Obama vs. the Founding Fathers

I’ve repeatedly said that Michael Ramirez is a good political cartoonist (see here, here, here, here, here, and here), and he’s proved his worth in this cartoon that cleverly mocks the cavalier attitude that statists have about America’s founding principles.

And here are two more Ramirez cartoons, including one that also uses the theme of Obama vs the Founding Fathers.

Finally, for those who want some analysis of why schemes like Obamacare are inconsistent with the Constitution, here’s some good analysis by Walter Williams, Thomas Sowell, Philip Klein and Damon Root, and yours truly.

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More Much-Deserved Abuse of the Political Class by Leno, Letterman, and the Rest of the Late-Night Gang

I’m periodically asked why I share political humor on  this blog. The glib and easy answer is that it’s good to share amusing material.

But there’s also a serious point, especially when disseminating jokes from the late-night talk shows. Politicians should be mocked. And the more pretentious they are, the more vicious we should be.

Even the ones we like should be subject to ridicule. Elected officials often get very egotistical because they spend all day being flattered by lobbyists. Our role is to make sure there’s a countervailing force.

So enjoy these gems.

Jay Leno

• What do you think your odds are of winning that jackpot? The last odds I checked, 176 million to 1. But then again, still better odds than Newt Gingrich getting the nomination.
• I think even President Obama realizes the Obamacare thing is not looking good in front of the Supreme Court. He’s starting to downplay it. Like today he called it Bidencare.
• Newt Gingrich announced today he is laying off a third of his campaign staff. Is that surprising? He laid off two-thirds of his wives.
• In New York City this week, they had the annual Greek Independence Day Parade. In fact, it was so authentically Greek that before the parade even started it was $12 million in debt.
• A madam in New York City claims that John Edwards was a customer in her brothel. You hear that kind of thing and it really makes you lose respect for prostitutes, doesn’t it?
• This weekend former Vice President Dick Cheney received a heart transplant. And I thought this was nice — they let him shoot the donor himself.
• Fox News sent Dick Cheney flowers. MSNBC sent chili cheese fries.

David Letterman

• Rick Santorum wants to ban pornography. That’s one of the few thriving industries America has left.

Conan

• Yesterday, Mitt Romney told what he thought was a humorous story about how his father closed down a Michigan factory. Then Romney went on to quote some of his favorite funny quotes from the movie “Schindler’s List.”
• The Supreme Court is deciding right now whether the government can mandate that all Americans buy health insurance. Rick Santorum said, “There’s no way I’m letting the government make me go on a man date.”
• In Germany, a court has ruled that German police are allowed to racially profile citizens. But don’t worry. It’s Germany, so things shouldn’t get out of hand.
• Today is Ann and Mitt Romney’s 43rd wedding anniversary. This means that 43 years ago Mitt proposed to his wife and due to a weak field of candidates, she said yes.

Jimmy Fallon

• A new poll found that President Obama’s approval rating is above 50 percent for the first time since last May. Obama made sure to thank the people who made that possible — Mitt Romney, Rick Santorum, Newt Gingrich, and Ron Paul.
• Rick Santorum gave a speech at the Jelly Belly factory in California. Incidentally, “Jelly Belly Factory” was also Newt Gingrich’s nickname in college.
• A recent survey showed that Rick Santorum is the favorite GOP candidate among Republican women. When he heard that, Santorum was like, “Wait — women have the right to vote?”
• Ron Paul said it’s still too early to count him out as the Republican nominee. Seriously? That’s like Newt Gingrich saying it’s too early to count him out as an Abercrombie model.
• That’s right — Rick Santorum was seen lying on the beach without his shirt on. He would have worn sunscreen, but he’s not really into protection.

Jimmy Kimmel

• Some top Republicans are urging Newt Gingrich to leave the race, but he says he’s sticking around. If they could get him to marry the race, he would probably leave it eventually.
• This Wednesday Mitt Romney goes one-on-one in a debate against the one man who stands in the way of his nomination: Mitt Romney.
• Rick Santorum wants to crack down on pornography. Most political analysts say it could hurt him with the “every single man in America” vote.

If you find these one-liners amusing, you can enjoy previous editions by clicking here, here, here, here, here, here, here, here, here, here, here, and here.

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Thomas Sowell Explains the 1942 Case that Enabled Government Statism, Just as Plessy v. Ferguson Enabled Government Racism

A few days ago, I wrote about Article 1, Section 8, of the Constitution, which lists the “enumerated powers” of the federal government. That post included a reference to Wickard v. Filburn, an infamous Supreme Court case that opened the door to unlimited intervention from Washington.

Why was this case important? As is so often the case, Sowell’s analysis is a model of clarity and common sense.

Thomas Sowell

Roscoe Filburn was an Ohio farmer who grew some wheat to feed his family and some farm animals. But the U.S. Department of Agriculture fined him for growing more wheat than he was allowed to grow under the Agricultural Adjustment Act of 1938, which was passed under Congress’ power to regulate interstate commerce. Filburn pointed out that his wheat wasn’t sold, so that it didn’t enter any commerce, interstate or otherwise. Therefore the federal government had no right to tell him how much wheat he grew on his own farm, and which never left his farm. The Tenth Amendment to the Constitution says that all powers not explicitly given to the federal government belong to the states or to the people. So you might think that Filburn was right. But the Supreme Court said otherwise. Even though the wheat on Filburn’s farm never entered the market, just the fact that “it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market” meant that it affected interstate commerce. So did the fact that the home-grown wheat could potentially enter the market. The implications of this kind of reasoning reached far beyond farmers and wheat. Once it was established that the federal government could regulate not only interstate commerce itself, but anything with any potential effect on interstate commerce, the Tenth Amendment’s limitations on the powers of the federal government virtually disappeared.

So why was this case such a disaster? Sowell continues.

The implications of this kind of reasoning reached far beyond farmers and wheat. Once it was established that the federal government could regulate not only interstate commerce itself, but anything with any potential effect on interstate commerce, the Tenth Amendment’s limitations on the powers of the federal government virtually disappeared. Over the years, “interstate commerce” became magic words to justify almost any expansion of the federal government’s power, in defiance of the Tenth Amendment. That is what the Obama administration is depending on to get today’s Supreme Court to uphold its power to tell people that they have to buy the particular health insurance specified by the federal government.

Sowell identifies the bottom line.

The power to regulate indirect effects is not a slippery slope. It is the disastrous loss of freedom that lies at the bottom of a slippery slope.

Many people have identified Plessy v. Ferguson, which allowed the racist imposition of separate-but-equal policies, as one of the worst decisions in Supreme Court history.

They’re right, but Wickard v. Filburn deserves a place on that list as well, only it enabled statism rather than racism.

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New Developments from Japan Show the Left Is Wrong on Two Big Fiscal Issues

There are several semi-permanent fiscal policy fights in Washington, most of which somehow are related to the big issue of whether government should be bigger or smaller.

Today, I want to focus on two of those battles, and point to developments in Japan to make the case that the left is wrong.

First, let’s look at a couple of sentences from a Wall Street Journal story about Japanese fiscal policy.

Top officials from Japan’s government and ruling party formally endorsed a revised bill to double the country’s sales tax, despite strong objections from other party members, in a sign of their determination to rein in the nation’s soaring public debt. …The legislation will double the current 5% sales tax in two stages by 2015 as a way to help pay for the nation’s growing social welfare costs as the population ages.

I realize I’m a strange person and I look at everything through a libertarian lens, but I think this story provides strong support for my viewpoint on two important issues.

1. Higher taxes lead to higher spending – Just like in the United States, politicians in Japan claim that they have to raise taxes to deal with deficits and debt. Indeed, the excerpt above includes that assertion, reporting that the VAT increase would be “to rein in the nation’s soaring debt.”

I think this is nonsense. Politicians are motivated by a desire to finance bigger government. And that’s what’s happening in Japan. Later in the article, we see that the real purpose of the tax hike is to “pay for the nation’s growing social welfare costs.”

2. The VAT is a money machine for big government – I’ve cited the European evidence to show that small VATs become big VATs in part because it is a hidden tax. My statist friends often respond by saying I need to look at Japan, Canada, and Australia, where VATs haven’t been increased. I then respond by saying it’s just a matter of time. So, even though I would like to be wrong, Japan is confirming my fears.

That being said, I must acknowledge the possibility that Canada and Australia may prove me wrong. And I will be happy if that’s what happens. Both nations have done a pretty good job of restraining the growth of government (see Table 25 of this OECD data), and I don’t see any immediate threat of VAT hikes. But I’m not holding my breath for what happens 10 years from now.

Last but not least, I’ve decided the title of this post is inaccurate. The left isn’t wrong. They know the higher taxes lead to higher spending, and they know the VAT is a money machine for big government. They just don’t publicly admit these are the results they want.

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E.J. Dionne Forgets that America Is a Constitutional Republic

My daily email containing the editorials and opinion columns from the Washington Post included an item written by E.J. Dionne entitled “Supreme Court activists: Conservative justices forget we’re a democracy.”

Surely this was a mistake.

• Doesn’t Dionne know that the Constitution was adopted in part to protect basic freedoms from untrammeled majoritarianism?
• Is he unaware that Article 1, Section 8 lists “enumerated powers” of the federal government, and that health insurance isn’t mentioned?
• Did he forget that America is a constitutional republic, or perhaps was never taught?
• Did he not learn about separation of powers in school, and that the courts are supposed to protect us against tyranny of the majority emanating from the legislature?

I suspect he does understand, at least with regard to the first question. For instance, I’d bet a lot of money that he was correctly in favor of the Court’s decision to protect flag burning as a form of political speech, notwithstanding public opinion and congressional approval.

But he seems to join with other leftists in treating the interstate commerce clause as some sort of blank check for federal intervention into every aspect of our lives. And it shows up in various ways in his column.

…conservative justices are prepared to act as an alternative legislature…discussing whether parts of the law could stand if other parts fell… Sotomayor asked what was wrong with leaving as much discretion as possible “in the hands of the people who should be fixing this, not us.” It was nice to be reminded that we’re a democracy, not a judicial dictatorship. …This is what conservative justices will do if they strike down or cripple the health-care law. …a court that…sees no limits on its power, no need to defer to those elected to make our laws.

At the risk of being blunt, the conservative justices are doing exactly what they should be doing. They’re deciding if a law enacted by Congress is consistent with the powers granted to Congress by the Constitution.

America has a democratic form of government, but we are not a democracy. At least not in the sense that 51 percent of the people have the unlimited right to rape and pillage 49 percent of the people.

I have no idea of the Supreme Court will make the right decision, but I am overwhelmingly confident that the Founding Fathers didn’t envision mandated health insurance as a function of the federal government.

But maybe I’m just too old fashioned, because when I peruse the enumerated powers, I don’t see any authority for a Department of Energy either. Or a Department of Agriculture. Or a Department of Commerce. Or Department of Housing and Urban Development. Or Department of Education. Or a Department of Transportation. Or…well, you get the idea.

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Prosecution of Gun Owner Is another Reason to Despise Illinois

Illinois is a hopeless state, filled with greedy bureaucrats and senseless politicians. Not surprisingly, it’s also a state that prosecutes people who try to protect themselves from criminals.

Here’s part of a story from the Chicago Tribune, featuring an elderly army veteran who was arrested for shooting a burglar.

An 80-year-old tavern owner in Englewood believes it’s “unjust” that he is facing charges after shooting a burglar, but believes he will prevail in court. “It’s wrong,” Homer “Tank” Wright said as he walked into his bar after being released from jail this afternoon. “Unjust that I can’t protect me.” Awakened by his 75-year-old wife, Wright confronted a 19-year-old burglar who had broken through some plywood over a bathroom window in hopes of stealing liquor, according to police. Wright grabbed his 38.caliber pistol, loaded with four rounds, and shot the intruder in the leg. The suspect was arrested — but so was Wright. …Wright said his bar has been broken into four to six times, and he and his wife had started staying overnight at the property to protect it. “This is our living,” he said, adding that he has had triple bypass surgery. “I’m going to be here. I’m not leaving. This is where I’m planning to stay.”

Fortunately, this isn’t like the Trayvon Martin case since both Mr. Wright and the thug are black. So without the distraction of race, we can focus on the genuine injustice of the government making it difficult for innocent people to fight back against crime.

Mr. Wright’s family understands the real issue.

Several of Wright’s relatives cheered in the gallery after the judge ordered him released, drawing a rebuke from deputies. After the hearing, Wright’s grandson Courtney Cook said his grandfather has the right to protect his home and the tavern he has run for 40 years. “You have to look at what’s right and what’s wrong in that situation,” he said. “He’s supposed to protect his home and his family. I mean, you know, is he supposed to be the victim? I mean, you know, just let it keep happening? If it’s going to keep happening, then where’s the law? What good is the law?”

Mr. Wright’s neighbors also have the right attitude.

On his South Side block, Wright is known as a hard-working neighbor who runs a bar that has become a neighborhood institution. Known as “Tank,” Wright has operated the bar next to his home for more than 40 years, neighbors said. …Anita Dominique, head of the block club in the neighborhood, said she has known Wright for more than 30 years. “He is a pillar of our community,” she said. “What does it say to me and other senior citizens that we will be arrested if we defend ourselves?” Neighbors held a news conference this morning to call on prosecutors to drop the charges. “If a man can’t defend himself from harm, what can he do?” asked Darryl Smith. “If he hadn’t defended himself, we would be here for a different reason — because an intruder came in and killed him. “We’re outraged as a community and we’re calling for the state’s attorney’s office to drop the charges,” he added. “This man has done nothing wrong.”

By the way, I’m mocking Illinois, but New York City is equally foolish about penalizing victims.

And you will be flabbergasted by this example of anti-gun zealotry in England.

It’s ironic, in an outrageous way, that the government punishes people for protecting their lives and property, when such actions are only necessary because the government is failing to fulfill one of its few legitimate responsibilities.

This is why I recommend you share this Cato Institute study showing how private guns are frequently used to thwart criminals.

P.S. I suspect these two anecdotes/stories are urban legends, but this interview with a general and this letter-to-the-editor are very much worth reading…and sharing.

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Two Very Good Political Cartoons

I’ve recently become a fan of Lisa Benson’s cartoons (see here, here and here), and this may be her best piece of work.

My only quibble is that there should be an elephant somewhere on the wagon since Schwarzenegger also was a big spender.

I’m also a big fan of the work of Michael Ramirez work (see here, here, here, here,here, and here), and he has a new cartoon about Paul Ryan’s plan for Medicare reform.

What makes this cartoon especially biting is that Ryan’s current plan isn’t quite as good as the one he proposed last year, but that isn’t stopping demagogues from complaining.

Which raises a good issue. If you’re going to be viciously demagogued regardless of whether you solve 5 percent of a problem or 100 percent of a problem, why not go all the way?

Maybe I’ll call this “Mitchell’s Don’t-Cross-a-Canyon-in-Two-Leaps Principle,” to complement “Mitchell’s Law” and “Mitchell’s Golden Rule.”

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Explaining Pro-Growth Tax Reform to the Senate Budget Committee

What do the flat tax and national sales tax (and even the value-added tax) have in common?

As I explain in this Senate Budget Committee testimony, they are all single-rate, consumption-base, loophole-free tax systems that fulfill the key principles of good tax policy.

But good theory doesn’t operate in a vacuum, which is why I make several additional points.

1. Echoing George Will, something like a VAT should never be implemented unless the income tax is completely abolished.

2. It’s impossible to have good tax policy if government is too big.

3. A proper definition of taxable income is necessary to understand what’s a loophole and what’s not.

4. Tax revenues already are projected to significantly increase over the next few decades because of “real bracket creep,” meaning than a rising burden of spending accounts for more than 100 percent of America’s long-run fiscal challenge.

5. If you want the rich to pay more tax, keep tax rates reasonable.

On a personal note, I’m irked that my jacket is riding up on my shoulders. I’ve been trained to sit on the tail of my jacket when doing TV interviews, and I should have remembered that lesson during my testimony.

But at least I’m wearing my Bulldawg tie, so that compensates.

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Should America Copy Europe, as Obama Believes?

Last year, I shared a very amusing Michael Ramirez cartoon showing Obama as the European lemming.

Today, Mark Helprin takes a much more serious look at the same issue in the Wall Street Journal, commenting on the wisdom (or lack thereof) of Obama’s interest in the European economic model.

Both in his re-election campaign and as the core principle of his presidency, Barack Obama asks America to cast off reliance on the free market—because, in his characterization, the free market “doesn’t work”—in favor of the European model of ever-tightening, ever-regulating, ever-expanding governance. This he does, astonishingly, at the very moment of the European model’s long-predictable crisis, collapse, bankruptcy, and devolution. With his trademark certainty he proposes—indeed, at times commands—that we follow him over the Niagara to which his back is turned. …Promiscuous endorsement of things European, inveterate in the president’s academic coterie, has long been characteristic of American snobs.  …in suppressing and over-engineering their economies they court national bankruptcies. Just as reckless are their efforts to ameliorate economic stagnation via the all-guzzling welfare state. Shall we create more jobs by aping Europe, which since 1990 has averaged 9.16% unemployment while ours was 5.95%? …like the leaders of the bankrupt states of Europe, President Obama believes that the key to prosperity is to regulate, engineer, and direct the economy; to raise taxes; to augment the powers of government; to substitute collective largess for family cohesion; to spend money that does not exist… In short, the president and his progressives are chasing after a specter. Because the president is apparently repelled by the principles of the American Founding and lacks an alternative other than the European model, nothing else is in his quiver as he is driven by the dread of a future absent his omnipresent intervention.

Needless to say (but I’ll say it anyhow), I concur. I’ve cited OECD data to show that America is much more prosperous than Europe’s welfare states. And I’ve participated in an online debate where I argued that Europe is in worse shape than the United States.

The World Bank also has produced research showing Europe falling behind, and there’s also been good analysis from Jim Glassman, Irwin Stelzer,  and Constantin Gurdgiev. And here’s a very compelling video on Europe’s fiscal crisis.

Last but not least, here’s a chart posted on the Cato blog by my Cato colleague, Marian Tupy. It shows how Europe’s growth rate has dropped with each passing decade.

In other words, the evidence is overwhelming. Europe is a model, but it’s a model of the policies to avoid, not the ones to emulate.

Let’s close with some humor. Here’s a post featuring a Hitler parody on the European downgrades, and here’s a list of ways to celebrate Europe Day.

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New Budget from Republican Study Committee Reduces Burden of Government to Where It Was When Bill Clinton Left Office

A couple of weeks ago, I offered some guarded praise for Paul Ryan’s budget, pointing out that it satisfies the most important requirement of fiscal policy by restraining spending – to an average of 3.1 percent per year over the next 10 years – so that government grows slower than the productive sector of the economy (I call this my Golden Rule).

I was more effusive in my comments about Senator Rand Paul’s budget, which limited the growth of the federal budget over the next 10 years to an average of 2.2 percent each year.

Now the Republican Study Committee from the House of Representatives has put forth a plan that also deserves considerable applause. Like Senator Paul, the RSC plan would impose immediate significant fiscal discipline such that spending in 2017 would be about the same level as it is this year.

Think of this as being similar to the very successful fiscal reforms of New Zealand and Canada in the 1990s.

After the initial period of spending restraint, the budget would be allowed to grow, but only about as fast as the private economy. This chart shows spending levels for the Obama budget, the Paul Ryan budget, the Rand Paul budget, and the RSC budget.

A couple of final points.

1. For all the whining and complaining from the pro-spending lobbies, the RSC budget is hardly draconian. Federal spending, measured as a share of GDP, would only drop to where it was when Bill Clinton left office.

2. One preferable feature of the Rand Paul budget is that the Kentucky Senator eliminates four needless and wasteful federal departments – Commerce, Education, Energy, and Housing and Urban Development. As far as I can tell, no departments are eliminated in the RSC plan. Also, Senator Paul’s plan is bolder on tax reform, scrapping the corrupt internal revenue code and replacing it with a simple and fair flat tax.

3. The RSC comes perilously close to winning a Bob Dole Award. The first chapter of their proposal fixates on symptoms of debt and deficits rather than the real problem of excessive government spending. Indeed, the first six charts all relate to deficits and debt, creating an easy opening for leftists to say they can solve the mis-defined problem with higher taxes.

There are lots of other details worth exploring, but the main lesson is that restraining spending is the key to good fiscal policy.

And that’s what’s happening.  Indeed, the good news is that policymakers have proposed several budget plans that would shrink the burden of spending as a share of GDP. It’s refreshing to debate the features of several good plans (rather than comparing the warts in the competing plans during the big-government Bush years).

The bad news is that Harry Reid and Barack Obama will succeed in blocking any progress this year, so America will move ever closer to becoming another Greece.

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If Obamacare Is Constitutional, then Why Did the Founding Fathers Bother with a List of Enumerated Powers?

I think Obamacare is bad policy because it exacerbates the main problem with the current healthcare system, which is third-party payer. And as a public finance economist, I’m obviously not happy about the new taxes and additional spending in Obamacare.

But those issues are temporarily on the back burner now that the Supreme Court is deciding whether the underlying law is constitutional.

I’m not a lawyer. I don’t even play one on TV. But I can read, and when I look at Article 1, Section 8, of the Constitution, I don’t see that Congress has the power to coerce me into buying a health insurance policy. Heck, I don’t see any role for the federal government in healthcare.

The statists say that the commerce clause (“To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”) is a blank check for federal intervention, but that’s a bastardization of the original meaning and purpose of that passage, which was inserted to prevent states from imposing protectionist barriers.

What matters, though, is how the nine Justices on the Supreme Court interpret that passage. Here’s some of Philip Klein’s analysis for the Washington Examiner.

…the outcome of the case, and fate of the president’s most significant legislative achievement, will likely hinge on how the court views the Commerce Clause. One of the most widely debated parts of the Constitution, the Commerce Clause grants Congress the power “to regulate commerce with foreign nations, and among the several states.” And as the size and scope of the federal government has grown throughout the nation’s history, the Supreme Court has grappled with how broadly or narrowly to interpret the phrase. …If the court allows the mandate to stand, opponents claim, it would effectively give the federal government unlimited power to regulate individual behavior.

And here’s some of what Damon Root penned for Reason.

Article 1, Section 8 of the U.S. Constitution grants Congress the power “to regulate commerce…among the several states.” The framers and ratifiers of the Constitution understood those words to mean that while congress may regulate commercial activity that crossed state lines, Congress was not allowed to regulate the economic activity that occurred inside each state. As Alexander Hamilton—normally a champion of broad federal power—explained in Federalist 17, the Commerce Clause did not extend congressional authority to “the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation.” In other words, the Commerce Clause was not a blank check made out to the federal government. Yet in its decisions in both Wickard v. Filburn andGonzales v. Raich, the Supreme Court held otherwise, allowing Congress to regulate the wholly intrastate cultivation of wheat and marijuana, respectively. Those decisions cannot be squared with the original meaning of the Commerce Clause. As Justice Clarence Thomas remarked about the majority’s reasoning in Raich, “If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything—and the Federal Government is no longer one of limited and enumerated powers.”

When I read all this material, my amateur legal analysis is pretty simple: Why would the Founding Fathers have bothered to list enumerated powers if the commerce clause gave the federal government a blank check to control our lives?

Like I said, I’m not a lawyer, much less an expert on constitutional law. Then again, this amusing poster shows that the same thing can be said about the President.

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Great Moments in Local Government, the New York City Edition

I’m periodically dumbfounded by the bizarre actions of government.

Indeed, I even put together a post comparing amazingly stupid policies in the United States and United Kingdom. And I later updated that post with new details of brainless bureaucracy.

Top U.K. entries included an effort to stop children from watching Olympic shooting events and (what must be) the most pointless sign in the history of the world, while leading American entries included preventing a girl from boarding a plane because her purse had an image of a gun and a local school calling the police because a little girl kissed a little boy in gym class.

But I don’t mean to just pick on the anglo-sphere. I’ve also noted the idiocy of the Greek government, which thinks it’s appropriate to subsidize pedophiles and collect stool samples as a condition of getting a business license to set up an online company.. And let’s not forget Italy’s new government of technocratic experts, which managed to appoint the wrong person to be Junior Agricultural Minister.

Saving NYC from the scourge of toy guns

But don’t overlook New York City, which really is in a special category.  And what are the “leaders” of the city that never sleeps doing to demonstrate their blundering incompetence? Well, read it and weep, courtesy of the New York Post.

The owner of a discount store in Brooklyn says the city is holding him up for $30,000 in fines he can’t afford — all because he stocked six toy sheriff sets that included plastic guns. And now the .44-caliber fines for the orange-tipped, obvious fakes are forcing him to close for good.

Isn’t this wonderful? These reckless politicians and bureaucrats will bankrupt an entrepreneur and destroy jobs, while achieving no legitimate public policy purpose.

But don’t be surprised. This is the same crowd that does things such as help prisoners sign up for food stamps, ban bake sales for spreading unhealthy food, and fine you $2,000 for idling your car for more than three minutes.

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Should States Be Allowed to Tax Outside their Borders, Particularly if It Means a Database of Your Online Purchases?

Tax competition, as I have explained to the point of being a nuisance, is an important restraint on the greed of the political class. Simply stated, politicians are less like to over-tax and over-spend if they know that geese with the golden eggs can fly across the border.

This is mostly an issue in the world of international tax policy, but the same principles apply for sub-national governments inside a nation.

State and local governments should compete with each by offering the best fiscal climate. Sadly, just as high-tax nations such as France and Germany are trying to hinder global tax competition, high-tax state governments are seeking to undermine fiscal rivalry inside the United States.

More specifically, they want to create a state sales tax cartel that would allow governments to force out-of-state businesses serve as deputy tax collectors. Greedy politicians are fearful that online shopping deprives them of revenue, so they are pushing for a privacy-threatening database that will enable them to track and tax these transactions.

I explained this issue last week for a standing-room-only audience on Capitol Hill.

The entire discussion is posted online, including the very astute observations of my former Heritage Foundation colleague, Adam Thierer, now at the Mercatus Center.

Investor’s Business Daily also has opined on why this is a bad idea, but if you want to get really worried, the clowns at the United Nations want to power to tax and regulate the Internet.

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This Is How the Left Thinks Gun Control Actually Works

While there are some statists who viscerally despise freedom and want ordinary citizens disarmed so that only the government has guns, most supporters of gun control presumably are motivated by a sincere desire to reduce crime and violence.

Their problem is a naive assumption that bad people will obey laws banning gun ownership and possession. Or a flawed assumption that the police can be everywhere.

And this is why this video is not only funny, but also a glimpse into the leftist mindset.

It was included in a comment on this post featuring a very funny cartoon, but it definitely deserves more attention.

And if you like videos upholding the right to keep and bear arms, check out this heartwarming Christmas story.

Last but not least, this poster (click to enlarge) is quite effective.

Indeed, this post about the Fort Hood murders, featuring the superb analysis of John Lott, is must reading on the foolishness of so-called gun free zones.

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The Toulouse Child Killer: Another Case of Welfare Being Used to Subsidize Terrorism?

I’m not a big fan of welfare programs, in part because I sympathize with taxpayers (check out these outrageous examples of waste) but mostly because redistribution programs subsidize poverty and trap people in lives of despair.

But as I wrote in 2010, the most perverse form of welfare is when governments give handouts to Islamo-fascist radicals. This has happened in the United Kingdom and Germany, and the video at the link about the taxpayer-financed radical cleric in Australia is absolutely horrifying.

It seems like this foolishness is happening in France as well. In a story about the recent horrific murders by Mohammed Merah, the New York Post included this blurb.

All the while, Merah, a petty criminal on welfare, was ostensibly under surveillance by French intelligence.

And a New Zealand TV station included this tidbit.

Etelin said he knew Merah since he was about 17, and described his life as typical for many teenagers and young men in poor French housing projects who get involved in criminal activity. “His mother couldn’t control him, his father was totally absent, his sister … also told me that she couldn’t exercise any influence over him,” the lawyer said.

Isn’t that so typical. Not only welfare, but also government housing, and a system of handouts that facilitates an absent father.

I’m not saying – or even implying – that welfare programs cause terrorism. Millions of people live off government and never go out and murder others. And it may turn out that Merah and his family were low-level moochers, making this aspect of the story worthy of nothing other than an asterisk.

But I am saying that welfare breeds idleness and despair, and in some cases it enables reprehensible behavior (as seen by this story about a couple of disgusting leeches who wanted to impregnate a 12-year old girl in hopes of getting a bigger handout).

For those interested, this video looks at the broader issue of welfare, and it includes this graph showing how the so-called War on Poverty has probably resulted in more destitution.

And here’s one final story, from the U.K., about the horrible human cost of the welfare state.

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Here’s a Song for All Americans: F-Blank-Blank-the-IRS

I’m rather clueless on matters of popular culture, but I know the IRS is a vicious and needless bureaucracy that plagues the American people (though IRS agents could learn something from their Pakistani counterparts)

So I’m obviously a fan of this song that several people have sent me.

About a month ago, I made fun of the IRS for wanting to squander $15 million of our tax dollars on a PR campaign.  What’s great about this song is that it presumably is akin to a big PR campaign against the IRS jackboots.

And remember, while most of the blame for a terrible tax system should be directed against the clowns in Congress and the White House, the IRS goes above and beyond legislative requirements to hassle and torture Americans. Heck, sometimes it simply decides to ignore the law!

This video has some of the ugly details.

But let’s not end this post on a depressing note. Here’s some IRS humor to brighten your day, including the IRS version of the quadratic formula, a new Obama 1040 form, a list of tax day tips from David Letterman, a cartoon of how GPS would work if operated by the IRS, an IRS-designed pencil sharpener, two Obamacare/IRS cartoons (here and here), a sale on 1040-form toilet paper (a real product), a song about the tax agency, and (my favorite) a joke about a Rabbi and an IRS agent.

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Shame on the Teachers’ Union and Double-Shame on the NAACP

Utterly despicable.

But this is an understatement, an entirely inadequate phrase to capture my feelings about how the NAACP and the teachers’ union have joined forces to undermine educational opportunities for minority children.

There are honest left-wingers, who are misguided but genuinely wish to make America a better place. But that’s definitely not the right way to describe people who put the narrow interests of teacher unions ahead of helping disadvantaged kids.

This new video from Reason TV has the sordid details.

Both Thomas Sowell and Walter Williams have very appropriate comments on this issue.

And this video looks at the broader issue of school choice.

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Romney’s Big Gaffe Is TARP, not Etch-a-Sketch

Governor Romney’s campaign is catching some flak because a top aide implied that many of the candidate’s positions have been insincere and that Romney will erase those views (like an Etch-a-Sketch) and return to his statist roots as the general election begins.

I’m surprised that anyone’s surprised.  Hasn’t anybody been paying attention to his comments and track record on issues such as the  value-added tax, healthcare, Social Security reform, budget savings, ethanol subsidies, Keynesian economics, and the minimum wage?

In any event, people should be more agitated by his recent defense of the corrupt TARP bailouts.

Here are the key sections of a report from NBC Politics.

Mitt Romney offered an unprompted defense of the 2008 Wall Street bailout on Wednesday, crediting President George W. Bush and the preceding administration for averting an economic depression. …”There was a fear that the whole economic system of America would collapse — that all of our banks, or virtually all, would go out of business,” Romney said. “In that circumstance, President Bush and Hank Paulson said we’ve got to do something to show we’re not going to let the whole system go out of business. I think they were right. I know some people disagree with me. I think they were right to do that.”

I can understand how some politicians got panicked back in 2008 by some of the reckless and inflammatory rhetoric that Bush, Paulson, and others used to build support  for their bailout plan.

But it’s now become more and more obvious that there was a much better alternative (as I explained in this post giving Cheney a kick in the pants), involving a process known as FDIC resolution.

That approach would have recapitalized the banking system without the corruption, favoritism, and moral hazard that characterized the TARP bailout.

"Which one of us is Tweedledee?"

I don’t know whether Romney doesn’t understand this, hasn’t bothered to learn about the issue, or simply thinks it is good politics to be pro-bailout, but it doesn’t matter. There is no good explanation for his actions.

This is going to be a miserable and depressing election season, revolving around whether the nation should replace a statist who calls himself a Democrat with a statist who calls himself a Republican.

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China, Regulation, Wealth, and Chicken Wings

While I’m not oblivious to geopolitical concerns, I don’t worry about China becoming a more prosperous nation. Yes, more wealth could enable the nation’s dictators to finance some unwelcome aggression, but I mostly think higher living standards will create pressure for political liberalization.

In any event, the United States is in no danger of being overtaken by China in our lifetimes (or probably ever).

With that bit of background, you can understand why I have a somewhat relaxed reaction to the news that Chinese regulators nailed a McDonald’s franchise for allegedly breaking the rule about serving chicken wings within 30 minutes of preparation.

Here’s my discussion of the topic on Fox News.

I’ve written about the burden of regulation, and I’ve highlighted examples of absurd regulation, but the most important part of this interview is the explanation that wealthier societies can afford higher standards.

Communism and other statist ideologies are evil, but it’s also worth noting that most of the worst examples of environmental degradation occur in societies with heavy government control, not wealthy capitalist nations.

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A Victory over the Ideological and Tyrannical Thugs at the EPA

In some recent polling data, most Americans expressed a negative view of the federal government, with many of them in another poll saying it poses an “immediate threat to citizens.”

That probably sounds extreme to some people, but this story about IRS abuse should be enough to convince any normal person the the federal government is despicable.

For another example, let’s look at a case involving the thugs at the Environmental Protection Agency (EPA). This Reason TV video provides the background.

This is a horrifying video to watch. Anybody with a shred of decency should be outraged.

Fortunately, all nine Supreme Court Justices sided with the property owners. I don’t know if they were outraged, but they made the right legal decision. The Wall Street Journal opined about the outcome.

These are hard times for economic liberty, but the Supreme Court on Wednesday offered a modest reason to hope. In a 9-0 ruling, they concluded that the Environmental Protection Agency can’t terrorize Americans via regulation without allowing them a day in court. …The case landed at the High Court after the Sacketts tried to appeal the wetlands designation. But the EPA refused to grant a review or lookback hearing, because an appeals process isn’t explicitly required by the Clean Water Act. Only after the EPA moved to enforce the compliance order would the Sacketts get their day in court. The EPA almost never needs to enforce, however, because disobeying a compliance order—even one that is later overturned—is legal proof in its mind of “willfulness” or a tacit admission of guilt. The only way to defend yourself is to break the law and therefore invite even higher penalties. The Sacketts claimed this Star Chamber violates their due process rights. …Congress ought to amend the Clean Water Act to make the law’s jurisdiction clearer. Meantime, the ordeal of the Sacketts shows once again how this agency with a $10 billion budget and 17,000 agents has become a regulatory tyranny for millions of law-abiding Americans.

Sadly, the decision still leaves the EPA thugs with too much power for discretionary abuse, as Brian Garst notes.

We’ve still got a long way to go to restore basic property rights in this country, and the Sackett’s still have to fight the EPA on the merits of the case as they seek to disprove the claim that their own property is a “wetland,” much less a “navigable water” of which the Act supposedly deals, despite having no water. But at least now they have their Constitutional due process rights recognized, so that they may challenge EPA’s jack-booted thugs in court without first having to rack up millions in fines waiting for EPA to allow them to do so.

But let’s enjoy at least a partial victory. I’m smiling today at the thought of unhappy bureaucrats at the EPA.

Last but not least, I want to acknowledge that government thuggery is not limited to the federal government in Washington.

• If you have a soul, you will be outraged by this example of a local government abusing poor people.
• If you have decency, you will be disgusted by this example of a state government persecuting someone who didn’t commit a crime.
• If you believe in basic rights, you will be horrified by this example of a foreign government seeking to outlaw political dissent and free speech.

Gee, do you detect a pattern?

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What Do Barack Obama and Colonel Sanders Have in Common?

With all the talk about budgets in Washington, and given Obama’s support for class warfare, higher tax rates, and double taxation, this image I received seems rather appropriate.

It’s quite possible, of course, that this is a photo-shop production, but that’s not really important. Good humor is worth sharing even if it’s based on doctored photos, exaggerated stories, dicey numbers, unverified quotes, and urban legends.

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Congressman Ryan’s Budget Restrains Spending Growth, Allows Private Sector to Expand Faster than Burden of Government

The Chairman of the House Budget Committee has produced a new budget plan which contrasts very favorably with the tax-heavy, big-spending proposal submitted by the President last month.

Perhaps most important, Congressman Ryan’s plan restrains spending growth, allowing the private sector to grow faster than the burden of government, thus satisfying Mitchell’s Golden Rule so that spending falls as a share of GDP.

The most important detail in the proposal is that the federal budget, which currently consumes 24 percent of GDP, would fall to less than 20 percent of GDP beginning in 2016.

That’s the good news. There are three pieces of not-so-good news.

1. Ryan’s plan allows spending to grow by an average of 3.1 percent annually over the next 10 years, with is faster than the 2.8 percent average annual growth in last year’s budget.

2. His proposed Medicare reform, while far better than current law, also is not as good as what was proposed last year.

3. The federal budget would still consume a greater share of the economy’s output than it did when Bill Clinton left office.

I suppose it’s also worth mentioning that Ryan’s proposal isn’t as good as Rand Paul’s budget. Spending only climbs 2.2 percent yearly under the plan put together by the Kentucky Senator, and he also abolishes several useless cabinet-level departments.

But the very good shouldn’t be the enemy of the good. As noted already, Congressman Ryan’s plan meets the most important test, which is restraining spending so that the federal budget grows slower than the private economy. And, as the chart shows, he obviously imposes more fiscal restrain then President Obama.

Regular readers know that I generally show no mercy to jelly-spined Republicans, but I praised GOPers for approving last year’s Ryan budget. The same will be true if they approve this year’s version.

P.S. I am frustrated and nauseated by all the people who are fixating on whether Congressman Ryan’s plan balances the budget in 10 years, 20 years, or whenever. What matters is shrinking the burden of government. I hereby bestow the Bob Dole Award on all the people who are mistakenly focusing on the symptom of red ink rather than the underlying disease of bloated government.

P.P.S. I’m happy to report that there is no value-added tax in the revenue portion of Congressman Ryan’s budget. There is a VAT in his Roadmap plan, and I endlessly worry that this poison pill will re-emerge and ruin other good fiscal plans put forth by the Wisconsin lawmaker.

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The Small Business Administration Should Be Abolished

Being pro-market is not the same as being pro-business. A free market means that nobody is using the coercive power of government to obtain unearned goodies, and that is true for big business as well as big labor, or any particular segment of the population.

Indeed, handouts to big business are the worst form of redistribution, as I noted in my previous post, because they transfer money from the poor to the rich and thus violate “Mitchell’s Guide to an Ethical Bleeding Heart”.

This is why I have strongly criticized subsidies and favors for the business community, whether for entire industries or for specific companies such as General Motors, Wal-Mart, and General Electric.

But it’s not just big business that should be weaned from the public teat. Veronique de Rugy of the Mercatus Center has a Wall Street Journal column explaining why the Small Business Administration should be shuttered.

…the SBA hurts more small businesses than it helps, wastes taxpayer money and distorts economic activity. The SBA’s main activity is to provide government-backed loans to qualifying small businesses. In fiscal 2011, the agency requested $1.5 billion in discretionary outlays. However, total outlays, which include projected payouts for defaults, were $6.2 billion. …the agency has suffered increased losses in recent years on its guarantees. How this trend will evolve depends on the economy and whether default rates on SBA loans continue to increase. Currently, outstanding loans guaranteed by the SBA—and federal taxpayers—total about $92.9 billion. …The SBA loan program is best understood as a subsidy to banks. Borrowers apply to an SBA-certified bank. The SBA guarantees 75% to 85% of the value of loans made in the flagship program. The banks then boost their earnings by selling the risk-free portion of the loans on a secondary market. Ironically, it’s also the biggest banks that do the most business through the SBA.

Ms. de Rugy then closes with an important insight from Frederic Bastiat (who is probably Veronique’s great great grandfather since I’m only slightly exaggerating when I say they’re the only two free market people in French history).

French economist Frederic Bastiat noted that many economic fallacies persist because the beneficiaries of government actions are easily visible, while the victims are harder to identify. The SBA is a classic example. Small-business owners who get subsidized loans feel good (so do the banks that profit from the loans), but we can’t identify how that capital would have been used absent government intervention. We can count the jobs created at the subsidized businesses, but we don’t know how many more jobs might have been created if market forces determined the allocation of capital. That’s the economic analysis. The political analysis is that politicians have successfully sold the SBA as a program to help small business—a widely held belief that’s almost as sacrosanct as baseball, motherhood and apple pie. In reality, the SBA is a form of corporate welfare, and America’s biggest banks are the only clear winners, leaving taxpayers on the hook for billions of dollars.

By the way, Veronique could use your help. There’s an online poll and the statists have been stuffing the ballot box. So click on the column link above and help her out. You folks have helped me prevail in some of my online debates for U.S. News and World Report (see here, here, here, and here), so don’t hesitate to cast a vote for Veronique and against cronyism.

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A Test for the GOP: Shutting Down the Spigot of Corporate Welfare at the Export-Import Bank

Republicans are telling voters that they’ve learned the hard lessons from the 2006 and 2008 elections and that they are back on the side of taxpayers. I’m not convinced, which is why I’ve outlined some key tests that will demonstrate whether the GOP genuinely supports limited government.

o No tax increases, since more money for Washington will encourage a bigger burden of government and undermine prosperity.

o To stop bailouts for Europe’s decrepit welfare states, no more money for the International Monetary Fund.

o Reform the biased number-crunching methodology at the Congressional Budget Office and Joint Committee on Taxation.

o No more money from American taxpayers to subsidize the left-wing bureaucrats at the Paris-based Organization for Economic Cooperation and Development.

I have another item to add to this list, and it’s one that may actually go the right way.

It appears that there’s a chance to end a major source of corporate welfare known as the Export-Import Bank. As the irreplaceable Tim Carney notes, a handful of Republicans are standing up for free markets over corrupt cronyism.

Ex-Im reauthorization typically passes easily. But after the Wall Street bailouts, Fannie Mae’s bailout, Solyndra’s collapse, and the rise of the Tea Party, many conservatives in Washington have grown hostile to corporate welfare. The free-enterprise Club for Growth, which was central in 2010 in helping conservatives and hurting moderate Republicans, blasted Ex-Im as “nothing more than a corporate welfare slush fund for companies with the best lobbyists.”

You won’t be surprised to learn that the President wants to expand this honeypot of corporate welfare. Here’s some of what George Will wrote about Obama’s plan to divert more capital to subsidize the well-connected.

This looks like a promise to compound market distortions by further politicizing credit markets, while enunciating no limiting principle. Obama is directing the bank to offer United Airlines a subsidy to match any subsidy Canada offers to persuade United to choose the Montreal-made Bombardier as United chooses between it, Boeing and Airbus. So American taxpayers will subsidize United to subsidize Boeing, which is already being subsidized in ways injurious to Delta and others.

Other than self-interested companies with their snouts in the trough – and the politicians and lobbyists they finance, it is very difficult to find any legitimate argument for this cesspool of cronyism.

One of the few self-professed conservatives to support the program is Hugh Hewitt, though I’m befuddled how anybody who supports corporate welfare (and Mitt Romney) can call himself a conservative.

But let’s set that aside. Hewitt’s main argument is that exports are good and that the federal government should subsidize good things. If that argument sounds familiar, it’s probably because you’ve heard Barack Obama say that health insurance is good and that the federal government should subsidize good things.

If you think I’m being unfair, I invite you to read the column. You’ll be especially amused by this passage.

Hamilton argued for a trading empire, a robust union deploying its combined power and resources to advance the nation’s interests abroad to the benefit of its merchants and thus its people at home.

Sounds reasonable, but Hewitt fails to mention that Hamilton’s view of “a robust union” did not include subsidized exports. Heck, Hewitt notes earlier in his column didn’t exist until it was created during the New Deal – about 130 years after Hamilton’s death!

Besides, the Export-Import Bank doesn’t even have an impact on trade balances, as explained by my colleague Sallie James, so mercantilists are barking up the wrong tree.

The Ex-Im Bank at best recreates, and at worst misallocates, private financial behavior. And to what end? The U.S. General Accounting Office (now the Government Accounting Office) has pointed out that“export promotion programs cannot produce a substantial change in the U.S. trade balance.” A country’s trade balance is driven largely by underlying macroeconomic factors, such as the ratio of savings to investment.  …rather than authorizing an increase in the Ex-Im Bank’s operating bud-get, or expanding its role in the U.S. economy,Congress should recognize that the alleged justifications for the Ex-Im Bank’s existence are hollow and abolish the agency completely.

Let’s also address the argument of Frank Gaffney, who normally is sensible about public policy. He makes the claim that the Export-Import bank is a profitable activity for the Treasury.

the Export-Import Bank is a money-making activity for the U.S. government.  According to the U.S. Chamber of Commerce, since 2005, Ex-Im loans, guarantees and insurance programs have returned $3.4 billion over and above its costs and loss reserves, with a default rate of less than 2%.  That includes $400 million in 2011 alone.

Since defenders of Fannie Mae and Freddie Mac made the same claims up until the eve of the financial crisis, this is not exactly a compelling claim. And deposit insurance premiums were a money-maker for the federal government prior to the Savings & Loan crisis about 20 years ago.

It’s possible, of course, that the Ex-Im Bank avoids losses in the future, but that’s not the key point. The real issue is whether the allocation of capital should be distorted by government subsidies. I imagine the government could “profit” by giving sweetheart loans to selected big companies, which would allow those firms to undercut their competitors. Such a scheme might generate some revenue, but it would still undermine prosperity and foment corruption.

Last but not least, don’t forget the moral component. This is a debate about whether ordinary Americans should directly and indirectly pay for a program that enriches some of the biggest companies and richest shareholders in America.

This galls me so much that I’m motivated to create another narcissistic poster (adding to Mitchell’s Law and Mitchell’s Golden Rule), which I’ll call Mitchell’s Guide to an Ethical Bleeding Heart.

This is a formalized version of something I wrote when writing last year about a disgraceful welfare queen.

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An Indictment of Barack Obama’s Economic Record

In a recent post comparing Reaganomics and Obamanomics, I explained why I think Barack Obama’s policies have been hurting the economy.

In today’s New York Post, I do a full-scale indictment. Here are my bullet points.

* The unemployment rate is still above 8 percent, even though the White House promised it would drop to about 6 percent today if the stimulus was enacted.

* Several million fewer Americans have jobs today than five years ago.

* The poverty rate has jumped to more than 15 percent, with a record number of Americans living below the poverty level of income.

* According to the most recent data, median household income is lower than when the recession began.

* The burden of government spending remains high, and record levels of red ink are a symptom of that bloat in Washington.

* The threat of higher taxes is omnipresent, serving as a Sword of Damocles over the economy’s neck.

* Continued weakness in the housing and financial sectors reminds people that bailouts and intervention have left lots of problems unsolved.

I also explain that some of  the recent good news is in spite of the President’s statist policies.

* The recovery began just as Obama’s stimulus spending ended, thus confirming suspicions that lots of money was wasted as part of a process that hindered the economy’s growth.

* The job numbers only began to improve at the end of 2010, right as Republicans took control of the House and presumably ended Obama’s ability to further shift the nation’s course.

The final point is one deserving of elaboration. People in the private sector necessarily have to make educated guesses about the future economic environment. With this in mind, I think it’s quite reasonable – as I commented last month – to argue that the GOP takeover on Capitol Hill boosted the economy since entrepreneurs could feel more comfortable that the federal government wasn’t going to be imposing additional burdens.

This indictment of Obama’s dismal economic track record does not suggest, I should hasten to add, that Mitt Romney or Rick Santorum would be any better. Both of them seem closer to Bush than Reagan, so it’s not clear they would make any substantive changes in the burden of the federal government.

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A Simple Choice: Barack Obama or Rutherford Hayes?

Other than my ongoing adulation for Ronald Reagan, occasional praise for Calvin Coolidge, and one post about John F. Kennedy, I don’t have many nice things to say about previous Presidents.

But I feel the need to rise to the defense of Rutherford B. Hayes, who was mocked recently by the current President. This Mark Steyn column is a deliciously vicious commentary on Obama’s speech, so no need for me to delve into the details.

Instead, I want to jump on the bandwagon and produce some posters comparing the 19th President and the 44th President (if you’re not aware, posters of Pres. Hayes with self-created captions have been all over the Internet).

You won’t be surprised to learn that I’m focused on the policy differences between Hayes and Obama.

Most important, Hayes largely was true to the Founding Fathers’ vision of a limited central government. Government spending averaged only about 6 percent of economic output during his tenure (probably less, the data are not very robust, so I took the worst-case numbers) and America was blessedly free of the income tax.

Obama, on the other hand, is repeating all of Bush’s mistakes and making government an even bigger burden, and then compounding his error by pursuing class warfare tax policy.

So which President would you prefer, Hayes or Obama?

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How Many Bureaucrats Does It Take to Screw in a Light Bulb?

I posted the other day about the federal government giving $10 million of our tax dollars to a private company for developing an “affordable” light bulb that costs $50.

Now, thanks to the pen of Alexander Hoffman (creator of this gem), we have an excellent cartoon to commemorate this achievement.

Since we’re on this topic, I want to atone for an admission in my previous post (as noted by Seth, Bill, Dan, and Talon’s Point).

If you believe the calculations cited in the article from the post, it’s possible that this light bulb might save money in the long run. I should have noted that there are two possible interpretations of that data.

a) It’s wrong, which is what you’d expect from the crowd that routinely trumpets misleading data on everything from global warming to job creation.

b) It’s right, in which case there’s no need for a $10 million taxpayer handout since consumers will figure out that the bulbs save money.

Which is why, in the absence of war, I’ll relentlessly publicize this poster showing that more government is not the answer.

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The Tax System Explained in Beer

In my explanations of the Laffer Curve, I’ve shown evidence that high tax rates discourage productive behavior and boost the underground economy.

And if higher tax rates are sufficiently onerous, the resulting reductions in taxable income can completely offset the revenue-generating impact of higher tax rates. Indeed, this is what’s already happened with the “Snooki tax.”

And the same thing happens in reverse. If lower tax rates lead to a big enough increase in taxable income, the government actually collects more revenue – which is exactly what happened when the top tax rate was lowered in the 1980s.

I’ve also tried to explain, shifting from economics to philosophy, that confiscatory tax rates are unfair and immoral. And I’m glad to see that most Americans agree, with 75 percent of all people saying that nobody should ever face a tax rate of more than 30 percent.

Notwithstanding that polling data, though, I fear that many people don’t really understand the economics of taxation. So I’m happy to share this little story that periodically winds up in my inbox.

===============================================

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

• The first four men (the poorest) would pay nothing
• The fifth would pay $1
• The sixth would pay $3
• The seventh would pay $7
• The eighth would pay $12
• The ninth would pay $18
• The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

• And so the fifth man, like the first four, now paid nothing (100% saving).
• The sixth now paid $2 instead of $3 (33% saving).
• The seventh now paid $5 instead of $7 (28% saving).
• The eighth now paid $9 instead of $12 (25% saving).
• The ninth now paid $14 instead of $18 (22% saving).
• The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

===============================================

Very well done. Reminds me of the PC version of the story about the ant and the grasshopper, or perhaps the joke about using two cows to explain various economic and political systems.

And if you like those, you’ll appreciate this modern fable about bureaucracy, featuring an ant and a lion.

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The Ultimate TSA Takedown

I’ve commented on the TSA’s incompetence in previous posts.

I’ve also shared some horror stories about TSA abuse.

And I’ve posted many jokes about the Keystone Cops of airport security (for more laughs, see this, this, this, and this).

But this graphic, sent to me by Tony Shin, is a superb visual display of what the TSA really means.

Created by: OnlineCriminalJusticeDegree.com

All of this underscores why the private sector would do a better job.

Unfortunately, the Obama White House seems more interested in using airport security as an opportunity to expand the universe of unionized bureaucrats.

And to make matters worse, it’s very distressing that the ideologues in the Obama Administration are trying to reverse the very successful policy of arming pilots (many of whom are former military).

Remember, this poster sums up everything that happens in Washington.

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Great Cartoon Showing How Gun Control Endangers Innocent Lives

Remember the Fort Hood shootings, when the crazed Islamist killed a bunch of people? How many of us know that Major Hasan had the ability to kill so many people because of a government rule limiting gun possession on military bases? In other words, the government created a safe zone for the killer.

This is why “gun-free” zones are stupid at best and more likely to create dangerous environments. If you’re a vile, evil, or crazy person, that’s where you’ll go because nobody can shoot back.

This great Chuck Asay cartoon makes this point, celebrating a recent Colorado Court decision (you can see more of his cartoons here, here, here, here, and here).

The cartoon is superb, but I also recommend this post reviewing a Cato study on the use of guns in self defense. And these posts about Chicago and New York City will probably get you upset.

And here’s some great analysis of gun control by Stephen Hunter, and my NRA-TV interview on the importance of gun ownership if America suffers a European-style societal breakdown.

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