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High Taxes Chase More Companies from Our Shores

Mega drugstore chain, Walgreen’s, is considering a merger with European competitor, Alliance Boots.   As part of the deal, Walgreen’s would move its corporate headquarters to Switzerland and in the process lower its effective corporate tax rate from 31 percent to 20 percent.

Walgreen’s is just one of many American firms that are contemplating using the tax reducing strategy called inversion – merging with foreign competitors in countries with lower tax burdens and then reincorporating in those countries while maintaining business interests in the United States.

Naturally, the economically illiterate are having a hissy fit. They are concerned about the revenue lost by government when firms relocate abroad. Walgreen’s actions are being called everything from “unfair” to “unpatriotic”. Senator Dick Durbin, from Walgreen’s home state of Illinois, told The Chicago Tribune, that he is “troubled by American corporations that are willing to give up on this country and move their headquarters for a tax break. It really speaks to your commitment.”

What’s amazing is that Senator Durbin and other statists do not understand how the market works. Business exists to turn a profit, not to fill the treasuries of government. And businesses make a profit by providing a better good or service at a lower price than its competitors. This in turn, benefits consumers, especially lower income ones. Thus, it should surprise no one that Walgreen’s and other companies would consider moving abroad to lower costs. After all, since the latter part of the last century, America has become accustomed to its businesses offshoring jobs to other countries.

But, try telling Durbin and his ilk that it’s their beloved government’s fault that U.S. companies and the jobs they provide have gone overseas. Back in October, this commenter predicted medical device companies would jump ship due to Obamacare’s new excise tax making their products more expensive to produce. Sure enough, last month medical device giant Medtronic announced a proposed $42.9 billion offer to buy Irish company Covidien and make lower tax haven Ireland its corporate home.

At the end of the day, the ability of business to move offshore is the check against government raising taxes forever higher. Otherwise, consumers of government services will continue to demand more and more and taxes on business will be raised higher and higher. As Chief Justice John Marshall believed, “the power to tax involves the power to destroy”.

If America is going to retain its business and reacquire businesses that have already left, we need to compete with the rest of the world. Americans need to understand that there are consequences to the profligate spending of government and the over regulation and taxation of business. The sooner Senator Durbin and his ilk understand this, the better.

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An Update on How the Minimum Wage Hurts Workers

It has been a while since I last blogged. A lot has happened recently that is worth commenting on. But, this post will focus on the correctness of my previous postings that the minimum wage hurts workers.

According to Andy Puzder, the CEO of CKE Restaurants – parent company of Carl’s Jr. and Hardee’s, in locations across the country where the minimum wage has been increased, his company’s franchisees are closing shops after their leases expire. “When the minimum wage increases, there are two things you can do,” he said. “One is you can reduce the amount of labor that you use or you can increase your prices.” Unfortunately, minimum wage increases do reduce jobs; as in the case above sometimes all jobs are eliminated.

But, Puzder is also correct about the causation between minimum wage increases and price increases. Many businesses in SeaTac, Washington, where the local minimum wage has recently been increased to $15, have imposed an 8.25 percent “Living Wage Surcharge” on goods and services to ease the increased cost of labor on business.

However, the bulk of the negative consequences of the $15 minimum wage in SeaTac have fallen on local workers. Those making the higher wage have reported losing their 401ks, paid holidays and paid vacations, free food, free parking, and overtime hours. In many cases, these benefits plus the lower state minimum wage added more value to workers’ earnings than the new $15 wage.

In the final analysis, the minimum wage does not enrich the working class or stimulate the economy like its proponents claim. Quite the opposite is true. The money involved to pay for the increased labor costs is not free. It comes from consumers in the form of higher prices and it comes from workers in the form of lost benefits and lost jobs.

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Originally posted on The Jeffersonian:

About a generation and a half elapsed between November 22, 1963, to September 11, 2001: thirty-seven years, nine months, and twenty days. If you were born the day Kennedy died, your children would be youngsters on 9/11, as I was on November 22, 1963. We let something terrible happen in 1963: criminals murdered our president, and we did not raise holy hell when they lied about what they had done. A little over thirty-seven years later, the instititutional children of those criminals struck again, and we did the same thing. We let them get away with it.

After long, careful and thorough research, we have good evidence now that we permitted a coup in 1963. A long time passed – more than forty years – before many of us understood or believed that. We don’t know yet what occurred on September 11, 2001. The events of that day present more complications…

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A recent Post/ABC poll found that 56 percent of Americans would be in favor of the United States and its allies imposing sanctions on Russia for its role so far in the crisis in Ukraine.  This is not surprising given the fact that most Americans get their news one sound bite at a time delivered by a media that generally is complicit in spouting whatever the Washington, D.C. line is on a story.  And it doesn’t help that President Obama ignores the sins of his own government while lying that Russia’s decision to send troops into Crimea is a “violation of Ukrainian sovereignty and territorial integrity…and breach of international law.

Then, there is the obligatory bluster of America’s biggest warmonger – John McCain.  Not only does he favor sanctions against Russia, but he also wants Congress to send American tax dollars to Kiev and U.S. missiles to the Czech Republic to show those evil Ruskies that we mean business.  And just a few days ago he ranted that the Obama Administration is derelict in its duty because it won’t supply the new regime in Kiev with arms, ammunition, and intelligence support for Ukraine’s military.

What makes the view of 56 percent of Americans, John McCain and President Obama ridiculous is that the crisis in Ukraine has American fingerprints all over it.  A leaked phone call between Assistant Secretary of State Victoria Nuland and U.S. Ambassador to the Ukraine, Geoffrey Pyatt indicates American government involvement with protests and the eventual coup in Kiev.

And both Nuland and Pyatt were photographed in Kiev in December handing out baked goods and mingling with anti-government protestors.  For those that say this proves nothing, since when is it appropriate for a sitting ambassador to directly encourage protests against the government he is supposedly engaged in diplomatic relations with?  Can we now understand why ambassadors like Chris Stevens get killed?

The point is, whether the U.S. government supported the coup which overthrew the popularly elected president in Ukraine directly or indirectly is immaterial.  Washington’s support for the coup is primarily responsible for the current tensions between Russia and the U.S.  We rightly wouldn’t like it if Russia facilitated the overthrow of the government in Mexico and supported a new regime hostile to America in that country.  Why do Americans have a hard time feeling empathy towards others?

But, the American response to Ukraine is also wrongheaded because the new Washington supported regime in Kiev is filled with ultra-rightist Svoboda party members and other neo-Nazis.  These are hardly the kinds of folks that share our values of human rights and liberty.  But, in the view of Washington, damn the Ukrainian people as long as their leaders are supportive of the West, not Russia.  Thus, once again, our government is playing politics with the wellbeing of people in another country.  This can only lead to disaster, not a good outcome.

Perhaps the biggest idiocy of the American position on the crisis in Ukraine is the belief that we could enact sanctions against Russia for her part in the crisis with no consequences for ourselves and our trading partners.

First of all, Russia is a major trading partner with all of Europe.  Sanctions against her would also harm her trading partners.

China would support Russia and the two of them could stop using U.S. dollars for international purchases.  Both could also completely stop buying U.S. debt.  The consequences for our economy would be devastating and quite possibly be the final nail in the coffin for the dollar as the world’s reserve currency.  Washington would be faced with two choices:  continue to spend at current levels and face hyperinflation at home or live within its means by drastically cutting federal spending and face social unrest from Americans who have become accustomed to federal largess.

The above scenario is inevitable in any event, but Washington would expedite the event by imposing sanctions on Russia now.

At the end of the day, the U.S. should leave Ukraine alone.  She has already caused enormous harm to the Ukrainian people.  And pushing the envelope by imposing sanctions on Russia could wreak economic devastation on her economy.  That is why the American policy toward Ukraine is wrongheaded.

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Obamacare and False Claims

 

Kevin Short over at the Huffington Post produced a wrongheaded post this week titled, “Obamacare Just Made Americans Richer Without Anyone Noticing”.  Citing a report issued by the Commerce Department’s Bureau of Economic Analysis and calculations made by the Wall Street Journal, Short claims Obama’s so-called Affordable Care Act (ACA), better known as Obamacare, was responsible for three-quarters of the rise in Americans’ spending and income growth in January.  Thus, according to Short, the ACA in its first month of operation has already made Americans richer.

The problem with Short’s analysis and the reason why Americans didn’t notice they were richer is because they aren’t.  Short’s claim is nothing more than typical Keynesian bunk.

So, how did the ACA make Americans’ richer in January according to Short?  Well, the expansion of Medicaid funding to the tune of about $19 billion and $15 billion in subsidies received by Obamacare enrollees did the trick.  The logic goes, because some Americans received a combined $34 billion in federal largess, that money will be spent in the economy providing new jobs for countless Americans.

Of course, what Short fails to mention is where the money for those welfare benefits (Medicaid and subsidies) came from.  Did they come from an increase in worker productivity?  Did they come from an expansion of business and employment?  No.  In fact, according to the Institute for Supply Management  its employment gauge in February declined for the first time in 25 months and currently stands at its lowest reading since March 2010.

Obviously, the money came from taxpayers, either through direct tax payments or debt monetization by the Federal Reserve.  Neither approach represents an expansion of the economy or wealth production.  What has happened is akin to taking money from one pocket and transferring it to the other.  Only in Short’s world and the world of Keynesians everywhere is this considered prosperity.

But, what is even more troublesome is how that $34 billion was spent in January.  Again, according to the Bureau of Economic Analysis, Obamacare handouts may have been responsible for a $29 billion increase in health care services.  Besides utilities, all other spending categories experienced a decline.

What this means is if Obamacare further increases government spending on health care, then the cost of health care will rise even higher.  All of that new money entering the health care industry will bid up prices to heights never seen before.  This is precisely the reason health care costs have been on the rise for the last 50 years.

Over the last few years, there have been many false claims made about Obamacare.  From “you can keep your coverage and doctor” to health care costs will decrease to more Americans will have health care coverage, there has been no shortage of mistruths.  And now we have the outrageous claim that the ACA is making Americans richer.  Not only does taking from one citizen and giving to another not make us richer, increased government spending on health care will surely make us poorer.

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President is Pushing Another Failed Policy

A couple of weeks ago, I received an email update from President Obama which discussed his signing of the Executive Order raising the minimum wage to $10.10 an hour for federal contract workers.  Within his remarks the President stated his belief that, “It’s the right thing to do”, raising the minimum wage for federal contract workers.

Naturally the President used the news of the Executive Order as a segue to lobby Congress to raise the federal minimum wage from $7.25 to $10.10 an hour for all American workers.  He claims raising the minimum wage “would move millions of Americans out of poverty”.  In fact, Obama indicated that, “Raising the minimum wage would grow the economy for everyone”.  The latter remark is based on his undying Keynesian dogma that more spending is the key to growing the economy.

There’s only one big problem with the President’s position on raising the minimum wage.  It’s called the Law of Demand.  According to this law of economics, with all other factors being equal, when the price of a good or service increases, demand for that good or service decreases and vice versa.

In the case of minimum wage laws, the service in question is the labor offered by workers.  Since minimum wage laws make the price of labor artificially higher the demand for labor decreases per the law of demand.  Consequently, some workers will receive pink slips and others will not be hired.  Higher unemployment will result.

In fact, a Congressional Budget Office report last week confirmed just that.  It indicated that Obama’s proposal to raise the minimum wage from $7.25/hour to $10.25/hour would result in the loss of possibly 1 million jobs.

And there are other reports issued by economists who know the laws of their science, which have found that minimum wage measures cause higher unemployment.  It’s also important to understand that that higher unemployment will result in greater income inequality between rich and poor.

At the end of the day, the President’s belief that raising the minimum wage will grow the economy is ridiculous.  In the first place, the law of demand tells us that less people will be working.  In the second place, the president is assuming that the money businesses earn which does not go to higher wages for their employees, somehow gets sucked down a black hole.  Does he not understand that that money could be channeled into productive enterprises like plant expansions, training for employees, and research and development?  All are enterprises which ultimately lead to job creation and higher pay for workers.  Even my 8th grade economics students understand this.  They also understanding that raising the minimum wage is not the right thing to do.

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Don’t Prepare Your Kids to be Slaves of the State

As we all know, the jails are full of victimless criminals in America.  Whether they are street walkers, gamblers, or drug users, many are serving time not for hurting anyone, but as protection against themselves or because they committed an act considered immoral by society’s moral elite.

However, adults are not the only ones punished for not hurting anyone.  Young children are usually placed in time out, spanked, or have their toys confiscated by their parents for committing the victimless crime of not sharing.

Picture this, little Jonny has a friend over to play, but refuses to give him a turn with his slinky.  After much quibbling between the two young lads, Jonny’s dad intervenes by taking the slinky away from Jonny and giving it to Jonny’s friend while Jonny is placed in time out on the couch to think about what he did.

But, what did little Jonny do?  He did not hurt his friend or violate his friend’s rights.  After all, he didn’t steal from or hit him.  What he did was obnoxious and inhospitable by societal norms, but no crime worth punishing was committed.  Little Jonny’s toys are his property and it is his decision whether or not to let others play with them.

If you disagree, then consider why adults are held to a different standard?  If my neighbor wishes to borrow my hedge trimmer, but I don’t loan my tools out to anyone, does some authority figure come along and take it from me and give it to my neighbor while I am placed in time out in a ten by ten cell?  Most people would say that is a preposterous example that would never happen.  Agreed, then why are kids punished for not sharing their toys?

Like adults, kids have a choice to make.  If they don’t share their things, when they are at a friend’s house, that friend may not share his things with them.  Worse yet, a child who doesn’t share may not have any friends even if he wanted them.  The bottom line is that the natural world has a way of working these issues out.  There are plenty of incentives for little Jonny to share.

But, let’s return for a moment to the example about the neighbor who wanted to borrow my hedge trimmer – the example is not so far-fetched upon closer consideration.  In America, it has become all too commonplace for our neighbors to ask for authority figures (government) to make us share our income with others or face time in prison.  Whether it is big bank bailouts, the military industrial complex, public employee unions, corporate and individual welfare, or foreign aid, Americans are constantly required to share their money with others or face jail time.

And that is really the lesson to be learned about punishing kids for not sharing their things with others.  It teaches them at a young age that property rights equates to selfishness and prepares them to be subservient slaves to the state which takes their property through taxation or price inflation and gives it to others.

At the end of the day, sharing should come from the heart not because you will be placed in time out or put in a cage.  Parents should teach their children empathy for others while respecting their property rights.  In an age of massive public assistance spending and “too big to fail” bailouts, property rights have taken a back seat to political expediency.  It is time property rights were once again respected. Parents can begin that process with their young children.

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Originally posted on The Jeffersonian:

Do you remember about ten years ago when the so-called vulcans on Bush’s national security council rather contemptuously dismissed their opponents? The vulcans prided themselves on their hard-headed realism in international affairs. Their critics said that going to war in Iraq ignored the realities of politics in that part of the world. Cheney’s vulcans, who tried to make everyone who disagreed with them feel like a sissy, replied, “We create our own reality.”

Now you see the reality they made. The vulcans wanted a friendly, peaceful regime in Iraq, secure access to oil shipped through the Strait of Hormuz, a bulwark against sworn enemy Iran, no home anywhere for al Qaeda, and a stable environment that would sustain friendly countries like Turkey, Saudi Arabia, Jordan, Lebanon, Egypt and Israel. Look what we have instead:

  • Civil war in Afghanistan, Iraq, Syria, Egypt, and Libya.
  • Refugees by the millions in Iraq, Kurdistan…

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It’s Time to Try Something New for a Change

Last week, on the 50th anniversary of Lyndon Johnson’s so-called War on Poverty, President Barack Obama unveiled his latest initiative to combat economic deprivation in America.  The President’s latest scheme involves public and private funding to create jobs, enhance public safety, improve schools, and provide better housing in 20 communities across the country.  You know, it is the same old story.  If only the federal government would spend enough money we could eradicate poverty in our lifetime.  Unfortunately, for Obama, his latest initiative to fight poverty will have the same end result as LBJ’s War on Poverty – utter failure.

You see, in the 50 years since LBJ signed into law the most sweeping social welfare programs in the history of the U.S., Uncle Sam has spent about $16 trillion on public assistance schemes.  Yet, Americans living in poverty has only gone from 19 percent of the population in 1964 to about 15 percent today.  Put another way, it cost our economy $4 trillion for every percentage point decrease in the rate of poverty.  Given our already enormous national debt and the future calamity it will bring, isn’t there a more cost effective way to help the poor escape poverty?  We cannot afford to spend more money and that is clearly not the answer anyway.

At the end of the day, the best way to fight poverty is with a job.  Thus, to help the poor all minimum wage laws should be repealed immediately.  The late, great, Murray Rothbard had it right when he labeled minimum wage laws “compulsory unemployment”.  Whenever government fixes prices either shortages or surpluses result.  Fixing wage rates above the market rate will only lessen demand for workers’ labor.  Thus, a surplus of workers’ labor (unemployment) will result.  This is Economics 101.

Low wages may not provide a decent standard of living, but for the 49 percent of African-American youth who are currently unemployed, the jobs they would have by virtue of repealing minimum wage laws would give them the opportunity to work hard, get work place experience, and build a resume.  All three could lead to higher paying jobs in the future.

But repeal of minimum wage laws alone isn’t enough.  Uncle Sam needs to repeal costly regulations on business which prevents the creation of new jobs.  In 2013, the federal government adopted $112 billion worth of new regulatory costs on job producers.  This amounted to 80,224 pages being added to the Federal Register.  Since Barack Obama became president in 2009 close to $500 billion in new regulations have been imposed.  And then there is the job killing scheme known as Obamacare.  At a time when the labor force participation rate is at the lowest level since 1978, should the federal government really be concerned about expensive energy efficiency standards for microwave ovens?

To be sure, more could be done to alleviate the scourge of poverty.  A gold backed dollar like existed in the late 1800s and which kept price inflation flat for more than 60 years should be reintroduced in America.  Abolition of the Federal Reserve System which is primarily responsible for the continuous boom and bust cycle in our economy and the destruction of the middle class should be enacted.

In the final analysis, for 50 years, Washington has thrown good money at the so-called War on Poverty.  The result has been failure to achieve the objective.  And this is why it’s time to try something new for a change.

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Originally posted on The Jeffersonian:

I came across a post I wrote in October about Dallas’s Love Project, where school children made posters on the theme of love for the fiftieth anniversary of Kennedy’s assassination. Business people and others posted the posters throughout Dallas’s business district, to remind everyone that Dallas is not a “city of hate.” That’s the reputation it had after Kennedy met his gruesome end in Dealey Plaza.

Talk about missing the point. People loved and hated Kennedy all over the country. That’s how it is with presidents. You don’t take that job without knowing you are going to raise antagonism. Some groups may have been more vocal in their anti-Kennedy rhetoric during the run-up to his visit, but no one can say that these sentiments were more virulent in Dallas than anywhere else.

Nellie Connally leaned over toward the president, shortly before the volley that killed him, to say, “No…

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Young Voters Betrayed by Obama Policies

Barack Obama, in large part, owes his presidency to young voters.  In two presidential elections he has garnered 66 percent and 67 percent of their vote respectively.  Many of those votes proved pivotal for him in winning key states like Florida, Virginia, Pennsylvania, and Ohio.  And yet the President apparently feels no loyalty toward this group of voters that has given him so much.  In fact, it has become second nature for him to run roughshod over their interests.

To begin with, the economy Obama has produced for young people in close to five years of his leadership is horrendous.  His policies of regulate and spend have not permitted the economy to recover from the Great Recession that began in 2008.  Unemployment for 15 to 24 year olds is more than double the national average.  Many college graduates, unable to find a job, have returned to their parents’ nests to wait for better days and brighter employment prospects.  African-American teenagers face a jobless rate of more than 40 percent!

And while the President was attempting to “stimulate” the economy back to good health with profligate spending, what he did instead was run up a tab that young folks will have to pay back for many years into the future.  What’s more, when interest rates rise to their historic average and interest payments on the national debt more than double, paying back that debt will have to include much higher taxes or enormous cuts in government services.

Lastly, there is Obamacare.  The President is relying on young folks to make his health care scheme work.  He is counting on millions of them to purchase high cost plans to offset costs for the sick and elderly.  Of course, many will not accommodate the President’s wishes, thereby causing health care premiums to skyrocket for all consumers.  By the time the current crop of 18-30 year olds is interested in purchasing health care coverage the costs will be astronomical.  Thus he has put them in an unenviable position.  They are damned if they do, damned if they don’t.

Young people made a serious mistake giving Barack Obama their overwhelming support in the last two presidential elections.  But, what choice did they have?  John McCain and Mitt Romney weren’t much better alternatives.  What young people need are free market policies – sound money, a balanced federal budget, and deregulation.  It doesn’t appear this is going to happen anytime soon.

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Originally posted on The Jeffersonian:

I was thinking today about the way we use the word hoax, perhaps because Connecticut at last released the Sandy Hook 911 recordings, almost a year after that schoolhouse massacre. Some skeptics referred to the shooting as if the deaths themselves were faked. Anything is possible, and in this environment, we shouldn’t rule anything out too quickly. Nevertheless, when people refer to a crime as a hoax, that doesn’t necessarily mean the crime itself is faked. They want to say that the official account of the crime is faked.

In case after case, the people responsible for investigating a crime act like co-conspirators who want to hide what actually happened. In the Sandy Hook case, people came at three in the morning to spirit the bodies away. No one, not even the children’s parents, were permitted to say goodbye to the children they had seen off to school the…

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Obama is Disingenuous about the Economy as Well

Lies, damn lies, and statistics.  The current administration has become adept at using all three to mislead the American people.  There is the current kerfuffle over the President’s lie that Americans could keep their health care plans and doctors under Obamacare if they liked them.  Of course, that was a damn lie, especially if you have lost your plan and are now looking at much higher premiums.  And then there are smaller mistruths, perhaps not as egregious, when it comes to describing the current state of the economy.

For instance, I got an email from the White House last week with the headline:  “Here’s What Economic Growth Looks Like, in 3 Charts”.  Included in the message was a chart showing private sector job growth over the last 44 months.  7.8 million private sector jobs have been produced in that time period.  At first glance, this number is amazing.  But, it is only a statistic.  And statistics can be deceiving if you only take them at face value.

Although, nearly 8 million jobs produced in the last 44 months is quite an accomplishment, the figure becomes a lot less remarkable when it is viewed alongside other related statistics.  Those 7.8 million jobs in the last 44 months calculates to an average of about 177,000 per month.  Unfortunately, over the same time period the working age population has grown by an average of 213,000 workers per month.  Thus, private sector job growth is not keeping up with the number of new workers entering the job market.  7.8 million new jobs is simply nowhere near the number of jobs that are needed.

Further, the statistic put out there by the Obama Administration does not indicate what kind of private sector jobs are being produced.  According to the Household Survey of the Bureau of Labor Statistics, from February to August of this year, 963,000 more people reported they were employed, and 936,000 of them reported they were in part-time positions.  Additionally, Labor Department statistics show that people employed in part-time positions are growing four and a half times faster than those employed in full time positions.  So, while claiming 7.8 million jobs is “What Economic Growth Looks Like”, the Administration is being less than honest given that most of the jobs are low-paying, light hour positions.

To put things in the proper perspective, in 2009, 133.5 million Americans were employed.  32 million Americans were on food stamps.  Today, 143.5 million Americans are employed, while 47 million are on food stamps.  Thus, while 10 million more Americans are working today, 15 million more are on food stamps.  This is not indicative of economic growth.  It is characteristic of a collapsing economy.

But, the point is that the President needs to come clean with regards to the condition of the economy.  He is a smart guy.  He has access to the same statistics referenced in this article.  The charade that the economy is growing and has been in recovery since 2009 must end.  Lastly, there needs to be an acknowledgement from Obama that spending trillions of dollars and pumping trillions more into the economy through Federal Reserve monetary schemes has been an abysmal failure in reviving our collapsing economy.  Let’s end the lies, damn lies, and dishonest statistics so we can have an adult conversation about a new direction for America.

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Originally posted on The Jeffersonian:

Governments will do what they can get away with, including torture and assassination, in secret. The only check on this evil is the people’s vigilance.

Governments will do what they can get away with, including torture and assassination, in public. The only check on this power is the people’s resistance.

Governments will do what they can get away with, including warfare, which is both a public and a secret activity. Notably, we have seen governments use their war power against their own people. The only check on government’s use of force is counterforce from the people.

All of these propositions are problematic, however, because government is supposed to have a monopoly on the use of force. How do people fulfill their necessary function as a check on government power if they do not have access to means of force?

That brings us to the foundation of the Second Amendment.

My father used to…

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Originally posted on The Jeffersonian:

Governments will do what they can get away with, including torture and assassination, in secret. The only check on this evil is the people’s vigilance.

Governments will do what they can get away with, including torture and assassination, in public. The only check on this power is the people’s resistance.

Governments will do what they can get away with, including warfare, which is both a public and a secret activity. Notably, we have seen governments use their war power against their own people. The only check on government’s use of force is counterforce from the people.

All of these propositions are problematic, however, because government is supposed to have a monopoly on the use of force. How do people fulfill their necessary function as a check on government power if they do not have access to means of force?

That brings us to the foundation of the Second Amendment.

My father used to…

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Originally posted on The Jeffersonian:

I recently imported a well done short film about the Fort Worth breakfast meeting where President Kennedy spoke on November 22, 1963. I took it down because it launched automatically, audio and all, when anyone visited http://sgreffenius.com.

You find yourself thinking as you watch the scenes that Kennedy has only four hours left to live. He’s his old charming self, doing what politicians do, and outwardly he seems to have laid aside the premonitions he had about what could happen on this trip. He tells the joke about how he’s the man who accompanied Jackie to Paris.

Meantime, a short distance away in Dallas, the assassins check their ammunition and gun sights, think about where they must position themselves, and run through the firing sequence in their minds. “Right onto Houston, left onto Elm, the car moves into range. We have to hit him right . . . there. I…

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Obamacare is Mostly a Wealth Redistribution Program

President Obama has long held the view that wealth redistribution is good for America.  His most famous proclamation of that position came during the 2008 presidential race when in Ohio he told “Joe the Plumber”, “When you spread the wealth around, it’s good for everybody,” But, perhaps the best indicator of how he would govern as president came in a 1998 speech he gave to students at Loyola University.   Then, Illinois state Senator Obama said, “The trick is figuring out how do we structure government systems that pool resources and hence facilitate some [wealth] redistribution — because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot.”

The President’s signature legislative accomplishment as chief executive, the Patient Protection and Affordable Care Act, more widely known as Obamacare, is one of those government systems he spoke about whose purpose is to redistribute wealth to help everybody.

All along, it’s been clear that Obamacare’s goal was to provide health care coverage to the millions of Americans who could not afford their own coverage.  Its purpose was never to lower health care costs in general.  In order to accomplish the goal, Obamacare must take from some (the young, healthy, and responsible) and give to others (the not so young, unhealthy, or irresponsible).  At the end of the day, this amounts to nothing more than a program to redistribute wealth on a vast scale.  And that is exactly what is happening under the law so far.

CBS News has reported that more than two million Americans have recently been notified that their current health care policies do not meet the higher minimum standards mandated by Obamacare.  Therefore, they will lose their coverage on January 1, 2014.  It’s been estimated that about half of those who have lost coverage will pay more while the other half will pay less.  But, Obamacare is not based on actuarial science like other insurance schemes.  Those paying higher premiums in the future aren’t going to be paying more because they smoke or guzzle booze or participate in risky sexual practices.  They will pay more to subsidize those who pay less or nothing at all.  This defies the very essence of insurance – shared risk.  What incentive do the poor have to live a healthier lifestyle if those with more resources will always pick up their bill?

And watching Secretary Sebelius testify before the House Energy and Commerce Committee, I learned that single men, who have never given birth, are required under Obamacare to have maternity coverage!  Really?  Is this fair or is this a means to transfer wealth from men to women by using the income of the former to reduce the costs of the latter?  After all, the Administration believes women only earn about 70 cents of every dollar that men make.  Perhaps, the Administration is trying to achieve through Obamacare what it can’t through legislative action?

No matter the case, Obamacare is doomed to failure.  Yes, more Americans will be covered but the costs will overwhelm the system and those that are footing the bill.  As more and more high risk applicants sign up for health coverage through the exchanges, the premiums of those paying the bill will continue to rise.  The incentive for these folks will be to find a way to have Uncle Sam subsidize at least a portion of their coverage.  More Americans will become impoverished.  That is always the result of wealth redistribution policies.  The president is a learned man.  He should know this.

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Originally posted on The Jeffersonian:

Mr. President, you’re going to go to Boston to speak in support of the Affordable Care Act? You want to do that because Republicans enacted model health care legislation here in 2006? Perhaps you think coming to Boston is a good way to make Republicans admit their error when they criticize you for taking the Massachusetts disaster national.

In fact, Massachusetts is a model of how people can make do when government imposes stupid ideas, policies, mandates, procedures, rationing, prices, prohibitions, and ideological, hare-brained, plainly misdirected schemes on them. Everyone who looks at the mess in this Democratic state says, “What we really need here is a single-payer system.” When your health care policy is so unworkable that you think a single-payer system would be an improvement, you’ve taken a wrong turn.

What does the president think will happen when he comes to Boston to tout his own disaster? You…

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Originally posted on The Jeffersonian:

Dallas may think its reputation will never recover, after it hosted Kennedy’s assassins fifty years ago. Given who carried out the murder, though, you can’t hold Dallas responsible for the crime. Yes, one perceives an anti-Kennedy atmosphere of hate in central Texas at the time, but haters reside everywhere. Almost no one in Dallas wanted to see Kennedy killed, and most of the people who planned his murder did not come from there.

Dallas authorities, however, bear a big load of responsibility for helping to conceal the truth about who murdered Kennedy, and about who murdered one of its own policemen, J. D. Tippit. In the days after November 22, Dallas police and prosecutors collaborated with the Federal Bureau of Investigation to hide the truth. Later on, when the Dallas police realized the feds consistently blamed the Dallas authorities to cover themselves for the crimes, it was too late. The…

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Obamacare Contributing to Jobs Leaving America

One major defect (there are many) of the Affordable Care Act (Obamacare) is the provision of the law which institutes an excise tax on medical device manufacturers.  Totaling a paltry $29 billion (in relation to what Obamacare will cost overall) over the next decade, the purpose of the new tax is to finance some of the subsidies the federal government will pay to expand Medicaid coverage to the uninsured.

Now on the surface, this sounds like an admirable goal, namely, providing health care coverage for those who can’t afford it on their own.  But, upon closer inspection, this is another example of what the famous French political economist Frederic Bastiat wrote about in his 1850 essay, “Ce qu’on voit et ce qu’on ne voit pas” (“What is Seen and What is Unseen”).

You see while the president and other advocates of Obamacare boast that they will expand coverage for more Americans through provisions like the medical-device excise tax, they fail to realize or refuse to acknowledge that other Americans will lose their jobs on account of the same provision.

Consider just two of the bigger players in the medical device industry.  Minneapolis based, Medtronic (NYSE: MDT), the world’s largest spinal device maker, announced it would soon hire 1,500 new workers, but because of Obamacare most of those hires will be overseas.  Then there is Massachusetts based Boston Scientific (NYSE: BSX).  The large cardiovascular device maker announced it would lay-off between 1,200 and 1,400 workers worldwide with a majority being American workers while at the same time announcing a $150 million investment in China that would create 1,000 new jobs there.  So, while Obama claims that more Americans will have health coverage under Obamacare, others will lose their jobs or not be hired because of it.

To be sure, companies do not move their operations overseas without careful consideration.  It is expensive and even risky for them to relocate all or the bulk of their workforce outside the United States.  There are a lot of costs involved with moving facilities and setting up shop abroad.  Corruption, political instability, and unskilled labor forces in most developing countries provide an enormous amount of risk for American companies.  Yet many of them make the move anyway.  And that is the question which has baffled Obama and his ilk for some time now. Why have American companies and the jobs they provide gone overseas these last several decades?  The answer is simple:  because the money saved in taxes, many times in the hundreds of millions of dollars annually, more than compensates them for their relocations abroad.  Medtronic and Boston Scientific are just the latest examples.

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Originally posted on The Jeffersonian:

Suddenly we are fifty-seven days from November 22, 2013, the fiftieth anniversary of Jack Kennedy’s death. Here’s an interesting article, the Saturday essay in this weekend’s Wall Street Journal:

Lee Harvey Oswald in the Soviet Union

Lee Oswald around the time of his move to Russia in 1959

If you read this article, compare the author’s view of Lee Oswald’s character and motives with an alternate framework that becomes more durable as evidence accumulates. In that view, Oswald worked with the CIA and the FBI, and Jack Ruby killed him not because he was pissed off at Oswald for killing the president, but because he was under orders to do so.

Infamy

I’ve been working on a book about Kennedy’s murder and 9/11 called Infamy. I wanted to finish it by November 22, but it won’t happen. Life took over as always, and I’m not sure when, or…

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If Republicans Love America They Must Keep the Government Closed Down

The current government shutdown has statists all in a tizzy.  Democratic congressmen and mainstream media pundits have been blabbering all week about how we are doomed because Republicans in the House of Representatives refuse to approve more wasteful federal spending thereby allowing the government to continue to function.  For these folks, it is the end of the world if Washington is not the center of decision making and the purveyor of all of life’s provisions for the American people.  The incessant chatter of how a small group of “extremists” in the House is holding the whole country hostage got old pretty darn quick and I found myself reaching for the remote to quell the noise on more than one occasion.

I mean what is so extreme about attempting to change the disastrous course the country is currently on?  Can the federal government continue to rack up enormous deficits each month with no end in sight?  Are we able to take on another massive entitlement program?  Finally, after five years of managing the economy and producing no economic recovery, is it not time to admit failure and try something new?  If Republicans love America, they must stick to their guns and demand changes before any budget deal is agreed to.

For one thing, it is no secret that Washington wastes billions of dollars each year and a lot of the spending has nothing to do with the welfare of the American people.  It includes everything from $10 million  to create a version of “Sesame Street” for Pakistani television to $2.6 million to train Chinese prostitutes to drink responsibly.  None of it is constitutional and none of it enriches the lives of ordinary Americans.

But, that spending is just the tip of the iceberg.  The national debt is quickly approaching $17 trillion and unfunded future liabilities for Social Security and Medicare equals another $84 trillion.

Then there is Obamacare – the president’s signature legislative accomplishment.  The increased costs that come with that scheme will be enormous.  Much of the costs will be covered by federal subsidies which will further exacerbate the national debt.  Because it is another entitlement program, future lobbying for protection of the system and increased benefits will rival that of Social Security and Medicare thereby causing huge unfunded liabilities of its own.  Yet, Democrats refuse to even consider delaying the law for one year.

In the final analysis, the way to get America back on the path to economic prosperity is not through big government programs supported with huge budget deficits.  That has been proven over the last five years.  The road to a bright economic future is through small government and balanced federal budgets.  The greatest period of economic growth in our nation’s history came when deficits were low and the largest federal program was the U.S. Postal Service.  Between 1869 and 1879 America’s economy grew 6.8 percent (NNP equals GDP minus capital depreciation) per year.  When the 20th Century began, America was the world’s leader in per capita income and industrial production.  Real wages increased greatly and prices of goods and services remained steady.

We have spent over $7 trillion in the last 5 years and what has it gotten us?  Lagging wages, continued high unemployment, and higher prices are the result.

An immense fiscal and monetary crisis is eventually going to engulf America. It is already too late to prevent it.  Over 40 years of profligate federal spending and monetary recklessness is quickly coming to a head.  If Republicans back down to the big spenders and pass a budget which increases the debt ceiling and funds Obamacare the collapse will be that much worse.  If they really love America, they must keep the government closed down.  Maybe we can salvage some of our doomed economy?

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Back in June, as the official government unemployment rate continued to fall, Federal Reserve Chairman Ben Bernanke indicated to the public that the Fed might begin to scale back its easy money policies sometime before the end of this year.  As the Fed met this past week, many economists and analysts expected it to announce that the central bank would indeed begin tapering its current $85-billion-per-month bond buying scheme known as Quantitative Easing 3.

But, these are also the same pundits who have been claiming for five years that the U.S. economy is in a state of recovery.  They are either disingenuous or totally clueless.

This commentator had no doubt the Bernanke Fed would not begin tapering QE3 now.  In fact, QE3 may never end.

In the first place, for five years now the Fed has injected over $2 trillion into the economy through QE 1, 2, and 3 and the real unemployment rate is still north of 14 percent. More Americans are on food stamps than ever before.  Middle class incomes are down and poverty is up.  At this point, Bernanke’s largess is a life support system for the economy.  It will not cure the patient; just simply prolong the agony until the day of reckoning.

And the day of reckoning will come when long-term interest rates climb to the level where the current QE induced housing and stock market bubbles pop.  The carnage from that, however, will be minor compared to the destruction left behind from the mother of all bubbles – Treasury Bills.  The point is, in June when Bernanke simply mentioned the Fed might begin tapering the stock market tanked 550 points and T-bill and mortgage interest rates instantly rose.  Imagine the impact if the Fed really pulled the plug on the economy’s life support.  Additionally, because T-bill and mortgage interest rates have been rising that could mean Bernanke has lost control of long-term rates.  The only tool he has for combating rising rates is more stimulus.  Thus, instead of taper talk, analysts should be asking when the Fed will increase the amount of bond purchases per month.

Lastly and perhaps the biggest reason why the Fed may never be able to cut back on its monetary stimulus is because to do so would accelerate the insolvency of Uncle Sam.  Realize that even though the current national debt is almost 3 times what it was in 1996, interest payments on the debt after adjusting for inflation are lower today than they were then.  The difference is the rate of interest the federal government is charged.  Bernanke has no choice but to keep printing.  If he tapers, rates will go up, interest payments will become a bigger share of federal expenditures and he will have to print even more to keep things going.  The hyperinflation that will result will finish off what’s left of the U.S. economy.

Many will say the above is nothing more than doom and gloom.  But, the above scenario is real.  Ben Bernanke steered Fed policy down a dangerous path in 2008.  Instead of allowing the market to liquidate the mal-investments from the preceding boom, Bernanke chose the politically correct way by attempting to re-inflate the bubble.  Instead of letting those that were reckless and brought on the crisis lose their shirts; Bernanke launched a massive program of bailouts and bond purchases.  He has printed himself (and us) into a corner and thrown away the key.  To keep things from crashing he has no choice but to continue printing.  Even then, the end will ultimately come and the devastation will be so much worse than 2008’s crisis.

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D.C. Mayor to Sign Outrageous Minimum Wage Scheme into Law?

This could be the week when Washington, D.C. Mayor Vincent Gray signs into law a minimum wage measure passed by the D.C. city council two months ago.  The Large Retailer Accountability Act would require stores that are larger than 75,000 square feet and whose parent companies have yearly revenues of $1 billion.to pay its workers 50 percent more than the current local minimum wage of $8.25 per hour.  Proponents of the new law cite the need for Wal-Mart and other employers to pay a “living wage”.  Detractors of the measure, including the liberal Washington Post, correctly claim it will give the nation’s capital an anti-business reputation which will continue to hinder job growth in the District.

Naturally, the Post’s analysis is spot on as Wal-Mart has threatened to scrap plans to build up to six stores in the D.C. area.  Altogether, 1800 jobs would be lost including at two locations in impoverished neighborhoods.

Nevertheless, backers of the measure are stubbornly sticking to their dogma even as Wal-Mart warns it will pull the plug on 1800 jobs if the measure becomes law.

Last week, Councilman Vincent Orange, in a statement reflecting serious economic imbecility, stated, “We’re glad (Wal-Mart) finally recognized the value of the District of Columbia, but we also recognize the value of our residents, and the value of one hour of our residents’ time is greater than $8.25″.

Wow, what does that mean?  Is Orange claiming that he and other council members are smart enough to determine the worth of every single worker in the nation’s capital?  Wasn’t this same hubris found to be fallacious in the collapsed Soviet Union?

It is bad enough that there is any minimum wage in D.C. let alone an attempt to produce a double tiered system.  Minimum wage laws are, as the late great Murray Rothbard put it, “compulsory unemployment”.  Rothbard explained it well:  “The law says it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.”

But, besides Rothbard’s cogent argument against minimum wage laws, the two tier system developed in D.C.is un-American.  How can there be two different sets of rules for different players in the marketplace?  Would there not be outrage if the government provided bailouts to two car manufacturers while the third which managed its business responsibly was not rewarded with federal largess?  Perhaps that’s not the best example, but again, even the leftist Washington Post understands that the law will create an “uneven playing field” for Wal-Mart and other big box retailers.

At the end of the day, one must question the motives of the Washington D.C. city council which passed the measure.  This particular city council has had three of its members convicted, one plead guilty, and another under investigation for bribery and corruption.  The law targets large, non-unionized retailers.  Was its passage a payback for union donations?  Unfortunately, for workers in D.C., whether it was or not, if the mayor signs it into law they will be out 1800 jobs.

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Originally posted on The Jeffersonian:

“I can give assurances to the public in Europe and around the world that we’re not going around snooping at people’s e-mails or listening to their phone calls,” Obama said. “What we try to do is target very specifically areas of concern.”

President Obama and Prime Minister Reinfeldt at a news conference in Stockholm, Sweden.

President Obama said these words in Stockholm, at a news conference with Swedish Prime Minister Reinfeldt. At home, he dishes this deceitful pablum out to American citizens by the shovelful. He seems to believe it. Then he rolls the same kind of statements out to the rest of the world, and expects people to believe it because he sounds so sincere! Or perhaps he thinks people believe it because everyone is grinning at him.

The issue isn’t whether the U. S. government “snoops at people’s e-mails or listens to their phone calls.” The issue is…

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Is the Chemical Attack in Syria a False Flag Perpetrated by Washington?

Next year will mark the 50th anniversary of the Gulf of Tonkin Incident.  It was that false flag event that persuaded Congress to give President Johnson a blank check to retaliate against the supposedly unprovoked attack by North Vietnam on an American warship patrolling international waters off the coast of Indochina.  The fraudulent claim by Johnson resulted in the Vietnam War fiasco which claimed the lives of over 50,000 young Americans and produced millions of Vietnamese casualties.

Now Barack Obama is potentially up to his own false flag event in Syria.  In an effort to justify U.S. military intervention in the Syrian conflict, the Obama Administration has accused Syrian dictator Bashar al-Assad of perpetrating the chemical weapons attack in a rebel-held suburb of Damascus last week.  Speaking forcefully, earlier this week, Secretary of State John Kerry stated, “The indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons is a moral obscenity.”  The Secretary chose his words carefully in an effort to rally a war-weary U.S. citizenry for another military adventure on the other side of the world.

Was al-Assad responsible for the attack?  The Administration has tried and convicted him before a team of U.N. inspectors has had a chance to finish its investigation.  It claims he alone possesses the means to carry out such an atrocity in Syria.  At least 4 U.S. warships are sitting off the coast of Syria waiting for Obama to give the order to attack Syrian military and government targets.  It seems likely that a U.S. attack on al-Assad forces is imminent.

But there are at least two other possibilities of who may be responsible for the chemical attack last week.  In May, members of the Al-Nusra front, an Al-Qaeda affiliated group which many analysts believe to be “the most aggressive and successful arm” of the Syrian resistance, were apprehended by Turkish security forces in Turkey while in possession of 2 kilograms of sarin gas.  Thus al-Assad does not have a monopoly on chemical agents in Syria as the U.S. asserts and it is possible that Al-Nusra perpetrated the chemical attack last week to provoke the U.S. into striking the Syrian regime in an effort to help its own cause.

But there may be an even scarier possibility of who was responsible for the chemical attack last week on the outskirts of Damascus – the Obama Administration.  Emails from the British-based contractor Britam Defence released in January by a Malaysian hacker showed a plan “approved by Washington” that would fund Syrian rebels to carry out chemical attacks in Syria which the U.S. could use as a pretense for military action against al-Assad.

Is it hard to believe that an American administration could be guilty of such an atrocity?  Not really if one looks at history objectively.  American history is littered with examples of our government producing coups, assassinations, lies about weapons of mass destruction, and other events that simply didn’t happen in order to accomplish its goals.

Let’s not forget that the current administration’s Bureau of Alcohol, Tobacco, and Firearms facilitated the sale of approximately 1400 illegal weapons to Mexican drug cartels in Operation Fast and Furious.  Ultimately the program resulted in the death of a U.S. border agent, Brian Terry, and no doubt scores of others caught up in Mexico’s failed war on drugs.

It is possible that Washington could stoop to any depth to carry out its aims.  Americans who believe that only other country’s governments are capable of heinous acts are simply naïve.

Of course, it is possible that Bashar al-Assad used chemical weapons against his people.  But, knowing that it would provoke U.S. military intervention in Syria, it just doesn’t make any sense for him to do it.  On the other hand, just like in 1964 when President Johnson was getting intense pressure from the military-industrial complex to escalate the war in Vietnam, Obama is receiving the same kind of pressure with regards to Syria today.  Unfortunately, like Johnson, he doesn’t seem to have the courage to resist it either.

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It’s a rare circumstance indeed, but I give Kudos to North Carolina’s state government.  Recently, Governor Pat McCrory signed legislation that allows gun owners with concealed carry permits to take their firearms into restaurants and bars.  Additionally, the measure allows concealed carry on greenways, playgrounds, and other public recreation areas as well as permitting the storing of weapons in locked vehicles on the campuses of public schools and universities.

It should be noted that the legislation provides for a great degree of local control.  Private property is respected by giving bar and restaurant owners the right to forbid guns on their premises.  Municipal governments retain the right to pass ordinances restricting concealed carry on public land.

In light of all of the shooting tragedies in public places in recent years, North Carolina’s new gun law represents a common sense approach to self-defense and crime prevention.  There is no softer target for a deranged assailant than a gun-free zone.  Just knowing that someone in a public place could possess the means to defend themselves and others will deter some criminals from striking.  Those undeterred could find themselves the victim of their own criminal madness.

If only Suzanna Hupp had been permitted, under Texas law, on October 16, 1991, to bring her firearm into a Luby’s Cafeteria in Killeen, Texas.  On that day, while having lunch with her parents, George Hennard crashed his truck into the front of the restaurant and proceeded to gun down 23 people including both of Hupp’s parents.  Hupp, a gun owner, instinctively reached for her .38 revolver, only to realize she had left it locked in her vehicle because Texas had just passed a new law banning concealed carry.  There is no question that if given the opportunity, Hupp would have prevented some of the carnage.

To be sure, there have been many other times when law-abiding gun owners could have saved lives if they were allowed to pack heat in public places.  Conversely, many gun owners have saved lives through the benefit of concealed carry laws and by being at the right place at the right time.  Back in 1995 the Journal of Criminal Law and Criminology at Northwestern University School of Law published a study that indicated that law abiding gun owners use their weapons for defensive purposes as many as 2.5 million times a year.  This calculates to guns being used 60 times more to protect innocent lives than being used in the commission of a crime.  Thus, loosening gun laws would make us safer because it would give responsible gun owners more ability to intervene in crisis situations like Aurora, Colorado, Virginia Tech, and Sandy Hook Elementary.

It’s common sense that gun control laws only disarm law-abiding citizens leaving them vulnerable to the whims of criminals.  Chicago, which has some of the strictest gun laws in the country, continues to experience high rates of gun violence.

Additionally, gun control laws are inhumane.  They leave gun owners like Suzanna Hupp defenseless and helpless to save lives in a crisis.

That is why North Carolina’s new gun law is a common sense approach to self-defense and crime prevention.  It gives responsible gun owners the ability to save lives in a crisis.

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Steven Greffenius:

As the original author says: disturbing, but we have to know about these things.

Originally posted on Starship Earth: The Big Picture:

police brutality images http://streetganglife.comMy friends, I really HATE being the bearer of bad news, but this has to get out. It’s not something most people go looking for, this undeniable evidence of the subversion of our police forces—I know I don’t—but it’s out there and people need to know the deplorable state of affairs we find ourselves in today.

This corruption didn’t just “happen”—it was most purposely cultivated in our local police departments by the Illuminati and officers have been ordered to treat innocent people this way to further the martial law environment they are creating while most Americans sleep on, blissfully oblivious to the tyranny and evil.

Many police no longer serve and protect civilians—but the dark cabal. We need to wake up and realize that things have changed and they are escalating.

This young woman, the victim who called for police assistance, was brutalized, arrested, and all her clothing removed while…

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Originally posted on The Jeffersonian:

The controversy about autism and vaccines is back in the news again, as Jenny McCarthy has taken a job with ABC’s The View. People want to see her blackballed. It’s an interesting coincidence that this issue should return the same week that twenty-three children in India died, and many others sickened by poison from school lunches that were supposed to be safe. I wonder if the Indian government will undertake studies now to determine whether a causal link exists between school lunches and fatal food poisoning.

Here’s an article on the subject. It dates from 2011, when the press pilloried Andrew Wakefield every time you looked up from your coffee. See also this web page titled Informed Choice: MMR vaccine and the autism epidemic. I don’t want to travel back to that controversy at the moment. Instead, let me propose a thought experiment that tries to capture the…

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Originally posted on The Jeffersonian:

Edward Snowden’s critics don’t try to conceal their satisfaction these days. They call him a “dweeb” who is “holed up” at the Moscow airport. They say he is a traitor and a spy who should be returned to the United States to face “due process.” You don’t have to wonder what that means any more.

You have to ask at this point: What would it take for the federal government’s defenders to recognize that our democratic republic has slipped away from us? So far, torture and dreadful forms of secret, illegal imprisonment have not done it. Wholesale abrogation of the search and seizure prohibitions in the Fourth Amendment has not done it. Neither has prosecution of illegal wars, operation of secret courts, or execution of American citizens without due process sufficed. What would it take?

Would they need to see militarized police squads breaking into people’s homes, carrying grenades, tear…

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Paula Deen and the Civil Rights Act of 1964

Next year will mark the 50th anniversary of the passage of the Civil Rights Act of 1964.  Passed at a time when racial discrimination in America was at its height, the act appropriately addressed discriminatory practices by government institutions.  For example, Titles I, III, and IV of the act, made it illegal for government to:  impose unequal application of voter registration requirements, deny access to public facilities on grounds of race, color, religion, or national origin, and continue to segregate public schools.

Two other titles, however, have always been controversial – Title II dealing with public accommodations and Title VII dealing with employment discrimination.  Both should be repealed.

Now, it’s not hard to understand why these mandates were included in the act at that time.  People of color being denied access to lunch counters and hotel accommodations were commonplace.  Discriminatory employment practices were rampant.

But, a lot has changed since 1964.  Take Paula Deen’s current so-called racial slur controversy.  By her simply admitting in a legal deposition that she used the N-word decades ago, she has been financially devastated.  To date, 12 companies have discontinued their relationship with her including Random House, Food Network, Smithfield, Wal-Mart, K-Mart, J.C. Penney, Sears, Walgreens, and QVC.  In the end, the loss to her bottom line will be in the tens of millions of dollars and this doesn’t even include potential lost sales at her restaurants due to the scandal.  Again, this is simply for admitting the use of a derogatory racial term a long time ago.

It is reasonable to believe that the reaction would be the same if Deen had denied service to or refused to hire people of color at her restaurants.

Also, let’s not forget that we live in an age where political revolutions are organized through social networking and the rescue of a dog from tornado rubble is seen on live TV.  In fact, that poignant scene inspired many to send money to help the pup and his master recover from the tornado’s destruction.

Thus, technology has become the great enabler.  It provides us with information and then gives us a platform to act.  If Deen had denied her lunch counter to anyone, a simple text message to a news outlet would publicize the event widely.  A campaign through facebook, Twitter, or any of the other social networks could be launched to boycott or picket the restaurant.  Instead of violating her property rights, the market with assistance from technology could right the injustice.

And that is what this really comes down to – property rights.  Titles II and VII of The Civil Rights Act of 1964, with the best of intentions, trampled on property rights in America.   As Ron Paul has so eloquently stated, “The rights of private property owners, even those whose actions decent people find abhorrent, must be respected if we are to maintain a free society.  That is why Titles II and VII should be repealed and why the market should be employed instead to right injustice.

Kenn Jacobine teaches internationally and maintains a residence in North Carolina.

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Originally posted on The Jeffersonian:

I ran across a post last night that asked why Edward Snowden gets more attention than William Binney, who has warned us about NSA’s domestic spying since he resigned from the agency in 2001, shortly after the 9/11 attacks. The post’s author seemed a little indignant that Snowden’s notoriety so surpasses Binney’s. It’s also interesting that no one has called for Binney to be prosecuted as a spy and a traitor, even though the warning from both individuals amounts to the same thing: the NSA is conducting domestic surveillance on a scale that goes way beyond what our Constitution permits. They both say we should be concerned about that.

So why does Snowden receive more attention than Binney? Civil disobedience is more dramatic and even spectacular than simple warnings. Glenn Greenwald, The Jeffersonian, and many others have all issued similar warnings for a long time, but Snowden’s documents from…

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Here We Go Again

The week before last, Federal Reserve Chairman Ben Bernanke emerged
from a Federal Open Market Committee (FOMC) meeting and proclaimed that the FOMC came to the conclusion that it may be “appropriate to moderate the pace of (bond) purchases later this year” if the economy continues to improve.  Mind you, he didn’t say the Fed would syphon liquidity out of the economy, simply that it might cut back on its buying of bonds if conditions warranted it.

What happened next was remarkable.  The price of gold dropped $100 an ounce, silver was down 8 percent, the yield on 5 year U.S. Treasury bonds surged by its largest percentage ever, and over a two day period the Dow lost more than 500 points.

Arguably, Bernanke and the FOMC are America’s version of the old Soviet Politburo – central economic planners that thwart the will of the market.  By having ultimate and unfettered control of monetary policy this small economic oligarchy has practically complete control of our economy. The question is, why do we tolerate this?

It’s not just what the Fed chairman says that is a problem; it’s what he does that is even more intolerable.

Albert Einstein use to say, insanity is “doing the same thing over and over again and expecting different results”.  Under this definition, Bernanke is insane.

He has made no bones about the fact that his policies since 2008 were meant to make Americans feel more prosperous so they would start spending again and stimulate the economy back to good health.  In essence, his goal was to re-inflate the housing and stock market bubbles.  According to recent statistics he has done just that.

Nationally, the median price for existing single-family homes was $178,900 in the fourth quarter of 2012, up 10 percent over the same period in 2011.  This marked the greatest year-over-year price increase since the fourth quarter of 2005.

Southern California, Silicon Valley, Washington D.C., and New York City are all experiencing huge real estate booms with prices for pre-construction condos in Manhattan increasing on a bimonthly basis.

There is even a farmland bubble taking place in the Midwest and Mountain states with non-irrigated cropland prices increasing on average by about 18 percent.

In terms of the stock market, it’s no secret that the Dow has surpassed its previous high.  Given Bernanke’s remarks and the subsequent crash of the Dow last week, there is clearly causation between Fed pumping and stock market performance.

But, in all of this “good” news there are reasons to believe that Bernanke’s policies are leading us to another crisis.  Unemployment and underemployment are still high and incomes are down, so where is the money coming from to cause real estate prices to rise dramatically?    It is from speculators and Wall Street firms eager to invest the cheap money they’ve gotten from the Fed.  The problem is that all that cheap money will cause over-investment in the housing market – the production of more homes than are needed.  Once that happens and interest rates rise the bust will come leaving mom and pop homeowners once again holding mortgages against falling property values.

And there is a big reason to be concerned about the booming stock market.  Buying stock on margin reached an all-time high in April at $384.3 billion.  Historically, whenever margin debt has exceeded 2.25 percent of GDP the market has crashed.  This happened in 1929, 2000, and 2007.  Does this mean the market will crash soon?  No one knows for sure, but one thing is certain, Bernanke’s easy money has clearly re-inflated the stock market bubble, setting up mom and pop investors for another dramatic crash.

Thus, Bernanke has been successful in attaining his goal of re-inflating both the housing and stock market bubbles.  However, his policies have not produced an economic recovery as he believed.  In fact, they have brought us to the brink of another crisis.  It’s no wonder since he employed the same approach that produced economic crisis in the past.

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Economic Illiterates Pounce on Wal-Mart Again

The Wal-Mart haters are at it again.  The token lefty at Forbes.com, Rick Ungar, has a piece on that site accusing the nation’s largest private employer of amassing huge profits at the expense of American taxpayers.  Citing a report issued by the Wisconsin Medicaid program, Ungar claims that for every 300 employee Wal-Mart Supercenter store in Wisconsin alone the company’s “sub-poverty” level wages costs American taxpayers about $904,000 per year.  The total is the result of government subsidized health care and housing, and food stamp payments needed to keep families afloat financially.

It’s the same tired old story with a new twist – not only does Wal-Mart harm its workers, but it is a financial burden to taxpayers as well.  What’s even more alarming is that California and other states are considering fining employers like Wal-Mart up to $6000 for every employee of theirs that ends up on state subsidized health care plans.

In the first place and at the foundation of the issue is the fact that no one is forced to work for Wal-Mart and accept the company’s so-called “sub-poverty” wage.  The last time I checked the 13th Amendment to the Constitution banned slavery and involuntary servitude.  If workers don’t like the wages they receive or can’t make ends meet working at Wal-Mart, they can look for work with another employer.

But many do not and thus we have the crux of the problem.  Retail jobs require few if any advanced skills and they certainly do not require a college degree.  Thus, they don’t pay very well.  Traditionally, they have been ideal starting positions for young folks to give them work experience and gas money.  I remember applying for my first job with a family pharmacy when I was 16.  The toughest question I encountered during the interview was, what is the final price of an $.89 box of cough drops if the sale price for the day is 10 percent off?  And today, retail clerks have it even easier as all they have to do is pass the item over a scanner to get the final price.  The bottom line is that retail positions are not made for folks who are supporting families or have adult commitments.  Customarily, folks with these responsibilities have turned to manufacturing and professional jobs.

However, the great irony is that the myriad federal and state regulations which were meant to benefit workers have actually hurt them more by chasing jobs overseas to lower cost venues.  Since 1979, when manufacturing jobs in America peaked at 19.5 million, we have lost close to half of them to overseas competition.  Currently, about 11.5 million Americans work in manufacturing jobs which is the lowest amount since 1941. Now, with far fewer manufacturing jobs for workers to turn to, the same folks who gave us this condition are demanding that retailers raise their wages so workers can meet their financial responsibilities.  But, it doesn’t work that way.  In our economic system, Wal-Mart pays wages based on what the market will bear.  Instituting a higher minimum wage or mandating that retail companies provide health care coverage for their employees will cause more unemployment and hurt the very people those directives were meant to help.  We are already seeing Wal-Mart and other companies gearing up for Obamacare by cutting employee hours to circumvent the law.

In the final analysis, hasn’t government intervention in our economy done enough harm already?  Besides obliterating our industrial base through enormously costly regulations, the Federal Reserve has destroyed the purchasing power of the dollar by monetizing huge sums of federal debt and expanding the money supply ad infinitum .  The very commodities that the working class spends so much of their disposable income on – health care, housing, and food are the very things that have increased in price the most.  More federal and state mandates will only make the matter worse.  We need a return to free markets and sound money.  Folks literate in economic theory understand this.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Teacher was Right to Warn Students About Drug Survey

Back in 1999 when my wife and I taught at a public high school in North Carolina, she came across an opportunity to put into action material she had just taught.  Fresh from teaching a unit on the Bill of Rights, as she wondered through the administrative office area of our school one day, she noticed a meeting between the vice-principal, the school’s resource police officer, and one of her students.  Without hesitation, she took full advantage of what teachers refer to as a teachable moment by ducking her head into the office and reminding her student that he had a constitutional right to remain silent under the 5th Amendment.  For her efforts, my wife received a sneer from the police officer and nothing more was made of the matter.

Let’s fast forward to 2013 and the tale of another public school teacher taking advantage of the same exact teachable moment.  A short while after teaching a unit on the Bill of Rights, John Dryden, a social studies teacher at Batavia High School in Illinois, picked up a stack of surveys from the school office for his students to complete.  Noticing that his students’ names were on the surveys and the surveys had questions asking about drug and alcohol usage, he reminded his students that they had the right to not incriminate themselves guaranteed by the 5th Amendment.

For his admonition, Dryden was docked a day’s pay, charged with “unprofessional conduct”, and had a letter of remedy outlining probationary actions he must complete placed in his file.

What a difference 14 years can make?

The above illustrates just how perverted the public school system in America has become.  Whether you are a teacher or a student, if you deviate from the Establishment order, you will pay a heavy price.  This includes arresting 12 year olds for doodling on desks and suspending 7 year olds for biting PopTarts into the shape of a gun.

In handing down the punishment on Dryden, the school board president Cathy Dremel indicated that he “mischaracterized” the intentions of school administrators with regards to the survey.  According to Dremel, the intention was not to invade the privacy of students but to focus attention on specific student needs.

Unfortunately, that focus was on actions (drug and alcohol usage) that are illegal and whether school officials and resource police officers like to admit it or not, they are a part of the government apparatus charged with making sure the law is adhered to in the public schools.  Thus, there is no guarantee that a student answering in the affirmative to illegal drug usage would not be charged with a crime.

Now, it could be argued that school officials at Batavia High School would have no way to address student needs without the cooperation of teachers and students on the survey.  Many kids could be lost to drug addiction or worst.

But, the current circumstances not the Bill of Rights impede a school’s ability to do that. If school officials want to truly help students with these types of problems they should push for ending the War on Drugs.  Then we can treat drug abuse not as a criminal matter but like the medical issue that it is.  Then, students could answer questions frankly and potentially receive the help they need.
At the end of the day, all Americans enjoy the right to not incriminate themselves guaranteed by the 5th Amendment.  Public school officials should not be allowed to ignore this right or punish those who teach it.

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Benghazi Investigation Entirely Misses the Big Picture

By now, unless you have been living under a rock you are aware of the scandals plaguing the Obama Administration – the Justice Department illegally acquiring the phone records of the Associated Press, the Internal Revenue Service illegally targeting the President’s opponents for tighter scrutiny, and Benghazi.  Now, in all fairness to Obama, to date, no improprieties have been proven in any of the above cases.  But, while the scandals involving AP phone records and IRS treatment of the President’s opponents should be investigated, the Benghazi investigation entirely misses the big picture on that issue.

With regards to Benghazi, currently congressional Republicans are focusing their investigation on whether the Obama Administration botched security at our consulate in that city thereby causing the assassination of Ambassador Christopher Stevens and 3 other Americans and whether it lied about it in an effort to cover it up.

I say, who cares?  The bigger issue and one that no one seems to be asking is, should we have been meddling in the internal affairs of Libya in the first place?

When Obama sidestepped Congress and unilaterally chose to intervene in the Libyan Civil War, the mission was supposed to be a United Nations sanctioned “no-fly zone” over Libya so Gadhafi could not use his air force to slaughter Libyans on the ground.  However, in very short order, the mission morphed into an all-out air invasion complete with coordinated strategy between NATO forces and anti-Gadhafi fighters and bombings of Gadhafi’s fighters on the ground.  The point man chosen by Obama to serve as a conduit between anti-Gadhafi fighters and the U.S. military was Ambassador Stevens.

What was lacking is the same thing that has failed to happen with all U.S. military engagements since World War II.  Congress did not debate whether American military forces should be employed and it did not vote on whether to grant a declaration of war.  Why is this important?  Because the Founders of the United States knew that the decision making power to send Americans into harm’s way and the consequences of that action for the country was too important to give solely to one person – the president.

Libya was not a national security issue for the United States.  We were allegedly there on a humanitarian mission to help Libyans.  The question is, is that a justified use of our military?  Should its role be to police the world?  Congressional debate could have addressed these questions, prevented our intervention in Libya, and possibly changed U.S. foreign policy in the future for the better.

Additionally, our intervention in Libya has made that country “a center of jihadist terror”.  Consequently, weapons, terrorism, and chaos are emanating from there to the rest of North Africa and the Sahel regions.  Gadhafi may have been a bad guy to his people, but our intervention in his country is having adverse effects on all the people of the region.  With 535 members in Congress, someone would have questioned, during debate in that body, what would happen as a consequence of our intervention?  Perhaps the consideration of that inquiry would have prevented our ill-fated intervention and Ambassador Stevens would still be alive today.

In the final analysis, what needs to be investigated is whether we should have been in Libya in the first place?  This investigation then should lead to a reconsideration of our current foreign policy.  Given that our current foreign policy has our military forces engaged in at least 74 other conflicts around the globe this seems more important than finding out whether the Obama Administration botched security at our consulate in Benghazi causing the death of an American ambassador and 3 other Americans and whether it lied about the matter in an effort to cover it up.  It’s time Congress looks at the big picture.

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Originally posted on The Jeffersonian:

Judy Woodruff, David Brooks, and Mark Shields

Brooks and Shields have an interesting discussion about trust in government on PBS NewsHour tonight. I won’t try to summarize it here. It’s not long and it holds your attention, so go ahead and listen to it.

Here’s the interesting thing: for all their perceptive comments about why our national government has lost people’s trust, these two analysts still believe that we would be better off if people trusted government more. That seems to be a mainstream view, that things were better back when more people trusted their government to do the right thing. We even have a polling question asked through the decades to gauge public confidence: “Do you trust government to do the right thing most of the time?” Before Vietnam and Watergate, seven in ten people answered the question yes. Fifty years later, two people in ten answer yes.

I…

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Focus on Minimum Wage is Misplaced

In spite of the abysmal unemployment problem in the United States, President Obama was in Texas last week touting his plan to raise the minimum wage to $9 an hour.  Recently, New York, Chicago, St. Louis, and Detroit have seen fast food workers walk off the job and strike demanding higher wages.  Specifically, in Detroit, the Michigan Workers Organizing Committee, a coalition of labor, religious and community organizers is calling for a national minimum wage of $15 an hour.

The common denominator for everyone who wants to raise the minimum wage is the claim that the current government mandated floor price for hourly workers is too low for them to make a decent living.  Then there are the recipients of low wages, who claim their value, after years of faithful service to an employer, is much higher than the wages they receive.  For them, raising the minimum wage is the only way they can potentially get what should be coming to them – a higher rate of pay.  At the end of the day, proponents of raising the minimum wage assert that it is simply a matter of fairness to give those at the bottom rungs of the socio-economic ladder a little more.

Well, there are a lot of problems with the above reasoning.  In the first place, only two percent of wage earners in America work for minimum wage.  While workers under 25 years of age account for just 20 percent of hourly paid workers, they make up close to 50 percent of those earning the federal minimum wage or less.  In other words, very few workers are affected by the minimum wage and those that are tend to be young, first time wage earners.  You know, the teenager working at McDonald’s after school.  Naturally, older folks with familial responsibilities should find it hard to live making the current minimum wage.  The system is not really set up for them.

Then there is the economic problem caused by the minimum wage, namely unemployment.  Now, I know that there have been studies on both sides of the issue.  But, it is an economic fallacy to believe that the minimum wage does not cause unemployment.  Basic supply and demand tells us that as the price for a good or service increases, demand decreases.  Conversely, as price falls, demand increases.  By its very definition, the minimum wage is a price fix for labor above the market rate.  Thus, as the minimum wage level is greater than the equilibrium wage or wage level where demand equals supply, fewer workers will be demanded and a consequent surplus of workers will result.  Put another way, unemployment caused by the minimum wage is the difference between the amount of workers demanded and the amount supplied at the minimum wage level.  To decrease unemployment (surplus of workers) wages have to drop, just like the price of a good, to reach the clearing equilibrium price.  Naturally, this is impossible under federal and state laws, so unemployment persists until the minimum wage is overtaken by the market wage rate.

Instead of raising the minimum wage to help the working poor make ends meet, the focus should be on the cause of price inflation – the Federal Reserve Bank (the Fed).  Since 1971, when President Nixon ended the convertibility of the dollar to gold that foreign creditors enjoyed, the Fed has monetized over $16 trillion in U.S. government debt and created trillions more dollars out of thin air helping the American banking cartel increase its profits.  The result has been an 82 percent loss in the value of the dollar and consequent general price inflation.  For instance, in 1971, a basket of groceries that cost $30 would cost $173 today.  It’s no wonder minimum wage workers are hard pressed to make ends meet.

In the final analysis, only a return to sound money will ultimately help those currently working for minimum wage.  It wasn’t perfect, but a return to the pre-1971 gold exchange standard would eliminate the need to constantly raise the minimum wage, cure our chronic youth unemployment problem, and be a “matter of fairness” for all wage earners.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Originally posted on The Jeffersonian:

Alright, folks, since I don’t read other people writing on this subject, I have to raise it myself. Does anyone else see a connection between the war in Syria and the war in Iraq? The Iraqi war started ten years ago, and continues now. The Syrian war started two years ago. Do we not want to think about this question, because of our complicity? What do people in Iraq and Syria think about these two conflicts and their connections?

מטוס F-16 של חיל האוויר (צילום: Gettyimages)

Israeli F16 fighter jet

About three years into the Iraq war, King Abdullah of Jordan expressed his fear that the war across his border with Iraq would cause a breakdown of peace in the region. The sectarian war so close by threatened to spread, with bad consequences for his country and other neighboring regions. Jordan has managed to escape the breakdown he predicted, but Syria has not.

The civil war in…

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Originally posted on The Jeffersonian:

Revolution on the Ground argues that the states should take the lead in resisting the federal government. Which states are in the best position to do that? Right now, states with Republican governors are well positioned to resist federal overreach, in health care and elsewhere. Of the states with Republican governors, which ones can act most effectively to resist the feds? Tea Party Republicans, or governors elected in 2010 as part of the Tea Party wave offer promise as effective leaders.

First, let’s have a look at a red-blue map of the United States, to see which states currently have Republican governors:

File:United States Governors map.svg

Red-blue map shows states that have Republican and Democratic governors.

Now let’s consider a list of Republican governors where the Tea Party vibe resonates.

Tea Party governors, or governors Democrats love to hate:

  • Nicki Haley – South Carolina
  • Rick Perry – Texas
  • Rick Snyder – Michigan
  • Paul LePage…

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