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Archive for the ‘Government Thuggery’ Category

It’s a bad idea when governments demand information on your bank accounts and investments so they can impose economically destructive double taxation.

It’s a worse idea when they also demand the right to tax economic activity in other jurisdictions (otherwise known as “worldwide taxation“).

And it’s the worst possible development when governments decide that they should impose a global network of data collection and dissemination as part of a scheme of worldwide double taxation.

Yet that’s exactly what’s happening. High-tax nations, working through the Paris-based Organization for Economic Cooperation and Development, want to impose a one-size-fits-all system of “automatic information exchange” that would necessitate the complete evisceration of financial privacy.

David Burton of the Heritage Foundation explains the new scheme for giving governments more access to peoples’ private financial information.

…the Organization for Economic Cooperation and Development released the full version of the global standard for automatic exchange of information. The Standard for Automatic Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis.

I think this is bad policy, regardless. It is based on imposing and enforcing bad tax policy.

But David goes one step farther. He warns that this global network of tax police includes many unsavory nations.

It is one thing to exchange financial account information with Western countries that generally respect privacy and are allied with the United States. It is an entirely different matter to exchange sensitive financial information about American citizens or corporations with countries that do not respect Western privacy norms, have systematic problems with corruption or are antagonistic to the United States. States that fall into one of these problematic categories but are participating in the OECD automatic exchange of information initiative include Colombia, China and Russia. …The Obama administration enthusiastically supports the OECD initiative.

Moreover, David wisely does not believe we should trust the Obama Administration’s hollow assurances that other nations won’t misuse the data.

…even the administration has realized important privacy issues at are stake. Robert B. Stack, Deputy Assistant Secretary of the Treasury for International Tax Affairs, has testified that “the United States will not enter into an information exchange agreement unless the Treasury Department and the IRS are satisfied that the foreign government has strict confidentiality protections…” Leaving these determinations to a tax agency with little institutional interest in anything other than raising tax revenue is dangerous. There is little doubt sensitive financial information about American citizens and businesses can and will be used by some governments for reasons that have nothing to do with tax administration, such as identifying political opponents’ financial resources or industrial espionage. In addition, individuals in corrupt governments may use the information for criminal purposes such as identity theft, to access others’ funds or to identify potential kidnapping victims. It is naïve to think otherwise. …The Senate should not ratify this protocol. The risks to American citizens and American businesses are too great.

David is exactly right, but too restrained and polite in his assessment.

Richard Rahn, my colleague at Cato, is more blunt in his analysis. Here’s some of what he wrote for the Washington Times.

Do you want the Obama administration sharing all of your financial information with the Russian, Chinese and Saudi Arabian governments? You may be thinking, not even President Obama would go that far. Not so… The rationale behind this despicable idea is to more effectively enable governments, such as that of France and the United States, to identify tax evaders. This might sound like a good idea until one realizes that every individual and business will be stripped of all of their financial privacy if this becomes the law of the land… all of the information that financial institutions now report to the U.S. government to try to ensure income-tax compliance, including your account balances, interest, dividends, proceeds from the sale of financial assets — would be shared with foreign governments. This would apply not only for individuals, but also for both financial and nonfinancial businesses, plus trust funds and foundations. 

Richard then explains that we can’t even trust the bureaucrats at the IRS.

The United States and other governments will, of course, claim that your sensitive financial information will remain confidential — and that you can trust the governments. After the recent Internal Revenue Service scandals — which recur every decade or so — why would anyone believe anything the IRS says? Remember, the IRS leaked information on some of Mitt Romney’s donors during the 2012 presidential campaign. It was blatantly illegal, and the IRS (i.e., you the taxpayer) paid a small fine, but no one went to jail. Many U.S. presidents have misused the IRS, starting at least as far back as Franklin Roosevelt, and the American people are always told “never again,” which is the beginning of the new lie.

And he logically concludes it would be even more foolish to trust foreign tax bureaucracies.

Particularly the tax authorities of the many nations that abuse human rights and persecute minorities, as well the tax police in nations that are too incompetent to be trusted with sensitive data.

…just think what is going to happen when all of those corrupt officials in foreign governments get ahold of it. Some will use the information for identity theft and to raid bank accounts, others for industrial espionage, some to identify potential kidnapping victims and some for political purposes. The potential list goes on and on. The U.S. Treasury Department says it will insist on strict confidentiality protections. (Lois Lerner, please call your office.) If you are a Ukrainian-American who donates to Ukrainian free-market and democratic causes, would you really think that Vladimir Putin’s team, having your financial information, would not misuse it? If you are an American Jew who donates to Israeli causes, do you really think that all of those in the Saudi government who now have full access to your confidential financial information are not going to misuse it? The Chinese are well known for using malware against their opponents. Just think of all the mischief they could cause if they had access to all of the sensitive financial information of human rights advocates in America.

Richard draws the appropriate conclusion. Simply stated, there’s no way we should have a global regime of automatic information exchange simply because a handful of high-tax nations want to remake global tax policy so they can prop up their decrepit welfare states.

As Lord Acton famously reminded us, governments are prone to misuse information and power. The instrument behind this information-sharing ploy is the OECD, which started out as a statistical collection and dissemination agency to promote free trade among its members. It has now morphed into an international agency promoting big government and higher taxes, and the destruction of financial freedom — while at the same time, by treaty, its staff salaries are tax-exempt. No hypocrisy there. Thinking Republicans and Democrats should unite around opposition to this terrible treaty and defund the OECD. Those who vote for it will deservedly be easy marks for their political opponents.

And kudos to Richard for urging the defunding of the OECD. It is absurd that American tax dollars are funding a Paris-based bureaucracy that constantly urges policies that would undermine the U.S. economy.

Especially when they’re insulated from the negative effects of the policies they push. Since they’re on the public teat, they don’t suffer when the private economy is battered. And they don’t even have to pay tax on their very generous salaries.

P.S. I’m very glad to report that at least one lawmaker is doing the right thing. Senator Rand Paul is leading the fight to block proposals that would put Americans at risk by requiring the inappropriate collection and sharing of private financial information.

P.P.S. By way of background, the OECD scheme is part of an effort to cripple tax competition so that high-tax nations can impose higher tax rates and finance bigger government. To learn more about tax competition (and tax havens), watch this four-part video series.

P.P.P.S. The OECD scheme is basically a multilateral version of the horrid “FATCA” legislation signed by Obama back in 2010.

P.P.P.P.S. Maybe I’m old-fashioned, but I think a global tax database is even worse than an Obamacare database on our sex lives.

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Michelle Obama wants the federal government to tell us what kind of food to eat.

I actually wouldn’t object if she merely used a bully pulpit to encourage healthier eating. But the busy-body crowd in Washington has a hard time distinguishing between giving advice and engaging in coercion.

So we now have legislation that gives Washington the power to interfere with food in local schools.

But not everybody is rolling over, particularly when federal rules are coercing states into banning bake sales. The National Journal reports on growing resistance to this absurd example of nanny statism from Washington. Here are some excerpts.

…states are…fighting nutrition standards that would considerably alter one of the most sacred rituals of the American public school system: bake sales. Twelve states have established their own policies to circumvent regulations in the Healthy, Hunger-Free Kids Act of 2010 that apply to “competitive snacks,” or any foods and beverages sold to students on school grounds that are not part of the Agriculture Department’s school meal programs, according to the National Association of State Boards of Education. Competitive snacks appear in vending machines, school stores, and food and beverages, including items sold at bake sales. …The pushback is not about students’ taste buds, but their wallets. Food fundraisers are a crucial source of revenue for schools, state education officials say. “Tough economic times have translated into fewer resources and these fundraisers allow our schools to raise a considerable amount of money for very worthwhile education programs,” the Georgia Department of Education wrote in a recent press release. …The statement called the federal guidelines on fundraisers “an absolute overreach of the federal government.”

Kudos to the Georgia officials who complained about government overreach.

But don’t forget that local governments certainly are capable of overreach as well, as this cartoon illustrates.

If you think banning bake sales is an example of government run amok, then you’ll be equally perturbed by what’s happening in California.

According to the Associated Press, some residents are being put in a no-win situation of being fined by either state or local government based on whether or not they water their lawns.

I’m not joking. Check out these blurbs from the story.

Laura Whitney and her husband, Michael Korte, don’t know whether they’re being good citizens during a drought or scofflaws. On the same day the state approved mandatory outdoor watering restrictions with the threat of $500 fines, the Southern California couple received a letter from their city threatening a $500 penalty for not watering their brown lawn. …They’re among residents caught in the middle of conflicting government messages as the need for conservation clashes with the need to preserve attractive neighborhoods. “My friends in Los Angeles got these letters warning they could be fined if they water, and I got a letter warning that I could be fined for not watering,” Whitney said. “I felt like I was in an alternate universe.”

It’s not an alternative universe. As Andy Johnson, Anthony Smelley, Charlie Engle, Tammy Cooper, Nancy Black, Russ Caswell, Jacques Wajsfelner, Jeff Councelller, Martha Boneta, Salvatore Culosi, and James Lieto can atttest, governments routinely abuse innocent people.

But at least we can take comfort in the fact that governments outside of America engage in equally silly actions.

Though I confess I’m not sure how to categorize the news that’s being reported by the BBC. As you can see from these excerpts, there’s apparently now a rule in China limiting public officials to no more than three mistresses.

We’ve heard a lot about China’s far-reaching anti-corruption campaign at the behest of President Xi Jinping. …But according to a report in the English-language newspaper China Daily, “adultery” is now banned for party members. …But just when you thought the party was taking a puritanical stand, the newspaper said that when authorities had previously accused officials of “moral corruption” they defined this as having more than “three mistresses”.

The Princess of the Levant didn’t allow me to engage in any field research on this issue during my recent trip to Shanghai, so I can’t comment on the accuracy of the story.

Though I wonder whether Chinese officials got any advice from America’s 42nd president before imposing these rules?

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You won’t know whether to laugh or cry after perusing these stories that will be added to our “great moments in government” collection.

For instance, did you realize that American taxpayers were saddled with the responsibility to micro-manage agriculture in Afghanistan? You’re probably surprised the answer is yes.

But I bet you’re not surprised that the money was flushed down a toilet. Here are some excerpts from a report on how $34 million was wasted.

American agricultural experts who consider soybeans a superfood…have invested tens of millions of U.S. taxpayer dollars to try to change the way Afghans eat. The effort, aimed at making soy a dietary staple, has largely been a flop, marked by mismanagement, poor government oversight and financial waste, according to interviews and government audit documents obtained by the Center for Public Integrity. Warnings by agronomists that the effort was unwise were ignored. The country’s climate turns out to be inappropriate for soy cultivation and its farming culture is ill-prepared for large-scale soybean production. Soybeans are now no more a viable commercial crop in Afghanistan than they were in 2010, when the $34 million program got started… The ambitious effort also appears to have been undone by a simple fact, which might have been foreseen but was evidently ignored: Afghans don’t like the taste of the soy processed foods.

Sadly, this $34 million boondoggle is just the tip of the iceberg. It’s been said that Afghanistan is the graveyard of empires. Well, it’s also the graveyard of tax dollars.

…the project’s problems model the larger shortcomings of the estimated $120 billion U.S. reconstruction effort in Afghanistan, including what many experts depict as ignorance of Afghan traditions, mismanagement and poor spending controls. No one has calculated precisely how much the United States wasted or misspent in Afghanistan, but a…special auditor appointed by President Obama the following year said he discovered nearly $7 billion worth of Afghanistan-related waste in just his first year on the job.

I’m guessing that most of the $120 billion was squandered using traditional definitions of waste.

But using a libertarian definition of waste (i.e., money that the federal government should not spend), we can easily calculate that the entire $120 billion was squandered.

Let’s now discuss another example of American taxpayer money being wasted in other nations. I’ve written previously about the squalid corruption at the Export-Import Bank, but Veronique de Rugy of Mercatus is the go-to expert on this issue, and she has a new article at National Review about “a project in Brazil that, if it goes bust and the Brazilians can’t pay the American contractor, your tax dollars will end up paying for.”

And what is this project?

…an Export-Import Bank–backed deal to build the largest aquarium in South America…the taxpayer exposure is $150,000 per job “supported.” Some people in Brazil are rightly upset about this. The Ex-Im loan may have lower interest rates and better terms than a regular loan, but this is probably money the indebted and poor Brazilian government can’t afford. …a real problem with the Ex-Im Bank: On one hand, it gives cheap money to large companies who would have access to capital markets even in its absence. But on the other hand, it encourages middle-income or poor countries to take on debt that they probably can’t afford, whether the products purchased are “made in America” or not.

Gee, aren’t we happy that some bureaucrats and politicians have decided to put us on the hook for a Brazilian aquarium.

But let’s try to make the best of a bad situation. Here’s a depiction of what you’re subsidizing. Enjoy.

Subsidized by American taxpayers

I hope you got your money’s worth from the image.

Perhaps I’m being American-centric by focusing on examples of bad policies from the crowd in Washington.

So let’s look at an example of government foolishness from Germany. It doesn’t involve tax money being wasted (at least not directly), but I can’t resist sharing this story because it’s such a perfect illustration of government in action.

Check out these excerpts from a British news report on over-zealous enforcement by German cops.

A one-armed man in Germany has received a full apology and refund from the police after an overzealous officer fined him for cycling using only one arm. Bogdan Ionescu, a theatre box office worker from Cologne, gets around the usually cycle-friendly city using a modified bicycle that allows him to operate both brakes – one with his foot. But on 25 March he was pulled over by a police officer who, he says, told him he was breaking the law. Under German road safety rules, bicycles are required to have to have two handlebar brakes. After a long argument at the roadside, the officer insisted that Mr Ionescu’s bike was not roadworthy and issued him with a €25 (£20) fine.

At least this story had a happy ending, at least if you overlook the time and aggravation for Mr. Ionescu.

Our last (but certainly not least) example of foolish government comes from Nebraska, though the culprit is the federal government.

But maybe “disconcerting” would be a better word than “foolish.”

It seems that our friends on the left no longer think that “dissent is the highest form of patriotism.” In a very troubling display of thuggery, the Justice Department dispatched a bureaucrat to “investigate” a satirical parade float.

Here’s some of what was reported by the Washington Times.

The U.S. Department of Justice has sent a member of its Community Relations Service team to investigate a Nebraska parade float that criticized President Obama. A Fourth of July parade float featured at the annual Independence Day parade in Norfolk sparked criticism when it depicted a zombie-like figure resembling Mr. Obama standing outside an outhouse, which was labeled the “Obama Presidential Library.” The Nebraska Democratic Party called the float one of the “worst shows of racism and disrespect for the office of the presidency that Nebraska has ever seen.” The Omaha World-Herald reported Friday that the Department of Justice sent a CRS member who handles discrimination disputes to a Thursday meeting about the issue. …The float’s creator, Dale Remmich, has said the mannequin depicted himself, not President Obama. He said he is upset with the president’s handling of the Veterans Affairs Department, the World-Herald reported. “Looking at the float, that message absolutely did not come through,” said NAACP chapter president Betty C. Andrews.

If you look at the picture (and other pictures that can be seen with an online search), I see plenty of disrespect for the current president, but why is that something that requires an investigation?

There was plenty of disrespect for the previous president. And there as also disrespect for the president before that. And before that. And before…well, you get the idea.

Disrespect for politicians is called political speech, and it’s (supposedly) protected by the First Amendment of the Constitution.

That’s even true if the float’s creator had unseemly motives such as racism. He would deserve scorn if that was the case, and parade organizers would (or at least should) have the right to exclude him on that basis.

But you don’t lose your general right to free speech just because you have unpopular and/or reprehensible opinions. And the federal government shouldn’t be doing anything that can be construed as suppressing or intimidating Americans who want to “disrespect” the political class.

P.S. Since we’re on the topic of politicized bureaucracy, we have an update to a recent column about sleazy behavior at the IRS.

According to the Daily Caller, there’s more and more evidence of a big fire behind all the smoke at the IRS.

Ex-IRS official Lois Lerner’s computer hard drive was “scratched” and the data on it was still recoverable. But the IRS did not try to recover the data from Lerner’s hard drive, despite recommendations from in-house IRS IT experts to outsource the recovery project. The hard drive was then “shredded,” according to a court filing the IRS made to House Ways and Means Committee investigators.

Gee, how convenient.

I used to dislike the IRS because of the tax code. Now I have an additional reason to view the bureaucrats with disdain.

P.P.S. One last comment on the controversy surrounding the parade float. Racism is an evil example of collectivist thinking. But it is also reprehensible for folks on the left to make accusations of racism simply because they disagree with someone.

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In some sense, there’s nothing remotely funny about the IRS’s targeting of Tea Party organizations.

It is disgusting that a powerful arm of the government became a corrupt vehicle for illegal partisan politics.

But it’s better to laugh rather than cry, so let’s enjoy this new video from Remy at Reason TV.

And let’s not forget that the IRS rewarded itself with big bonuses after the scandal!

President Obama infamously claimed there wasn’t a “smidgen” of corruption at the IRS. This Glenn Foden cartoon is the only appropriate response.

P.S. Switching to another topic, I explained recently that the left was wrong about unemployment insurance. The statists told us that paying people to be unemployed wouldn’t increase joblessness, but virtually all the evidence is on the other side.

Now we have even more research emphasizing that point. Here’s a blurb from some new research published by the St. Louis Federal Reserve.

…we find that the extension of unemployment benefits affected the labor market status of long-term unemployed workers in late 2013. Without extended UI benefits, these unemployed workers would have been more likely to be employed, more likely to exit the labor force, and on average 1.9 percent less likely to remain unemployed in the following period. In short, our simulated early termination of the EUC program lowered the unemployment rate by 3 to 5 basis points, suggesting that the December 2013 expiration of the EUC program might have slightly lowered the unemployment rate in early 2014.

However, since most leftists are not very literate about economics, let’s simplify the issue. Maybe they can understand some cartoons. Here are some options from Michael Ramirez, Robert Gorrell, and Chuck Asay, as well as a great Wizard-of-Id parody.

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When I wrote recently that the IRS was corrupt, venal, and despicable, I didn’t realize that I was bending over backwards to be overly nice.

Every new revelation in the scandal shows that the agency is beyond salvage.

Writing for Real Clear Markets, Diana Furchtgott-Roth of the Manhattan Institute is appropriately skeptical of the IRS.

Coincidentally, Lerner’s computer crashed 10 days after Congress expressed concern about possible targeting of conservative groups. Emails between January 2009 and April 2011 were lost. Her computer is not available for examination, because it has already been recycled by the IRS. In a further coincidence, or not, a backup tape of agency emails made by the IRS was erased after 6 months. …As Georgia Republican Rep. Doug Collins said, the story sounds more and more implausible.

Diana then explains why this matters, using Obamacare as an example of why we should worry about a corrupt and politicized IRS.

Why should we care about missing emails from 2009 to 2011? As former Secretary of State Hillary Clinton said in a 2013 hearing about Benghazi, “What difference at this point does it make?” It is not just that Americans’ basic trust in the IRS is being called into question. Over the past five years the IRS has been concentrating its power, giving the agency increased opportunities to pick on people and groups it dislikes. …Sarah Hall Ingram, who was commissioner of the IRS’s Tax-Exempt and Government Entities Division from 2009 to 2012 during the Lois Lerner scandal, now heads the IRS Affordable Care Act Office. …Do Americans trust the IRS to calculate these subsidies and refunds impartially? The IRS already made a power grab in May 2012 by extending premium subsidies to the 34 states with federal exchanges.

She also points out that the IRS is carrying water for the President’s attempt to stifle opposing views.

…the IRS proposed regulations that would allow the agency to regulate the free speech of President Obama’s political opponents, while leaving the political activities of his friends untouched. …The regulations were targeted at tax-exempt organizations that file under 501(c)(4) of the IRS code… Under the new rules these groups would not be allowed to engage in voter education that mentions a candidate within two months of a general election or one month of a primary. Left untouched by the proposed regulations were unions, which file under 501(c)(5) of the Internal Revenue Code.

Stan Veuger of the American Enterprise Institute also is not persuaded by the IRS’s deceitful excuses.

The Internal Revenue Service (IRS) and the administration have consistently spouted lies and half-truths about the IRS scandal. The latest development in the controversy is that crucial emails have conveniently gone missing – is there any reason to believe that it is, as the administration claims, a mere accident? …This effort to keep conservative 501(c)(4) organizations from attempting to prevent president Obama’s reelection was, of course, hidden from the public. Ms. Lerner was careful to try and structure the IRS’ targeting in such a way that would not be appear to be a “per se political project,” in her own words, and denied in meetings with, and letters to, congressional oversight staff in 2012 that conservative groups were treated exceptionally or that the IRS’ ways of evaluating 501(c)(4)s had ever changed. The claims were false… In her response to a planted question from the audience at an American Bar Association tax conference, Ms. Lerner blamed the targeting of conservative groups on “our line people in Cincinnatti.” This has also turned out to be false. …non-Tea Party groups were never subjected to the same delays and investigations as Tea Party groups were. This once more suggest that obfuscation and dishonesty were central to the IRS’ approach to their targeting practices.

He even crunches some numbers to show that the claims from the IRS are utterly implausible.

It would be very helpful to see what communications took place between IRS officials and other Democrats. And this is where the missing emails come in. …They are gone, they now tell us, hard drives crashed and tapes were erased. Should we believe that? Of the 82 IRS employees tied to the targeting operation, 7 had their email disappear, or 8.5%. According to IRS commissioner John Koskinen, the industry standard is 3 to 5%. Under reasonable statistical assumptions, that makes the IRS scandal disappearance rate about as likely as the emails having been eaten by unicorn, with a probability far smaller than 1%. Given the IRS’ track record in this affair, that is way beyond anything that would justify giving the IRS and Lois Lerner the benefit of the doubt.

Amazingly, 12 percent of Americans believe the IRS. Here’s some polling data that Phil Kerpen shared on his twitter feed.

I’m particularly happy that younger people are more skeptical. They’re more tech-savvy and realize that the IRS’s excuses are a bunch of….well, a bunch of stuff that comes out of male cows.

And here are some good cartoons on the topic, starting with Eric Allie’s gem.

I like how he includes a representative of the 12 percent of deliberately gullible Americans.

And here’s another contribution from Allie.

And here’s Steve Kelley’s cartoon on the topic.

He’s right, needless to say. It would be better if the IRS was merely squandering money rather than seeking to subvert the democratic process.

Last but not least, here’s an evergreen cartoon about the IRS from Glenn McCoy.

Oh, and let’s not forget two other items.

The political hack who now heads the IRS is a partisan leftist.

IRS Commissioner John Koskinen contributed more than $85,000 to Democratic candidates and committees…with a $5,000 donation to President Obama in 2012 and $19,000 to the Democratic National Committee from 1988 to 2008.

And the political hack who was forced out of the IRS actually wanted to target a US Senator.

…the Internal Revenue Service’s (IRS) targeting of conservative individuals includes a sitting United States Senator. According to emails reviewed by the Committee under its Section 6103 authority, …Lois Lerner sought to have Senator Chuck Grassley (R-IA) referred for IRS examination.

There are more horror stories to share, but this is enough for one day.

Suffice to say, you can understand why my fantasies involve tax reform rather than supermodels.

P.S. I can’t resist one more comment. Don’t forget that the corrupt and partisan IRS is in charge of Obamacare enforcement, but the bureaucrats want to be exempt from that government-run healthcare system. Just like politicians.

The moral of the story: Washington is even worse than you think. It’s a racket for insiders, but a burden for the rest of us.

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With occasional exceptions such as Switzerland and Estonia, there’s rarely good news from Europe. At least with regards to fiscal policy.

But maybe there’s a bit of sense on the Iberian Peninsula. I reported a couple of years ago that Portugal was at least flirting with the notion of lower tax rates and spending restraint.

Now Spain may be undoing some class-warfare mistakes on tax policy.

The Wall Street Journal is reporting that the government plans to lower tax rates on both personal income and corporate income.

Spanish leaders who broke their no-new-taxes pledge after taking office 2½ years ago announced sweeping tax cuts on Friday, saying it was time to compensate a recession-battered populace for its sacrifices and boost a nascent recovery. Budget Minister Cristóbal Montoro, announcing the government’s main economic initiative of the year, said the planned reductions of income and corporate taxes will stimulate investment, creating jobs and making Spanish companies more competitive abroad. …Spain’s corporate tax rate would drop from 30% to 25% by 2016. People earning more than €300,000 ($408,000) a year would see their personal income-tax rate fall from 52%, one of the highest in Europe, to 45% in 2016. …The cuts announced Friday would by 2016 bring income-tax rates back to their pre-2012 levels for high-income earners and lower them slightly for low-income earners.

For what it’s worth, I don’t think the tax cuts will happen – or at least won’t be durable – unless Spain’s politicians also impose some long-run spending restraint.

Fortunately, there are some good examples they can follow.

Since we’re on the topic of international tax developments, let’s shift to another story.

If you want hard-core tax enforcement, beyond the fantasies of even the IRS, then it’s hard to beat the ISIS crowd in Iraq.

Let’s not give the IRS any ideas

Here some of what the New York Times reported on that group’s “tax” regime.

Behind the image of savagery that the extremists of the Islamic State in Iraq and Syria present to the world, as casual executioners who kill helpless prisoners and even behead rival jihadis, lies a disciplined organization that employs social media and sophisticated financial strategies in the funding and governance of the areas it has conquered. …Once in charge, they typically levy “taxes,” which are just as lucrative. So-called road taxes of $200 on trucks are collected all over northern Iraq to allow them safe passage. The Iraqi government claims that the insurgents are now levying a “tax” on Christians in Mosul, who were a significant minority there, to avoid being crucified.

Hopefully, this is just a short-run aberration and not a new idea that will spread to other nations.

Though politicians in other countries already have demonstrated that they’re willing to innovate when it comes to extracting money from their citizens.

Showing amazing capacity for innovation, Pakistan’s tax authority hires transgendered people to encourage (presumably homophobic) taxpayers to cough up more money.

The tax police in England have floated a proposal to have all paychecks go directly to the tax authority, which would then decide how much gets forwarded to taxpayers.

And since we’re talking about the United Kingdom, that nation’s despicable political class wants to improve compliance by indoctrinating kids to snitch on their parents.

Speaking of snitches, tax authorities in both the state of New York and the city of Chicago have programs encouraging neighbors to rat our neighbors.

And New York also has won a case to treat lap dances – for purposes of sales tax – as a service rather than art.

And who among us isn’t impressed that the German tax authorities have figured out how to levy a prostitute tax using parking meters.

Just remember that politicians view any money you earn as either a current tax obligation or a potential source of future revenue.

After all, all money belongs to them.

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Why are so many people upset that the Obama White House keeps arbitrarily changing parts of Obamacare – even when bad provisions are being suspended or certain groups are being exempted from bad policy?

Well, some of them may simply dislike Obama or government-run healthcare, and there’s nothing wrong with being against a politician or rejecting bigger government.

But the most important reason to be upset is that the White House is making a mockery of the rule of law.

But what exactly is the rule of law? Why, for instance, does it have such a large impact on a nation’s grade in the Economic Freedom of the World Index?

This Learn Liberty video explains that the rule of law is critical because it creates a framework for honest exchange and it limits the power of politicians and government.

As Professor Bell states, the rule of law provides “a necessary framework for civil society” and enables “tolerance, liberty, and free trade.”

I also like that the video highlights the importance of having laws that are easy to understand, which means that Byzantine schemes like Obamacare are contrary to the rule of law – even if they are administered honestly.

Which explains why the tax code also is an affront to the rule of law, whether we’re looking at incomprehensible policy, illegal regulations, or extraterritorial application.

And the corrupt TARP bailout obviously is contrary to the rule of law as well.

Let’s now step back and take a big-picture look at the issue. Perhaps the best example of the rule of law is the United States Constitution. That sacred document was written precisely to limit the power of the state in hopes or preventing the capricious rule of men.

This Thomas Jefferson quote gets to the heart of the matter.

It’s embarrassing that the United States only ranks #19 in an international comparison of the rule of law. Particularly when the presence of the rule of law is the biggest factor that separates advanced nations from the developing world.

P.S. It’s discouraging that the Constitution’s protections of individual liberty have eroded, so let’s share a bit of good news.

I’ve written before about the threat posed by international bureaucrats who want to cartelize business taxation in order to enable higher tax rates.

Well, at least some American lawmakers are not on board with this scheme, as reported by Reuters.

Republican tax law writers in the U.S. Congress and multinational businesses on Monday said international talks aimed at preventing companies from moving profits to low-tax countries could hurt the United States. Representative Dave Camp and Senator Orrin Hatch of Utah warned of the effect on U.S. taxpayers from the Organisation for Economic Co-operation and Development’s (OECD) work to develop multilateral tax rules. Known as the Base Erosion and Profit Shifting (BEPS) project, the OECD effort calls for revising tax treaties, tightening rules and more government tax information sharing.

The Wall Street Journal also has criticized the OECD’s “global revenue grab.”

Let’s hope this is a sign that this leftist campaign for higher taxes has hit a brick wall.

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It’s not as sophisticated as Professor Bryan Caplan’s Purity Quiz and it doesn’t have the simple elegance of the World’s Smallest Political Quiz, but at least you don’t need to answer any questions to see where you stand in this Venn Diagram that my intern shared with me.

We don’t know who created it, but it’s a clever shortcut to help people to identify their philosophical alignment based on what they think are the proper roles of government.

I’ll do a bit of nit-picking later in this column, but my immediate observation is that I belong in the “Minarchism” camp but that I’m willing to settle for “Classical Liberalism.”

Philosophical Circles

Now it’s time to quibble.

1. There’s no scope for federalism in this Venn diagram, and that may affect the answers of some people. I am completely against the notion that Washington should have any role in our education system, for instance, but I wouldn’t lose much sleep if state and local governments operated school choice systems. Does this mean I’m in the “modern conservatism” camp?

2. I’m also not clear why the person who created the Diagram decided that buses and subways are part of “classical liberalism.” I don’t consider transportation to be a core function of the state. Though this may be another issue where federalism plays a role. I’m not going to get overly agitated if the taxpayers of New York City want to tax themselves (and only themselves) to operate mass transit. Just don’t ask me to pay for it.

3. For reasons I’ve explained before, there’s a difference between socialism (government ownership of the means of production) and redistributionism (government taxing some to give things to others). So at the risk of being pedantic, I would reclassify the big red circle as “total statism.”

But let’s not make the perfect the enemy of the good. This Venn Diagram/Circle Test is very well done.

P.S. The worst political quiz I ever took was the one that pegged me as a “moderate” with “few strong opinions.”

P.P.S. Reason’s political candidate quiz, by contrast, produced a much more logical conclusion.

P.P.P.S. I’ve written a few times about the politicized corruption at the IRS. Building on recent revelations, Kevin Williamson has a superb column at National Review on this topic.

The first excerpt notes that the IRS engaged in an ideological witch hunt.

…the evidence, now conclusive and irrefutable, that the Internal Revenue Service, under the direction of senior leaders affiliated with the Democratic party, was used as a political weapon from at least 2010 through the 2012 election. …the IRS targeted these conservative groups categorically, regardless of whether there was any evidence that they were not in compliance with the relevant regulations. Simply having the words “tea party,” “patriot,” or “9/12”…in the name was enough. Also targeted were groups dedicated to issues such as taxes, spending, debt, and, perhaps most worrisome, those that were simply “critical of the how the country is being run.” Organizations also were targeted based on the identity of their donors. Their applications were delayed, their managements harassed, and the IRS demanded that they answer wildly inappropriate questions, such as the content of their prayers.

Our second excerpt explains that the witch hunt was directed by partisans in Washington.

…the direction came from Washington and was, in the words of the agency’s own e-mails, “coordinated with” a senior manager there, Rob Choi, director of rulings and agreements. This began at the behest of Democratic officeholders, including Senator Carl Levin of Michigan, who requested that the IRS disclose to him information about tea-party groups that it would have been illegal for the IRS to disclose.

In our final excerpt, Kevin explains why this is – or at least should be – very troubling for anyone who thinks America should have the rule of law.

The IRS is not just a revenue agency — it is a law-enforcement agency, a police agency with far greater powers of investigation and coercion that any normal police force. Its actions in this matter are not only inappropriate — they are illegal. Using government resources for political ends is a serious crime, as is conspiring to mislead investigators about those crimes. …The most important question that must be answered in this matter does not involve the misbehavior of IRS officials and Democratic officeholders, though those are important. Nor is it the question of free speech, vital and fundamental as that is. The question here is nothing less than the legitimacy of the United States government. When law-enforcement agencies and federal regulators with extraordinary coercive powers are subordinated to political interests rather than their official obligations — to the Party rather than to the law — then the law itself becomes meaningless, and the delicate constitutional order we have enjoyed for more than two centuries is reduced to a brutal might-makes-right proposition. …The IRS investigation is no mere partisan scandal, but a moral challenge for the men and women who compose the government of this country.

Amen.

Unconstrained government enables corruption and oppression.

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Since I’m a public finance economist, I realize I’m supposed to focus on big-picture issues such as tax reform and entitlement reform. And I do beat those issues to death, so I obviously care about controlling the size and power of government.

But I like to think I’m also a decent human being. And this is why I get even more agitated when politicians and bureaucrats engage in thuggish behavior against comparatively powerless citizens.

Some of the worst examples of government thuggery are the result of “asset forfeiture,” which happens when governments confiscate the property of people who haven’t been convicted of any crime. Heck, sometimes they’re not even charged with any crime.

*Such as when the government wanted to steal someone’s truck because a different person was arrested for drunk driving.

*Such as when the government tried to steal the bond money a family has collected to bail out a relative.

*Such as when the government seized nearly $400,000 of a business owner’s money because it was in the possession of an armored car company suspected of wrongdoing.

*Such as when the government sought to confiscate an office building from the owner because a tenant was legally selling medical marijuana.

*Such as when the government killed a man as part of an anti-gambling investigation undertaken in hopes of using asset forfeiture to steal other people’s cash.

But we do have a bit of good news. All these horror stories seem to be causing a backlash.

Fox News has a very revealing article on how this system is under assault. The story begins by explaining how asset forfeiture is an open invitation for abuse and grossly inconsistent with the Constitution.

Civil forfeiture is when police and prosecutors seize property, cars or cash from someone they suspect of wrongdoing. …authorities don’t have to prove guilt, file charges or obtain a conviction before seizing private property. Critics say it is a process ripe for abuse, and one which leaves citizens little means of fighting back. “You breed a culture of ‘take first, ask questions later,’” Larry Salzman, an attorney with the Institute for Justice, told FoxNews.com. “It’s thuggish behavior.” …civil forfeitures represent a dangerous area of the U.S. justice system where, by law, a person is supposed to be presumed innocent until proven guilty and not the other way around.

The report from Fox cites a couple of reasons why asset forfeiture is misguided. One major problem is that it gives cops a budgetary incentive to steal.

In Tennessee, local law enforcement agencies get to keep 100 percent of all property seized through civil forfeiture – an incentive some say can tempt police to go after property for the wrong reasons.

Fortunately, people are now fighting this horrible procedure. The story explains that a former law enforcement official who is now a state lawmaker, Barrett Rich, is trying to reform Tennessee’s awful bill.

And Minnesota actually has eliminated this odious tactic. Here are some excerpts from a Forbes column.

In a big win for property rights and due process, Minnesota Gov. Mark Dayton signed a bill yesterday to curb an abusive—and little known—police practice called civil forfeiture. Unlike criminal forfeiture, under civil forfeiture someone does not have to be convicted of a crime, or even charged with one, to permanently lose his or her cash, car or home. …Now the government can only take property if it obtains a criminal conviction or its equivalent, like if a property owner pleads guilty to a crime or becomes an informant. The bill also shifts the burden of proof onto the government, where it rightfully belongs.

Wyoming’s state legislature also is considering reform, so there are positive developments in many different states.

For more information, click here for a very good introductory video about civil asset forfeiture.

If you like videos, click here for a horrifying video about the government stealing $17,000 from an innocent man.

And here’s another video, this one about the government stealing money from a family grocery store.

Last but not least, if you want to get more upset, here are some additional examples of non-forfeiture related government thuggery.

Gee, it’s almost enough to make a person a libertarian!

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I realize this may be a thought crime by DC standards, but it sure would be nice to eliminate the high tax rates that undermine economic growth and reduce American competitiveness.

At the risk of sharing too much information, I fantasize about a world without the internal revenue code. In addition to getting rid of high tax rates, I also want to abolish the pervasive double taxation of income that is saved and invested.

Tax Code PagesJust as important, I want to wipe out the distorting loopholes that tilt the playing field in favor of politically connected interest groups. And I daydream about how much easier tax day would be if ordinary people didn’t have to figure out how to comply with an ever-changing tax code.

But perhaps you’re a normal person and you don’t dwell on these topics. Your fantasies probably have nothing to do with fiscal policy and instead involve that hottie in your neighborhood.

That’s fine. I’m actually envious of well-adjusted people who don’t fixate on the cesspool of Washington.

But – at the very least – I want you to agree that America needs fundamental tax reform. And to help persuade you,  here are some fresh stories to remind you that the tax code and the IRS are a blight on society.

For instance, how do you feel about the IRS engaging in partisan politics, as reported by the Washington Times.

Even as the IRS faces growing heat over Lois G. Lerner and the tea party targeting scandal, a government watchdog said Wednesday it’s pursuing cases against three other tax agency employees and offices suspected of illegal political activity in support of President Obama and fellow Democrats. …the Office of Special Counsel…said it was “commonplace” in a Dallas IRS office for employees to have pro-Obama screensavers on their computers, and to have campaign-style buttons and stickers at their office. In another case, a worker at the tax agency’s customer help line urged taxpayers “to re-elect President Obama in 2012 by repeatedly reciting a chant based on the spelling of his last name,” the Office of Special Counsel said in a statement. …Another IRS employee in Kentucky has agreed to serve a 14-day suspension for blasting Republicans in a conversation with a taxpayer.

For more information about this nauseating scandal, read the wise words of Tim Carney and Doug Bandow.

Or what about the time, expense, and anxiety that the tax code causes for small businesses? Heck, even the Washington Post has noticed this is a big issue.

More than half of small employers say the administrative burdens and paperwork associated with tax season pose the greatest harm to their businesses, according to a new survey by the National Small Business Association. Forty-seven percent say the actual tax bill hits their companies the hardest. On average, small-business owners spend more than 40 hours — the equivalent of a full workweek — filing their federal taxes every year. One in four spends at least three full weeks on the annual chore. There is also the expense of doing that work. Only 12 percent of employers filed their taxes on their own this year, down from 15 percent last year — and hiring help can be pricey. Half spent more than $5,000 on accountants and administrative costs last year. One in four spent more than $10,000.

I was tempted to say compliance costs add insult to injury, except that understates the problem. Watch this video if you want to understand why the tax code needs to be junked.

And let’s not forget that high tax rates are pointlessly destructive and bad for America. Dozens of companies have redomiciled in other jurisdictions to get out from under America’s punitive corporate tax system. And more are looking at that option. Here are some excerpts from a report in the U.K.-based Financial Times.

Walgreens has come under pressure from an influential group of its shareholders, who want the US pharmacy chain to consider relocating to Europe, in what would be one of the largest tax inversions ever attempted. …The move, known as an inversion, would dramatically reduce Walgreens’ taxable income in the US, which has among the highest corporate tax rates in the world. …In a note last month, analysts at UBS said Walgreens’ tax rate was expected to be 37.5 per cent compared with 20 per cent for Boots, and that an inversion could increase earnings per share by 75 per cent. They added, however, that “Walgreens’ management seems more hesitant to pull the trigger near-term due to perceived political risks.”

By the way, “perceived political risks” is a polite way of saying that the team at Walgreens is worried that the company might be targeted by the crowd in Washington. In other words, it will be attacked if it does the right thing for workers, consumers, and shareholders.

But that’s blaming the victim. All you really need to know is that America’s corporate tax system is so harsh that companies don’t just escape to Ireland, Switzerland, the Cayman Islands, and Bermuda. They even find better fiscal policy in Canada and the United Kingdom!

Last but not least, do you trust the IRS with your confidential financial data? If you answer yes, seek help right away from a mental health professional and check out these stories.

According to the Washington Times:

A new cost-saving computer technology being implemented by the IRS has left the agency vulnerable to hacking, putting taxpayers’ info at risk, an investigative report has found. …although the IRS has developed cybersecurity guidelines, many of the servers aren’t following them, said a report by the agency’s internal watchdog, the Inspector General for Tax Administration. In fact, the servers failed 43 percent of the tests investigators put them through, though they aren’t releasing what those tests and settings are due to security concerns.

According to a Bloomberg report:

A U.S. Internal Revenue Service employee took home a computer thumb drive containing unencrypted data on 20,000 fellow workers, the agency said in a statement today. …The IRS said it’s working with its inspector general to investigate the incident. The IRS statement didn’t say why the incident was discovered now, didn’t include the name of the employee who used the thumb drive and didn’t say whether the employee still works at the IRS.

And National Review has reported:

The Internal Revenue Service stole and improperly accessed 60 million medical records after raiding a California company, according to a legal complaint filed in March with the California superior court for San Diego. …“No search warrant authorized the seizure of these records; no subpoena authorized the seizure of these records; none of the 10,000,000 Americans were under any kind of known criminal or civil investigation and their medical records had no relevance whatsoever to the IRS search.”

So what’s the bottom line? I suppose there are different interpretations, but my view is that the system is irretrievably broken. It needs to be shredded and replaced.

What are the options?

My real fantasy is to have a very small federal government. Then we wouldn’t need a broad-based tax of any kind.

But I also have incremental fantasies. Until we can shrink the federal government to its proper size, let’s at least figure out ways of collecting revenue that are much less destructive and much less unfair.

The flat tax is one possible answer.

I’m also a fan of the national sales tax, though only if we first amend the Constitution to ensure that politicians don’t pull a bait-and-switch and burden us with both an income tax and sales tax!

To be more specific, I’m a fan of the Fair Tax, but only if we make sure that politicians never again have the ability to impose an income tax.

P.S. Since we’re on the subject of taxes, folks in Northern New Jersey, Southern New York, and New York City may be interested in a tax symposium this Thursday at Ramapo College in Mahway, New Jersey. Along with several other speakers, I’ll be pontificating on the following question: “The Income Tax:
Necessary Evil, Or the Root of All Evil?”

The college is convenient to I-287 near the New York/New Jersey border. Say hello if you attend.

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Even though I’m personally a prude on the issue of drugs, that doesn’t stop me from opposing the Drug War, both for moral and practical reasons.

After all, how can any sensible and decent person want laws that produce these outrageous results?

The DEA trying to confiscate a commercial building because a tenant sold some marijuana.

The government seeking to steal a hotel because some guests sold some marijuana.

Cops raiding an organic nursery and seizing blackberry bushes.

The feds grabbing cash from innocent bystanders in legal cases.

The government arresting a grandmother for buying cold medicine.

Cops entrapping an autistic teen to boost their arrest numbers.

And don’t forget the misguided War on Drugs is also why we have costly, intrusive, and ineffective anti-money laundering laws, which result in other outrages, such as the government arbitrarily stealing money from small business owners.

Though not every enforcement action leads to grotesque abuse of human rights. Sometimes the Drug War merely exposes the stupidity of government.

Let’s add another horror story to our list.

Jacob Sullum of Reason has a very disturbing example of how the Drug War leads to very bad outcomes.

Why did a SWAT team raid Bob and Addie Harte’s house in Leawood, Kansas, two years ago, then force the couple and their two children to sit on a couch for two hours while officers rifled their belongings, searching for “narcotics” that were not there?

Sullum conveniently provides the answer, though it’s not one that should satisfy any normal person.

…the Hartes made two mistakes: Bob went to a hydroponics store in Kansas City, Missouri, with his son to buy supplies for a school science project, and Addie drank tea. It cost them $25,000 to discover that these innocent actions earned them an early-morning visit by screaming, rifle-waving men with a battering ram.

Here are the odious details of local government run amok.

…the Hartes hired a lawyer to help them obtain the relevant records… Eventually the Hartes learned that a Missouri Highway Patrol trooper saw Bob at the hydroponics store on August 9, 2011. Seven months later, state police passed on this hot tip to the sheriff’s office, which sprang into action (after a few weeks), rummaging through the Hartes’ garbage three times in April 2012. On all three occasions, they found “wet plant material” that a field test supposedly identified as marijuana.

Does that sound like probable cause for an assault on their home?

…the cops did not bother to confirm their field results with a more reliable lab test before charging into the Hartes’ home, three days after their third surreptitious trash inspection. When the Hartes starting asking questions about the raid, the sheriff’s office suddenly decided to test that wet plant material, which it turned out was not marijuana after all. The Hartes figure it must have been the loose tea that Addie favors, which she tends to toss into the trash after brewing.

So what’s the bottom line? The Hartes want to make it easier to obtain records.

…the Hartes think Kansas cops would be more careful if obtaining police records were easier. “You shouldn’t have to have $25,000, even $5,000,” Addie Harte tells KSHB. “You shouldn’t have to have that kind of money to find out why people came raiding your house like some sort of police state.”

I obviously agree, but an even more important lesson is that we should re-think America’s foolish Drug War.

I happen to think drugs are bad and that people shouldn’t use them. Heck, I also think people shouldn’t overeat, that gambling is dumb, and that alcohol abuse is terrible.

But I know that government prohibition won’t solve these problems and almost surely will make matters worse.

Besides, I don’t like being on the same side of an issue as certain people.

I’d rather side with folks such as John Stossel, Gary Johnson, John McCain, Mona Charen, Pat Robertson, Cory Booker, Rick Perry, and Richard Branson.

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Senator Rand Paul is being criticized and condemned by the Washington establishment.

That’s almost certainly a sign that he’s doing the right thing. And given the recent events in Russia and Ukraine, we should say he’s doing a great thing.

Rand PaulThis is because Senator Paul is waging a lonely battle to stop the unthinking and risky move to a world where governments – including corrupt and evil regimes – collect and share our private financial information.

I’ve written about this topic many times and warned about the risks of letting unsavory governments have access to personal information, but the Obama Administration – with the support of some Republicans who think government power is more important than individual rights – is actively pushing this agenda.

The White House has even endorsed the idea of the United States being part of a so-called Convention on Mutual Administrative Assistance in Tax Matters, even though that would require the sharing of large amounts of personal financial data with thuggish and corrupt regimes such as Argentina, Azerbaijan, China, Greece, Mexico, Nigeria, Russia, and Saudi Arabia!

I’m sure Vladimir Putin very much appreciates this insider access so he can monitor dissidents and track political opponents. His government even signed onto a recent G-20 Communique that endorsed automatic information-sharing.

Heck, there’s even a Russian heading up the Financial Action Task Force, which is endlessly pushing to give governments untrammeled access to private information. FATF even wants banks and other financial institutions to spy on customers, regardless of whether there’s the slightest evidence of any wrongdoing.

The general mindset in Washington is that we should all bury our heads in the sand and blithely allow this massive accumulation of power and information by governments. After all, Putin and other thugs would never abuse this system, right?

Senator Paul battles the statists

Fortunately, at least one lawmaker is trying to throw sand in the gears. Like Horatius at the bridge, who single-handedly thwarted an invasion of Rome in 509 BC, Senator Paul is objecting to this massive invasion of privacy.

He has this old-fashioned appreciation for the Constitution and doesn’t think government should have carte blanche to access private financial data. He even – gasp! – thinks that government power should be restrained by the 4th Amendment and that there should be due process legal protections for individuals.

No wonder the DC establishment doesn’t like him.

One example of this phenomenon is that Senator Paul has placed a “hold” on some tax treaties. Here are some excerpts from a recent article in Politico.

Paul for years has single-handedly blocked an obscure U.S.-Swiss tax treaty that lawmakers, prosecutors, diplomats and banks say makes the difference between U.S. law enforcement rooting out the names of a few hundred fat-cat tax evaders — and many thousands more. …International tax experts for years have seethed over Paul’s block on the Swiss and several other tax treaties. These sorts of mundane tax protocols used to get approved by unanimous consent without anyone batting an eyelash — until Paul came to town.

These pacts are “mundane” to officials who think there shouldn’t be any restrictions on the power of governments.

Fortunately, Senator Paul has a different perspective.

Kentucky’s tea party darling says the treaty infringes on privacy rights. …Paul, a libertarian Republican widely believed to be eyeing a 2016 presidential run, says his hold stems from concerns about Fourth Amendment protections against “unreasonable search and seizure.” “These are people that are alleged, not convicted of doing anything wrong,” Paul said a few weeks ago. “I don’t think you should have everybody’s information from their bank. There should be some process: accusations and proof that you’ve committed a crime.”

The article also notes that Senator Paul is one of the few lawmakers to fight back against the egregious FATCA legislation.

Paul’s protest is also linked to his abhorrence of the soon-to-take-effect Foreign Account Tax Compliance Act, which will force foreign banks to disclose U.S. account information to the IRS, and domestic banks to reciprocate to other nations’ revenue departments. …the senator has legislation to repeal FATCA and hesitates to support a treaty that enables a law he views as U.S. government overreach.

I don’t know how long Senator Paul can withstand the pressure in his lonely fight for individual rights, but I’m glad he’s waging the battle.

Even the Swiss government and Swiss banks have thrown in the towel, having decided that they have no choice but to weaken their nation’s human rights laws on financial privacy because of threats of financial protectionism by the United States.

So let’s give three cheers to our modern-day Horatius, a very rare elected official who is doing the right thing for the right reason.

For more information on the importance of financial privacy, here’s my video on the moral case for tax havens.

P.S. I shared some good jokes about Keynesian economics a few weeks ago.

Now, via Cafe Hayek, I have a great cartoon showing the fancy equation that left-wing economists use when they tell us that the economy will grow faster if there’s a bigger burden of government spending.

Keynesian Miracle Cartoon

Now you can see how the Congressional Budget Office puts together its silly estimates.

Indeed, Chuck Asay even produced a cartoon on CBO’s fancy methodology.

The next step is to find the secret equation that CBO uses when it publishes nonsensical analysis implying that growth is maximized when tax rates are 100 percent.

But to be fair, the politicians who pay their salaries want them to justify bigger government, so should we expect anything else?

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Two years ago, I shared a video about the Environmental Protection Agency’s brutal and thuggish tactics against an Idaho family.

Constitution Limits Government PowerThat story had a very happy ending because the Supreme Court struck a blow for property rights and unanimously ruled against the EPA (too bad that similarly sound analysis was absent when the Justices decided the Kelo case).

Now we have a new example of the EPA running amok

Let’s look at a horrifying report about another family in the cross hairs of a rogue bureaucracy.

All Andy Johnson wanted to do was build a stock pond on his sprawling eight-acre Wyoming farm. He and his wife Katie spent hours constructing it, filling it with crystal-clear water, and bringing in brook and brown trout, ducks and geese. It was a place where his horses could drink and graze, and a private playground for his three children.

Sounds like the American dream, but also responsible stewardship since ponds usually have a positive role in limiting erosion.

Unfortunately, the EPA’s pinhead bureaucrats saw an opportunity for pointless and destructive intervention.

But instead of enjoying the fruits of his labor, the Wyoming welder says he was harangued by the federal government, stuck in what he calls a petty power play by the Environmental Protection Agency. He claims the agency is now threatening him with civil and criminal penalties – including the threat of a $75,000-a-day fine. …The government says he violated the Clean Water Act by building a dam on a creek without a permit from the Army Corps of Engineers. Further, the EPA claims that material from his pond is being discharged into other waterways. Johnson says he built a stock pond — a man-made pond meant to attract wildlife — which is exempt from Clean Water Act regulations.  The property owner says he followed the state rules for a stock pond when he built it in 2012 and has an April 4-dated letter from the Wyoming State Engineer’s Office to prove it. …But the EPA isn’t backing down and argues they have final say over the issue. They also say Johnson needs to restore the land or face the fines.

As you can imagine, this was not exactly good news for the property owner.

Johnson says he was “bombarded by hopelessness” when he first received the administrative order from the EPA. …The EPA order on Jan. 30 gave Johnson 30 days to hire a consultant and have him or her assess the impact of the supposed unauthorized discharges. The report was also supposed to include a restoration proposal to be approved by the EPA as well as contain a schedule requiring all work be completed within 60 days of the plan’s approval. If Johnson doesn’t comply — and he hasn’t so far — he’s subject to $37,500 per day in civil penalties as well as another $37,500 per day in fines for statutory violations.

But kudos to Mr. Johnson. Unlike so many others, he’s not going to roll over and acquiesce to EPA brutishness.

Johnson plans to fight. “This goes a lot further than a pond,” he said. “It’s about a person’s rights. I have three little kids. I am not going to roll over and let [the government] tell me what I can do on my land. I followed the rules.”  …Johnson says his legal fight with the government agency is a teachable moment for his kids. “This is showing them that they shouldn’t back down,” Johnson said. “If you need to stand up and fight, you do it.”

Needless to say, the EPA is not the only out-of-control bureaucracy in Washington.

Let’s now read about the thuggish actions against blueberry growers by the Department of Labor.

Bureaucrats from that entity decided to launch a legal jihad against some growers and they relied on bad numbers and grotesque strategy.

Another example of big government run amok.

In late July 2012, officials from the Department of Labor’s Wage and Hour Division visited Pan-American Berry Growers, B&G Ditchen and E&S Farms for spot inspections. …the Labor Department’s Wage and Hour division district director, Jeff Genkos, accused the growers of minimum-wage violations and declared the blueberries “hot goods” under the 1938 Fair Labor Standards Act. This charge is usually reserved for, say, T-shirts sewn by child laborers. The effect was to stop the fruit from being shipped to customers. He then ordered the growers to pay back wages and penalties and asked them to sign away any right to appeal the deal.

What was most shocking about the DOL’s actions is that they engaged in Mafia-type tactics and “made an offer they couldn’t refuse.”

This put the growers in an impossible spot. Either they could collectively pay $240,435 or let millions of dollars’ worth of berries rot. And they only had a day or two to make a decision. They did what any prudent employer would do: They paid the money, and the hot goods order was lifted.

And you won’t be surprised that the bureaucracy cooked the numbers in the first place.

It turns out that Labor’s bureaucrats had divined that the average worker could only pick around 60 pounds of blueberries an hour, some 30 pounds below what workers usually pick. They then counted the number of workers employed and concluded the growers must have had workers employed off the books. …In January, Oregon magistrate judge Thomas M. Coffin ruled for the growers. “In essence, to avoid the potential loss of millions of dollars worth of berries, defendants had to agree to the DOL’s allegations without an opportunity to present a defense or confront the DOL’s evidence in an administrative or court hearing,” he wrote.

I’m glad at least one court has ruled against the Department of Labor. Let’s hope that the final result is positive when all the appeals have been exhausted.

Both of these stories belong in my collection of “Government Thuggery in Action.”

Previous examples include:

If you peruse those examples without getting angry at big government, you probably need a lengthy bit of soul-searching.

If you’re a normal person, you’ll want this t-shirt (and don’t be a perv, just the t-shirt!).

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We’ve reached the stage where Obamacare is the punchline to a bad joke.

The law has been a disaster, both for the economy and for the Democratic Party. Not that we should be surprised. You don’t get better healthcare with a poisonous recipe of higher taxes, added government spending, and more intervention.

With any luck, Obamacare will be a textbook example of why we should never again give power to a bunch of political hacks and dreamy-eyed central planners.

Because when they try to buy votes and create more dependency with Rube Goldberg schemes, the results are…well, we see the cluster-you-know-what of Obamacare unfolding before our eyes.

Not that anyone should be surprised. Remember what happened when politicians decided government would make housing more affordable?

And remember what happened when politicians decided government should extend American tax law into other nations?

Simply stated, grandiose plans for expanded government don’t end well.

But this isn’t a normal public policy issue.

The Obama Administration has just announced that it arbitrarily will be ignoring one of the requirements in the law, and this is the executive branch’s 18th unilateral change to Obamacare.

We have to ask whether the American political system is being corrupted by a White House that doesn’t feel bound by the rule of law.

To put it mildly, the Wall Street Journal is not impressed.

…the law increasingly means whatever President Obama says it does on any given day. His latest lawless rewrite arrived on Monday as the White House decided to delay the law’s employer mandate for another year and in some cases maybe forever. …last summer the Treasury offered a year-long delay until 2015 despite having no statutory authorization. …Now the new delay arrives amid a furious debate about jobs after a damning Congressional Budget Office report last week, only this time with liberals celebrating ObamaCare’s supposed benefits to the job market. …Oh, and the Treasury also notes that, “As these limited transition rules take effect, we will consider whether it is necessary to further extend any of them beyond 2015.” So the law may be suspended indefinitely if the White House feels like it. …The text of the Affordable Care Act specifically says when the mandate must take effect—”after December 31, 2013″—and does not give the White House the authority to change the terms. Changing an unambiguous statutory mandate requires the approval of Congress, but then this President has often decided the law is whatever he says it is.

I admit that part of me wants Obamacare delayed as much as possible.

After all, even more jobs will be lost if the employer mandate is properly enforced, and that would add to an already anemic employment situation.

But America isn’t Argentina, or some other Banana Republic, where the law is based on the arbitrary and capricious decisions of some political thug.

Political Cartoons by Lisa Benson

At least it shouldn’t be.

If the President wants to change the law, he should propose legislation and send it to Congress.

But it’s obvious what that isn’t happening. The White House understands that it would be forced to make concessions to get the changes it wants.

So why not make a mockery of the rule of law instead?

As nicely illustrated by the Lisa Benson cartoon.

This is such a depressing topic that we need to close this post with some cartoons about the failure of Obamacare.

We’ll start with Henry Payne, who uses an Olympics theme.

Political Cartoons by Henry Payne

Gary Varvel has some fun mocking the left about being “liberated” from the drudgery of employment.

Political Cartoons by Gary Varvel

Fans of James Bond my remember a certain scene from Goldfinger, and Glenn McCoy recreates that scene.

Political Cartoons by Glenn McCoy

Steven Breen looks at the law’s impact on jobs.

Political Cartoons by Steve Breen

And Robert Gorrell makes a nice point about labor supply incentives.

Political Cartoons by Bob Gorrell

These are all amusing cartoons, but let’s not forget that Obama will get the last laugh if the final result is more dependency and a permanent expansion of the welfare state.

At some point, we need to restore genuine market forces and get a lower-cost, more-efficient healthcare system.

And that means not only repealing Obamacare, but also addressing all the other programs and policies which have caused the third-party payer crisis.

P.S. Here’s some good news showing we’re not quite at the same level as Argentina.

You may remember what I wrote back in 2012 about the IRS seeking to impose new restrictions on the tax preparation industry.

This was a power grab with no legal justification. Indeed, it seems to have been an example of crony capitalism since H&R Block wanted to shut down low-cost competitors.

That was the bad news. The good news is that the Institute for Justice sued to block the IRS/H&R block scheme.

And the great news is that the D.C. Circuit Court of Appeals just drop-kicked the IRS thugs into a dumpster.

Here’s part of the Court’s decision, as reported in the Washington Post.

It might be that allowing the IRS to regulate tax-return preparers more stringently would be wise as a policy matter. But that is a decision for Congress and the President to make if they wish by enacting new legislation…. The IRS may not unilaterally expand its authority.

Let’s keep our fingers crossed that the Courts do the same – by defending the rule of law – on future Obamacare decisions.

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One of the many differences between advocates of freedom and supporters of statism is how they view “rights.”

Libertarians, along with many conservatives, believe in the right to be left alone and to not be molested by government. This is sometimes referred to in the literature as “negative liberty,” which is just another way of saying “the absence of coercive constraint on the individual.”

Statists, by contrast, believe in “positive liberty.” This means that you have a “right” to things that the government will give you (as explained here by America’s second-worst President). Which means, of course, that the government has an obligation to take things from somebody else. How else, after all, will the government satisfy your supposed right to a job, education, healthcare, housing, etc.

Sometimes, the statists become very creative in their definition of rights.

You may laugh at these examples, particularly the ones that focus on seemingly trivial issues.

But don’t laugh too hard, because our friends on the left are busy with very grandiose plans for more “positive liberty.”

The EU Observer reports on efforts in Europe to create expanded rights to other people’s money.

Austerity programmes agreed with the troika of international lenders (the European Commission, European Central Bank and International Monetary Fund) are in breach of the EU’s Charter of Fundamental Rights, according to a German legal expert. …under the EU charter of fundamental rights, a legal text which became binding for member states in 2009, several austerity measures enshrined in the MoUs can be fought in courts. …His study highlights that the MoUs “have seriously limited the autonomy of employers and trade unions to negotiate wages.” …Education and health care reforms prescribed in the memorandums are also questionable because they are focusing too much on cutting budgets, he said. …He noted that the concept of “financial stability” was put above all other considerations. “But financial stability cannot be achieved without social stability,” he said.

But it’s not just one oddball academic making these claims.

…the Council of Europe’s social rights committee noted that public policies since 2009 have been unable to stem a generalised increase in poverty on the continent. The committee identified some 180 violations of European Social Charter provisions on access to health and social protection across 38 European countries. In the bailed-out countries, the committee found several breaches – particularly in terms of wages and social benefits. Ireland was found in breach of the social charter for not ensuring the minimum levels of sickness, unemployment, survivor’s, employment injury and invalidity benefits. Greece and Cyprus have “inadequate” minimum unemployment, sickness, maternity and old age benefits, as well as a restrictive social security system. Spain also pays too little to workers on sick leave.

This crazy thinking also exists in the United States. A former Carter Administration official, now a law professor at Georgetown, has written that countries with good policy must change their systems in order to enable more tax revenue in nations with bad policy.

Do states like Switzerland, which provide a tax haven for wealthy citizens of developing countries, violate internationally recognized human rights? …bank secrecy has a significant  human rights impact if governments of developing countries are deprived of resources needed to meet basic economic rights guaranteed by the United Nations Covenant on Economic, Social, and Cultural Rights. …The Covenant explicitly recognizes individual rights to adequate food, clothing, and housing (Article 11); health care, clean water, and sanitation (Article 12); and education (Article 13). The Covenant also imposes obligations on member states to implement these rights.

And the right to redistribution isn’t just part of the U.N. mission.

There’s also a European set of Maastricht Principles which supposedly obligates nations to help each expand the burden of government.

Articles 19 and 20 of The Maastricht Principles call on states to “refrain from conduct which nullifies or impairs the enjoyment and exercise of economic . . . rights of persons outside their territories . . . or which impairs the ability of another State to comply with that State’s . . . obligations as regards economic rights.” …recognizing the fact that secrecy for offshore accounts makes it difficult for developing countries to implement Covenant obligations. It therefore seems indisputable that offshore accounts impede the fulfillment of internationally recognized human rights.

You may be thinking that all this sounds crazy. And you’re right.

You may be thinking that it’s insane to push global schemes for bigger government at the very point when the welfare state is collapsing. And you’re right.

You may be thinking that it’s absurd to trample national sovereignty in pursuit of bad policy. And you’re right.

And you may be thinking this is a complete bastardization of what America’s Founding Fathers had in mind. And you’re right.

But you probably don’t understand that this already is happening. The IRS’s awful FATCA legislation, for instance, is basically designed for exactly the purpose of coercing other nations into enforcing bad American tax policy.

Even more worrisome is the OECD’s Orwellian Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which is best viewed as a poisonous acorn that will grow into a deadly World Tax Organization oak tree.

P.S. And the Obama Administration already is pushing policies to satisfy the OECD’s statist regime. The IRS recently pushed through a regulation that says American banks have to put foreign tax law above U.S. tax law.

P.P.S. Statists may be evil, but they’re not stupid. They understand that tax havens and tax competition are a threat to big government.

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Last June, in response to a question about indiscriminate spying by the National Security Agency, I made two simple points about the importance of judicial oversight and cost-benefit analysis.

I want – at a minimum – there to be judicial oversight whenever the government spies on American citizens, but I also think some cost-benefit analysis is appropriate. Just because a court has the power to approve snooping, that doesn’t mean it’s a sensible use of law enforcement resources.

Nothing since then has changed my mind.

Indeed, I’m perhaps even more skeptical of untrammeled government power and ability to spy on citizens for the simple reason that I don’t trust politicians.

Just look at how the White House turned the supposedly professional IRS into a partisan political operation. The government had power, ostensibly for a legitimate reason, but politicians and bureaucrats then used the power is a grossly improper fashion.

On the other hand, I know there are people out there who hate America. And they don’t just hate us because we’re intervening in the Middle East. I suspect many of them would want to kill us even if we had a perfect libertarian foreign policy of non-intervention and peaceful global commerce.

Now we learn from a report in the Washington Post that government has become bigger and more powerful and that our privacy has been violated as part of the NSA’s spying, yet there have been no benefits. As is zero. Nada. Zilch.

Here are some excerpts.

An analysis of 225 terrorism cases inside the United States since the Sept. 11, 2001, attacks has concluded that the bulk collection of phone records by the National Security Agency “has had no discernible impact on preventing acts of terrorism.” In the majority of cases, traditional law enforcement and investigative methods provided the tip or evidence to initiate the case, according to the study by the New America Foundation, a Washington-based nonprofit group.

But perhaps, you may be thinking, this is merely the predictable conclusion of a group that is predisposed to be skeptical. That’s a fair concern, but the article also has some very compelling corroborating evidence.

The study, to be released Monday, corroborates the findings of a White House-appointed review group, which said last month that the NSA counterterrorism program “was not essential to preventing attacks” and that much of the evidence it did turn up “could readily have been obtained in a timely manner using conventional [court] orders.”

So not only do outsiders find little to no value in NSA spying, but even hand-picked insiders couldn’t come up with any evidence to show that the program was effective.

But you won’t be surprised to learn that defenders of the NSA have come up with a can’t-miss way of defining success.

Senior administration officials…say it has been valuable in knocking down rumors of a plot and in determining that potential threats against the United States are nonexistent. Director of National Intelligence James R. Clapper Jr. calls that the “peace of mind” metric.

Yes, your eyes did not deceive you.You actually read correctly. The government wants us to acquiesce to a loss of privacy because we will learn that there are no threats and we’ll have “peace of mind.”

That has to be the lamest justification for government power that I’ve ever read.

This is even more preposterous than asserting that we should squander $1 trillion per year on anti-poverty programs, not because that redistribution will help the poor, but rather because it makes leftists feel better about themselves.

That being said, supporters do have a somewhat powerful comeback.

Michael Morell, a former acting CIA director and a member of the panel, said the program “needs to be successful only once to be invaluable.”

Indeed, I suspect this is the main reason why ordinary people might support the NSA.

But I disagree with Mr. Morell because he asserts that a single example of success would be invaluable. The article, for instance, cites one “victory” for the NSA surveillance program.

…the program provided evidence to initiate only one case, involving a San Diego cabdriver, Basaaly ­Moalin, who was convicted of sending money to a terrorist group in Somalia. Three co-conspirators were also convicted. The cases involved no threat of attack against the United States.

I’m glad that a foreign terrorist attack was blocked, but is that really “invaluable”? Does that “victory” justify a very expensive and very intrusive NSA monitoring regime?

As I’ve acknowledged before, I don’t know enough about terrorism to offer an informed viewpoint. But I have studied a similar issue, money laundering laws, and that research leads me to be very suspicious about the NSA.

These laws were put in place with the excuse that government would collect and analyze large amounts of data to help deter crime.

All the evidence, however, shows that these laws are a costly failure. The invade our privacy, hurt the poor, impose high regulatory costs, and have little or no impact on underlying crimes.

Just something to keep in mind when people argue that government should have more power and authority.

P.S. At least the revelations about NSA spying have generated some first-rate political humor.

P.P.S. Keep in mind that the NSA is just one cog in the machinery of government. So if you’re worried about the NSA’s intrusion and power, then you should also worry about the power of the IRS. If you’re concerned about the IRS’s authority, then you also should fret about the Obamacare exchanges. And if you think the Obamacare exchanges give the government too much knowledge and power, then you should be agitated about “know-your-customer” laws that require banks to spy on their customers. And if you’re not happy about those money-laundering rules, then you surely should be dismayed about asset-forfeiture rules. And if you don’t approve of government stealing property, then maybe you don’t like government accumulation of power for the Drug War. And if the failed War on Drugs rubs you the wrong way, then perhaps you…I better stop now. I think you get the point.

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President Obama thinks he can prevail in the government shutdown fight by deliberately making life as difficult as possible for the maximum number of ordinary Americans.

We’ve seen this before. After suffering a defeat on the sequester, he made himself a laughingstock (as illustrated by these cartoons) with his Chicken-Little warnings that a tiny bit of fiscal restraint would grind government to a halt.

But his sequester hysterics are trivial compared to what the Obama Administration is doing today with the National Park Service.

Here are some unbelievable excerpts from Mark Steyn’s funny yet horrifying National Review column.

…the one place where a full-scale shutdown is being enforced is in America’s alleged “National Park Service,” a term of art that covers everything from canyons and glaciers to war memorials and historic taverns. The NPS has spent the last two weeks behaving as the paramilitary wing of the DNC, expending more resources in trying to close down open-air, unfenced areas than it would normally do in keeping them open. It began with the war memorials on the National Mall — that’s to say, stone monuments on pieces of grass under blue sky.

But it gets worse.

Not content with that, the NPS shock troops then moved on to insisting that privately run sites such as the Claude Moore Colonial Farm and privately owned sites such as Mount Vernon were also required to shut. When the Pisgah Inn on the Blue Ridge Parkway declined to comply with the government’s order to close (an entirely illegal order, by the way), the “shut down” Park Service sent armed agents and vehicles to blockade the hotel’s driveway.

Think that’s bad? Read on.

..in South Dakota, having closed Mount Rushmore the NPS storm troopers additionally attempted to close the view of Mount Rushmore — that’s to say a stretch of the highway, where the shoulder widens and you can pull over and admire the stony visages of America’s presidents.

What happened in Yellowstone, though, is surreal. Like something from Cambodia during the Pol Pot years.

But perhaps the most extraordinary story to emerge from the NPS is that of the tour group of foreign seniors whose bus was trapped in Yellowstone Park on the day the shutdown began. They were pulled over photographing a herd of bison when an armed ranger informed them, with the insouciant ad-hoc unilateral lawmaking to which the armed bureaucrat is distressingly prone, that taking photographs counts as illegal “recreation.” “Sir, you are recreating,” the ranger informed the tour guide. And we can’t have that, can we? They were ordered back to the Old Faithful Inn, next to the geyser of the same name, but forbidden to leave said inn to look at said geyser. Armed rangers were posted at the doors, and, just in case one of the wily Japanese or Aussies managed to outwit his captors by escaping through one of the inn’s air ducts and down to the geyser, a fleet of NPS SUVs showed up every hour and a half throughout the day, ten minutes before Old Faithful was due to blow, to surround the geyser and additionally ensure that any of America’s foreign visitors trying to photograph the impressive natural phenomenon from a second-floor hotel window would still wind up with a picture full of government officials. The following morning the bus made the two-and-a-half-hour journey to the park boundary but was prevented from using any of the bathrooms en route, including at a private dude ranch whose owner was threatened with the loss of his license if he allowed any tourist to use the facilities.

No bathroom stops?!? Has the bureaucracy really become this punitive and vindictive? Sounds like the Park Service has the same training program as the IRS.

I wonder if the “you-are-recreating” ranger is related to Mr. Norlander?

Ironically, American citizens now have less rights to “public land” than English peasants in 1217.

…in actual monarchies the king takes a more generous view of “public lands.” Two years after Magna Carta, in 1217, King Henry III signed the Charter of the Forest, which despite various amendments and replacement statutes remained in force in Britain for some three-quarters of a millennium, until the early Seventies. If Magna Carta is a landmark in its concept of individual rights, the Forest Charter played an equivalent role in advancing the concept of the commons, the public space. Repealing various restrictions by his predecessors, Henry III opened the royal forests to the freemen of England, granted extensive grazing and hunting rights, and eliminated the somewhat severe penalty of death for taking the king’s venison. The NPS have not yet fried anyone for taking King Barack’s deer, but it is somewhat sobering to reflect that an English peasant enjoyed more freedom on the sovereign’s land in the 13th century than a freeborn American does on “the people’s land” in the 21st century.

Yet all this abuse serves no purpose for open-air parks and monuments.

The geyser stasi of the National Park Service have in effect repealed the Charter of the Forest. President Obama and his enforcers have the same concept of the royal forest that King John did. The government does not own this land; the Park Service are merely the janitorial staff of “we the people” (to revive an obsolescent concept). No harm will befall the rocks and rivers by posting a sign at the entrance saying “No park ranger on duty during government shutdown. Proceed beyond this point at your own risk.” And, at the urban monuments, you don’t even need that: It is disturbing that minor state officials even presume to have the right to prevent the citizenry walking past the Vietnam Wall.

So what’s the bottom line?

The National Park Service should be out of the business of urban landmarks, and the vast majority of our “national” parks should be returned to the states.

Amen.

In my libertarian fantasy world, I have a list of priorities. I start with big things like entitlement reform and flat tax.

Then I move to medium goals like shutting down the department of agriculture and getting out of NATO.

At the bottom of my list are things like ending the drug war. It used to be that getting rid of national parks was in this category.

But the bureaucrats at the NPS have behaved so despicably that this is now much higher on my list of priorities. Simply stated, they’ve earned our disdain.

Let’s close with some amusing cartoons on this topic.

This Nate Beeler gem may be my favorite from today’s collection.

NPS Cartoon 3

Michael Ramirez unveils a monument to arrogance.

NPS Cartoon 4

Chip Bok shows who’s the real ideologue.

NPS Cartoon 2

Last but not least, Glenn McCoy captures the President’s petulance.

NPS Cartoon 1

P.S. Other examples of government shutdown humor can be enjoyed by clicking here, here, here, here, and here.

P.P.S. Excerpts from some of my other favorite Mark Steyn columns can be read here, here, here, here, here, here, and here.

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Most Western nations have huge long-run fiscal problems because of unfavorable demographics and misguided entitlement programs.

That’s the bad news.

The good news is that dozens of nations have fully or partially shifted to mandatory private savings as a pro-growth way of modernizing bankrupt tax-and-transfer Social Security systems.

But good news in the short run doesn’t mean good news in the long run if greedy politicians decide to loot the wealth accumulated in personal retirement accounts.

That’s already happened in Argentina and Hungary, and now it’s happened in Poland. Here’s part of a Financial Times report about the government stealing money from private pension funds.

Poland’s government on Wednesday took an axe to part of the country’s pension system in a bid to bolster public finances. Premier Donald Tusk said that part of the country’s obligatory pension system run by private funds would be dramatically revamped, with 120bn zlotys ($37bn) in government bonds held by the 14 funds being transferred to the government pension scheme and cancelled… The funds will keep control of the 111bn zlotys they hold in equities and current benchmarks will be loosened. The funds will be banned from investing in more government debt. Tusk said that the millions of Poles currently enrolled in the privatised system would have the choice of staying in the scheme or of transferring their assets into the government-run pension system. Market reaction to the long anticipated move was negative. The Warsaw Stock Exchange, where the private funds, known as OFEs, have a big presence, was down by more than 2 per cent. Yields on 10-year Polish government bonds jumped to 4.75 per cent, the highest in a year.

Is anyone surprised by the “negative” reaction?!? Of course markets are unhappy when politicians arbitrarily seize wealth for short-term political games!

Sounds like Poland wants to become the Argentina of Europe. Though there’s always plenty of competition in the contest for bad government policy.

But we do have a bit of good news.

Here is some interesting polling data from an article on the political preferences of young Americans.

…51 percent of Millennials believe that when government runs something it is usually wasteful and inefficient, up from 31 percent in 2003 and 42 percent in 2009: “Hardly a ringing endorsement for a bigger government providing more services.” There’s more: 86 percent of Millennials support private Social Security accounts and 74 percent would change Medicare so people can buy private insurance. Sixty-three percent believe free trade is a good thing. Only 38 percent of Millennials support affirmative action.

Wow, 86 percent of young people support personal retirement accounts. That’s very encouraging, particularly since the general population supports this pro-growth reform by a more-than 2-1 margin.

Here’s a video that explains why a privatized or “personalized” Social Security system is the only way of dealing with the current system’s bankruptcy without screwing younger workers.

I think the video is a good summary explanation, but I also invite you to look at these two charts, one showing the impressive private wealth being accumulated in Australia thanks to personal retirement accounts and the other showing the staggering future shortfalls for America’s pay-as-you-go Social Security scheme.

If those charts don’t convince you, I suspect you’re a genetic statist.

P.S. The thievery of the Polish government is a helpful reminder of why it’s good to have some of your money offshore, preferably managed by a non-US company. After all, does anyone doubt that American politicians are capable of the same venal behavior? They’re probably looking at the money in IRAs and 401(k)s and salivating at the thought of how many votes they could buy with all that money. If (or when) that tragic day arrives, the Americans who have their money beyond the grasp of the federal government will be very happy.

P.P.S. Here’s a good joke about the Social Security system. Except it’s not really a joke because it’s too close to the truth.

P.P.P.S. You can see President Obama’s proposed “solution” to the Social Security crisis by clicking here. I don’t think you’ll be surprised to learn that it means a big shift of money from taxpayers to politicians.

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I spoke earlier today at the 2013 Liberty Conference in Lausanne, Switzerland. But I don’t think anybody is going to remember my speech about the collapse of the welfare state, even though I presented lots of powerful data from the BIS, OECD, and IMF, and also shared a very funny cartoon showing what happens when there’s nothing left for interest groups to steal.

Escaped the North Korean gulag

At a normal conference, my remarks may have resonated, but I freely admit that I was completely overshadowed by the presentation of Shin Dong-Hyuk, who is the only person to have successfully escaped from the North Korean gulag.

In the future, if I ever get discouraged and think the fight for freedom is too difficult, I will watch this video and realize that nothing in my life will ever compare to the horror of living under communism. It’s not nearly as powerful as today’s first-person presentation, but the video will give you some sense of the utter barbarity of the North Korean government.

If you want more information, here is his Wikipedia entry, but I also suggest you watch this short speech by Blaine Harden, a journalist who wrote the story of Shin’s escape.

Keep in mind, by the way, that North Korea is an awful and repressive country even for the people who aren’t in the gulags. Malnutrition is such a problem, for instance, that children are stunted and the North Korean army had to lower its requirements to allow soldiers as short as 4’8″.

So perhaps now you understand why I get so upset when people in the west glorify communist thugs such as Che Guevara, or use the Soviet hammer and sickle as a cutesy marketing gimmick.

I hope nobody would ever think to wear a Hermann Göring t-shirt or use the swastika in a value-neutral fashion, so why should it be okay to whitewash and/or rehabilitate communists?

P.S. I was never a fan of former Indiana Governor Mitch Daniels, but he deserves lasting applause for seeking to protect children from the anti-western, soft-on-communism crap published by the late historian Howard Zinn.

P.P.S. Since today’s post is about a very dour topic, let’s close with a bit of humor about  the communist version of efficiency.

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Government officials do some really crazy things in the name of law enforcement.

Bambi ExecutedI recently wrote about an armed raid on an animal shelter in order to execute a baby deer.

That was paramilitary overkill (pun intended), though it probably didn’t waste as many tax dollars as the regulatory overkill of the year-long sting operation by the Food and Drug Administration against an Amish farm for the horrible crime of selling unpasteurized milk to consenting adults who prefer unpasteurized milk.

And let’s not forget Robert Norlander, the thuggish, dumpster-diving IRS agent, who sought to ruin the life of an innocent man because…well, for no reason.

Well, we now have something that may be even more absurd.

Radley Balko reports in the Huffington Post about “a massive police action last week that included aerial surveillance, a SWAT raid and a 10-hour search.”

Sounds like the cops must have been up against the mafia. Or a bunch of bank robbers, right?

Not exactly. They raided an organic farm.

…the real reason for the law enforcement exercise appears to have been code enforcement. The police seized “17 blackberry bushes, 15 okra plants, 14 tomatillo plants … native grasses and sunflowers,” after holding residents inside at gunpoint for at least a half-hour, property owner Shellie Smith said in a statement.

The cops claimed that they were looking for marijuana. Even if that was the actual goal, why not just send a couple of cops to the door? We’re talking about an organic farm, after all, not a crack house run by the Hell’s Angels.

But let’s at least be thankful the cops seized okra plants. The people of Arlington, Texas, can now walk the streets safely, freed from the danger of vegetables running amok.

So what triggered this raid?

…authorities had cited the Garden of Eden in recent weeks for code violations, including “grass that was too tall, bushes growing too close to the street, a couch and piano in the yard, chopped wood that was not properly stacked, a piece of siding that was missing from the side of the house, and generally unclean premises,” Smith’s statement said. She said the police didn’t produce a warrant until two hours after the raid began, and officers shielded their name tags so they couldn’t be identified.

Oh. My. God. These criminals had improperly stacked wood? And insufficiently mowed grass? No wonder they needed a SWAT team!

If you read Radley’s entire story, it seems clear that the real issue is that neighbors didn’t like the messy conditions of the farm and they pressured the local government to do something about it.

I probably wouldn’t like living next door to somebody who kept a piano in their yard, so I’m sympathetic to their concerns.

Stories like this are why I picked my license plate

And even though I’m libertarian and much prefer that neighborhood standards be determined by private agreements, even I’m not going to get overly agitated by zoning rules about couches in the front yard.

But why deal with this trivial conflict by ordering “aerial surveillance, a SWAT raid and a 10-hour search”?

Sounds like the local police force has a bloated budget and tries to justify its wasteful practices by concocting needlessly risky operations.

P.S. The government’s harassment of another organic farm was the runaway winner of my contest for the worst example of government thuggery.

P.P.S. As I already mentioned, I don’t think this raid was about marijuana, but I don’t want to miss an opportunity to say that it’s time to end the foolish Drug War. People who abuse drugs may be stupid, but they’re not infringing on my rights. But the War on Drugs had led to all sorts of policies that do infringe on our rights, from disgusting asset forfeiture policies to pointless snooping on our bank accounts.

P.P.S. To close with some humor, check out what Dave Barry had to say about great moments in government.

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I’ve argued that Obama’s not a socialist.

I wasn’t trying to defend him. I was simply making the point that it’s technically more accurate to refer to him as a statist or a corporatist.

But he may be even worse than that, at least according to a must-read Kevin Williamson analysis of Obama for National Review.

He starts with how Obama seems to be a run-of-the-mill leftist.

Obama has been called many things — radical, socialist — labels that may have him dead to rights at the phylum level but not down at his genus or species. His social circle includes an alarming number of authentic radicals, but the president’s politics are utterly conventional managerial liberalism.

But Kevin then suggests that there’s something different about the President.

President Obama is nonetheless something new to the American experience, and troubling. It is not simply the content of his political agenda, which, though wretched, is a good deal less ambitious than was Woodrow Wilson’s or Richard Nixon’s. Barack Obama did not invent managerial liberalism, nor has he contributed any new ideas to it. He is, in fact, a strangely incurious man. …Obama’s most important influences have been tacticians such as Abner Mikva, bush-league propagandists like the Reverend Jeremiah Wright, and his beloved community organizers. Far from being the intellectual hostage of far-left ideologues, President Obama does not appear to have the intellectual energy even to digest their ideas, much less to implement them.

Then we have some examples of Obama’s “managerial liberalism.”

The result of this is his utterly predictable approach to domestic politics: appoint a panel of credentialed experts. …IPAB is the most dramatic example of President Obama’s approach to government by expert decree, but much of the rest of his domestic program, from the Dodd-Frank financial-reform law to his economic agenda, is substantially similar.

While this may appear to be incremental statism, Kevin argues that it represents something quite radical.

…it amounts to that fundamental transformation of American society that President Obama promised as a candidate: but instead of the new birth of hope and change, it is the transformation of a constitutional republic operating under laws passed by democratically accountable legislators into a servile nation under the management of an unaccountable administrative state. The real import of Barack Obama’s political career will be felt long after he leaves office, in the form of a permanently expanded state that is more assertive of its own interests and more ruthless in punishing its enemies.

Echoing Thomas Sowell, who explained that Obama’s agenda technically could be described as fascism, Kevin says that the current administration’s approach is a soft form of totalitarianism.

…he also has advanced it without legislative assistance — and, more troubling still, in plain violation of the law. President Obama and his admirers choose to call this “pragmatism,” but what it is is a mild expression of totalitarianism, under which the interests of the country are conflated with those of the president’s administration and his party.

For all intents and purposes, we are now governed by a leftist bureaucracy.

…the United States is not going to fall for a strongman government. Instead of delegating power to a would-be president-for-life, we delegate it to a bureaucracy-without-death. You do not need to install a dictator when you’ve already had a politically supercharged permanent bureaucracy in place for 40 years or more. As is made clear by everything from campaign donations to the IRS jihad, the bureaucracy is the Left, and the Left is the bureaucracy. Elections will be held, politicians will come and go, but if you expand the power of the bureaucracy, you expand the power of the Left, of the managers and minions who share Barack Obama’s view of the world. Barack Obama isn’t the leader of the free world; he’s the front man for the permanent bureaucracy, the smiley-face mask hiding the pitiless yawning maw of total politics.

And the law apparently doesn’t mean much in this new world.

…he has decided — empowered to do so by precisely nothing — that the law will not be enforced until after the elections. Neither does the law empower him arbitrarily to exempt millions of his donors and allies in organized labor from the law, but he has done that too. This is a remarkable thing. The health-care law gives the executive all sorts of powers to promulgate regulations and make judgments, but it does not give the executive the power to decide which aspects of the law will be enforced and which will not, or to establish a different timeline from the one found in the law itself. For all of the power that Congress legally has given the president in this matter, he feels it necessary to take more — illegally.

Kevin shows that lawlessness goes far beyond Obamacare.

In a similar vein, President Obama has refused to cut off foreign-aid funds to the Egyptian government, though he is required by law to do so in the event of a coup d’état, which is precisely what happened in July in Egypt. …The law also prohibits the president and his allies from using the instruments of government to persecute their rivals, but that is precisely what the IRS has been up to for several years, as it turns out. And not just the IRS: Tea-party activist Catherine Engelbrecht was subject to an IRS audit, two FBI visits, an OSHA investigation, and an ATF inspection of her business (which does not deal in A, T, or F).  …The president not only ignores the law but in some cases goes out of his way to subvert it. …He has attempted to make “recess appointments” when Congress is not in recess and has been stopped from doing so by the federal courts, which rightly identified the maneuver as patently unconstitutional.

Another example is the recent IRS regulation that forces American banks to put foreign law above U.S. law.

Indeed, Kevin explains that the White House’s disdain for the law is even worse than Nixon’s.

…what is particularly disturbing is the quiet, polite, workaday manner with which the administration goes about its business — and with which the American public accepts it. As Christopher Hitchens once put it, “The essence of tyranny is not iron law; it is capricious law.” Barack Obama makes a virtue out of that caprice… President Nixon’s lawlessness was sneaky, and he had the decency to be ashamed of it. President Obama’s lawlessness is as bland and bloodless as the man himself, and practiced openly, as though it were a virtue. President Nixon privately kept an enemies list; President Obama publicly promises that “we’re gonna punish our enemies, and we’re gonna reward our friends.”

So what’s the bottom line? According to Williamson, we have a might-makes-right White House.

He has spent the past five years methodically testing the limits of what he can get away with, like one of those crafty velociraptors testing the electric fence in Jurassic Park. Barack Obama is a Harvard Law graduate, and he knows that he cannot make recess appointments when Congress is not in recess. He knows that his HHS is promulgating regulations that conflict with federal statutes. He knows that he is not constitutionally empowered to pick and choose which laws will be enforced. This is a might-makes-right presidency, and if Barack Obama has been from time to time muddled and contradictory, he has been clear on the point that he has no intention of being limited by something so trivial as the law.

In other words, the ends justifies the means.

Do I agree with this analysis? I think Kevin is spot on in terms of policy. Obama unambiguously has expanded the power of the political class in Washington.

The more interesting question, though, is whether the President is following a deliberate plan to change the nation. Or is government expanding – as it normally does – because of corruption, incompetence, politics, ideology, greed, and self interest?

I’m not a big believer in secret plans, so my normal instinct is to accept the conventional explanation for ever-growing government. On the other hand, Kevin points out that Obama is quite open about “fundamentally transforming” America and he pursues his agenda even when that means running roughshod over the law.

All I can say is that you should read the entire article. You’ll have a greater appreciation of the challenges we face if we want to restore the American ideal of economic liberty and personal freedom.

P.S. With regards to the is-Obama-a-socialist debate, Steven Horwitz (a former grad school colleague) makes some insightful observations.

P.P.S. Since we’re discussing who is a socialist and who isn’t, Cal Thomas has some wise words on whether religious faith requires socialist politics.

P.P.P.S. If you really want to see an example of bizarre name calling, there are some people who think Obama is a conservative.

P.P.P.P.S. And if you enjoy irony, some leftists are more rational than others.

P.P.P.P.P.S. Last but not least, I’ve cited some other first-rate Kevin Williamson columns in previous posts, including one on the corrupt nexus of Washington and Wall Street, another on limits to supply-side economics, and a delicious take down of Krugman, which I link to at the bottom of this post.

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The bad news is that governments do a lot of things they shouldn’t do. The good news is that I never run out of material.

I’ve even created some sub-categories, such as my U.S. vs U.K. government stupidity contest and my great-moments-in-local-government series.

But I never thought I would have a special category about bureaucrats vs. Bambi.

1. Bureaucrats in Virginia filed three misdemeanor charges against a man for the horrible crime of rescuing a deer that was hit by a car.

2. Bureaucrats in Maryland fined two men $90 each for not having life jackets when they had the gall to rescue a deer that fell through some ice.

3. Bureaucrats in Indiana are threatening prison time for a family that rescued a baby deer from coyotes.

The paper pushers of the world seem to harbor a special grudge against these harmless ruminants, since we now have another story about a baby deer. But this time, Bambi was the victim, not the family.

Here are some of the unbelievable details from a local news report.

Two weeks ago, Schulze was working in the barn at the Society of St. Francis on the Kenosha-Illinois border when a swarm of squad cars arrived and officers unloaded with a search warrant. “(There were) nine DNR agents and four deputy sheriffs, and they were all armed to the teeth,” Schulze said. The focus of their search was a baby fawn brought there by an Illinois family worried she had been abandoned by her mother.

My first reaction when reading this was “what the @#$*?” Is he public sector really so bloated that 13 bureaucrats have nothing better to do than to serve a search warrant for a baby deer?

And why on earth were they heavily armed? Were they expecting Osama Bin Bambi?

But don’t answer yet, because it gets more absurd.

The Department of Natural Resources began investigating after two anonymous calls reporting a baby deer at the no-kill shelter. The warden drafted an affidavit for the search warrant, complete with aerial photos in which he described getting himself into a position where he was able to see the fawn going in and out of the barn.

I’m not sure what part of this excerpt gets me more upset, the fact that some snitch informed on the shelter for having a baby deer, or the fact that the government is so wasteful that bureaucrats went through the cost of arranging aerial surveillance!

Dangerous criminal executed

As a taxpayer, I get agitated about the waste of money. As a decent human being, this next part bothers me even more.

“I was thinking in my mind they were going to take the deer and take it to a wildlife shelter, and here they come carrying the baby deer over their shoulder. She was in a body bag,” Schulze said. “I said, ‘Why did you do that?’ He said, ‘That’s our policy,’ and I said, ‘That’s one hell of a policy.'”

The local cops justified the overkill approach by equating an animal shelter with a crack house.

“Could you have made a phone call before showing up, I mean, that’s a lot of resources,” WISN 12 News investigative reporter Colleen Henry asked. “If a sheriff’s department is going in to do a search warrant on a drug bust, they don’t call them and ask them to voluntarily surrender their marijuana or whatever drug that they have before they show up,” Niemeyer said,

Horrified citizens are complaining and fighting back, though I’m not holding my breath that justice will be served.

Schultz said she plans to sue the DNR for removing Giggles without even a court hearing. She also questioned what such an operation costs taxpayers. “They went way over the top for a little tiny baby deer,” Schultz said,

Remember, though, that this type of government thuggery is hardly unusual.

The Food and Drug Administration raided a dairy for the terrible crime of selling unpasteurized milk to people who prefer unpasteurized milk.

New York City imposed a $30,000 fine on a small shop because it sold a toy gun.

The pinheads at the Equal Employment Opportunity Commission went after Hooters for not having any male waiters in hot pants and tight t-shirts.

An unlucky guy wound up in legal hot water for releasing some heart-shaped balloons to impress his sweetheart.

Yup, our tax dollars at work. And Obama thinks government is too small and needs more of our money so it can do even more things.

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I’ve conducted a handful of polls in the past four-plus years of writing this blog.

* Michael Ramirez won the contest for best political cartoonist.

* In the government-thuggery contest, readers overwhelmingly selected the organic farmer being harassed by local bureaucrats.

* I was surprised that Romney easily won the 2012 election poll, but even more surprised that Obama wasn’t that far behind Gary Johnson.

* For my poll on why (or if) people support the Second Amendment, my choice came in fourth place.

 * We got a wide range of responses in the poll about the guy who took revenge in a very unique way against local law enforcement.

Now let’s do another poll. Our contest today will be to select the worst example of the regulatory state running amok.

1. Our first option deals with the Orwellian Foreign Account Tax Compliance Act (FATCA), which seeks to impose bad American tax law on things that happen outside America’s borders.

The good news is that Obama has unified the world, just like he promised in his campaign. The bad news – from the U.S. perspective – is that the world is now united against this horrible piece of legislation.

Here’s some of what a law professor just wrote about FATCA for the Wall Street Journal Europe.

Beware the sledgehammer used to crack the nut. In this case, the nut is the U.S. government’s laudable goal of catching tax evaders. The sledgehammer is the overreaching effect of legislation that is alienating other countries and resulting in millions of U.S. citizens abroad being forced to either painfully reconsider their nationality, or face a lifetime of onerous bureaucracy, expense and privacy invasion. The legislation is Fatca, the Foreign Account Tax Compliance Act.

Ms. Graffy provides a very powerful example of why FATCA is an absurd extraterritorial application of bad U.S. law.

To appreciate its breathtaking scope along with America’s unique “citizen-based” tax practices, imagine this: You were born in California, moved to New York for education or work, fell in love, married and had children.IRS Thuggery Even though you have faithfully paid taxes in New York and haven’t lived in California for 25 years, suppose California law required that you also file your taxes there because you were born there. Though you may never have held a bank account in California, you must report all of your financial holdings to the State of California. Are you a signatory on your spouse’s account? Then you must declare his bank accounts too. Your children, now adults, have never been west of the Mississippi but they too must file their taxes in both California and New York and report any bank accounts they or their spouses may have because they are considered Californians by virtue of one parent’s birthplace.

Sounds utterly ridiculous, but FATCA applies these rules to American citizens in other nations – with predictably awful results.

Extrapolate that example to the six million U.S. citizens living around the globe. Many, if not most, don’t know about these requirements. Yet they face fines, penalties and interest for not complying—even if they owe no U.S. taxes, own no U.S. property, have no U.S. bank account and haven’t lived there in years—if ever. …Foreign financial institutions trying to avoid these new requirements have two alternatives: to drop American clients, or don’t invest in the U.S. Neither scenario benefits America.  …This infringement on the sovereignty of other nations has not gone down well abroad and has only served to reinforce the most negative stereotypes of America. …It forces honest people with affection for their ties to America to either keep quiet about their heritage, or spend potentially thousands of dollars a year to prove that they owe no U.S. taxes. Or, as is increasingly occurring, it forces them to give up their U.S. citizenship. The result is that the U.S. is turning millions of “good will” ambassadors into “bad will” ambassadors. Can any of this be good for America?

Of course it’s not good for America, but greedy politicians are perfectly happy to impose enormous costs on the private sector in exchange for trivially small amounts of additional revenue. And those projections of additional revenue almost surely won’t materialize because of Laffer-Curve effects on investment in the American economy, so even the politicians won’t come out ahead when the dust settles.

Maybe the crowd in Washington will even learn the right lesson and support Senator Rand Paul’s legislation to undo some of the worst parts of FATCA, but don’t hold your breath.

2. Here’s the second choice. I thought I had learned never to be surprised by examples of foolish government intervention, but even I did a double take when I learned that the federal bureaucracy was regulating rabbits in magic shows.

Not just regulating them, but even requiring disaster plans in case of calamities such as “Fire. Flood. Tornado. Air conditioning going out. Ice storm. Power failures”. I’m not joking. Here are some excerpts from a Washington Post report.

This summer, Marty the Magician got a letter from the U.S. government. It began with six ominous words: “Dear Members of Our Regulated Community . . .” Washington had questions about his rabbit. Again. …Hahne has an official U.S. government license. Not for the magic. For the rabbit. The Agriculture Department requires it, citing a decades-old law that was intended to regulate zoos and circuses. Today, the USDA also uses it to regulate much smaller “animal exhibitors,” even the humble one-bunny magician. That was what the letter was about. The government had a new rule. To keep his rabbit license, Hahne needed to write a rabbit disaster plan. …For Hahne, the saga has provided a lesson in one of Washington’s bad old habits — the tendency to pile new rules on top of old ones, with officials using good intentions and vague laws to expand the reach of the federal bureaucracy. …“Our country’s broke,” Hahne said. “And yet they have money and time to harass somebody about a rabbit.”

What if regulators are committing crimes against common sense?

Just in case you think this is merely a case of bureaucrats concocting silly rules from their comfortable perches in Washington, I’m sure you’ll be delighted to learn that our fearless public servants are venturing outside the beltway.

Hahne…has been doing magic shows full time for 27 years, on cruise ships and on land. That means he has experienced most of the troubles a magician can expect… But he did not expect the U.S. Department of Agriculture. “She said, ‘Show me your license.’ And I said, ‘License for . . .?’ ” Hahne recounted. This was after a 2005 show at a library in Monett, Mo. Among the crowd of parents and kids, there was a woman with a badge. A USDA inspector. “She said, ‘For your rabbit.’ ” Hahne was busted. He had to get a license or lose the rabbit. …Hahne has an official USDA license, No. 43-C-0269, for Casey — a three-pound Netherland dwarf rabbit with a look of near-fatal boredom. The rules require Hahne to pay $40 a year, take Casey to the vet and submit to surprise inspections of his home. Also, if Hahne plans to take the rabbit out of town for an extended period, he must submit an itinerary to the USDA. The 1966 law that started all of this was four pages long. Now, the USDA has 14 pages of regulations just for rabbits. …the law applies only to warmblooded animals. If Hahne were pulling an iguana out of his hat — no license required. Now, he needs both a license and a disaster plan.

I’ve complained about a bloated and overpaid government workforce, but I’ll redouble my efforts now that I know we have bureaucrats going to one-man magic shows to check people for licenses.

On the other hand, I’m surprised that rabbit rules only 14 pages of regulations? That’s pretty spartan compared to the 74,000 pages of rules for the tax code.

The good news – relatively speaking – is that rabbit regulations don’t threaten to drive investment and jobs from the U.S. economy. But for sheer stupidity on the part of government, can you think of a more pointless set of regulations?

3. Now let’s consider our final example, which manages to combine the nanny state with domestic protectionism with an attack on the First Amendment.

This trifecta of red tape insanity comes from Kentucky, where the local state-protected cartel of psychologists wants to stop a newspaper columnist from giving free advice.

Here are some of the details from the Associated Press.

John Rosemond has been dispensing parenting advice in his newspaper column since 1976, making him one of the longest-running syndicated columnists in the country. But some Kentucky authorities want to put him in a time out. In May, Kentucky’s attorney general and its Board of Examiners of Psychology told Rosemond his parenting column — which regularly offers old-school advice and shows little tolerance for any kind of parental coddling — amounts to the illegal practice of psychology. They want him to agree to a cease-and-desist order. In particular, they want Rosemond to stop identifying himself as a psychologist, because he is not a licensed psychologist in Kentucky.

To his credit, Mr. Rosemond is fighting back.

Rosemond, an author of 11 parenting books who has a master’s degree in psychology from Western Illinois and is a licensed psychologist in his home state of North Carolina, sees the board’s letter as an effort at censorship and is filing a lawsuit Tuesday in federal court seeking to bar the state from taking any action against him. …He is represented by the Arlington, Va.-based Institute for Justice, which has filed multiple lawsuits challenging what they see as overreach by government licensing boards. Institute for Justice lawyer Paul Sherman says that under Kentucky’s logic, columnists like Dear Abby and television personalities like Dr. Phil and Dr. Oz are breaking the law any time they offer advice, because the content is aired in Kentucky and meets the state’s broad definition of psychological advice.

And the newspaper that publishes his column also is standing up for the First Amendment.

Peter Baniak, editor of the Lexington Herald-Leader, which ran the column that prompted the psychology board’s cease-and-desist letter, said Monday that his paper has not been contacted by the board or the Kentucky attorney general, and that the paper intends to continue publishing the column. “I would find it troubling for a state board to suggest or think it has the ability to say what should or shouldn’t run in an advice column,” Baniak said.

By the way, if you watch this video, you’ll see that Rosemond’s home state of North Carolina also is guilty of trying to undermine the First Amendment as part of efforts to protect certain professions from competition.

Now it’s your turn to pick the most foolish example of regulation from this list.

By the way, just in case there are skeptics who think I’ve shared isolated examples and that regulation is generally beneficial, check out these staggering numbers.

So whether we’re looking at anecdotes or big-picture data, the message is the same. Red tape is strangling the productive sector of the economy.

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Whether we’re talking about NSA spying, cross-border collection and sharing of private financial data by tax-hungry governments, pointlessly intrusive money-laundering laws, or other schemes to give the state more power and authority, we’re often told that “if you’re a law-abiding person, you have nothing to fear.”

But that assumes government is both competent and trustworthy.

You don’t have to be a crazed libertarian like me to realize that those two words are not a good description of Washington.

The IRS scandal is just one recent example of politicians and bureaucrats behaving badly. Heck, this blog is basically just a collection of examples illustrating the incompetence and venality of the public sector, augmented by my snarky comments and economic evangelizing.

That being said, while we may get irritated by government waste, senseless snooping,  and onerous taxes, we’re actually lucky.

The people who really suffer are the law-abiding folks (like Martha Boneta) who wind up in the crosshairs of less-than-savory folks in government, which includes not just politicians, but also some law enforcement officials and oftentimes ambitious prosecutors.

And you could be next, even if you’re a goody-two-shoes type who actually obeys speed limits. Simply stated, government is so big and has so many laws that every one of us is probably guilty of something.

And if we cross the wrong bureaucrat, our lives may be ruined – particularly since there are very few checks and balances to restrain these petty tyrants.

Professor Glenn Reynolds (a good guy despite teaching at the University of Tennessee Law School) addresses this issue in a very good article for the Columbia Law Review.

Here’s some of what Professor Reynolds wrote, starting with a brief explanation of the underlying problem.

Prosecutorial discretion poses an increasing threat to justice. The threat has in fact grown more severe to the point of becoming a due process issue. …prosecutors’ discretion to charge—or not to charge—individuals with crimes is a tremendous power, amplified by the large number of laws on the books. …If prosecutors were not motivated by politics, revenge, or other improper motives, the risk of improper prosecution would not be particularly severe. However, such motivations do, in fact, encourage prosecutors to pursue certain individuals, like the gadfly Aaron Swartz, while letting others off the hook—as in the case of Gregory, a popular newscaster generally supportive of the current administration. This problem has been discussed at length in Gene Healy’s Go Directly to Jail: The Criminalization of Almost Everything and Harvey Silverglate’s Three Felonies a Day. The upshot of both books is that the proliferation of federal criminal statutes and regulations has reached the point where virtually every citizen, knowingly or not (usually not) is potentially at risk for prosecution.

I’ve already written about the unfairness of giving David Gregory a free pass when ordinary citizens are punished for similar offenses, so I’m in full agreement that this is a problem.

More specifically, we can’t trust that prosecutors are motivated by justice.

In many cases, we’re talking about deeply flawed individuals motivated by a lust for political power (such as my former debating opponent Elliot Spitzer).

Self-aggrandizing  prosecutors seem more than willing to deliberately target certain individuals for unfair persecution, so we need some way of clipping their wings.

Glenn mentions the approach that you might find in a Civics 101 textbook, but he also notes that it’s not an effective check on government abuse.

Traditionally, of course, the grand jury was seen as the major bar to prosecutorial overreaching. The effectiveness of this approach may be seen in the longstanding aphorism that a good prosecutor can persuade a grand jury to indict a ham sandwich. Grand jury reforms—where grand juries still exist—might encourage grand jurors to exercise more skepticism and educate them more. But grand juries are not constitutionally guaranteed at the state level, and reforming them at the federal level is likely to prove difficult.

So what, then, are the potential solutions?

Glenn’s first suggestion is that immunity for prosecutors should be relaxed.

Overall, the problem stems from a dynamic in which those charged with crimes have a lot at risk, while those doing the charging have very little “skin in the game.” One source of imbalance is prosecutorial immunity. The absolute immunity of prosecutors—like the absolute immunity of judges—is a judicial invention, a species of judicial activism that gets less attention than many other less egregious examples. Although such immunity no doubt prevents significant mischief, it also enables significant mischief by eliminating one major avenue of accountability. Even a shift to qualified, good faith immunity for prosecutors would change the calculus significantly, making subsequent review something that is at least possible.

In theory, lawyers (such as prosecutors) already can be punished for misconduct. But other lawyers are the ones in charge of determining whether misbehaving colleagues should be disbarred or otherwise penalized.

Needless to say, members of a club generally are reluctant to punish other members of the club.

So reducing immunity would be a good idea.

Glenn’s second option is to impose a variant of “loser pays.”

Perhaps the prosecution could be required to pay a defendant’s legal fees if he or she is not convicted. To further discipline the process, one could implement a pro-rate system: Charge a defendant with twenty offenses, but convict on only one, and the prosecution must bear 95% of the defendant’s legal fees. This would certainly discourage overcharging.

As an economist, I instinctively like this idea. It’s always a good idea to make people bear the costs of their own actions.

But there’s a catch. Prosecutors wouldn’t be bearing the costs. You and me and other taxpayers would have to cough up the money.

However, perhaps “loser pays” could be structured so the money comes out of a predetermined budget for salaries and benefits of prosecutors and staff.

Since they are probably overpaid, like most government bureaucrats, I imagine this idea would have the desired impact on their actions.

The third option – and it’s a big one – is to get rid of plea bargains.

The “nuclear option” of prosecutorial accountability would involve banning plea bargains. An understanding that every criminal charge filed would have to be either backed up in open court or ignominiously dropped would significantly reduce the incentive to overcharge. …Our criminal justice system, as presently practiced, is basically a plea bargain system with actual trials of guilt or innocence a bit of showy froth floating on top.

I don’t know enough to opine on this proposal, but the status quo obviously isn’t any good, so maybe it’s time to think big.

Glenn also adds an additional point about narrowing the definition of a crime, or at least what “offenses” carry criminal sanctions.

It is also worth considering whether mere regulatory violations…should bear criminal sanctions at all. …with the explosion of regulatory law, every citizen is at risk of criminal prosecution for crimes that, as David Gregory’s defenders noted, involve no actual harm or ill intent. Yet any reasonable observer would have to conclude that actual knowledge of all applicable criminal laws and regulations is impossible, especially when those regulations frequently depart from any intuitive sense of what “ought” to be legal or illegal. Perhaps placing citizens at risk in this regard constitutes a due process violation; expecting people to do (or know) the impossible certainly sounds like one.

When you look at the perverse forms of government persecution included in this post from earlier this year, Glenn’s point becomes even more persuasive.

I’ll just add one more way of constraining the legal system, and that’s jury nullification.

Judges and prosecutors hate the concept, which suggests to me that it’s probably a very good idea in certain cases.

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I’m a strong believer in federalism, but not because I think state and local governments are competent. Politicians and interest groups are a toxic combination in all circumstance.

But at least people have considerable ability to cross borders if they want to escape greedy and despotic governments at the state and local level. And when the geese with the golden eggs can fly away, this facilitates competition between governments and forces politicians to restrain their appetites.

So when California screws up, people can move to Texas. And when Detroit screws up, people can move just about anyplace.

But it’s not just stereotypically left-wing places where you find stupid and oppressive government. Here are three examples of bad government, and you get to pick the one that most exemplifies statism in action!

Option #1: The “Prove Your Gender” Requirement in Georgia

I realize that gender can be a somewhat fuzzy concept in modern society, and things can get even more complicated with modern technology, but you would think that certain things are…um…well, self evident.

But that wasn’t good enough for one bureaucrat in Georgia, as reported by the New York Daily News. Here are some relevant excerpts

A Georgia mom was ordered by state workers to prove she was a woman after she found her birth certificate mistakenly listed her as a man. Nakia Grimes, 36, said she was left “in shock” after officials told her she must undergo an invasive Pap smear exam if she ever wanted the error corrected. …Grimes said the offensive proposition came about when she spotted her birth certificate had an “X” listed next to male while getting her driver’s license renewed. …a state worker said the only way for the Clayton County resident to get her gender changed would be to prove it properly. “She said I needed to go have the exam, have a doctor write a note verifying you’re a woman, and bring it back – notarized,” she added.

Shockingly, this story actually has a happy ending. According to the story, the government eventually “…altered her gender status after checking her son Zion’s birth certificate, where she is legally listed as the birth mother.”

Option #2: Squandering Money to Rip Up Flowers in Washington, DC

When government fails to fulfill one of its supposed obligations, there’s a natural tendency among some people to volunteer their time and energy to improve their communities.

But bureaucrats don’t like private initiative, particularly since it makes it rather obvious that government is a costly and inefficient way of doing things. And that’s why good Samaritans who clean parks and rescue people open themselves up to harassment and persecution.

In other cases, the bureaucrats undo the good work of private citizens. Here’s some of what was reported in the Washington Post about one episode of spiteful bureaucracy.

…the transit system would look silly if it let perish 1,000 flowers planted secretly at the Dupont Circle station by local garden artist Henry Docter, the self-described Phantom Planter. I feared that Metro would merely neglect the flowers. Instead, last Sunday, it sent workmen to yank them out.The transit system regularly pleads poverty, yet employees devoted supposedly valuable time to remove more than 1,000 morning glories, cardinal flowers and cypress vines that Docter donated to the city — albeit without permission. The plants would have bloomed from August to October in a patriotic display of red, white and blue.Instead of greenery today and colors to come, the 176 flower boxes along the top stretch of the escalators at the station’s north entrance now feature dirt, a few straggling stems and the occasional discarded soda can. …“They paid people to tear out plants that everyone loves? Well, this is cause for insurrection. Talk about fixing something that’s not broken,” said Robin Diener, a member of the Dupont Circle Citizens Association board of directors.

Amazing. The bureaucracy claims there’s no money to plant flowers, but there’s somehow money to dig up flowers someone else has planted. That’s government in action!

Option #3: Thugs from Local Government Harass Organic Farmer

One of the most unpleasant features of big government is that bureaucrats have immense power to engage in vindictive attacks.

I’ve already shared some horror stories, such as this instance of vicious IRS persecution, a story of a woman jailed overnight because she let her kids play outside, an example of cops “legally” stealing $17,000 from a man who committed no crime, a video about how the EPA tried – and fortunately failed – to destroy a family, and a disturbing report about the Justice Department’s discriminatory attack on a hapless homeowner.

We have another example of government thuggery. Here are some passages from a disturbing Washington Examiner story, though you really should read the whole thing.

Since purchasing Liberty Farm in Fauquier County, Virginia, where she grows organic vegetables and has over 160 rescued livestock…, her life has been a series of harassment and bullying by people in power. The latest trouble is that her house…was vandalized. The same day, she was harassed at her farm by strangers in a Georgetown-registered car. Ten days earlier Martha had gone public about an IRS audit. Journalist Kevin Mooney broke the story that Boneta was audited by the IRS last year after a series of disputes with the Piedmont Environmental Council and the Fauquier County government. It was later shown that the audit was disclosed to at least one Fauquier County official, perhaps feloniously. Martha’s disputes brought her national attention because of her willingness to stand up to ridiculousness. She was cited and threatened with $5,000 fines for hosting a birthday party for eight 10-year-old girls without an “events” permit from the county. …Asked about the IRS audit of Boneta coming on the heels of legal disputes between the farmer and the PEC, [former IRS Commissioner] Richardson said, “Coincidences do happen.” But this audit has shown to be no coincidence. A Fauquier County supervisor blabbed about the audit two days after the notice was signed at the IRS and six days before Boneta received it. That shows collusion. The supervisor is Richardson’s friend and neighbor, and a former PEC board member.

This is such a disturbing story that I’m incapable of making a snarky or sarcastic comment. But at least this is a good example to illustrate my point that politicians and bureaucrats at the state and local level can be just as evil as those from Washington.

Anyhow, not it’s time for you to throw in your two cents. Which story best symbolizes government?

P.S. If you were inspired by these stories and want to engage in petty harassment of people who produce, here’s one way of training for government employment.

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Exactly three years ago, I posted a simple quiz about libertarians and patriotism.

The two questions in that quiz are illuminating since they highlight how libertarians in some cases may differ from conservatives (click here for more on that issue), but I also included this t-shirt, which seems to capture the mindset of a lot of Americans regardless of their political outlook.

Well, it seems that Mark Twain had the same attitude as the young lady in the photo, at least if we can believe the quote in this Steve Breen cartoon.

Simply stated, our loyalty should be to a set of ideals, not to any particular group of people who happen to hold power.

Patriotism Cartoon

What makes the cartoon so effective, though, is the inclusion of an IRS thug and a snoop from the NSA.

Reminds me of this cartoon about Obama and the Founding Fathers.

But there’s a serious point to discuss. Are we losing our freedoms and giving the state too much power and authority?

According to a recent news report, a former lieutenant colonel for the infamous East German STASI spy agency says the NSA-type snooping ability “would have been a dream come true.”

Wolfgang Schmidt…pondered the magnitude of domestic spying in the United States under the Obama administration. A smile spread across his face. “You know, for us, this would have been a dream come true,” he said, recalling the days when he was a lieutenant colonel in the defunct communist country’s secret police, the Stasi. In those days, his department was limited to tapping 40 phones at a time, he recalled. Decide to spy on a new victim and an old one had to be dropped, because of a lack of equipment. He finds breathtaking the idea that the U.S. government receives daily reports on the cellphone usage of millions of Americans and can monitor the Internet traffic of millions more.

I’ve already written that we do have enemies and that I think it’s okay to spy on those enemies (though I want the government to get judicial approval before spying on Americans).

But I also wrote that spying should be subject to cost-benefit analysis. The NSA info-gathering exercise reminds me of anti-money laundering laws and those laws are a costly failure. They invade our privacy, hurt the poor, impose high regulatory costs, and have little or no impact on underlying crimes.

We also need to be concerned about potential misuse of data, whether by people currently in the government or those that will have access to the information in the future.

This is what worries me the most. Simply stated, I don’t trust people in government. Which, rather ironically, means I’m in agreement with a former STASI bigwig.

Even Schmidt, 73, who headed one of the more infamous departments in the infamous Stasi, called himself appalled. The dark side to gathering such a broad, seemingly untargeted, amount of information is obvious, he said. “It is the height of naivete to think that once collected this information won’t be used,” he said. “This is the nature of secret government organizations. The only way to protect the people’s privacy is not to allow the government to collect their information in the first place.”

Hmmm… maybe being warned about the risk of unrestrained government by a former communist spy is the modern equivalent of being called ugly by a frog?

In any event, I suppose Herr Schmidt has first-hand knowledge of the danger of giving government too much information.

P.S. Speaking of first-hand knowledge, it’s somewhat amusing that former communists in Russia and current communists in China have told the Europeans that the welfare state breeds too much dependency.

P.P.S. While this post has touched on libertarians and patriotism, fairness requires me to acknowledge that leftist politicians also believe in a form of patriotism.

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What’s the worst example of bureaucrats harassing and persecuting parents?

Was it the Texas woman who was arrested because her children were playing outside?

Government Stupidity SignOr how about the Michigan woman who was threatened for looking after her neighbor’s kids?

Those are egregious examples, but here’s another example of government run amok.

Lenore Skenazy has a column in today’s Wall Street Journal on the topic of whether it should be a criminal offense to leave your kids in a car, even if just for a few minutes.

Here’s how she describes the issue.

One mother is hauled off to the police station. Another is clapped in handcuffs. The mothers’ offenses? They let their kids wait in the car while they ran a quick errand. Yes, these moms did just what yours probably did back when you were a kid. That age-old practice has been criminalized in 19 states in recent years, thanks to a world that seems increasingly unable to distinguish between negligence and normal parenting. …The impulse behind these laws is not evil, just excessive. Many people and politicians—I suppose the categories overlap—believe that whenever children are left alone in a car they could easily die of heat exhaustion or be kidnapped.

She then looks at the data. Kidnapping doesn’t even merit an asterisk, while death from heat is very rare and overwhelmingly caused by factors other than a quick stop to get a gallon of milk.

While the kidnapping fear is beyond absurd (doubters, please look up the stats), the heatstroke fear is based on the fact that cars do get hot. Just not in the time it takes to buy a gallon of milk. …each year about 40 children die of hyperthermia in automobiles. …But according a group that tracks these statistics, kidsandcars.org (“Love Them, Protect Them”), the overwhelming majority were either forgotten in the car for hours (54%) or climbed into an empty vehicle without anyone’s knowledge and got stuck (31%). This, in a country with 32 million children under age 8 taking billions of car trips annually. Any child’s death is a terrible tragedy. But the reflexive call to 911 the minute a child is spied alone in a car is lunacy. Why not wait a minute to see if the parent comes back?

I don’t necessarily blame strangers for calling 911. After all, maybe the time you see kids alone in a car is one of those one-in-a-million instances of tragic forgetfulness by a parent.

But I do blame cops for overreacting. Ms. Skenazy has a couple of examples in her column. Here’s the one that I found most outrageous.

A typical story is the one I heard about from a mother of two who lives in a small town near Utica, N.Y. Last summer, on a 69-degree night, she ran into a grocery store to get some chicken breasts at 6:54 (she had just spoken to her husband on her cellphone). In the car she left her 5-year-old girl and 6-month old boy, who was asleep. At 7:03 (it’s on record) a passerby called 911. Then he pulled a truck behind her car so she couldn’t drive away—which she dearly wanted to do when she emerged from the store moments later. Instead, she had to wait for the police. The officer, rather than informing the busybody stranger that he shouldn’t prevent the free movement of citizens, told the mother that she was in big trouble. He searched her purse for dangerous objects. Then she had to call her parents to come get the kids, because the cop was taking her to the police station. Her daughter cried as she left. After that? Three visits from child-protective services to her home. The workers found nothing amiss, but “they have told me if it ever happens again, they will move the courts to have my children placed in foster care,” she said.

First, what sort of jerk blocks the women from leaving? Since this happened in New York, I wonder if it was Michael Wolfensohn, who has a track record of being a certain unmentionable orifice.

More important, why didn’t the cop simply ask the women what happened, take a minute to ascertain that certain common-sense precautions were taken (such as the car doors being locked while she was in the store), and then let her go home after some friendly advice about being careful?!?

At least we should be relieved that the poor woman wasn’t arrested, though I can only imagine how galling it would be to have some bureaucrats come to your house over and over again with immense powers to disrupt your family if you don’t kowtow to them.

Whatever happened to common sense? Oh, wait, never mind. We’re talking about government, that delightful entity that arrests kids for throwing snowballs, arrests a heroic young man for rescuing a child, and treats failure to file a form as a more serious crime than child pornography.

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I was thinking of writing something deep and profound, but then I saw this cartoon. For those of us who love the IRS, it’s too good not to share.

IRS Frankenstein Cartoon

Frankenstein periodically appears in political cartoons, including this Glenn Foden IRS cartoon and these Henry Payne cartoons about Romneycare and Obamacare.

Sort of makes you wonder why there’s so much discrimination against the Mummy, Count Dracula and the Werewolf? Maybe we can ask the EEOC to launch an investigation after they’re done trying to coerce businesses into hiring ex-convicts.

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I’ve used the Superman theme to make fun of Obama’s shallow understanding of the Constitution and to express disgust about a bureaucrat ripping off taxpayers.

Now there’s a well-timed Jim McKee cartoon that looks at government’s super intrusiveness.

Government Man Cartoon

Jim McKee is relatively new to me, but he does great work. You can see some of his other cartoons here and here.

Regular readers know that I’m very fond of cartoons that portray government as fat and bloated slob. For other examples, see here, hereherehere, here, here, here and here.

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