elections and temperament is often the only way to judge this. Understanding the personal lives of politicians allows voters to elect one who best represents them in the sense of being able to act in their name in a changing world. Thus it is critical for the good electoral decision-making that the right to privacy of politicians be overruled.

The Boons of Scrutiny

When politicians see themselves constantly under the lens of public scrutiny, they are essentially forced to dedicate themselves wholesale to their duties as representatives. They are disincentivized in the extreme to pursue any transgressive or hypocritical activities behind closed doors, resulting in more energy dedicated to legislating, and less to lining their pockets or chasing interns, since the added risk of being discovered increases the cost of trying to conceal their foibles.

Having a culture of scrutiny of politicians’ private lives will mean those who most see their work as a public service and so will be dedicated to it will be the ones who seek to become politicians. Dominique Strauss-Kahn’s lurid sex life, for example, threw light on the sexual misconduct rife in French politics and has actually sparked a major effort to reform the system and a change to a more demanding culture towards politicians. Politicians are human, after all, and susceptible to the base human urges that power unchecked is wont to accommodate.

A powerful probe into politicians’ private lives can only serve the cause of better governance.

Categories: On the Blog

Yes, Eric Cantor, There is a Virginia

June 13, 2014, 11:12 AM

It seems fitting that after such a momentous political evening, the Washington, D.C. area woke early this morning to the thundercrack of a summer storm, with a furious arrival and just as quickly faded and gone. The crushing and unexpected defeat of Eric Cantor – the first defeat of a sitting House Majority leader since 1899, which also happens to be the creation of the position – is sending ripples through a Republican Party which will have ramifications for this cycle and beyond.

In media terms, Cantor’s loss wrecks the established narrative about the nature of this cycle (the establishment either crushes or learns to live with the remnants of the Tea Party); in policy terms, it wrecks the likelihood of immigration reform as anything taken up by Republicans under the Obama presidency; and in political terms, it wrecks the longstanding work of many in the business and donor community who have spent years cultivating relationships with Cantor as the presumptive next Speaker of the House, opening up a new contest for leadership in the party which will serve as a proxy battle over the speakership and the most prominent role on Capitol Hill.

I wish that as a Virginian I could have shared some particular advance insight on the nature of this loss – and indeed, there had been rumblings late last week that Cantor’s challenger, Randolph-Macon economics professor and Princeton Seminary grad David Brat, was keeping things close – but you dismiss such things as noise when contemplating the possibilities of such an historic upset. He has since the beginning of his career been a man motivated by sheer ambition, and it is this double-edged sword which best explains his loss yesterday.

The narrative today was supposed to be amazement at how Lindsey Graham, one of the most patient political survivors in Washington – who worked hard to get where he is, and dedicated his days over the past several years to undermining or compromising his potential challengers – prevailed easily over weak opposition in South Carolina. Instead, Graham’s victory and Cantor’s loss provide a good contrast in the crippling danger of complacency in politics. And that’s becoming the real lesson of the 2014 primary season: good candidates win, bad candidates lose – and the difference is often as simple as recognizing who you represent is not the collection of interests inside the beltway but the people who actually pull the lever back at home.

While Cantor has been gunning for the speakership now for several years, his ladder-climbing ambition leading him to attempt to position himself as all things to all people, he lost sight of the frustrations back home in his “real Virginia” district. Rob Tracinski, who has lived in Virginia’s 7th for two decades, relates this story:

At the Republican Convention in 2008, I approached Cantor after an event, introduced myself as a constituent, and told him where I lived. It’s a tiny place, more of a wide spot in the road than an actual town, so this was partly a test to see how well Cantor knew his own district. I turns out that he did recognize the town, and to prove it, he started to tell me about how he had worked on getting us an earmark for a local Civil War battlefield park. An earmark, mind you, just after Republicans had officially renounced earmarks in an attempt to appease small-government types. Cantor suddenly realized this and literally stopped himself in mid-sentence. Then he hastily added: “But we don’t do that any more.”

The insulating power of money or incumbency is still significant – but Cantor outspent Brat to the tune of more than five million to less than 200k, and it still wasn’t enough. You can see why when you see what Cantor was doing with it – money for consultants, pollsters, travel, steakhouses, and ads like this:

Of course, most people inside the Beltway will view this outcome through the lens of the policy scrum over immigration, where advocates on both sides have done themselves no favors, even to the end:

In the room of downcast Cantor allies, a new energy suddenly erupted — but not the kind they wanted on election night. A group of immigration activists stormed the ballroom, screaming and waving a flag. “What do we want? Immigration reform! When do we want it? Now!” A few Cantor supporters tried to block the protesters’ entrance into the ballroom, and pushing and shoving ensued. And before they reached the microphone, one Cantor supporter threw his glass of wine at a female protester. She swore at him in return.

The more hackish journalists will deploy this as a harbinger of GOP doom in 2016. But I’m unconvinced that in a field without a single prominent immigration hardliner (Ted Cruz, perhaps?) that this is the case.

And immigration policy is just one aspect of this. For years, the impression has been forming in Virginia that Cantor’s priorities were with K Street and the Chamber of Commerce and the Business Roundtable – not with the people who actually elect him:

The central theme of Brat’s campaign is that Cantor is beholden to business — specifically the U.S. Chamber of Commerce and the Business Roundtable.

“If you’re in big business, Eric’s been very good to you, and he gets a lot of donations because of that, right?” Brat said at the meeting. “Very powerful. Very good at fundraising because he favors big business. But when you’re favoring artificially big business, someone’s paying the tab for that. Someone’s paying the price for that, and guess who that is? You.”

Cantor’s allies say that is exactly the type of rhetoric that has left the state party struggling for cash.

So immigration mattered, yes – but it was just one piece of that broader narrative, a narrative which painted Cantor as a two-faced power broker whose priorities were elsewhere:

It’s true that Cantor enjoyed a strong relationship with business, especially with Wall Street. The industry that gave him the most campaign contributions was the securities and investment sector. Individuals from the private equity firm Blackstone were his biggest financial supporters. Cantor went to bat for the industry repeatedly over politically unpopular issues, including the taxation of income at private equity firms at the lower capital gains rate.

That’s no surprise: for decades, the GOP and big business have worked closely together to build a political alliance that until recently appeared airtight. But now with Tea Party activist groups charging the traditional wing of the GOP with “crony capitalism”—and Cantor’s loss—the balance of power is creeping away from the pro-business faction of the Republican Party.

After spending so many years framing himself as the all things to all people future of the party, Cantor now serves as a walking cautionary tale for the dangers of ambition which becomes out of touch with the priorities of the people back home. Cantor has used his YG Network in recent months to recast himself as a reform conservative. Along with Mitch McConnell, he’s nodded in the right direction toward Main Street priorities and the like, but the sincerity of such interest was always a question among those who viewed Cantor as an unctuous faux conservative climber. Now it’s a moot point – you can’t chart an agenda if you can’t get re-elected – and Cantor risks becoming the American version of Michael Portillo.

This race was not about the Tea Party – Dave Brat may have been backed by voters sympathetic to the Tea Party, but not by any significant organization, money, or groups. It was instead about the question of whether a politician can serve two masters – big business and the people – and get away with it. The answer is yes, but only if you are very good at politics. Lindsey Graham is. Eric Cantor wasn’t. And that made all the difference.

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[Originally published at The Federalist]

 

Categories: On the Blog

Activists Try to Take the Joy out of Summer for Children and Adults

June 13, 2014, 10:05 AM

 National Center for Public Policy Research Risk Analysis Director Jeff Stier is responding this week to a range of stories bubbling up in the news and in social media recently that have one common denominator, according to Stier: “ideologically-driven scares.”

Stier warns that as we begin the summer, “we should remember that it is important not only to stay safe while having fun, but to not let agenda-driven scares interfere with how we spend the warmer months.”

Stier believes that “narrow-interest activists are using the onset of summer to make former New York City Mayor Mike Bloomberg look like a libertarian by comparison.”

A school district in Texas won’t allow children to bring in sunscreen without a doctor’s note. ABC affiliate KSAT in Austin reports this month that North East Independent School District spokeswoman Aubrey Chancellor said that, “Typically, sunscreen is a toxic substance, and we can’t allow toxic things in to be in our schools.”

The news item continued, “Chancellor said if parents know their child may be outdoors, they should come to school fully covered in sunscreen. At this time, she said, sunscreen can’t be brought by students to school campuses.”

Of course, Stier reminds us, sunscreens should be reapplied at least every two hours, longer than the school day, according to the Food and Drug Administration, so rules of government-run schools are conflicting with the government’s own advice.

As children finish school for the summer, and they may again be allowed to use sunscreen, others warn parents about letting the kids have too much fun, at least in “bounce houses.” Time magazine says the inflatable activity-boosters are causing an “epidemic” of injuries. “‘Epidemics’” almost always precede another phenomenon,” says Stier, “regulations.”

“Activists aren’t only trying to regulate us to protect children,” says Stier. “Adults who consume beer are also the subject of consumer warnings.” Going Viral on Facebook is an article titled “8 Beers That You Should Stop Drinking Immediately.” Stier says, “The Buzzfeed-worthy headline shouldn’t cause you to put down your brew, but rather to raise your level of skepticism.”

“Indeed,” says Stier, “the story is a click-generating piece meant to advance big government agendas including anti- genetically modified food warning label campaigns, chemical bans (BPA), and ingredient restrictions (caramel colorings).

Stier has a warning of his own: “Buy into these warm-weather scares at the risk of helping the left expand the regulatory chokehold on not only businesses, but consumers.”

National Center Chairman Amy Ridenour, a mom, says some warnings do make sense; for example, advice to put purses or briefcases on the backseat with the baby so you don’t accidentally forget to drop the baby off at daycare on your way to work. “But unfortunately,” she said, “there are so many unnecessary warnings out there, the good advice parents can actually use gets drowned out by pointless warnings about everything from feeding kids genetically-modified foods or letting them bounce. Really. Kids are going to bounce.”

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, three percent from foundations, and three percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions are tax-deductible and greatly appreciated.

[Originally published at Jeffstier.org]

Categories: On the Blog

A Lawless Administration: Andrew McCarthy at the Heartland Institute

June 12, 2014, 3:44 PM

Author and former federal prosecutor Andrew C. McCarthy joined the Heartland Institute on June 12th to talk about his new book, Faithless Execution: Building the Political Case for Obama’s Impeachment, with a packed and lively crowd of Heartland supporters. McCarthy was incisive and exceptionally convincing.

McCarthy began his talk by bemoaning the fact that an author must eventually stop writing and submit a book for publication, which means that events occurring between the final draft’s submission and the actual publication cannot be included in the text. This fact means that his book is “two or three impeachable offenses behind.” Even still, the list he presents in Faithless Execution is enthralling and terrifying.

The talk then turned briefly to the subject of Bowe Bergdahl, whose release has stirred up tremendous controversy in Washington and across the nation. McCarthy explained that the focus in Congress was all wrong, and that the issue was not really about the violation of the statute requiring the president to talk to Congress 30 days before the release of prisoners from Guantanamo Bay. Rather, the issue of concern is the fact that releasing five Taliban leaders represents a clear case of replenishing an enemy that is still fighting the United States, which is an “irresponsible dereliction of duty of a commander-in-chief.”

McCarthy explained that, despite the focus going awry, the Bergdahl case has had two positive effects. First, it was perfectly timed to publicize his book. Second, it had finally led mainstream politicians to start using a word they have constantly avoided: impeachment.

Impeachment has ceased to be muttered behind closed doors alone and is now being spoken openly. “Even Lindsey Graham is comfortable uttering it,” McCarthy said.

The Obama administration has been, according to McCarthy, deliberately “overloading the system,” engaging in a cascade of scandals that takes advantage of ordinary people’s finite ability to deal with crises. McCarthy gave the example of how the new EPA regulations that may have profound impacts on the health of the economy have barely been discussed, sandwiched as they are between the Bergdahl and VA hospital scandals.

It is because of these scandals and persistent abrogation of duty that McCarthy proposes the process of impeachment. McCarthy explained to the audience that, “Impeachment is a political remedy, not a legal one.” In other words, despite the trappings of the courtroom, impeachment proceedings are not about assessing criminal liability. Rather, the “high crimes and misdemeanors” to which the Constitution refers are concerned with breaches of fiduciary duty and violations of the public trust. McCarthy stated that he could identify many such breaches committed during Obama’s tenure.

Chief among the president’s impeachable offenses, McCarthy explained, is his failure to execute laws faithfully. The president is the only federal official under the Constitution required to take an oath to execute the laws faithfully and to defend the Constitution. McCarthy cited Obama’s unilateral amendments of Obamacare and his selective and arbitrary enforcement of certain laws to benefit his allies and harm his opponents as evidence of unfaithful execution.

Another offense McCarthy identified was Obama’s dereliction of duty. He identified the atrocities committed to Americans in Benghazi and the previous unauthorized military actions in Libya as clear examples of this offense.

After outlining these offenses, McCarthy turned the discussion to the political climate and the prospects for impeachment. McCarthy was adamant that impeachment must not be a frivolous exercise. After all, it takes a two-thirds majority in the Senate to convict, which is only possible if there is wide bipartisan support for the proceedings both among legislators and in the public.

McCarthy then pointed out that there is no appetite in the American people for impeachment. He pointed to Bill Clinton’s impeachment as a clear example of the dangers of impeachment when there is no popular will for it. When an impeachment fails, the media can paint it as an endorsement of the very actions under censure.

What McCarthy proposed, in his book and during the talk, is a concerted effort to change the political environment so that the issue of lawlessness is front-and-center in the public discourse. Changing that environment would likely push Obama to actually execute the laws faithfully and to act within the bounds of the Constitution.

Failure to change the discourse could have serious negative effects for the future of the American republic, as McCarthy deftly explained. He described how the accretion of presidential power erodes citizens’ liberty, and that this is “not a conservative issue, not a Republican issue, it is an American issue.” Unless something is done about it, the powers Obama takes for himself will belong to his successors, of whatever party.

McCarthy explained that he was still hopeful for the republic’s future, a hopefulness he expanded upon during the Q&A session after his talk. When asked about what people can do if impeachment is not yet possible, he said, “Let’s make a big issue out of lawlessness.”

It is that issue that must be won before the imperial presidency can be stopped. Andrew McCarthy’s magisterial book will go a long way to winning it.

Categories: On the Blog

Should the Government Define the American Dream?

June 12, 2014, 10:27 AM

I have not written anything of significance about the YG Network’s Room to Grow agenda, but Ross Douthat writes a piece here about an aspect of it, the child tax credit expansion, which I have criticized in the past, along with Scott Lincicome. It also provides a glimpse of an interesting underlying question about the motivations of reform on the right.

The politics of dramatically expanding the child tax credit entitlement (and yes, it is an entitlement) just don’t make all that much sense to me. Consider the landscape of America today, where more people are staying single longer and having fewer kids of their own volition, as they pretty much always do all over the world as cultures become more highly educated. These are not recent developments:

“Between 1970 and 2012, the share of households that were married couples with children under 18 halved from 40 percent to 20 percent. The proportion of one-person households increased by 10 percentage points between 1970 and 2012, from 17 percent to 27 percent. Between 1970 and 2012, the average number of people per household declined from 3.1 to 2.6.”

I understand that the people behind this agenda think this is a bad thing, and I largely agree (from a more libertarian perspective, intact families are the greatest hedge we have against the expansion of government, as it rushes in to do the things that intact families do). But why is it conservative or even an example of limited government to use tax policy to essentially reject that steady decision-making over the course of decades? Is it because there are too many young people voting for Republicans? Isn’t there something better that could be offered to single people 18-34 – a disturbing portion of whom are still living with their parents – without suggesting that they’re pursuing the wrong American dream if they’re unmarried or don’t have children?

How about instead cutting taxes for working Americans broadly by getting rid of the payroll tax entirely? You could even create big tax advantaged savings accounts attractive for families and for single people who don’t have retirement accounts through work – like Canada did, but perhaps with a large HSA component. If you assume that people still want to get married and have children, but are simply too burdened financially to do it… shouldn’t the obvious limited government policy solution here be about removing government-imposed burdens, not expanding an entitlement that subsidizes one portion of society and alienating those outside of it?

What is good for society may be good for the soul, but government policy ought to set that aside and instead focus on the idea that what is good for your wallet is good for society. This is something that Wall Street recognizes, where smart people are increasingly concerned about the consumer expenditure side of stagnant wages and slow family formation:

“The problem is that new jobs often pay less than the ones destroyed in the recession, said Jack Ablin, chief investment officer at BMO Private Bank, which manages $66 billion in Chicago. “New jobs are coming through at lower wages. Collectively, people have fewer dollars in their wallets even though they have jobs again,” he said. That helps explain why consumer spending fell in April for the first time in a year, according to a May 30 Commerce Department report. Weak wage gains also are making it hard for the housing market to return to normal, Mr. Ablin said. He calculates that new single-family home construction is running at less than 500,000 a month. Demographics say it should be twice that, he said. “People are waiting longer to get married and they are having fewer kids,” Mr. Ablin said. That is making them delay home purchases. “It is certainly making us a little more cautious on the economy.”

The answer to this challenge is that we ought to reform the tax code just as we would seek to reform regulations and redistributive subsidies: to lower burdens on everyone so that they can make choices for themselves absent the market-warping force of government, not to merely reform to help people who live a certain way. Eliminate the ability to offer the carrot and the stick and just see what people do.

If you do this, people have the flexibility to pursue their own path – and many of these people who want families and homes but just can’t afford to go down that path (from their risk averse perspective) will start them and purchase them. Using the alternative approach amounts to slapping Band-aids over existing problems, and future administrations can always warp policies to help people who live the way they prefer (such as buying houses and college educations even if they can’t afford them or don’t need them). And back and forth and back and forth … and that’s how we got here in the first place.

This argument reminds me of a George Will quote cited in a little disagreement concerning Will’s evolution away from his book Statecraft As Soulcraft. Pete Wehner at the time wrote in defense of laws which more aggressively “shape the dispositions and habits of the polity”, which is just a nice way of saying it forced them to do or not do things that Wehner believes improved the country. By comparison, Will today is making the case for a different view, one which Jonah Goldberg found to be a positive development:

“And these [natural] rights are the foundation of limited government – government defined by the limited goal of securing those rights so that individuals may flourish in their free and responsible exercise of those rights. A government thus limited is not in the business of imposing its opinions about what happiness or excellence the citizens should choose to pursue. Having such opinions is the business of other institutions – private and voluntary ones, especially religious ones – that supply the conditions for liberty.”

Between the old Will and the newer, the latter seems like the better approach to reform in general, but particularly in the arena of taxation. And in the tug of war between those who favor an approach which “shapes the dispositions and habits of the polity” and one which does not impose its opinions about what happiness or excellence the citizens should choose to pursue, I suspect the limited side is winning the argument.

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[Originally published at The Federalist]

 

Categories: On the Blog

Evidence Trumps the Phony Consensus

June 12, 2014, 9:27 AM

 

zpolitics.com

We are lectured monotonously about the “consensus” that carbon dioxide produced by human activities is “highly likely to cause dangerous global warming”. The alarmist computer models are all based on this assumption, with predicted warming multiplied by also assuming strong positive feedbacks.

A consensus of opinion never determines a scientific question – real proof depends on evidence and logic. Consensus is a tool of politics and a guidepost for lemmings.

The so-called “Greenhouse Effect” depends entirely on the known property of carbon dioxide gas to intercept radiant heat in certain wavelengths. This process starts operating as soon as the extra gas enters the atmosphere.

If this influence is strong enough to drive “dangerous global warming”, its effect should be noticeable even in the short term, with Earth’s surface temperature increasing in step with increasing carbon dioxide.

Carbon dioxide in the atmosphere has been steadily increasing for over a century, but global temperatures have fluctuated in broad cycles decades long, and there has been no warming for the last 17 years.

This evidence suggests that increasing carbon dioxide is not a major driver for dangerous global warming, no matter what the consensus says – even if a million people say a foolish thing, it is still a foolish thing.

We may still get natural global warming, as the vast restless oceans roll over or the solar cycles change, but man-made carbon dioxide is not driving these processes. Moreover, a bit of warming is not our greatest risk – history shows that ice ages extinguish more species and habitats than warm eras.

The consensus of alarmists is trying to lynch an innocent party.

Categories: On the Blog

President Obama’s Plan To “De-develop” America Shifts Into High Gear

June 12, 2014, 9:16 AM

President Obama’s own Administration officially reports that the U.S. economy DECLINED by 1% in the first quarter of this year. That follows 1.9% reported total annual growth for all of 2013.

The U.S. economy sustained a real rate of economic growth of 3.3% from 1945 to 1973, and achieved the same 3.3% sustained real growth from 1982 to 2007. Before President Obama, it was only during the stagflation decade of 1973 to 1982, reflecting the deeply misguided reigning intellectual leadership of the time, that real growth fell to only half long term trends.

This 3.3% long term economic growth trend line is the minimum standard by which to judge President Obama’s economic performance. That sustained 3.3% real economic growth was the foundation for America’s world leading, post World War II, economic and military dominance, not battlefield victories 70 years ago (ok, those did help for a while too). As Brian Domitrovic explained in Econoclasts: The Rebels Who Sparked the Supply Side Revolution and Restored American Prosperity, “The unique ability of the United States to maintain a historic rate of economic growth over the long term is what has rendered this nation the world’s lone ‘hyperpower.’”

But President Obama should have done better than that, precisely because the economy was in recession when he entered office! That is because the American historical record is the deeper the recession the stronger the recovery, as the economy grows faster than average to catch back up to the long term trendline. That observation originally stemmed from Milton Friedman, the greatest economist of the 20th century. So it comes by way of a top pedigree.

It certainly worked that way under President Reagan. After the 1981-1982 recession that greeted him soon after entering office, the economy took off on a boom that lasted 92 months without a recession, until July, 1990, when the tax increases of the 1990 budget deal killed it. That set a new record for the longest peacetime expansion ever, the previous high in peacetime being 58 months.

During those 7 years, the economy grew by almost one-third, the equivalent of adding the entire economy of West Germany, the third largest in the world at the time, to the U.S. economy. In 1984 alone, real economic growth boomed by 6.8%, the highest in 50 years. President Obama has not had a year of economic growth even half that large.

Indeed, in the 11 post-Depression recessions before President Obama, the economy recovered all the GDP lost during the recession within an average of about a year (4.5 quarters) after the recession started. But it took Obama’s recovery 16 quarters, or 4 years, to reach that point. And the economy has bumbled along in slow growth stagnation since then. By sharp contrast, at this point in the Reagan recovery, the economy had boomed by over a fifth.

Great Depression Food Line (Photo credit: Kevin Burkett)

In fact, that Reagan recovery grew into a 25 year boom, from late 1982 until the end of 2007, with just slight interruptions by shallow, short recessions in 1990 and 2001. As Art Laffer and Steve Moore wrote in their book, The End of Prosperity,

“We call this period, 1982-2007, the twenty-five year boom – the greatest period of wealth creation in the history of the planet. In 1980, the net worth – assets minus liabilities – of all U.S. households and business…was $25 trillion in today’s dollars. By 2007.…net worth was just shy of $57 trillion. Adjusting for inflation, more wealth was created in America in the twenty-five year boom than in the previous two hundred years.”

Similarly, Steve Forbes wrote in Forbes in 2008,

“Between the early 1980s and 2007 we lived in an economic Golden Age. Never before have so many people advanced so far economically in so short a period of time as they have during the last 25 years. Until the credit crisis, 70 million people a year [worldwide] were joining the middle class. The U.S. kicked off this long boom with the economic reforms of Ronald Reagan, particularly his enormous income tax cuts. We burst from the economic stagnation of the 1970s into a dynamic, innovative, high tech-oriented economy. Even in recent years the much maligned U.S. did well. Between year-end 2002 and year-end 2007 U.S. growth exceeded the entire size of China’s economy.”

In other words, the growth in the U.S. economy from 2002 to 2007 was the equivalent of adding the entire economy of China at the time to the U.S. economy.

The Hopeless President

So what is President Obama doing to inspire a real, booming recovery for the American economy at long last, now in the sixth year of his Presidency? On June 2, the EPA unveiled a new blanket of regulations (645 pages) that will only further smother economic growth and opportunity in America. The regulations would require the states to adopt policies to reduce carbon dioxide emissions (CO2) by 30% by 2030 from 2005 levels.

The states could each choose the policies to achieve that goal, such as a new tax on “carbon,” or “cap and trade” which means paying for limited permits for CO2 emissions, which come from burning fossil fuels such as oil, natural gas, coal, and gasoline. This is what Obama meant when he privately told supporters at the San Francisco Chronicle editorial board in 2008, “Under my plan of a cap and trade system, electricity costs would necessarily skyrocket.”

These regulatory burdens would be like a new tax further squelching the economy with additional, artificial costs. In the 1970s, the Washington Establishment told us the bad economy was due to the oil price spikes caused by Arab oil embargoes. Now the Washington Establishment, which wildly supports shutting down the American economy, because the vast riches it can produce morally embarrass them, is telling us we have to do the same thing to ourselves.

David Rothbard, President of the Committee for a Constructive Tomorrow, correctly explained the ultimate results of such regulatory madness in his column on June 3, writing, “Millions of Americans will endure lower quality of life and be unable to heat or cool their homes properly, pay their rent or mortgage, or save for college and retirement….As Sen. Joe Manchin (D-WV) points out, ‘A lot of people on the lower end of the socio-economic spectrum are going to die.’” Manchin should be preparing to run for Senate Majority Leader next year, as a Republican.

The Wall Street Journal further explained on June 3, “Consumers may not realize how these regulations will affect their daily lives. Groups like the Natural Resources Defense Council and the Brookings Institution support a policy known as ‘direct load control’ that would manage when you are allowed to run the air conditioner or washing machine.” Big Brother is here, watching you. Check out Jonah Goldberg, Liberal Fascism.

Rothbard cites President Obama saying, “the costly regulations are needed to reduce ‘carbon pollution’ that he claims is making ‘extreme weather events’ like Superstorm Sandy ‘more common and more devastating.” But no honest, educated person can use the term “pollution” to refer to carbon dioxide emissions. For the easily manipulated, low information voters out there, carbon dioxide is not some toxic industrial gas. It is a natural substance essential for the survival of all life on the planet. Plants need CO2 to grow and conduct photosynthesis, which is the natural process that creates food for animals and fish at the bottom of the food chain.

Moreover, there is no demonstrated connection anywhere in what passes for “science” these days between CO2 emissions and Super Storm Sandy. As Rothbard accurately explains in regard to this whole global warming scare behind the regulations,

“[A]verage global temperatures have not risen in almost 18 years. We have now gone over eight years without a category 3-5 hurricane hitting the United States – the longest such period in over a century. Tornadoes are at a multi-decade low. Droughts are no more frequent or intense than since 1900. There were fewer than half as many forest fires last year as during the 1960s and 1970s. Sea levels rose just eight inches over the last 130 years and are currently rising at barely seven inches per century. There’s still ice on Lake Superior – in June.”

Sea levels have been rising, in fact, since the end of the last ice age, 12,000 years ago! But there has been no acceleration in the rate of that sea level rise for at least 200 years. There also is exactly zero real science to back up wildly manipulative claims that CO2 emissions cause asthma attacks or even heart attacks.

The Journal also correctly explained, “The irony is that all this [economic] damage will do nothing for climate change. Based on the EPA’s own carbon accounting, shutting down every coal-fired plant tomorrow and replacing them with zero carbon sources would reduce the Earth’s temperature by about one-twentieth of a degree Fahrenheit in a hundred years.”

Green v. Blue

Politically, all of this involves an historic, dramatic change of course for the Democrat Party, as the Journal further observed on June 4: “The [EPA’s] mammoth rule is an important political moment because it shows that national Democrats have come down decisively on the side of modern environmentalists over the working class voters who were once their base. The richer coasts dominated by gentry liberals now trump the union jobs of the Midwest.” In other words, Democrats have chosen green over blue. This opens up the same huge opportunities Reagan so successfully exploited to win over millions of Reagan Democrats. As Reagan used to say so often, “I didn’t leave the Democrat Party. The Democrat Party left me.”

When I began studying the concern over potentially catastrophic global warming years ago, I was shocked at how weak the argument for it was. It is basically broad theory which does not specify how much warming and when. And it is 73 climate models collected by the U.N. projecting catastrophic warming on our current course long term. But these models, which have never been validated, meaning they cannot even predict the past, are diverging farther and farther from real world temperatures. Global temperature records do not remotely track anywhere near rising carbon dioxide emissions over time, especially throughout the 20th century to today. The cyclical up and down temperature patterns track much more closely instead with the natural cycles of ocean churning currents, as cold water from the deep cycles up to slightly cool the planet for a couple of decades at a time, and cycles of sunspots and other solar activity.

The argument for ultimately catastrophic, man caused global warming has been corrupted by political correctness, political ideology, the special interest of governments in expanded power and authority, and billions in overwhelming government money paying to get the results desired. Bottom line: there is zero chance that the possibility of ultimately catastrophic, man caused global warming is greater than zero. The real world cannot bear trillions in artificial costs to satisfy the scientific equivalent of Lysenkoism.

Yes, you can cite scientific societies that have disgracefully sold out to this Lysenkoism. But in not one instance have the politically correct bureaucracies running those societies reached that conclusion by canvassing their members. Instead, in at least one instance a rebellion among the rank and file has forced the leadership to reevaluate by appointing worthy competing rival committees of alarmists versus skeptics to conduct an investigation of the issue. Following the results of that real debate will be highly illuminating.

For decision-makers in government and business who need to be sure and make responsible decisions, the full truth of the issue is completely and thoroughly discussed in the thousands of pages of Climate Change Reconsidered II, authored by dozens of serious, top scientists serving on the Nongovernmental International Panel on Climate Change (NIPCC), and published this year in ultimately 3 volumes of thousands of pages each by the Heartland Institute. Those volumes are “double peer reviewed,” in that they discusses thousands of peer reviewed articles published in scientific journals, and are themselves peer reviewed. Last year, the Cato Institute published a thorough, comprehensive refutation of the publicly released draft of the National Climate Assessment, The Missing Science from the Draft National Assessment on Climate Change, by Patrick J. Michaels, et. al. You can learn more by attending the Ninth International Conference on Climate Change, to be held at the Mandalay Bay Resort in Las Vegas, July 7-9, with more than 1,000 scientists from around the world (where I will be speaking).

The scientific truth of the matter will be determined not by counting how many scientists or their professional societies take on side or another, but by counting the real world data on the issue, which intelligent laymen can judge by reading the sources above.

The bottom line is that when June, 2016 rolls around, when states are supposed to submit “compliance” plans to the EPA for approval, Governors should send letters explaining that they and their legislatures decided not to trash the economies of their states with unjustified “carbon taxes” or cap and trade burdens designed to ensure that their “electricity costs would necessarily skyrocket.” And if the EPA thinks that is not acceptable, the state will see them in court. Because under the Constitution, neither the EPA, nor the entire federal government, nor his majesty Barack Obama, have any authority to impose any penalty on any state if the state does not adopt some tax or costly, crippling regulatory burden.

This issue should be affecting now state political races between Democrats and Republicans for Governor, the legislature, and all other state offices. Let Democrats say vote for us and we will impose on you carbon taxes and cap and trade burdens under which your electricity costs will necessarily skyrocket. And let Republicans say vote for us and we will tell the Feds they can go to Hades.

Obamanomics: The De-development of America

It should be no surprise to anyone that President Obama’s economic policies have all but terminated any economic growth and opportunity in America. Because every one of those policies has been decisively anti- growth.

Obama has led increases in the top tax rates of virtually every major federal tax — income taxes, capital gains taxes, taxes on corporate dividends, death taxes, even payroll taxes. The only marginal tax rate he has not increased, the federal corporate tax rate, is already the highest in the world.

Obama has led massive increases in regulatory costs, burdens and barriers, from health care to finance to energy to see above.

Obama and his Administration have cheerled the Fed to pursue wild, zero interest rate monetary policies, buying up most national debt, for years now, laying the foundation for the future return of inflation.

The only pro-growth policy has been the sequester, and other cuts in spending, imposed on him, by the Republican House majority. But Obama is working mightily to reverse that, proposing to restore wild-eyed spending in every budget, and speech relating to the subject.

Some commenters have asserted that President Obama has failed to produce economic growth because Congressional Republicans refuse any compromise with him. But name any policy President Obama has proposed that would lead to more economic growth and jobs that Congressional Republicans have refused to support. You can’t, because there isn’t one. Some of you are so easy for professional politicians to fool.

The real explanation for what is going on here with Obamanomics was actually revealed years ago by the President’s Science advisor, John Holdren. Holdren said, “A massive campaign must be launched to…de-develop the United States…bringing our economic system (especially patterns of consumption) into line with the realities of ecology and the global resource situation….We must design a stable, low consumption economy in which there is a much more equitable distribution of wealth.”

And that is what you have with the President’s economic policies, a massive campaign to de-develop the United States. Even I have to say, if that is what the President’s plan is, it’s working.

For any other President engaged in this, we would have to impeach him for pursuing such a war on his own people. But in this case, Obama just represents the true heart and soul of his own party, which protects and enables him in this foolish endeavor. So the conclusion to take away: don’t blame President Obama, blame the Democrat Party, which you have a clear chance to do this fall.

Categories: On the Blog

Why is the U.S. Government in the Mortgage Loan Business?

June 11, 2014, 3:50 PM

It is often truly astonishing to me the harm done by the way the federal government was expanded well beyond its constitutional limits during the 1930’s New Deal era. One dramatic example is the government’s role in the housing mortgage loan marketplace.

I recently read a commentary by Steve Stanck, a research fellow at The Heartland Institute, a free market think tank, whose title was “Don’t Replace Fannie and Freddie; End Them.” He began by pointing out that “For every 100 mortgages being sold in the United States these days, at least 94% of them have government backing.”

Fannie is shorthand for the Federal National Mortgage Association and Freddie is short for the Federal Home Loan Mortgage Corporation. Both are referred to as “government sponsored enterprises” and Stanck points out that “The housing market was nearly ruined several years ago, and the government’s involvement is a big reason” because, before the 2008 financial crisis, both “were bundling mortgages into mortgage-backed securities and selling them to investors”, primarily banks.

Still largely unknown to the public, the financial crisis was triggered on September 15, 2008 when the Federal Reserve noticed a tremendous drawdown of money market accounts in the U.S. amounting to $550 billion dollars in the matter of an hour or two. This was revealed in a 2008 congressional closed door session and later reported by Rep. Paul Kanjorski of Pennsylvania. Had the Federal Reserve not closed down the accounts by 2 PM that day, the entire economy would have collapsed, followed by the world economy a day later.

To this day, the identity of those who initiated the withdrawal has not been revealed, but the banks that were heavily invested in Fannie and Freddie’s bundled mortgage-backed securities were most at risk. Those securities were regarded as a safe investment precisely because both are, as noted, “government-sponsored enterprises”, implying that they were backed by the government—taxpayers.

When the housing bubble burst in 2008, the federal government put Fannie and Freddie into conservatorship “and handed them $188 billion to stay afloat. The actions of both entities had artificially lowered mortgage interest rates in order to increase home buying and required lenders—banks—to loan money to riskier borrowers.

As Brian M. Carney noted in a July 26, 2010 Wall Street Journal editorial opinion, “The official version of the housing boom and bust, and subsequent panic and recession, tells us that greedy bankers took unacceptable risks, assumed too much leverage, made irresponsible loans, and left the government to clean up the mess. The causes of the crisis, in this version, include banker bonuses, deregulation ideology and predatory lending. Most of this is nonsense.”

Carney noted that “There’s simply no room in this story for two giant government-sponsored enterprises that distorted the housing and credit markets…” Those would be Fannie Mae and Freddie Mac.

Stanck notes that there is a bill in Congress to “wind down Fannie and Freddie. This is good. But they want to replace those organizations with private mortgage bond issuers who would each have government guarantees back by a new entity called the Federal Mortgage Insurance Corporation. This is bad.”

It is bad for the same reason that Fannie and Freddie are bad. The government needs to get out of the mortgage loan business. The bill barely squeaked through the Senate Banking Committee on May 15 with minimal support.

The new entity that the bill would create would charge fees to the private mortgage bond issuers—“fees that would be based on how many people in ‘underserved’ demographic groups receive mortgages” leading to “more of the subprime lending that played such a big role in the most recent housing mortgage collapse.” It is nothing more than Fannie Mae and Freddie Mac with a new name.

Stanck sensibly says “Let borrowers and lenders strike their own deals without government meddling. In that way, mortgage interest rates would better reflect true risk, there’d be almost no way for legislators to inject corruption and cronyism into the system, and taxpayers would not be at risk of shelling out more hundreds of billions of dollars.”

You may read or hear that Fannie Mae and Freddie Mac are returning to solvency, able to turn a profit in the first quarter of 2014 and this is true. Those profits are going straight into the U.S. Treasury to resolve their debt incurred when they were bailed out. When they pay it back, they should, as Stanck says, be ended, not replaced.

So long as they exist, another housing boom and bust, and another financial collapse will repeat what occurred in 2008.

Categories: On the Blog

Jay Lehr on Fox News

May 27, 2014, 4:46 PM

On May 16th, Jay Lehr, science director at The Heartland Institute went on “Your World with Neil Cavuto” to discuss the issue of living in high risk areas. Lehr argues that the current system requires serious change in order to more justly deal with individuals who choose to live in high risk areas. Lehr explains how the current system allows individuals to live in high risk areas like San Diego with minimal regulations or burdens. Considering the high activity of fire fighters in places like San Diego, Lehr believes that those who choose to live in such locations should pay an increased tax. Instead of placing the tax burden of compensating fire fighters and other public servants on everyone in the area, Lehr calls for a shift of that burden onto those who choose to live in particularly high risk areas.

Cavuto went on to ask Lehr about other risks, such as floods or hurricanes. While he adamantly defends the individual’s freedom to choose their place of residence, Lehr also advises caution. He argues that some regulation is necessary. For example, Lehr references Ohio’s policy that disallows the construction of permanent structures on 100 year flood plains. This regulation exists to combat the risk of serious flooding and avert any potential disaster. Lehr argues for vigilance and flexibility in these regulations as new information continues to come to light about high risk areas.

Lehr and Cavuto go on to discuss the issue of homeowners being grandfathered into new building codes and regulations. Lehr outlines the foolishness of such a system. He contends that all homeowners, regardless of when they move into an area, should be required to abide by the newest codes and regulations. Such a requirement comes at a small price and carries the potential for huge reward.

Categories: On the Blog

Transform The VA Into A Pro-Growth Model For First Rate Health Care

May 27, 2014, 12:23 PM

The VA (Veterans Administration) scandals show why so many people have been so highly motivated for so long to fight against Obamacare. That is because of the perfectly rational fear that Obamacare will end up doing to the entire American health care system what the VA has done to health care for America’s veterans.

Many have already commented that the VA system is actually pure socialized medicine. The government doesn’t just pay for health care or health insurance under the system for our nation’s veterans. The government actually builds and owns the hospitals and their clinics, and hires the doctors and nurses, who serve as government employees. The government then finances the operation of these facilities, actually providing the health care directly itself. Those eligible for VA benefits then go to these government facilities to get their health care.

This is basically how the notorious British National Health Service (NHS) operates. I say notorious because the National Health Service is famous for running a strict rationing system, with the government determining who gets what health care and when, and deciding who gets told when its time to go home and die. In my 2011 book, I suggested that Britain’s National Health Service is probably responsible for the deaths of more British subjects than the Nazis and Adolf Hitler. But a thorough study would be necessary to document that.

The NHS does not do this out of malevolence. It does it because when the government is dispensing free health care, there must be some means to control costs. With no market prices, incentives, or competition to control costs, the only choice is for the government to decide when the money train stops at the station to let some off. Ironically, a system originally adopted supposedly so everyone could get health care becomes an institutionalized means for deciding when some shall be denied health care.

The British people accept the cold, calculating, health care rationing of the NHS because of a social belief that it is necessary for everyone to get health care. That is deluded because market competition and incentives will work in health care the same as for everything else. But when social mores prevent anyone from questioning the status quo, and alternatives from being considered, the people and the society suffer. That is essentially the same social process more generally which left many societies around the world stagnant with no economic growth for centuries going back to the Dark Ages. British health care could ultimately be liberated by starting social experiments with Health Savings Accounts, which would teach eye opening social lessons.

America’s VA, with all market prices, incentives and competition excluded from the system, operates with similar health care rationing. The VA is given a “global budget” each year that it can spend for health care for our nation’s veterans and no more. With no prices or competition for anyone in the system to weigh costs against benefits, the only way total costs for essentially free health care can be kept within that budget is for the VA bureaucracy to deny health care through some form of rationing. That is primarily accomplished within America’s social mores with long wait times for the free VA health care granted to veterans, effectively denying or at least stretching out health costs.

That is why Larry Kudlow is so right when he says in his May 23 column, “The VA problem is not Shinseki, it’s socialism.” That is why America’s VA operates like the socialized medicine systems of Great Britain, Canada, and continental Europe, with long delays for the sick to obtain necessary health care, and other bureaucratic means of reducing access to quality care to control costs (again without consumer choice and market competition to control costs, there must be some means to control costs). These problems are so serious that at dozens of veterans are now documented to have suffered premature deaths due to lack of health care, and the full scope of the problem may involve the same for many more.

The problem is not inadequate spending on the VA, which socialist Democrats are trying to argue. As John Merline reported in Investor’s Business Daily on May 20, from 2000 to 2013, VA spending nearly tripled while the population of veterans declined by 4.3 million. Moreover, as Michael Tanner of the Cato Institute reports, 344,000 veterans’ care claims are now backed up and waiting to be processed. But it takes 160 days, almost half a year, for health benefits approval. For those who have to appeal a decision, the wait is 1,598 days, or more than four years.

Forbes’ own Avik Roy in his thorough May 23 column explains how America fell into the VA experiment with socialized medicine. The roots of the VA go all the way back to 1827, before the modern American health care system had even developed. So the federal government itself had to establish homes for disabled military veterans, and facilities to provide the more rudimentary health care of the time.

By the end of World War II, the VA was responsible for a burgeoning veterans population including aging veterans from World War I as well. This population swamped the available health care at the time. So the VA undertook the burden of sharply expanding the supply of hospitals, clinics, and medical facilities. From 1930 to 1947, the number of VA hospitals more than doubled, from 54 to 120. Today, the VA maintains and operates 153 hospitals, and with 300,000 mostly medical employees, it is the second largest department of the federal government.

But America’s private health care system is all grown up now, and the best in the world, by far in my opinion, in providing critical health care to the sick. Just consider premature babies, and the miracles America’s health care system achieves with those born less than a foot long, and less than a pound in weight. No other country even really tries to save these most vulnerable newborns today. But in America they now almost routinely are saved to grow up and lead normal lives. Or compare the health care and survival and recovery rates of America’s seniors with those of the same age in any other country.

America’s veterans now would do far better participating in this same private health care system, along with everyone else. That can be achieved by dividing up the VA budget in equal shares for every veteran, and freeing them to use those sums to help purchase the private health insurance of their choice. That would include Health Savings Accounts (HSAs), which maximize the freedom of control and choice by patients over their own health care, and their own health care dollars. Such HSAs are also the only health policy innovation that have proven to control health costs in the real world, without a third party empowered to deny health care to the patient.

Similar reforms can and should be extended to liberate the poor on Medicaid to obtain better health coverage and care of their own choice. Block grants of federal Medicaid funds back to the states, which were so successful in reforming the old New Deal, Aid to Families with Dependent Children (AFDC) program in 1996, could be adopted while giving the states broad authority to reform Medicaid to best suit the poor in their state. Each state could then experiment with providing the poor with vouchers that could be used to help pay for the health insurance of their choice, including again HSAs. The voters of each state would then decide how much should be given in assistance at each income level to assure that the poor would be able to buy essential health insurance.

Some states might choose to reform their Medicaid programs primarily focusing on providing the poor on Medicaid with HSAs, like Indiana has recently done. Or they might focus more on covering the poor with managed care programs, like Rhode Island has recently done. Or they might leave the choice completely to each poor family. The important point is that broad opportunities exist for states to assure the poor much better access to essential health care than Medicaid currently does, like both Indiana and Rhode Island have done, even with more efficient control of Medicaid spending.

Such reforms should also be extended to replacing Obamacare, with much broader benefits. Because Obamacare is not only a serious threat to the quality and supply of American health care. It also is a major drag on the American economy, due primarily to the costly regulatory burdens imposed by the program, and the perverse, counterproductive incentives involved.

The employer mandate is the source of much of the problem. The mandate raises the cost of employment, and so results in less of it. This effect is exacerbated by the high cost of the health insurance the Obamacare law requires to satisfy the mandate. That is in the process of raising costs even for employers that already provide health insurance for their workers.

President Obama recognizes this, which is why he has unilaterally and without legal authority delayed implementation of the employer mandate required by the Obamacare law, for years now. He knows, in fact, that the high costs of the Obamacare employer mandate will perversely and counterproductively cause millions to lose the employer provided health insurance they already have.

Because employers and the labor market plan ahead, we have already seen real world effects of this problem. Since the employer mandate only applies to full time employment involving 30 hours a week or more, millions of workers have already seen their hours cut back to part time work below the 30 hours a week threshold. And millions of others have already dropped out of the work force, because they have given up on finding work. This is all documented in the monthly Bureau of Labor Statistics reports. The real world effects can also be seen in the badly lagging U.S. economic growth we have now long suffered under Obama, as the economy never has fully recovered from the recession, which is now years overdue based on the American historical record.

This means that Obamacare can be replaced with reforms that would have major pro-growth effects, spurring the economy to return to the world leading economic growth and prosperity deeply ingrained in America’s heritage. Such reforms are needed as well to prevent Obamacare from deteriorating into single payer, socialized medicine, similar to the VA, regardless of the foolish sentiments favoring precisely that we hear from Nancy Pelosi, Harry Reid, and other “Progressives.” That can be done while more assuredly achieving the original supposed goal of Obamacare of health care for all.

Even the Congressional Budget Office, which we too easily forget is a bastion of the Washington establishment, has always foreseen that Obamacare would not achieve anywhere near universal coverage, estimating that 30 million would still be uninsured 10 years after full implementation! For careful, reasoned observers, it is not even clear whether Obamacare so far is reducing rather than increasing the number of uninsured, as millions have already lost their health insurance, with millions more to come once the employer mandate is implemented, especially apart from just expanding Medicaid, which adds even more to unmanageable, long term entitlement costs.

By extending similar reforms to those proposed above for both the VA and Medicaid to the replacement of Obamacare, we can, in fact, assure health care for all, with no individual mandate, no employer mandate, sharply reduced regulatory burdens more broadly, and trillions in reduced federal spending and taxes over the years. John Goodman, President of the National Center for Policy Analysis, has long advocated a universal health insurance tax credit for all, which everyone could use to help purchase the private health insurance of their choice. That would involve broadening out the tax preference currently provided only for employer provided health insurance to everyone. He is now advocating a credit of $2,500 per person per year, which would not completely finance essential health insurance, but provide help and an incentive for it, just like the tax preference for employer provided health insurance does not completely finance, but does provide help and effective incentive for it.

That credit can be used by those on Medicaid to opt out of it for the private health insurance of their choice, including HSAs. Concomitantly, it can be used to opt into Medicaid, assuring coverage for any pre-existing condition is always available. Those with employer provided coverage can still use the credit for alternative private coverage of their choice if they prefer, again including HSAs. This provides working people with a critical check and balance on their employers, assuring access to the health care of their choice, even when their employer plan does not. For any worker who does not use the credit to purchase private coverage, the $2,500 for the year goes to indigent care facilities in the worker’s local area.

Along with Medicaid block grants to the states, which states could use in part to finance uninsurable risk pools for the uninsured, such reforms would feasibly assure health care for everyone. At the same time, these reforms would be more broadly pro-growth. With no employer mandate requiring the purchase of very costly health insurance for every employee, the cost of employment would be substantially reduced, encouraging more jobs, and higher wages. There would be no longer be any incentive to cut working people back to part time hours. Eliminating the costly Obamacare regulatory requirements on insurance, along with the broader availability of cost reducing HSAs, would reduce unnecessary health costs, further boosting the economy with an effective tax cut for everyone. Reducing taxes and federal spending due to Obamacare by trillions over future years would further enhance economic growth and general prosperity for all.  Republicans in Congress are presently drafting such an alternative to Obamacare.

All of this comprehensive health care liberation, from the VA, to Medicaid, to Obamacare, would mean ultimately better health care for all, along with helping to restore economic growth and prosperity, and the American Dream.

[Originally published at Forbes]

Categories: On the Blog