The Only Compromise Is Mine!

Would someone please get Mr. Reid a dictionary?

"The only compromise that there is, is mine."  This after vowing to kill any chance of the republican's bill of even getting a vote on the Senate floor. 

Does this surprise anyone?  This is the same group that preaches tolerance, but denounces any who do not see as they see, act as they act and do as they do.  (not that they're alone there.  plenty on the right suffer that particular malady)

Example conversation:

"Peace and love and sunshine..."

"What do you think about Sarah Palin?"

"I HATE THAT BITCH SHE SHOULD ROT AND DIE"

"I love tolerance."

Hobbitses!

John "Gollum" McCain doesn't like those sneaking hobbitses.  He blames them for taking his Precious!  Well, the Hobbits have come to Mordor on the Potomac, and we all know how well that worked out for the denizens of that place.

It must have been awful...

...before Lyndon Johnson saved us all from living in a nation of poverty.  People must have been dying in the streets of untreated illnesses or starvation.  What did people do before foodstamps and medicaid?

"Well, it was a different world back then.  People took care of each other.  They don't do that these days." 

Have you ever stopped to wonder why?  Why did people stop "taking care of each other?"  Have you ever wondered if maybe it was because the government stepped in and said, hey, we got it from here?  (As they began making plans to steal from your unborn grandchildren)

The Wealth Gap

News about the Census Data may not be as bad as it first was reported. 

You know, sometimes I wonder, do they actually read the reports before writing the shocking headlines?  Or is it just that you need to shock people in order to catch their interest.  "If I want someone to read my story, I better make it sound catastrophic."

So, all the headlines said that the "Wealth Gap" had spread between whites and minorities.  ummmmm....Duh.  Tell ya what.  I'm going to start with $10,000.  You start with $500.  In 10 years, let's see who can make that money grow more. 

The other side of the story is much more interesting.  The income gap is narrowing.  Even considering that unemployment for black males is considerably higher than white and hispanic males, the discrepancy in income between the groups is getting smaller.  Given opportunities in this country, however, shouldn't the gaps be narrowing faster?  Why?  Personally, I think you have to look at one of my favorite subject in these pages, the incentive. 

POUTUS

Maybe I should have a caption contest....

Why Do People Get Libertarianism Confused?

I've had many people recently tell me that they're "mostly libertarian" but go on to tell me that "rich people" and "big business" should be taxed to pay for social programs. 

I'm afraid people are getting libertarianism confused with either purely social and civil liberty OR they think it sounds better than saying I'm a Big Government Liberal who thinks we need to live in a Nanny State or they're dumb (not mutually exclusive with the former choices) and think it means liberalism.

By the way, anyone who has not seen it, should go to youtube right now and search for "The Money Hole."  This was a special done by John Stossell back in June.  It's truly fantastic.  Several people have posted the entire show together and in segments for easy digestion.  The entire show is based on this sketch from TheOnion.com

Incentives Re-Re-Revisited

We've talked alot in these articles about the driving mechanism in rational decision making, the incentive.  We've discussed how some incentives can be monetary, some are spiritual, and some for those not spiritually inclined are those that just make you feel good. 

For corporations, it's often exactly the same.  For publicly traded companies, there are laws that force corporations to seek the profit incentive, but accounting concepts such as Goodwill, tax incentives such as the charitable donation write down, and other such allow them to be generous to an extent. 

Corporations are about to have an opportunity to not only turn a profit, but also do what is best for their employees:  Cancel their health insurance.

WHAT??  Yeah, you heard me.  Not only is that the profitable alternative, but it will likely lead to better health coverage options for less money for most employees.  Thanks to a poorly drafted, ill-considered, hastily passed, unread health care laws enacted last year a corporation will be able to save money by cancelling their employees health insurance plans, paying a small fine to the government (less than the cost of the plan), and then employees who make less than $70,000 per year (most working Americans!) can get government subsidies up to $7,000 per year to purchase better plans from the Health Insurance Exchanges. 

Drafters and defenders of the poorly written statute claim that societal goodwill and the desire to be a Good Employer will stay the hand of most employers.  Well, they haven't been paying attention.  This is a double incentive.  A- Saves corporate money!  Hire more people and/or pay higher salaries! B- This is a financially beneficial move for the employees, especially those that already contribute a healthy amount toward their own health care. 

No one would really do this, though....would they? 

Yes, they would.

But, wasn't that survey discredited.  While leftist bloggers did attack the survey, McKinsey & Co. did a fair job defending their methodology. 

If I were a shareholder and it made sense for the company to do this, I might insist on it.  A former director of the Congressional Budget Office recently issued an analysis that claimed that based on 30% droppage rate, that this beautifully drafted, artfully prepared, sarcastically described piece of legislative dung will wind up costing us an additional trillion dollars....more money we don't have.

When is a spending cut not a spending cut

If you're looking for just 1 answer, you haven't been paying attention to our Congress lately. 

Scenario 1:

For years Republicans have bitterly resented the fact that cutting the rate of growth has been characterized by Democrats as a spending cut.  If you propose to increase spending on program A by $10million instead of $20million, you've SLASHED their budget, blah blah blah.  Well, in the interest of calling a hypocrite a hypocrite, you guys are all a bunch of hypocrites! 

Right now, Republicans are trying to get the deficits trimmed.  They're throwing out numbers like $1 trillion in deficit reduction,  2.4 trillion, even 4 trillion was a number out there last week.  Turns out, those who have complained about the accounting shenanigans in the past are using the very same shenanigans.  If it was B/S for the Dems to use it against you, it's B/S for you to use it to sell us that you're taking our debt issues seriously.   MOST of the proposed $2.7 trillion cut over 10 years comes from reductions to the rate of growth of government spending.  It does nothing about the currently bloated spending levels.  It does nothing to encourage cost-saving within the bureaucracy. 

Scenario 2:  Senator Harry Reid came out today with a whopping $2.7 trillion in budget cuts.  Most of which has been classified as pure sham.  When $1.2 trillion is already marked for cuts, I really don't think you should trumpet it as part of your package. 

Smoke and mirrors and word games.  It's no wonder that Americans are fed up with Washington.  Now, if only the voting public could take this pledge:

"I'll vote my bum out if you vote yours out too."

Pinky swear.

One Tax Code to Rule Them All

And you only thought Sauron's ring was controlling. 

So, this topic comes to us courtesy of a recent op-ed in the NYT.  I'd link to it, but when I tested the link it only comes up to a subscriber access page.  Here's the gist.  New taxes should be enacted on junk food to force people to eat healthier options.  This will raise revenue and reduce obesity.

This, to me, is a frontal assault on liberty.  It took a constitutional amendment to ban the sale of alcohol.  Would it take a similar amendment to ban the sale of junk food?  Maybe not with today's wide open commerce clause, BUT a wholesale ban would never fly.  No one wants to vote on the next prohibition.  So, should the government be able to do via the tax code what they couldn't do otherwise?  Should they even be attempting to control what we eat?  "But we have such a problem."  You're absolutely right.  We eat way too much junk in this country.

Shouldn't we be free to do so?  Yes.  Yes we should.  Listen, if you tell me we should be free to suck a living child from a willing mother's womb but that the government should curb the eating of "undesirable" foods, then you seriously need to have your head examined. 

If you want people to be thin, incentivize them.  Allow insurance companies to charge "fit" people less than the obese.  Quit classifying obesity and obesity related disabilities as qualified to receive SSDI, if after becoming fit they would still be unable to work.  There are lots of ways to go about this, that don't involve the government mandating anything, either directly or through the tax code. 

The broader question follows the same logic.  There are ways to create the goals of many in the government, but they rely on hard work and the ability and freedom to try and fail.  Just as the government shouldn't treat any one business as to big to fail, neither should they treat any movement as too big to fail.  You don't need new taxes to promote a concept and influence behavior.  Free the Market to do it instead.

The American Dream...

I sometimes get accused of being just a little cynical.   About a lot of things, I am.

Honesty of elected officials - Cynic
Belief in the federal reserve system - Cynic
Belief that socialists on the left and evangelicals on the right are too involved in governance - Cynic.

One thing I do believe in though, is the spirit of the American People.  More specifically I believe in the American Dream.  I'm talking about the American Dream as my parents and my grandparents taught it to me, the Dream that's couched in hard work, and sweat and EARNING a living and BUILDING a better life for yourself and your children.  Surpassing your parents and preparing your kids to surpass you.  All of this is just as possible today as it was 30 years ago when I learned it, and 30 years before than when my mother was first learning it for the first time. 

As I've learned recently, this is not the American Dream that many people know.  Some consider the American Dream to be a spiritual quest.  Finding satisifaction, be it through material, spiritual, or a strong combination of the two is a noble idea and I think fits within my own meaning. 

Some Americans, however, think of the American Dream as what is their due, their right, what is given unto them.  These are the habitual bankrupts, the law suit seekers, the lifelong welfare recipients, those who gave up too soon or never bothered to try.  The abusers of the system fit this category in all levels of life.  From the corrupt police officer or politician, to the teacher who just shows up, these non-pursuers of the Dream have corrupted the ideals and spread their poison across the nation.  Sometimes I fear that our own Government is culpable in this spread.  Certainly the politicians who have fed it and fed off of it are.

The fire still burns.  Those who embrace hard work, who believe in the rewards of effort, both physical and mental, material and spiritual will sustain this nation.  We pump the lifeblood of commerce, we are the innovators of tomorrow, WE are the caretakers of our brothers.  The American Dream is not dead, I think we've just gotten confused about what it is and our responsibility to pursue it.

Ransom Rates May Decline, but Deductions will too...

I'm all for rates going down, but when deductions start to selectively disappear I smell trouble.  I haven't seen any detailed releases about the supposed Gang o' Six deal, but don't count on it being a good deal for us super wealthy people who make $250,000 a year and fly corporate jets and own oil companies.  The problem is that they won't do it right.  Maybe it's a start, but count on these growing pains lasting for another decade at least. 

What I think they'll do:  A nominal cut in the marginal tax rates, but still leaving better than 40% of Americans not paying any taxes at all; Striking deductions that apply to us tycoons; Cap other deductions (such as the mortgage interest deduction) to an income level that probably can't afford homes; Leave in tax incentives for having large #'s of children you can't afford to raise.

What I'm Afraid this will mean:  I'm afraid they'll try to label this as a flat tax, much in the way that the aborted fetus of deregulation was labeled "deregulation of the energy markets" in California.  It will not spur growth because it doesn't offset the cuts in deductions with an equal cut in the overall rate of taxation.  People will then point to the "flat tax" as a failure. 

For years now the government has been trying to determine who wins and who loses in the market by granting favorable tax treatment to offset a lack of market interest.  When the market demands energy star appliances, they were built, without government incentives, but when appliance makers lobbied congress, they got tax incentives to help them be more competitive than traditional appliances.  Many of these same companies lobbied again, and now the government is mandating that you use a certain type of lightbulb, but we're talking taxes.  Tax breaks are given to ethanol producers because they make an inferior product and have to be given subsidies to continue to make it.  If ethanol was a product worth producing, their would be plenty of producers willing to do so WITHOUT the government paying them for it.  Another great example in the government trying to influence production through tax policy is in the electricity markets.  Massive tax subsidies and grants given to producers of wind energy, directives that local resellers of electricity have to use a certain percentage of "green" energy sources have done 1 thing only.  Increase the price of electricity for you and for me. 

For those interested in this green energy debate, read the excellent op-ed by Robert Kennedy, Jr. in the Wall Street Journal from Monday July 18.

Bottom line, ladies and gentlemen is this:  When the government tries to influence the market via tax policy, you should beware.  When what they want to support is efficient and/or important enough to you to make you a buyer then you'll become a buyer, but by supporting an inefficient producer, the government doesn't encourage the innovation necessary to make that product successful.  In today's environment it's probably more useful to hire a lobbyist than spend that money on R&D.

Somebody Is Going to be Less Well Off

It's impossible.  You can't make everyone happy.  If you could, we could just have the government make us all millionaires and no one would have to do any work.  Sorry, but it doesn't work that way.  So, when we have to cut $4-5 trillion in spending, someone is going to be hurt.  Sorry Barry.  That's just the way it is.  Now, just because someone may be hurt by the cuts, does that mean they don't need to happen? 

Well, no.  We have to prioritize and ask ourselves a fundamental question about fairness.  Is it fair to take the fruits of another's labor, by force if necessary, and distribute that to those who have done nothing more than to exist to deserve it?  Is the recipient better off receiving that stolen property or would they be better off if you encouraged them to earn their own livelihood?  Asked another way: If you took away the incentive to do nothing, would a man in fact, be encouraged to do SOMETHING?

Everytime a bell rings....

Teacher says that everytime Obama frowns someone succeeds on their own merit. 

I'm just at a loss here....

I don't understand the mindset that thinks that giving people a disincentive to work, to advance themselves, and to do for themselves is preferable to one where all your basic needs are met without your lifting a damn finger.

When you're teaching a child to take those first steps on their own, you don't go and walk them along, you step away, turn around, and hold out your hands.  You encourage the child to take those first steps toward you on their own.  When your child learns to ride a bike without training wheels.  You may hold onto the bike at first, but then you let go and let them peddle on their own. 

And if your child falls down or falls off the bike, do you allow them to give up walking or bike riding for good?  No, you keep encouraging them. 

Why are we treating our nations poor any differently?  Why are we carrying them instead of encouraging them to walk?  When you provide luxury housing to the poor, but then take it away as they improve their lives, you encourage them to do nothing.  We should be encouraging those who perform, not carrying those who refuse to try.

Hopefully my writer's block is starting to fade, and I'll be getting more posted soon.  Until then...