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Archive for March, 2012

I’ve written about the government’s war on consumer-friendly light bulbs (and also similar attacks on working toilets and washing machines that actually clean), so I’m generally not surprised by bureaucratic nonsense.

But even I’m shocked the federal government gave an affordability award for a light bulb that costs $50. I’m not making this up. Here’s a blurb from ABC News.

The U.S. government has awarded appliance-maker Philips $10 million for devising an “affordable” alternative to today’s standard 60-watt incandescent bulb. That standard bulb sells for around $1. The Philips alternative sells for $50. Of course, the award-winner is no ordinary bulb. It uses only one-sixth the energy of an incandescent. And it lasts 30,000 hours–about 30 times as long. In fact, if you don’t drop it, it may last 10 years or more. But only the U.S. Government (in this case, the Department of Energy) could view a $50 bulb as cheap.

Isn’t that wonderful? My tax dollars were used to reward a company that produced a light bulb I can’t afford.

Lisa Benson has a very good cartoon about this light bulb, as well as the less-than-shocking news that Obamacare will be more costly than originally forecast.

If you like Lisa’s work, there are some other good examples here and here.

Last but not least, I’m up in New York City for an investment funds conference about the Cayman Islands. Not a bad view from my window, though you need to click on the image to get a good idea of what I woke up to.

Too bad the state and the city are high-tax hell holes.

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I sometimes get accused of being too libertarian. One leftist blogger even said my views are insane.

So I decided to show my open-mindedness by finding a way to praise big government. It took a bit of head scratching, but I think I discovered something that is impressive, sort of.

As you can see in this chart prepared by the Republican Study Committee, the federal government is remarkably effective at wasting money with duplication and featherbedding.

But I don’t want to be chintzy in my praise of the federal government. If you look at the areas where there is the most duplication and waste, you’ll find programs for energy, housing, and education – all of which are areas where the Constitution does not authorize spending and intervention by the federal government. So let’s also praise the politicians in Washington for their agility in sidestepping the system set up by the Founding Fathers!

And let’s not be shy about crediting the political elite for shoulder-to-the-grindstone diligence. It takes a certain dedication – or something like that – to continue to pour money into these programs when all the evidence suggests federal involvement in education has undermined outcomes, that federal housing programs helped cause the financial crisis, and that federal energy programs have become cesspools for cronyism.

I know I’m guilty of sometime posting absurd examples of government stupidity. I hope today’s post shows that I’m capable of looking at the positive side of government.

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I’ve remarked before that Democrats are the evil party and Republicans are the stupid party. Well, if anyone needs additional proof about GOPers being clueless and tone deaf, exhibit A is Congressman Rick Crawford of Arkansas, who has decided to preemptively capitulate in favor of higher tax rates.

Here are the relevant details from a Politico story.

Freshman Republican Rep. Rick Crawford will propose a surtax on millionaires Thursday morning, a crack in the steadfast GOP opposition to extracting more money from the nation’s top earners. The Arkansas Republican will unveil the plan during a local television interview Thursday morning, and plans to introduce legislation when the House returns next week, according to sources familiar with his thinking. Crawford will propose the additional tax— expected to be north of 2.5 percent — on individual income over $1 million as part of a broader fiscal responsibility package.

I have no idea if Congressman Crawford is simply naive, unaware that tax-increase deals inevitably lead to higher spending and more red ink. Or perhaps he’s trying to become the kind of Republican who thinks he can advance his career by saying things that will earn him pats on the head from the establishment media.

But I do know that America’s fiscal problem is a government that is far too big. You don’t solve the problem with more taxes, just as you don’t cure alcoholics by giving them more to drink.

Congressman Crawford, though, wants to give away the keys to a liquor store without even asking for an insincere commitment for future sobriety in exchange. Indeed, the Congressman’s naiveté is so impressive that he is the first winner of the Charlie Brown Award for Vapidness and Gullibility.

There’s a rumor that he is sending former President George H.W. “read my lips” Bush to collect his award, but I’m unable to confirm at this point.

This new award is part of a series, with the “Bob Dole Award” having been announced earlier this year.

In the same vein, but recognizing concepts rather than people, we also have “Mitchell’s Law” and “Mitchell’s Golden Rule.”

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Early in 2010, I wrote about a reprehensible IRS plan to create a cartel in the tax preparation industry, which would screw small firms and entrepreneurs to help line the pockets of big companies such as H&R Block.

And, earlier this year, I specifically criticized the IRS Commissioner for moving ahead with this scheme, which I also suspect is motivated by a desire on the part of the IRS to have a group of captive tax preparers who will be timid about protecting the interests of taxpayers.

With thuggish moves like that, no wonder the IRS wants to flush $15 million of our tax dollars down the toilet in a futile effort to improve its public image.

But there is some good news. The Institute for Justice has filed suit against the IRS for its disgusting behavior. This video explains.

One point from the video that should be emphasized is that the IRS is taking this step without any congressional authorization or instruction. But if you read this link about an IRS regulation that would force American banks to put foreign law above US law, you’ll know that the tax agency is capable of rogue behavior.

By the way, the Institute for Justice is a great organization that effectively fights for individual rights. Check out this IJ video on asset forfeiture laws (which basically enable stealing by the government).

And since we’re on the topic of theft by government, this IJ video on property rights, eminent domain, and the Kelo decision also is very much worth watching.

P.S. I’m not interested in protecting the interests of the tax preparation industry. Indeed, I want a simple and fair flat tax, which would decimate all tax preparation firms. But I don’t want the thugs at the IRS to decide which firms are allowed to operate.

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Back in 2009, I got very excited when President Obama stated, “No business wants to invest in a place where the government skims 20 percent off the top.”

Did that mean he wanted to reduce America’s punitive and anti-competitive corporate tax burden? Or maybe even fix the entire tax code and install a simple and fair flat tax?

Unfortunately, it turns out the President was speaking to the Parliament of Ghana and apparently his recommendation for good policy didn’t apply inside the United States.

With this in mind, I’m not sure whether I should get too excited about his remarks yesterday that it is better to “let the market work on its own.”

Here are a few reasons why I am less than enthusiastic about this remarkable statement.

The President was not talking about solving the problem of government-caused third-party payer in health care.

Nor was he urging the elimination of the culture of bailouts and cronyism in the financial services sector.

And he obviously wasn’t saying it was time to end the government’s failed school monopoly.

"Free market for thee, not for me"

Instead, when he said that we should “let the market work on its own,” he was referring to the very narrow issue of China’s production and distribution of certain minerals.

In other words, if presidential statements came with asterisks, the fine print at the bottom of the page would read “offer good in China only.”

However, a journey of a thousand miles begins with a first step. So if he thinks it’s a good idea to reduce government intervention in China, maybe someday he will apply the same wisdom to the American economy.

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In previous posts, I’ve used data from the Minneapolis Federal Reserve Bank to show how Obamanomics is leading to very weak results, particularly compared to the economic boom triggered by Reaganomics.

So you can imagine how I was anxious to participate when U.S. News & World Report asked me to contribute my two cents to a debate panel on the question: “Is Obama Turning the Economy Around?

Here’s part of what I wrote.

…we can hold the president at least partially responsible for an extraordinarily weak and slow recovery. It’s been nearly three years since the recession officially ended in June 2009, yet jobs are still well below their pre-recession levels. And overall economic output, or gross domestic product, has just now finally gotten back to where it was when the downturn began. This is an anemic record. Especially since an economy normally enjoys a strong bounce when coming out of a deep recession. The problem is that Obama has tried all the wrong policies. He tried a big-spending Keynesian package that was supposed to be a “stimulus,” but that’s the same failed approach that Bush tried in 2008, the same failed approach that Japan tried in the 1990s, and the same failed approach that Hoover and Roosevelt tried in the 1930s. Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy. The president also has continuously expanded subsidies for unemployment, even though academic scholars (and even left-wing economists) all agree that such policies cause more joblessness. And now he’s demanding higher tax rates, holding a Sword of Damocles over entrepreneurs, investors, and small business owners.

By the way, you can impact this debate by voting to approve or disapprove of the various submissions. Just click here.

I did come out ahead (at least in online voting) in previous U.S. News & World Report debates, one on the desirability of double taxation and the other on the fiscal crisis in Europe and the United States.

I’d hate for that winning streak to come to an end.

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I’ve always admired the English sense of humor, and this post on terrorism alerts is a good example.

In that spirit, here’s something that just arrived in my inbox, originally from this website.

For your reading enjoyment, a financial glossary for modern times, including in many cases an example of how the term should be used.

BANK, n. Bottomless cavity in the ground that sucks in money and the unwary.
I had quite a bit of money but then I put it in the bank.

BOND, n. A profitless contrivance used for catching the gullible or feeble-minded.
That pension fund is 100% in bonds now.

BROKER, adj. A comparative descriptive state for a client of a Wall Street bank.
He didn’t exactly have a lot of money before he started dealing with Goldman Sachs. Now he’s even broker.

BUBBLE, n. Fundamental prerequisite for a functioning Anglo-Saxon economy.
We need a new bubble to replace the ones we had in dotcom and property.

CENTRAL BANK, n. Lobbyist for commercial banks well versed in alchemy.

CURRENCY, n. Largely intangible substance with an inherent property that tends to instantaneous evaporation, the destruction of life and the permanent impairment of wealth.
I had money once but then I exchanged it for currency in a moment of madness.

DEFAULT, n. Semi-mythical celestial occurrence that passes by Earth every 76 years.
I was worried for a second about that Greek default, but I realise there’s nothing to see now and all is well.

FEDERAL RESERVE, n. A wholly owned subsidiary of Goldman Sachs.
The Federal Reserve voted to give a few more billion dollars to Wall Street.

GREECE, n. An undesirable or unfortunate happening that occurs unintentionally but results in harm, injury, damage and colossal loss of wealth. And profits for Goldman Sachs.
Did you see Greece ? Sheesh.

HORLICK, n. Progressive and insufficiently appreciated investment visionary.

HOUSE, n. In most countries, simply a place to live. In Britain, a theoretically infinite source of perpetual tax revenue for deluded Lib Dems.¹
(¹This is tautological. – Ed.)

INVESTOR, n. Plucky protagonist admired for brave deeds and quixotic struggling who is about to get shafted by Wall Street interests.
I was an investor in euro zone sovereign bonds but then everything went Greek.

JAPAN, n. Where hopes of profit go to die.

KEYNES, n. Slang: Vulgar. Disparaging and offensive.
That joker Posen is a complete Keynes.

POLITICIAN, n. Someone better informed than you about how to spend your money.

RATINGS AGENCY, n. A professional entertainer who amuses by relating absurd and fantastical tales.
That ratings agency’s credit assessment was so funny, I had to change my trousers.

RESTRUCTURING, n. Statutory rape.
Those bondholders are undergoing a voluntary restructuring – you might even call it a ‘credit event’.

ROGUE TRADER, n. Unprofitable proprietary trader. (Hat-tip to Killian Connolly.)

SOCIETY, n. The process whereby wealth is diverted from taxpayers to banks.

TAXPAYER, n. Simple-minded dolt too foolish to be working for the government.

US GOVERNMENT, n. Another wholly owned subsidiary of Goldman Sachs.
We seem to be running out of Goldman Sachs alumni here in the Treasury. No, wait, we’ve still got hundreds of ‘em.

VINCE CABLE, n. (No longer in technical use; considered offensive) a person of the lowest order in a former and discarded classification of mental retardation.
Don’t be a Vince Cable – get down off that wardrobe and come and eat your tea!

Here’s one last joke that I assume was concocted by someone in England.

Also from the U.K., here are two youtube videos, one on the “end of the world in 3 minutes” (might be Australian, but close enough) and the other on the “subprime crisis.”

P.S. I have no idea who or what a “Horlick” is, but I can give you this clue and this clue about Vince Cable.

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Welcome, Instapundit readers. This school choice video shows the best way of dealing with the problems described in this post (though, as Walter Williams explains, that’s only part of the answer).

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If you care about helping the less fortunate succeed, I’m commenting today on a Thomas Sowell column that will make you sad and angry. It is a story about how powerless and disadvantaged people are being hurt to advance the political interests of some elitists.

Here is the clever way he starts the column. I particularly like the reference to Social Security as a Ponzi scheme, which reminds me of this cartoon.

There have been many frauds of historic proportions — for example, the financial pyramid scheme for which Charles Ponzi was sent to prison in the 1920s, and for which Franklin D. Roosevelt was praised in the 1930s, when he called it Social Security. In our own times, Bernie Madoff’s hoax has made headlines. But the biggest hoax of the past two generations is still going strong — namely, the hoax that statistical differences in outcomes for different groups are due to the way other people treat those groups.

Then he gets to the meat of his topic.

The latest example of this hoax is the joint crusade of the Department of Education and the Department of Justice against schools that discipline black males more often than other students. According to Secretary of Education Arne Duncan, this disparity in punishment violates the “promise” of “equity.” Just who made this promise remains unclear, and why equity should mean equal outcomes despite differences in behavior is even more unclear. This crusade by Attorney General Eric Holder and Secretary of Education Arne Duncan is only the latest in a long line of fraudulent arguments based on statistics. If black males get punished more often than Asian American females, does that mean that it is somebody else’s fault? That it is impossible that black males are behaving differently from Asian American females? Nobody in his right mind believes that. But that is the unspoken premise, without which the punishment statistics prove nothing about “equity.”

Professor Sowell contemplates the motive for this Obama Administration initiative.

What is the purpose or effect of this whole exercise by the Department of Education and the Department of Justice? To help black students or to secure the black vote in an election year by seeming to be coming to the rescue of blacks from white oppression? Among the many serious problems of ghetto schools is the legal difficulty of getting rid of disruptive hoodlums, a mere handful of whom can be enough to destroy the education of a far larger number of other black students — and with it destroy their chances for a better life.

Sowell elaborates further, pulling no punches.

Secretary Duncan and Attorney General Holder want to play the race card in an election year, at the expense of the education of black students. Make no mistake about it, the black students who go to school to get an education are the main victims of the classroom disrupters whom Duncan and Holder are trying to protect. What they are more fundamentally trying to protect are the black votes which are essential for Democrats. For that, blacks must be constantly depicted as under siege from whites, so that Democrats can be seen as their rescuers. Promoting paranoia translates into votes. It is a very cynical political game, despite all the lofty rhetoric used to disguise it. Whether the current generation of black students get a decent education is infinitely more important than whether the current generation of Democratic politicians hang on to their jobs.

Very powerful stuff. And it should be disturbing as well.

I’ve already commented on the implicit racism in the minimum wage law and the reprehensible decision by leftists to put the interests of teacher unions ahead of the interests of black students.

Now we can add something else to the list.

If you like Professor Sowell’s insights, I’ve highlighted more of his work here, here, here, here, here, here, here, here, here, here, here, here, and here. And you can see him in action here. A truly gifted public intellectual and a (thankfully) prolific writer.

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Actually, I’m not sure this is humorous. Whether we’re looking at ethanol, Solyndra, or other green-energy scams that promote corruption and undermine the economy, this is not a laughing matter.

After all, we’re the taxpayers and consumers who are pushing this turkey up the hill.

I’m adding Lisa Benson to my list of good cartoonists. Her monopoly cartoon at this link (the second of the two cartoons) is also disturbingly accurate.

And if you like humor about energy policy, check out these three cartoons.

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Last year, while lounging on the beach in the Caribbean…oops, I mean while doing off-site research, I developed the first iteration of a rule to describe how fiscal policy should operate.

Good fiscal policy exists when the private sector grows faster than the public sector, while fiscal ruin is inevitable if government spending grows faster than the productive part of the economy.

My motivation was to help people understand that America’s fiscal problem is excessive government spending, not red ink. Deficits and debt are undesirable, of course, but they are best understood as symptoms. The underlying disease is a bloated federal budget that diverts resources from the productive sector of the economy and subsidizes dependency.

But after getting feedback, I realized that the rule was too wordy. So, after a bit of tweaking and market testing, I came up with “Mitchell’s Golden Rule.”

The purpose of this rule isn’t to make me famous, like Art Laffer with the Laffer Curve. Instead, I’m hoping that this simple construct will help policymakers focus on the most important variable.

Countries that follow the Golden Rule, such as Hong Kong and Singapore, enjoy long-run prosperity. But the Golden Rule also shows how nations in fiscal trouble can get back on the right track with periods of spending restraint, as shown in this video featuring Canada, Slovakia, New Zealand, and Ireland. And this video shows how the United States made progress during both the Reagan years and the Clinton years.

Governments that take the opposite approach, however, eventually wind up in fiscal chaos. Just look at the data from Greece. Or other crumbling welfare states.

All this discussion about how to measure good fiscal policy may seem esoteric, but it provides the foundation to understand why Senator Rand Paul’s new budget proposal is so admirable. Joined by Senators Jim DeMint and Mike Lee, Senator Paul has a comprehensive proposal to curtail big government.

1. An immediate cut of $500 billion of wasteful spending.

2. A five-year freeze on total government spending.

3. Limiting average annual spending growth to 2.2 percent over the next ten years.

Last but not least, taxpayers get a big reward from Senator Paul’s budget with a simple and fair 17 percent flat tax. This pro-growth policy is desperately needed to boost the economy and improve competitiveness. And while a flat tax theoretically could be enacted without accompanying spending restraint, it’s far more likely to happen if lawmakers show they’re serious about restraining the federal behemoth.

The accompany chart shows the 10-year projections for spending and revenue if Senator Paul’s budget is enacted.

A few additional thoughts. Senator Paul and his colleagues are highlighting the fact that the plan generates a balanced budget in just five years. That’s a good outcome, but it should be a secondary selling point. All the good results in the plan – including the reduction in red ink and the flat tax – are made possible because the overall burden of federal spending is lowered. That should be the main selling point.

This doesn’t mean that Senator Paul is in any danger of winning a Bob Dole Award, but it’s nonetheless unfortunate since a focus on deficits gives an opening for leftists to claim that they can achieve the same outcome with tax increases. This is why sponsors should focus on the importance of spending restraint, and then add explanations of how this eliminates red ink. This is the approach I took in this video showing how limits on the growth of spending would lead to a balanced budget.

Also, I have two minor disagreements with Senator Paul’s budget proposal.

1. He does not modernize Social Security system with personal retirement accounts. He does have reforms to rein in the program’s long-run outlays, thus addressing the system’s fiscal crisis. But this generally means workers will pay more and get less, thus exacerbating the system’s other crisis, which is the anemic ratio of benefits received compared to taxes paid.

2. He retains the home mortgage interest deduction in the flat tax plan. This may sound like nit-picking since I should be happy to get 99 percent of what I want, but I worry that allowing one deduction will pave the way for more deductions. Remember the old advertisement by Lay’s potato chips (at least I think) with the saying that “I bet you can’t eat just one”? Well, that’s how politicians would be with a flat tax. Once they allowed one horse out of the barn (I realize I’m mixing my metaphors here, but you get the point), it would be just a matter of time before the entire herd escaped.

But I’m not here to make the perfect the enemy of the very, very good. I wrote a lot last year about the Ryan budget, which was quite an achievement (particularly since it actually passed the House).

The Paul budget is the Ryan budget, but even better.

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Continuing my tradition of periodically sharing the good political jokes from the late-night talk show hosts (you can enjoy previous editions by clicking here, hereherehereherehereherehereherehere, and here), you’ll find below the latest ones that passed the got-me-to-laugh test.

Jay Leno

  • While visiting a GM plant President Obama pledged to buy a Chevy Volt after his presidency ends in five years. Today Mitt Romney said, “Make it one year and I’ll buy it for you.”
  • I think Romney’s a good man but he just doesn’t inspire people. Even his new campaign slogan: “I guess you’re stuck with me.”
  • Not a good day for Rick Santorum. I haven’t seen him this depressed since they invented the birth control pill.
  • It’s leap day tomorrow. This is God’s way of punishing us by making the election year even longer.
  • President Obama talked about rising gas prices today. He focused on the positive things his administration has done when it comes to energy prices. So, in other words, it was the shortest speech he’s ever given.
  • President Obama is starting to get a little overconfident. In an interview with Univision radio, he said, “My presidency isn’t over yet, and I’ve still got five more years.” Even his predictions are over budget.
  • I saw the worst reality show last night. Have you seen this one? It’s called “The Republican Debate.”
  • Rick Santorum is claiming that Mitt Romney and Ron Paul have teamed up against him. Which is kind of ironic — that Santorum can be brought down by two men forming a civil union.
  • Santorum says that Satan has his sights set on the United States of America. And today Satan said he tries to avoid politics because it makes him feel dirty.
  • Italian police seized $6 trillion worth of fake, worthless U.S. bonds. Let that be a lesson. If you want to try and sell worthless financial instruments, you’d better be Treasury Secretary Timothy Geithner. That’s the only way you’re going to get away with it.

David Letterman

  • It’s tax time. I switched to a new tax guy and I think he’s fantastic. He wants me to establish my full-time residence in Syria.
  • Every time I drive up to my new tax guy’s office, he says the same thing. “You weren’t tailed, were you?”
  • Today is the 100th anniversary of the Oreo cookie. For New Jersey Governor Chris Christie, it’s a holy day.

Conan

  • A new study found that government employees are the happiest workers. The study was not conducted at the DMV.
  • It’s being reported that Snooki is pregnant. When Rick Santorum heard the news, he immediately came out in favor of birth control.
  • Mitt Romney has accused Rick Santorum of saying outrageous things just so Santorum can appeal to the most extreme voters. Santorum denied this and said, “That’s exactly the kind of misrepresentation I’d expect from gay abortion doctor Mitt Romney.”
  • As of today, Rick Santorum will be assigned Secret Service agents. This is the first time Santorum has agreed to use any kind of protection.

Jimmy Kimmel

  • Kid Rock gave Mitt Romney an endorsement. He also endorsed porn, Jack Daniels, and hepatitis C.

Jimmy Fallon

  • Mitt Romney accused the other GOP candidates of pandering to voters to get support. Romney was like, “I would never pander to voters. I mean, unless you guys want me to.”

Craig Ferguson

  • President Obama is trying to come up with a new campaign slogan that would replace “hope and change.” He’s thinking of going with “I am not Mitt Romney.”
  • There are rumors that Mitt Romney will ask Ron Paul to be his running mate. He was originally going to reach out to Rick Santorum. But Rick’s not crazy about other dudes reaching out for him.
  • Everyone throws beads on Mardi Gras. The beads are paid for by local businessmen who ride on elaborate floats and toss little trinkets to the desperate masses in the streets. Which is also Mitt Romney’s economic plan.
  • People should stop believing bizarre stories about U.S. presidents. George Washington did not have wooden teeth. Abe Lincoln did not write the Gettysburg address on an envelope. And President Obama wasn’t born in Kenya. It was Tanzania.
  • Obama was going to be born in Kenya but it wasn’t socialist enough.

I can’t resist one parting shot, regarding the Conan joke about happy government workers. Of course they’re happy, since their compensation is twice as high as people in the productive sector of the economy.

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I like to think people in the United States still believe in liberty, and I’ve cited some polling data in support of American Exceptionalism.

And it seems like that philosophical belief in individualism and limited government sometimes has an impact in the polling booth. According to a recent study, Obamacare was poison for Democrats in 2010.

Here’s an excerpt from a report in The Hill.

Voting for President Obama’s healthcare reform law cost Democratic incumbents 5.8 percentage points of support at the polls in 2010, according to a new study in the journal American Politics Research. The study helps explain why Democrats lost 66 House seats, significantly more than the median academic forecast of 44 to 45 seats, study co-author Brendan Nyhan of Dartmouth College writes on his blog. Democrats in the lead-up to the elections took a number of tough votes — notably on the Wall Street bailout, the stimulus and cap-and-trade — but none was as unpopular as their support for the healthcare reform law. “We show that the roll-call effect on vote share was driven by healthcare reform. Democratic incumbents who voted yes performed significantly worse than those who did not,” Nyhan writes. “We then provide simulation evidence suggesting that Democrats would win approximately 25 more seats if those in competitive districts had voted no, which accounts for the gap between the academic forecasts and the observed outcomes.”

As with any statistical study, you should take the results with a big grain of salt. That caveat aside, the conclusions of the study seem quite plausible. And since I’m not a fan of Obamacare and think the law will be much more costly than advertised, I’m not shedding any tears for politicians who lost their jobs after voting for the new entitlement.

But the 2010 election may have been a Pyrrhic victory – a short-run victory that paves the way for long-run defeat.

I think the left made a clever calculation that losses in the last cycle would be an acceptable price to get more people dependent on the federal government. And once people have to rely on government for something like healthcare, they are more likely to vote for the party that promises to make government bigger.

One of the most-viewed posts on this blog is the set of cartoons drawn by a former Cato intern, one showing how the welfare state begins and the other showing how it ends.

This is why Obamacare – and the rest of the entitlement state – is so worrisome. If more and more Americans decide to ride in the wagon of government dependency, it will be less and less likely that those people will vote for candidates who want to restrain government.

Europe is a good example. The supposedly “conservative” leaders of major nations such as SpainGermanyFrance, and the United Kingdom are a bunch of big-government statists.

That being said, I’m not a complete pessimist. The Medicaid and Medicare reforms in last year’s Ryan budget would largely solve the problem, especially since any Obamacare subsidies presumably could be eliminated as part of such reforms.

I’m just not holding my breath that we’ll get real entitlement reform in the next four years.

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I’ve periodically written about the overall cost of regulation, and I’ve also highlighted the onerous costs of proposals such as the Dodd-Frank bailout bill.

This blurb from the IFC Review may give readers a sense of the regulatory onslaught facing financial institutions.

Banks and other financial services firms had to deal with 60 regulatory changes each working day during 2011, according to a report from Thomson Reuters Governance, Risk & Compliance, reports City AM. Regulators around the world announced 14,215 changes in 2011, a 16 per cent increase from the 12,179 announcements in 2010. The report shows that the majority of regulatory activity, 57 per cent, came from the US… Scott McCleskey, head of financial services regulation at the GRC unit, said: “This growth in activity also has an effect on the level of compliance spending leaving less to lend, invest, and do the other core activities which will be necessary to revive the global economy.”

Wow, an average of 60 regulations every single day. Great for lobbyists and politicians. Not so good for competitiveness and prosperity.

Now let’s touch on just one specific part of the regulatory burden. Banks and other financial firms must deal with a costly array of laws and regulations as part of the government’s war on money laundering. This video explains the issue.

Now let’s consider whether we’re getting any bang for the buck. We know anti-money laundering (AML) laws impose very high costs and make it difficult for many poor people to get banking services.

But are there some offsetting benefits? Unfortunately, the answer seems to be no. Professor Jason Sharman explains, starting with an explanation of the scope and cost of AML policies.

It is now just over 20 years since the first international anti-money agreements were concluded….Since then, the monitoring and implementation of AML standards have morphed into a global industry. …A vast array of financial institutions, from banks to brokers, insurance firms to casinos, money remitters to hedge funds, have now been conscripted into monitoring their clients for signs of suspicious financial activity. All this has imposed substantial costs on governments, private financial firms, and, indirectly, consumers, with the burden being especially significant for International Financial Centres.

He then raises a very important question, but one that everyone else seems to ignore.

…it is disconcerting how seldom the most obvious questions about this system are asked. First amongst these is whether AML standards actually work. That is to say, is there any less money laundered now than there was 20 years ago?  Is there any less predicate crime that gives rise to these dirty funds in the first place? Despite all the evaluations performed by the FATF, other international organisations, national governments and the army of private AML experts that has grown up, it is striking that these sort of first-order questions are almost never asked, let alone answered.

Given the incompetence of government, you won’t be shocked to learn that the bureaucrats view the laws as an excuse for empire building and bloat.

Surprisingly, however, one can read through thousands of pages of FATF reports, covering everything from football to free-trade zones, without finding much, if any, attention devoted to these measures. Instead, the international surveillance and monitoring system that judges almost every country to see whether they have ‘the right stuff’ in AML terms has tended to foster a bureaucratic game of goal displacement: means to an end have become ends in themselves.

And what about stopping crime?

The most careful studies of effectiveness (both in absolute terms and relative to the cost) have been done by those outside the system, for example scholars like Peter Reuter, Edwin Truman, Jackie Harvey and Michael Levi. Each of these observers notes the mismatch whereby we have an incredibly extensive and intrusive policy apparatus, but very little knowledge about the results produced. On the basis of the fragmentary evidence that is available, however, it is hard to see any impact that AML rules have made on the incidence of crime.  The general conclusion is that the expansion of the AML regime owes more to a political imperative to ‘do something’ in response to hot-button issues like crime or terrorism, rather than any track record of success.

Remarkable. Billions upon billions of regulatory costs. The immeasurable loss of privacy because of government-mandated snooping and spying. Yet all for naught.

And now the statists are even talking about getting rid of the $100 bill, making life even more inconvenient.

Maybe the answer is less regulation? Maybe the answer is that politicians and bureaucrats should do cost-benefit tests? But those types of rules would mean less government and more freedom, so don’t hold your breath.

P.S. This map shows you the countries considered most at risk of dirty money, which should make you wonder why anyone is foolish enough to think that higher costs on American banks will make a difference.

P.P.S. You probably didn’t realize there was such a thing as money laundering humor, but you’ll enjoy this joke featuring President Obama.

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I’ve already posted some humor about Sandra Fluke and the Obama Administration’s contraception mandate, including this set of four cartoons and posters.

But the folks at Reason TV always do things worth sharing, so here’s a video about a cough drop mandate. As you can see, a healthy dose of sarcasm.

By the way, if you want something more serious about the issue, including a discussion of third-party payer and the proper role of insurance, check out the excellent analysis of Prof. Cochrane in this post.

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If you click here, you’ll see the best poster ever produced on gun control. It shows the various tyrants that have disarmed citizens as part of their oppressive rule.

But it’s missing one face, Hugo Chavez, the hopefully-soon-to-die dictator of Venezuela.

Here’s the key part of an excellent column for Business Insider.

In recent remarks to the Latin American Herald Tribune, Venezuelan Interior and Justice Minister Tareck El Aissami announced that the government will begin suspending firearm importation, effective this month. Furthermore, local gunsmiths will no longer be able to market or sell firearms and ammunition. According to El Aissami, “As of March, every last gun shop remaining in Venezuela – and there are less than 80 – should be closed. That is to say, in Venezuela, the perverse chapter of the commercialization of firearms and munitions is over.”

If you support the 2nd Amendment, you’ll enjoy these gun control posters (here,hereherehere, and here). And here are some amusing images of t-shirts and bumper stickers on gun control (herehere, and here). In addition, I’ve posted three different videos on gun control (herehere, and here). And here’s my interview on NRA-TV. Last but not least, you’ll like this powerpoint presentation on Firearms and the Second Amendment.

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Even though I’m a dull and straight-laced guy, that doesn’t mean I want the government to pester, harass, and persecute people for engaging in victimless crimes that I find distasteful.

Especially when interventionism and prohibition doesn’t work. To be blunt, the War on Drugs has been a costly failure (much like the War on Poverty).

Fortunately, it appears that more and more people are coming to the same conclusion – and many of them aren’t libertarians. For instance, I recently cited Mona Charen’s wise comments about the issue.

Even more remarkable are the statements from one of America’s leading evangelicals, Pat Robertson.

Here’s the key sections from an Associated Press report.

Religious broadcaster Pat Robertson says marijuana should be legalized and treated like alcohol because the government’s war on drugs has failed. The outspoken evangelical Christian and host of “The 700 Club” on the Virginia Beach-based Christian Broadcasting Network he founded said the war on drugs is costing taxpayers billions of dollars. He said people should not be sent to prison for marijuana possession. The 81-year-old first became a self-proclaimed “hero of the hippie culture” in 2010 when he called for ending mandatory prison sentences for marijuana possession convictions. “I just think it’s shocking how many of these young people wind up in prison and they get turned into hardcore criminals because they had a possession of a very small amount of a controlled substance,” Robertson said on his show March 1. “The whole thing is crazy. We’ve said, ‘Well, we’re conservatives, we’re tough on crime.’ That’s baloney.” …Robertson said he “absolutely” supports ballot measures in Colorado and Washington state that would allow people older than 21 to possess a small amount of marijuana and allow for commercial pot sales. Both measures, if passed by voters, would place the states at odds with federal law, which bans marijuana use of all kinds. While he supports the measures, Robertson said he would not campaign for them and was “not encouraging people to use narcotics in any way, shape or form.” “I’m not a crusader,” he said. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think: this war on drugs just hasn’t succeeded.”

Wow, not only for legalization, but “absolutely” supports ballot initiatives in Colorado and Washington. Kudos to Rev. Robertson for recognizing the human cost of the Drug War. As the old saying goes, not everything immoral should be illegal.

Here’s five minutes from Gov. Gary Johnson on the issue.

Very well stated. Legalization is common-sense conservatism. Too bad Gary Johnson didn’t get more attention early in the GOP race.

The Drug War doesn’t work, and it is the ultimate example of Mitchell’s Law since it has spawned bad policies such as asset forfeiture and anti-money laundering rules.

Time to “just say no” to big government.

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Last year, I narrated this video making the case for Medicaid reform. The proposal is very simple: Replicate the success of the welfare reform of the 1990s by block granting the program and giving states full autonomy to figure out how best to provide health care to low-income people.

Medicaid reform is critical to save the nation from Greek-style fiscal collapse, especially if it is part of a comprehensive modernization of entitlement programs, and I was very impressed that the House of Representatives actually adopted a version of this reform last year as part of the Ryan budget.

But with the Senate refusing to enact a budget and Obama opposed to reform, the proposal languished.

In this case, though, languish is not the same as die. Led by Congressman Rokita of Indiana, reformers on Capitol Hill have introduced a new proposal to block grant Medicaid.

As you can see from the chart they prepared (click to enlarge), the proposal will cap outlays for the block grant at the current level of Medicaid spending. This policy will save $1.8 trillion over the next 10 years, when compared to leaving the program on autopilot.

Writing about the proposal, Emily Miller of the Washington Times opined.

At the state level, Medicaid is the biggest expenditure, growing at a faster pace than even Medicare. Making matters worse, Obamacare mandates will increase the Medicaid rolls by an estimated 17 million to 25 million people. In order to give states flexibility to deal with this, the House rank-and-file GOP would eliminate the one-size-fits-all mandates for the federal funds. This also would provide better care.

The Washington Examiner also is impressed by the new proposal.

Medicaid represents a federal mandate that forces state governments to shoulder as much as half of the program’s annual costs but allows them virtually no say in how it is run. Even if Washington permitted the states some flexibility, there is little incentive for them to figure out more efficient ways to operate Medicaid, since the federal subsidy is paid with only incidental concern about performance. And thanks to Obamacare, unless Medicaid is reformed before 2014, the burdens it imposes on the states will only grow more severe. That’s when Obamacare requires state governments to spend an estimated $118 billion more of their own money in order to extend Medicaid coverage to an additional 17 million to 25 million people. Four House Republicans want to change all of that by converting the federal government’s share of Medicaid and Children’s Health Insurance Program funding into a single block grant with none of the strings that now prevent state officials from improving the way the program is managed.

These are all good points. The bottom line is that failure to reform entitlements guarantees that politicians eventually will impose a value-added tax. Or they’ll push red ink to unsustainable levels. Actually, based on what’s happened in Europe, where higher taxes simply meant higher spending and more debt, we’ll get both.

Simply stated, Medicaid reform is good health policy and good fiscal policy.

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Europe is in shambles. Nations are going bankrupt. There are riots in the streets. So you would guess that the folks at the European Commission are focused on some big issues.

But you would be wrong.

The eurocrats in Brussels have much bigger fish to fry. They’re addressing the unmitigated horror of inadequate female representation in corporate boardrooms and contemplating continent-wide quotas.

I’m not kidding. Here are some excerpts from the New York Times report.

Frustrated that her previous efforts to get more women into the top echelons of European business have not yielded stronger results, Viviane Reding, the senior justice official in the European Union, was to announce a new effort Monday that could result in legislation requiring that women occupy up to 60 percent of the seats on corporate boards. …E.U.-wide rules were now needed, she said. “Personally, I don’t like quotas,” Ms. Reding said. “But I like what the quotas do. Quotas open the way to equality and they break through the glass ceiling.” Countries that have quotas “bring the results,” she said. Ms. Reding has long campaigned for major changes in European boardrooms and had given industry “a last chance” to improve its record on placing women in top management.

Isn’t that nice. She doesn’t like quotas, but she has no choice because she gave industry a “last chance” to engage in gender bean counting and they didn’t comply.

I wonder if it’s ever occurred to this über-bureaucrat that it’s not her job to tell private companies who to hire, fire, or promote?

"Nice business you have, shame if anything happened to it"

As an aside, the New York Times manages to demonstrate its bias by directly implying that “genuine equality” only exists if boardrooms have equal numbers of men and women.

Having now concluded that self-regulation has failed, Ms. Reding has set her sights on legislation that could, if enacted, drastically speed up a revolution in the position of women in the workplace that began many decades ago but has so far failed to deliver genuine equality in many areas of business.

Has it ever occurred to the reporter that “genuine equality” exists when everyone has an equal chance and government doesn’t put a thumb on the scale? But regardless of what he thinks, doesn’t good journalism mean keeping his opinions to himself?

Maybe I’m just too old fashioned.

Let’s return to the meat of the story and the actions of Ms. Reding. In this passage, I like how she blames “society” because companies didn’t kow-tow to her voluntary suggestions.

In the announcement to be made Monday, Ms. Reding will call for a new round of consultations with governments, trade unions, companies and civil groups. The move comes a year after she called on companies to take voluntary steps to increase the representation of women on boards to 30 percent by 2015 and to 40 percent by 2020, by replacing departing male directors. …Ms. Reding said that the severe economic downturn in Europe that has pressured companies to focus on their bottom lines was not responsible for the failure of her voluntary initiative. “It is really a question of society,” she said.

The story continues with discussion of the onerous plans being concocted by Ms. über-bureaucrat.

Ms. Reding said that the consultations, beginning Monday and ending on May 28, would determine the proportion of women that should be on boards under any E.U.-wide legislation; whether quotas should apply to state-owned companies as well as publicly listed ones; whether both executive and nonexecutive boards should be covered by the rules; and what sanctions should apply to companies that do not meet the objectives, and if there are circumstances where exceptions are necessary.

Unfortunately, the private sector in Europe has the same cringing approach as their counterparts in the United States. Instead of boldly saying that corporate boards are a private matter for shareholders to decide, representatives from big companies accept the intrusion and merely complain about implementation.

…the European Round Table of Industrialists, a forum for the chairmen and chief executives of major multinational companies, has warned that big divergences among sectors and national traditions meant any measures should remain voluntary. “Societal changes take time,” said Carlo Bozotti, the chief executive of STMicroelectronics, a semiconductor company, and the head of a group at the Round Table looking at the issue. “There is no one-size-fits-all solution for industrial companies from multiple sectors, of various structures, and from diverse cultural backgrounds,” he said.

The article concludes with an assertion that “gender-diverse” boardrooms lead to better economic performance. That may very well be true, but it suggests that shareholders are deliberately sacrificing income and wealth in order to retain something akin to an old boys’ network. That seems rather implausible, to say the least.

There is plentiful evidence from business consulting firms including McKinsey & Co., and from Catalyst, a nonprofit research group, that companies with gender-diverse management teams experience higher growth in their share prices, better-than-average operating profits, and outperform their rivals in terms of sales, return on investment capital and return on equity, according to the report. That research showed that women asked more questions and made fewer reckless decisions, proving that “women are not a cost, women are a benefit,” Ms. Reding said.

I want to close with a semi-optimistic note. As crazy as it is for Ms. Reding to try to dictate the number of men and women in corporate boardrooms, at least she’s not complaining about discrimination based on looks or height and trying to get government involved in those areas. At least, not yet.

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In a grand Washington tradition, I periodically make imperious demands. In the past year or two, I’ve issued the following ultimatums to the GOP.

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

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 don’t actually expect any politicians to pay attention when I make these demands, of course, but I am highlighting issues that send a signal about whether Republicans actually learned any lessons after getting shellacked in 2006 and 2008.

So far, they’re holding reasonably firm on the tax issue. They don’t have control over the CBO and JCT thanks to Harry Reid, so we’ll give them a pass on that topic. And we’ll see later this year whether they agree to squander another $100 million on the OECD.

Well, here’s another test to see whether the GOP is on the side of taxpayers or the establishment. The Obama Administration has agreed that the fiscal pyromaniacs at the International Monetary Fun should have more money and power to provide more and bigger bailouts.

Here are some relevant parts of a Washington Post story.

…a brewing election year fight with congressional Republicans…could restrict the IMF’s finances at a time when agency officials say they need a substantial boost to protect the world economy. The dispute centers on Republican opposition to increasing the United States’ financial contributions to the agency, reflecting anger over IMF rescue programs in Europe that some GOP lawmakers argue have become too expensive and have put U.S. taxpayers at risk. …opposition is growing to a permanent increase in U.S. government support for the IMF, as well as to a $100 billion credit line the United States provided in 2009 as part of an international move to help the IMF respond to the global financial crisis. The IMF has been dipping into that credit line for emergency loans to Portugal and elsewhere… Planned changes at the IMF, which would shift seats on the fund’s governing board from Europe to the developing world, cannot proceed without congressional approval. For practical purposes, neither can a related doubling, from $370 billion to $740 billion, in the total permanent contribution that IMF members make to support the agency.

As you can see from the excerpt, Republicans in the House of Representatives have the ability to stop this global boondoggle. The interesting question, though, is whether they defend the interests of ordinary people or whether they cater to the whims of the political elite.

By the way, I’m irked by the Post’s biased presentation. They refer to IMF “rescue programs,” yet all the evidence seems to suggest that the international bureaucracy is simply making the debt bubble bigger. We certainly don’t see any evidence that problems are getting solved. Greece is still in trouble, as are the other nations that stuck their hands in Uncle Sam’s pocket.

But that could be excused as a bit of sloppy reporting. Here’s a part of the story that is hopelessly biased.

The potential for a stalemate over the issue in the United States has the IMF and other international officials worried that it could put broader agency reform efforts at risk. IMF officials say that to backstop the global economy they need about $500 billion in addition to the increase in permanent contributions.

Since when is it appropriate to use the term “reform efforts” to describe policies that subsidize moral hazard and reward profligacy? And how is it accurate to say that IMF actions “backstop the global economy” when the bureaucrats don’t seem to achieve anything other than encouraging more debt?

Congresswoman Rodgers, Defending Taxpayers

But this isn’t a post about media bias, even though I sometimes can’t resist pointing out sloppy or dishonest journalism. Let’s get back to the main point. Giving the IMF more resources would be like giving the keys to a liquor store to a bunch of alcoholics.

Republicans have the ability to stop this raid on the Treasury by saying no. What they decide will reveal a lot about whether they’re still part of the problem.

Some GOPers in the House, such as Cathy McMorris Rodgers of Washington, already are fighting against expanded bailout money for the IMF. The real key, though, will be whether the Republican leadership does the right thing.

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I’m a big fan of political humor, particularly when it exposes absurdity. This is why I shared all these jokes (here, here, here, here, here, and here) about the Occupy Wall Street crowd.

But I also appreciate good jokes that target me and other libertarians (here, here, here, here, and here).

If I had to pick a favorite, though, it would be the jokes that teach economics. That’s why I like this joke about Keynesian economics, this cartoon about Obama’s stimulus, this video on Halloween taxes, this cartoon about the minimum wage, and this joke about the perverse incentives of redistribution.

And it’s also why I shared the cartoon yesterday about Ms. Fluke and the controversy over the birth control mandate.

This motivated readers to send several others, all of which make the point that this is an issue about subsidies and redistribution, not birth control.

Here’s one that was posted on the Powerline blog.

This one’s obviously a photoshop creation, but definitely appeals to me because of my support for the 2nd Amendment.

And here are a couple of posters featuring Ms. Fluke.

I especially like these two posters because there’s no attempt to personally demonize Ms. Fluke. It’s her ideas are bad because she wants to coerce others.

I’m not making an indirect dig at Limbaugh, by the way, who does a rather impressive job of staying on the right side of the line while spending three hours every day trying to be funny, entertaining, and informative. I shudder to think how often I would step in you-know-what if I tried to do the same thing.

Instead, my goal is to change hearts and minds. We won’t win the battle for liberty if we focus on personalities as opposed to ideas.

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This might not be quite as funny as the Iowahawk video on the Pelosi GTxi SS/RT, but it’s a close call. In any event, this is extremely clever, makes an important philosophical point, and deserves to be shared widely.

And since we’re on the topic of mooching car companies, here’s another very good parody, featuring the sleek new Obummer from Government Motors.

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I like to think I despise politicians more than 99.9 percent of the population. Even in my kindest moments, I see them as occasionally well-intentioned souls who are easily corrupted. Most of the time, they are a plague on society, as this cartoon illustrates.

So you might think I’m in favor of throwing them in prison on the slightest pretext. That’s surely an appealing thought, but one of the main traits of libertarianism is a belief in the rule of law. Arbitrary arrests, trumped-up charges, and unjustified imprisonments should not exist in a civilized society (though I’m ashamed to admit that such things are happening with increasing frequency in the United States).

I raise this topic because of a story I saw in the EU Observer. The former Prime Minister of Iceland is on trial, but as far as I can tell, his only crime is to have been in charge when that nation’s financial bubble expanded and popped. Here are some details from the story.

Iceland’s former Prime Minister Geir Haarde on Monday (5 March) became the world’s first leader to be put on trial on charges of negligence over the 2008 financial crisis. Haarde, who was a premier from 2006 to 2009, is being accused of “gross negligence” in failing to prevent the collapse of Iceland’s top three banks – Glitnir, Kaupthing and Landsbanki – all heavily involved in risky investments on the US real estate market. One of the main architects of Iceland’s transformation from a fishing nation into a financial services hub, Haarde is also accused of failing to control the country’s fast-growing banks and of having withheld information indicating the country was heading for financial disaster. He faces a sentence of up to two years in prison if found guilty. “None of us realised at the time that there was something fishy within the banking system itself, as now appears to have been the case,” Haarde told the Reykjavik court on Monday. He denied all charges and said that “only in hindsight is it evident that not everything was as it should have been.”

So what crime did he commit? If economic mismanagement and/or bad timing are crimes, can we make a citizen’s arrest of Obama? Of the entire Congress (other than Ron Paul and a small handful of compatriots)?

It is a good idea to hold politicians accountable for their actions, of course, but isn’t that what elections are for?

The bottom line is that politicians are despicable creatures and part of me wants to throw most of them in jail for the things they do to reduce freedom and undermine prosperity, but after-the-fact trials are not right unless real evidence exists of a law actually being broken.

So this is one of those cases where I’m conflicted. My emotions lead me one way, but I can’t overcome my belief in the rule of law. I don’t know if Iceland uses jury trials, but I’d be a not-guilty vote unless somebody showed evidence of genuine criminal behavior on the part of the former Prime Minister.

If you enjoy pondering this type of moral dilemma, here are some previous posts dealing with rather thorny topics:

o Vigilante justice

o Brutal tax collection tactics

o Child molestation

o Sharia law

o Healthcare

o Incest

o Speed traps

o Jury nullification, and

o Vigilante justice (again).

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I’ve already explained that the Obamacare contraception-coverage controversy is about economics and religious liberty, not birth control.

But now that the debate has been transformed by the remarks of a Georgetown student, this cartoon seems rather appropriate.

The bubble quotes in the cartoon do a good job of capturing the statist mentality. They want me to leave them alone (which I’m happy to do), but they won’t leave me alone.

So here’s a deal for Ms. Fluke and her fellow travelers. I’ll agree to you doing whatever you want behind closed doors (heck, you can even leave the doors open, as far as I’m concerned). But, in exchange, I want you to leave me alone, which means I don’t want to pay higher taxes OR higher insurance premiums to subsidize your birth control.

In a nutshell, this is the non-aggression principle that motivates libertarianism.

I’m quite disappointed, by the way, that the cartoon portrays the student in an unflattering light. This is the mistake Rush made (not for the first time), and it enables the left to deflect attention from the real issue of whether the government should be mandating subsidies.

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As a libertarian who became interested in public policy because of Ronald Reagan, it won’t surprise you to know that I’m more of a “right libertarian” than “left libertarian.”

I fully agree with positions that motivate left libertarians, such as the war on drugs doing more harm than good, foreign entanglements such as NATO no longer serving America’s national security purpose, and the importance of preserving constitutional protections of civil liberties. But since I’m a fiscal policy economist, I normally consort with conservatives.

And my frequent interactions with conservatives sometimes lead me to wonder why we aren’t closer allies. Well, maybe we can be if both sides read what Tim Carney wrote for today’s Washington Examiner.

His column is about Rick Santorum’s inability to unite proponents of limited government, but that’s secondary to the insightful analysis on how conservatives and libertarians can be natural allies. Here are key passages.

For many of today’s liberals, if something is bad — like the traditional light bulb, a very high health-insurance deductible, a gas-guzzling car, or a lack of racial diversity — the government ought to outlaw it. Maybe they can’t comprehend the mind-set of many of today’s conservatives, who revere both individual liberty and traditional morality as the necessary conditions for human happiness and thus say that certain behaviors are immoral but shouldn’t be illegal. Not only are traditional morality and limited government totally compatible, today they are intimately linked, as the Left uses big government to subsidize abortion providers and force all employers to pay for their employees’ contraceptives. …the moral law should guide our personal actions, and individual liberty should guide our political decisions. …When liberals cry that conservatives are trying to legislate morality, that’s typically projection and misdirection from liberal attempts to legislate morality — they say we’re trying to outlaw buying contraception because we oppose their efforts to mandate buying contraception. …More often than not, in the United States these days, it’s the secular Left imposing its morality on the religious Right. Don’t want to photograph a gay wedding? You’re fined. Don’t want to sell the morning-after pill at your pharmacy? You’re driven out of your job. Don’t want to pay for your employees’ sterilization? You’re a criminal. Don’t want to subsidize Planned Parenthood with your tax dollars? Tough, pay up. An alliance between libertarians and conservatives is natural and right today. …The proper conservative response is to fight for the liberty of all Americans, including religious conservatives, to manage their own affairs according to what they believe is correct. Increasing the size of government, even in the name of a more moral society, simply gives the Left more weapons to turn on the Right in the culture war — Obamacare is the perfect example.

Maybe Tim’s column makes sense to me because I’m somewhat of a social conservative in my personal life. I’ve never smoked, never done drugs, don’t like gambling, rarely drink, don’t deal with prostitutes (other than the non-sexual ones serving in government), and have a traditional view on the importance of family. But I’ve never thought my boring personal preferences should be part of the law.

But as Tim explains, leftists believe in imposing their views on everyone else. And the last sentence in the excerpt shows why conservatives and libertarians should be united in opposition to statism. Big government gives the left the tools to advance an agenda that undermines both morality and liberty.

So with that in mind, I’m going to do something similar to Mitchell’s Law and Mitchell’s Golden Rule. But in this case, I’ll actually give credit to someone else. As shown in the picture, libertarians and conservatives should unite behind Carney’s Fusionist Theorem.

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Whenever I narrate videos lasting longer than nine minutes, such as my three videos on tax havens or my video on international corporate taxation, I often get backhanded compliments along the lines of “that was good, but it would be even better if you said it in five minutes.”

So it is with considerable envy that I offer up this video about Europe’s fiscal/financial/monetary mess. Even though it lasts longer than nine minutes, I suspect it will keep everyone’s attention.

I’m not fully endorsing the contents of the video. Mr. McWilliams, for instance, probably has a confused IMF-type definition of austerity. But I definitely agree with him that policy is driven by the interests of the elite.

In any event, the production values of the video are first rate. Perhaps not in the same league as Part I and Part II of the Hayek v Keynes video set, but still remarkably well done.

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Almost exactly one year ago, I did a post entitled “A Laffer Curve Tutorial” because I wanted readers to have all the arguments and data in one place (and also because it meant I wouldn’t have to track down all the videos when someone asked me for the full set).

Riders from the fiscal policy short bus

Today, I’m doing the same thing on the issue of government spending. If you watch these four videos, you will know more about the economics of government spending than 99.9 percent of the people in Washington. That’s not a big achievement, to be sure, since you’re being compared to a remedial class, but it’s nonetheless good to have a solid understanding of an issue.

The first video defines the problem, explaining that deficits and debt are bad, but then explaining that red ink is best understood as a symptom of the real problem of too much government spending.

The second video reviews the theoretical reasons why a large public sector undermines prosperity.

The next video examines the empirical evidence, citing both cross-country data and academic research.

Last but not least, the final video looks at the research about the growth-maximizing size of government.

You may have noticed, by the way, that this post does not include any of the videos about Keynesian economics or Obama’s stimulus. That’s an entirely different issue, perhaps best described as being a debate over whether it’s good or bad in the short run to increase the burden of government spending. The videos in this post are about the appropriate size and scope of government in the long run.

This post also does not include the video about fiscal restraint during the Reagan and Clinton years, or the video looking at how nations such as New Zealand and Canada were able to restrain spending. Those are case studies, not economics.

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Washington is filled with people who exaggerate, prevaricate, dissemble, and obfuscate. And those are the people I like. The ones I don’t like are much worse.

That’s why, during the Obamacare debate, I warned that the numbers were utterly dishonest.

We were told, if you remember those grim days, that adopting a giant new entitlement somehow was going to lead to less red ink, but I doubt anybody with an IQ above room temperature actually believed that nonsense, notwithstanding the supposedly non-partisan estimates from the Congressional Budget Office and the Joint Committee on Taxation.

Well, Obamacare was enacted and we’ve already seen evidence that supporters were being less than truthful.

"I'm shocked, shocked, that Obamacare is more expensive than the original forecasts"

And now there are additional re-estimates suggesting the problem is much worse than even critics feared.

One wonders whether supporters of the legislation will now imitate Inspector Renault from Casablanca and pretend that they are surprised about this outcome.

Here are some excerpts from an Associated Press report about these “surprise” findings.

Cost estimates for a key portion of President Barack Obama’s health care overhaul law have ballooned by $111 billion from last year’s budget… the estimated cost of helping millions of middle-class Americans buy health insurance has jumped by about 30 percent for an eight-year period, from 2014-2021. Administration officials say the explanation lies in budget technicalities and that there are no significant changes in the program that would raise concerns. …Cost overruns for the health care overhaul could create new political problems for Obama by undermining the law’s promise to reduce federal deficits. The revised health care numbers, buried deep in the president’s budget, stumped lawmakers and some administration officials earlier in the week. At a congressional hearing Tuesday, Health and Human Services Secretary Kathleen Sebelius, who is in charge of carrying out the health care law, indicated she was unaware of the changes. …Last year’s budget estimated the cost of the aid to be $367 billion from 2014-2021. This year’s budget puts it at $478 billion over the same period.

A mature and dignified person would resist the temptation to say “I told you so.” But I’m neither mature nor dignified, so here’s an encore edition of my video on the Obamacare cost estimates.

This is a case, though, where I wish I had been wrong. Unfortunately, if you’re predicting bad results from government intervention, you’re on firm ground – especially if politicians are trying to deal with a mess caused by previous forms of government intervention.

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I get agitated when I think about”energy policy” in Washington.

The jackasses in that town are requiring us to use crummy light bulbs. They’re mandating sub-standard washing machines. And they’ve coerced us into ridiculous “low-flow” toilets that don’t work very well if you happen to…um…deposit something that reminds you of Washington.

And let’s not forget examples of sleaze and corruption such as the Solyndra scam and the ethanol racket.

But I haven’t written anything on rising gas prices because, in general, I don’t think politicians can be blamed.

Yes, prices would be a bit lower if the crowd in Washington wasn’t blocking pipelines and hindering exploration, but those policies presumably don’t cause sudden price spikes. So I’ll mostly let Obama off the hook, just as I’ve sometimes defended him in the past.

That being said, the Administration’s energy policies are a joke – especially the plethora of green energy subsidies. So even though I don’t blame them for higher gas prices, I’m nonetheless amused that the White House is taking a beating on the issue.

As illustrated by these cartoons.

The Algaeman cartoon reminds me of President Bush’s silly switchgrass policy.

Here’s a Ramirez cartoon about the prevarication, dissembling, and obfuscation at the White House.

If you like Ramirez cartoons, you can see some of my favorites here, here, here, here, and here.

Last but not least, here’s a funny image a friend posted on my Facebook page.

These are all funny images, but the history of botched government intervention in the energy sector teaches an important lesson. As illustrated by this poster, you’ve asked a very silly question if more government is the answer.

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Notwithstanding my post comparing stupid government policies in the U.S. and U.K., I thought the Greeks took to prize for most moronic government.

After all, the politicians in that nation think it’s fine and dandy to subsidize pedophiles and collect stool samples as a condition of getting a business license to set up an online company.

But the United Kingdom will reclaim the top spot (or would it be the bottom spot?) if the government follows through on the advice of two nanny-state academics.

Here’s a blurb from a story in the Telegraph.

Experts said the eating disorder was a disease that was linked to social and cultural influenced, the Guardian reported. The LSE academics said restricting the use of photographs of underweight models in magazines would help ease the pressure on women to be very thin. In a paper that will be published in the journal Economia later this year, LSE economist Dr Joan Costa-Font and Professor Mireia Jofre-Bonet from City University wrote: “Government intervention would be justified to curb the spread of a potential epidemic of food disorders.

To be fair, there’s no indication in the story that the U.K. government will adopt the recommendation of these academics, but don’t be too optimistic. After all, this is the country that has done these crazy things:

o A job-placement center got in trouble for discriminating against incompetent people by seeking “reliable” and “hard-working” candidates.

o A women who was being threatened by thugs got in trouble with the police for brandishing a knife in her own home.

o A man got arrested for finding a gun in his yard and turning it over to the police.

o The government wanted to require “competency tests” for pet owners.

Remember, never underestimate the stupidity of government.

And I suppose this is the appropriate spot for a disclaimer. Yes, I realize anorexia is not a joking matter. I’ve known people with this problem and I recognize it’s serious. But banning skinny models is an absurd and abusive way for politicians to deal with the issue.

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I mentioned yesterday that Senator Johnson of Wisconsin did a good job at the Senate Budget Committee’s hearing on tax reform. Today, I want to elaborate on two of his points.

First, he asked all three of the witnesses what the maximum marginal tax rate on any American should be. The two leftists on the panel, Len Berman and Diane Lim Rogers, hemmed and hawed because they (correctly) smelled a trap. But the Senator persisted and Len said something in the range of 45 percent and Diane said 70 percent-80 percent. This matters because recent polling data shows that the vast majority of Americans don’t want any of their fellow citizens to ever pay more than 30 percent.

Most Republicans aren’t smart enough to focus on arguments that are simultaneously economically sound and politically effective, so kudos to Senator Johnson.

The Wisconsin lawmaker also hit hard on the notion of phony spending cuts, a point near and dear to my heart (as you can see by these interviews with Judge Napolitano and John Stossel).

I touched on this yesterday, but I want to share a chart that Senator Johnson used during the testimony. As you can see, Obama’s budget doesn’t call for any budget cuts.

When Obama released his budget, I did a post showing how annual spending was going to be $2 trillion higher in 10 years than it is today. But I think I’ll steal Senator Johnson’s chart since it makes the same point more dramatically.

I’ve already confessed to having man crushes (in the philosophical sense) on Chris Christie, Marco Rubio, and Rand Paul. If Senator Johnson continues this good work, I may have to become really promiscuous.

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