Friday, May 28, 2010

Government Abuse Begets More Government Abuse

Which Institution is More Enlightened?
Posted: 24 May 2010 02:20 PM PDT
Here's a letter that I sent on Saturday to the New York Times:
Reacting to Rand Paul's remarks about the 1964 Civil Rights Act, you say that his libertarian philosophy "is a theory of liberty with roots in America's creation, but the succeeding centuries have shown how ineffective it was in promoting a civil society.. It was only government power that . abolished Jim Crow" ("Limits of Libertarianism <> ," May 22).
You've got it backwards. Jim Crow itself was government power. Jim Crow was legislation that forced the segregation of blacks from whites. Research shows that people acting in the free market that you apparently believe is prone to racial discrimination were remarkably reluctant to discriminate along racial lines. It was this very reluctance - this capacity of free markets to make people colorblind - that obliged racists in the late 19th century to use government to achieve their loathsome goals.*
Had Mr. Paul's libertarian philosophy been followed more consistently throughout American history, there would have been no need for one government statute (the Civil Rights Act) to upend earlier government statutes (Jim Crow) and the business practices that they facilitated.
Donald J. Boudreaux
* See especially Robert Higgs, Competition and Coercion: Blacks in the American Economy, 1865-1914 <> (University of Chicago Press, 1976); Jennifer Roback, "Southern Labor Law in the Jim Crow Era: Exploitative or Competitive?" University of Chicago Law Review, Vol. 51 (1984); and Jennifer Roback, "The Political Economy of Segregation: The Case of Segregated Streetcars," Journal of Economic History, Vol. 46 (1986).

Thursday, May 27, 2010

Steyn in Reversoworld
At the time of writing, I have no idea who's won the British general election. At the time of reading, you probably have. But, whatever the result, I doubt it will make much difference to the fate of the United Kingdom, which is in the fast lane of the not-so-slow-burn bonfire of the liberties consuming much of the Western world.
The official "defining moment" of the campaign was Gordon Brown's unguarded post-photo-op dismissal of Gillian Duffy as a "bigoted woman." Mrs. Duffy, a plain-spoken working-class granny and lifelong Labour voter, had made the mistake of asking Mr. Brown, her party leader, a very mild question about immigrants from eastern Europe. He got back in his car and wrote her off, forgetting he was still miked. So she's a "bigot." He's not. That's why he makes all the decisions for her, and she just makes the best of them. What part of that don't you understand?

The other "defining moment" got less coverage. Another "pensioner," 74-year-old Roy Newman, got sick of the various party hacks knocking on his door and put a sign up in his front window: "GET THE LOT OUT." Ninety minutes later, two police officers arrived at his home to arrest him for "racism."
Racism? Why, yes. His sign was a piece of white card with red and blue lettering. Red-white-and-blue, geddit? The colours of the Union Jack. If using the same colour scheme as the national flag isn't coded racism, I don't know what is. Mr. Newman was prevailed upon to alter some of the letters to yellow, thereby diminishing the racist subtext.
With bigotry and racism running rampant, it was inevitable that homophobia would raise its ugly head. Dale McAlpine, a practising (wait for it) Christian, was handing out leaflets in the town of Workington and chit-chatting with shoppers when he was arrested on a "public order" charge by police officer Sam Adams (no relation), a gay, lesbian, bisexual and transgender community outreach officer. Mr. McAlpine said homosexuality is a sin. "I'm gay," said Officer Adams. Well, it's still a sin, said Mr. McAlpine. So Officer Adams arrested him for causing distress to Officer Adams.
In fairness, I should add that Mr. McAlpine was also arrested for causing distress to members of the public more generally, rather than just the aggrieved gay constable. No member of the public actually complained, but, as Officer Adams pointed out, Mr. McAlpine was talking "in a loud voice" that might be "overheard by others." And we can't have that, can we? So he was fingerprinted, DNA-sampled and tossed in the cells for seven hours.
The other day, upholding the sacking of a black Christian for declining to provide "sex therapy lessons" to gay couples, Lord Justice Laws ruled that "law for the protection of a position held purely on religious grounds is irrational, divisive, capricious, arbitrary." Actually it's the law of Lord Justice Laws that is increasingly "irrational, divisive, capricious, arbitrary." Or as George Orwell, in Animal Farm, formulated it: all animals are equal, but some animals are more equal than others. In the land of Laws, a gay is more equal than a Christian. A Muslim is more equal than anybody. A black man is more equal than a white man, unless the white man is gay and the black man a Christian. An eco-zealot is more equal than an Anglican. Not long before Lord Justice Laws' decision on the "irrationality" of legal protection for Christianity, Tim Nicholson, a "Head of Sustainability" fired for questioning his property management group's environmental policies, sued for wrongful dismissal under "Employment Equality (Religion And Beliefs) Regulations." He wound up with the best part of one hundred thousand pounds after Mr. Justice Burton ruled that Mr. Nicholson's faith in anthropogenic global warming was a "philosophical belief" on a par with religion. So the Employment Equality (Religion And Beliefs) Law protects belief in apocalyptic "climate change" but not in Jesus.
As for Muslims, in December Tohseef Shah sprayed the words "KILL GORDON BROWN," "OSAMA IS ON HIS WAY" and "ISLAM WILL DOMINATE THE WORLD" on the war memorial at Burton-upon-Trent. But the Crown Prosecution Service decided his words were not "religiously motivated." Phew! Thank goodness for that, eh? So a week or so back he walked out of court a free man, except for £500 in compensation to the municipal council for cleaning off his non-religiously motivated "ISLAM WILL DOMINATE THE WORLD" graffito.
I am currently slogging my way through a rather stodgy 650-page tome called Extreme Speech And Democracy. On the back is a question from Christopher McCrudden, professor of human rights law at Oxford: "What are the appropriate limits to freedom of expression in societies that wish to be democratic, multicultural, and committed to the human rights of all?"
Whether or not you regard that as a legitimate query, it's certainly an irrelevant one. Because whatever you decide are the "appropriate" limits, by the time they percolate down to the transgendered liaison officer patrolling Workington shopping centre they'll be reliably inappropriate. As I always point out in retailing the latest idiocy from Canada's "human rights" fanatics, none of the above are "right-wing" in any sense that Steyn or Rumsfeld or Cheney would recognize the term. Mrs. Duffy is a lifelong Labour voter; Mr. Newman is one of those pox-on-all-their-houses types; the property company that fired Mr. Nicholson is so wretchedly politically correct it employed him as "Head of Sustainability," a title of near parodic bogusness. Yet all fell afoul of Lord Justice Laws' "irrational, divisive, capricious, arbitrary" laws. Because it's hard not to. Because once you establish the principle that the state has the right to police ideas, sooner or later one of yours will catch their eye. I say "principle," but that's not really the word. The spirit is more aptly caught by a new joint initiative by the Canadian "Human Rights" Commission, the Manitoba "Human Rights" Commission and the Treaty Relations Commission of Manitoba to "promote and enhance the learning experience relative to human and treaty rights for all people living in Canada and around the world." No idea what that means, but, as the CHRC press release says, this is the first time that these three useless taxpayer-funded sinecures have come together to "further their cause." Since when do government agencies have ideological "causes"? And what happens if you disagree with their "cause"?
Professor McCrudden's question on "appropriate" limits is very adroitly formulated: in today's advanced Western society, there are no absolute rights—for all individual freedoms must be "balanced" against the state's commitment to "multiculturalism" or "equality" or whatever other modish conceit tickles its fancy. Everybody talks like this now: for Canada's Chief Censor, Jennifer Lynch, Q.C., freedom of expression is just one menu item in the great Canadian salad bar of rights, so don't be surprised if we're occasionally out of stock. Instead, why not try one of our tasty nutritious rights du jour? Like the human right to a transsexual labiaplasty, or (per a recent Quebec ruling) the human right to non-Eurocentric table manners. Real "rights" are restraints upon the state—"negative" rights, as constitutionalists have it; they delineate the limits of the sovereign's power. But in the modern era "rights" are baubles in the state's gift, and the sovereign confers them at the expense of individual liberty. Truly, this is an Orwellian assault on the very foundations of freedom.
The statists justify this on the grounds of what Lord Justice Laws calls "public tranquility"—a phrase that rings very hollow in contemporary Britain. In his last years of office, Tony Blair used to fret about "social disintegration." You can see what he means in the Hogarthian depravity of not just decayed urban centres but leafy villages and prosperous suburbs. His response, of course, was the effete smack of socially progressive authoritarianism: ever more government micro-regulation of public discourse, until we reach the surreal point where the gay outreach officer arrests the Christian for causing distress to the gay outreach officer. In truth, the Big Blairite Brother, like Nanny Lynch in Canada, incentivizes identity-group grievance, frivolous victimhood, and social atomization. Meanwhile, aggressive, confident identities can drive a coach-and-horses through the PC flower beds: the remorseless feasting of Islamic polygamy on the Eurowelfare gravy train is only one example of how feeble "rational" secular statism proves in the face of a minority that has its number.
As for the "balancing act" that Professor McCrudden urges between individual rights and broader responsibilities, only a truly free people have the incentive even to seek it. The more you haul nobodies off to the cells for putting up a poster or quoting the Bible, the more a timid conformist populace will keep its head down, mind its own business, and avoid broader social engagement—or at any rate non-alcohol-fuelled engagement. Big Government is dismantling civic identity, and the slow-burn bonfire of liberties in Europe and North America will eventually consume us all.

Wednesday, May 26, 2010

Classic Quotes, Ferguson

Ferguson described civilization - including each component part, such as language, law, and the economy - as being "the result of human action, but not the execution of any human design."* Adam Ferguson (1723-1816)
"Failure to understand not only that undesigned social orders are real, but also that these undesigned orders are superior to any arrangements that could be consciously designed and engineered, is perhaps the greatest source of tyranny and disorder of the past 200 years." Donald J. Boudreaux,

Classic Quotes, d'Argenson

“Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé.... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!!”
(Leave them be, that should be the motto of every public authority, according to which the world is civilized..... A detestable principle that which would not wish us to grow except by lowering our neighbors! There is nothing but mischief and malignity of heart in those satisfied with that principle, and interest is opposed to it. Leave them be, d@mn it! Leave them be!)
René de Voyer, Marquis d'Argenson

Tuesday, May 25, 2010

Classic Quotes, Rand

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."  Ayn Rand

Monday, May 24, 2010

Reason on Ryan

The GOP’s rising fiscal policy star is too cautious for radical economic reform yet too radical for his own party.

PAUL RYAN, free market extremist: With an economics degree in his pocket and small-government conservatism in his blood—Calvin Coolidge appointed his grandfather as a U.S. attorney—Wisconsin’s Paul Ryan rose quickly from Jack Kemp acolyte to ranking Republican on the House Budget Committee before the age of 40. A supply-sider and deficit hawk, Ryan is the author of the GOP’s only Congressional Budget Office–certified “road map” to balance the budget and eliminate the long-term deficit. His proposal calls for politically courageous cuts to beloved entitlements such as Medicare and Medicaid—cuts so drastic that New York Times contributor James Kwak summarized their effects under the headline: “People will die.” Ryan has argued that the central battle in American politics is between “individualism and collectivism” and said, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.”
Paul Ryan, free market sellout: Ryan voted in favor of the Troubled Asset Relief Program (TARP), the widely despised bank bailout. He also endorsed the taxpayer-funded auto bailout, citing “mounting hardships” in a part of his state once dominated by carmakers. His ballyhooed spending plan is so incrementalist that it wouldn’t balance the budget until 2063. And this year, while defending his policies to The New York Times, the congressman declared, “I’m not trying to win an award from the Cato Institute.”
Which of these two snapshots represents the real Ryan? They both do.
The Close:
"No politician’s record is pure. Perhaps it isn’t reasonable to expect anything different, since politics is the business of compromise. For advocates of limited government, Ryan remains one of the most important allies in Congress. But those advocates can’t help but notice that the best hope for fiscal responsibility and free market reform is a plan to balance the budget 50 years from now that will never, ever pass.
Ryan claims victory just for showing “you can put these ideas out there and you can survive.” Survive, yes, but thrive? Asked directly about his plan’s political prospects, he pauses for an unusually long time, then shrugs and smiles, as if to welcome both the uncertainty and the challenge. “When I have it all figured out,” he says, “I’ll let you know.”"
Peter Suderman ( is an associate editor at reason.

Classic Quotes, Voltaire

"The art of government consists in taking as much money as possible from one class of the citizens to give to the other."  Voltaire

Entering Stall Buffet for the Death Spiral

This is a fascinating history of unions and when/how they began to get legal backing at state and local levels. We Americans say we don't like monopolies, but we sure have fallen all over ourselves awarding these workers a coercive government monopoly on working for the State. Now we all work to keep them comfy. Any risk brought on by their blackmail of politicians, we own. The real shame is, eventually, everyone pays. When their state fails, the rank and file will pay. No one gets away clean, except the former politicians and the union bosses - they took the money and ran.
"Municipalities around the state are also buckling under massive labor costs. One city, Vallejo, has already filed for bankruptcy to get out from under onerous employee salaries and pension obligations. (To stop other cities from going this route, unions are promoting a new law to make it harder for municipalities to declare bankruptcy.) Other local California governments, big and small, are nearing disaster. The city of Orange, with a budget of just $88 million in 2009, spent $13 million of it on pensions and expects that figure to rise to $23 million in just three years. Contra Costa's pension costs rose from $70 million in 2000 to $200 million by the end of the decade, producing a budget crisis. Los Angeles, where payroll constitutes nearly half the city's $7 billion budget, faces budget shortfalls of hundreds of millions of dollars next year, projected to grow to $1 billion annually in several years. In October 2007, even as it was clear that the area's housing economy was crashing, city officials had handed out 23 percent raises over a five-year period to workers. (See the sidebars on pages 22 and 26.)"

Sunday, May 23, 2010

Going to El Paso?

By conventional wisdom, El Paso, Texas should be one of the scariest cities in America. In 2007,the city's poverty rate was a shade over 27 percent, more than twice the national average. Median household income was $35,600, well below the national average of $48,000. El Paso is three-quarters Hispanic, and more than a quarter of its residents are foreign-born. Given that it's nearly impossible for low-skilled immigrants to work in the United States legitimately, it's safe to say that a significant percentage of El Paso's foreign-born population is living here illegally.
El Paso also has some of the laxer gun control policies of any non-Texan big city in the country, mostly due to gun-friendly state law. And famously, El Paso sits just over the Rio Grande from one of the most violent cities in the western hemisphere, Ciudad Juarez, Mexico, home to a staggering 2,500 homicides in the last 18 months alone. A city of illegal immigrants with easy access to guns, just across the river from a metropolis ripped apart by brutal drug war violence. Should be a bloodbath, right?
Here's the surprise: There were just 18 murders in El Paso last year, in a city of 736,000 people. To compare, Baltimore, with 637,000 residents, had 234 killings. In fact, since the beginning of 2008, there were nearly as many El Pasoans murdered while visiting Juarez (20) than there were murdered in their home town (23).
El Paso is among the safest big cities in America. For the better part of the last decade, only Honolulu has had a lower violent crime rate (El Paso slipped to third last year, behind New York). Men's Healthmagazine recently ranked El Paso the second "happiest" city in America, right after Laredo, Texas—another border town, where the Hispanic population is approaching 95 percent.
So how has this city of poor immigrants become such an anomaly? Actually, it may not be an anomaly at all. Many criminologists say El Paso isn't safe despite its high proportion of immigrants, it's safebecause of them.

Saturday, May 22, 2010

Immigration - 3

EXECUTIVE SUMMARY (link follows)
The absence of a way to enter the United States legally to work has contributed to more than 4,000 men, women, and children dying while attempting to cross to America since 1998. Alarmingly, immigrant deaths increased in 2009 at a time when illegal entry fell significantly. This death toll - an average of about one person a day - has occurred in the context of great pressure from Congress and executive branch officials to "control the border." The loss of life will almost certainly continue unless more paths are open to work legally in the United States. The only plausible way to eliminate immigrant deaths at the border, as well as reduce illegal immigration in the long term, is to institute a new program of temporary visas or portable work permits for foreign workers. Strong evidence exists that the current "enforcement-only" policy has strengthened criminal gangs, providing a profitable line of business for Mexican criminal enterprises. If Mexican and Central American workers could come to America on a legal visa or work permit they would have no need to employ the services of a coyote or criminal enterprise. (The research for this paper was funded by a grant from the Carnegie Corporation of New York.)

Friday, May 21, 2010

Immigrants Footing Their Own Bill?

Heritage research indicates uneducated immigrants take a significant drain on the economy via the entitlement programs. This paints a different picture. The complexity builds!

"The fact that illegal immigrants pay taxes at all will come as news to many Americans. A stunning two-thirds of illegal immigrants pay Medicare, Social Security and personal income taxes. Yet, nativists like Congressman Tom Tancredo, R-Colo., have popularized the notion that illegal aliens are a colossal drain on the nation's hospitals, schools and welfare programs — consuming services that they don't pay for.

In reality, the 1996 welfare reform bill disqualified illegal immigrants from nearly all means-tested government programs including food stamps, housing assistance, Medicaid and Medicare-funded hospitalization. The only services that illegals can still get are emergency medical care and K-12 education."

"What's more, aliens who are not self-employed have Social Security and Medicare taxes automatically withheld from their paychecks. Since undocumented workers have only fake numbers, they'll never be able to collect the benefits these taxes are meant to pay for. Last year, the revenues from these fake numbers — that the Social Security administration stashes in the "earnings suspense file" — added up to 10 percent of the Social Security surplus. The file is growing, on average, by more than $50 billion a year.

Beyond federal taxes, all illegals automatically pay state sales taxes that contribute toward the upkeep of public facilities such as roads that they use, and property taxes through their rent that contribute toward the schooling of their children. The non-partisan National Research Council found that when the taxes paid by the children of low-skilled immigrant families � most of whom are illegal — are factored in, they contribute on average $80,000 more to federal coffers than they consume."

Thursday, May 20, 2010

Immigration - The Issues

Do you see immigrants this way?
"Industrious self-starters who come to the United States to find work, create new wealth, and improve their lives are not a menace or a threat. They are an asset. No state seeks to drive out hard-working newcomers from New Mexico or Indiana; why should hard-working newcomers from Old Mexico or India be treated any differently? To say that they cross the border illegally only begs the question. Why should it be illegal for any person to come to the United States, assuming his intentions are peaceful and he is not likely to become a public charge or health risk?"
This author notes that the 'real' problem is a result of the drug war vice the immigration restrictions:
"The organized-crime epidemic in Latin America, spawned by a U.S. drug policy more than four decades in the making, seems to be leeching into American cities. Powerful underworld networks supplying gringo drug users are becoming increasingly bold about expanding their businesses. In 2008, U.S. officials said that Mexican drug cartels were serving their customers in 195 American cities."
Dr. B's summary is here, and is where I purloined all these rich links.

My econ professor sees the matter as one of collectively punishing large groups, which essentially victimizes the 'not guilty' in a blind effort to target the guilty:
"I wish I could say that the side I'm on has no collectivist thinking. But I can't. Many people have responded to the law, not by holding accountable and protesting the individual legislators who voted for it and the Arizonans who favor it, but by calling for a boycott of Arizona. Boycotts are unlikely to be effective but, even if they were effective, they would tend to penalize the wrong people. They're like sanctions. They don't single out the specific people who did something the boycotters object to. Instead, they treat Arizonans as one undifferentiated mass."
This issue illustrates federal policy failures on all levels - immigration, drug war, and social safety nets. It likely will never be solved due to the resulting complexities and unintended negative consequences, combined with most folks' fear of those 'not like me' which is in my view a constant in the human condition.

Self Government

Searching for Self-Governance in America
By Jeremy Lott

In Search of Self-Governance is not the sort of book you would expect the head of a major polling firm to write. Scott Rasmussen, the president and founder of Rasmussen Reports, has written a slim volume that is admittedly "not filled with polling data," and that's putting it too mildly. The first percentage the reader comes across is half way through the book, where we learn that "only about 3% of Americans watch those Sunday morning shows."
Rasmussen has written a heart-felt pamphlet calling for a reordering of American politics, from bottom to top. The only special pleading he does on behalf of his day job is to assure us that that the "ideas and attitudes presented are shared by a solid majority of Americans." He takes up the popular complaint that our political system is "broken" and that political "dialogue" is really aimed at dividing and conquering the public. He says that "all" Americans (once you round up, I suppose) "believe we can do better."
According to Rasmussen, American politics is broken because politicians of both parties have lost sight of something important. After the last presidential election, he explains, Democrats argued over how far left they could govern the country. Republicans and some pundits tried to counter that they would fail because this is really a "center-right nation," and needs to be governed from that perspective. "Both perspectives are wrong," he avers. "The American people don't want to be governed from the left, the right, or the center. The American people want to govern themselves."
He invokes the Declaration of Independence and Alexis de Tocqueville, as all would-be civic reformers must. The French observer marveled at the ability of "Americans of all ages, conditions, and dispositions" in the 1830s to form seemingly spontaneous associations "of a thousand kinds" to deal with collective problems. Explains Rasmussen, "this American trait was radically different from the world [de Tocqueville] knew. In France or England, he observed, when something needed to be done, the government or a person of noble rank would be asked to do it.
But 1776 or the 1830s were a long time ago. Has that American instinct toward self government persisted? Rasmussen argues that it has. In this present century, Americans do not often dwell on "the virtues of self-governance. Instead, we live them. Our society and daily life is still based upon those concepts so eloquently articulated long ago." In his telling, Americans are not anarchists but they think that the government should form only a small part of our larger society. Americans would far prefer to govern ourselves, for the most part, through volunteerism and the normal back-and-forth of commerce.
Is he right about that? Is Rasmussen expressing his own preference or is he speaking up for "ideas and attitudes" that are "shared by a solid majority of Americans" in his call for a return to self-government from our current big government policies? One test case would be Social Security. Rasmussen writes that while the political class has so far "failed to come up with a solution" to the looming entitlement crisis, "the American people have been dealing with the reality before them for years rather than waiting for somebody else." They have set up 401(k) accounts, started second businesses as fall-back options, delayed retirement, and in hundreds of other ways factored in the real possibility that they won't be able to rely upon government largesse in the future.
These prudent actions now, Rasmussen hopes, "will make Social Security less essential in the future." Of course, this will come at a steep and unfair price. The current generation of younger workers "will be the sandwich generation and pay for two generations worth of retirement -- our own and our parents."
A huge problem that Rasmussen is up against in arguing for greater self-governance is that the political trends have been running the other way. President George W. Bush expanded Medicare and had his proposed free market Social Security reform was quashed by a Republican Congress. President Barack Obama rammed an expansion of government controlled healthcare through, over the tepid objections of moderates in his own party. Both men embraced bailouts and stimulus in what Rasmussen decries as "an unholy alliance" of big business and big government.
Rasmussen's only real hope, politically, is in the mother of all backlashes. He wants a temporary era of renewed civic participation in politics by people who usually hate politics. Though he doesn't call out the tea parties by name, it's reasonably clear that's what he has in mind. He cautions would-be reformers about the need to work with established pols to prune back the state. He even drags in the Star Wars trilogy to help make the pitch. Like Darth Vader, he argues, "Career politicians may have gone over to the dark side, but it's not too late for all of them."
Jeremy Lott is editor of Capital Research Center's Labor Watch newsletter. He has worked for both Cato and CEI and co-hosts CEI's Liberty Week podcast.

Wednesday, May 19, 2010

Lies Damned Lies and Government Statistics

"Combine those two figures and you get the unified budget, that $162.8 billion. In the past eight years we've had two years of reported surpluses and six years of reported deficits. Altogether, the total reported deficit has run $1.3 trillion.
Some numbers don't add up
But if you examine another figure, the gross federal debt, you'll see something strange. First, the debt has increased in each of the past eight years, even in the two years when surpluses were reported. Second, the gross federal debt, which includes the obligations held by the Social Security and Medicare trust funds, has increased much faster than the deficits -- about $3.3 trillion over the same eight years.
That's $2 trillion more than the reported $1.3 trillion in deficits over the period. Can you spell "Enron"?"

Will Talking Greek on LA

Los Angeles-to get from downtown to the residence of the man who, in 2005, became the first Hispanic elected mayor since 1870, you drive through a sliver of Korea. With 125,000 people packed into 2.7 of the city's 469 square miles, Koreatown is typical of this polyglot city where more than 100 languages are spoken and nothing is typical except recentness: 46 percent of the residents are foreign-born.
So when His Honor Antonio Villaraigosa was invited to appear at a recent rally protesting Arizona's law concerning illegal immigrants, he went. But he stipulated: "I want American flags." He knows that protesting immigrants should not carry the flags of Mexico and other nations where they have chosen not to live.
The city is chin-deep in California's trickle-down misery, and last week Richard Riordan, who was L.A. mayor from 1993 to 2001, coauthored with Alexander Rubalcava-an investment adviser-a Wall Street Journal column declaring the city's fiscal crisis "terminal." They say Villaraigosa should "face the fact" that "between now and 2014 the city will likely declare bankruptcy." Villaraigosa says that will not happen. But look what has happened.
For 15 years Villaraigosa was an organizer for the Service Employees International Union and the city's teachers' union. Now he is trying to cope with, and partially undo, largesse for unionized public employees: "I have to sign the checks on the front, not just the back."
Riordan and Rubalcava say two numbers-8 percent and 5,000-define the city's crisis. L.A. has conveniently but unrealistically assumed 8 percent annual growth of the assets of the city's pension funds. The two main funds' actual growth over the last decade have been 3.5 percent and 2.8 percent. And Villaraigosa added 5,000 people to the city's payroll in his first term.
Nationwide, government employees are most of what remains of "defined benefit" America. More than 80 percent of government workers have defined benefits-as opposed to defined-contribution-pension plans. Only about 20 percent of private-sector workers have defined-benefit plans. California's parlous condition owes much to burdensome health-care and pension promises negotiated with public employees' unions, promises that are suffocating the state's economic growth.
Riordan and Rubalcava suggest replacing defined-benefit pensions with 401(k) accounts for new public employees. But when another product of America's immigrant culture, Gov. Arnold Schwarzenegger, tried to do that, public employees' unions squashed the idea. Riordan and Rubalcava say the retirement age for public employees should be raised from 55 to 65, employees should pay more than the maximum of 9 percent of their salaries for pensions, and the city should end subsidies of up to $1,200 a month for health insurance for those who retire before becoming eligible for Medicare. But even his ideas for nibbling at the edges of the fiscal problem by privatizing the zoo, the convention center, and city parking lots are opposed by the unions.
They are government organized as an interest group to lobby itself for ever-larger portions of wealth extracted by the taxing power from the private sector. Increasingly, government workers are the electoral base of the party of government. So Villaraigosa must live with the arithmetic of interest-group liberalism. The federal government, he says, can run deficits and print money; the state government (supposedly) must balance the budget but can push burdens down onto cities. There, he says, "you have 10 cookies in the cookie jar and every interest wants all 10."
The nightmare numbers include the state's unemployment rate (12.6 percent)-it is higher than the nation's (9.9)-and the city's rate (13.5), which is higher than the state's. The city's long-term success depends on its schools, in many of which most of the children come from homes without fathers, and in some of which, Villaraigosa says, 40 percent of the children are in foster homes. He has little control over the school system and, anyway, unions oppose radical reforms. He would like to emulate the education reforms of former Florida governor Jeb Bush, a recent visitor to the mayor's residence, but, holding his fingers three inches apart to suggest the thickness of the standard contract with the teachers' union, Villaraigosa calls the union "the most powerful defender of the status quo."
The mayor's residence is near Wilshire Boulevard, which is named for a socialist who made and lost several fortunes before dying destitute. The life of Henry Wilshire is a cautionary tale for this city where the climate is usually Mediterranean and the fiscal climate is now Greek.

Tuesday, May 18, 2010

A Duty To Die

A "Duty to Die"?
By Thomas Sowell
One of the many fashionable notions that have caught on among some of the intelligentsia is that old people have "a duty to die," rather than become a burden to others.
This is more than just an idea discussed around a seminar table. Already the government-run medical system in Britain is restricting what medications or treatments it will authorize for the elderly. Moreover, it seems almost certain that similar attempts to contain runaway costs will lead to similar policies when American medical care is taken over by the government.
Make no mistake about it, letting old people die is a lot cheaper than spending the kind of money required to keep them alive and well. If a government-run medical system is going to save any serious amount of money, it is almost certain to do so by sacrificing the elderly.
There was a time-- fortunately, now long past-- when some desperately poor societies had to abandon old people to their fate, because there was just not enough margin for everyone to survive. Sometimes the elderly themselves would simply go off from their family and community to face their fate alone.
But is that where we are today?
Talk about "a duty to die" made me think back to my early childhood in the South, during the Great Depression of the 1930s. One day, I was told that an older lady-- a relative of ours-- was going to come and stay with us for a while, and I was told how to be polite and considerate towards her.
She was called "Aunt Nance Ann," but I don't know what her official name was or what her actual biological relationship to us was. Aunt Nance Ann had no home of her own. But she moved around from relative to relative, not spending enough time in any one home to be a real burden.
At that time, we didn't have things like electricity or central heating or hot running water. But we had a roof over our heads and food on the table-- and Aunt Nance Ann was welcome to both.
Poor as we were, I never heard anybody say, or even intimate, that Aunt Nance Ann had "a duty to die."
I only began to hear that kind of talk decades later, from highly educated people in an affluent age, when even most families living below the official poverty level owned a car or truck and had air-conditioning.
It is today, in an age when homes have flat-panelled TVs, and most families eat in restaurants regularly or have pizzas and other meals delivered to their homes, that the elites-- rather than the masses-- have begun talking about "a duty to die."
Back in the days of Aunt Nance Ann, nobody in our family had ever gone to college. Indeed, none had gone beyond elementary school. Apparently you need a lot of expensive education, sometimes including courses on ethics, before you can start talking about "a duty to die."
Many years later, while going through a divorce, I told a friend that I was considering contesting child custody. She immediately urged me not to do it. Why? Because raising a child would interfere with my career.
But my son didn't have a career. He was just a child who needed someone who understood him. I ended up with custody of my son and, although he was not a demanding child, raising him could not help impeding my career a little. But do you just abandon a child when it is inconvenient to raise him?
The lady who gave me this advice had a degree from the Harvard Law School. She had more years of education than my whole family had, back in the days of Aunt Nance Ann.
Much of what is taught in our schools and colleges today seeks to break down traditional values, and replace them with more fancy and fashionable notions, of which "a duty to die" is just one.
These efforts at changing values used to be called "values clarification," though the name has had to be changed repeatedly over the years, as more and more parents caught on to what was going on and objected. The values that supposedly needed "clarification" had been clear enough to last for generations and nobody asked the schools and colleges for this "clarification."
Nor are we better people because of it.

Monday, May 17, 2010

Classic Quotes, Sowell

"While Obama's winning the majority of the votes in overwhelmingly white states suggests that many Americans are ready to move beyond race, it is painfully clear that others are not."

"Human beings cannot be trusted with unbridled power"

"The history of slavery across the centuries and in many countries around the world is a painful history to read-- not only in terms of how slaves have been treated, but because of what that says about the whole human species-- because slaves and enslavers alike have been of every race, religion and nationality.
If the history of slavery ought to teach us anything, it is that human beings cannot be trusted with unbridled power over other human beings-- no matter what color or creed any of them are. The history of ancient despotism and modern totalitarianism practically shouts that same message from the blood-stained pages of history."

Sunday, May 16, 2010

Coercion Vice Cooperation

"The point of all this is that when even slaves had to be paid to get certain kinds of work done, this shows the limits of what can be accomplished by power alone. Yet so much of what is said and done by those who rely on the power of government to direct ever more sweeping areas of our life seem to have no sense of the limits of what can be accomplished that way."

Government has only coercion in it's tool kit; does any of us really believe that's the best way to get life done?

Saturday, May 15, 2010

Insurance Price Control Inevitability

"Unthinkable or not, though, it's an outcome that should have been entirely predictable to any student of the most basic elements of supply and demand: Price controls result in service cuts."

Friday, May 14, 2010

Obama Care Failing Already

"Already, businesses small and large are warning of the ill effects of the law's changes to the tax code. In order to generate the nearly $1 trillion necessary to pay for the law, its authors scoured the tax code looking to squeeze out more money whereever possible. And sure enough, within a few days of its passage, a handful of big companies took tax write downs in response to changes in the tax treatment of an existing drug subsidy. An estimate by Credit Suisse puts the total damage across the economy at around $4.5 billion—with $1 billion coming from AT&T alone.
The change involved the tax treatment of a subsidy that never should have existed, but it suggests the extent to which America's health care system is already reliant on government meddling, and how costly expanding the government's role in the system can be. And, perhaps more importantly, a planned investigation into the write-downs revealed that many big corporations are considering dropping their health care coverage and dumping employees onto the public dole."

Will on Greece

Crony Capitalism: From GM to Greece, the Lies Keep Growing
By George Will

WASHINGTON -- To understand the pertinence to America of events in Greece, notice General Motors' most recent misbehavior. A television commercial featuring CEO Ed Whitacre demonstrates the institutional murkiness and intellectual dishonesty that result when the line between public and private sectors disappears.

In the commercial, Whitacre says GM has "repaid our government loan in full." Rep. Paul Ryan, R-Wis., noted that GM used government funds to pay back the government: It "simply transferred $6.7 billion from one taxpayer-funded TARP account to another." The government still owns 60.8 percent of GM's common equity, and the Congressional Budget Office projects that the government will lose about $34 billion of the $82 billion of TARP funds dispersed to the automotive industry.

When Ryan and two colleagues asked the Treasury Department for clarification, they got this careful reply: "Treasury has never suggested that the loan repayment represented a full return of all government assistance." A Treasury press release did say "GM Repays Treasury Loan in Full." The loan is, however, a small part of taxpayer exposure. Under crony capitalism, when government and corporate America merge, both dissemble.

Now American taxpayers also own a little bit of a small nation. They provide the U.S. contribution of 17 percent of the assets of the International Monetary Fund, which is giving Greece $39 billion (the IMF also is contributing $321 billion to a "stabilization" fund for other eurozone nations with debt problems). So the U.S. government, which would borrow 42 cents of every dollar it spends under the president's 2011 budget, is borrowing to rescue Greece and others from the consequences of their borrowing.

That nation, whose GDP is below that of the Dallas-Fort Worth metropolitan area, is "too big to fail," meaning too inconveniently connected to too many big banks. Bailing out Greece really rescues European banks that improvidently bought Greek bonds. Visit here for a useful New York Times graphic illustrating how European nations borrow from one another. For example, Italy owes France (French banks) $511 billion, a sum nearly equal to 20 percent of France's GDP. About one-third of Portugal's debt is held by Spain, which has $238 billion of its debt held by Germany and $220 billion by France. Russell Roberts of George Mason University notes that this "discourages prudence and wariness" because when "everyone has financed everyone else, you can justify bailing everyone out."

At the Parthenon last week, the Greek Communist Party, which got 8 percent of the vote in the last national election, draped banners emblazoned with the hammer and sickle: "Peoples of Europe Rise Up." Of course. "Arise ye prisoners of starvation" exhorts "The Internationale," the left's ancient anthem. But who is to arise against whom?

Time was, the European left said it spoke for horny-handed sons of toil oppressed in dark Satanic mills. But Athens' so-called "anti-government mobs" have been composed mostly of government employees going berserk about threats to their entitlements. Even Greek air force pilots went on strike. The government, unable to say how many employees it has, promises to count them. It cannot fire many of them because article 103, paragraph 4 of the Greek constitution says: "Civil servants holding posts provided by law shall be permanent so long as these posts exist."

America's projected $9.7 trillion in budget deficits in this decade will drive the nation's debt to 90 percent of GDP (Greece's is 124 percent). So some people say that to avoid a Greek-style crisis, America should adopt a value-added tax (VAT). But Europe's most troubled nations -- the PIIGS: Portugal, Ireland, Italy, Greece and Spain -- have VATs of 20 percent, 21 percent, 20 percent, 21 percent and 16 percent, respectively. As part of its austerity penance, the Greek government is going to give itself more money by raising its VAT to 23 percent.

Germans are furious about being the biggest bailers in this bailout of a nation where tax evasion is pandemic. They have not been assuaged by being told by their chancellor, Angela Merkel, that the stakes are stupendous: Their money will save "Europe." Hearing that, Greeks bearing banners proclaiming "Out with the IMF" might think:

Why accept "austerity" (as that is understood in Greece -- no more annual bonuses of two months' salary, no more retirement at 53)? Suppose, after pocketing some of the bailout, we just threaten to collapse and make a mess of "Europe"?

Greece now knows the terrific strength of weakness. Beware of Greeks -- or any other people -- receiving gifts.
Copyright 2010, Creators Syndicate Inc.

Page Printed from: at May 13, 2010 - 10:52:59 AM PDT

Wednesday, May 12, 2010

An Incredible Tribute

"A man's worth can be measured in many different ways. Most of these ways are foolish.
"Is a man's worth measured by his wealth? Hardly. History is littered with wealthy people who are scoundrels. I meet lots of wealthy people whom I detest -- whom I don't wish to be near or whom I pity because they are shallow.
"Is a man's worth measured by his power? Absolutely not. Hitler and Stalin and Mao had enormous power. But they are among the scummiest of history's scumbags. Powerful people are almost always detestable creeps.
"Is a man's worth measured by his education? No. Many people with advanced college degrees (and I know lots of them!) lack decency and generosity. Too many are crybabies, more childish than mature and more clever than wise.
"Too few men are truly great. Greatness comes from within and is often invisible to eyes unfamiliar with a great person. A man is great only if he is responsible; only if he is a loyal and loving husband and father and friend; only if he teaches his children and grandchildren properly, not only with words but by example; only if he is free of envy and spite and pettiness."

Read the entire tribute. This part was the most potent:
"I also remember how, a few years ago when you and Mom were visiting us in Virginia, an offensive former colleague of mine ridiculed a view you expressed about the economy. You took no offense at his remark. You just smiled, and said only, 'Well, that's how things look to me, but I'm not as educated as you are.' Your voice had no trace of insult or anger. You didn't back down from your view in the face of my colleague's obnoxious remark, but nor did you deny that he might be correct. By word and example, you (a shipyard worker) upstaged my colleague (a university professor) in both tolerance and good manners."

This reminds me of the "True Gentleman." Based on this tribute, it would seem the man in question was one.
Thanks for sharing, Dr. B.

Monday, May 10, 2010

Samuelson on the Death Spiral

Excerpts follow, link below:

WASHINGTON -- What we're seeing in Greece is the death spiral of the welfare state. This isn't Greece's problem alone, and that's why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.

To be sure, Greece's plight is usually described as a European crisis -- especially for the euro, the common money used by 16 countries -- and this is true. But only up to a point.

The Euro currency clearly hasn't lived up to its promises. It was supposed to lubricate faster economic growth by eliminating the cost and confusion of constantly converting between national currencies.

Economic growth in the "euro area" (the countries using the currency) averaged 2.1 percent from 1992 to 2001 and 1.7 percent from 2002 to 2008. Multiple currencies were never a big obstacle to growth; high taxes, pervasive regulations and generous subsidies were. As for political unity, the euro is now dividing Europeans.

If other euro countries (Portugal, Spain, Italy) suffer Greece's fate -- lose market confidence and can't borrow at plausible rates -- there would be a wider crisis.

Countries everywhere already have high budget deficits, aggravated by the recession. Greece is exceptional only by degree. In 2009, its budget deficit was 13.6 percent of its gross domestic product (a measure of its economy); its debt, the accumulation of past deficits, was 115 percent of GDP. Spain's deficit was 11.2 percent of GDP, its debt 56.2 percent; Portugal's figures were 9.4 percent and 76.8 percent. Comparable figures for the United States -- calculated slightly differently -- were 9.9 percent and 53 percent.

Aging populations make the outlook worse. In Greece, the 65-and-over population is projected to go from 18 percent of the total in 2005 to 25 percent in 2030. For Spain, the increase is from 17 percent to 25 percent.

The welfare state's death spiral is this: Almost anything governments might do with their budgets threatens to make matters worse by slowing the economy or triggering a recession. By allowing deficits to balloon, they risk a financial crisis as investors one day -- no one knows when -- doubt governments' ability to service their debts and, as with Greece, refuse to lend except at exorbitant rates. Cutting welfare benefits or raising taxes all would, at least temporarily, weaken the economy. Perversely, that would make paying the remaining benefits harder.

Greece illustrates the bind. To gain loans from other European countries and the International Monetary Fund, it embraced budget austerity. Average pension benefits will be cut 11 percent; wages for government workers will be cut 14 percent; the basic rate for the value added tax will rise from 21 percent to 23 percent. These measures will plunge Greece into a deep recession. In 2009, unemployment was about 9 percent; some economists expect it to peak near 19 percent.

If only a few countries faced these problems, the solution would be easy. Unlucky countries would trim budgets and resume growth by exporting to healthier nations. But developed countries represent about half the world economy; most have overcommitted welfare states. They might defuse the dangers by gradually trimming future benefits in a way that reassured financial markets. In practice, they haven't done that; indeed, President Obama's health program expands benefits. What happens if all these countries are thrust into Greece's situation? One answer -- another worldwide economic collapse -- explains why dawdling is so risky.

Copyright 2010, Washington Post Writers Group

Thursday, May 6, 2010

Cal Pension Death Spiral

The state pension follies
Broken system, not side issues, should be focus of reform push
Tuesday, April 20, 2010 at 12:02 a.m.
For years, congressional earmarks have been the target of vast public and media ire. Earmarks are obnoxious in many ways. They are lightly scrutinized, if at all; they are commonly used as political payoffs; and they promote a culture of corruption, as San Diegans witnessed with Randy "Duke" Cunningham, the local congressman turned federal prison inmate.
But the problem with devoting so much energy to earmarks is that they are a relatively minor part of a vastly larger problem: enormous federal deficits and the burgeoning national debt. Consider what happened in February: The U.S. government spent $328 billion while only receiving $107 billion in revenue. For anyone worried about government spending, preventing similar fiscal atrocities should be the priority, not fighting earmarks.
Now we're seeing a similar dynamic in California with another huge long-term fiscal problem: the cost of public employee pensions. In Sacramento, reformers are pushing for eliminating the use of "placement agents" - well-connected insiders, normally - to acquire hundreds of millions of dollars in investments from the California Public Employees' Retirement System and the California State Teachers' Retirement System. There are also efforts to make it more difficult for public employees to spike their pensions through dubious late-career job transfers and to have pensions be based on an average of a worker's final five years of pay, not the final year alone.
These ideas, while worthy, don't address the pension system's fundamental problem: Its basic structure is unaffordable. California needs a complete break with current policies that allow government workers to retire in their 50s with pay equal to 60 percent to 90 percent of their final salaries. We need a new system with much less generous pensions and with disincentives to early retirements.
Last summer, CalPERS' own actuary said the current system is unsustainable. But CalPERS' official stance amounts to denial. It rails against those who doubt its optimistic return forecasts and who note the pension giant's key role in promoting a ruinous 1999 state law allowing local governments to give away 50 percent retroactive pension increases.
In key ways, this defensiveness is indistinguishable from dishonesty. As documented by David Crane, an economics adviser to Gov. Arnold Schwarzenegger, CalPERS uses accounting gambits to minimize its gigantic unfunded liabilities that it would never tolerate in the companies it invests in.
Such duplicity props up a broken system. This deserves much more attention than the relatively minor issues now taking up the time of many pension reformers in Sacramento. The sooner this sinks in, the better.

Classic Quotes, O'Rourke

"The free market is just a measurement, a device to tell us what people are willing to pay for any given thing at any given moment. The free market is a bathroom scale. You may hate what you see when you step on the scale. "Jeeze, 230 pounds!" But you can't pass a law making yourself weigh 185. Liberals think you can. And voters-all the voters, right up to the tippy-top corner office of Goldman Sachs-think so too."

Sunday, May 2, 2010

What's A VAT?

For one thing, it just adds to the hidden taxes you already pay on everything you buy.,0,4761142,print.column
And to make matters worse, try finding this federal tax on a receipt
Dennis Byrne
April 13, 2010

Where will they strike next?
Now that we've been flattened with the crushing weight of what Democrats imagine is health care reform, what additional burdens will follow? Some say it'll be "comprehensive" (there's that word again) immigration reform, providing a "path" for millions of expatriates here illegally to be rewarded with citizenship.
But you've got to be careful when trying to figure out the direction of the next Democratic blitz. The Democrats are likely to surprise you by suddenly veering off in a different direction, or sneaking in the unexpected. Like they did with the federal takeover of the student loan program while we were distracted by the sizzling health care debate. While similarly distracted, they also zapped us with another exorbitant "stimulus" package of "investments" in roads, bridges, "clean energy" and whatnot. What have I forgotten? Oh, yes, Race to the Top, another futile showering of public schools with billions in a continuing campaign to concentrate education powers in Washington.
It's as if liberals had been waiting for years for their chance to launch this frenzy, and now with a gigantic, satisfying belch, they have issued forth every invention, concoction or scheme they've been unable to launch since President Lyndon B. Johnson. I guess they figure this is their one chance in a generation of getting them all enacted, and in that, they'd be right.
So, as we rush to break up the commotion around the corner about, say, immigration reform, we end up discovering that it's only a feint. Because in the other direction, behind our backs, is approaching an even larger horror - the value added tax.
Paul Volcker, chairman of President Barack Obama's Economic Recovery Advisory Board, dropped the bomb last week when he said a value added tax is "not a toxic idea." That was an odd way to describe what essentially would be a national sales tax designed to suck hundreds of billions of dollars out of the American economy.
That Democrats might embrace a VAT surprises me. Well, maybe I shouldn't be surprised, because the tax is widely levied in Europe, and we know how fond liberals are of all things European. Republicans have occasionally toyed with the VAT idea, but as a substitute for - can I say it? - "comprehensive" reform of the present jumbled tax system. Republicans weren't proposing that it be piled on top of existing taxes.
Of greater surprise and importance about Democratic interest in the VAT is its punitive effect on poor and middle-class Americans. Liberals - at least old-school ones - long opposed sales taxes because the poor and middle class pay a greater percentage of their income for it than the rich. To put it bluntly, the regressive VAT leaves the poor and middle class holding the bag.
Here's how: The tax is levied at each stage of production. A knitting mill, for example, pays a yarn-maker $1 for the yarn in each sweater. The mill then sells each sweater to Kmart for $3. The value added is $2 per sweater. If the VAT is 10 percent of the added value, the sweater-maker pays a 20-cent tax. Now comes the hitch: The sweater-maker may not have to pay the full 20 cents; when he pays his tax, he can deduct whatever everyone upstream in the supply chain, including the yarn-maker, paid in the VAT. For example, if the yarn-maker paid 10 cents for the value he added to the product, the mill can deduct that from the 20 cents he must pay.
Confusing, yes. But here's how to keep it simple: Guess who pays the full cost of the VAT? The "end user." That'd be you, the consumer. Unlike manufacturers, you can't deduct the VAT paid by previous producers in the supply chain. You pay it all, because it is built into the price you pay for your sweaters, cars, appliances, etc. The sneaky part is that, unlike state and local sales taxes, the national sales tax is not separately listed on your receipt. So, it feels like you're not paying the tax. From the viewpoint of the politicians, it's a perfect tax because it is invisible.
Perfect, that is, for Democrats to try to impose on an unwilling public during a lame duck session after the November election. It would be their final belch in this generation.
Dennis Byrne is a Chicago-area writer and consultant. He blogs at

Copyright C 2010, Chicago Tribune