Read This Horrifying George Will Column and You Will – if You Have any Decency – Become a Libertarian

I periodically provide mind-blowing examples of individuals who have their lives turned upside down by evil bureaucrats.

You may think “evil” is too strong a word, but it sticks in my mind after perusing these examples of abusive actions by the federal government.

• A story of vicious IRS persecution.
• Two stories of innocent people who were victimized by the idiotic Drug War.
• A video about how the EPA tried – and fortunately failed – to destroy a family.
• A story about the Justice Department’s discriminatory attack on a hapless homeowner.

Now we have a George Will column that will get you very angry. At least if you’re a good person.

Will starts by describing the federal bureaucracy’s attack on an innocent woman for a non-crime.

…our unhinged government, with an obsession like that of Melville’s Ahab, has crippled Nancy Black’s scientific career, cost her more than $100,000 in legal fees — so far — and might sentence her to 20 years in prison. This Kafkaesque burlesque of law enforcement began when someone whistled. Black, 50, a marine biologist who also captains a whale-watching ship, was with some watchers in Monterey Bay in 2005 when a member of her crew whistled at the humpback that had approached her boat, hoping to entice the whale to linger. Back on land, another of her employees called the National Oceanic and Atmospheric Administration (NOAA) to ask if the whistling constituted “harassment” of a marine mammal, which is an “environmental crime.” NOAA requested a video of the episode, which Black sent after editing it slightly to highlight the whistling. NOAA found no harassment — but got her indicted for editing the tape, calling this a “material false statement” to federal investigators, which is a felony under the 1863 False Claims Act, intended to punish suppliers defrauding the government during the Civil War.

But it gets worse, because the federal jack-boots then raided her office (I don’t even know what “jack-boots” are, but they signify government thuggery, and that’s definitely a good description of what happened).

…after this bizarre charge — that she lied about the interaction with the humpback that produced no charges — more than a dozen federal agents, led by one from NOAA, raided her home. They removed her scientific photos, business files and computers.

This unfortunate woman has also been charged with another non-crime.

She has also been charged with the crime of feeding killer whales when she and two aides were in a dinghy observing them feeding on strips of blubber torn from their prey — a gray whale. To facilitate photographing the killers’ feeding habits, she cut a hole in one of the floating slabs of blubber and, through the hole, attached a rope to stabilize the slab while a camera on a pole recorded the whales’ underwater eating. So she is charged with “feeding” killer whales that were already feeding on a gray whale they had killed. She could more plausibly be accused of interfering with the feeding.

As an aside, Will notes that the NOAA bureaucrats have little regard for the Constitution.

Six years ago, NOAA agents, who evidently consider the First Amendment a dispensable nuisance, told Black’s scientific colleagues not to talk to her and to inform them if they were contacted by her or her lawyers. Since then she has not spoken with one of her best friends.

Most important, he concludes with the key point about how all of us are threatened by Leviathan.

In 1980, federal statutes specified 3,000 criminal offenses; by 2007, 4,450. They continue to multiply. Often, as in Black’s case, they are untethered from the common-law tradition ofmens rea, which holds that a crime must involve a criminal intent — a guilty mind. Legions of government lawyers inundate targets like Black with discovery demands, producing financial burdens that compel the innocent to surrender in order to survive. The protracted and pointless tormenting of Black illustrates the thesis of Harvey Silverglate’s invaluable 2009 book, “Three Felonies a Day: How the Feds Target the Innocent.” Silverglate, a civil liberties lawyer in Boston, chillingly demonstrates how the mad proliferation of federal criminal laws — which often are too vague to give fair notice of what behavior is proscribed or prescribed — means that “our normal daily activities expose us to potential prosecution at the whim of a government official.” Such laws, which enable government zealots to accuse almost anyone of committing three felonies in a day, do not just enable government misconduct, they incite prosecutors to intimidate decent people who never had culpable intentions. And to inflict punishments without crimes. …The more Americans learn about their government’s abuse of criminal law for capricious bullying, the more likely they are to recoil in a libertarian direction and put Leviathan on a short leash.

Utterly disgusting. As Glenn Reynolds periodically suggests, “tar, feathers” would be an appropriate way of dealing with these hyenas.

By the way, government thuggery is not limited to the crowd 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.

P.S. For the second time, I feel compelled to apologize to Hyenas. They’re part of the natural ecosystem. Thuggish bureaucrats, by contrast, are a malignant and artificial force.

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Here’s Why the Cayman Islands Is Considering Fiscal Suicide

What Do Greece, the United States, and the Cayman Islands Have in Common?

At first, this seems like a trick question. After all, the Cayman Islands are a fiscal paradise, with no personal income tax, no corporate income tax, no capital gains tax, and no death tax.

By contrast, Greece is a bankrupt, high-tax welfare state, and the United States sooner or later will suffer the same fate because of misguided entitlement programs.

But even though there are some important differences, all three of these jurisdictions share a common characteristic in that they face fiscal troubles because government spending has been growing faster than economic output.

I’ve written before that the definition of good fiscal policy is for the private sector to grow faster than the government. I’ve humbly decided to refer to this simple principle as Mitchell’s Golden Rule, and have pointed out that bad things happen when governments violate this common-sense guideline.

In the case of the Cayman Islands, the “bad thing” is that the government is proposing to levy an income tax, which would be akin to committing fiscal suicide.

The Cayman Islands are one of the world’s richest jurisdictions (more prosperous than the United States according to the latest World Bank data), in part because there are no tax penalties on income and production.

So why are the local politicians considering a plan to kill the goose that lays the golden eggs? For the simple reason that they have been promiscuous in spending other people’s money. This chart shows that the burden of government spending in the Cayman Islands has climbed twice as fast as economic output since 2000.

Much of this spending has been to employ and over-compensate a bloated civil service (in this respect, Cayman is sort of a Caribbean version of California).

In other words, the economic problem is that there has been too much spending, and the political problem is that politicians have been trying to buy votes by padding government payrolls (a problem that also exists in America).

The right solution to this problem is to reduce the burden of government spending back to the levels in the early part of last decade. The political class in Cayman, however, hopes it can prop up its costly bureaucracy with a new tax – which euphemistically is being called a “community enhancement fee.”

The politicians claim the tax will only be 10 percent and will only be imposed on the expat community. But it’s worth noting that the U.S. income tax began in 1913 with a top rate of only 7 percent and it affected less than 1 percent of the population. But that supposedly benign tax has since become a monstrous internal revenue code that plagues the nation today.

Except the results will be even worse in Cayman because the thousands of foreigners who are being targeted easily can shift their operations to other zero-income tax jurisdictions such as Bermuda, Monaco, or the Bahamas. Or they can decide that to set up shop in places such as Hong Kong and Singapore, which have very modest income tax burdens (and the ability to out-compete Cayman in other areas).

As a long-time admirer of the Cayman Islands, I desperately hope the government will reconsider this dangerous step. The world already has lots of examples of nations that are following bad policy. We need a few places that are at least being semi-sensible.

By they way, I started this post with a rhetorical question about the similarities of Greece, the United States, and the Cayman Islands. Let’s elaborate on the answer.

Here’s a post that shows how Greece’s fiscal nightmare developed. But let’s show a separate chart for the burden of federal spending in the United States.

What’s remarkable is that the federal government and the Cayman Islands government have followed very similar paths to fiscal trouble. Indeed, Caymanian politicians have achieved the dubious distinction of increasing the burden of government spending at a faster rate than even Bush and Obama. No mean feat.

This data for the U.S. chart doesn’t include the burden of state and local government spending, so the Cayman Islands still has an advantage over the United States, but I’ll close with a prediction.

Cayman’s proposed income tax

If the Cayman Islands adopts an income tax – regardless of whether they call it a community enhancement fee (to misquote Shakespeare, a rotting fish on the beach by any other name would still smell like crap), it will be just a matter of time before the burden of government spending becomes even more onerous and Cayman loses its allure and drops from being one of the world’s 10-richest jurisdictions.

Which will be very sad since I’ll now have to find a different place to go when America suffers its Greek-style fiscal collapse.

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What’s More Important, Monopoly Privileges for Union Bosses or Educational Opportunity for Minority Children?

I’ve criticized union bosses for fighting school reform, and I’ve condemned the so-called civil rights establishment for opposing school choice.

And here’s a powerful video from Reason TV that combines those themes, noting the unholy alliance of teacher unions and the NAACP.

The spiritual leader of the teacher unions?

Fortunately, the statists seem to be losing this issue. Louisiana recently adopted school choice legislation that will give poor children an opportunity to escape failing government schools.

But the left isn’t losing gracefully. In a move that would make George Wallace proud, they are threatening schools that will participate in the new program.

Here’s some powerful criticism of their sleazy tactics from today’s Wall Street Journal.

In some parts of the antebellum South, it was illegal to teach blacks how to read. Are teachers unions in Louisiana trying to turn back the clock? Last week, lawyers for the Louisiana Association of Educators, one of the state’s two major teachers unions, threatened private and parochial schools with lawsuits if the schools accept students participating in a new school choice initiative that starts this year. Education reforms signed into law in April by Governor Bobby Jindal include a publicly funded voucher program that allows low-income families to send their children to private or parochial schools. …lawyers representing the unions faxed letters to about 100 of the 119 schools that are participating in the voucher program. “Our clients have directed us to take whatever means necessary,” the letter reads. Unless the school agrees to turn away voucher students, “we will have no alternative other than to institute litigation.” The letter demanded an answer in writing by the next day. Louisiana’s voucher program is adjusted for family income and is intended above all to give a shot at a decent education to underprivileged minorities, who are more likely to be relegated to the worst public schools. …Demand for vouchers has been overwhelming: There were 10,300 applications for 5,600 slots. Despite claims to the contrary by school-choice opponents, low-income parents can and do act rationally when it comes to the education of their children. State officials have rightly slammed the union’s tactics. A spokesman for the Governor said in a statement that union leaders are “stooping to new lows and trying to strong-arm schools to keep our kids from getting a quality education.” State Superintendent John White said it was “shameful” that the unions were “trying to prevent people from doing what’s right for their children.” The unions claim that vouchers don’t benefit students, but we know from school-choice programs in Washington, D.C., and elsewhere that voucher recipients attend safer schools and enjoy higher graduation rates than their peers in public schools.

As I note in this post (featuring a great column by Jeff Jacoby), I’ve always believed that the school choice issue exposes the dividing line between honest liberals and power-hungry liberals.

Regardless of ideology, any decent person will favor reforms that enable poor kids to escape horrible government schools. Lots of liberals are decent people. The ones who oppose school choice, by contrast, are…well, you can fill in the blank.

P.S. Here’s some wisdom on the issue of school choice from a former University of Georgia quarterback.

P.P.S. Not surprisingly, Thomas Sowell nails the issue, as does Walter Williams, with both criticizing the President for sacrificing the interests of minority children to protect the monopoly privileges of teacher unions.

P.P.P.S. Chile has reformed its education system with vouchers, as have Sweden and the Netherlands, and all those nations are getting good results.

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A Statue for Bill Clinton

Even though it seems he would be an easy target, I haven’t posted much Bill Clinton humor.

All that comes to mind is this reference to Colombian prostitutes, this R-rated Monica Lewinsky joke, and this bonding moment with Arnold Schwarzenegger.

But let’s add this image to the mix.

While I firmly believe all politicians should be mocked, and am perfectly happy to take some shots at Clinton, it’s time for a serious point.

America’s 42nd President actually did a pretty good job. Or, to be more accurate, we got good results during his tenure, particularly when looking at the burden of government spending.

Which is why I have openly stated on TV that I would go back to Bill Clinton’s tax rates if it also meant we could have the lower levels of spending and regulation that existed when he left office.

P.S. Time for a confession. This image, which I received from a British ex-pat living in the Caribbean, originally said the crowd was waiting for a Tony Blair statue to be unveiled. But since that reference wouldn’t resonate for most readers, I took the liberty of substituting the spiritual leader of the New Democrats for the spiritual leader of New Labor. But if you’re hungry for some negative commentary on the United Kingdom, you’ll enjoy this, this, and this.

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On Death Tax, the U.S. Is Worse than Greece, Worse than France, and Even Worse than Venezuela

Considering that every economic theory agrees that living standards and worker compensation are closely correlated with the amount of capital in an economy (this picture is a compelling illustration of the relationship), one would think that politicians – particularly those who say they want to improve wages – would be very anxious not to create tax penalties on saving and investment.

Yet the United States imposes very harsh tax burdens on capital formation, largely thanks to multiple layers of tax on income that is saved and invested.

But we compound the damage with very high tax rates, including the highest corporate tax burden in the developed world.

And the double taxation of dividends and capital gains is nearly the worst in the world (and will get even worse if Obama’s class-warfare proposals are approved).

To make matters worse, the United States also has one of the most onerous death taxes in the world. As you can see from this chart prepared by the Joint Economic Committee, it is more punitive than places such as Greece, France, and Venezuela.

Who would have ever thought that Russia would have the correct death tax rate, while the United States would have one of the world’s worst systems?

Fortunately, not all U.S. tax policies are this bad. Our taxation of labor income is generally not as bad as other industrialized nations. And the burden of government spending in the United States tends to be lower than European nations (though both Bush and Obama have undermined that advantage).

And if you look at broad measures of economic freedom, America tends to be in – or near – the top 10 (though that’s more a reflection of how bad other nations are).

But these mitigating factors don’t change the fact that the U.S. needlessly punishes saving and investment, and workers are the biggest victims. So let’s junk the internal revenue code and adopt a simple and fair flat tax.

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England’s Despicable Political Class Pushes Soviet-Style Tax Tactics

I wrote last week about David Gauke, a simpering and unctuous statist who said it was “morally wrong” for people to pay cash for services because that made it harder for the state to seize a share of the proceeds.

And last month I condemned the country’s CINO (Conservative in Name Only) Prime Minister for saying that legal tax avoidance is “morally wrong.”

These nauseating examples are just the tip of the iceberg. The U.K. government also has proposed a scheme that would require employers to send employee’s paychecks to the tax police, giving the folks at Inland Revenue the authority to then decide how much can be sent to hapless workers.

Equally disturbing, the government even uses the tax authority and the education system to propagandize kids – even to the point of asking information about people they know who aren’t fully obedient to the state.

Here are excerpts from a report in the Telegraph.

HMRC has set up teaching modules to guide children through the hazards of pay as you earn and National Insurance contributions. Some of the modules – which can be downloaded from HMRC’s website – teach school children as young as 11 about paying their fair share of tax. …One lesson plan – targeted at 14 to 16 year olds – requires students to “discuss whether it is good to pay the tax we do, considering the benefits we receive. If it is good, then why do people try not to pay?” It continues: “Show class the remaining factfile slides on tax evasion. What do students think of those who refuse to pay tax…? “Can they think of any example they may have heard of in their local area?” …The modules were criticised by thinktank Civitas. David Green, its director, said: “This sounds a bit too ‘Big Brotherish’. People ‘in their local area’ are most likely to be parents or close relatives. Turning children into state spies is un-British.”

The government denies that it collects and uses the information as part of its tax enforcement activities.

An HMRC spokesman said…”We certainly don’t use this to collect information on tax evaders from children. These materials are solely designed to help children to learn about how tax works in Britain.”

I’m willing to assume that the government is being honest about its actions today, but that doesn’t mean the statists won’t decide to expand the system in the future. After all, that is the history of government.

But even in the unlikely event that the tax police never utilize the system to encourage snitching, it is still disgusting and reprehensible that the government is brainwashing children into being compliant serfs.

P.S. The statists in the U.K. say money is needed to fund important social services, but these examples (here and here) show that dysfunctional and destructive impact of the welfare system, and this post (as well as all the examples linked at the end of the post) show that the government-run healthcare system leaves a lot to be desired.

P.P.S. But the U.K. government needs more money. After all, how else can it have taxpayer-financed sex trips to Amsterdam?

P.P.P.S. Thuggish and Orwellian tax enforcement also exists in the United States. You won’t be surprised to learn that Chicago encourages snitches by paying bounties. Yup, the murder capital of the world can’t keep its people safe, but it has resources to implement Soviet-style revenue tactics (and don’t forget the city is against free speech as well).

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Assault Weapons: Facts vs. Fiction

It’s not much of an exaggeration to say that John Lott has changed the national debate on gun control. His rigorous research and prolific pen have exposed the slip-shod analysis of anti-Constitution advocates.

I’ve cited his work on several occasions.

• Lott explained how anti-gun laws facilitated the terrorist attack at Fort Hood.
  

  Defender of Liberty

• Writing after the Tucson shootings, Lott explained the benefits of concealed-carry laws.
• In the aftermath of the Heller decision, Lott explained how more guns resulted in less crime in DC.
• Lott explained how gun control made Jamaica a more dangerous country.

It’s now time to share more of Lott’s work.

Responding to some of the demagoguery after the Colorado killings, here’s some of what he wrote for National Review.

…the M&P 15 and the AK-47 are “military-style weapons.” But the key word is “style” — they are similar to military guns in their aesthetics, not in the way they actually operate. The guns covered by the federal assault-weapons ban (which was enacted in 1994 and expired ten year later) were not the fully automatic machine guns used by the military but semi-automatic versions of those guns. The civilian version of the AK-47 uses essentially the same sorts of bullets as deer-hunting rifles, fires at the same rapidity (one bullet per pull of the trigger), and does the same damage.

This is a key point. I suspect most journalists (and far too many people who get their news from these clowns) genuinely think an “assault weapon” is akin to a machine gun.

Lott also shows that there is nothing about “military-style” weapons that enables a bigger magazine.

The Aurora killer’s large-capacity ammunition magazines are also misunderstood. The common perception that so-called “assault weapons” can hold larger magazines than hunting rifles is simply wrong. Any gun that can hold a magazine can hold one of any size. That is true for handguns as well as rifles. A magazine, which is basically a metal box with a spring, is also trivially easy to make and virtually impossible to stop criminals from obtaining.

Lott then discusses some of the research showing that Clinton’s assault-weapons ban didn’t reduce crime.

…despite Obama’s frightening image of military weapons on America’s streets, it is pretty hard to seriously argue that a new ban on “assault weapons” would reduce crime in the United States. Even research done for the Clinton administration didn’t find that the federal assault-weapons ban reduced crime. Indeed, banning guns on the basis of how they look, and not how they operate, shouldn’t be expected to make any difference. And there are no published academic studies by economists or criminologists that find the original federal assault-weapons ban to have reduced murder or violent crime generally. There is no evidence that the state assault-weapons bans reduced murder or violent-crime rates either.

Indeed, it appears that crime has dropped because the ban no longer exists.

Since the federal ban expired in September 2004, murder and overall violent-crime rates have actually fallen. In 2003, the last full year before the law expired, the U.S. murder rate was 5.7 per 100,000 people. Preliminary numbers for 2011 show that the murder rate has fallen to 4.7 per 100,000 people. In fact, murder rates fell immediately after September 2004, and they fell more in the states without assault-weapons bans than in the states with them.

Correlation is not causation, of course, but these results also are consistent with logic and intuition. If law-abiding people have more access to guns, it makes sense that this makes life more difficult for criminals.

P.S. For fans of the Second Amendment, you’ll enjoy these gun control posters (here, here, here, here, and here). And here are some amusing images of t-shirts and bumper stickers on gun control (here, here, and here). In addition, I’ve posted four different videos on gun control (here, here, here, and here). And here’s my interview on NRA-TV.

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A Funny Look at Obama’s You-Didn’t-Build-That Comment

I made a serious point the other day about how government plays a very important role in the lives of entrepreneurs.

But since I was talking about the staggering burden of red tape and regulation, I wasn’t being very supportive of the President’s assertion that government deserves a big chunk of the credit when a business is successful.

This cartoon makes the same point, but adds taxation to the mix.

As far as I recall (I sound like a politician under oath when I write something like that), this is the first Branco cartoon I’ve used, but I think it’s the best one in this post, so I’m looking forward to more of his (her?) work.

Regular readers know about Michael Ramirez, of course, and he has an amusing take on the you-didn’t-build-that controversy.

I’ve used lots of Ramirez cartoons over the past few years, and you can enjoy some of his work here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

The Obama campaign has been complaining that the President’s words were misinterpreted, so this Eric Allie cartoon is quite amusing and appropriate.

You can laugh at more Allie cartoons here, here, here, and here.

Fortunately for Obama, he has some allies to help him out, as Lisa Benson reminds us.

More funny Lisa Benson cartoons can be seen here, here, here, here, here, here, here, here, and here.

Last but not least, we have another Allie cartoon. I think this is the first time I’ve used two cartoons by the same person, but I think you’ll agree they’re worth sharing.

This gives me an opportunity to end on a serious note. The Obama campaign is asserting that the President was simply stating that private sector prosperity is made possible by the provision of “public goods” such as roads and bridges.

This is a perfectly fair point, as I explain in this video about the Rahn Curve.

But what Obama conveniently overlooks is that spending on so-called public goods is only about 10 percent of the federal budget. The vast majority of government spending is for unambiguously harmful outlays on transfers, consumption, and entitlements.

Which is why the second Allie cartoon is so good. Even when government does something that is theoretically good, it causes a lot of collateral damage because of the excessive size and scope of the welfare state.

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Chik-fil-A, Gay Marriage, and the Role of Government

Since I’ve already written that polygamy – regardless of how weird it is – is not something that demands government intervention, you won’t be surprised that I also think that gay marriage is a non-issue.

I don’t care if two guys want to get together. I don’t care if some religion (or some other group) wants to sanction their union, and I don’t care if they want to call it marriage, or make up some new word.

But I also don’t care if some churches don’t want to sanction same-sex unions. And I don’t care if some religious people don’t want to give approval to such relationships.

The good thing about freedom is that there is room for diversity. We all don’t have to be the same and think the same.

Unless, of course, government is involved. Then private differences become policy disputes.

This is why I urged non-intervention in this CNN discussion about whether local governments should discriminate against a restaurant chain merely because the top executive has religious beliefs that irk some politicians.

Some of these local politicians are nothing but Chavez-style  thugs, willing to use government coercion for arbitrary and capricious reasons. I hope my disdain was apparent in the interview.

P.S. Just to show I’m consistent, here’s my post urging that Bush’s pro-marriage program be defunded.

P.P.S. And for those who appreciate humor, there are good gay marriage one-liners among the rest of the jokes you can peruse here, here, and here.

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Political Satire and the Colorado Shootings

I wrote a serious post last week asking why Brian Ross wasn’t fired after linking the shooter to the Tea Party on the basis of nothing more than a shared (and somewhat common) name.

Today, let’s look at some good political satire. Let’s start with a cartoon mocking Mr. Ross, the nitwit from ABC News.

You can see more good Bok cartoons here, here, here, here, here, and here.

And speaking of nitwits, here’s a good cartoon looking at several rich buffoons, all of who raced to exploit the tragedy by uttering vacuous platitudes about gun control and violence.

More amusing Eric Allie cartoons can be seen here, here, and here.

On the topic of gun control, one silver lining to the dark cloud of this madman’s actions is that it is increasingly clear that the left has basically given up on trying to violate the Constitution (though keep in mind that the Supreme Court has been upholding the Second Amendment by the narrowest of margins, so Obama – or Romney – can undo that victory in the next couple of years).

Chuck Asay, as regular readers know, is one of my favorites. You can see more of his work here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

Last but not least, I sometimes wish I was a statist. Wouldn’t it be fun, after all, to make a ridiculous and absurd accusation that the killings were somehow caused by getting a handout from the federal government?

Which is why this cartoon is amusing. It doesn’t directly make any silly charges, but it does point out the federal government’s tangential interaction in a way that will probably irk leftists (just as they irk me when they directly say something stupid and blame the Tea Party for murders).

You can enjoy a couple of additional Glenn McCoy cartoons here and here.

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Fighting Anti-Tax Haven Demagoguery on CNN

A left-wing group recently put out a report criticizing low-tax jurisdictions for attracting capital and investment from high-tax nations.

Since I’m a big defender of tax havens and tax competition, I noted that the assumptions in the report were very dodgy. As the Wall Street Journal noted, “Dan Mitchell, a senior fellow at the libertarian Cato Institute, compared the report’s findings to some estimates of climate change.”

And here’s some of what CNBC reported.

The problem, says Dan Mitchell, a senior fellow at the Cato Institute, is that the estimate is based on a series of assumptions aimed at making people “believe that much of cross-border investing is all about tax evasion and that all this money should go to government, and that this would be a good thing.” The real problem facing governments, Mitchell says, is spending not revenues.

I also was part of this CNN report.

A few things about this interview are worth highlighting.

1. First, it’s a bit disappointing that CNN even bothered to cover this non-story. This is akin to me pulling numbers out of the air, claiming that tax reform cures cancer, and then having Fox News report my make-believe nonsense simply because some of the programming is conservative.

It’s also rather revealing that they referred to the Tax Justice Network merely as an “advocacy group” rather than revealing that they have a hard-left orientation. I don’t object to Cato being identified as “libertarian-leaning,” but why not also let viewers know that the cranks at TJN also have a point of view?

2. Now let’s shift to policy. The second thing worth noting is that Mr. Henry says (around the 2:23 mark) that it would be good for politicians to get their grubby hands on cross-border investment capital so it can be “put to use.”

This is a remarkably radical and misguided assertion, as you can see from this chart. Henry is basically saying that money should be diverted from private capital markets, where it funds wage-boosting investment, in order to facilitate higher spending by politicians who already have spent their nations into fiscal crisis.

3. Even though I wasn’t given credit for the comment, I’m glad that the reporter (at the 2:38 mark) noted my argument that the real problem is that many nations have class-warfare tax systems that penalize work, saving, and investment.

This is why, when I give speeches in the so-called tax havens, I frequently say that they should be worried about “onshore” nations adopting the flat tax. Sadly, there’s no short-run possibility of replacing the corrupt tax system in America, so places like Singapore, Switzerland, and the Cayman Islands don’t have to worry about competitive pressure from the United States.

The main thing to understand about this “tax haven” debate is that groups like the Tax Justice Network are closely allied with governments in left-wing nations such as France, and they share the same goals as statist international bureaucracies such as the Paris-based Organization for Economic Cooperation and Development.

If they succeed in crippling tax competition and setting up some sort of global network of tax police, more politicians will raise tax rates, causing more misery, and bringing more nations one step closer to Greek-style fiscal collapse.

P.S. The TJN report isn’t total nonsense. The author correctly recognizes, for instance, that the United States is a so-called tax haven. Where we disagree is that Mr. Henry wants American lawmakers to deliberately make the United States less attractive to international investors and I think it is a gross mistake to enact policies that will hurt American workers by driving capital out of the economy.

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Obama’s Right – in a Perverse Way – about Government Playing an Important Role for Small Businesses

President Obama recently got himself in a bit of hot water with his “you didn’t build that” remark, which trivialized the hard work of entrepreneurs.

But he is right – in a perverse way – about government playing a big role in the life of small businesses. Thanks to a maze of regulations, the government is an unwelcome silent partner for every entrepreneur. And we’re not talking small numbers.

• Americans spend 8.8 billion hours every year filling out government forms.
• The economy-wide cost of regulation is now $1.75 trillion.
• For every bureaucrat at a regulatory agency, one study estimated that 100 jobs are destroyed in the economy’s productive sector.

But sometimes an image helps to make things easy to understand. Here’s a chart from the Joint Economic Committee, which maps out the web of regulation imposed by Washington.

This chart does more than just show sources of red tape coming from Washington. It shows that “Washington” is really several entities, such as Congress, the executive branch, the courts, and so-called regulatory agencies.

These varies entities then impose regulatory burdens in various fields, such as labor, finance, tax, and environment.

Keep in mind, by the way, that each small pink circle actually represents an entire field of regulation. So when you see, for instance, the “Obamacare” circle, what you’re really seeing is this nightmarish image of regulatory complexity.

And don’t forget the role of state and local government.

Last but not least, remember that each regulatory bureaucracy is then capable of making individual decisions that…well, you judge for yourself.

• Putting a store out of business for selling toy guns.
• Regulations making it difficult for trucking firms to weed out drunk drivers.
• Year-long sting operations by federal milk police.
• Rules harassing coffee shops with bikini-clad sales staff.
• OSHA requirements for expensive safety harnesses for people working 11 feet off the ground.
• Rules from the EEOC for “pee-shy” employees.
• The IRS making banks put foreign tax law above US tax law.

Gee, it’s almost enough to make you think regulation might be the problem and not the solution.

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The United Kingdom Is Royally /*@#$&;^%*(

The United Kingdom has a magnificent history and has produced great leaders.

I get inspired, for instance, when I watch these Margaret Thatcher speeches about “public money” and “the poor poorer.” Sort of the same feeling I get when I watch the Gipper talking about Washington being a “company town” and the “unnecessary and excessive growth of government.”

But just as the United States has devolved by moving over time from Reagan to Obama, the United Kingdom has degenerated by going from Thatcher to David Cameron.

Cameron is supposedly a conservative, but it’s more accurate to say he’s an English version of George W. Bush. Some of the lowlights of his tenure include:

• Cameron has undermined the U.K.’s system of personal retirement accounts.
• Cameron is giving taxpayer money to statist environmental groups.
• Cameron has increased the capital gains tax.
• Cameron is increasing the burden of government spending.
• Cameron has whined that it is wrong for people to minimize their tax burdens.

And his statist mentality infects other Tory politicians.

Here is a report on the intellectually bankrupt ramblings of another enemy of freedom, as reported by the Telegraph.

David Gauke, a Treasury minister, told The Daily Telegraph that home owners who allow workmen to evade VAT or income tax were forcing others to pay more. …critics accused the Government of being “unnecessarily moralistic” about ordinary people trying to keep their household bills down. …According to a report by the Public Accounts Committee, more than two million people make cash-in-hand payments costing the Treasury an estimated £2  billion. There is no law against paying someone in cash… In a speech to the Policy Exchange think tank, he said that while using Isas and claiming gift aid on charitable donations was acceptable, buying homes through companies to avoid stamp duty and using service companies to reduce income tax was “morally repugnant”. Mr Gauke said: “These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.”

Can anyone imagine Margaret Thatcher saying something this offensive?

Particularly since it is Gauke’s views that are “morally repugnant,” not the actions of people who are trying to protect their property from a rapacious and greedy government.

Keep in mind that the burden of government spending in the United Kingdom consumes nearly 49 percent of economic output according to OECD data. That’s more than Greece, Portugal, Ireland, or Spain!

Sort of makes you wonder how long it will take before investors decide that it’s no longer a good idea to lend money to such a profligate government.

The good news is that the English people aren’t as bad as their politicians. As part of the story, the Telegraph is conducting an online poll, which you can see to your left.

Notwithstanding the statolatry of UK politicians, the voting so far is overwhelmingly on the side of taxpayers rather than the government.

But public opinion doesn’t really matter if government policy continues to drift in the wrong direction.

And, as you can see from this data, the long-term outlook for the United Kingdom is very grim. And we know Cameron isn’t doing anything to address this looming crisis.

Not that this makes the UK special. Thanks to reckless entitlement programs, the same data shows that the United States also is headed for Greek-style fiscal chaos.

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Shame on the Associated Press for Sloppy and/or Biased Reporting about Poverty

In a recent post about Brian Ross and the despicable behavior of ABC News, I included examples of what I categorized as deliberate and accidental media bias.

Here’s a good (or perhaps I should say bad) example of accidental bias, demonstrating how statist premises get incorporated into news reports.

Here’s how the Associated Press began a recent story about expected increases in the poverty rate.

The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

At first glance, the story seems fine. After all, I’ve already reported on the record number of people living in poverty under Obama’s watch.

But my complaint is about the latter part of the sentence, which blithely assumes that the so-called War on Poverty improved the lives of poor people.

Check out this chart, which I first posted back last September.

As you can see, the poverty rate in America was falling at a rapid clip, but progress stopped once the so-called War on Poverty began. And ever since, the poverty rate has stayed relatively constant, oscillating between 11 percent-15 percent.

To be sure, this chart doesn’t prove that Lyndon Johnson’s redistribution programs – such as Medicaid – halted the progress that was being made.

But surely these numbers show that the folks at the Associated Press were smoking crack when they wrote that the War on Poverty led to “gains.”

The left, incidentally, does have their spin on the story. They basically cherry pick two data points and make it seem as if the diminished rate of progress during that time period was because of the War on Poverty.

…poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson’s war on poverty, launched in 1964, created Medicaid, Medicare and other social welfare programs. “I’m reluctant to say that we’ve gone back to where we were in the 1960s. The programs we enacted make a big difference…,” Edelman said.

That’s creative, but not convincing. What the data really show is that we were making good progress before LBJ imposed all his redistribution. But that rapid progress turned into slow progress and then basically came to a grinding halt within a couple of years. If that’s evidence of success, I’d hate to see what failure looks like.

If anything, the data show the benefits of moving policy in the other direction. During the Reagan years, for instance, redistribution programs were constrained and the poverty rate began to fall. And during the Clinton years, welfare reform and other market-friendly policies led to another drop in the poverty rate.

But that’s a separate issue. The main point of this post is to expose a remarkably flawed and inaccurate bit of bias embedded in an Associated Press report. I suspect it was accidental bias, presumably from some reporter who lives in a bubble and automatically assumed that government programs are like fairy dust and have magical effects.

In reality, of course, government programs tend to make problems worse, and that’s definitely been the case with the supposed War on Poverty. We have record levels of food stamp dependency, with more and more people being trapped in lives of dependency.

But watch this video and decide for yourself.

P.S. With support from left-wing international bureaucracies such as the OECD,  the Obama White House wants to rig the poverty numbers to justify even more redistribution.

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Should Politicians Get a New Tax Without First Abolishing an Existing Tax?

I’ve explained before that I’m skeptical of the Fair Tax, hostile to the value-added tax, and opposed to other forms of a national sales tax for the simple reason that I don’t trust politicians to get rid of the income tax.

Indeed, I fully suspect that the crowd in Washington – including many Republicans – would like nothing better than to impose a VAT on top of the current internal revenue code.

For the same reason, I’m inherently hostile to proposals that would create a new tax on the basis of how much we drive. As I explain in this interview for Fox Business News, the politicians would treat this tax as a new source of revenue and not get rid of gas taxes and/or property taxes on cars.

By the way, I hope everyone appreciates my sartorial splendor. A couple of years ago, some of my degenerate softball buddies made fun of me for the relatively subdued jacket I wore in this interview.

That motivated me to take the next step and unveil the madras.

P.S. Never trust politicians when they introduce a tax at a low rate and claim it won’t be a big burden. I mentioned in the interview how the first income tax in 1913 morphed into the nightmare we face today, but I also call your attention to the British tax on air travel, which has ballooned since its introduction in 1994.

P.P.S. Here’s another post on the topic of a miles-driven tax, but focusing more on the threat to privacy.

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Ice-T Defends the Second Amendment

I’ve confessed before that I am hopelessly uninformed about popular culture, so it’s no big surprise that I couldn’t identify a single song by Ice-T.

But since I’m a big supporters of the Second Amendment, I’ve decided he’s now my favorite singer (or would he be called a rapper?) after seeing him defend the right to bear arms on British TV.

Since most of the cops I know are good people who want to fight crimes against people and property (as opposed to harassing people engaged in victimless crimes or enforcing misguided bureaucratic edicts), I would like the video even more if he said “protect yourself from the government” rather than “protect yourself from the police,” but I’m nitpicking.

Ice-T and the latest in home defense

If you like what Ice-T has to say, you’ll definitely appreciate these other videos.

• Ted Nugent talking about gun ownership and the right of self defense.
• A look at the Switzerland’s strong gun culture and the importance of self defense as a protection against oppression.
• And some very powerful testimony to some weasels on Capitol Hill (make sure to pay attention around the 5:00 mark).

Lastly, for those of you who prefer addressing the issue with humor, this funny video shows that our left-wing friends are incapable of understanding this topic and this video is a heartwarming Christmas story.

Also, check out this joke comparing California with other parts of America, this interview with a general (presumably an urban legend, but could be true), and this t-shirt that I’m putting on my Christmas list.

And you can see two excellent Chuck Asay cartoons on gun control here and here.

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Is Sicily the California of Italy, or Is California the Sicily of the United States?

Considering the spectacular incompetence of the Italian government, I’m not surprised that the Italian people take extraordinary steps to protect their income from the tax police.

But I have a hard time cheering their actions, since they routinely vote for corrupt politicians and also seek to mooch off the government that they don’t want to pay for.

Sicily is a useful example. Here are key passages from a New York Times report.

…one region in particular has been in the spotlight: Sicily, which some fear has become “the Greece of Italy” and is at risk of defaulting on its high public debts. …an official in the Sicily branch of Italy’s leading industrialists association called for the island to be put into receivership by the central government to clean up its finances. …Sicily highlights the challenges that Mr. Monti is facing in trying to use pressure from European leaders and international markets to push Italy’s politicians to cut costs. Those expenses have ballooned after decades of a patronage system in which the state has been the primary means of employment in Sicily.

We know there’s a mess. And, to give credit where it’s due, the New York Times does discuss the bloated bureaucracy in Sicily.

…critics say Italy — and Sicily in particular — has been driven into dire financial straits not by austerity but by the rampant public spending of the past, the product of an entrenched jobs-for-votes system that helped keep Italian governments in power and Sicilians employed. Today, Sicily’s regional government has 1,800 employees — more than the British Cabinet Office — and the island employs 26,000 auxiliary forest rangers; in the vast forest lands of British Columbia, there are fewer than 1,500. Out of a population of five million people in Sicily, the state directly or indirectly employs more than 100,000 of them and pays pensions to many more. It changed its pension system eight years after the rest of Italy. (One retired politician recently won a case to keep an annual pension of 480,000 euros, about $584,000.)

Not surprisingly, the political class doesn’t want to fire any of the deadwood, which means an enormous burden on taxpayers and lots of suffering for young people.

“Of course that’s too many,” Mr. Lombardo said of the forest rangers. But he said it was difficult to cut back because state workers have job protection. “We have to wait for them to retire.” That system has come at a cost. Last month, Italy’s audit court issued a scathing report saying that Sicily had 7 billion euros, about $8.5 billion, of liabilities at the end of 2011 and showed “signs of unstoppable decline.” Sicily’s unemployment rate is 19.5 percent, twice the national average, and 38.8 percent of young people do not have jobs.

Lombardo must have spent time in Chicago

By the way, the head of the Sicilian government is a very accomplished politician. It’s not uncommon for lawmakers to go to prison after a stint in government, but it takes a special politician to then go back into “public service.”

Mr. Lombardo, who belongs to the Movement for Autonomy — which believes that Sicily should secede from the Italian state, as unlikely as that is to happen — said he would step down as agreed. (He is under investigation for Mafia ties. He denies the accusations and has not been formally charged. He was jailed on corruption charges in the early 1990s, though he was later acquitted.)

At least some residents have figured out how the political system works.

Many Sicilians, for their part, take a world-weary view of the political class. “If I steal a little, I go to jail; if I steal a lot, I advance my career,” Gioacchino De Giorgi, 34, said as he worked in a tobacco shop in downtown Palermo.

Needless to say, this story is yet another example of why bailouts are a bad idea. As I’ve explained before, governments will only make the right reforms as a final option. Bailouts, by contrast, simply give politicians more time to delay, while also making the debt bubble even bigger as reforms are postponed.

This is true, regardless of whether bailouts come from national governments, the European Commission, or international bureaucracies such as the International Monetary Fund.

And it’s true whether we’re talking about an Italian province, or an American state that also is governed by short-sighted and corrupt politicians. Like California.

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Thank the Private Sector for the Internet, not Government

As part of his campaign to expand the size and scope of the federal government (and to justify his advocacy of class-warfare taxation), President Obama has been asserting that all of us benefit from government spending.

It’s why he now echoes Elizabeth Warren’s claim that entrepreneurs owe their success to government programs and activities.

It’s also why he cites the Internet as an example of wise, prudent, and far-seeing government intervention.

Sounds like a powerful example. The kind of anecdote that leaves libertarians momentarily speechless.

But there’s just one small, tiny, itsy-bitsy, teeny-weeny problem with Obama’s example. It ain’t true.

Here are some excerpts from a first-rate column by Gordon Crovitz in the Wall Street Journal.

It’s an urban legend that the government launched the Internet. …The truth is a more interesting story about how innovation happens—and about how hard it is to build successful technology companies even once the government gets out of the way. …If the government didn’t invent the Internet, who did? Vinton Cerf developed the TCP/IP protocol, the Internet’s backbone, and Tim Berners-Lee gets credit for hyperlinks. …But full credit goes to the company where Mr. Taylor worked after leaving ARPA: Xerox. It was at the Xerox PARC labs in Silicon Valley in the 1970s that the Ethernet was developed to link different computer networks. Researchers there also developed the first personal computer (the Xerox Alto) and the graphical user interface that still drives computer usage today. …So having created the Internet, why didn’t Xerox become the biggest company in the world? The answer explains the disconnect between a government-led view of business and how innovation actually happens. Executives at Xerox headquarters in Rochester, N.Y., were focused on selling copiers. From their standpoint, the Ethernet was important only so that people in an office could link computers to share a copier. …As for the government’s role, the Internet was fully privatized in 1995, when a remaining piece of the network run by the National Science Foundation was closed—just as the commercial Web began to boom. Economist Tyler Cowen wrote in 2005: “The Internet, in fact, reaffirms the basic free market critique of large government. Here for 30 years the government had an immensely useful protocol for transferring information, TCP/IP, but it languished. . . . In less than a decade, private concerns have taken that protocol and created one of the most important technological revolutions of the millennia.”

It’s nice to see this urban legend of effective government punctured weakened, but let’s close out this post with a thought experiment. Let’s assume that the federal government deserves the lion’s share of the credit for the Internet.

Our Tax Dollars at Work?

Or we’re sometimes told that NASA generated big benefits, such as Tang and microwave ovens, and maybe those claims are true.

Would any of this justify Obama’s proposals to expand the size and cost of the federal government?

Since I’ve actually explained in one of my videos that there are some forms of government spending – such as capital spending – that can generate positive rates of return, this is an empirical question.

But here’s where Obama’s argument breaks down. If you look at federal outlays for “major public physical capital investment” and “conduct of research and development,” they add up to less than 10 percent of the federal budget.

So the parts of the budget that theoretically might generate some positive spin-offs are trivial. The vast majority of spending, by contrast, is consumed by inefficient tax-and-transfer entitlement programs.

And what are Obama’s two biggest “accomplishments” since taking office? The so-called stimulus and Obamacare, two pieces of legislation that expand the unambiguously unproductive portions of the federal budget.

In other words, like most other politicians, Obama is like an unethical used car salesman. He lures the unsuspecting onto the lot with glib talk of good roads and the Internet, but they wind up driving away with a lemon known as the welfare state.

P.S. Speaking of Elizabeth Warren, here’s an amusing parody of her views as they apply to the world of intimacy. And here’s a video mocking her “Soul Man” claims of Indian ancestry.

P.P.S. Just like I recently apologized to hyenas and gang members, I now apologize to used car salesmen for putting them on the same level of politicians.

P.P.P.S. The government may not have invented the Internet, but it sure is anxious to tax it, with everyone from state politicians to U.N. bureaucrats trying to stick their hands in the cookie jar.

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

Addendum: My Cato colleague Jim Harper and others tell me that government played a bigger role than argued by Crovitz, so the first part of this post overstates the argument against government as incubator. But that underscores the importance of what I wrote in the concluding part of the post.

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Why Does the Government Discriminate to Help Me Get Through Security at Airports?

I don’t like discrimination by the government.

• I’m for the flat tax because I don’t want government to discriminate based on how people earn their income, how they spend their income, or the level of their income.
• I’m against government-imposed race and sex preferences because I think everyone should be judged by their talents, ability, and willingness to work hard.
• I’m against the too-big-to-fail policy that enriches big banks by shielding them from market discipline.

I’m even against government-sponsored discrimination when I’m the beneficiary.

It bothers me, for instance, that the Transportation Security Administration has special lines for people – like me – who have some sort of elite frequent-flyer status with one or more airlines.

I have no problem with United Airlines treating me well. I give them lots of money because they’re my main airline, so it’s good business practice for them to reward me with special treatment regarding boarding, seat assignments, and upgrades.

But the Transportation Security Administration has only one responsibility (don’t laugh), and that’s to make sure people don’t bring dangerous items on airplanes.

So why should I get VIP treatment from a government agency just because I fly a lot?

That might be justifiable if I paid extra, sort of like drivers who pay more to ride in H-O-T lanes.

It might be justifiable if I participated in some sort of pre-screening process that enabled me to bypass some or all of TSA’s pointless security apparatus – assuming, though, that the pre-screening process was open to everybody.

And maybe there are other examples where special treatment might be warranted, such as payments from the airlines to cover the costs of the VIP lanes.

But buying a first class ticket or being a frequent flyer should not be sufficient to get someone favoritism from the government.

P.S. This post does not imply I approve of the TSA’s performance. Indeed, 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).

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Why Hasn’t Brian Ross of ABC News Been Fired?

I try not to spend too much time complaining about media bias, mostly because it doesn’t do any good.

But I have had a couple of posts about the topic, usually when there’s a hopelessly outrageous example on an issue I care about.

• That’s why I complained about an ABC report about Mitt Romney and tax havens.
• It’s why I groused about a Reuters report that presumed Obama’s spending plans created jobs.
• And it’s why I nailed the Washington Post for using “slash” to describe a tiny reduction in the growth of spending.

I’ve also had a few posts where I hit the media for mistakes that probably don’t represent overt bias, but instead reflect no knowledge of economics and/or a cloistered worldview.

• This New York Times report about government freebies being costless.
• This distorted story, also from the New York Times, about tax reform and loopholes.
• A report from the EU Observer about which Greek political parties are against bailouts.
• And this story from the Associated Press about Social Security’s finances.

Now we can add another example to the list. But it definitely belongs in the first group, because this is clear, blatant, and deliberate bias. I’m talking, of course, about ABC News and its reprehensible decision to smear a member of the Tea Party simply because he had the same name as the Colorado killer.

The obvious question to ask is why the reporter who did the smear, Brian Ross, hasn’t been fired. But not just Brian Ross. The axe should fall on anyone involved in the ideologically biased and legally reckless decision to speculate that a 52-year old Hispanic Tea Party member was responsible for the Colorado shooting

Here’s a good cartoon from the Hope-n-Change website, which has an amusing collection of anti-Obama cartoons. This does capture the mentality of the establishment media.

P.S. Here’s another cartoon about media bias that is definitely worth sharing.

P.P.S. I get irked whenever anybody refers to the big networks and newspapers as the “mainstream press.” That’s a horribly misguided term, considering how far left they are. The Tea Party is much closer to the mainstream than those clowns. That’s why they should be called the “establishment press.”

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Ambassador John Bolton Explains Need to Block Back-Door Gun Control Scheme from the United Nations

I’m not a big fan of the United Nations and I’m not a supporter of gun control, so you can imagine how agitated I get when two bad things are combined together.

And that’s exactly what’s happening with a new anti-gun treaty being concocted by the United Nations.

John Bolton, a former U.S. Ambassador to the organization, explains what the other side is trying to achieve.

Gun-control advocates and the Obama administration are rushing to complete negotiations in New York on a proposed international agreement called the United Nations Arms Trade Treaty. They hope to finish the drafting within weeks, perhaps having a document ready for signature so that President Obama could press a lame-duck Senate to ratify it after our Nov. 6 elections.

He also explains why.

Gun-control groups, frustrated by years of failing to impose harsh measures on American firearms owners, have pursued a covert strategy. Instead of constant defeats in Congress and local legislatures, they instead shifted their attention to the international realm, hoping to achieve by indirection what they had consistently failed to do at home.

Simply stated, this is an effort to erode American sovereignty and short-circuit freedoms guaranteed by the Constitution.

Ambassador Bolton elaborates.

Ostensibly, UNATT is about regulating government-to-government arms transfers or direct sales by manufacturers to foreign governments. But the hidden agenda of the gun controllers is to craft treaty language that, while seemingly innocuous, has long-range implications for the use and ownership of guns here in America. The real danger lies in vague, ambiguous stipulations gun-control advocates could later cite as requiring further domestic restraints. In other words, they hope to use restrictions on international gun sales to control gun sales at home. Indeed, the theme underlying the negotiations is that the private ownership of guns is inherently dangerous. There is, of course, little doubt why dictatorships and authoritarian regimes don’t want their oppressed citizens to have weapons — but such positions do not merit American support.

And he provides some background, just in case anyone has any doubts about the true intentions of the treaty advocates.

The U.S. has a long history of respecting the individual ownership of firearms. It is against this legitimate tradition of private ownership that gun-control advocates are exerting their efforts. Their strategy surfaced most clearly in 2001 at a UN conference aiming to restrict international sales of “small arms and light weapons,” a precursor to the current negotiations. I was part of the Bush administration’s diplomacy to block this effort, which we ultimately succeeded in doing. During the 2001 debate, I spoke at the UN General Assembly in New York, and the reaction to my remarks revealed the gun-controllers’ hidden agenda. I said merely that the United States would not agree to any proposed treaty that would violate our Second Amendment freedoms. From the gun-control lobby’s reaction, you would have thought I said something outrageous or even dangerous. In truth, they knew we had uncovered their agenda and spiked it.

Fortunately, there’s no risk (at least at this moment) of the treaty getting approved by the U.S. Senate.

Significantly, a bipartisan letter signed by 58 senators has already rejected any treaty that seeks, however cleverly, to impose gun-control obligations on the U.S. The gun-control crowd’s strategy of trying to do through treaties what it cannot accomplish in America’s domestic political process is not unique to that issue. We have seen and will undoubtedly see many more examples of frustrated statists, unable to prevail in free and open debate, seeking to take their issues global, hoping to find more sympathetic audiences. Stopping UNATT will be one clear way to send a message that such strategies are doomed to failure.

But once the treaty begins to circulate around the world, and gets approval from the various dictatorships, kleptocracies, and thug regimes (as well as support from the milquetoast nations of Europe), then there will be pressure on the United States to join with “world opinion” and ratify the agreement.

In other words, it will be like the Law of the Sea Treaty. Another misguided scheme that sits on the shelf, while statists wait for an opportune moment to impose it on the nation.

For more information on the folly of gun control, you can watch some good videos here, here, and here. I also recommend this Thomas Sowell column, this Cato Institute study, this Stephen Hunter column in the Washington Post, and my NRA-TV appearance on the importance of gun ownership as a safeguard against societal breakdown.

P.S. I image that the statists will attempt to use the murders in Colorado to advance their agenda, just as happened after the shootings in Arizona. Heck, we’ve already seen the left falsely report that the Colorado killer was a member of the Tea Party, which also is what happened after the Arizona killings.

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Much-Deserved Abuse for the Crooks and Scoundrels in Washington

Every couple of weeks, I share the best politically oriented one-liners from the late-night comics.

While I enjoy the laughs as much as anybody, there’s a serious point to be made. Politicians deserve mockery.

They are not our “leaders.” They are compulsive narcissists who are trying to compensate for losing student council elections in the 6th grade.

And when they achieve their dreams of wielding power over the rest of us, they routinely engage in corrupt behavior just so they can try to buy our votes in the next election. Using other people’s money, of course.

And because they put themselves about the country 99 percent of the time, they’ve burdened us with reckless and unsustainable entitlement programs that have us on a trajectory for Greek-style fiscal chaos.

So enjoy, but also have scorn.

Jay Leno

• Federal Reserve Chairman Ben Bernanke told a congressional committee the economic recovery is weakening. But the good news is most Americans will not be affected because they had no idea there was a recovery.
• Jobless claims rose again by 35,000 last week. Not good. But it does show that if you’re unsuccessful in this country, you didn’t do it on your own. You had help. Thank you, President Obama.
• Well, President Obama and first lady Michelle went to see the U.S. Olympic basketball team play Brazil the other day. And during the game, they were put on the kiss cam. At first, they didn’t kiss and the crowd booed them. Then the camera went back to them. And they finally did kiss. Isn’t that amazing? A politician in Washington caught on camera kissing a woman he’s actually married to?
• Romney’s surrogate, John Sununu, he’s in hot water for saying, “I wish President Obama would learn how to be an American.” Well, that’s kind of insulting, isn’t it? President Obama spends money he doesn’t have. He loves to skip work and play golf. He sneaks away from his wife to eat fatty foods. What is more American than that?
• Ralph Lauren says the uniforms they make for the 2014 Winter Olympics will be made right here in the USA — using our own old-fashioned illegal immigrants.
• Well, Harry Reid and other members of Congress, they’re just furious over this Olympic uniform deal. He says we should burn the uniforms, and it’s an embarrassment and a disgrace. Not as embarrassing as Congress constantly borrowing money from the Chinese, but still embarrassing.
• The big news in Washington now is the disappearance of Congressman Jesse Jackson, Jr. Nobody can find him. He’s completely disappeared. People think he’s either in rehab or he might have been given his own show on CNN.
• I was sweating like Mitt Romney trying to differentiate between Romneycare and Obamacare.
• There’s talk that if Jennifer Lopez leaves “American Idol” they’re going to bring back Paula Abdul. Insiders say Paula was chosen over Chief Justice John Roberts, who producers felt was too unpredictable.
• The White House is now urging Americans not to “read too much” into last week’s jobs report. In fact, they said it would be best if you didn’t read it at all.
• Mitt Romney told the crowd at an NAACP conference that if he were elected president he would fight for all millionaires, black or white.
• At a Democratic fundraiser in Seattle earlier this week, Vice President Biden said that Romney’s economic policies were “George Bush on steroids” — as opposed to Obama’s policies, which are “Jimmy Carter on Ambien.”
• In Mexico, the loser of their presidential election is accusing the winner of election fraud. He says the winner bought millions of votes. To which Mitt Romney said, “You can do that?”

David Letterman

• After years of criticism for his poor record on boosting employment, President Barack Obama is pleased to announce today he created a job. Congratulations to Amelio Markham from Smithsburg, Maryland, on his new job, making charts illustrating President Obama’s downward spiraling approval ratings.
• Steven Tyler and another of the “American Idol” judges, Jennifer Lopez — fired, gone, they’re not coming back. Well, that’s two more jobs lost under Obama.
• Wall Street says they prefer Mitt Romney for president. And by God, who could question Wall Street’s judgment?
• The American League was defeated 8-0. The American League also lost the 2011 All-Star Game as well as the 2010 All-Star Game. Under President Obama, America’s own league is on a losing streak.

Conan

• According to a new report, the average Canadian is now richer than the average American. This is bad news for Americans and worse news for those Mexicans who now have to tunnel all the way to Canada.

Jimmy Kimmel

• A new study claims that for the first time ever, Canadians are wealthier than Americans. We are their Mexico now, it turns out.
•  Over the past five years the value of the Canadian household has risen above the American household. I think most of that came from Justin Bieber and he belongs to us now.
• Maybe the reason Mitt Romney doesn’t want to release his tax returns is because Mitt Romney is Batman.
• John Boehner, who is speaker of the House of Representatives, is super tan, he cries, and he drinks. He should be speaker of the “Jersey Shore” house.
• Mitt Romney gave a speech at the annual NAACP conference in Houston. Why, I don’t know. Maybe he confused NAACP with NASCAR.
• The event got off to a bad start when Romney pulled up in front of the convention center and he instinctively locked the doors to his limo.

I realize it’s inappropriate to interrupt this string of one-liners with a serious point, but read this if you’re curious why Canadians are now doing so well. To compensate, here’s a joke about American leftists migrating to Canada after the Tea Party election of 2010.

Jimmy Fallon

• A new CBS poll found that 47 percent of voters are supporting Mitt Romney, while 46 percent support Obama. Well, it makes sense, because if Romney wins, it’s definitely going to be thanks to the one percent.
• During last night’s USA-Brazil basketball game, President Obama gave Michelle a kiss when they were shown on the kiss cam. That’s cute. It explains why everyone was like, “Quick, put him on the fix the economy cam!”
• Yesterday in Cincinnati, Jerry Springer announced that he is endorsing Obama. Don’t get too excited. Obama still has to win over Judge Judy and Maury.

Craig Ferguson

• Batman is a billionaire who doesn’t trust the system to get the job done. He has a butler and an awesome car that gets like two miles to the gallon. He is the most Republican superhero of all time! Batman is a Republican.

You can read more of these amusing jokes, put together by the good folks at Newsmax.com, by looking here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

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What Obama and the New York Times Don’t Understand about Worldwide Taxation

Mitt Romney is being criticized for supporting “territorial taxation,” which is the common-sense notion that each nation gets to control the taxation of economic activity inside its borders.

While promoting his own class-warfare agenda, President Obama recently condemned Romney’s approach. His views, unsurprisingly, were echoed in a New York Times editorial.

President Obama raised…his proposals for tax credits for manufacturers in the United States to encourage the creation of new jobs. He said this was greatly preferable to Mitt Romney’s support for a so-called territorial tax system, in which the overseas profits of American corporations would escape United States taxation altogether. It’s not surprising that large multinational corporations strongly support a territorial tax system, which, they say, would make them more competitive with foreign rivals. What they don’t say, and what Mr. Obama stressed, is that eliminating federal taxes on foreign profits would create a powerful incentive for companies to shift even more jobs and investment overseas — the opposite of what the economy needs.

Since even left-leaning economists generally agree that tax credits for manufacturers are ineffective gimmicks proposed for political purposes, let’s set that topic aside and focus on the issue of territorial taxation.

Or, to be more specific, let’s compare the proposed system of territorial taxation to the current system of “worldwide taxation.”

Worldwide taxation means that a company is taxed not only on it’s domestic earnings, but also on its foreign earnings. Yet the “foreign-source income” of U.S. companies is “domestic-source income” in the nations where those earnings are generated, so that income already is subject to tax by those other governments.

In other words, worldwide taxation results in a version of double taxation.

The U.S. system seeks to mitigate this bad effect by allowing American-based companies a “credit” for some of the taxes they pay to foreign governments, but that system is very incomplete.

And even if it worked perfectly, America’s high corporate tax rate still puts U.S. companies in a very disadvantageous position. If an American firm, Dutch firm, and Irish firm are competing for business in Ireland, the latter two only pay the 12.5 percent Irish corporate tax on any profits they earn. The U.S. company also pays that tax, but then also pays an additional 22.5 percent to the IRS (the 35 percent U.S. tax rate minus a credit for the 12.5 percent Irish tax).

In an attempt to deal with this self-imposed disadvantage, the U.S. tax system also has something called “deferral,” which allows American companies to delay the extra tax (though the Obama Administration has proposed to eliminate that provision!).

Romney is proposing to put American companies on a level playing field by going in the other direction. Instead of immediate worldwide taxation, as Obama wants, he wants to implement territorial taxation.

But what about the accusation from the New York Times that territorial taxation “would create a powerful incentive for companies to shift even more jobs and investment overseas”?

Well, they’re somewhat right…and they’re totally wrong. Here’s what I’ve said about that issue.

If a company can save money by building widgets in Ireland and selling them to the US market, then we shouldn’t be surprised that some of them will consider that option.  So does this mean the President’s proposal might save some American jobs? Definitely not. If deferral is curtailed, that may prevent an American company from taking advantage of a profitable opportunity to build a factory in some place like Ireland. But U.S. tax law does not constrain foreign companies operating in foreign countries. So there would be nothing to prevent a Dutch company from taking advantage of that profitable Irish opportunity. And since a foreign-based company can ship goods into the U.S. market under the same rules as a U.S. company’s foreign subsidiary, worldwide taxation does not insulate America from overseas competition. It simply means that foreign companies get the business and earn the profits.

To put it bluntly, America’s tax code is driving jobs and investment to other nations. America’s high corporate tax rate is a huge self-inflected wound for American competitiveness.

Getting rid of deferral doesn’t solve any problems, as I explain in this video. Indeed, Obama’s policy would make a bad system even worse.

But, it’s also important to admit that shifting to territorial taxation isn’t a complete solution. Yes, it will help American-based companies compete for market share abroad by creating a level playing field. But if policy makers want to make the United States a more attractive location for jobs and investment, then a big cut in the corporate tax rate should be the next step.

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Louisiana’s Sensible Rule on Political Corruption

Citing sleazy examples such as the Export-Import Bank, I’ve offered some serious analysis about controlling political corruption by shrinking the size and scope of the federal government.

But perhaps the Louisiana approach is the right way. Here’s a cartoon sent to me by a buddy from the Pelican State.

Though I wonder whether Louisiana is the right example. Illinois has a pretty impressive group of recent governors who have gone to prison, leading to some amusing jokes from Conan and Leno.

For general abuse of politicians (which is almost always a good thing), here’s a good collection of humor, including this one showing the mindset of a politician, this one about why it’s easy to operate on politicians, this one about a politician visiting flyover country, this one about a politician in a bar, this one about Little Johnny copying politicians, and this one showing the relationship between people and elected officials.

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Europe’s Crisis Is Because of Too Much Government, Not the Euro Currency

The mess in Europe has been rather frustrating, largely because almost everybody is on the wrong side.

Some folks say they want “austerity,” but that’s largely a code word for higher taxes. They’re fighting against the people who say they want “growth,” but that’s generally a code word for more Keynesian spending.

So you can understand how this debate between higher taxes and higher spending is like nails on a chalkboard for someone who wants smaller government.

And then, to get me even more irritated, lots of people support bailouts because they supposedly are needed to save the euro currency.

When I ask these people why a default in, say, Greece threatens the euro, they look at me as if it’s the year 1491 and I’ve declared the earth isn’t flat.

So I’m delighted that the Wall Street Journal has published some wise observations by a leading French economist (an intellectual heir to Bastiat!), who shares my disdain for the current discussion. Here are some excerpts from Prof. Salin’s column, starting with his common-sense hypothesis.

…there is no “euro crisis.” The single currency doesn’t have to be “saved” or else explode. The present crisis is not a European monetary problem at all, but rather a debt problem in some countries—Greece, Spain and some others—that happen to be members of the euro zone. Specifically, these are public-debt problems, stemming from bad budget management by their governments. But there is no logical link between these countries’ fiscal situations and the functioning of the euro system.

Salin then looks at how the artificial link was created between the euro currency and the fiscal crisis, and he makes a very good analogy (and I think it’s good because I’ve made the same point) to a potential state-level bankruptcy in America.

The public-debt problem becomes a euro problem only insofar as governments arbitrarily decide that there must be some “European solidarity” inside the euro zone. But how does mutual participation in the same currency logically imply that spendthrift governments should get help from the others? When a state in the U.S. has a debt problem, one never hears that there is a “dollar crisis.” There is simply a problem of budget management in that state.

He then says a euro crisis is being created, but only because the European Central Bank has surrendered its independence and is conducting backdoor bailouts.

Because European politicians have decided to create an artificial link between national budget problems and the functioning of the euro system, they have now effectively created a “euro crisis.” To help out badly managed governments, the European Central Bank is now buying public bonds issued by these governments or supplying liquidity to support their failing banks. In so doing, the ECB is violating its own principles and introducing harmful distortions.

Last but not least, Salin warns that politicians are using the crisis as an excuse for more bad policy – sort of the European version of Mitchell’s Law, with one bad policy (excessive spending) being the precursor of additional bad policy (centralization).

Politicians now argue that “saving the euro” will require not only propping up Europe’s irresponsible governments, but also centralizing decision-making. This is now the dominant opinion of politicians in Europe, France in particular. There are a few reasons why politicians in Paris might take that view. They might see themselves being in a similar situation as Greece in the near future, so all the schemes to “save the euro” could also be helpful to them shortly. They might also be looking to shift public attention away from France’s internal problems and toward the rest of Europe instead. It’s easier to complain about what one’s neighbors are doing than to tackle problems at home. France needs drastic tax cuts and far-reaching deregulation and labor-market liberalization. Much simpler to get the media worked up about the next “euro crisis” meeting with Angela Merkel.

This is a bit of a dry topic, but it has enormous implications since Europe already is a mess and the fiscal crisis sooner or later will spread to the supposedly prudent nations such as Germany and the Netherlands. And, thanks to entitlement programs, the United States isn’t that far behind.

So may as well enjoy some humor before the world falls apart, including this cartoon about bailouts to Europe from America, the parody video about Germany and downgrades, this cartoon about Greece deciding to stay in the euro, this “how the Greeks see Europe” map, and this cartoon about Obama’s approach to the European model.

P.S. Here’s a video narrated by a former Cato intern about the five lessons America should learn from the European fiscal crisis.

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Thanks to Pro-Free Market Reforms, Chile Is the Latin Tiger

One of the reasons why this blog is called International Liberty is that the world is a laboratory, with some nations (such as France) showing why statism is a mistake, other jurisdictions (such as Hong Kong) showing that freedom is a key to prosperity, and other countries (such as Sweden) having good and bad features.

It’s time to include Chile in the list of nations with generally good policies. That nation’s transition from statism and dictatorship to freedom and prosperity must rank as one of the most positive developments over the past 30 years.

Here’s some of what I wrote with Julia Morriss for the Daily Caller. Let’s start with the bad news.

Thirty years ago, Chile was a basket case. A socialist government in the 1970s had crippled the economy and destabilized society, leading to civil unrest and a military coup. Given the dismal situation, it’s no surprise that Chile’s economy was moribund and other Latin American countries, such as Mexico, Venezuela, and Argentina, had about twice as much per-capita economic output.

Realizing that change was necessary, the nation began to adopt pro-market reforms. Many people in the policy world are at least vaguely familiar with the system of personal retirement accounts that was introduced in the early 1980s, but we explain in the article that pension reform was just the beginning.

Let’s look at how Chile became the Latin Tiger. Pension reform is the best-known economic reform in Chile. Ever since the early 1980s, workers have been allowed to put 10 percent of their income into a personal retirement account. This system, implemented by José Piñera, has been remarkably successful, reducing the burden of taxes and spending and increasing saving and investment, while also producing a 50-100 percent increase in retirement benefits. Chile is now a nation of capitalists. But it takes a lot more than entitlement reform, however impressive, to turn a nation into an economic success story. What made Chile special was across-the-board economic liberalization.

We then show the data (on a scale of 1-10) from the Fraser Institute’s Economic Freedom of the World, which confirm significant pro-market reforms in just about all facets of economic policy over the past three decades.

But have these reforms made a difference for the Chilean people? The answer seems to be a firm yes.

This has meant good things for all segments of the population. The number of people below the poverty line dropped from 40 percent to 20 percent between 1985 and 1997 and then to 15.1 percent in 2009. Public debt is now under 10 percent of GDP and after 1983 GDP grew an average of 4.6 percent per year. But growth isn’t a random event. Chile has prospered because the burden of government has declined. Chile is now ranked number one for freedom in its region and number seven in the world, even ahead of the United States.

But I think the most important piece of evidence (building on the powerful comparison in this chart) is in the second table we included with the article.

Chile’s per-capita GDP has increased by about 130 percent, while other major Latin American nations have experienced much more modest growth (or, in the tragic case of Venezuela, almost no growth).

Perhaps not as impressive as the performance of Hong Kong and Singapore, but that’s to be expected since they regularly rank as the world’s two most pro-market jurisdictions.

But that’s not to take the limelight away from Chile. That nation’s reforms are impressive – particularly considering the grim developments of the 1970s. So our takeaway is rather obvious.

The lesson from Chile is that free markets and small government are a recipe for prosperity. The key for other developing nations is to figure out how to achieve these benefits without first suffering through a period of socialist tyranny and military dictatorship.

Heck, if other developing nations learn the right lessons from Chile, maybe we can even educate policy makers in America about the benefits of restraining Leviathan.

P.S. One thing that Julia and I forgot to include in the article is that Chile has reformed its education system with vouchers, similar to the good reforms in Sweden and the Netherlands.

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The Turbo-Charged Italian Version of the Laffer Curve

Thanks largely to the Laffer Curve, there are some impressive examples of failed tax increases in countries such as the United States, France, and the United Kingdom. But if there was a prize for the people who most vociferously resist turning over more of their income to government, the Italians would be the odds-on favorite to win.

When they’re not firebombing tax offices to show their displeasure, they’re taking to the high seas to escape.

Here are some excerpts from a report in the UK-based Telegraph about runaway yachts.

Thousands are weighing anchor and fleeing with their gin palaces to quiet corners of the Mediterranean to escape a tax evasion crackdown – part of efforts by the government of Mario Monti, the prime minister, to tackle Italy’s €1.9 trillion public debt. …in the ports and marinas they are going after the owners of luxury yachts. Uniformed officers of the Guardia di Finanza, or tax police, are performing on-the-spot checks, boarding boats and checking owners’ details against their tax records. …The unwelcome attention has led many yacht owners to flee Italy’s marinas for friendlier foreign ports, from Corsica and the Cote d’Azur in the west to Croatia, Slovenia, Montenegro and Greece in the east. Others are heading southwards, to Malta and Tunisia – where they can access their boats on low-cost budget flights from Italy for a fraction of the tax bill they might otherwise face.

Not surprisingly, a lot of middle-class people are suffering because of lost business.

Arriverderci, Polizia Fiscale!

Around 30,000 yachts have fled Italy this year, costing €200 million in lost revenue from mooring fees, port services and fuel sales, according to Assomarinas, the Italian Association of Marinas. “We’ve lost 10 to 15 per cent of our regular customers,” said Roberto Perocchio, the president of Assomarinas. “This is the worst crisis in Italian boating history. The authorities are using scare tactics and creating a climate of fear.” …Plans for a further 30,000 new berths have been put on hold. Business is down by more than a third in many marinas, with some half empty compared to last summer. “We’ve lost 40 boats in the last few months, all between 20 and 25 metres long,” said Giovanni Sorci, director of a marina at Rimini, on the Adriatic coast. “Most went to Slovenia – in fact it is so popular that there’s now barely a berth to be had there. …At Porto Rotondo in Sardinia, Giacomo Pileri, the general manager of a 700-berth marina, said at least 150 boats had fled to nearby Corsica. …A steep new tax of up to €700 per day on the largest yachts mooring in Italian ports, introduced by the Monti government in December, was watered down in March to exclude foreign-owned boats. But it has further fuelled the exodus of Italian boats abroad.

And it’s not just yachts that are being targeted by a revenue-hungry government. Here’s a remarkable report from Reuters on what’s happened to the luxury car market (h/t: suyts space).

Italians spooked by rising car taxes and highly publicized tax fraud spot checks cut back their purchases of Fiat’s high-end sports car brands Ferrari and Maserati in the first quarter of 2012, an industry body said on Tuesday. Ferrari sales slumped 51.5 percent, in Italy, and Maserati sales plummeted by 70 percent, said Italian car dealers group Federauto in a statement. Prime Minister Mario Monti’s government has stepped up its fight on tax evasion with spot checks on supercar drivers, as well as higher taxes on large cars. “These figures show how the choices made by the government are literally terrorizing potential clients,” said Federauto chairman Filippo Pavan Bernacchi.

I assume those awful sales numbers are partly because the economy is weak, but well-to-do Italians obviously don’t want to attract attention from the tax police.

The moral of the story is that Italy’s government should try a new strategy. The politicians need to understand that taxpayers don’t meekly acquiesce, like lambs in a slaughterhouse.

• When tax rates increase, sometimes people engage in tax avoidance, lowering their tax liabilities legally.
• When tax rates change, sometimes people choose to alter their levels of work, saving, and investment.
• And when tax rates go up, sometimes people resort to illegal steps to protect themselves from the tax authority.

Heck, even the folks at the International Monetary Fund (a crowd not known for rabid free-market sympathies) have acknowledged that excessive taxation is the leading cause of the shadow economy.

So rather than trying to squeeze more blood from an unwilling stone, maybe the Italian government should junk the current tax code and adopt a simple and fair flat tax.

To conclude, here’s Part II of the three-part video series on the Laffer Curve, which focuses on historical evidence (including what happened to the yacht market in the U.S. when politicians went after the “rich”).

Sort of makes you wonder why politicians never seem to learn from their mistakes – especially when thoughtful people like me give them free lessons about the relationship between tax rates, tax revenue, and taxable income.

P.S. While I’m very happy to defend tax evasion in cases where government is excessive, venal, and/or corrupt, I suspect that Italians would evade even if they lived under a Hong Kong-style fiscal regime. If that ever happened (don’t hold your breath), even I wouldn’t get upset about crackdowns on yacht owners and Maserati drivers who aren’t declaring any income.

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Senator Patty Murray Wants the GOP to Do a Belly Flop off the Fiscal Cliff

Democrats have openly admitted that their top political objective is to get Republicans to give up their no-tax-hike position.

You would think, therefore, that Republicans would instinctively recognize that they should hold firm. After all, when your enemy wants you to do something, it’s not because he has your best interests at heart.

But there’s a reason that the GOP is known as the “stupid party” and this year’s tax fight may give them an opportunity to further demonstrate their ineptitude. Especially because Democrats have launched a two-pronged attack in hopes of bullying Republicans into surrender.

1. Democrats are saying that there will be automatic cuts to the defense budget (sequestration) unless Republicans agree to raise taxes.
2. Democrats are saying that they’ll let all the Bush tax cuts expire at the end of the year – thus screwing all taxpayers – unless Republicans agree to Obama’s class-warfare proposals to soak the rich.

I’ve already dealt with the first threat, pointing out that the defense budget still grows by 17 percent over the next 10 years with a sequester, so there’s no need to surrender to a tax hike (especially since the Pentagon accounts for 45 percent of global military spending).

As such, let’s deal with the second threat, which is actually a repeat of the fight we had back in 2010. Back then, Republicans said that extending the 2001 and 2003 tax cuts was an all-or-nothing proposition, while Democrats issued their own ultimatum and said that the rich should be hit with higher tax rates.

Republicans won that fight, even though they were heavily outnumbered in both the House and Senate. So why, given that they control the House and have many more seats in the Senate, isn’t this year’s fight an easy win for the GOP?

Beats me, but the Democrats are playing hardball, perhaps because they think a fight over class warfare is a good way of distracting voters from the weak economy.

One of the Senate’s top Democrats, Patty Murray of Washington, has thrown down the gauntlet and stated that her colleagues are willing to push all taxpayers off the fiscal cliff. Here’s some of what the Wall Street Journal opined about her remarks.

Democrats must feel really good about their election chances, because their latest campaign strategy is to say how willing and eager they are to leap off the January tax cliff. They’re all but daring Republicans to make the Democrats’ day by refusing to raise taxes before the election. …In a speech at the Brookings Institution, she declared that if Republicans won’t raise taxes on income above $250,000 before November, Democrats will gladly let all of the Bush tax rates expire at the end of the year—even on the middle class, and no matter the economic consequences.

The editors at the WSJ are mystified as to why Democrats are willing to undermine an already weak economy with an election just a few months away.

The Murray Democrats are the ones holding the middle-class rates hostage to a GOP vote to raise taxes on the affluent. …Mrs. Murray may think she’s putting Republicans on the political spot, but her real hostage is the already weak economy. Growth in the first quarter was a mere 1.9%, and economists have steadily downgraded their expectations for the second. As the tax cliff approaches, the policy uncertainty is already causing businesses to hold off on hiring and investment. Even the Keynesians at the Congressional Budget Office say that if all of the Bush tax rates expire, growth will fall close to recession territory.

Since the Democrats aren’t coming to me for advice, I’m not sure about their motives. Are they so wedded to class-warfare tax policy that they’re willing to sacrifice other goals in hopes of penalizing success?

Or are they playing a clever political game, figuring that a GOP surrender on taxes will generate so much discord on the right that it will more than offset any electoral downside of a weaker economy?

I suspect the answer to both questions is “yes,” but mostly to the second question. Which is why this Lisa Benson cartoon is an appropriate way to conclude this post.

P.S. You can find more Lisa Benson cartoons here, here, here, here, here, here, here, and here.

P.P.S. If you somehow think that higher taxes are necessary because it’s impossible to otherwise balance the budget, I hope you’ll change your mind when you learn we can balance the budget in just 10 years if politicians merely limit spending increases to 2 percent annually.

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Cory Booker’s Libertarian Case Against the Drug War

I’ve already confessed to man-crushes on Chris Christie, Marco Rubio, Rand Paul, Ron Johnson, and (or course) the Gipper, but it’s time for me to cross partisan and racial boundaries and announce my man-crush on Cory Booker.

From the Huffington Post, here’s what the Newark Mayor had to say about the failed War on Drugs.

Newark, N.J. Mayor Cory Booker took to Reddit Sunday to criticize the war on drugs, saying it was ineffective and “represents big overgrown government at its worst.” “The so-called War on Drugs has not succeeded in making significant reductions in drug use, drug arrests or violence,” the Democrat wrote during the Reddit “ask me anything” chat. “We are pouring huge amounts of our public resources into this current effort that are bleeding our public treasury and unnecessarily undermining human potential.” Booker then called drug arrests a “game.” “My police in Newark are involved in an almost ridiculous game of arresting the same people over and over again and when you talk to these men they have little belief that there is help or hope for them to break out of this cycle,” he wrote.

At the risk of stating the obvious, this doesn’t mean that anyone should use drugs. I’ve led a very boring life, for instance, and have never tried any illegal drugs.

But Mayor Booker is right. Like Ron Paul, Pat Robertson, Richard Branson, and Gary Johnson, he’s figured out that the Drug War is mostly a vehicle to expand the size and power of government. It’s why we have fascist asset forfeiture laws and costly money laundering laws.

Oh, and by the way, the Drug War has totally failed in stopping illegal drug use. Though it has enriched organized crime, so big government isn’t the only beneficiary.

To learn more about the failed War on Drugs, I’d recommend this video and this video. But mostly, I suggest you read these two horrific stories.

P.S. As you can see from this post, there actually are political jokes about money laundering laws. I haven’t run across any about the Drug War, but I’ll be sure to post them if they show up in my inbox.

P.P.S. Here’s a very funny video featuring Cory Booker and Chris Christie. Kudos to both of them for having senses of humor.

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A Cartoon Showing the Logic (or lack thereof) of Keynesian Economics

I’ve run across very few good cartoons about Keynesian economics. If my aging memory is correct, I’ve only posted two of them.

But at least they’re both very good. We have one involving Obama, sharks, and a lifeboat, and another one involving an overweight jockey.

Now we have a third cartoon to add to the collection.

To provide a bit of additional background, the cartoon is channeling Bastiat’s broken-window insight that make-work projects don’t create prosperity, as explained in this short video narrated by Tom Palmer.

I make similar points in this post mocking Krugman’s wish for an alien invasion and this post explaining why Obama’s green energy programs lead to net job destruction.

P.S. This Wizard of Id parody is the best cartoon about economics, but it teaches about labor markets rather than Keynesianism.

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