Category: Politics

Breaking (Not) News: Politicians are dishonest and hate freedom.

Add Montgomery County, Maryland to the list of governments that doesn’t trust its residents and business owners. Yesterday, it passed a ban on trans fats in “food service establishments”. The story offers the standard fare discussion, which misses how anti-liberty such government intrusion is. For example:

The move comes as health officials across the country decry a rise in bad eating habits, growing waistlines and an increase in heart disease and other ailments. The anti-trans fat bill puts Montgomery in the vanguard of a growing national movement to make it easier to obtain healthy foods in restaurants and grocery stores.

I disagree that easier is the correct word to use in that paragraph. Such anti-trans fat bills seek to make it obligatory to obtain healthy foods. Why bypass that? To make this sound more reasonable? Don’t bother; nothing can make this reasonable.

That doesn’t mean I like trans fats. I avoid them. But I’m not egotistical enough to believe that what I choose for myself is the best, or at least desirable, choice for everyone. We’re all unique human beings with different, subjective preferences and an individual risk aversion not readily apparent to government busybodies. Personal choice is better than institutionalized denial of choice.

Where governments go wrong with that is most apparent in this:

Council member Duchy Trachtenberg (D-At Large), the bill’s chief sponsor, said she thinks the food industry will be able to adjust. Some Montgomery establishments, such as the Silver Diner and Marriott Corp., stopped using trans fats voluntarily.

I wonder what evidence Councilwoman Trachtenberg used to come to her conclusion that the food industry will be able to adjust. Wishing isn’t evidence.

“The goal is to protect the public health,” she said. “People want to know what they are eating.”

And there’s the deceit. Mandatory menu labeling would achieve her stated goal, for customers to know what they’re eating. They’d have the information to make an informed choice. But that’s not the bill Councilwoman Trachtenberg sponsored. What she’s done speaks louder than what she said.

Will Councilwoman Trachtenberg achieve her stated goal?

Gene Wilkes, owner of Tastee Diners in Bethesda and Silver Spring, said the ban will force him to eliminate certain items, such as lemon meringue pie and chocolate cream pie, which he buys from a supplier. His popular biscuits, made in bulk at the diners from a General Mills mix that contains trans fats, will be a no-no. He said he’ll begin making them from scratch, most likely.

I guess if people in Montgomery County want to know what’s in their lemon meringue pie or chocolate cream pie, they’ll know because they’ll have to make it themselves. Mission accomplished. Right?

UnFair Tax Assumptions and Goals

Since the recent debates involving declared presidential candidates, much buzz follows (former) Senator Mike Gravel, a Democrat. I didn’t watch the debates, so I haven’t followed him. But with the Internets being excited about him, I looked into his positions. I figured I wouldn’t need to look very far to dismiss him. I was right.

I saw his support for the Fair Tax, which is not quite enough for me to discount him outright. The details of his tax plan did that. For example:

There is only one one [sic] entity in the U.S. that pays taxes: the individual. Businesses and corporations do not, they merely collect taxes from consumers of their products and pass on the taxes to the government. The Fair Tax proposal calls for eliminating the IRS and the Income Tax and replacing it with a progressive national Sales Tax on new products and services. To compensate for necessities, such as food, lodging, clothing, etc there would be a “prebate” to reimburse taxpayers for the taxes paid on necessities.

I can’t figure out why he includes the (true) statement that businesses merely collect taxes. How will this help him in promoting a national sales tax? Who will collect taxes on products sold, if not businesses? But I didn’t want to get too distracted by that. “Prebate” spooked me more. So I followed his links to his more detailed explanation:

But the U.S. Income Tax system is unfair and regressive because Americans earning less than $97,400 pay a larger portion of their income in taxes than those who earn more than $97,400.

I’m not sure the data support that, or his later claim that Americans “with low or moderate incomes will automatically pay less in taxes”. But that’s a minor quibble in a sea of issues.

What sales tax rate will be applied to all new products and services?

The goal is to keep tax reform revenue-neutral. It is not a tax-cut program. Whatever the tax rate on new goods and services that will produce the same amount of money currently raised by the income tax is the sales tax rate. Best estimates indicate that the rate would be somewhere between 20 and 25%. Also, best estimates indicate that it would take a year to transition from one system to the other.

I really hate the phrase “revenue-neutral.” It’s an open (and incorrect) admission from Sen. Gravel that he’s content with the size of government. He’s wrong. And that sort of nonsense also implies that the sales tax rate will have to fluctuate to hit a target for tax-receipts. I doubt that will simplify the tax process.

Here are a few of Sen. Gravel’s basic Fair Tax facts:

Dramatically reduces the price of new products and services, estimated at 20-25%, because corporations no longer need to hide these costs in the retail prices that are now passed on to consumers. This reduction equals the present income taxes being paid.

I don’t care if the price of a book decreases from $25 to $20 if I’m still going to pay $25 after sales tax. That’s marketing, pure and simple. I suspect it isn’t particularly logical or effective marketing, either, because if I owned a retail store, I might advertise after-tax price so customers didn’t get a surprise at the register.

Businesses, and state and local governments collecting the sales tax will keep a small percentage to reimburse themselves for the cost of collecting and forwarding the funds to the U.S. Treasury.

There’s our answer to the statement about businesses collecting taxes. Not only will they continue, but they’ll interact with now-conscripted state and local governments in the collection of sales taxes. That should simplify the process none, as expected.

Encourages the re-use products [sic] and the purchase of tax-free, pre-owned products.

This will, of course, reduce the purchase of new, taxable products. That should do well for the bottom line for businesses, as well as the revenue-neutral mandate. Elsewhere, Sen. Gravel also talks about how bad “exceptions” are in the tax code, because they allow “wealth” to game the system. Isn’t zero tax on pre-owned items an exception?

Eliminates corporate taxes and the costs of compliance. These costs are currently hidden in the price consumers pay for the company’s product or services [sic]

Again, won’t there be compliance costs with state and local governments, as well as compliance costs with tracking the sales tax? Will they not be “hidden” in the price shown to consumers?

All that’s enough to induce fits of laughter, but we must look at the Prebate:

One of the most exciting features of the Fair Tax is the monthly payments to individuals and/or families to reimburse them for the tax they pay on the essentials of life (food, shelter, clothing, medicine). The amount of the Prebate is calculated by multiplying the cost of essentials by the tax rate. The resulting tax is divided into 12 equal payments and sent on the first of each month to consumers who have registered annually for the program. The progressiveness of the Fair Tax can be determined by adjusting the amounts selected for the prices paid for essentials, which should not be taxed in the first place. However, giving these essentials an exception from the sales tax opens the door for wealth to game the system and we are back with the problems we have in the income tax system.

Exciting? Right there, I’m done with Sen. Gravel. But looking at the prebate, I can’t comprehend how anyone can honestly imply that politicians won’t game that system. Also, how can we define one equal amount for each person’s basic food, shelter, clothing, and medical needs? Just assessing food, will Sen. Gravel argue that a petite, 5’1″ woman has the same food need as a muscular, 6’6″ man? How will the government account for this? Not with exceptions, right? Those would be bad. So what is it? Everyone gets 4 steaks, 12 chicken breasts, 5 pounds of bacon, 24 eggs, 1 bunch of carrots, 4 heads of lettuce, 1 pound of broccoli, 2.5 gallons of milk, and 6 cookies? I wouldn’t like that “average basket”.

I dislike the Fair Tax already, but these details are horrendous and show that Sen. Gravel’s plan is little more than the same belief that individuals serve government.

Here’s video explanation from Sen. Gravel at YouTube.

Will you forgive us, eh?

The Canada Family Action Coalition wrote an open letter to the world (pdf here):

To the world’s leaders and people,

We, the people of Canada who support marriage solely as the union of a man and a woman, apologize to the people of the world for harm done through Canada’s legalization of homosexual marriage.

Pathetic, but it gets worse.

Our government and courts considered adult “rights” only. The impact on children’s rights, children’s education, parental rights, religious rights, adoption, the economy and family law were never fully considered.

The obvious and easy rebuttal is always the fact that societies don’t require married couples to have children. Absent any such requirement, or the proposal of any such requirement, this isn’t about children. It’s naked bigotry.

Adults have rights. Government can protect or take those rights. The Canada Family Action Coalition is on the side of taking.

Via Big Fat Hairy Living.

Rent-seeking protectionism is ugly when you confront it.

More on the proposed Sirius-XM merger, this time recapping recent research studies:

One of the main arguments against the merger, according to the Carmel Group, is that consumers’ audio options, particularly in the car, are limited. While some technology firms promise great advances that could bring more choice — such as in-car, high-definition radio and built-in MP3 technology — regulators should consider only what’s available now, the group says.

“The FCC and DOJ aren’t in the business of looking into some crystal ball and predicting some technology in the future,” said Jimmy Shaeffler, Carmel Group senior analyst and author of the group’s report released last week. “Somewhere down the line, maybe 5 years, 7 years or more, XM and Sirius can come back to this argument and possibly prevail.”

I wrote about this study last week when it first appeared. I must say, it’s mighty gracious of Mr. Shaeffler to permit Sirius and XM to come back to regulators and the National Association of Broadcasters, presumably with hat in hand, and ask for permission. Assuming they’re both still around, of course. But it’s not competition they have to worry about. Nope, that’s not evolved, and it would certainly be irresponsible to predict changes that will no doubt be glacial in speed. Look at where we were 5 or 7 years ago. So little has happened, it would be irresponsible to assume anything.

Nothing to see here, folks. The Carmel Group’s study is independent and unbiased, despite being paid for by the National Association of Broadcasters.

Choose: Bankruptcy in Solidarity or Survival in Reality

In today’s Washington Post, Harold Meyerson attempts to suck us into his view of the world. Imagine how he gets to this line:

It was, in short, just a normal day in contemporary American capitalism.

Any number of scenarios could build to that. When you have an aversion to economic liberty because it means some people will “lose,” you arrive via this route:

On March 28, Circuit City announced that it was laying off 3,400 of its salesclerks. Not because they had poor performance records, mind you: Their performance was utterly beside the point. They were shown the door, said the chain, simply because they were the highest-salaried salesclerks that Circuit City employed.

Their positions were not eliminated. Rather, the store announced that it would hire their replacements at the normal starting salary.

One can only imagine the effect of Circuit City’s announcement on the morale of the workers who didn’t get fired. The remaining salesclerks can only conclude: Do a good job, get promoted, and you’re outta here.

I’m in a somewhat useful position to critique this. As of next Friday, I will not have an active client. The funding for the project I’ve been working on disappeared. I’m a bit concerned, but I’ve planned for this possibility. That’s mere responsibility. But as much as capitalism can be blamed for losing my current contract, it will also be responsible when I land my next contract. Change may mean death for some opportunities, but it’s only the natural re-ordering in response to reality. This is inherently good.

In the case of Circuit City¹, what function do salesclerks serve? When I visit an electronics retailer, I either know what I’m looking for or am browsing to discover what’s out that I’ve missed. I rely on the Internets for my pre-education, if you will. I rarely make an impulse buy. (Danielle is saying “no kidding” right now.) The one time in recent memory where I did make an impulse buy, I called my brother from the store and asked him to pull up reviews of the product. I gave my usual “just browsing” response to any salesclerks who accosted me offered to help. I didn’t need anyone other than a cashier, and if a store offers self-checkout, I always do that. From my anecdotal observations, most shoppers behave this way. Expert knowledge is no longer valuable in store the way it used to be.

That doesn’t stop Mr. Meyerson:

Over at Wal-Mart, the employer that increasingly sets the labor standards for millions of our compatriots, wage caps have been set for certain jobs, and many longtime employees are now required to work weekends and nights in the hope that they’ll quit. A memo prepared by a Wal-Mart executive in 2005 for the company’s board noted that, “the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity.”

(That, of course, is because Wal-Mart does nothing to raise its employees’ skills lest it have to raise their wages.) Coincidentally, in the same week that Circuit City axed its clerks, an analysis of Internal Revenue Service data from 2005 that became available showed that the bottom 90 percent of Americans made less money that year than they had in 2004. According to a study by economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics, total reported income in the United States increased by 9 percent in 2005 over its level in 2004. All of that increase, however, came from the wealthiest 10 percent of Americans, and the wealthiest 1 percent experienced an increase of 14 percent. Among the remaining 90 percent, income actually decreased by 0.6 percent.

Capitalism, as cruel as it is, generally demands that one provide more value to earn more return. If Mr. Meyerson prefers the world of government, his skewed view is understandable, for the government is far more lax in requiring measurable return for its increased expenditures. But the government has guns to enforce its demands. The private sector must use persuasion.

When Mr. Meyerson quotes the IRS data showing a decrease in income for the “bottom 90 percent”, the only context he provides involves the change in income for the top 10 percent. Big deal. There is more than just income to determine how well a person is doing. Mr. Meyerson offers no analysis of how this affects Poor American other than the outrage we’re supposed to feel because his absolute dollar income decreased. This is the fallacy of a mind unconcerned with the basics of economics.

There’s a bunch of progressive gobbledygook in the rest of his essay, but given his poor economic foundation, Mr. Meyerson offers little beyond the usual chants. Unions! Health care! Equality! Blech, all socialist crap. When American workers who buy into this start treating themselves as mini-capitalists offering a product rather than pawns in a game for business elites, this drivel will die away from all but the tiniest group of “intellectuals”. Until then, we’ll suffer through more harmful policies masquerading as help for the working man.

¹ I shop at Best Buy because I like it better and I’ve only had bad experiences the last few times I’ve given Circuit City a chance. But the buying process is the same.

Voting to Bolster Political Egos

Residents of one New Mexico county voted to impose a tax on themselves to fund a commercial spaceport. (Two other counties will vote soon.) The usual bromides about economic development seem abundant, but I like this one:

Rick Homans, chairman of the New Mexico Spaceport Authority and the state’s secretary of economic development, said the referendum is sufficiently far ahead in the counting of provisional ballots to declare victory, although an official count has not yet been announced.

“This positive vote ignites the final design, engineering and construction of Spaceport America,” Homans said. “New Mexico is prepared to launch a whole new era of discovery, exploration and commercial activity in space, on the moon and beyond. We have nothing but beautiful black sky ahead of us.”

Any guesses who will be taking credit for such visionary brilliance? Does it matter that a commercial spaceport is not even distantly related to a legitimate government task? I don’t for a second believe that the commercial spaceport will be used for discovery and exploration beyond what space tourists seek. But still. Discovery! Exploration! Besides, there’s (allegedly) a market, so build it!

The $200 million spaceport is to be built in scrubland near the White Sands Missile Base and is expected to be open for business by early 2010.

British entrepreneur Richard Branson and his company Virgin Galactic have signed a long-term lease with the state to make New Mexico its international headquarters and the hub of a space-tourism business.

Those lease terms are favorable to Virgin Galactic, costing it $27.5 million total over the 20 years of the lease. Clearly that doesn’t recoup the $200 million “investment” approved by a majority of voters. I can’t help thinking that the same standard that applies to every other “private” business should apply here, vote or no vote. If it’s a viable commercial business, the business itself will fund the spaceport. If it can’t fund the spaceport, it’s not a viable business. That should be the end of the analysis from the state’s viewpoint.

Mob rule is anti-American.

David Broder is right to raise questions about a new, foolish attempt to circumvent the Electoral College process for electing presidents. The heart of the proposed approach:

The National Popular Vote Plan, as it is known, has passed both houses of the Maryland legislature and is headed for signing by Gov. Martin O’Malley.

The scheme, invented by John R. Koza, a Stanford professor, relies on the provision of the Constitution giving legislatures the power to “appoint” their presidential electors. If legislatures in enough states to make up a majority of the electoral college — 270 electoral votes — pledge to commit those votes to the candidate winning the national popular vote, no constitutional amendment is needed. [Former Senator Birch] Bayh and other high-minded individuals, such as former Illinois Republican representative John B. Anderson, a one-time independent presidential candidate, support the plan, arguing that it is a perfect expression of 21st-century democracy, while the electoral college is a relic of 18th-century thought.

There are many issues arguing against going to a national popular vote, whether directly or indirectly as put forth here. I’m not going to address them, but I’ll point you in the smart direction. Read Kip’s analysis of the District Method. (Thread here.) He explains it perfectly.

To the plan under consideration, what state would be so stupid as to give its votes away like this? Aside from Maryland, of course. Is it so hard to believe that Maryland could vote for one candidate while the rest of the nation could vote for another? This may count as some perverted form of solidarity, but it’s not an American principle.

The founders devised the Electoral College to avoid such lunacy. We should not be running towards such lunacy.

Avoiding Capitalism Because Winners Aren’t Pre-determined

Is this the type of “research” our government listens to?

The influential research firm Carmel Group, whose analysis helped kill the 2003 merger of EchoStar Communications Corp. (ECHO) and DirecTV Group Inc. (DTV), will release a new report Tuesday that outlines arguments against merging satellite radio companies Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., The New York Post reported in its Tuesday editions.

Sponsored by the National Association of Broadcasters, which has already come out against the deal, the 11-page independent white paper includes a point-by-point rebuttal to the six main arguments put forth by Sirius and XM in favor of a merger.

I like having research back up my opinions as much as anyone, but this is shameless. I shouldn’t worry, though, because I’m sure the National Association of Broadcasters is looking out for customers and only customers, whether those customers choose to purchase the free broadcasts of its members or the non-free broadcasts of its competitors non-members. The FCC will probably fall for it, which is why Sirius’ stock price is down so much.

Good Intentions and Taxpayer Money

As long as government is doing something, that action is “good”. Or not:

New York City’s Department of Health and Mental Hygiene is planning a campaign to encourage men at high risk of AIDS to get circumcised in light of the World Health Organization’s endorsement of the procedure as an effective way to prevent the disease.

The taxpayers of New York should not pay for cosmetic surgery. Yes, it has some supposed health benefits regarding HIV, but condoms are more effective. In that context, the surgery is unnecessary because any benefits it might achieve can be achieved without surgery and the corresponding risks. (Malpractice insurance, anyone?) If the government pays for anything, condoms are the way to go.

However, this is government, so when it takes action, it must find extra-special creative ways to be stupid.

In the United States, “New York City remains the epicenter of the AIDS epidemic,” Dr. Thomas R. Frieden, the city’s health commissioner, said in an interview. Referring to H.I.V., he said, “In some subpopulations, you have 10 to 20 percent prevalence rates, just as they do in parts of Africa.”

His department has started asking some community groups and gay rights organizations to discuss circumcision with their members, and has asked the Health and Hospitals Corporation, which runs city hospitals and clinics, to perform the procedure at no charge for men without health insurance.

If you have no insurance, you still get to have sex with fewer consequences! Aren’t New York’s taxpayers city officials generous? But ignore that. The three released studies (which all ended early, remember, despite HIV’s 3-6 month latency period before detection) have not shown any link between circumcision and reduced HIV-infection among men having sex with other men. The research simply isn’t there. To theorize any such link is irresponsible and potentially dangerous.

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