I’m in Europe as part of a six-nation speaking tour, participating in the Free Market Road Show.
My first speech was yesterday in Greece, which is infamous for a government that is insanely wasteful, even to the point of subsidizing pedophiles and requiring stool samples from folks applying to set up online companies.
But I don’t want to share anything about my remarks, which would be rather familiar to regular readers of this blog.
Instead, I want to share a couple of slides from Professor Aristides Hatzis of the University of Athens.
Let’s start with a look at the number of bureaucrats over time in Greece. You don’t need to read Greek to see that featherbedding exploded over the past 35-plus years.
As you can see, it’s an expanded version of this grim chart.
Now let’s look at another slide from Professor Hatzis.
When you see these numbers (or read this information), it’s a surprise that Greece didn’t collapse earlier.
One reason that I liked the presentation from Professor Hatzis is that he included a couple of amusing cartoons, one of which he borrowed from the United States. Here’s the Gary Varvel cartoon he shared with the Greek audience.
When I was became interested in public policy, I thought Jimmy Carter was the epitome of a bad President. But as I began to learn economics, I realized that Richard Nixon and Lyndon Johnson also were terrible and belong in the Hall of Fame of bad Presidents.
Or I guess we should call it a Hall of Shame (you can click on the image to see my selections).
Whatever we call it, I’m now at the point where I realize that Woodrow Wilson and Teddy Roosevelt are the charter members. Why? Well, because they were the first Presidents to reflect the progressive ideology.
More specifically, they shared the ideology of the progressive movement, which saw a powerful and activist central government as a force for good – a radical departure from the views of America’s Founding Fathers, who hoped that the Constitution would protect people by keeping government very small.
Not surprisingly, Barack Obama is in that “progressive” tradition, even to the point of attacking the views of the Founding Fathers in a recent speech at Ohio State University.
I commented on this issue in this Fox News segment.
That short clip only scratches the surface.
For more detail, here are some excerpts from a column by Andrew Napolitano. Like me, he isn’t impressed by the President’s statolatry.
It should come as no surprise that President Obama told Ohio State students at graduation ceremonies last week that they should not question authority… And he blasted those who incessantly warn of government tyranny. Yet, mistrust of government is as old as America itself. America was born out of mistrust of government. …Thomas Jefferson…warned that it is the nature of government over time to increase and of liberty to decrease. And that’s why we should not trust government. In the same era, James Madison himself agreed when he wrote, “All men having power should be distrusted to a certain degree.” …The reason Obama likes government and the reason it is “a dangerous fire,” as George Washington warned, and the reason I have been warning against government tyranny in my public work is all the same: The government rejects the natural law because it is an obstacle to its control over us. …Because the tyranny of the majority can be as dangerous to freedom as the tyranny of a madman, all use of governmental power should be challenged and questioned. Government is essentially the negation of liberty.
Napolitano also warns against majoritarianism in his column, which is music to my ears.
Though I’m not sure our battle today is with majoritarianism or the progressive ideology.
Our real challenge is redistributionism. Far too many people think it is okay to use the coercive power of government to obtain unearned benefits. And that’s true whether the benefits are food stamps or bailouts.
I prefer the honest approach. If you believe in bigger government and higher taxes, you should “man up” and openly express your views. Don’t dissemble, prevaricate, mislead, and obfuscate.
The same is true, by the way, for advocates of individual freedom and smaller government. I’ve always admired Barry Goldwater, who famously wrote, “I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them.” There’s no ambiguity in that statement!
Anyhow, we have a new entry in this contest for the most egregious use of Orwellian word games. And, not surprisingly, it’s by a statist.
Fred Hiatt, the editorial page editor of the Washington Post, wrote a column claiming that people are getting an entitlement if the government doesn’t double tax their retirement savings.
This spring Obama proposed a cap of about $3.4 million on how much people can save in their tax-advantaged IRAs and 401(k) plans… Obama isn’t keeping people from saving as much money as they can or want. The question is how much the rest of us should have to chip in. Obama is suggesting that at some point retirement accounts, invented to encourage working people to set aside enough for their sunset years, no longer need a helping hand from taxpayers. …The entitlement culture…runs deeper than the entitlement programs we normally think of, like Medicare and Social Security. …Now it’s the top one-thousandth demanding their right to tax breaks for socking away unlimited wealth in retirement plans.
There are several things about these excerpts that rub me the wrong way.
First, IRAs and 401(k)s are not “tax advantaged.” They’re tax neutral. These vehicles exist so that people don’t get double taxed on their savings. As I explained last year.
If you have a traditional IRA (or “front-ended” IRA), you get a deduction for any money you put in a retirement account, but then you pay tax on the money – including any earnings – when the money is withdrawn. If you have a Roth IRA (or “back-ended” IRA), you pay tax on your income in the year that it is earned, but if you put the money in a retirement account, there is no additional tax on withdrawals or the subsequent earnings. From an economic perspective, front-ended IRAs and back-ended IRAs generate the same result. Income that is saved and invested is treated the same as income that is immediately consumed.
But let’s set that aside. My main gripe with Hiatt’s column is that he wants us to think that people with IRAs and 401(k)s are getting “a helping hand from taxpayers” and that this is part of an “entitlement culture.”
This is statist nonsense. If somebody has an IRA and 401(k), they’re saving their own money. There’s no obligation being imposed on me or any other taxpayer.
But Hiatt presumably thinks that the government’s decision not to impose double taxation is somehow akin to a giveaway. But that only makes sense if you assume that government has a preemptive claim to all private income.
And if you have that bizarre mindset, then I guess it makes sense that IRAs and 401(k)s are part of the “entitlement culture.”
In other words, Hiatt wants us the think that there’s no moral, ethical, or economic difference between giving person A $5,000 of other people’s money and person B being allowed to keep $5,000 of his or her own money.
But if that’s true, why bother producing and subjecting yourself to stress when your reward is punitive tax rates? Why not participate in the easy side of the “entitlement culture” and simply take other people’s money?
I thought conservatives were the ones with an unseemly fixation on sex. They’re supposed to be the Puritans who, in the words of Mencken, have a “haunting fear that someone, somewhere, may be happy.”
Maybe that’s true in a few cases, but it also appears that some leftists also are bizarrely focused on sex. Only instead of worrying that someone may be having fun, they concoct novel claims that a statist agenda is necessary to stop prostitution.
Just the other day, for instance, some lawmakers actually asserted that “climate change” would force more women to become prostitutes.
Several House Democrats are calling on Congress to recognize that climate change is hurting women more than men, and could even drive poor women to “transactional sex” for survival. …Rep. Barbara Lee (D-Calif.) and a dozen other Democrats, says the results of climate change include drought and reduced agricultural output. It says these changes can be particularly harmful for women. “[F]ood insecure women with limited socioeconomic resources may be vulnerable to situations such as sex work, transactional sex.
Though these American politicians are behind the times. A Filipino bureaucrat at the United Nations proposed this laughable theory as early as 2009.
While the link between climate change and “transactional sex” is a bit of a stretch, to put it mildly, it’s not the only area where leftists make bizarre and unsubstantiated assertions about stopping prostitution with a statist agenda.
I thought I had dealt with every imaginable silly argument against tax havens, but I didn’t give my leftist friends enough credit. It seems that low-tax jurisdictions somehow facilitate sex slavery.
While battles over government budget deficits dominate the media coverage, tax havens pose a much bigger problem. They facilitate bribery, they enable sex slavery, and they foster terrorism. As Sachs notes, “the havens serve countless purposes, yet not one is for the social good.”
Not surprisingly, there’s not a single piece of evidence to support any of the assertions in this excerpt. We’re just supposed to believe that financial privacy laws enable bad things because of money laundering.
P.S. So why do leftists have this quirky fixation about prostitutes and public policy? Do they go to left-wing conferences and hear stories from Dominique Strauss-Kahn , the infamous former head of the IMF. Or do they get briefings from my one-time debating opponent Elliot Spitzer, who also was disgraced because of “transactional sex”?
Folks, the pendulum is swinging in the right direction.
In recent weeks, I’ve shared a bunch of examples to support my hypothesis that libertarians, small-government conservatives, and classical liberals are finally making some progress.
Well, here’s another feel-good story. A powerful Committee Chairman in the House of Representatives realizes that being pro-market is not the same as being pro-business. Hallelujah!
During Jeb Hensarling’s first congressional bid, a man at a campaign stop in Athens, Texas, asked the Republican if he was “pro-business.” “No,” the candidate replied, drawing curious stares from local business leaders who had gathered to hear him speak, a former Hensarling aide recalled. “I’m not pro-business. I’m pro-free enterprise.” Now, more than a decade later, that distinction has Wall Street on edge. The new chairman of the House financial services committee wants to limit taxpayers’ exposure to banking, insurance and mortgage lending by unwinding government control of institutions and programs the private sector depends on, from mortgage giants Fannie Mae and Freddie Mac to flood insurance. Banks and other large financial institutions are particularly concerned because Mr. Hensarling plans to push legislation that could require them to hold significantly more capital and establish new barriers between their federally insured deposits and other activities, including trading and investment banking. …In interviews, a half-dozen industry representatives expressed some level of anxiety about Mr. Hensarling’s legislative agenda.
So, the cronyists are “on edge” and feeling “anxiety.” Gee, just breaks my heart.
And it’s not just Rep. Hensarling that is singing from the right song sheet.
Earlier this month, all 45 Senate Republicans voted for a symbolic measure aimed at banks with more than $500 billion in assets. The amendment, offered by Sens. David Vitter (R., La.) and Sherrod Brown (D., Ohio), sought to eliminate any subsidies or other advantages enjoyed by the biggest financial institutions because investors expect the government to prevent them from collapsing. …Most congressional Republicans believe the changes enacted in the wake of the 2008 financial crisis—principally in the Dodd-Frank financial reform bill—enshrined the notion that the biggest institutions are “too big to fail” because they guaranteed the government would step in to prevent the most sprawling firms from going under.
To be sure, many of these same politicians voted for TARP, so I’m not under any illusions that they’ve become committed supporters of genuine capitalism.
Here are some more details from the article about Hensarling’s commitment to economic liberty.
Mr. Hensarling has been a vocal critic of taxpayer backstops for the private sector. He voted against the Wall Street rescue package in the fall of 2008 and supported measures to ease the importation of prescription drugs. He even picked a fight with one of the largest employers in his backyard—American Airlines—by supporting initiatives to allow more long-distance flights out of Dallas’s Love Field, the home base for rival Southwest Airlines. Now, his other potential targets include: the Export-Import Bank of the U.S., which makes loans to American companies that do business overseas, and the Terrorism Risk Insurance Act, a temporary backstop created in the aftermath of 9/11 to insure construction projects. The latter measure expires at the end of 2014, unless Mr. Hensarling’s committee acts to extend it. “In every jurisdictional area that I can get my fingers on, I want to move us away from the Washington insider economy,” he said. Mr. Hensarling sharpened his free-market views when he studied economics under former Sen. Phil Gramm at Texas A&M University.
So what does all this mean? Perhaps not much in the short run, particularly with Obama in the White House and Tim Johnson of South Dakota chairing the Senate Banking Committee.
In the long run, though, this is a positive sign. Our prosperity and liberty depend on small government and free markets, so we need at least a few lawmakers who understand that there shouldn’t be any special favors for big interest groups.
Why do words like “snitch” and “narc” have distasteful connotations?
And why don’t we hold “tattle tales” and “stool pigeons” in high regard?
Is it because we think people should be able to do bad things and get away with it? Do we like misbehavior to go unpunished?
I think the answer to these last two questions is an emphatic NO. Close to 100 percent of people would want the authorities to know if any of us overheard a terrorist plot. Or somehow found out about a murder. Or knew about some dirtbag who had raped someone.
Yet we still don’t like “narcs” and “stool pigeons,” probably because we know that some rules are bad, misguided, or foolish. For all intents and purposes, most Americans have libertarian sensibilities about victimless crimes.
So while we approve of “tattle tales” if it means we catch genuine criminals who violate the rights of others, we look down on the “snitch” who rats out the guy smoking a joint, the jerk who informs the IRS on a small business owner hiding income, and the weasel who tells the local planning gestapo that someone is remodeling their basement without government approval.
I’ve previously shared nauseating stories about Soviet-style tax informant programs in both Chicago and the United Kingdom (where they’re actually encouraging kids to turn in their parents!).
The state of New York is engaging in the same reprehensible tactics, only this time the target is guns rather than money.
For more than a year, New York state has maintained a tip line allowing people to report illegal gun owners and collect a $500 reward. …A February 2012 press release from Gov. Andrew M. Cuomo’s office first publicly announced the tip line, saying it was designed to “encourage citizens to report illegal firearm possession.” …On the Facebook page for The Record’s story, several users criticized the tip line for apparently encouraging New Yorkers to spy on each other.
Not surprisingly, the government is defending this campaign to turn people into stool pigeons for illegitimate reasons.
…a spokesperson for the New York State Division of Criminal Justice Services defended the program. “This program has been in place for more than a year and is aimed only at getting illegal crime guns off the streets: a goal that every New Yorker can agree with,” wrote Janine Kava, director of public information at NYS DCJS.
What the government should be doing, needless to say, it getting people who do bad things off the street. And that means investigating, arresting, prosecuting, and punishing those who abridge the rights of other people.
It does not mean arbitrarily criminalizing inanimate objects such as guns.
And as this young lady says, the government should only get the guns of law-abiding people under very particular circumstances.
P.S. Andrew Cuomo also happens to be a former Secretary of Housing and Urban Development, where he infamously was in charge of imposing so-called affordable lending requirements that helped start the bad Fannie Mae/Freddie Mac policies that eventually led to the housing bubble and financial crisis.
Two Belgian government ministers have complained…that..Belgian companies are facing unfair competition. The two Belgian cabinet ministers were in Hannover (Germany) on Monday. They decided on their visit after often hearing in Belgium that it was cheaper to get Belgian cattle processed in Germany than at home.
So what is the unfair competition from Germany? Are there special tariffs or trade barriers that are artificially raising costs on Belgian products?
Nope, the Belgians are complaining that Germany doesn’t have a minimum wage and that regulations are not sufficiently onerous. Oh, the horror.
The Belgian ministers say that the most striking thing is that this can happen legally because there is no general minimum wage in Germany: “The company is not violating any regulations, because there are no regulations and that must stop” Mr Vande Lanotte told the VRT. The Belgians insist Belgian companies are the subject of unfair competition. Economy Minister Vande Lanotte says that in principle everybody should be treated in the same way: “Belgian companies cannot compete with their German competitors and this has ramifications.”
Gasp, there “are no regulations.” What sort of vicious dog-eat-dog system are the Germans running?!?
The answer, of course, is that Germany has lots of red tape.
More statist than France?!?
But apparently not as much intervention as Belgium. And you’ll notice that the “principle” that “everybody should be treated the same way” is really a stalking horse for the argument that there should be regulatory harmonization.
But the harmonization always means that everyone has to impose more onerous rules. Belgium doesn’t harmonize with Germany’s comparatively market-oriented policy. Instead, Germany is supposed to harmonize with the more statist and interventionist model of the Belgians.
In an ideal world, the Germans would tell the Belgians to go jump in a lake.
But thanks to the never-ending pressure for regulation, harmonization, and centralization in Europe, it’s not that simple. The Brussels bureaucrats may decide to force Germany to adopt bad policy.
Mr Vande Lanotte intends to raise the issue of the absence of a minimum wage in many German sectors with the European Commission.
P.P.S. This story helps to explain why I want Belgium to split apart. If it became two nations, one Dutch and one French, I suspect we’d get better policy because they would then compete with each other instead of nagging Germany to become more statist.
As a general rule, it’s not right to take pleasure at the misfortune of others.
But I think we’re allowed an exception to that Schadenfreude rule when the “others” are greedy politicians pursuing spiteful policies. We want the political elite to suffer misfortune because of our desire to promote freedom and prosperity for ordinary people.
New evidence of top French executives leaving the country has emerged as President Francois Hollande battles a stalling economy and tumbling approval ratings. Two senior executives at Moet Hennessy, the champagne and cognac arm of the LVMH luxury group, are moving to London from Paris and the head of Dassault Systemes, the software arm of Dassault Aviation, said some senior managers of his company had left and he was considering following suit. …The news follows Mr Arnault’s own application for Belgian citizenship, leaked last September, which poured fuel on a fiery debate in France about entrepreneurship, patriotism and high taxes.
Yup, just like Joe Biden, French politicians want people to think it’s patriotic to give more money to wasteful and incompetent politicians.
While I’m happy that some people are escaping Hollande’s punitive tax grasp, there are plenty of victims that can’t escape. France’s economy is in the toilet and millions of ordinary people are suffering.
Figures released on Monday showing a worse-than-expected 1.2 per cent fall in industrial production in January over December underlined the grim outlook facing Mr Hollande, whose approval ratings have fallen this month to as low as 30 per cent. The economy went into reverse in the last quarter of 2012, unemployment has hit 10 per cent of the workforce
Not surprisingly, the politicians are not learning any lessons. They either have their heads buried in the sand or they lash out at those who offer constructive criticism.
The government has denied claims of a tax exodus and denounced as “French bashing” criticism such as the declaration last month by Maurice Taylor, head of tyremaker Titan International, that he would be “stupid” to buy a French factory.
Hollande and his cronies can pretend that successful taxpayers aren’t escaping, but reality will hit them over the head when they count how much tax revenue they receive this year and next year.
In other words, we’re going to see an interesting Laffer Curve experiment.
We saw in America that rich people paid a lot more to the IRS when Reagan lowered their tax rates in the 1980s.
Francois Hollande is trying to run the same experiment, only in reverse.
Anybody want to take a wild guess how that’s going to turn out?
P.S. As shown in this remarkable chart, the real problem in France is that government is far too big. And if the public sector is consuming more than 50 percent of a nation’s economic output, it’s impossible to have a good tax system.
Some big-government nations – such as Sweden and Denmark – try to minimize the damage of high tax burdens, but there’s no way to have a non-destructive tax system when the government wants to take half of what people produce.
And France is trying to maximize the pain rather than minimize the pain, so it’s a safe bet that Hollande’s policies won’t end well.
P.P.S. The debacle in France helps explain why we should celebrate tax competition. The fact that entrepreneurs can migrate to nations with better (or less worse) tax systems is a valuable way of penalizing politicians that impose bad policy.
One tiny correction, though. The Europeans aren’t socialists anymore. It’s more accurate to describe the policy in France, Italy, and elsewhere as cronyism, corporatism, or statism.
What about providing some evidence that Obama’s making America more like Europe? Well, just check out the data from the latest Economic Freedom of the World annual report.
There are now six European nations that score above the United States, including two of my favorite places – Switzerland and Estonia!
And here’s another set of charts showing a big gap between the United States and Europe.
So the obvious question is whether we should copy the statist policies of our cousins across the Atlantic.
This video explores some of the possible consequences.
The video should make us contemplate the importance of cultural attitudes.
Values such as the work ethic, the spirit of self reliance, and personal responsibility are all form of social capital that help an economy prosper.
But if social capital begins to erode, restoring it is a bit like trying to put toothpaste back in a tube.
So while I obviously think tax and spending policy is important, pro-growth fiscal policy may not mean much in a society where dependency and mooching are considered acceptable lifestyles.
It’s an easy question because the obvious answer is to say “none-of-the-above.”
After all, voters in Italy have four horrible choices.
Silvio Berlusconi, who is an Italian version of George W. Bush. He’ll occasionally dish out some good rhetoric and promise tax relief, but he’s shown zero desire to reduce the burden of government spending and intervention.
Mario Monti, an apparatchik who is first and foremost a creature of the calcified bureaucracy in Brussels. He would be a sober hand on the helm, but seems content that the ship is heading in the wrong direction. He’s sort of the Mitt Romney of Italy.
Beppe Grillo, a comedian/entertainer/blogger who has a populist (albeit incoherent) agenda. He’s a strange cross of Jesse Ventura, Arnold Schwarzenegger, Ross Perot, and Bernie Sanders, so don’t even think about that petri dish.
Pier Luigi Bersani, a run-of-the-mill social democrat who started his political life in the Communist Party but now is best described as a career politician who wants to preserve the status quo of statism. Sort of the Harry Reid of Italy.
So far as I’m aware, there is no good political party in Italy. Classical liberals, conservatives, and libertarians seem to be endangered species. That’s why I answered none-of-the-above.
But what if my kids were being held hostage and I had to choose from this unpalatable quartet?
Go ahead and shoot them…no, just kidding. Let’s see, what should I do…?
Part of me wants to cheer for a Bersani-Monti coalition government for the same reason that I wanted Hollande to win in France. When there’s no good alternative, let the above-board statists prevail so there’s hope of a backlash when things fall apart.
And if the polling data is accurate, that’s probably going to happen.
But part of me wants Grillo to do well just for the entertainment value. And maybe he would blow up the current system, which unquestionably has failed, though one wonders whether any system will work now that a majority of Italians are riding in the wagon of government dependency.
While I’m largely uncertain about what should happen in this election, let me close with a few thoughts on public policy in Italy. In particular, I want to disagree with some of my right-leaning friends who argue that the euro should be blamed for Italy’s woes.
I’m not a fan of the single currency, largely because it is part of the overall euro-federalist campaign to create a Brussels-based superstate.
That being said, the euro has been a good thing for Italy and other Club Med nations. As I explained last July, it means that countries such as Italy, Spain, and Greece can’t augment the damage of bad fiscal and regulatory policy with inflationary monetary policy.
In other words, it is good news that Italy can’t use inflation as a temporary narcotic to offset the pain caused by too much red tape and an excessive burden of government spending.
This doesn’t mean that politicians will ever choose the right approach of free markets and small government, but at least there’s a 2 percent chance of that happening if they stay with the euro. If Italy goes back to the lira, the odds of good reform drop to .00003 percent.
This Henry Payne cartoon is satire, but it’s eerie how the “Valentine’s Fairness Act” seems quite similar to the litany of spending, regulation, and intervention we endured as part of the State of the Union address.
This sign was on a train I rode today. It is sponsored by the UK version of the IRS, and it pretty much symbolizes how the United Kingdom has turned into a predatory state.
The United Kingdom is in terrible fiscal shape. Government spending has reached record levels, and now consumes a larger share of economic output than the public sectors in failed welfare states such as Spain.
And what are taxpayers getting for their money, other than Orwellian signs?
Not much. They get an increasingly dysfunctional society filled with scroungers such as Natalija, Gina and Danny.
But let’s close by contemplating the mindset of a government that would post such a sign. We already know that Prime Minister Cameron and some of his senior deputies think it’s wrong to engage in legal tax avoidance.
My argument is that Obama’s policies are impeding growth. Simply stated, higher tax rates, a heavier burden of government spending, and other forms of intervention are not exactly the right recipe for growth and prosperity.
But sometimes it’s easier to get that message across with a clever cartoon.
Payne’s cartoon has a similar theme to this Ramirez cartoon, which is the fourth-most-viewed post in the history of my blog.
At some point, though, the public sector becomes so demanding that slow growth becomes no growth. Here’s a very clever Asay cartoon about what happens when you reach that tipping point.
P.S. I suspect it was meant as sarcasm and to nail Obama for blame-shifting, but the “Republican fiscal flux capacitor” does deserve some of the blame. Just look at these charts to see what happened the last time the GOP was in charge.
But that doesn’t mean Obama doesn’t want to be as bad as FDR. Indeed, one of his top advisers seems very happy that the President’s second inaugural address was reminiscent of Roosevelt’s so-called Second Bill of Rights.
Obama is updating Franklin Delano Roosevelt’s Second Bill of Rights. …Roosevelt announced the Second Bill of Rights in his State of the Union address in 1944. With the Great Depression over, and the war almost won, FDR declared that we “have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence.” …Then he listed them:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
The right to earn enough to provide adequate food and clothing and recreation.
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
The right of every family to a decent home.
The right to adequate medical care and the opportunity to achieve and enjoy good health.
The right to adequate protection from the economic fears of old age, sickness, accident and unemployment.
The right to a good education.
…the Second Bill was meant to specify the goals of postwar America… Obama took more such steps. …Obama’s second inaugural did not refer explicitly to the Second Bill of Rights, but it had an unmistakably Rooseveltian flavor. …Obama emphasized “that a great nation must care for the vulnerable, and protect its people from life’s worst hazards and misfortune.” …Having helped America to survive its greatest economic challenge since the 1930s, the current occupant of that office is giving new meaning to those commitments, and making them his own.
But here’s the good news. America will have gridlock for the next two years, and probably the next four years.
The bad news is that we won’t take necessary steps to reform entitlements, but the good news is that we won’t make things worse with the kind of statist policies outlined in FDR’s fake Bill of Rights.
Yes, I expect Republicans to screw up on some of the small issues and give the White House a few minor victories, but I can’t imagine them approving any big Obama initiatives, even if their opposition is driven only by partisanship rather than principle.
We’re supposed to believe that President Obama is some sort of expert on constitutional law.
Richard Epstein was not overly impressed by his track record as a lecturer at the University of Chicago, and here’s a good parody of the President’s selective view of the Bill of Rights.
Likewise, we now have a Michael Ramirez cartoon that captures the spirit of the President inaugural address earlier this week.
If you’re amused – in a tragic way – by cartoons showing the huge gap between Obama’s ideology and America’s founding principles, you’ll doubtlessly enjoy this and this.
I’ve always been a big fan of Economic Freedom of the World because it provides a balanced and neutral measure of which nations do best in providing free markets and small government.
But for all its many positive attributes, Economic Freedom of the World isn’t a comprehensive measure of liberty. That’s why I’m very glad to see that Ian Vasquez and Tanja Stumberger have put together a Freedom Index designed to measure economic and personal liberty.
And since they’re both sensible people, their definition of personal liberty is very sound – i.e., the freedom to be left alone and not harassed, persecuted, or annoyed by government.
Here’s their description of what the Freedom Index is designed to measure.
…we use indicators that are as consistent as possible with the concept of negative liberty: the absence of coercive constraint on the individual. We do not attempt to measure positive freedom…nor do we measure so-called “claim freedoms,” which often become government-imposed attempts at realizing positive freedoms (e.g., the “right” or freedom to a have job or housing). …This index of freedom also does not incorporate measures of democracy or “political freedom.” …Democracy may be more consistent than other forms of government at safeguarding freedom, but it is not freedom, nor does it necessarily guarantee freedom. …We combine economic freedom measures from the Economic Freedom of the World (EFW) index with measures of what we somewhat imprecisely call civil or personal freedoms. The economic freedom index and the personal freedom index we devise each receive half the weight in the overall index.
Here are some additional details on the personal freedom score.
For the personal freedom sub-index, we use 34 variables covering 123 countries… The index is divided into four categories: 1) Security and Safety; 2) Freedom of Movement; 3) Freedom of Expression; and 4) Relationship Freedoms. …We have tried to capture the degree to which people are free to enjoy the major civil liberties—freedom of speech, religion, and association and assembly—in each country in our survey. In addition, we include indicators of crime and violence, freedom of movement, and legal discrimination against homosexuals.
So how do nations compare with this system?
New Zealand is the nation with the most freedom, followed by the Netherlands and Hong Kong. The United States is #7
By the way, if you’re wondering about places to avoid on your next overseas vacation, Zimbabwe is in last place, followed by Burma and Pakistan.
And if you want to maximize your personal liberty, but aren’t as concerned about economic liberty, the top nations are the Netherlands (9.5), Uruguay (9.4), and Norway/Japan/New Zealand (9.2).
If you want to experiment with a life of very limited personal liberty, your “best” choices are Pakistan (3.1), Zimbabwe (3.2), Sri Lanka (3.4), and Iran (3.6).
Last but not least, here’s the video I narrated from the Center for Freedom and Prosperity that explains in more detail the economic-freedom component of the Freedom Index.
4. Was it the delusional decision by 54 percent of California voters to impose a big, class-warfare tax hike? I thought the vote for Prop 30 was a very troubling development since it signaled that voters could be tricked into enacting class-warfare tax policy, even though they should have realized that more revenue for the state’s politicians would simply exacerbate the eventual fiscal collapse. But since I think this will be a learning experience on what not to do, I can’t put this at the top of my list.
6. Or was it the envy-motivated decisions by politicians in both Slovakia and the Czech Republic to replace flat tax systems with so-called progressive tax regimes? This is a strong candidate for the worst policy of the year. It’s very rare to see governments do the right thing, so it’s really tragic when politicians implement good reforms and later decide to reinstate class-warfare policies.
All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform.
But I think there’s a strong case to be made, by anyone who believes in freedom, that politicians from Slovakia and the Czech Republic deserve the booby prize for worst public policy development of 2012.
On December 4, 2013, the center-left parliament of Slovakia modified the country’s historic 19% flat-rate tax… Effective January 1, 2013, the income tax rate for corporations was raised from 19% to 23%, while that on individuals earning more than €39,600 (€1=$1.30) a year was raised to 25%, thereby creating two brackets of 19% and 25%. …On November 7, 2012, the lower house (Chamber of Deputies) of the national parliament approved a proposal to impose a second higher rate of 22% on annual income exceeding Czech Koruna (CZK) 100,000 ($5,200) per month. President Vaclav Klaus signed the bill on December 22, 2012, which will take effect on January 1, 2013.
What’s especially depressing about these two defeats is that the supposedly right-wing parties deserve the blame.
Two nations filled with brain-dead conservative politicians
In Slovakia, all but one of the right-leaning parties in the old government decided to support the Greek bailout, leading to the collapse of the government and the election of a new socialist government that then sabotaged tax reform.
And in the Czech Republic, the current right-of-center government decided to scrap the flat tax for “fairness” reasons. I’m sure that will really be comforting to the Czech people as the economy suffers from less growth.
To understand what the people of those nations are losing, here’s my video on the flat tax.
Last but not least, I should have included this image when making the two-wolves-one-sheep warning about democracy in these posts about statism in Europe and the value of tax havens.
Now I have something new to add to the list – an image showing the evolution of government.
I’m not quite sure what the next-to-last image is supposed to specifically convey, but the clear message throughout is that government means coercion.
And that coercion doesn’t become legitimate merely because 51 percent of the population decides to plunder 49 percent of the population.
Which is perfectly shown by the final image, which accurately portrays today’s system of government and the IRS.
I predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their income.
But the new President of France, Francois Hollande, doesn’t seem overly concerned by economic rationality and decided (Obama must be quite envious) that a top tax rate of 75 percent is fair.” And patriotic as well!
French Prime Minister: “I’m upset that the wildebeest aren’t remaining still for their disembowelment.”
But he’s not the only one. The nation’s top actor also decided that he doesn’t want to be a fatted calf. Indeed, it appears that there are entire communities of French tax exiles living just across the border in Belgium.
Best of all, the greedy politicians are throwing temper tantrums that the geese have found a better place for their golden eggs.
France’s prime minister has slammed wealthy citizens fleeing the country’s punitive tax on high incomes as greedy profiteers seeking to “become even richer”. Jean-Marc Ayrault’s outburst came after France’s best-known actor, Gerard Dépardieu, took up legal residence in a small village just over the border in Belgium, alongside hundreds of other wealthy French nationals seeking lower taxes. “Those who are seeking exile abroad are not those who are scared of becoming poor,” the prime minister declared after unveiling sweeping anti-poverty measures to help those hit by the economic crisis. These individuals are leaving “because they want to get even richer,” he said. “We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity,” he added.
In the interests of accuracy, let’s re-write Monsieur Ayrault’s final quote from the excerpt. What he’s really saying is: “We cannot buy votes and create dependency if those that produce, and sometimes produce a lot, do not act like morons and let us rape and pillage without consequence.”
So as France gets ever-closer to fiscal collapse, part of me gets a bit of perverse pleasure from the news. Not because of dislike for the French. The people actually are very nice, in my experience, and France is a very pleasant place to visit. And it was even listed as the best place in the world to live, according to one ranking.
But it helps to have bad examples. And just as I’ve used Greece to help educate American lawmakers about the dangers of statism, I’ll also use France as an example of what not to do.
I’m glad, for instance, that Greece instead of America is winning the race to fiscal collapse (though both the BIS and OECD predict the U.S. faces a bigger long-run challenge).
And I’m happy that California is farther down the path to chaos and meltdown than my state of Virginia (as illustrated by this amusing cartoon).
So you will understand that I am worried when a French socialist defends bad economic policy by saying that his country is copying the United States.
The French politician who said Indian steel company ArcelorMittal should leave the country has told CNBC that his government is only acting like U.S. President Barack Obama. Industry Minister Arnaud Montebourg, a member of the governing Socialist party, caused controversy last week when he said that the Indian company, which employs close to 20,000 people in France, should leave after it said it would have to close down a factory. The French government announced on Thursday that it could nationalize the factory in question… The news raised the specter of the nationalizations of the early 1980s, which were instigated by Hollande’s predecessor Francois Mitterrand. Montebourg told CNBC after a meeting with trade unions in Paris: “Barack Obama’s nationalized…” Montebourg brushed off comparisons with that era. He said: “It’s a very good sign to send out (to investors). Nationalizing is a very modern step to take. Especially when you not only nationalize losses but profits as well, when you make public/private partnerships. This is our strategy. …He declined to answer a question about comments from Mayor of London Boris Johnson, who told Indian businessmen earlier this week to come to London instead of France.
But a good overall score doesn’t mean that one nation is better than another in all regards. The United States still ranks above Sweden, even though the Swedes have implemented school choice and personal retirement accounts. And America still ranks above the Slovak Republic, even though that country (at least for now) has a simple and fair flat tax.
So maybe Monsieur Montebourg is right about the U.S. being a trendsetter for bad industry nationalization policy. Gee, what a high honor. I guess this is what it means to be called ugly by a frog.
On tax policy, the Financial Secrecy Index measures how well a nation treats foreign investors, while the Tax Oppression Index measures how well a nation treats its own people.
But I’ve also run into some really strange rankings since starting this blog, some of which are preposterous and others of which are rather subjective.
That last one was good for my ego. My only comment is that I wish that I had real influence.
Speaking of preposterous rankings, I have something new for the list.
There’s a group that puts out something called the “Happy Planet Index,” which supposedly is a “global measure of sustainable well-being.”
But it’s really an anti-energy consumption ranking, modified by life expectancy data along with some subjective polling data about lifestyles. And it leads to some utterly absurd conclusions.
Here’s their map of the world. All you really need to know is that it’s supposedly bad to be a red country.
I’m perfectly willing to agree that people in Afghanistan and Angola are not part of a “happy planet,” but do they really expect people to believe that the United States is in the bottom category?
But my job is to criticize bad public policy, so my life would be rather dull if the crowd in Washington adopted a much-needed policy of benign neglect for the economy.
My real gripe is that some of the world’s main cesspools get high rankings. The United States is 105th according to the clowns who put together the rankings, while Cuba somehow came in 12th place.
Venezuela also ranks near the top, and other jurisdictions that score at least 50 places above America include Albania, Pakistan, Palestine, Iraq, Moldova, and Tajikistan.
It’s not just that those nations all rank about the United States. They also are ahead of Sweden, Canada, Australia, Iceland, Singapore, and Hong Kong.
And I’d rather live in any of those nations than live in any of the ones I listed that got good scores according to the poorly named Happy Planet Index.
Heck, I’d also prefer to live in some of the nations that score even lower than the United States, such as Belgium, Denmark, Estonia, or Luxembourg.
The Luxembourg ranking is particularly absurd. It is down near the bottom, with a ranking of 138 and trailing such garden spots as Burkina Faso and the Congo.
But the nuts who put together the Crazy Planet Index give Luxembourg the second-to-worst ranking for its “ecological footprint,” and I guess you’re supposed to be unhappy if you have enough wealth to use a lot of energy.
Gee, too bad Luxembourg couldn’t be more like the nations that get the highest rankings for their “ecological footprint.” The people of Afghanistan and Haiti must be very, very happy about that high honor.
As a taxpayer, I’m not a big fan of international bureaucracies. They consume a lot of money, pay themselves extravagant (and tax-free!) salaries, and generally promote statist policies.
The Paris-based Organization for Economic Cooperation and Development is a prime example. Originally created for benign purposes such as gathering statistics, it now is a bloated bureaucracy pursuing an anti-free market agenda.
But international bureaucracies also have a nasty habit of operating in the shadows and using thuggish behavior to thwart critics. And I have the scars to prove it from my efforts to protect fiscal sovereignty.
But it’s not just the crowd in Paris that doesn’t believe in openness and fair play. A journalist recently traveled to South Korea to report on a World Health Organization conference on tobacco.
This doesn’t sound like the type of event that would involve skullduggery, but here’s part of what the reporter wrote for the Korea Times.
A monumental session during the World Health Organization’s (WHO) convention on tobacco control turned into an alarming attack on transparency, accountability and press freedom. …delegates of the member countries of the conference stripped the media of the ability to cover the meeting and escorted public onlookers from the premises. The decision to meet behind closed doors occurred when a discussion began about efforts to decrease tobacco use by increasing the price of tobacco products. Specifically, the convention attendees were discussing the framework for an international tobacco tax. This is one of the most controversial topics for debate in Seoul this week.
This is what is called a “learning moment.” And the journalist clearly recognized both the WHO’s hypocrisy and its troubling policy agenda.
As a reporter covering this meeting, this was not only a frustrating stance, but it raises some serious questions about an organization that for years has operated largely behind the scenes and without the benefit of much public scrutiny. When is the media more necessary than when an unaccountable, shadowy organization that devours millions of tax dollars each year from people across the world debates getting in the business of issuing global taxes? This effort to silence the press is particularly chilling since it is in direct conflict with the U.N. — the WHO’s parent organization—claims to fight to advance “free, independent and pluralistic media” across the world. Apparently, U.N. and WHO leaders believe in media rights in all cases except when the media covers them.
And remember, you’re paying for this thuggish behavior.
If you want to learn more about the underlying issue, I wrote about the WHO’s push for global tobacco taxation back in both May and September.
Now, in honor of Sandra Fluke, the United Nations has decided that contraception is a human right. Not just a human right, a universal human right. The New York Times reports on this big news.
The United Nations says access to contraception is a universal human right that could dramatically improve the lives of women and children in poor countries.
So what’s the big deal? Surely people should have the right to buy a condom.
Paid for with your tax dollars?
Yes, but we’re talking about the United Nations, so you won’t be surprised to learn that there shouldn’t be any “financial barriers” to birth control, which means people have the right to have other people pay for their fun and games.
It effectively declares that legal, cultural and financial barriers to accessing contraception and other family planning measures are an infringement of women’s rights. …The global body also says increasing funding for family planning by a further $4.1 billion could save $11.3 billion annually in health bills for mothers and newborns in poor countries.
Well, Sandra Fluke surely will be happy about this news. Even though national governments safely can ignore U.N. pronouncements, this is yet another sign of a growing dependency mindset.
I agree that Obama inherited a crappy economy, and I think it is silly to assert that he bears any responsibility for the severity of the 2007-2009 recession.
And I think it is fair to blame Obama for the economy’s anemic performance during that time, largely because his agenda of faux stimulus and Obamacare exacerbated the statist policies of Bush. In other words, he promised “hope” and “change,” but delivered more of the same.
Well, now that the election is over, even the Washington Post is willing to admit that Obama’s economic performance is dismal. Here’s a remarkable chart showing that growth is far below the average.
There are actually two very important conclusions to draw from this chart.
Little did I realize, though, that biceps may be a determinant of political philosophy. To be sure, some on the left have long said that conservatives are primitive and reactionary brutes, sort of modern-day neanderthals.
Well, it turns out that there’s some scientific evidence for this idea, at least among males. But before leftists get too excited about this new research, they should be forewarned that it also implies that folks on the left are more likely to be sunken-chested, spindly-armed weaklings.
In the grand scheme of things, I’d rather be Arnold Schwarzenegger than Woody Allen. But I’ll just assume that libertarians are a perfect fusion of strength and sensitivity.
Anyhow, enough of my speculation. For those who want to know what the research really says, here are some excerpts from an article in The Economist.
Dr Petersen and Dr Sznycer were investigating the idea that a person’s political opinions might be aligned with his physical characteristics. The opinion in question was whether resources should be redistributed from the rich to the poor. The physical characteristic was strength. …For men, …opinion did depend on strength. The two researchers came to this conclusion after looking at 486 Americans, 223 Argentinians and 793 Danes. They collected data on their volunteers’ strength by measuring the circumference of the flexed biceps of an individual’s dominant arm. (Previous work has shown that this is an accurate proxy for strength.) They then measured people’s status with questionnaires about their economic situation. And they determined a person’s support for redistribution by asking the degree to which he or she agreed with statements like: “The wealthy should give more money to those who are worse off”; and “It is not fair that people have to pay taxes to fund welfare programmes.” They also asked about participants’ political ideologies. Dr Petersen and Dr Sznycer found that, regardless of country of origin or apparent ideology, strong men argued for their self interest: the poor for redistribution, the rich against it. No surprises there. Weaklings, however, were far less inclined to make the case that self-interest suggested they would.
On a semi-serious note, the research doesn’t say that strong men are against redistribution. It simply says they openly favor whatever happens to be in their self-interest. So a strong but poor male would favor a big welfare state, while a rich and strong male will prefer liberty.
For weaklings and women, from what I can tell, there is no correlation between strength (or lack thereof) and political philosophy.
I’ve already written about the despicable practice of “civil forfeiture,” which allows governments to confiscate the property of innocent people who have not been convicted of any crime.
People in the political world say that President Obama threw Secretary of State Clinton under the bus in an attempt to protect himself from political fallout from Libya.
I don’t follow those issues, so I can’t comment about the veracity of that charge, but I find it very interesting that some conservatives are urging Mitt Romney to throw former President George W. Bush under the bus.
More specifically, they’re urging him to condemn Bush’s statism and to attack Obama for continuing Bush’s failed policies.
Phil Kerpen of American Commitment nails the issue in a column for Fox News.
Romney’s biggest missed opportunity in the second debate wasn’t on Libya…he should have connected the dots between Obama and Bush to illustrate the accurate point that on the most significant dimensions of economic policy, Obama has accelerated Bush’s policy errors rather than reversing them. In the crucible of the 2008 financial crisis, President Bush famously remarked that “I chucked aside my free-market principles .” He was referring to TARP, his infamous big bank bailout. Obama supported the bill and voted for it. …On government spending, it’s the same story. Bush racked up one of the most disastrous records of out-of-control spending and debt the country had ever seen. Every aspect of the federal budget jumped under Bush. …Obama came in and continued spending recklessly. Bush’s $152 billion stimulus bill failed and so did Obama’s $821 billion stimulus bill. Bush flushed $25 billion in bailout funds to Chrysler and General Motors, and Obama added another $20 billion before finally recognizing that the companies would inevitably file for bankruptcy. All of the pre-bankruptcy bailout dollars were lost. …On the biggest economic policy questions, the Bush/Geithner/Bernanke approach is almost indistinguishable from the Obama/Geithner/Bernanke approach. It hasn’t worked. Obama’s failed policies of the present are all too similar to Bush’s failed policies of the past.
Obama’s claim that Bush’s policies caused the recession resonates with American voters. Almost four years after George W. Bush left office, polls show the American people continue to blame him—more than Obama—for the recession that created today’s dismal economic conditions. Throughout the fall and in their debates, it’s a sure thing that Obama will continue to argue that Romney is just another George W. Bush. How can Romney respond? …Romney should not deny Bush’s error. Although Clinton began the process of forcing low mortgage underwriting standards, Bush continued and enhanced it. Instead, Romney should point out that the government should never have been in the housing finance business, and that he will eliminate Fannie and Freddie to restore a functioning housing market—something Obama has failed to do in almost four years.
But here’s where I disagree with Kerpen and Wallison, or at least where I would add a big caveat to their analysis. What makes them think that Romney would be any different that Bush or Obama?
If all one cares about is whether politicians have an “R” or a “D” after their names, then my concerns don’t matter.
But if you’re actually interested in making America a better place, then policy matters a lot.
I’ll close with a final point. I have no idea whether Romney is a closet statist or a closet Reaganite. All I’m saying is that, if Romney wins, people who value limited government and freedom should begin working on November 7 to take whatever steps are necessary to prevent Romney from becoming another RINO such as Bush or Nixon.
The same is true, by the way, for advocates of individual freedom and smaller government. I’ve always admired Barry Goldwater, who famously 
