Economics and Scrambled Eggs

The answer to bad government is always more government. A proposal by US Senator Charles Schumer from New York perfectly illustrates this sad but true axiom.  After stories surfaced about strip searches of old ladies at airports in this country,  the Senator has proposed setting up a passenger advocate at air terminals where passengers can lodge complaints against the TSA on the spot.

Of course like most government solutions, this idea completely misses the mark on several fronts. First and foremost, searches conducted by the TSA violate the Fourth and Fifth Amendments to the Constitution.  You cannot solve the inherent problems of an unconstitutional government arm with another unconstitutional government arm.  It is akin to one thief overseeing the actions of another thief.  The question always with government advocates is what side they will be advocating for. One thing I can say for certain is that their concerns will not involve the US Constitution.

Secondly, TSA personnel are not professionals in any meaning of the word.  Most have little more law enforcement experience than a night security guard at the lumber yard. I would suspect that for many receiving a government check for non-work is quite common. The bottom line is that the people working for the TSA are not the brightest bulbs on the tree.

The real answer to airport security is to follow the path of private property and the free markets. The airlines should handle their own security issues. If passengers feel a particular carrier is not adequately promoting the safety of customers, than the flying public travel with another airline that will. The consequence of bad experiences will be customers taking their business to a competitor. The free market is the only advocate a customer needs; an idea that government does not advocate for.

The other week I wrote about the concept of “could happen” laws. My post referred to the opponents of conceal and carry gun laws because allowing a citizen to pack heat could result in someone getting shot.  A number of laws today, including the ones covering drugs and prostitution, are based on the possibility that somebody could be harmed.

William Anderson posted a story about a man charged on the basis of “could happen”. One of the weapons citizens have against laws that inhibit liberty is to nullify or ignore government edicts. In the case of a trial for instance of a person charged with drug possession, a jury contrary to all evidence can vote the defendant not guilty on the basis that the law is wrong. I believe it was Jefferson that once declared people have a duty to ignore bad laws. The civil rights movement was an example of people turning their backs on “Jim Crow” laws.

Summarizing the story relayed by Anderson, a man in New York City stood outside a courthouse passing out leaflets arguing for jury nullification. Federal prosecutors had the man arrested and charged him with jury tampering even though he was not on trial or had any personal benefit in a specific court case, which is usually necessary to prove to find an individual guilty of trying to influence a juror or the jury.

http://www.lewrockwell.com/blog/lewrw/archives/99621.html 

What is the man guilty of in the eyes of federal prosecutors? The people receiving the leaflet could happen to sit on a jury one day. The next thing you know there will be a law against team sports because the coach could happen to become a child rapist.   

In a rebuttal to an editorial opinion by the staff of the Hudson Star-Observer the other week over the recent passage of conceal and carry, Saint Croix County Supervisor Steve Hermsen talks about what I call the “could happen” society.  The encroachment of government force outside of our constitutionally protected rights is a direct result of this mentality. No longer does a crime need to be committed in order for government forces to conduct searches without warrants or prosecute an individual for what they could do.

http://www.hudsonstarobserver.com/event/article/id/45254/

Opponents to conceal and carry gun law chew their finger nails down to a nub worrying that a person packing heat with a legal permit might shoot someone. The whole purpose for an individual absent of criminal intent for carrying a weapon is to shoot a person when threatened with deadly harm. We do have the right to self-defense. If we do not protect ourselves when threatened, then who will? The police arrive well after the other person shoots or robs you. Admittedly a person carrying a gun could run into a situation where they are called upon to fire the weapon. But could is a long way from actually doing it and furthermore, it is a huge leap to believe a citizen legally carrying a gun will do so without provocation.

In our modern “worry about the possibilities” culture, laws have been created to assume guilt without a criminal act because the person could commit an illegal act. Drug crimes are based on the presumption that a person strung out on drugs could commit a crime to support a habit; maybe or maybe not. If the person does rob or murder, then we have laws that punish the act. Ironically if the victim to be is carrying a gun, then the crime might be stopped beforehand.  But what about the person that does not commit a crime against another’s property or life while smoking or popping. They are guilty of nothing but minding their own business.

As Steve Hermsen asks, where do you draw the line when it comes to possible danger? On our roads 30,000 to 40,000 people die annually in automobile accidents, which mean a chance exist every time we get into a car that somebody could die. Why don’t we outlaw cars? Of course people have been known to suffer serious injuries involving motorcycles, bicycles, or skateboards. Why don’t we outlaw all means of transportation outside of our own feet? Of course a person could run into another causing an individual to fall and suffer an injury. Because a person could hurt another anytime movement is involved, perhaps we should make it illegal to move.

A person can imagine hundreds of “could happen“ scenarios. Taking all possibilities to a logical conclusion results in only one law; it is illegal to live.

When Governor Rick Perry dared to say that Social Security is a Ponzi scheme, his Republican challengers for the Republican Presidential nomination swooped down on him like vultures flocking to the carcass of a Wildebeest on the Serengeti Plains.  After taking jabs from Romney, Bachmann, and company over the harsh truth about Social Security, Perry conceded that the system needs to be fixed. The proper reply to those that call for saving the program is by what moral principles do we rest on where money is forcibly taken from one generation and handed to another.

Bernie Madoff ran a similar scheme for about thirty years. Madoff paid returns to one set of investors from the new “investments” made by others.  Like Social Security, some in Madoff’s pyramid benefited from this arrangement while other investors had no chance of getting their money back. With trillions in unfunded liabilities, the fact remains that one generation paying into Social Security will not see a dime of their investment despite promises to the contrary. Though they invested under the spell of grand returns, individuals trusting Madoff with their money did so voluntarily; the same cannot be said about Social Security.

Distributing wealth by force or fraud is morally reprehensible.  You cannot save a Ponzi scheme without endorsing immorality.

One other exchange out of the Republican debate highlights that got my attention was between Bachmann and Perry regarding the Texas Governor’s executive order mandating Gardasil injections for young girls. The Minnesota Congresswoman rightly threw a verbal punch at Perry about his Executive order and the potential coziness with the pharmaceutical company Merck, the maker of Gardasil.

The real question to Perry should have been by what moral authority he possesses to dictate the mandatory infusion of a drug.  

Today Republican Presidential candidate Mitt Romney unveiled his 160 page job creation plan. Like most policy proposals coming from Republican political transvestites, Romney dabbles at the corners and babbles around the rest of the room. The first thing people should take away from his plan is that the former Governor of Massachusetts and author of state run healthcare belief in big government.  Do you think a proposal from a defender of liberty and proponent of free markets would take 160 pages to outline a plan for government to get the hell out of the way?

http://www.theatlanticwire.com/politics/2011/09/romneys-job-creation-plan-cut-taxes-and-punish-china/42148/ Romney Plan

 On tax reform, Romney punted. Yes, I agree with him to eliminate the estate tax plus taxes on interest and dividends. But why in the case of interest and dividends implement a means test of anyone making under $200,000. He also favors keeping intact the Bush era tax cuts.  A true believer in limited government would abolish any concept of a progressive tax system and argue for a means of restricting government revenues in addition to chopping the IRS completely.

Romney’s stance on regulations is pure double talk.  He would eliminate regulations as an offset whenever new regulations raise business costs.  Perhaps the former Governor can give an example of a law that did not increase economic costs. Why not take an ax to existing regulations.

On federal spending Romney proposes to cut non-security discretionary spending by 5%. Present discretionary spending not related to security amounts to around $491 billion out of a $3.7 trillion

budget.  His plan would end up cutting a whopping $24.5 billion. The budget for the Department of education is $64.3 billion; Health and Human Services rings $84 billion in spending; Department of Agriculture adds another $25 billion; and the Department gushes almost $30 billion in federal outlays. And Romney can only come up with a measly $24.5 billion in federal government spending cuts. In the words of John McEnroe, “You can’t be serious!”

Mr. Romneycare states that he will abolish Obamacare.  Pretty good odds say that he will propose another type of national healthcare system in its place.

In terms of energy, Romney proposes extracting more US reserves of oil, coal, and natural gas, which means chopping the legs out from the Department of Interior and the Environmental Protection Agency in addition to the aforementioned Department of Energy, which slashes another $16 billion from the budget (does not include the Energy Department).

The one time Governor of Massachusetts also calls for a tougher trade stance with China and that country’s currency manipulation. If Mr. Romney is so concern about the currency markets, then I would suggest he look no farther than the Federal Reserve.

A plan for economic growth does not require 160 ink filled pages of unprincipled gibberish. The engine of a robust economy only needs the fuel of free markets.   The plan is quite simple:

Eliminate all federal bureaucracies and spending programs not specified in the US Constitution including the immediate end to all bailouts and subsidies.

Keep our noses out of the affairs of other countries and withdrawal our military from foreign bases, plus the present conflicts they are involved.

The first three proposals basically end the need for the IRS.  Funding for the remaining parts of the government can be done through a minimal flat tax or national sales tax that excludes exemption.

Abolish the Federal Reserve and tear down the building in Foggy Bottom. The history of central banks has proven once again that the institution is a cauldron of widespread economic misery.

Sever all entangling alliances including the United Nation.

Darn, I could not keep it under 100 words!

As the over-hyped Category 1 Hurricane Irene targeted the east coast of the United States, the customary mandatory evacuations were issued by several governors and even the mayor of New York City.  Mayor Bloomberg warned that staying behind was against the law. He later echoed concern for the safety of first responders coming to the aid of those that elected to stay in their homes.

The real question is under what principle of freedom does government have the power to order people off their private property when the same government declares a weather or any other circumstance to be dangerous.  Furthermore, when an evacuation occurs who is in charge of protecting my property from thieves taking advantage of the situation? The same police that Mayor Bloomberg says should not be put in harm’s way by people that stay on their property.

If the government can order you off your property for a storm, then the idea of freedom in this country is just blowing in the wind.

The following test was forwarded to me that tests your knowledge of government, philosophy, and free markets. Sadly, the 2500 adults that took the quiz scored on average 49%. And perhaps even more discouraging, those that teach in our college and unversity classrooms scored just a bit better with an average score of 55%.

Give the quiz a try. Be honest and answer the questions without help. It will be interesting to see the scores of those that visit our website. I also invite all politicians to give it a try, but please resist your natural tendency to lie or cheat (sorry, I could not resist).

I missed three questions for a score of over 91%.  One wrong answer was due to not properly reading the answer.

http://www.isi.org/quiz.aspx?q=FE5C3B47-9675-41E0-9CF3-072BB31E2692  Take the Test

Discussions over state or federal budget cuts either revolve around the idea of government spending being a percentage of GDP or some percentage loped across the board from proposed budgets. Neither approach analyzes the purpose and effectiveness of the programs or even the morality.

As I pointed out last week, much of government spending involves the forced transfer of wealth from one individual to another. What is exactly moral in me having to fork over portions of my income literally at the point of a gun to a government non-worker, worker so they can retire in comfort without contributing a dime of their own money? Where is the morality in me being once again forced to subsidize a company or farmer that cannot profitably operate a business? What is the moral justification for forcibly taking my money to enable a person who makes poor choices in the manner they go through life?

But imagine the crime we would have if support programs were not in place. I do not have to imagine at all. The statistics after forty-five years of welfare reveal utter failure.  Unwed mothers account for forty percent of all births in the United States. In the black community, a staggering seventy percent of the births are illegitimate. Before the initiation of the “Great Society” in the 1960s, the illegitimate birth rate for blacks was 25%.  For whites the rate has climbed from 3 percent to 25%.

Since 1960 the population of the United States has increased from 179 million to around 310 million today or a gain of 73%. In 1960, murders in the country totaled 9,000 and the number doubled within thirteen years.  The murder rate has declined since 1995 with over 15,000 killed in 2009. Violent crime, on the other hand, has risen four-fold since 1960. All other categories for crime including forcible rape and robbery have shown remarkable increases that outweigh any gains in population.

Either the spending on law enforcement is minimally effective or the modern welfare state with its high rate of illegitimacy fosters behavior outside the norm of a moral person. And why should we continue to spend on programs that result in a dysfunctional society?

Government is also deemed necessary by many to keep economic order and safeguard society from financial upheaval. Prior to the early 1900s when the Federal Reserve Act passed legislation and the 16^th Amendment was ratified. the economy had little guidance from central planners. The number of recession s from 1790 to 1913 is estimated to be around 22 with an average length of 22 months (though these numbers may be mere estimates because official economic data was recorded). Since the inception of central planning into the economy over the last 100 years, the country has experienced 18 recessions or depressions lasting an average of 18 months. It is hard to see where government steering of the economy has made any difference in stability. The only difference appears to be the mountains of federal and state debt, which will be the source of the greatest depression of all.

One of the great myths concerning government-run education is that the more you spend the better student achievement becomes.  The result of more and more dollars spent by the federal government and states on education has been a steady decline in achievement scores of students in this country compared to other industrialized nations.  Forty percent of incoming college freshman require some type of remedial classes.  In our inner city government schools where spending per student can be as high as $20,000, those graduating from high school are in the minority and of that number, the ones literate or able to comprehend is even less.  Even in our suburban schools, students have lost the ability to estimate in math or the deduction of logic. How many students today could correctly answer a high school test from 100 years ago?

The Department of Energy was created to facilitate the innovation for new energy sources and remove our dependence on foreign oil. After forty years and hundreds of billions in spending neither has been realized. In fact, our dependency on foreign energy supplies has nearly doubled from before the agency was established.

This country’s military is stretched around the world and billions more are doled out in foreign aid every year.  Despite all of it, the world is in a constant state of conflict and we now battle enemies that wear no particular colors.

The list of ineffective government spending goes for pages. Suffice to say, the real question that should be asked in debates over government spending is: What has been the result and is it truly any better than before the program was initiated? And how did society manage before government decided to spend?

More than likely the answer is we would be better off without most of it.

Yesterday a riddle was put forth to test the limits on the idea of free travel.  In order to facilitate my journey to see a relative I build a rocket ship in the backyard. Of course something goes awry with the rocket and it slams into a building. Because of the danger posed by a rocket, does not the government have a place in regulating the mode of transportation used?

The answer lies in a true story that happened to our family. Years ago we erected a trampoline in the backyard. A few weeks later our insurance company sent us letter stating that we must enclose the trampoline in a safety net. Or disassemble the contraption. Failure to do either would result in the home ownership policy being cancelled. Not wishing to losing my liability coverage and risk potential financial disaster or disappointing the children, the safety net was installed.

Despite a speed limit sign to the contrary, I could drive through a residential neighborhood at  100 m.p.h.  But I don’t, why? First I do not want to lose my life, property, or the same for someone else. Secondly, after too many claims the insurance company will deny coverage, which exposes me to financial ruin.  But what about the crazy person who does not care about financial ruin or life itself? Don’t we need government to protect us against them?

We have reams of law regulating motor vehicle use, and yet annually, an estimated 40,000 deaths and countless injuries occur on our nation’s road ways. We have laws against murder, and yet, 18000 a year lose their lives at the hands of another. We have laws against theft, and yet, an untold amount of property is taken from its rightful owners.  We have laws against security fraud and a thousand bureaucrats enforcing it, but that did not stop Bernie Madoff from committing one of the greatest heists over a twenty year span.

We do not need the government to protect our air travel. In the free market, the insurers of airlines will ensure that the carrier follows all necessary steps to provide safety. The financial risk of not doing so exposes the airline and the insurance company to unmitigated losses. If air travel under these circumstances is perceived to be too risky, then individuals will seek alternatives.  After 9/11 the government stepped into the process by essentially bailing out the two airlines involved in the attacks plus their insurance carriers. I have to believe all the requirements and screening imposed the government would have naturally occurred.

As noted in conversation, government reacts to an event that already took place, which offers no protection to those already injured or killed. The free market likewise cannot prevent a calamity, but in turn will have natural actions of remedy.

The elites, including the President, believe a great number of people are too ignorant to understand the philosophy and policies of the socialist intelligensia. I cannot to a degree argue with such an assessment. The American dumbness, however, lies in the fact that nearly half the population believes government bureaucrats can make their lives better than the free market.

 It appears at least both sides agree that Americans as a whole have plunged to depths of stupidity. But how did individuals in this country fall into what can be described as an educational spiral?

The answer seems rather obvious. Just look at the entity that controls a vast majority of the education in the country… government and government union workers.  We trust entrepreneurs to provide our food, clothing, shelter, and items to keep us alive. We gripe about the service at the Post Office, DMV, DNR, IRS, and a host of other initial designated government units.

Any questions to our fate as long as government is allowed to teach our children?