Doing good, equality and individual freedom

27 Mar 2011. It turns out that 3 February 1913 was a poor day for individual freedom. In the name of doing good and achieving equality, the 16th amendment to the Constitution was ratified. How are we doing? In the ensuing 90-odd years we have created the most efficient and lucrative tax taking system the world has ever seen. The amount of cash available to governments was, is, will be breathtaking. What’s the government’s record on improving quality of life? In my opinion, it’s not good. Have we eliminated poverty or created a permanently entitled underclass? After many trillion dollars of expenditures to eliminate poverty I would say the picture is dimmer now than when individuals were primarily responsible for sheltering, feeding, clothing and caring for themselves. There is a distinction between caring for those who cannot care for themselves and arbitrarily defining the downtrodden via an income level and then bestowing all manner of benefits on them. Has the government affected health care in a positive way? I think not. The imposition of the employer health insurance mandate during the World War II brought the first of many distortions to the market of health care. While no one wants the sick, injured and dying to go without care, yet in the name of this good we have created a most coercive scheme of tax takings and restriction of individual freedom. When government says you must buy insurance, not buying it becomes a crime. Never in our country’s history has not doing something with your own earnings been a crime. Welcome to the land of equality -- everybody forced to accept the same outcome independent of individual effort.

In some ways we are all badgers now

24 March 2011. My thoughts are these. On style I note a deceit of having two people who are for unions discussing the effects of unions. Though the writer claims to have been anti-union, the ensuing discussion is one-sided, disguising persuasion as objectivity. On issues of public sector unions, my thoughts are more complex.
I am for unions and right-to-work laws. I do not condone that a simple majority of workers joining together in a union – whatever the workplace – may compel all workers to be members, pay dues, and adhere to union directives. I put my individual rights (and hence the rights of other individuals) above the rights of groups – however constituted. Unions should compete with other workplace options for my loyalty. I note here that a badger is a solitary animal not a herd animal.
In the private sector, I see declining union membership sector as due to an unintended consequence of laws that regulate workplace safety and rights, child labor, and minimum wages – and not to the efforts of greedy capitalists. Many of the issues that gave rise to unions no longer exist. Further, “capitalists” (those who build companies and hire labor) have learned that labor is a resource/tool set essential to long-term success of their enterprise: A satisfied workforce is absent less, engages in less sabotage and work stoppage, and understands that the quality of the goods and services of a firm are essential to the long-term health of the company and their job. Right-thinking capitalists do what they can to insure they have a stable satisfied work force. Having learned this lesson and taken steps consonant with its implications, over the past few generations capitalists have decreased the need of unions.
Public sector unions are another matter. There are a variety of reasons why I see them differently. Taxes are the source of funds to pay worker salaries and benefits. Since I view taxes as takings from citizens, these should be minimized, their expenditure should be scrutinized with the most stringent and skeptical eye, and be free of corruption. None of these conditions hold at present in any government with which I am familiar. The most cited example of corruption is the circle of support: union dues –> Democrats’ campaign funds –> elected democrats increasing worker pay and benefits. The most egregious aspect of this circle is that a public sector worker with strong conservative values who seeks limited government must watch as union leaders send money to politicians who espouse views totally contrary to his beliefs. The herd tramples the badger here. If honest accounting accompanied proposals to fund increases in pay and benefits and if expenditures were required to be fully funded at all times (two actions that would bring unfunded liabilities under control and force the future tax increases into the present), I would be willing to trust the electorate to discriminate among the persons vying for office. Unfortunately, our elected officials seem incapable of enacting either of these honest actions. Short of making programs actuarially sound from the moment of initiation, a careful and skeptical scrutiny of expenditures might serve the same purpose. Both Republicans and Democrats resist this type of scrutiny. So we are left with a large pool of individuals who derive their income from the tax pool and who return a fraction back into the tax pool: Such individuals are not affected by tax increases as long as they can negotiate en masse for higher wages and benefits. They are in fact, not net taxpayers, but rather net tax receivers. Now, I am willing to say that teachers, firefighters, police and government workers are doing useful and honest work for which they should receive just compensation, yet among these groups there are no competing forces to increase productivity, lessen costs, and reduce featherbedding. In fact, the forces are aligned in the opposite direction. This has to change. Since the 1970’s education expenditures have more than doubled in inflation-adjusted constant dollars – to what effect. A well-run company that received a doubling of capital investment would generally present a much different performance profile. So let there be unions, but let me choose whether I want to belong.
As you know from past writings, I am disgusted by the amount of tax takings in this country. Further, I am disgusted by the notion that the “rich” must pay their fair share, in which the definition of “fair share” is simply more. At times I am tempted to respond in kind, by saying that net tax users (as opposed to payers) should not be eligible to vote on tax increases. To date, I have managed to maintain a relative state of personal calm and usually vote for the most fiscally conservative candidate who is not a Republican or Democrat. Systems usually work until they stop.

Gadafi games

15 March 2011. I am no fan of henchmen like Gadafi and his sons as I prefer representative forms of government providing the strongest protections for minorities to brutal selfish autocracies. Assuming the Libyan rebels seek greater freedom and representation in their own governance, the question is “what is the most effective course of U.S. actions there?” Unlike Afghanistan, where U.S. policy makers justified war by transforming the terrorist threat of al Qaida (operating in Afghanistan) into a national threat (the governing Taliban were responsible), two different segments of the Libyan population (one bad, one not well understood) are in conflict, and the bad segment is rapidly getting the upper hand. Further, although our government’s record is not perfect (Darfur, Saudi Arabia, Tibet, etc.), the general tendency of American foreign policy is to do the right thing (Haiti, tsunami responses). Americans like to see action on problems. Unfortunately, events in Libya appear to be moving too fast for our bloated government to make a military response (military responses take planning and preparation in order to succeed, and I believe the rapid deployment force is occupied elsewhere). So, what is an effective course of action at this point? Here’s my suggestion. By the end of today, we should recognize the sovereignty of the rebel government over all of Libya (those areas currently controlled by Gadafi would be labeled “disputed territory “). Next, by end of day tomorrow we should have a diplomatic mission in Benghazi. Finally, the President should announce publicly that any further military action by Gadafi military against the Benghazi government would be treated as an act of war requiring our swiftest possible military response. It’s the game of chicken that we have played with Gadafi before. He backed down then, and he will back down now because he knows what it means to have his tent rattled. After Iraq and Afghanistan, I don’t think there is a single autocrat in the Middle East that wants to step over a line drawn in the sand by the President of the United States.

Chaos and voting behavior

13 Mar 2011. Today, as I drank my coffee and home-grown orange juice and smoked a cigar, I watched the news on Fox, read the Sunday paper and checked out news and blogs on Real Clear Politics. I do it daily. Today is typical – consensus is that the world is a mess and someone ought to do something. The urge to do something is a part of human nature (Here I sit writing about it). What emerges in my mind as I write this is the notion that urge to do something needs to be tempered with some calm reasoning (Although I disagree with Obama’s political perspective, I find his willingness to reflect on issues a very positive trait). Calm reasoning requires that benefits, costs, and consequences of actions be examined with honesty and without passion. Among the costs and consequences of any political action are its effects on future generations. One reason I believe the deficit/debt issue has become so intense is that a majority of citizens now realize how onerously previous and current choices affect their own children and grandchildren – a once abstract concept has reached the stage where the consequences are real for those in our immediate families. Usually people are not energized by special taxes on other minorities (for example, expressed with humor, luxury taxes hit the evil rich, cigarette taxes punish stupid smokers, and fast food taxes will soon punish those with unhealthy life styles). Now that irresponsibly designed and funded programs like Social Security, Medicare (all parts, but especially part D) and Obama Care are going to make paupers of their own children and grandchildren, more people are willing to examine the dishonest aspects of these programs. That is, debate about these programs is starting to become more honest and dispassionate. That’s good. Being on the cusp of the wave of boomers, I am in the most advantaged position with respect to these programs. So much so that I feel guilt and think about what I would be willing to give up in order to help make a higher quality of life possible for future generations in perpetuity (not just the 75 years currently being thrown about in talking points about Social Security). Actuaries and insurance companies are really good at determining the balance between current inflows of funding against the outflow of future benefits. I have argued in other venues that each new program should be required to be revenue neutral in the sense that it not depend upon future tax raises in order to fund future expenditures. For example, Social Security fails this test because in order to meet future obligations at current benefit levels, taxes must be raised. All other fixes reduce benefits in some fashion either by increasing the number of working years or eliminating some from eligibility (those evil rich again 8-) ). A dispassionate and honest analysis at each point of past modification and extension of the Social Security system would have revealed this. Among our national politicians, here and there we are beginning to hear some dispassionate and honest assessments of the way forward. So here’s what I urge (after all I am a member of the human race and suffer from the same trait of thinking something must be done) : in the next election, disregard party affiliation, consider every candidate running for each office, and listen carefully for honest and dispassionate appraisals of the issues – that’s the person to vote for. That person might be from a Green or Libertarian or Tea party, or an independent candidate. If the candidate just keeps repeating talking points, you can be sure they are taking big money from the Democratic or Republican national organizations, or affiliated organizations. Talking points and taking big money don’t eliminate candidates, but it sure is an indication that they are not thinking about needed changes in a serious way.

Dialog in a civil society

Yesterday, I took a chance by going to the Paradise Grill to have lunch with the old lunch group, then started in on my favorite topics, and provoked responses (I should have expected) by one of them. During the exchange I became angry and had to leave. All day today I have been thinking about that exchange, and my thoughts suggest that I have to control my anger and the accompanying impulsive, emotional responses, but further, I am a little depressed about what the interaction augurs for dialog among more general audiences. If two well-off, college-educated, adult men discussing taxes, business, and the role of government cannot avoid shouting and name calling, how will larger and more heterogeneous groups with much larger stakes in the game behave when discussing them? For me, for now I have settled on a number of small steps that I can personally take. For the most part, I will seek conversations with persons outside the lunch group. I intend to express my more pointed views on taxes and governance in written form –probably this blog – and hope that these views find their way into the broader society and find persons who are open to my perspective. The themes which capture my perspective are these: (1) control by others over one’s own life should be minimal, no more than absolutely necessary and only with one’s consent, (2)judging on an absolute basis, everyone in our country is pretty well off, (3) if there must be taxes, then all must pay something, (4) the rich are not evil simply because they are rich, nor the poor good just because they are poor, (5) it is work that is noble, not the line of work, (6) sharing is a good deed when it is voluntary not when it is compulsory (those who compel are simply thieves who use desirable outcomes to mask immoral means). So, as of today I am going to try and say something here at waterballooner’s on a regular basis.

An Independent view - 2

Sometimes election outcomes are exquisite. This time voters resuscitated republicans and slapped democrats on the side of the head – needed actions I'd say – putting professional politicians on notice. Nearly perfect! (If only a viable, organized, third party had emerged, but alas no.) Because both parties are not yet honorable, I don’t believe much of what their principals or media reps have to say. At the federal level, I view the vortex of fiscal (taxes, budgets, debt)—policy (government overreach) – and vision (individual liberty vs. state-mandated “freedom” and “equality”, aka “fairness”) as the central problem of our time. Just what did the 2010 voting do? You have to step back and look at the big picture.
Don’t waste time considering whether tea and republican parties get along, or whether conservatives and moderates survive as democrats. These are distractions used to fill television time and print space. Resolution will come with time. Rather consider this. Federal government is stalled for a couple of years. There will be a lot of flailing by participants practicing their posturing, but not much will occur in this vortex. Actions will occur on the periphery and the central paralysis will have its greatest impact in the states, particularly California and New York and states similarly comprised.
In CA and NY voters achieved a sublime accomplishment at precisely the right time. They left in charge the principals who created the highly unstable budgetary situations existing therein. It’s perfect karma. In California and NY, voters stuck with what got us here (perhaps the democrats successfully demonized opponents.) Perfect. Now democrats are responsible for cleaning up the messes they have created – as it should be. If I were a republican strategist in these two states, I’d leave state governance to the democrats until the state fiscal problems were solved. I’d concentrate on city, town, village and county politics and build the grass roots in the stinking manure spread everywhere by hapless state machines. If republicans (or a third party) act honorably at the local level, in a couple of generations, there would not be a democrat left in these states.
Voters elsewhere have said to residents of CA and NY, go for it, but don’t come to us for help, because we chose a different path. This week Arnold called an emergency session because the CA budget crisis is worse than anticipated. I’d bet the actual figure is worse than the stated $25B. In CA and NY states we’ll see what democratic control delivers to “fix” the problems. These are two experiments that I will watch with almost morbid fascination. High income families are already leaving, taking incomes with them, so higher taxation will only increase the flight. Here’s a solution progressives in CA might consider – a state takeover of the entertainment industry – it’s a big cash cow and those actors make way too much money. NY could do a similar thing to the financial industry. That’s a joke. I reject state control of any business but my cynicism has reached a level at which it would not surprise me to see these fanciful actions seriously considered.

An Independent's View

Because democrats and republicans are sure to impose their story line on the election results, I hope some of them will read this, and spread the word. Neither party appeals to me. Parties are legal conspiracies to gain electoral and regulatory power. That democrats and republicans have locked up election processes in every state is a sign of how far we are from free and open elections – it’s a lot easier to win elections and gain power if you only have one opponent. That’s why I vote for third parties and will keep doing so until there are viable alternatives to democrats and republicans.
I am hopeful about the tea party movement (TPM) – I see it as an organic, self-organizing, response of the people to current political choices: I too favor free markets, low taxes, less intrusive government, balanced budgets, and constitutional governance. The TPM perspective is about integrity of federal government processes, not specific policies except as they violate the integrity of the process. In a real sense the TPM is apolitical, relative to democrat and republican perspectives. There are so many examples of a lack of integrity in federal processes, it is hard to know what to address first. I think TPM members focused a lot of energy on taxes, overspending, and debt and deficit because their lives are shaped by family income, balancing debt and income, and making hard choices about what to buy – and they know the consequences of bad management of these processes. Deep down I think we all know that our country is on the cusp of an unpleasant future if we do not exercise credible restraint. On this, it is interesting to note that the federal government has some of the toughest accounting standards, as any business that has federal contracts knows. Yet these standards are not imposed on federal budgeting processes. It’s a case of do as I say not as I do. Let’s stop this by adopting commonly accepted accounting practices to all federal programs and federal budgeting processes. This will immediately reveal the true state of our deficit and debt problems. Because the problems that we have created for ourselves have come into being over time, we have to work ourselves out overtime. The incoming Speaker of the House has called for spending to be capped at 2008 levels. This is admirable, but insufficient. The federal budget must be balanced. There are two parts to process. First, federal income has to be capped at a fixed percentage of GDP (20% is a good figure because it permits support for national defense [4-5% of GDP] and popular social programs like social security and Medicare – if these programs are constructed and run properly). Second, spending must be limited to income. Both of these steps have to be instituted via statute or via constitutional amendment to ensure their effectiveness. These steps create the mechanism by which undesirable government programs are defunded and eliminated, and will incentivize efficiency – the only way to increase spending on a program is to find or create savings elsewhere. I have been fortunate in this recession and I am thankful. This good fortune makes me willing to endure too high taxes for a while to help those in need, but not to expand the entitlement state -- there is a difference between helping those in need in hard times and permanent, coerced, transfers of my income to others.
At the same time, I am also angry, and I trace my anger to two aspects of the health insurance reform process. First and foremost, I did not elect a congressional representative to put into law a mandate to buy health insurance. I communicated this to him, but he disregarded me and the will of the district. We just fixed the representative problem in the past election, but it will take years to undo the damage his vote has created, because nearly as odious (as the individual mandate) was the use of reconciliation to pass the health insurance reform bill. This abuse of legislative process will come back to haunt those who used it so, and I know in my heart the outcomes of such future abuses will not be pleasant. Somehow the legislative branches must preclude all future uses of reconciliation for such purposes. There is a reason the Senate is constructed as it is. Senate processes force deliberative and consensual decision making among the major forces at play in any issue. In the end, Senate processes offer the best protection of the rights of minority interests. Sometimes the minority interests are objectively correct, and their protection is important for the health of the nation.
I consider myself a thoughtful person, and my thoughts run this way. There is a new Congress coming. They have been sent a relatively clear signal. The country wants the Congress to engage in meaningful, fiscally responsible discussions about what to do to put the country right. I personally am able to be patient as long as I see steady progress in the right direction. At a minimum, the Congress, the Senate, and the President should know I will keep my eye on them and make my choices accordingly.