27 October 2008 @ 8:24AM >> An e-mail that’s making the rounds:

In a local restaurant my server had on a “Obama 08” tie [...]

When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need—the homeless guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank the server inside as I’ve decided he could use the money more. The homeless guy was grateful.

At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient deserved money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.

(Hat tip: Robert Bluey.)

26 October 2008 @ 6:48PM >> A local TV reporter in central Florida made television history the other day by questioning Saint Barack’s running mate in a manner usually reserved for Republican candidates.

And, of course, disciples of The One aren’t happy about it.

So the TV station has been cut off from all access to the Obama campaign for the duration of the election.

The Orlando Sentinel reports:

WFTV-Channel 9’s Barbara West conducted a satellite interview with Sen. Joe Biden on Thursday. A friend says it’s some of the best entertainment he’s seen recently. [...]

West wondered about Sen. Barack Obama’s comment, to Joe the Plumber, about spreading the wealth. She quoted Karl Marx and asked how Obama isn’t being a Marxist with the “spreading the wealth” comment.

“Are you joking?” said Biden, who is Obama’s running mate. “No,” West said.

West later asked Biden about his comments that Obama could be tested early on as president. She wondered if the Delaware senator was saying America’s days as the world’s leading power were over.

“I don’t know who’s writing your questions,” Biden shot back.

Biden so disliked West’s line of questioning that the Obama campaign canceled a WFTV interview with Jill Biden, the candidate’s wife.

“This cancellation is non-negotiable, and further opportunities for your station to interview with this campaign are unlikely, at best for the duration of the remaining days until the election,” wrote Laura K. McGinnis, Central Florida communications director for the Obama campaign.

McGinnis said the Biden cancellation was “a result of her husband’s experience yesterday during the satellite interview with Barbara West.”

[...]

WFTV news director Bob Jordan said, “When you get a shot to ask these candidates, you want to make the most of it. They usually give you five minutes.”

Jordan said political campaigns in general pick and choose the stations they like. And stations often pose softball questions during the satellite interviews.

“Mr. Biden didn’t like the questions,” Jordan said. “We choose not to ask softball questions.”

You can watch the interview here.

25 October 2008 @ 3:45PM >> Echoing a point I made on Tuesday, former Federal Reserve Chairman Alan Greenspan on Thursday discussed the limits of human understanding of systems as complex as the economy:

[W]e have this extraordinarily complex global economy, which as everybody now realizes is very difficult to forecast in any considerable detail.

And, Mr. Chairman, I know — I agree with you in the fact that there were a lot of people who raised issues about problems emerging, but there are always a lot of people raising issues, and half the time they’re wrong. And the question is, what do you do?

I mean, you point out quite correctly that the Federal Reserve had as good an economic organization as exists, and I would say, in the world. If all those extraordinarily capable people were unable to foresee the development of this critical problem, which undoubtedly was the cause of the world problem with respect to mortgage-backed securities, I have to — I think we have to ask ourselves, why is that?

And the answer is that we’re not smart enough as people. We just cannot see events that far in advance. And unless we can, it’s very difficult to look back and say, why didn’t we catch something?

23 October 2008 @ 6:29PM >> A novel new ailment:

[New York Governor David] Paterson’s chief of staff now says he owed nearly $300,000 in back taxes, $100,000 more than was previously known - and his lawyer blamed the problem on “non-filer syndrome.”

Charles O’Byrne’s attorney, Richard Kestenbaum, mentioned the virtually unheard-of ailment at a briefing for reporters intended to quell the firestorm surrounding O’Byrne’s failure to file income-tax returns from 2001 to 2005.

O’Byrne, 49, a former Jesuit priest with close ties to the Kennedy family, has already blamed his neglect to file - first reported by The Post - on clinical depression.

Kestenbaum said yesterday O’Byrne also had “non-filer syndrome.”

“Many times, that syndrome causes them not to be able to file their tax returns,” he explained.

[...]

“Yes, it’s quite common,” one Manhattan accountant joked. “A hundred percent of my clients suffer from this syndrome, and it gets especially bad every year as April 15th approaches.”

21 October 2008 >> The current market turmoil is not due to an insufficient amount of government meddling; quite the opposite, as the Washington Post notes in an editorial today:

[T]he problem with the U.S. economy, more than lack of regulation, has been government’s failure to control systemic risks that government itself helped to create. We are not witnessing a crisis of the free market but a crisis of distorted markets.

[...]

We’ll never know how this newly liberated financial sector might have performed on a playing field designed by Adam Smith. That’s because government interventions of all kinds, from the defense budget to farm supports, shaped the business environment. No subsidy would prove more fateful than the massive federal commitment to residential real estate — from the mortgage interest tax deduction to Fannie Mae and Freddie Mac to the Federal Reserve’s low interest rates under Mr. Greenspan. Unregulated derivatives known as credit-default swaps did accentuate the boom in mortgage-based investments, by allowing investors to transfer risk rather than setting aside cash reserves. But government helped make mortgages a purportedly sure thing in the first place. Home prices seemed to stand on a solid floor built by Washington.

Since no government regulator can know in advance how new man-made economic rules will affect the financial choices people make, no regulator is ever capable of understanding the full set of potential pitfalls those regulations could create. Any wholesale changes to the functioning of our markets is therefore extremely risky.

In a political environment like this, new regulations are an easy sell. People will support any bill that puts a stop to Demonized Financial Activity X—as long as they think it’ll only cost other people. But when deciding whether to support a particular regulatory solution, remember that you’ll never get to hear a full accounting of its possible downsides. That’s because there’s no human or computer on the planet capable of accurately modeling the quintillions of variables that will also change as those regulatory changes ripple through the world’s economic oceans.

New regulations may seem obvious, but the damage they can cause rarely is, sometimes even in retrospect.

Since those with an ample supply of pessimism are already comparing our economy to that of the Great Depression—I’m not denying there’s the potential for pain in our future, but call me once the economy has contracted by 33% or when unemployment hits 25%—perhaps it’s useful to recall what happened in the 1930s when government bureaucrats in their infinitesimal wisdom decided that they knew better than markets:

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

[...]

“The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes,” Cole said. “Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”

Sadly, our country once again seems to be blindly groping its way towards socialism.

22 July 2008 @ 7:51PM >> In a recent post, I cited some statistics on this year’s distribution of the income tax: “the richest 1% of tax filers [will pay] more than 40% of the income tax burden. The top 50% will account for 97% of all federal income taxes, while the bottom 50% [will pay] just 3%.”

In response, I commented, “Every time I hear someone claim that ‘the rich’ aren’t paying their ‘fair share,’ I wonder, how much tax would ‘the rich’ have to pay before it becomes fair?”

Steve W. e-mailed me with a good question:

What percentage of the total income earned goes to that top 1% of filers that are paying 40% of the income tax burden? If it is something like 37% of the total income, and they are paying 40% of the total income taxes, that doesn’t seem overly atrocious, but if they are down around 15% of the total income, that seems like a far bigger problem to me.

Yesterday, the Wall Street Journal supplied the answer:

The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%. [...] Americans with an income below the median paid a record low 2.9% of all income taxes, while the top 50% paid 97.1%. [...]

Aha, we are told: The rich paid more taxes because they made a greater share of the money. That is true. The top 1% earned 22% of all reported income. But they also paid a share of taxes not far from double their share of income. In other words, the tax code is already steeply progressive.

In other words, the top 1% earned 22% of the nation’s income, but paid 40% of the nation’s income tax. That’s a pretty steep disparity.

So, the question remains: if the rich aren’t paying their fair share even under this lopsided scenario, how much tax would “the rich” have to pay before it becomes fair?

10 July 2008 @ 9:53AM >> Interesting data on taxes from The Wall Street Journal:

New data from the IRS will be out in a few weeks on who pays how much in taxes. My contacts at the Treasury Department tell me that for the first time in decades, and perhaps ever, the richest 1% of tax filers will have paid more than 40% of the income tax burden. The top 50% will account for 97% of all federal income taxes, while the bottom 50% will have paid just 3%.

Every time I hear someone claim that “the rich” aren’t paying their “fair share,” I wonder, how much tax would “the rich” have to pay before it becomes fair?

2 July 2008 @ 9:36AM >> Politicians like John McCain and Barack Obama show a fundamental misunderstanding of economics when they attack “speculators” as the cause of price increases for things like oil. Leaving aside the falling dollar—which increases the price of anything imported—the prices of commodities and raw materials are going up because demand for those materials has increased all over the world. And that demand has been increasing faster than supply.

In other words, as Robert J. Samuelson shows in the Washington Post, the shocking reality is that the law of supply and demand is governing the prices of commodities, not some unseen cabal of evil “speculators” gaming the system.

Unfortunately for politicians, economic laws can’t be demagogued. A suspicious and easily-caricatured “other” is needed to attack. So even though politicians themselves have done much to constrict the supply of certain commodities (oil) and artificially raise demand for others (corn), they’d prefer to blame the price increases on someone else. So “speculators”—who actually use futures markets to shield themselves from future risk—are now the villain du jour.

Let’s say you want to buy a plane ticket to visit a relative for Christmas. You might decide to buy the ticket now or months before Christmas. Many other people will do the same. You might just like making plans early, or you might be thinking about all those bills you’ll have around Christmas. Part of the rationale for buying early is that it helps you manage future expenses better by shifting some of the burden to today. Or you might just worry that the tickets will cost more in the future.

Well, the airline does the same thing.

It takes a lot of fuel to fly, and any significant change in the price of fuel changes the economics of every flight. So, airlines can buy fuel futures, meaning that they make a financial commitment today in exchange for a guarantee to get fuel at a certain price in the future. If the price of fuel moves up significantly, the airlines are protected because their price is locked in by the futures contract. This helps prevent airlines from taking massive losses on flights in the future, and it’s what enables them to sell you tickets months in advance.

If there were no futures market, airlines would be taking a big risk by selling tickets far in the future. Without the ability to lock in fuel prices, every ticket sold would amount to a bet taken by the airline. The futures market allows the airline to shift that gamble to a third party: whoever purchases the other side of the futures contract.

The so-called “speculators” aren’t gaming the market, they’re lubricating the market. Without them, commerce would be riskier and more expensive.

It’s too bad that both major party candidates don’t get this.

12 December 2007 @ 8:32AM >> Celebrities are frequently mocked for making political statements that yield applause on Hollywood back lots, but that sound tone-deaf to the rest of America. So it’s refreshing to hear a little common sense from a source I didn’t expect:

During a discussion of Republican Presidential candidates on ABC’s “The View,” which the comedian co-hosts, [Whoopi] Goldberg said, “I’d like somebody to get rid of the death tax. That’s what I want. I don’t want to get taxed just because I died.” The studio audience started applauding, but she wasn’t done. “I just don’t think it’s right,” she continued. “If I give something to my kid, I already paid the tax. Why should I have to pay it again because I died?” (Watch the video here.)

[...]

When another co-host, Joy Behar, responded to Ms. Goldberg’s remarks by asserting, “Only people with a lot of money say that,” Ms. Goldberg shot back, “No, I don’t think so. . . . It doesn’t matter if you have or don’t have money. Once you paid your taxes, it should be a done deal. You shouldn’t have to pay twice.”

Death should not be a taxable event.

13 June 2007 >> Yesterday, I was a panelist on CNN’s Paula Zahn Now discussing Congressional earmarks and pork-barrel spending.

As is often the case on those prime-time news shows, you go in with enough discussion ideas to fill an entire hour. And then you find yourself in a short segment with enough time to cram in a few sentences in before the music starts getting louder and the producers whisk you off the set.

So I didn’t get a chance to mention Porkbusters and their fight to bring greater transparency to government spending. Porkbusters’ current campaign is to reform the use of legislative amendments called earmarks.

Earmarks allow Congressmen to load up bills with unrelated spending items without revealing to the public who inserted them or why. Politicians use earmarks to steer taxpayer money to special interests and pet projects in their districts. And although it’s not always the case, earmarks all too often waste money on things that are of dubious value or just plain illegal.

Right now, nearly $20 billion dollars in taxpayer money is allocated each year through earmarking. Split that up among all American working-age adults, and your personal share of the earmark bill is over $100. Every year.

Using taxpayer money to do favors for supporters and act like Santa Claus to various voting blocs must be quite a tempting proposition for politicians, especially if they can be sure nobody ever finds out. And that’s exactly why the party in power—whichever it may happen to be—probably won’t be dismantling this incumbency protection racket any time soon.

Most Americans—regardless of party or ideology—understand that the current system is corrupt. So the out-of-power Republicans get a chance to sound noble and score political points even though they had 12 years to fix the problem but didn’t. And Democrats, who made such grand promises when gaining control of Congress last fall, have been reminded of how politically useful earmarks can be. When it comes to preserving the status quo on earmarks, it seems the two parties always disagree. It’s just that their positions keep flipping depending on whether they’re in or out of power.

Congressman David Obey—the Democrat responsible for shepherding earmarks through the House—has decided he’s been so overwhelmed with earmark requests that he won’t be able to make them public for months. Conveniently, he’s pledging to make the earmarks public only after they’ve been attached to bills and can’t be removed, and just before the bill comes up for a final up-or-down vote. With tens of thousands of little earmarks attached to lots of unrelated bills, the public will have no time to debate or even discover the earmarks. If particularly malodorous provisions are found in a bill, by the time enough people become aware of the problem to oppose it in any organized fashion, the voting will have already happened.

Effectively, Congressman Obey’s excuse is that because his colleagues are making so many special spending requests—some 36,000 so far this year, more than double last year’s figure—he can’t get all his work done in time. Congress routinely churns out multi-thousand-page bills without breaking a sweat, but now that taxpayers are asking for a little transparency, it’s too much effort to comply in any meaningful way. But at least Congress has the courtesy to tell us after it no longer matters.

Obey’s feeble rationale for keeping information from voters and taxpayers inspired this novel idea from Porkbusters:

To House Appropriations Committee Chairman David Obey:

I read with interest news reports that you may only include earmarks in last-minute, un-amendable conference reports, as opposed to amendable House appropriations bills, because you and your staff reportedly need “extra time to evaluate the 36,000-plus earmark requests members have submitted to the Appropriations Committee this year.”

You have also been quoted you as saying: “I think we have a helluva lot more ability [to root out bad earmarks] than the individual working alone.”

Chairman Obey, I share your concern about unworthy projects receiving federal funding due to a lack of careful and thoughtful evaluation, and I agree that one individual working alone would have a very hard time completing this task in a timely manner.

Therefore, I would like to personally volunteer my time to help you and your staff in evaluating this year’s earmark requests.

As you know, Internet technology has made research faster and easier than at any previous time in human history. By releasing your 36,000 earmark requests publicly, I and other taxpayers across the country could work together in a cooperative effort to determine which Members of Congress may have financial conflicts attached to their earmark requests, which local projects may be unworthy of federal funding and which may have value to the taxpayers.

Under the threat of incarceration, we fund Congress’s earmarks whether we like it or not. So it is not unreasonable to demand transparency in government spending. After all, it’s our money to begin with.

And considering that the IRS routinely subjects citizens to rather unpleasant experiences in forced transparency—tax audits—we have to ask: why is our government held to a lower standard than we are?

16 February 2007 @ 7:49AM >> Socialism always leads to the same predictable ruin for nations ignorant of history. Yet for some reason, the ideology that enslaved millions throughout the 20th century still appeals to wide-eyed leftists throughout academia and around the globe.

Venezuela is the latest country to fall victim to the delusion of utopia through socialism:

Meat cuts vanished from Venezuelan supermarkets this week, leaving only unsavory bits like chicken feet, while costly artificial sweeteners have increasingly replaced sugar, and many staples sell far above government-fixed prices.

President Hugo Chavez’s administration blames the food supply problems on speculators, but industry officials say government price controls that strangle profits are responsible.

Such shortages have sporadically appeared with items from milk to coffee since early 2003, when Chavez began regulating prices for 400 basic products as a way to counter inflation and protect the poor.

Yet inflation has soared to an accumulated 78 percent in the last four years in an economy awash in petrodollars, and food prices have increased particularly swiftly, creating a widening discrepancy between official prices and the true cost of getting goods to market in Venezuela.

“Shortages have increased significantly as well as violations of price controls,” Central Bank director Domingo Maza Zavala told Union Radio on Thursday. “The difference between real market prices and controlled prices is very high.”

Authorities on Wednesday raided a warehouse in Caracas and seized seven tons of sugar hoarded by vendors unwilling to market the inventory at the official price.

Major private supermarkets suspended sales of beef earlier this week after one chain was shut down for 48 hours for pricing meat above government-set levels, but an agreement reached with the government on Wednesday night promises to return meat to empty refrigerator shelves.

14 February 2007 @ 7:59AM >> The federal budget surplus increased by 82% in January.

(Surplus? There’s a budget surplus? Who knew? Certainly not the media.)

---

Update: A criticism of the post is that by focusing on one month, I painted an inaccurate picture. The statistics were for the month of January. I generally assume people will follow the links for the full story. But just in case, the first link from MarketWatch indicates that tax receipts are generally higher in January due to individuals (like me) making estimated tax payments.

But MarketWatch also states: “For the first four months of the 2007 fiscal year, the deficit was $42.2 billion, about 57.2% lower than the $98.4 billion deficit in the same period in the previous fiscal year.” The trajectory of the falling deficit is impressive, potentially leading to a balanced budget by mid-2008.

My distrust of the establishment media’s reporting of the economy still stands. I would hope the media would be equally vigorous in reporting good economic news regardless of which party occupies the White House. And by many measures, the economy over the last few years has outperformed the economy of the mid-to-late 1990s. Unlike then, today’s boom is not based on the irrational exuberance of an Internet-driven stock market bubble. And unlike today, the 1990s economy was not saddled with the massive economic damage caused by the September 11th attacks.

Nevertheless, a surplus in a single month is not the same as a surplus for the fiscal year, and we’re not there yet. The fact that, in my view, the media represents the economy inaccurately is no excuse for my doing the same.

10 February 2007 @ 5:58PM >> A reader points out that the tax disparity I highlighted in yesterday’s Two Americas post may be more severe than I indicated:

Hi Evan,

I think you understate the problem. You say “Yet today, 14 million Americans are receiving representation without paying any taxes, while 50% of the population pays 97% of the taxes. That means there are 14 million free-riders who have a vote that enables them to call for taxes to be raised on everyone else.” But the article says “about 14 million Americans at lower incomes have been removed from the federal income tax rolls since 2000“.

TaxProf’s Blog gave the percentages a couple years ago: 25.2% of filers reported zero tax liability in 2000, compared to 32.4% in 2004. The underlying report reveals the raw number of the untaxed grew nearly 10 million (from 32.5 million to 42.5 million) in those 4 years. I can’t find the latest numbers, but it’s certainly conceivable that 4 million more free-riders were added in 2005 and 2006. And this is just the number of tax returns filed, not the number of Americans. The report goes on to say “roughly 15 million individuals and families earned some income last year but not enough to be required to file a tax return.... Even 57.5 million is not the actual number of people because one tax return often represents several people. When all of the dependents of these income-producing people are counted, roughly 120 million Americans – 40 percent of the U.S. population – are outside of the federal income tax system.”

To be fair, however, a study of tax liability and propensity to vote is warranted if you’re going to claim tyranny of the majority. The study concludes by breaking down the numbers by several demographics, but “likely voters” isn’t one of them.

Cheers,
Bill

Thanks for the careful reading of the original report, Bill. It seems clear that I did understate the problem.

9 February 2007 @ 9:18AM >> Investor’s Business Daily on the “two Americas”:

As reported by Congress’ Joint Economic Committee, the richer half of the American population pays almost 97% of income taxes. And most of that — 54% — is paid by those in the top 5%. Those ranked in the top 1% — the richest of the rich — pay more than 34% of all personal income taxes collected by Uncle Sam.

What’s more, the Congressional Budget Office last month found that the after-tax income of those “superrich” actually declined after the Bush tax cuts by 8.3% from 2000 to 2004.

Hand in hand with these trends, about 14 million Americans at lower incomes have been removed from the federal income tax rolls since 2000 because of the earned income tax credit and the per-child tax credit.

“John Edwards actually got it right,” Tax Foundation President Scott Hodge told IBD. “There are two Americas: a taxpaying America and a non-taxpaying America.” That means the recent increases in tax burden are actually understated for those still paying income taxes.

Despite this, Democrats in Congress are paving the way to raise taxes yet again. “The rich” need to pay their “fair share,” the argument goes. But I wonder: what exactly is a fair share? If I pay 40% of my income in taxes, is that fair? What about 50% or 75%?

No matter how much “the rich” pay—and according to the tax code, “the rich” includes plenty of middle class people—the taxers never seem satisfied.

This country was founded on the notion that it is immoral to tax people without giving them a say in how the government is run. Yet today, 14 million Americans are receiving representation without paying any taxes, while 50% of the population pays 97% of the taxes. That means there are 14 million free-riders who have a vote that enables them to call for taxes to be raised on everyone else.

There’s an old saying that simple democracy is three wolves and a sheep voting on what to have for dinner. That’s why individual liberty is an important component of true freedom; it prevents tyranny of the majority.

The founders rightly decided that taxation without representation is unjust. But is representation without taxation any less unjust?

---

Update: The problem of tax free-riders is worse than the report above indicates.

22 January 2007 @ 7:02AM >> From Briefing.com:

On Friday, it was reported that the December US federal budget showed a surplus of $44.5 billion. This was well above the expected $24 billion.

The twelve month trailing deficit is now down to $208 billion.

This is amazing. The US federal deficit is now down to just 1.5% of GDP (through fourth quarter estimates).

At the end of 2003 the deficit was running at over 3.8% of GDP and was in excess of $420 billion. The forecasts were for “$400 to $500 billion yearly deficits as far as the eye can see.”

That conventional wisdom has been proved COMPLETELY WRONG. Yet, the belief seems to linger on. There are continued constant references to the “huge budget deficits” in the press on nearly a non-stop basis.

The fact is, the accumulated deficit as a percentage of GDP has fallen from 75% in 1994 to about 61% today. The deficit is shrinking not just on a current year basis, but also as a burden to future generations.

This improvement is even more remarkable considering that the Iraq war is costing approximately $100 billion per year, and that reconstruction costs for Katrina are also in the past twelve months’ data.

If not for these factors, the deficit would be nearly in balance and certainly less than 1% of GDP.

Furthermore, when state budget surpluses are taken into account, the current US government deficit is closer to just 1% of GDP. This consolidate figure including state budgets is actually a better measure of the fiscal health of US government overall and is more accurate in terms of comparing to other countries.

Speaking of which, Italy, Germany, Japan, and France continue to run deficits in excess of 3% of GDP. That is far higher than the US percentage of 1.5%, or 1% for all government. Italy’s accumulated deficit is 100%, Japan’s is 100%, and the EU as a whole is close to 65%.

It can easily be argued that there is in fact no current budget crisis in the US.

This is not to say that curtailing the deficit further would not make sense. Nor is it to ignore the long-term problems posed by the need to fund social security or Medicare. Those are budget issues that need to be addressed.

Nevertheless, the clamor over the current deficit is blown way out of proportion. It may simply be lingering pessimism in the press, or it may be supported by those advocating tax hikes.

Or, it may be that the people advocating tax hikes have a lot of allies in the press, and that both camps have an ideological vested interest in convincing people that the economy is in the tank and the federal government needs to grow even further.

I suspect the economic gloom and doom in the press will continue...at least until the next time a Democrat occupies the White House, when the same economic situation that prevails today will suddenly be reported as positive news.

8 January 2007 >> Mine Your Own Business is a soon-to-be-released film documenting the detrimental effects that trendy environmentalists can have on underprivileged communities throughout the world. Not every society has yet been fortunate enough to reap the economic benefits of the industrial revolution, and some activists want to keep it that way, preferring to impose impoverishment on other cultures in the name of quaintness.

You can view the trailer for Mine Your Own Business on YouTube or read more about the film here.

The film debuts in New York on Friday, January 19th and in Washington, D.C. on January 24th. Both screenings start at 7PM. If you wish to attend either screening, you can sign up here.

Disclosure: Mine Your Own Business was created with the assistance of the Moving Picture Institute, which was also instrumental in enabling the completion of another soon-to-be-released film, Indoctrinate U.

21 November 2006 @ 6:05PM >> In response to my recent post on transparency in education, reader J. Gates e-mailed a link to an article from the Ludwig von Mises Institute that included this revealing snippet (emphasis added):

Excluding student financial aid, public universities receive about 50 percent of their funding from federal and state governments, dwarfing the 18 percent they receive from tuition and fees. Even “private” universities like Stanford or Harvard receive around 20 percent of their budgets from federal grants and contracts. If you include student financial aid, that figure rises to almost 50 percent. According to the US Department of Education, about a third of all students at public, 4-year colleges and universities, and half the students at private colleges and universities, receive financial aid from the federal government.

Given the amount of money taxpayers are forced to spend on higher education, we have a right to demand financial transparency from these institutions. What other industry receives this much of its funding from the public without any oversight or accountability to the taxpayers who are paying for it?

25 October 2006 @ 9:13AM >> David Zucker, the writer and director of Airplane! and a number of other comedies, has recently been releasing humorous political ads online. Political involvement among Hollywood insiders is nothing new, but what makes Zucker’s recent work a man-bites-dog story is that he’s been doing ads for those evil Republicans, something which is sure to make him an anathema in his industry.

One of his recent ads, a send-up of the Clinton Administration’s foreign policy—complete with a Madeleine Albright stand-in who looks a little too accurate to be flattering—was deemed too hot for establishment Republicans, who declined to air it. No matter; these days, you can reach audiences online without expensive media buys.

Zucker’s latest piece looks at what life might be like if Democrats captured Congress and dictated the nation’s tax policy.

Has David Zucker stumbled onto a new model in political advertising? I think so.

19 October 2006 @ 5:25PM >> Even fictional currencies in virtual words are within the reach of the taxman:

Users of online worlds such as Second Life and World of Warcraft transact millions of dollars worth of virtual goods and services every day, and these virtual economies are beginning to draw the attention of real-world authorities.

“Right now we’re at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise — taxes, barter exchanges, property and wealth,” said Dan Miller, senior economist for the Joint Economic Committee of the U.S. Congress.

“You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there’s no mechanism by which you’re taxed on this stuff,” he told Reuters in a telephone interview.

The increasing size and public profile of virtual economies, the largest of which have millions of users and gross domestic products that rival those of small countries, have made them increasingly difficult for lawmakers and regulators to ignore.

...in much the same way that a weekend invitation to the Kennedy compound is hard for alcoholic philanderers to ignore.

26 April 2006 @ 9:58AM >> When it came to the economy, there used to be two distinct political parties in America. Democrats generally favored larger government, more controls over the economy, and higher taxes. Republicans preferred smaller government, a more free economy, and lower taxes. But in the dozen years since the Republicans gained control over Congress, they have inexplicably begun to morph into the party that they displaced.

Government spending under the Republican Congress is out of control, and the high price of gas is causing Republicans to dust off socialist terminology like “price gouging” and “obscene profits.” The one remaining difference between the parties seems to be on tax policy—Republicans still tend to favor lower taxes—but given the Republicans’ abandonment of their other principles, I wonder how long that will be the case.

James K. Glassman chides President Bush for jumping on the “bash big oil” bandwagon:

He started his speech by, once again, criticizing Americans for their “addiction to oil.” He used the same obnoxious phrase in his State of the Union Address.

[...]

The President — and I am not even mentioning the claptrap one hears from Speaker Denny Hastert, Senate Majority Leader Bill Frist and Judiciary Chairman Arlen Specter — is now using the lexicon of extreme environmentalists and statists. Again, he knows better.

After talking about addiction, the President said he was going to crack down on price gouging — that old bugaboo. He said he had asked the Justice and Energy departments to find out whether the rising price of gas was partly the result of manipulation. This is absurd. The gasoline market is broad, fragmented and highly competitive. Price gouging has been studied many times, to no effect. Gas prices are rising because crude oil prices are rising.

[...]

President Bush lived and worked in the oil patch. He knows very well that oil is a commodity whose price moves up and down with global changes in supply and demand — movements that we can’t affect all that much. What we can do is remove political obstacles to a well-functioning market. Such steps would increase supply and lower prices. But we shouldn’t kid ourselves. The rising oil price is affected by geopolitical threats, but it is mainly the result of increased demand, which itself is the result of rising standards of living — which are a lot better than the alternative.

Glassman also explains many of the reasons that the price of gas is so high today: increased demand from developing countries like India and China, belligerent talk from Iran and general uncertainty on the world stage, and a political climate in America that makes it impossible to increase production capacity.

Did you know, for example, that a new oil refinery hasn’t been built in the United States in the past 30 years? Or that environmentalists have blocked new oil drilling virtually everywhere in the country? And since oil isn’t an option, what about nuclear power? Nope, environmentalists have blocked that, too. Even wind farms are out of vogue; the great environmentalist Kennedy clan is trying to kill a wind farm project in the Nantucket Sound that might have marred the view from their Hyannisport compound. In other words, many of the people using the high price of gas to push for government intervention in the economy are the very people who created the energy supply shortfall in the first place.

But that doesn’t let the Republicans off the hook. In fact, it makes it more important to take them to task for their irresponsible economic rhetoric. I expect Democrats to employ socialist arguments; it’s what they do. But when Republicans join them, it makes me wonder what the point of voting Republican is. I doubt I’m alone in feeling this way, and if so, the Republicans have a reason to worry about the election in November. They are supposed to be the party that understands basic economic laws like supply and demand. Maybe a good old-fashioned electoral ass-whoopin’ is what the Republicans need to remind them of that.

11 April 2006 >> If agreeing to a date with someone meant that you had to marry and spend the rest of your life with that person, how many dates would you go on?

France puts employers in much the same position. Once someone is hired, French employment laws make it virtually impossible for that person to be fired. Naturally, this makes companies quite leery about taking on new employees. It’s a huge risk to hire someone who might prove to be lazy or incompetent down the road. But in France, lifetime employment laws mean that employers are stuck.

This sort of economic thinking is one of the reasons that the French unemployment rate for people under 30 rivals the American unemployment rate during the Great Depression. It is also one of the reasons that the French government quite sensibly tried to reform the law.

The proposed change—intended to make hiring younger workers more palatable—was quite modest: new hires under the age of 26 could be fired within the first two years of employment. This way, companies could make sure there’d be a good fit before being locked in to a lifetime commitment. Companies would be more likely to hire people if there was less of a risk of hiring someone who might not work out.

But in France, the prospect of having to earn your job through sustained good performance was just too much for people to bear. So the country erupted in mass strikes and riots, as it tends to do for various reasons every few months. The leadership of France saw all this turmoil and surrendered yet again, as it tends to do every few years:

French President Jacques Chirac has announced that the new youth employment law that sparked weeks of sometimes violent protests will be scrapped.

He said it would be replaced by other measures to tackle youth unemployment.

Millions of students and union members have taken to the streets over the last month in protest against the law, which made it easier to fire young workers.

[...]

The new package of measures includes offering state support for employers hiring young people who face the most difficulties in gaining access to the labour market.

Apparently, the French have figured out that the way to cure the problems of socialism is with more socialism. That hasn’t worked anywhere else on the planet, but I wish the French the best with their noble experiment.

24 January 2006 @ 10:22AM >> Even though the Republicans have held Congress for over a decade and the White House for the past 5 years, the left is still succeeding at using government to redistribute wealth. So argues Patrick Chisholm in this editorial:

During the first five years of President Bush’s presidency, nondefense discretionary spending (i.e., spending decided on an annual basis) rose 27.9 percent, far more than the 1.9 percent growth during President Clinton’s first five years, according to the libertarian Reason Foundation. And according to Citizens Against Government Waste, the number of congressional “pork barrel” projects under Republican leadership during fiscal 2005 was 13,997, more than 10 times that of 1994.

Discretionary spending is dwarfed by mandatory spending - spending that cannot be changed without changing the laws. Shifting demographics combined with an inability to change those laws virtually ensures that, through programs such as Social Security and Medicare, America’s workers will be forced to redistribute a larger and larger portion of their income to other Americans in the coming decades.

[...]

Certain trends have been favoring the left for the past several decades. In the early 1960s, transfer payments (entitlements and welfare) constituted less than a third of the federal government’s budget. Now they constitute almost 60 percent of the budget, or about $1.4 trillion per year. Measured according to this, the US government’s main function now is redistribution: taking money from one segment of the population and giving it to another segment. In a few decades, transfer payments are expected to make up more than 75 percent of federal government spending.

[...]

The left has a powerful institutional force on its side: “public choice” economics. Our system of government is highly responsive to vocal groups that lobby for subsidies, government programs, and other special favors. Since the costs are spread out among all taxpayers while the benefits are concentrated among smaller segments of the population (such as retirees, in the case of Social Security and Medicare), the taxpayers have much less of an incentive to lobby against the measure while the beneficiaries have a huge incentive to lobby for it. Whenever those subsidies are threatened, the lobbies launch their barrages of politically effective complaints.

Forces favoring the left are virtually locked in. Even with Republicans in control, big government is destined to get a lot bigger.

This raises the question: for free-market conservatives, what’s the point of voting Republican anymore?

For decades, the Republican party has benefited from a fragile coalition of economic conservatives and social conservatives. These are two distinct groups that don’t necessarily have much in common aside from their shared disdain for the politics of the left.

For the time being, Republicans will probably be saved by the propensity of Democrats to remain embarrassingly weak on matters of national security. But that issue can be taken off the table if the Democrats nominate a foreign policy hawk (unlikely) or if the American public perceives less of a threat than they do now (possible, assuming American soil continues to remain free from attack). If economic conservatives sit at home during future elections, the Republican party will feel the pain of ignoring their roots. And if that happens, social conservatives will suffer as well.

For the health of the conservative movement, the Republicans in Congress better wake up soon. There are very many people who won’t bother showing up on election day if the choice is between one party of government and the other party of government.

9 January 2006 @ 1:35PM >> The Republicans campaigned to bring their philosophy of limited government to Washington and pledged to clean House, literally. And they did, for a while, but over time, certain principles seemed to disappear. (Whatever happened to the idea of term limits? Oh yeah, bad for incumbents, so let’s forget about that.) Now that the Republican Party has controlled Congress for over a decade, it seems that they have morphed from the party of limited government into the party of, simply, government. More >>

4 January 2006 @ 1:50PM >> The factual inaccuracies in the reporting of self-proclaimed economics expert Paul Krugman are so plentiful that an ad-hoc “truth squad” exists online solely to correct his many errors.

You can add Stuart Browning to the ever-expanding list of truth squad members. Stuart—one of the executive producers of my upcoming film Indoctrinate U—is also working on his own project analyzing the Canadian health care system. Last October, he and Blaine Greenberg—my two partners in On The Fence Films—released a short film called Dead Meat on the topic, and more will come later this year.

In his research on health care, Browning is discovering the various tricks that advocates of socialized medicine use to portray Canada as the utopian ideal of health services, an image that Krugman tries to promote when he describes the Canadian model as the “obvious solution” to the perceived shortcomings of our system.

Browning writes:

What Krugman doesn’t say is that its easy to hold down health care costs if you do what Canada does: withhold medical treatment from sick and injured people. The U.S health care system could save billions of dollars if we drastically reduced the number of doctors, hospitals, outpatient clinics, medical devices and diagnostic machines available. If we followed Canada’s lead, we would severely limit each surgeon’s allotted hours in the operating room so that they couldn’t perform too many surgeries. Americans would wait months and years for critical medical tests and treatments - many would suffer greatly, become crippled, addicted to painkillers, go blind or die while waiting - however, the country would spend a lot less money on health care.

Browning then proceeds to administer a fact-based smackdown of Krugman’s spin. It’s a good read if you’re not Paul Krugman. And if you are, you may want to avoid the embarrassment.

9 December 2005 >> I remember seeing an old New Yorker cartoon years ago that had a guy in a bookstore telling a clerk, “I’d like a book on chutzpah, and I want you to pay for it.”

Out of that same mold comes this proposal from Joe Mathewson, a journalism professor at Northwestern’s Medill School of Journalism:

[N]ewspapers, as important to the civic health of our society as public transportation, have a claim on public allegiance that goes beyond financial measure. Does anyone believe that our society is better, our civic virtue enhanced, by the failure of the Washington Star and the New York Herald Tribune and the Chicago Daily News and all the other fine dailies that have perished for purely financial reasons?

Because declining readership and revenue threaten the newspaper industry, Professor Mathewson recommends converting newspapers into tax-exempt entities. In effect, taxpayers would be underwriting the publishing of newspapers by giving them a free pass on their tax bills.

Just imagine...not only would you have the privilege of choosing to buy the print edition of The New York Times or paying $50 a year for TimesSelect, under Mathewson’s scheme, you’d have the additional privilege of subsidizing the Times through tax breaks, which would underwrite an editorial page that consistently calls for higher taxes. You’d be paying taxes so the Times could lobby for you to pay even more taxes.

Chutzpah indeed!

23 November 2005 @ 11:49AM >> They learned something about economics, the hard way. If only more politicians would heed the lesson.

9 November 2005 @ 2:38PM >> Many commentators are saying that last night’s election results bode ill for the Republicans in 2006. But the two headline races—the governorships of Virginia and New Jersey—don’t seem like major defeats for the Republican party as a whole. In each case, a Democrat was elected to replace a Democrat, and even when you factor in Governor Schwarzenegger’s defeated ballot initiatives in California, what you’re left with is Democratic victories in places where Democrats have either been dominant for years or have been successful in recent elections. The one exception, of course, is New York City, where Mayor Mike Bloomberg won re-election in a landslide. This is no victory for Republicans, however; Bloomberg can barely be considered a Republican at all. He switched parties shortly before his first run for mayor, and likely did so only to avoid a bruising Democratic primary, which he would not likely have won in the first place.

So, while last night’s results don’t seem to send much of a signal one way or the other, Republicans in Congress should still be wary. Why? Because with the 2004 presidential election a distant memory, Republican voters no longer have to fear a Kerry presidency rehashing all the greatest hits of the Carter era. A Republican criticizing a Republican no longer has the effect of indirectly helping someone like John Kerry get the keys to the White House. So the supporters who have been relentlessly defending President Bush and the Republicans against the scurrilous smears of the Democrats and the anti-war left can now take stock of their own leaders. And many of them don’t like what they see.

Unfortunately, the structure of our government encourages each Congressman to go to the voters every two years with a laundry list of goodies brought back to the district courtesy of U.S. taxpayers everywhere. When I was growing up, House Speaker Tip O’Neill was the embodiment of the tax-and-spend Democrats. Every time you’d see his face on TV, you knew money was magically evaporating from your pocket. And day by day, his nose seemed to balloon with the size of the Federal government. Tip, you see, lived by the dictum that “all politics is local.” He knew how to buy votes by handing out goodies to his district, and he didn’t care what it did to the size of the budget or the rest of the country.

In 1994, the Republicans took over the House for the first time since the Eisenhower Administration. Faithful Republican voters were promised a class that would clean house. And they did, for a while, until they got comfortable in their jobs, propped up by the perks, and then all of a sudden various planks from the Contract With America went down the memory hole. (Does anyone remember term limits?) Over a decade after the Republicans took over, they seemed to have gotten as fat and lazy as the Democratic leadership they replaced. They’re now spending like drunken sailors in a fashion that would make Tip O’Neill proud (and maybe a little jealous). And on important issues like protecting our borders, the Republicans in Congress have followed President Bush’s lack-of-lead and taken no action. Millions of people stream across our borders illegally—providing a big gaping hole for not just immigrants seeking work, but terrorists seeking destruction—and Republicans turn the other way out of fear of alienating potential voters. With Republicans like that, who needs Democrats?

2006 may be a nasty year for the Republicans, and if it is, it won’t be because the Democrats are making gains with the public. It’ll be because many Republican voters see little point in supporting candidates who are indistinguishable from their opponents on such important issues. In these days of a hyper-polarized electorate, the importance of each party’s base becomes paramount. If Democrats emerge victorious in 2006, it’ll be because their base is energized while the Republican base is dispirited.

So even though last night’s results aren’t really the wake-up call that some commentators are claiming, perhaps Republican politicians should interpret it that way just the same. Because unless something changes between this November and next, I don’t think there are going to be very many Republican voters enthusiastic about pulling the lever for their party.

29 June 2005 >> If you haven’t yet read about the Supreme Court’s decision in the Kelo vs. New London case, then you might not appreciate how much I love this:

Could a hotel be built on the land owned by Supreme Court Justice David H. Souter? A new ruling by the Supreme Court which was supported by Justice Souter himself itself might allow it. A private developer is seeking to use this very law to build a hotel on Souter’s land.

Justice Souter’s vote in the “Kelo vs. City of New London” decision allows city governments to take land from one private owner and give it to another if the government will generate greater tax revenue or other economic benefits when the land is developed by the new owner.

On Monday June 27, Logan Darrow Clements, faxed a request to Chip Meany the code enforcement officer of the Towne of Weare, New Hampshire seeking to start the application process to build a hotel on [...] the present location of Mr. Souter’s home.

Clements [...] points out that the City of Weare will certainly gain greater tax revenue and economic benefits with a hotel on [Mr. Souter’s land].

The proposed development, called “The Lost Liberty Hotel” will feature the “Just Desserts Cafe” and include a museum, open to the public, featuring a permanent exhibit on the loss of freedom in America. Instead of a Gideon’s Bible each guest will receive a free copy of Ayn Rand’s novel “Atlas Shrugged.”

Clements indicated that the hotel must be built on this particular piece of land because it is a unique site being the home of someone largely responsible for destroying property rights for all Americans.

“This is not a prank” said Clements, “The Towne of Weare has five people on the Board of Selectmen. If three of them vote to use the power of eminent domain to take this land from Mr. Souter we can begin our hotel development.”

Clements’ plan is to raise investment capital from wealthy pro-liberty investors and draw up architectural plans. These plans would then be used to raise investment capital for the project. Clements hopes that regular customers of the hotel might include supporters of the Institute For Justice and participants in the Free State Project among others.

(Note: Links in quoted text above added by me.)

13 April 2005 >> As someone who has to file and pay taxes quarterly—gotta love working on 1099—I think this is a great idea. Deroy Murdock explains tax choice:

President Bush’s bipartisan tax reform commission should endorse a powerfully simple idea that would ease the pain of many taxpayers: Let Americans choose between today’s tax system and a 19 percent flat tax.

For now, Americans contend with a federal tax code that has grown luxuriant after 10 years of Republican congressional dominance. As Cato Institute tax analyst Chris Edwards reports, federal tax rules that filled 40,500 pages in 1995 stretch to 60,044 pages today. A decade ago, 50 percent of Americans hired tax professionals, versus at least 62 percent now.

Last year, Americans spent 6.5 billion hours wading through the 529 different tax forms the IRS scrutinizes. Completing the standard 1040 tax return and Schedules A, B, and D required 21.2 hours on average in 1995, compared to 28.5 hours in 2004; painting Uncle Sam a numerical portrait of one’s finances typically requires more than 3.5 work shifts. Add this temporal insult to the economic injury of sending the Treasury money.

Tax compliance will cost U.S. individuals, businesses, and non-profits at least $223.7 billion this year, the Tax Foundation estimates. Every dime of this fortune could be employed more productively in the stock market or any home loan agency. Economists call this “deadweight loss.” Regular folks call this “cash down the toilet.”

As is the case whenever citizens want greater freedom from government, there will be many large, powerful interests opposed to it. Convoluted tax laws ensure a continual boom in the tax preparation industry, and the government has a huge bureaucracy built up around the maintaining the tax code. Any simplification would result in drastically less income for professional tax preparers and lost jobs for the IRS employees who implement and enforce the laws. Naturally, these folks will fight vigorously against tax simplification. I just hope the rest of us—we who sacrifice hard-earned money and countless hours contending with this incomprehensible mess—can make our voices heard by the politicians who have the power to clean it up.

1 April 2005 @ 10:52AM >> Over at OpinionJournal.com, Bridget Johnson surveys Hollywood’s contributions to the idolization of Communist murderer Che Guevara in The Motorcycle Diaries and beyond:

Now that “Motorcycle” has ridden into the awards sunset—ironically, considering the nature of communism, also picking up two Independent Spirit Awards—the sequel to Che canonization is on the horizon. Filming is scheduled to start later this year on “Che,” a Steven Soderbergh (”Traffic”) vehicle starring Benicio del Toro as the famed Marxist. The plot line as listed on the Internet Movie Database: “An epic about Argentine revolutionary Che Guevara, who fought for the people.”

Wait, there’s more. IMDb lists another movie titled “Che” currently filming, written and directed by Josh Evans, son of Ali McGraw. If one can assume that Sonia Braga’s “Celia” character is Guevara’s mother, are we in store for another innocent, youthful portrayal of the guerrilla in “The Tricycle Diaries”?

Annoying as the Che adulation is, a recent comment by a 14-year-old on an online movie message board was truly disturbing: “I just saw The Motorcycle Diaries, which further made me question: Why is communism bad? ... Young people are told how bad communism is, but we are not told why. ... The Motorcycle Diaries showed me how Ernesto Guevara wanted to help people. ... But this did not explain why he was such a ‘bad’ person and apparently deserved to be murdered by the U.S.”

Is this a legacy of dangerous ignorance that the makers of “Che” wish to continue? Might this teen be taught that the product of Guevara and Castro’s “revolution” is a nation whose inhabitants still risk their lives to escape—and an estimated one-third die trying? A nation where neighbor spies on neighbor, where dissent lands one in the clink—or worse—and persecution is punishment for everything from religion to homosexuality?

What feature films have showed the true nature of communism? There was “The Killing Fields,” showing families torn apart, cities emptied, forced labor, bones littering the Cambodian landscape. Adding to the authenticity was its star, Oscar-winner and real-life survivor Haing S. Ngor, who would have been summarily executed had his intellectual background been discovered by the Khmer Rouge. As a cinematic achievement, it ranks as one of the best films of all time. As a historical testament, it shows that communism had nothing to do with betterment of the masses but stripped away everything that comprised the individual. Though this film should be required high-school viewing, not much else springs to mind that could counter the effects of pro-Marxist cinema.

Usually Hollywood’s antipathy towards capitalism comes through more subtly. Businesspeople are almost invariably portrayed as corrupt people bent on destroying the environment or ruining the lives of workers. The heroes are usually those who fight against the evil corporations. That’s the typical script on the micro view capitalism, so it isn’t much of a surprise that on the macro level, Hollywood also glorifies enemies of capitalism.

Hollywood apparently doesn’t understand the irony of making money by selling such films...unfortunately, neither do audiences.