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Archive for June, 2012

I have given the left credit many times for clever humor, even when their satiric efforts target libertarians.

Well, it’s time to give the left credit again. I don’t know whether to call this satire, humor, or if I should just lump it in the catch-all category of social commentary, but it is effective. It’s visually powerful and leaves a clear message.

Even the small touches are clever, including Bush and the Pope on the TV, as well as the IMF sticker on the IV pole (though I’m surprised, given the bureaucracy’s statist track record, that the left thinks the IMF is the enemy).

But I’m not sharing this image out of pure appreciation for effective imagery. I also think it reveals two themes of left-wing thought, one foolish and the other legitimate.

1. The foolish theme is that rich nations are rich because poor nations are poor. This is the same mentality that you find among leftists such as Obama, who assume that rich people in America are rich because they somehow deprived the poor.

2. The accurate theme is that bigwigs sometimes use the coercive power of government to obtain unearned wealth. And in some cases, that unearned wealth comes from corrupt deals with politicians from third-world governments.

I address both of these points in this interview, pointing out that true capitalism generates an expanding economy so that the rich and poor both benefit, but that cronyism enables the politically well-connected to rip off taxpayers and/or consumers.

If we want to promote liberty, it would help to enlist the help of those leftists who legitimately want to make the world a better place (as opposed to the union thugs, political hacks, grievance mongers, and others who use statism as a racket to achieve wealth and power).

We need to educate the honest left about why they’re wrong about the first theme and why we’re on their side regarding the second theme.

The challenge is to teach them that good intentions sometimes don’t lead to good results, so that we can fix the mentality displayed in this cartoon.

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In their never-ending efforts to buy votes with other people’s money (see the first cartoon in this post), politicians have been expanding the welfare state and creating more dependency.

This is bad for the overall economy because it means a larger burden of government spending and it’s bad for poor people because it undermines their self reliance and self respect.

It also has very worrisome long-run effects on the stability and viability of a culture, as shown by these two cartoons.

A stark example can be seen in the food stamp program, which has morphed from a handout for the genuinely poor to a widespread entitlement for everyone from college students to the Octo-mom, and for products ranging from luxury coffee to lobster.

Here are some of the unpleasant details about the fiscal costs from Veronique de Rugy’s column in the Washington Examiner.

When the food stamp program was first expanded nationally in the 1970s, just 1 in 50 Americans participated. Today, 1 in 7 Americans receive $134 each month… With the bipartisan Farm Bill going through Congress right now, these high levels of dependency may become permanent. Some 70 percent of the nearly $1 trillion Farm Bill recently passed by the Senate will be spent on food stamps — that’s $770 billion over ten years. …An estimated 45 million Americans received food stamps in 2011, at a cost of $78 billion. That’s a twofold increase from just five years ago when 26 million people received benefits at a cost of $33 billion. …food stamp enrollment increased and spending doubled, even as unemployment and the poverty level dropped modestly between 2007 and 2011. The more important part of the story comes from the eligibility changes implemented by the Bush and Obama administrations.

The last sentence is the key. Eligibility has been expanded dramatically. Food stamps are slowly but surely becoming mainstream and that should worry all of us.

But food stamps are just one form of income redistribution. Welfare spending also is a problem.

Here are some excerpts from a New Hampshire story, featuring a store clerk who got fired because she didn’t think welfare cards should be used to buy cigarettes.

Jackie R. Whiton of Antrim had been a six-year employee at the Big Apple convenience store in Peterborough until a single transaction sent her job up in smoke. The store clerk was fired after she refused to take a customer’s Electronic Balance Transfer card to pay for cigarettes. …Whiton said she did not think EBT cards could be used to purchase cigarettes and refused to sell to him. The two “had a little go-around” as the line got longer behind him, said Whiton. “I made the statement, ‘do you think myself, that lady and that gentlemen should pay for your cigarettes?’ and he responded ‘yes,’ ” Whiton said. …Charles E. Wilkins, the general manager of the C.N. Brown Co. that runs the stores, said the EBT cards in the cash phase could be used for any items, including alcohol, tobacco and gambling. Wilkins said the company gave Whiton the option of staying but she said she would not accept the cards anymore. “She didn’t think it was right and just wasn’t going to sell to people in that program anymore,” Wilkins said. Whiton said when she came to work the next day, her manager asked her how much notice she was giving. When she responded “a week,” she was told the home office had just called and fired her.

Ms. Whiton is now one of my personal heroes, joining Mr. Mothershead, another store clerk who had the right reaction when confronted by someone who tried to get something he didn’t earn (albeit using a different tactic).

Last but not least, here’s something that arrived in my inbox yesterday.

A bit harsh, but we have gotten to a strange point where the Obama Administration is bribing states to add more food stamp recipients and even running ads to lure more people into food stamp dependency.

So, yes, Billy Fleming (assuming he’s real) has a right to be upset.

P.S. Here’s some more welfare humor.

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I’ve already thrown in my two cents on yesterday’s disappointing decision, and I was planning on ignoring the issue for a few days because I’m so irked by the result.

But they say laughter is an effective part of grief therapy, so let’s take some solace in these cartoons.

This first one is about the very serious issue of increased authority and power for the IRS.

Technically, the Supreme Court decision didn’t give the IRS any more power than it already had been given under the legislation, but the cartoon isn’t claiming otherwise, so it gets points for being accurate and (tragically) amusing.

By the way, here’s a cartoon making a similar point from back in 2010 when Obamcare was being debated.

Next we have a cartoon about Chief Justice Roberts and his new BFF status with Obama. I almost didn’t include it because Roberts deserves nothing but scorn, but I don’t want my feelings to interfere.

Speaking of Roberts, this next cartoon is accurate in many ways.

It’s designed to blame Bush for appointing a Justice who would put establishment approval before fealty to the Constitution, but I think it’s also true because Obama might not have won – and the Democrats certainly wouldn’t have picked up so many seats in the House and Senate – if Bush had not imposed so much statist legislation and weakened the economy, thus paving the way for big Democrat victories in 2006 and 2008.

And here’s a cartoon making the obvious point that Obama prevaricated.

I’ve saved my favorite for last, showing how the Supreme Court botched its responsibility.

But even though it’s my favorite of the five cartoons, I would make a change (just like I suggested alterations to a very good Chuck Asay cartoon back in April).

In this case, I also would amend this gem by replacing “economy” with “Constitution.”

I hope all these cartoons make you feel a bit better. If not, you can look at some R-rated Obamacare humor here, here, and here. And, just for the heck of it, here’s a PG-rated Obamacare joke to end on a more subdued note.

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America’s political elite is nauseating for many reasons, but perhaps most of all when they blame others for problems that are caused by misguided government policies. A stark example is the way they attacked the Facebook billionaire who moved to Singapore because of punitive taxation and class-warfare policy.

Today, let’s look at an example that affects almost everybody rather than just a handful of rich people. Many people in Washington sanctimoniously say that American households and businesses are too focused on the short term and that we don’t save enough.

But as I explain in this CBNC interview, tax and spending policies from Washington have undermined the incentive to save.

Allow me to elaborate on three of my examples.

1. Look at this post comparing the red ink from America’s bankrupt Social Security system with the huge levels of private savings generated by Australia’s system of personal retirement accounts.

Good politicians would respond by copying Australia and reforming Social Security. But good politicians are like unicorns.

2. Or look at this chart showing the extensive double taxation in our tax code, as well as these international comparisons of how America over-taxes dividends and capital gains.

Good politicians would respond by junking the tax code and adopting a flat tax, which has no double taxation of income that is saved and invested. But good politicians are like the Loch Ness Monster.

3. And consider the fact that the Obama Administration has just imposed a regulation that will discourage foreigners from depositing money in American banks, thus driving capital from the U.S. economy.

Good politicians would minimize the damage of anti-savings policies by keeping America a haven for foreign capital. But good politicians are like Bigfoot.

The moral of the story, just in case you haven’t picked up on the theme, is that bad things happen because politicians can’t resist expanding the burden of government when they should be doing the opposite. Which is why this poster is funny, but in a painful way.

P.S. I should have mentioned that some politicians think that we can boost savings by imposing a value-added tax! This is not only a perverse example of Mitchell’s law, but it’s also completely illogical.

A VAT does not change the incentive to save since current consumption and future consumption are equally taxed. But it does reduce the amount of money people have, thus reducing both private consumption and private savings.

Statists would argue that a new tax will reduce the budget deficit and thus reduce the amount of private savings that is being used to finance government debt. That’s only true, though, if you’re naive enough to think politicians won’t spend the new revenue. Good luck with that.

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I’m not a lawyer, or an expert on the Constitution, though I sometimes play one on TV.

But I can read, and I’ll agree with my friends on the left that the federal government has a broad power to tax. I wish the 16th Amendment had never been ratified, but its language gives the federal government a green light to rape and pillage.

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

That being said, the power to tax is not the same as the power to spend. And at the risk of sounding old fashioned, my big objection to the Obamacare decision is that health care is not listed as one of the federal government’s enumerated powers in Article I, Section VIII of the Constitution.

Sadly, that horse got out of the barn many decades ago, culminating in a horrible 1942 Supreme Court decision that said a man couldn’t grow crops on his own land to feed his own animals for consumption by his own family.

But let’s look at the bright side. Even though the Obamacare case was decided incorrectly, at least the judiciary is beginning to reconsider these issues, thanks in large part to the work of the Cato Institute’s legal scholars and adjunct legal scholars.

P.S. While the federal government has a broad power to tax, I should add that this doesn’t – or at least shouldn’t – vitiate other provisions of the Constitution. This is why it is so disappointing that we’ve seen the erosion of key civil liberties such as the presumption of innocence and the 4th Amendment’s protection against unreasonable searches and seizures.

P.P.S. This Michael Ramirez cartoon about Obamacare and the Constitution is amusing, though that’s not much solace given what happened. And here’s another one of his cartoons, this one on the broader theme of Obama vs. the Founding Fathers.

P.P.S. Speaking of cartoons, this one seems especially appropriate today.

If you like that one, you can see another Breen cartoon here.

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I was born 54 years ago in the People’s Republic of New York.

Back then, all I wanted was a new baseball glove

But I don’t mention that because I want you to send me a present or to say Happy Birthday.

Instead, I’m hoping at least five of the Justices on the Supreme Court will make this day special by rejecting Obamacare.

And I mean the entire legislation, not just the mandate. I want them to throw out all the new taxes, all the new spending, all the new subsidies, and all the new market distortions.

My video on Obamacare, for instance, completely focused on how the legislation would expand the burden of government. The mandate is a bad idea, without question, but it’s also a big mistake to impose more spending and taxes when government already is far too big.

I’m worried, though, that the Court will reject the mandate and decide the rest of the law is okay. Not only does this mean we’ll be stuck with bigger government, but it also creates a scenario where politicians – including squeamish Republicans – may decide to enact other bad laws.

John Stossel shares my concerns about what may happen after a Supreme Court decision.

I’m scared. I fear that even if the Supreme Court overrules most of Obamacare (or did already, by the time you read this), Republicans will join Democrats in restoring “good” parts of the law…parts of Obamacare are popular. People like getting what they think is free stuff.

John elaborates, noting that politicians may enact laws that destroy the insurance market.

…discrimination is what makes insurance work. An insurance regime where everyone pays the same amount is called “community rating.” That sounds fair. No more cruel discrimination against the obese or people with cancer. But community rating is as destructive as ordering flood insurance companies to charge me nothing extra to insure my very vulnerable beach house, or ordering car insurance companies to charge Lindsay Lohan no more than they charge you. Such one-size-fits-all rules take away insurance companies’ best tool: risk-based pricing. Risk-based pricing encourages us to take better care of ourselves. Car insurance works because companies reward good drivers and charge the Lindsay Lohans more. If the state forces insurance companies to stop discriminating, that kills the business model. No-discrimination insurance isn’t insurance. It’s welfare. If the politicians’ plan was to create another government welfare program, they ought to own up to that instead of hiding the cost.

And since big business has a dismaying habit of getting into bed with big government, John isn’t expecting the insurance industry to defend markets.

Women go to the doctor more often than men and spend more on medicines. Their lifetime medical costs are much higher, and so it makes all the sense in the world to charge women higher premiums. But Sen. John Kerry pandered, saying, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change!” The industry caved. The president of its trade group, Karen M. Ignagni, said that disparities “should be eliminated.” Caving was safer than fighting the president and Congress, and caving seemed to provide the industry with benefits. Insurance companies wouldn’t have to work as hard. They wouldn’t have to carefully analyze risk. They’d be partners with government — fat and lazy, another sleepy bureaucracy feeding off the welfare state. Alcoholics, drug addicts and the obese won’t have to pay any more than the rest of us. But this just kills off a useful part of insurance: encouraging healthy behavior. Charging heavy drinkers more for insurance gives them one more incentive to quit. “No-discrimination” pricing makes health care costs rise even faster.

I’ve repeatedly written that the only way to fix healthcare is to get rid of the government-created third-party payer problem.

Unfortunately, that will be very difficult precisely because people like the illusion that they don’t pay (even though they do bear the costs in the form of lower take-home wages and higher taxes).

So while I want a full-repeal birthday present from the Supreme Court, that will only provide fleeting happiness unless we solve the third-party payer problem caused by Medicare, Medicaid, tax distortions, and other forms of government intervention.

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Being a libertarian, I’m used to disappointment. So when something actually goes according to plan, I get very happy.

On that basis, I should be utterly and deliriously overjoyed about my endorsement of Francois Hollande to be President of France.  I wanted him to win, in part because he would engage in statist experiments that would help discredit bad policy.

Well, all my dreams are being fulfilled. Here’s some of a new report in the Wall Street Journal.

French Socialist President François Hollande is set to increase the minimum wage by more than inflation, betting consumers will help revive the country’s stalling economy, while his government levies more taxes on the wealthy and large corporations in a bid to reduce the budget deficit. …The government also is preparing to unveil tax increases to make good on its pledge to reduce the budget deficit to 4.5% of yearly output this year and 3% in 2013. The list includes a new tax on dividends, a new top income-tax bracket of 75% for people earning more than €1 million a year, and increases in the wealth and inheritance taxes.

It’s not terribly surprising that Hollande’s going the fully Monty with higher taxes. Indeed, I’ve already mocked those plans.

But I’m surprised that he’s pushing a higher minimum wage as well, particularly with unemployment already at high levels. This video explains why minimum wages undermine job creation and hurt the less fortunate, but Hollande apparently thinks his plan will stimulate growth.

Other European nations have become more rational and now understand that labor markets need to be more flexible.

The Smic increase and the fiscal plan are in line with Mr. Hollande’s election promises but position France at odds with most other euro-zone nations, which are seeking to keep a lid on labor costs to improve their competitiveness and rein in their budget deficits through spending cuts rather than tax increases.

The comment about “spending cuts” is nonsensical, however. Even though traditionally left-leaning organizations such as the World Bank have concluded that government is far too big in Europe, most governments have imposed huge tax increases. Only the Baltic nations have focused on spending cuts.

As such, we can expect more news like this in France.

In France, economic growth has evaporated, with national statistical office Insee forecasting a further rise in the jobless rate, from 10%. Flag carrier Air France last week said it needs to shed more than 5,000 jobs, around 10% of its workforce, by the end of next year.

The nation’s dwindling productive class, meanwhile, will get even smaller since we’re already seeing evidence that investors and entrepreneurs are going to escape to other nations with less punitive tax regimes.

I joked last month that Obama would never be able to make America as socialist as France, and Hollande is confirming that tongue-in-cheek prediction with his crazy policies.

But I should state that I don’t actually want the French people to suffer. But if they elect bad people who impose bad policy, then I want to make lemonade out of lemons and at least help the rest of the world learn from their mistakes.

As my friend (and soon-to-be American citizen) Veronique de Rugy explained in a video, we don’t want America to become more like France.

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