The “I-Told-You-So” Blog Post about the Completely Predictable Failure of the Greek Bailout

Way back in February of 2010, I wrote that a Greek bailout would be a failure. Not surprisingly, the parasites at the International Monetary Fund and the political elite from other European nations ignored my advice and gave tens of billions of dollars to Greece’s corrupt politicians.

The bailout happened in part because politicians and international bureaucrats (when they’re not busy molesting hotel maids) have a compulsion to squander other people’s money. But it also should be noted that the Greek bailout was a way of indirectly bailing out the big European banks that recklessly lent money to a profligate government (as explained here).

At the risk of sounding smug, let’s look at my four predictions from February 2010 and see how I did.

1. The first prediction was that “Bailing out Greece will reward over-spending politicians and make future fiscal crises more likely.” That certainly seems to be the case since Europe is in even worse shape, so I’ll give myself a gold star.

2. The second prediction was that “Bailing out Greece will reward greedy and short-sighted interest groups, particularly overpaid government workers.” Given the refusal of Greek politicians to follow through with promised cuts and privatizations, largely because of domestic resistance, it seems I was right again. As such, I’ll give myself another pat on the back.

3. My third prediction was that “Bailing out Greece will encourage profligacy in Spain, Italy, and other nations.” Again, events certainly seem to confirm what I warned about last year, so let’s put this one in the win column as well.

4. Last but not least, my fourth prediction was that “Bailing out Greece is not necessary to save the euro.” Well, since everybody is now talking about two possible non-bailout options – either a Greek default (a “restructuring” in PC terms) or a Greek return to using the drachma – and acknowledging that neither is a threat to the euro, it seems I batted 4-4 in my predictions.

But there’s no reward for being right. Especially when making such obvious predictions about the failure of big-government policies. So now we’re back where we were early last year, with Greece looking for another pile of money. Here’s a brief blurb from Reuters.

The European Union is racing to draft a second bailout package for Greece to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday.

If this second bailout happens (and it probably will), then I will make four new predictions. But I don’t need to spell them out because they’ll be the same ones I made last year.

We’ve reached the lather-rinse-repeat stage of fiscal collapse for the welfare state.

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We Need More Politicians Willing to Resist the Tax Harmonization “Thieves’ Cartel”

I’m back in Bermuda, but not for sun and fun. Instead, I’m like the little Dutch boy with his finger in the dike as part of my ongoing effort to thwart high-tax nations in their attacks against tax competition and tax havens at the “Global Tax Forum” of the Organization for Economic Cooperation and Development.

There are some really horrifying developments at the this meeting, most notably the genesis of an International Tax Organization. I’m in the midst of analyzing this wretched proposal, which has the full support of the Obama Treasury Department folks at the conference, so hopefully I’ll be able to post something later today.

In the meantime, here are two videos I just found, featuring a British member of the European Parliament talking about the issue of tax competition. Unlike most politicians, he has the right view of the issue. This one was just released.

And here’s one from last year.

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One Final Osama bin Laden Joke

After sharing lots of jokes (here, here, here, here, and here) about the much-deserved death of Osama bin Laden, I figured I had beaten that horse enough and re-focused on policy-oriented blogging.

But I’m a sucker for good political humor. So even though this is a remake of a joke I shared last year, it brightened up my Memorial Day and I figure others will enjoy it as well.

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In Perfect Symbol of How Government Treats Taxpayers, Postal Worker Keeps Job after Getting Caught Defecating in Someone’s Yard

What’s the difference between a real job and working for the government? I used the think the answer was that bureaucrats are overpaid, usually for being in positions that shouldn’t even exist.

Then I thought the difference was that bureaucrats got lavish benefits, about four times as much as people in the productive sector of the economy.

But now I realize that a government job means you get to dump on taxpayers, both figuratively and literally. Here are the unseemly details from KOMO News.

A mail carrier who was caught using a yard as his personal toilet will not be fired. The incident happened last month at a home in southeast Portland and a neighbor, Don Derfler, captured the man in the act with his camera. …The incident was an embarrassment to the post office and the worker was immediately placed on unpaid leave. Now, a decision has been made to keep the worker but he will be transferred to a different route. A spokesperson said the administrative action was taken based on a postal service investigation but he did not elaborate. He also did not say which route the mail carrier has been assigned to cover.

I’m almost at a loss for words. I knew that it was virtually impossible to fire a bureaucrat. But surely this was an example of crossing the line?!? But I was wrong.

Two final thoughts: How many of us would keep our jobs if we did something like this? And isn’t it wonderful that the Postal Service monopoly isn’t giving any warning to the potential victims on the bureaucrat’s new route.

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The Pope, the Environmentalist, and the Loggers

The Pope took a couple of days off to visit the mountains of Wyoming for some sightseeing. He was cruising the wilderness in the popemobile when there was a frantic commotion just at the edge of the woods. A helpless hippie, wearing sandals, shorts, a “Save the Whales” hat, and a “Greenpeace” T-shirt, was screaming while struggling frantically and trying to free himself from the grasp of a 10-foot grizzly.

The Pope then saw a group of loggers come racing up. One quickly fired a .44 magnum into the bear’s chest. The other two reached up and pulled the bleeding, semiconscious environmental from the bear’s grasp. Then using long clubs, the three loggers finished off the bear and two of them threw it onto the bed of their truck while the other tenderly placed the injured activist in the back seat.

As they prepared to leave, the Pope summoned them to come over. “I give you my blessing for your brave actions!” he told them. “I heard there was a bitter hatred between loggers and environmental activists, but now I’ve seen with my own eyes that this is not true.”

As the Pope drove off, one of the loggers asked his buddies, “Who was that guy?”

“It was the Pope,” another replied. “He’s in direct contact with heaven and has access to all wisdom.”

“Well,” the logger said, “he may have access to all wisdom, but he sure doesn’t know anything about bear hunting! By the way, is the bait holding up, or do we need to go back to Massachusetts and get another one?”

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Is Mitt Romney Trying to Become the Richard Nixon of the 21st Century?

I can’t say I’m surprised, but I’m nonetheless still nauseated to read that Mitt Romney has decided to endorse ethanol subsidies. Here’s a blurb from Fox in DC.

“I support the subsidy of ethanol,” Romney told an Iowa voter. “I believe ethanol is an important part of our energy solution for this country.” …Romney’s renewed support came just days after former Minnesota Gov. Pawlenty officially announced his candidacy and said the nation could no longer afford to subsidize ethanol, a position that he said backed up his claim to be the truth teller in the race.

I’ve written about ethanol subsidies before, noting that they rank as one of the most corrupt and inefficient special-interest programs in Washington. By endorsing ethanol, Romney demonstrates that he is a profoundly flawed candidate.

Indeed, he seems eerily similar to Richard Nixon. Not in the sense of being corrupt, but in his totally amoral approach to public policy.

From a policy perspective, Nixon was a terrible president. He raised taxes, created new government agencies and programs, imposed wage and price controls, and implemented many other policies to expand the burden of government. But he did those things for reasons of political expediency, not because of any set of beliefs.

Romney seems to have the same shallow approach. It appears that he will say anything and do anything to advance his own political ambition. Doing what’s right for America doesn’t seem to be a factor when he makes decisions.

By imposing Romneycare on Massachusetts, Romney paved the way for Obama to impose a similar policy on the entire nation. Now Romney has embraced one of the sleaziest scams in Washington, one that lines the pockets of a rich special interest and screws over taxpayers and consumers.

That does not bade well. If he makes it to the White House, I will predict right now that he would destroy America’s fiscal future with a value-added tax.

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Ireland Is Considering a Lower Corporate Tax Rate, so How Come I’m not Happy?

It’s not often that I am unenthusiastic about the possibility of a nation reducing its corporate tax rate. But when the country is doing the right thing for the wrong reason, I hope that feelings of ambivalence are understandable.

In this case, some Irish politicians are talking about using a lower corporate tax rate as a weapon to extract more favorable bailout terms from other European nations. That’s an embarrassment, and it makes good tax policy seem like some sort of scam.

Indeed, I’m quite irritated with everything that’s happened in Ireland in the past couple of years. For a period of time, the nation was a positive example of the benefits of lower corporate tax rates and spending restraint. But Irish politicians did not handle prosperity well, and they went on a spending binge with all the tax revenue that was generated by a rapidly growing economy.

And the icing on this unpalatable cake was the decision to engage in the “Mother of all Bailouts” when the big banks became insolvent. That meant not just holding depositors harmless, but also bailing out all bondholders as well.

Given these unfortunate developments, I hope you will share my lack of excitement about the possibility of a lower corporate tax rate in the land of my ancestry.

Here’s the relevant part of a story in the Irish press.

The Government’s failure to secure a cut in the penal interest rate being charged on Ireland’s so-called ‘bailout’ and worsening diplomatic relations with France over corporation tax have been the catalyst for a surprising increase in Euro-scepticism within Government circles. Last week in Europe, Finance Minister Michael Noonan — who has previously been markedly restrained in his comments — sharply criticised the current ECB bailout strategy and, for the first time, openly asked if it offered a realistic road to success. Now, the Sunday Independent has learned that senior political figures are not ruling out the possibility that the under-fire Irish corporation tax rate of 12.5 per cent might be cut to 10 per cent or an even lower rate — rather than being increased — if the Irish Government does not soon receive a similar cut to that secured by Greece to the interest rate being on its bailout.

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If You Were on a Jury, Would You Convict this Woman?

Time for another episode of “You Be the Judge.” I periodically come across stories that present very difficult (at least for me) moral quandaries, so I figure why not see how other people react.

I’ve cited some tough cases in previous posts, dealing with thorny topics such as brutal tax collection tactics, child molestation, Sharia law, healthcare, incest, jury nullification, and vigilante justice.

And speaking of vigilante justice, that’s the topic of today’s post. A woman in Spain was not very happy when the man who raped her daughter decided to gloat about the crime, so she decided to do something about it. Here’s an excerpt from a story in the UK-based Telegraph.

A Spanish mother has taken revenge on the man who raped her 13-year-old daughter at knifepoint by dousing him in petrol and setting him alight. He died of his injuries in hospital on Friday. Antonio Cosme Velasco Soriano, 69, had been sent to jail for nine years in 1998, but was let out on a three-day pass and returned to his home town of Benejúzar, 30 miles south of Alicante, on the Costa Blanca. While there, he passed his victim’s mother in the street and allegedly taunted her about the attack. He is said to have called out “How’s your daughter?”, before heading into a crowded bar. Shortly after, the woman walked into the bar, poured a bottle of petrol over Soriano and lit a match. She watched as the flames engulfed him, before walking out. The woman fled to Alicante, where she was arrested the same evening. When she appeared in court the next day in the town of Orihuela, she was cheered and clapped by a crowd, who shouted “Bravo!” and “Well done!”

The story is from 2005, and I confess that I have no idea how the case was resolved. But let’s imagine that something like this happened in the United States and you were on the jury. How would you vote? Would you practice jury nullification? Or what if you were the prosecutor, and had some discretion in what crime to prosecute. What charge would you file?

I know this is an impulsive answer and probably not the right approach, but I would be have been part of the crowd at the court cheering the woman.

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International Bureaucrats: Riding the (Tax-Free) Gravy Train at Taxpayer Expense

I’ve remarked before about how I get especially upset when well-to-do people figure out ways of ripping off taxpayers. Redistribution from rich to poor is not a good idea, but it is far more offensive when the coercive power of government is used to transfer money from ordinary people to the elite.

A good (perhaps “reprehensible” would be a better word to use) example if the scam created by international bureaucracies. The folks who work for entities such as the International Monetary Fund, World Bank, United Nations, and Organization for Economic Cooperation get wildly excessive compensation packages. To add insult to injury, their income is tax free!

Here are some excerpts from a Richard Pollack column at Pajamas Media.

At the World Bank, Inter-American Development Bank, the African Development Bank, and at the IMF, you find extravagantly paid men and women who masquerade as anti-poverty fighters for the Third World. As one World Bank vice president said upon his resignation: “Poverty reduction is the last thing on most World Bank bureaucrats’ minds.” These global institutions are supposed to act as non-profits, but big salaries and big perks rule as the norm. And you’re paying for them: as the largest single contributor, American taxpayers pick up the tab. By now everyone knows about DSK’s extravagant $420,000 employment agreement that included an additional $73,000 for living expenses — a provision explained thusly by the IMF: “To enable you to maintain … a scale of living appropriate to your position.” …A PJM survey found that a common annual compensation package for senior management at the anti-poverty banks exceeds $500,000 — tax-free. World Bank President Robert Zoellick currently receives $441,980 in base salary and $284,500 in other benefits. Strauss-Kahn’s deputy, John Lipsky, receives $384,000 in base salary plus “living allowances.” …Ten of Zoellick’s deputies receive tax-free base pay of $321,00 to $347,000, plus enjoy an additional $210,000 in benefits. Even mid-level World Bank employees earn well into six digits: the average salary for a professional manager is $181,000, plus $97,000 in benefits. A senior adviser receives on average $238,000 plus $127,000 in benefits. A vice president receives $286,000 plus $153,000 in benefits. The biggest hidden benefits are the off-the-book perks called “living allowances.” These perks can nearly double a stated salary. Of the 2,600 IMF and 10,000 World Bank full-time employees, all receive some form of supplemental living allowances in addition to their base pay. These include home leave grants, dependent allowances, travel perks, and education “grants” for their children to attend private schools. In addition, they offer generous pensions and health insurance policies. According to a U.S. General Accounting Office study, the average cost for these additional perks added $197,300 per employee cost beyond their base pay in 1994 dollars.

The column doesn’t mention my “favorite” international bureaucracy, which is the Paris-based Organization for Economic Cooperation and Development. The OECD’s budget is small compared to some of the other parasitic bodies mentioned in the column, but this video explains how big-government policies are being financed with the $100 million-plus of American tax dollars sent to France to subsidize the OECD.

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Obama’s IRS Unveils New 1040 Tax Form

Found this in my inbox. I was thinking about saving it for next April, but then decided I might forget so I better use it now. You can click to enlarge and get a clearer image.

This is somewhat clever, though I don’t like line 6c since it indirectly implies that McCain would have been better than Obama. But let’s just enjoy a good cartoon and not dwell on the fact that there was no good choice in 2008.

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The Sleazy Corruption of Obamacare

Michael Barone of the American Enterprise Institute goes to town on the selective, discriminatory, and politically motivated dispensation of Obamacare waivers. I particularly like how he zings the left by asking why, if Obamacare is so wonderful, so many millions of people trying to escape the President’s new scheme. But the more important message in his article is how arbitrary application undermines the rule of law.

1,372 businesses, state and local governments, labor unions and insurers, covering 3,095,593 individuals or families,…have been granted a waiver from Obamacare by Secretary of Health and Human Services Kathleen Sebelius. All of which raises another question: If Obamacare is so great, why do so many people want to get out from under it? More specifically, why are more than half of those 3,095,593 in plans run by labor unions, which were among Obamacare’s biggest political supporters? Union members are only 12 percent of all employees but have gotten 50.3 percent of Obamacare waivers. Just in April, Sebelius granted 38 waivers to restaurants, nightclubs, spas and hotels in former House Speaker Nancy Pelosi’s San Francisco congressional district. Pelosi’s office said she had nothing to do with it. On its website HHS pledges that the waiver process will be transparent. But it doesn’t list those whose requests for waivers have been denied. …One basic principle of the rule of law is that laws apply to everybody. If the sign says “No Parking,” you’re not supposed to park there even if you’re a pal of the alderman. Another principle of the rule of law is that government can’t make up new rules to help its cronies and hurt its adversaries except through due process, such as getting a legislature to pass a new law. …Punishing enemies and rewarding friends — politics Chicago style — seems to be the unifying principle that helps explain the Obamacare waivers, the NLRB action against Boeing and the IRS’ gift-tax assault on 501(c)(4) donors. They look like examples of crony capitalism, bailout favoritism and gangster government. One thing they don’t look like is the rule of law.

A few months ago, I had a post about cronyism and corruption crippling Argentina. Sadly, the same thing is now happening to America.

My contention is that this is the inevitable result of giving more power to Washington. And this gives me an excuse to reuse my video showing the link between big government and corruption.

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The Ryan and Rubio Medicare Videos: The GOP Begins to Fight Back

Republicans have finally woken up and are beginning to explain why Medicare needs to be reformed.

Here’s a very good new video from Congressman Paul Ryan, Chairman of the House Budget Committee. He hits on key points regarding market competition versus government monopolies, and warns about the danger of giving control of the health care system to Obama’s panel of bureaucrats.

Senator Marco Rubio, meanwhile, has a video emphasizing the need for reform. He also trashes the demagoguery of the left.

Not surprisingly, I can’t resist adding my video to the mix. I’m not as polished as the two lawmakers, but I hope the information in my video is a very important complement to the issues discussed by Rep. Ryan and Sen. Rubio.

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Republicans Won’t Like the First Joke, but It Is Funny…and Probably True

This Jimmy Fallon joke from the other night got me to laugh, though I suspect some of my GOP friends will have a different reaction.

Obama was in Ireland. He thought about buying a four-leaf clover for good luck, and then he looked at the field of Republican candidates and decided it wasn’t necessary.

Speaking of Fallon jokes, he also had this one about Obama’s new foreign aid scheme.

President Obama offered $1 billion to Egypt to boost the creation of new jobs. And if that works, they’re going to try it here.

And here’s a Conan joke featuring Ron Paul.

Ron Paul came out in favor of the legalization of heroin and prostitution. Unfortunately, he didn’t come out in time to be Charlie Sheen’s replacement on “Two and a Half Men.”

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The DNC’s Utterly Dishonest “Let Detroit Go Bankrupt” Video

Here’s a video just released by those wonderful folks at the Democratic National Committee. It claims that the bad Republicans were wrong about the auto bailout because the companies are still in business and have paid back the money they confiscated from taxpayers.

This partisan video may be effective, but it’s wrong in very important ways. I’ve already explained in a previous blog post why the General Motors bailout was not a success.

The Chrysler bailout also is a failure. Here’s what Conn Carroll wrote for today’s Washington Examiner.

American taxpayers have already spent more than $13 billion bailing out Chrysler. The Obama administration already forgave more than $4 billion of that debt when the company filed for bankruptcy in 2009. Taxpayers are never getting that money back. But how is Chrysler now paying off the rest of the $7.6 billion they owe the Treasury Department? The Obama administration’s bailout agreement with Fiat gave the Italian car company a “Incremental Call Option” that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for … wait for it … $3.5 billion. …to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.

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Europe and Greece: Every Option Is on the Table…Except Doing the Right Thing

Veronique de Rugy of the Mercatus Center has a very good – but somewhat depressing – analysis of the fiscal crisis in Greece. She basically concludes that bailouts will continue because nobody in Europe is willing to do the right thing.

This got me thinking about what I expect to happen. Here are the options, along with my (admittedly wild) guesses about their likely implementation. They add up to more than 100 percent because I think the Greek government (aided and abetted by their German and French enablers) will adopt more than one of these options.

Indeed, the only option that is completely unrealistic is doing the right thing and reducing Greece’s bloated public sector.

My CYA disclaimer is that these are the probabilities for the next two years.

New Bailouts – 40 percent chance of additional funds from European taxpayers (via the European Union) and/or from world taxpayers (via the IMF).

Default to Private Bondholders – 25 percent chance of default (a.k.a., restructuring) of at least some portion of the money owed to private investors. This number would be higher if it wasn’t for the next options.

Restructuring of Prior Bailouts – 50 percent chance of an indirect bailout by restructuring existing loans from the European Commission and/or IMF.

Indirect Bailout from the ECB – 80 percent chance of additional purchases of Greek government bonds by the European Central Bank.

More Tax Increases – 65 percent chance of additional significant tax hikes. I’m tempted to make this 100 percent, but I think even the Europeans realize that Greece is probably on the wrong side of the Laffer Curve. As such, more tax increases would reduce revenues for the government.

Leave the euro – 10 percent chance that the government will abandon the common European currency. It may seem like I’m not giving enough consideration to this option, particularly since going back to the drachma would give the government the ability to screw bondholders with inflation. Veronique’s article explains why this might not be an attractive option, but I’ll add one further point. The European elite passionately favor centralization and the common currency is a symbol of centralization. As such, they will provide endless amounts of bailout money before allowing something that would be interpreted as a violation against their secular religion of “ever closer union.”

Real Spending Cuts – .0001 percent chance of meaningful reductions in the burden of government spending. Why do the right thing when you can get taxpayers from Germany, Netherlands, and other nations to subsidize your corrupt fiscal regime?!?

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New Paper Explains Why Low-Tax Jurisdictions Should Resist OECD Attacks Against Tax Competition and Fiscal Sovereignty

One of the biggest threats against global prosperity is the anti-tax competition project of a Paris-based international bureaucracy known as the Organization for Economic Cooperation and Development. The OECD, acting at the behest of the European welfare states that dominate its membership, wants the power to tell nations (including the United States!) what is acceptable tax policy.

I’ve previously explained why the OECD is a problematic institution – especially since American taxpayers are forced to squander about $100 million per year to support the parasitic bureaucracy.

For all intents and purposes, high-tax nations want to create a global tax cartel, sort of an “OPEC for politicians.” This issue is increasingly important since politicians from those countries realize that all their overspending has created a fiscal crisis and they are desperate to figure out new ways of imposing higher tax rates. I don’t exaggerate when I say that stopping this sinister scheme is absolutely necessary for the future of liberty.

Along with Brian Garst of the Center for Freedom and Prosperity, I just wrote a paper about these issues. The timing is especially important because of an upcoming “Global Forum” where the OECD will try to advance its mission to prop up uncompetitive welfare states. Here’s the executive summary, but I encourage you to peruse the entire paper for lots of additional important info.

The Paris-based Organization for Economic Cooperation and Development has an ongoing anti-tax competition project. This effort is designed to prop up inefficient welfare states in the industrialized world, thus enabling those governments to impose heavier tax burdens without having to fear that labor and capital will migrate to jurisdictions with better tax law. This project received a boost a few years ago when the Obama Administration joined forces with countries such as France and Germany, which resulted in all low-tax jurisdictions agreeing to erode their human rights policies regarding financial privacy. The tide is now turning against high-tax nations – particularly as more people understand that ever-increasing fiscal burdens inevitably lead to Greek-style fiscal collapse. Political changes in the United States further complicate the OECD’s ability to impose bad policy. Because of these developments, low-tax jurisdictions should be especially resistant to new anti-tax competition initiatives at the Bermuda Global Forum.

To understand why this issue is so important, here’s a video I narrated for the Center for Freedom and Prosperity.

And here’s a shorter video on the same subject, narrated by Natasha Montague from Americans for Tax Reform.

Last but not least, here’s a video where I explain why the OECD is a big waste of money for American taxpayers.

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A Very Depressing Picture of Tax Complexity and Political Corruption

Read it and weep. Or maybe I should say look at it and weep.

I suppose this is a good time to recycle my flat tax video. I don’t mention this in the video, but Hong Kong’s flat tax system, which has been around for more than 60 years, requires less than 200 pages. Slovakia’s flat tax law is thinner than a magazine.

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The TSA Hokey-Pokey

Here’s a classic video from Reason TV mocking our intimate friends at the TSA. Enjoy…and share.

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Since I Want Smaller Government, Mitch Daniels Won’t Be Missed

Indiana Governor Mitch Daniels has announced that he won’t be running for President.

This is good news, as far as I’m concerned. As I wrote last October, I see no evidence that Gov. Daniels would shrink the burden of government. Indeed, I think he would have moved policy in the wrong direction. The three things that worried me most were:

1. He was Budget Director for President Bush, which should be a disqualifying factor for any libertarian or small-government conservative.

2. Has has expressed support for a value-added tax, which would be akin to unfurling the white flag in the battle against big government.

3. He tried to raise Indiana’s top income tax rate when he first become Governor, showing a disturbing weakness on tax policy.

Some libertarian-leaning people are inexplicably drawn to Daniels because he called for a “truce” on social issues, but that doesn’t mean anything. Indeed, if all I know about a political contest is that one candidate is a social conservative and one is not, I don’t hesitate in choosing the social conservative.

Simply stated, the odds are fairly good that a social conservative will also be an economic conservative. Jim DeMint is a typical example. Very few non-social conservatives, however, can be called economic conservatives. Instead, you get people like Arlen Specter

I’m also not impressed that Mitch Daniels sometimes claims to be libertarian and has Rise and Decline of Nations and The Future and Its Enemies on his list of favorite books. Ilya Somin thought that was a very good indicator that Daniels would be an acceptable candidate. Ilya is a solid guy and I like 99 percent of what he writes, but I think he erred by focusing on that list of books and not paying enough attention to what Daniels actually would do if he ever got power.

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Mirror, Mirror, on the Wall, Which Nation Has the Most Debt of All?

Last night, I spoke at the closing dinner of the European Resource Bank. My message was simple and straightforward: Entitlement programs are killing the developed world.

That’s not exactly a surprise, but what may be shocking is America’s relative position. In my remarks, I shared with the audience some data from a 2010 study by the Bank for International Settlements, and I’m including below charts directly copied from the study.

The charts show projected debt as a share of GDP in 12 nations. The top line is the “baseline estimate” and the lower lines show what will happen if nations limit entitlement outlays. (you can click on the different charts for a clearer image)

Amazingly, the long-term position of the United States is worse than either Greece or Portugal. Indeed, the only nations in more trouble than the United States are Japan and the United Kingdom.

Something to keep in mind next time you hear Obama, Reid, or Pelosi demagogue against Congressman Ryan’s Medicare proposal.

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Greetings from Ukraine, and Dismal News from Europe

I’m on the Crimean Peninsula for a meeting of the European Resource Bank. It’s my first trip to Ukraine, and the conference is being held at a hotel on the Black Sea, so I can’t complain about the scenery.

But the news from the various European think tanks is generally not favorable.

Marcin Nowacki of Project Lodz in Poland spoke about how the government is confiscating most of the money that workers contribute to personal retirement accounts.

Pierre Garello of France’s Institute for Research in Economic and Fiscal Issue gave a less-than-hopeful analysis of regional developments.

And I was given a rather depressing analysis of Portugal from Orlando Samoes of the Instituto de Estudos Politicos.

Last but not least, from an American perspective, I added to the misery by looking at the fiscal mess in the developed world, but I’ll provide the gory details tomorrow.

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The Joys of Government-Run Healthcare: More Spending, Longer Waiting Lines, Fewer Patients Treated

I’m a glass-half-full guy, so I’m always looking for the silver lining to any dark cloud. For example, the unfortunate people of the United Kingdom are saddled with a government-run healthcare system that is deficient in some important categories yet still costs a lot of money. But the good news is that this system at least serves as an example of what not to do.

And even left-wing newspapers in the United Kingdom feel compelled to acknowledge the shortcoming of the system. Here are some newly-released grim details from the Guardian.

New NHS performance data reveal that the number of people in England who are being forced to wait more than 18 weeks has risen by 26% in the last year, while the number who had to wait longer than six months has shot up by 43%. …Despite rising demand for healthcare caused by the increasingly elderly population and growing numbers of people with long-term conditions, the NHS treated 16,201 fewer people as inpatients in March 2011 compared to March 2010, the latest Referral To Treatment data disclose. …

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I Can’t Believe I’m Siding with Ruth Bader Ginsburg over Clarence Thomas!

Sometimes it is a pain in the neck to be allied with conservatives. Just like liberals, conservatives sometimes are guilty of imposing their preferences on society, regardless of clear and unambiguous language in the Constitution.

The most recent example is a case originating in Kentucky. Every Supreme Court Justice, with the exception of Ruth Bader Ginsburg, voted to ignore the 4th Amendment and allow unlawful entry into the dwelling of a private citizen. Michael Walsh of National Review explains in the New York Post.

A series of recent court rulings, including one this week from the US Supreme Court, appear to erode one of our bedrock defenses against the arbitrary, abusive power of the state. At risk: the Fourth Amendment guarantee to all American citizens of the right to be “secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” On Monday, in Kentucky v. King, the high court upheld the conviction of a man arrested after cops — who were tailing a suspected drug dealer into an apartment building — smelled marijuana smoke and banged on his door. When they heard noises coming from the apartment “consistent with the destruction of evidence,” they broke in and found drugs. But they had the wrong guy. The drug courier was in another apartment. Hollis King may have been breaking the law, but he was minding his own business, on his own premises, and only became a suspect after the police had made their mistake. But Justice Sam Alito, writing for the 8-1 majority, said, in effect, So what? …What planet is Alito living on? The whole point of the Bill of Rights is to restrict authority. The Founders, who suffered under the British system of “general warrants” and “writs of assistance” — i.e., fishing expeditions — wished to ensure that no American home could be searched without probable cause and a duly issued warrant specifying exactly what police are looking for. The case has been remanded to Kentucky, to sort out whether the circumstances were truly “exigent.” But Alito’s interpretation is an open invitation to abuse — as Justice Ruth Bader Ginsburg emphatically warned in her dissent: “The court today arms the police with a way routinely to dishonor the Fourth Amendment’s warrant requirement in drug cases. In lieu of presenting their evidence to a neutral magistrate, police officers may now knock, listen, then break the door down — never mind that they had ample time to obtain a warrant. I dissent from the court’s reduction of the Fourth Amendment’s force.”

The final point I’ll make is that this is yet another sign that the War on Drugs is a disaster. It results in bigger government and less freedom. You can be completely anti-drug (like me), but still realize that it’s not the job of government to dictate the decisions of other people.

Or, if you want to control other people, do it within the confines of the Constitution. Is that too much to ask?

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Is Portugal an “Adult Baby” Nation?

Yesterday, I took aim at a truly pathetic human being who lives as an “adult baby.” But what got me upset was not his lifestyle, but rather the fact that he was mooching off the taxpayers thanks to the dumb bureaucrats at the Social Security Administration, who granted him “disability’ status, which means he gets to live the rest of his life at the expense of taxpayers.

Is it possible, though, for an entire nation to live as an adult baby? I don’t know the answer, but some people in Portugal want to give it a try. Here is an excerpt from the EU Observer, featuring some jaw-dropping assertions by a Portuguese union boss.

Speaking at a rally in the western German town of Meschede on Tuesday evening, Merkel suggested southern Europeans are not working enough, while Germans are expected to bail them out. “It is also about not being able to retire earlier in countries such as Greece, Spain, Portugal than in Germany, instead everyone should try a little bit to make the same efforts – that is important,” she said. …”Yes Germany will help but Germany will only help when the others try. And that must be clear,” she said. Her comments sparked outrage on the German political scene, with the Social Democratic opposition calling her “populist” for giving a “coarse representation of Greek realities,” while the European Greens labelled her remarks “absurd.” In Portugal, trade unionist were also angered by the suggestion that southern Europeans are having a nice time on the beach while the Germans are working hard for their bailouts. “This is the purest colonialism,” Portuguese trade union chief Manuel Carvalho da Silva said, as quoted by DPA. He blasted Merkel for showing “no solidarity” and supporting a system where “the rich continue to live at the expense of the poorest countries in a disastrous system of exploitation.”

Let’s parse Mr. da Silva’s remarks. He starts by accusing Merkel of colonialism, but he never explains why refusing to write more blank checks means the German Chancellor is a colonialist.

Mr. da Silva then says Merkel is failing to show “solidarity.” But this assumes that German taxpayers have a moral obligation to support fiscally reckless politicians and interest groups in Portugal and other nations.

Last but not least, Mr. da Silva claims Merkel is promoting a system that allows the rich to exploit the poor. This accusation actually is true, but not in the way Mr. da Silva means. This post, using a chart put together by the New York Times, shows that the bailouts are mostly for the purpose of bailing out the big European banks that foolishly bought bonds from irresponsible governments. In other words, poor German taxpayers are subsidizing rich (and foolish) German bankers.

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It’s a Bird…It’s a Plane…No, It’s Super-Bureaucrat

I’ve had dozens of posts about overpaid bureaucrats. Indeed, I’ve largely stopped blogging about the topic because it is so depressing to constantly be reminded about how a privileged class of people is manipulating the system to coercively obtain undeserved compensation from their less-fortunate neighbors.

But every so often I see a story which cries out for attention. Bloomberg has a report about a double-dipping bureaucrat who has managed to snag a position providing more than $200K per year while simultaneously ripping off taxpayers for a pension of more than $300K per year.

In a perverse way, I admire Mr. Hunderfund. I never would have thought a bureaucrat could figure out how to scam taxpayers for more than half a million dollars in one year. And for a job that probably shouldn’t even exist.

James Hunderfund, who earns at least $225,000 a year as a school superintendent on Long Island, is also entitled to a $316,245 annual pension from a previous administrative post, according to a compilation of pension data by the Empire Center for New York State Policy. Hunderfund retired in 2006 as superintendent of the Commack school district, also on Long Island. His current contract with Malverne stipulates that he receive an annual salary of no less than $225,000 through June 30, according to Empire’s report, which used a database from the New York State Teachers Retirement System.

The story also notes that there are more than 1,000 other edu-crats who are getting six-figure retirement packages.

The only other issue to address is whether we should be more upset by Mr. Hunderfund’s bloated salary of his obscene pension.

I think the pension is more outrageous, but I’m open to other opinions. Any thoughts?

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I Don’t Care if You Wear Diapers as a 30-Year Old, but Don’t Ask Me to Subsidize Your Lifestyle

I wrote yesterday about the shocking case of a millionaire collecting food stamps. Today, I have an equally disgusting story of government waste.

The Social Security program is actuarially bankrupt, with unfunded liabilities of several trillion dollars. Our topic today deals with the disability portion of Social Security, which is in especially poor shape, with untold numbers of people faking illness in order to scam permanent payments – beginning in some cases decades before retirement age.

I’ve actually shared jokes about this phenomenon (see here and here), but this is no laughing matter.

The latest outrage is a 30-year old man who pretends to be an infant, and his roommate, who pretends to be his mother. I don’t care that he wears diapers and she changes them. I don’t care that he weighs 350 pounds. I wouldn’t care if I found out that they have sex with turtles and eat horse manure. As a libertarian, I genuinely believe people should be free to do anything that doesn’t infringe on the rights of others.

But I care very much that they are scamming taxpayers. In a typical display of government incompetence, both of them have convinced the Social Security Administration to give them disability payments.

Here are some of the key details from the Washington Times expose, including an effort by Senator Coburn to end the ripoff.

Sen. Tom Coburn, Oklahoma Republican and the Senate’s top waste-watcher, asked the agency’s inspector general to look into 30-year-old Stanley Thornton Jr. and his roommate, Sandra Dias, who acts as his “mother,” saying it’s not clear why they are collecting Supplemental Security Income (SSI) benefits instead of working. “Given that Mr. Thornton is able to determine what is appropriate attire and actions in public, drive himself to complete errands, design and custom-make baby furniture to support a 350-pound adult and run an Internet support group, it is possible that he has been improperly collecting disability benefits for a period of time,” Mr. Coburn wrote in a letter Monday to Inspector General Patrick P. O’Carroll Jr.

The sorry excuse for a human being, otherwise known as Mr. Thornton, responded to Senator Coburn’s letter with a perverse form of moral blackmail.

In an email response to The Washington Times, Mr. Thornton threatened to kill himself if his Social Security payments are taken away, and said the television episode showing him doing woodwork oversold his abilities. “You wanna test how damn serious I am about leaving this world, screw with my check that pays for this apartment and food. Try it. See how serious I am. I don’t care,” the California man said. “I have no problem killing myself. Take away the last thing keeping me here, and see what happens. Next time you see me on the news, it will be me in a body bag.”

My immediate reaction is not very charitable, involving a combination of the f-word with “go” and “yourself.” As I calm down and think about it, I hope that both of these people have friends and family who can help them return to normal life.

But I also know that Mr. Thornton and his partner should no longer be allowed to mooch off taxpayers.

P.S. Senator Coburn also should demand that the SSA track down the bureaucrat(s) that approved the disability payments and have him/her/them fired.

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Gee, I’m Glad I Pay Taxes to Give Food Stamps to a Millionaire

Not that we needed any additional evidence that the government wastes money in truly spectacular fashion, but this story from the Detroit Free Press is especially disgusting and outrageous.

A man who won $2 million on a Michigan lottery show has told a TV station that he still uses food stamps. Leroy Fick of Bay County admitted he still swipes the electronic card at stores, nearly a year after winning a jackpot on “Make Me Rich!” He told WNEM-TV in Saginaw that more than half the prize went to taxes. Fick says the Department of Human Services told him he could continue to use the card, which is paid with tax dollars. He told WNEM: “If you’re going to … try to make me feel bad, you aren’t going to do it.” The TV station says people have seen Fick driving a new Audi convertible.

Normally I fell sorry for people who have 50 percent of their money confiscated by the tax authorities, but in this case I’ll make an exception.

The real lesson is that the federal government should get out of the redistribution business. State and local governments are far less likely to be this profligate. And if they do waste money, migration is a feedback mechanism that will penalize them for excessive handouts.

(h/t: Amanda Carpenter)

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Punish the French Rapist, but the Real Target Should Be the IMF

I certainly take second place to nobody in my utter contempt for Dominique Strauss-Kahn, the head of the International Monetary Fund. Who knew that forcing yourself (allegedly) on women could earn you a reputation as “the Great Seducer”? I guess my failure to understand means I’m just a backwards and provincial American.

I’m also a bit old-fashioned in my approach to economics. I don’t think people should use the coercive power of government take what they haven’t earned. That’s why I hold international bureaucracies in low esteem. Most of my efforts have focused on the OECD, a Paris-based (gee, what a surprise) bureaucracy that squanders American tax dollars on statist schemes such as their ongoing anti-tax competition campaign that persecutes countries with low tax rates.

But I’m also a big believer in kicking an enemy while he’s vulnerable, so let’s shift to the International Monetary Fund. Here are some passages from a new column by my Cato colleague Doug Bandow. He points out that the IMF has a horrible track record of promoting and facilitating big government.

…the rape charges against him symbolize the IMF: an institution of privilege that routinely acts to the disadvantage of the vulnerable. The IMF’s founding purpose vanished when the system of fixed exchange rates collapsed in the early 1970s. But instead of closing up shop (no jobs for international bureaucrats in that!), the IMF switched to promoting development. That is, it became a welfare program for Third World governments (and, more recently, for Eastern Europe and even Greece). The IMF spent decades subsidizing the world’s economic basket cases. Few, if any, advanced because of its programs. …the agency often got “wise” wrong. It often focused on narrow accounting data, with perverse consequences — such as forcing governments to raise taxes rather than cut spending. …Years ago, economist John Williamson pointed to the problem of the IMF feeling pressure “to lend money in order to justify having it.” Indeed, the IMF seems to measure success by making loans. As a result, its cash often acted as a general subsidy for collectivist economic policies. (Williamson once defended the organization against the criticism that it was too market-oriented by pointing to its loans to several unreconstructed communist states.) Indeed, the agency proudly disclaimed any bias against collectivist systems, pointing to “programs in all types of economies” which had “accommodated such nonmarket devices as production controls, administered prices and subsidies.” It sometimes seems to favor the most perverse policies. For instance, in the IMF’s first 40 years, India collected more money from it than any other developing state — at a time when India was pursuing a Soviet-style industrialization program.

Ironically, some people are arguing that it is unfortunate that Strauss-Kahn is in jail at such a critical time, with several European welfare states teetering on the edge of default.

But this is actually very good news. If there is any chance of saving Europe, it will be precisely because bailouts stop and nations are forced to finally fix the awful big-government policies that have crippled growth and bloated budgets, thus leading to fiscal crises. Doug makes this essential point in the conclusion to his column, and also makes the key argument that it’s time to stop the handouts to this corrupt and wasteful bureaucracy.

The IMF’s loans have often likely postponed reform — allowing governments to keep going without making the tough changes that lead to long-term growth. That appears to be happening in Greece now — where the Fund has pushed more lending and a bigger bail-out (to the consternation of Germany, which is picking up much of the bill). Strauss-Kahn may finally have done a true public service by focusing attention on the IMF. With America drowning in red ink, Washington should stop throwing good money at this pernicious institution.

P.S. For those who want to hoist Europeans on their own petard, Tessa Berenson has a great little column at the Frum Forum pointing out how many of the political elite on the other side of the Atlantic thought it was horrible and inexcusable when an American head of the World Bank arranged for a pay raise for his girlfriend. The Europeans were right at the time, but they now turn a blind eye at a far more odious episode today.

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Greetings from Bermuda – a Multiracial Paradise Disliked by the Left

My fight for freedom often requires great sacrifice. Last month, I went to Monaco and spoke about financial regulation and bailouts. Today, I’m in Bermuda, where I just gave a speech about tax competition.

Both jurisdictions are remarkable places, among the richest places on the planet. And remarkably scenic, as illustrated by this picture I took from my balcony.

What makes Bermuda’s success especially admirable is that it is a genuinely multiracial society, with blacks comprising a slight majority of the population and playing major roles in both politics and finance.

One would think, therefore, that leftists would see Bermuda as a role model.

But that would be a mistaken assumption. Bermuda actually is a bad place from a left-wing perspective because the jurisdiction is guilty of two unforgivable sins.

First, like Monaco, Bermuda has no income tax. This makes the small island a terrible role model for statists. After all, wouldn’t it be awful if other places learned from Bermuda’s success and abandoned class-warfare tax policy?

Second, Bermuda is (gasp) a tax haven. This means that it attracts jobs and capital from high-tax nations. Not surprisingly, this is even more upsetting to leftists since it makes it difficult for other nations to impose class-warfare tax policy.

In other words, the left wants power for government even more than it wants prosperous multiracial societies. But that’s not exactly a surprise. Prosperous people, after all, generally are not sympathetic to ideological movements based on high tax rates and bloated government.

For folks who want more information, here’s a video that explains the economic benefits of tax havens.

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Who’s Right on Medicare Reform, Ryan and Rivlin or Obama and Gingrich?

This new video from the Center for Freedom and Prosperity discusses a proposal to solve Medicare’s bankrupt finances by replacing an unsustainable entitlement with a “premium-support” system for private insurance, also known as vouchers.

This topic is very hot right now, in part because Medicare reform is included in the bold budget approved by House Republicans, but also because Newt Gingrich inexplicably has decided to echo White House talking points by attacking Congressman Ryan’s voucher plan.

Narrated by yours truly, the video has two sections. The first part reviews Congressman Ryan’s proposal and notes that it is based on a plan put together with Alice Rivlin, who served as Director of the Office of Management and Budget under Bill Clinton. Among serious budget people (as opposed to the hacks on Capitol Hill), this is an important sign of bipartisan support.

The video also notes that the “voucher” proposal is actually very similar to the plan that is used by Members of Congress and their staff. This is a selling point that proponents should emphasize since most Americans realize that lawmakers would never subject themselves to something that didn’t work.

The second part discusses the economics of the health care sector, and explains the critical need to address the third-party payer crisis. More specifically, 88 percent of every health care dollar in America is paid for by someone other than the consumer. People do pay huge amounts for health care, to be sure, but not at the point of delivery. Instead, they pay high tax burdens and have huge shares of their compensation diverted to pay for insurance policies.

I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants).  In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted.

Medicare reform, by itself, won’t solve the third-party payer problem, but it could be part of the solution – especially if seniors used their vouchers to purchase real insurance (i.e., for large, unexpected expenses) rather than the inefficient pre-paid health plans that are so prevalent today.

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