Free Markets, Free People

Monthly Archives: May 2013


Economic Statistics for 23 May 13

Here are today’s statistics on the state of the economy:

Initial Jobless claims fell 23,000 to 340,000 last week. The 4-week average held at 339,500. Continuing claims fell 112,000 to 2.192 million.

The PMI Manufacturing Index Flash fell a single tick to 51.9 for May.

The FHFA House Price Index for March rose 1.3%, which is 7.2% higher on a year-over-year basis.

The Bloomberg Consumer Comfort Index rose to 29.4 last week from -30.2 the prior week.

New Home Sales rose 2.3% in April to a 454,000 annual rate. Prices are skyrocketing, too, up 8.3% in April.

The Kansas City Fed Manufacturing Index rose into positive territory in May, to 2 from last month’s -5.

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Dale Franks
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It’s easy to be smug when you think you’re smart and virtuous. Exhibit A: Lois Lerner

Over at Cold Fury, Mike is discussing the spectacle of Lois Lerner taking the 5th before Congress. He observedquoted DrewM at Ace of Spades:

What a smug SOB she is. She sat there like she’d done nothing wrong and was above it all.

That is not due to any intended deception on her part. She believes that she did nothing wrong, all the way to her core of her being.

First, as Heinlein said, no one is a villain in their own eyes. They always manage to rationalize why their immoral or unethical actions were actually just peachy if everyone knew the whole story about them.

But it goes beyond that with today’s leftists. They are steeped in post-modern philosophy, so steeped in fact that they can’t even think outside the patterns imposed by that philosophy. There are axioms that they believe cannot be violated, and that reality can never falsify.

One axiom is that leftists are wise, beneficent people who are eminently qualified to boss everyone else around by virtue of their superior intellect and good intentions. The direct corollary to this axiom is that any time they fail in the real world, the fault must be ascribed to someone not on the left.

Reality doesn’t matter here. Any non-left group will do as the scapegoat, even squishy establishment Republicans. Any excuse (non-doctored "doctored" emails, non-hacked "hacked" Twitter accounts) will do.

That leads to another axiom: anyone who opposes the left deserves whatever the left can inflict on them. Anyone opposing the left has shown by that very fact that they are morally deficient, have bad intentions, and are possibly less than human.

So it’s not wrong to discriminate against them, violate the law to deny them access to the political process, throw them in jail for non-existent or flimsy reasons (such as carrying a perfectly legal gun in the trunk of their car), tax them until their ears bleed, seize their property because someone else happened to be parked there with a joint, seize their property because they changed the course of a creek that only runs once every three years, throw them out of college for inoffensive remarks that accidentally offend another hyper-sensitive leftist, take their children away from them for indoctrination by the state, and prohibit them from doing a thousand things that used to be perfectly legal and have no demonstrated harm or ill effects.

In fact, it’s not simply that it’s not wrong to do those things. It’s virtuous to do such things to those who oppose the left. Lois Lerner can sit there and be smug in the face of Republican questions because she’s positive in her heart and soul that she was doing good to impede and harass the Tea Party organizations. It was a virtuous act, as far as she is concerned, and she does not feel the least shame or guilt over it.

It’s an inconvenience that she and the rest of the oppressive leftists who love government got caught, of course.  They have to manufacture narrative, dance around those bumbling Republicans who have to put up a show for the people back home, and, perhaps worst of all, they’ll have to suspend their oppression of their political enemies during a short cosmetic period before they get back to business.

But never, ever expect today’s left to show remorse for any act they undertake, no matter how illegal, immoral, or unethical it might be. For them, whatever behavior benefits the left is, by definition, virtuous. 

*** Update 11:40 CST ***

The very next article I read is an excellent example of one of the points above. Kirsten Powers in USA Today is doing her best to defend the indefensible.

A synopsis of her article is:

“These scandals can’t possibly be blamed on liberalism because liberals are good, virtuous people. Therefore the Republicans who are claiming these scandals indicate flaws in big government are unfairly twisting the truth for political advantage. Big government is clearly wonderful when run by virtuous liberals.”

Notice how this dovetails into the idea that the left is never at fault when things go wrong, and thus a scapegoat must be found. It was big-government advocates who put the tax system in place, appointed people with the willingness to suppress opposing viewpoints with the power of the IRS, and covered up those actions as long as possible. Nevertheless, the real villain in the investigation is small government advocates!

She dismisses those who actually did the political oppression as aberrations and peripheral to the entire debate. But those who indict big government using the very actions of big government are somehow bad actors.

There’s no debating people who will simply deny the facts sitting on the table because their worldview does not permit them to think liberalism/leftism has any flaws.

Look, I know the flaws of free market economics. Some abuses will occur, usually transient and corrected in the long term by the market, but real for a time. I know allowing radical freedom means some people will make bad choices.

I don’t claim limited government is without flaw, nor that everyone on the right is a saint. But history and our internal desire for freedom tell us that limited government is the best system we can get.

At least it has feedback built in to correct flaws. Perhaps the biggest indictment of today’s leftism is demonstrated by Kirsten’s column: she and her ilk are incapable of taking feedback on the flaws of the political system she prefers. All she can do is blame problems on the other side, and keep maintaining against all evidence that her side does not have the flaws that it so evidently does have.

*** Update 15:00 CST ***

Looks like Congressman Issa wasn’t any more impressed with Lerner’s smug “I’m so, so innocent” performance than the rest of us. He’s hauling her back and telling her that her opening statement claiming innocence means she waived 5th Amendment rights. (Via Drudge)


Cold Fusion?

So, there’s this Italian guy named Rossi who has a little device he calls the "E-Cat" reactor tube. He says this reactor tube produces a Low Energy Nuclear Reaction (LENR), or what the rubes call "cold fusion". Rossi has been a very secretive little fellow about his device, and has essentially been classified as either a crank or a scam artist—and has a white collar conviction record. So, he’s not especially trustworthy. He’s been challenged to submit the E-Cat to independent testing, because his claims about seem too good to be true.

Well, apparently he did. A team of researchers from Uppsala University in Sweden, the Swedish Royal Institute of Technology, and Bologna University in Italy have uploaded a paper to Cornell’s xarchiv pre-press archive server entitled, "Indication of anomalous heat energy production in a reactor device", in which they say they observed the E-Cat in two tests, during which says things like, "the E-Cat HT2’s performance lies outside the known region of chemical energy densities," and it’s "at least one order of magnitude above the volumetric energy density of any known chemical source." To wit, the paper says the team observed "observed power production of 2,034 Watts thermal for an input of 360 Watts."

Not everyone is convinced, of course, and there are still troubling references to Rossi’s "industrial trade secrets". Skeptics are saying the physicists who took part in this are being hoodwinked by Rossi.

But if—and it’s a big if—the paper’s observations are true, then this is big. Really big. Still, it would’ve been nice if, in addition to the physicists, the team had taken a good journeyman electrician along, to look for the simple stuff.

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Dale Franks
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IRS Commissioner knew about illegal targeting of conservative groups a year ago

And, as it always seems to happen now days, nothing was done:

In late March 2012, IRS deputy commissioner Steven Miller–who resigned his post as acting commissioner last week at President Obama’s request–directed senior technical advisor Nancy J. Marks to investigate allegations of political targeting of groups seeking tax exempt status, agency officials told congressional aides. Holly Paz, acting director of ruling and agreements, worked with Marks on the probe, and both traveled to Cincinnati to conduct interviews.

Sounds serious, right?  Eh, not so much:

On May 3, 2012. Marks gave what IRS officials described as a “presentation” to Miller describing her findings. According to the House aide, Marks said the investigation had found significant problems in the review process and a substantial bias against conservative group. No written findings were produced as a result, the aide said, and it does not appear the internal review led to any disciplinary actions against IRS employees.

Now, I don’t know about you, but if, in fact, “a substantial bias against conservative groups” was found, and it was important enough, at least initially to send Paz and Marks to check it out, then by doing nothing, it would seem to me that IRS management at least tacitly endorsed the action.

Which may be why certain IRS official has decided has decided to plead the Fifth:

A top IRS official in the division that reviews nonprofit groups will invoke the Fifth Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups.

Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening – or why she didn’t reveal it to Congress, according to a letter from her defense lawyer, William W. Taylor 3rd.

And yes, you’re right … this stinks to high heaven and it absolutely begs to be prosecuted.

Of course, if you had any faith in government, you’d expect it too.

That exempts me, however. I expect a few low level IRS employees to get to take one “for the team” and those that actually made it happen will, as usual, escape scott free.

That’s how it works today in this land where everyone is “equal” under the law.

~McQ


Servant, or Master?

Reprinted from Medium.

Forget your politics for a minute. Lose the whole Democrat vs. Republican, liberal vs. conservative thing. Because this doesn’t really have anything to do with that. We’ve heard a lot this week about some IRS people improperly handling tax applications for some conservative and, oddly, Jewish groups.

If so, this shouldn’t a surprise, because it’s happened before. There were certainly allegations of it as far back as the Kennedy and Johnson Administrations, and it comprised one of the impeachment articles against Richard Nixon. Until the IRS is staffed by benevolent philosopher-kings, rather than, you know, people, IRS power abuses will continue to recur.

Even if they didn’t, ordinary run-of-the-mill IRS incompetence should be bad enough. But put aside the various GAO and inspector generals’ reports showing, for instance, that the IRS accepted 2,137 tax returns from a single address in Lansing, MI, to which they returned $3.3 million in refunds. Forget the Treasury Department investigation where IRS taxpayer question centers incorrectly answered 43% of the taxpayer questions they received. And don’t even think about poor Rachel Porcaro, the Seattle single mom who filed a tax return for $18,000, only to be told by the IRS that it was impossible to live in Seattle on that little money, whereupon the IRS demanded an additional $16,000 in taxes and penalties.

All you have to think about is how many times you or some member of your family or friends have had some sort of hassle with the IRS. Think about how you feel when you receive an envelope with the IRS eagle in the upper left-hand corner. It’s not a good feeling is it? Because you know, really, that you’re not gonna open it up and find out that you’ve won a cuddly little puppy.

The IRS is a government agency with the power to delve into the deepest minutia of your personal financial life. If they don’t like what they find they can garnish your income, confiscate your property, or jail you. If they decide you owe them more money, you can’t escape paying them. You can’t even discharge a tax bill with bankruptcy. It’s like having Ray Liotta’s character in Goodfellas in charge of taxation. “Your kid got sick? F*** you, pay me. You lost your job? F*** you, pay me.”

Ultimately, though, the problem with the IRS isn’t incompetence or malice. The problem is that we have a system of income taxation in the first place. If you tax income, you inherently give the government the power to inquire into every single aspect of your financial life. Once you’ve done that, then you automatically have a government agency with the power to destroy individuals’ lives.

So…why would you do that? There are plenty of options for governments to raise revenue. There are sales taxes,value-added taxes, excise taxes, tariffs on imports and exports, user fees, and several other methods. So, why would you intentionally create a tax system that gives the government such enormous power over individuals?

There are lots of other reasons to wonder about the efficacy of a system of income taxation, of course. The IRS estimates that simply completing a tax return costs the average taxpayer 25.5 hours and $149. If you own a small business or are self-employed, that rises to more than 97 hours and $752. That’s a lot of time and money to fill out a single form.

Also, it’s nearly impossible to prevent politicians from expanding and complicating the tax code, because an income tax allows politicians to subsidize or penalize all sorts of individual behaviors—and they do. The assumption being, apparently, that 535 people in Washington, DC, can make better decisions than you can about how to spend your money. Do you remember that Congressman from Georgia who asked the Chief of Naval Operations if sending more Marines to Guam would cause the island “to tip over and capsize”? He’s one of the guys who gets to decide how the tax code handles your income, and he’s a dolt.

Ask yourself a simple question: “If I was creating a new tax system from scratch, would I create one that allows the government to take my house, and maybe send me to jail if I make a mistake?”

If you wouldn’t, then why in the world would you want to keep one that already does?

If it’s possible for a presidential administration to use the IRS to cow his political opponents, why would you want to keep the tax system that allows it, no matter who the president is? That’s serious banana republic stuff. And if that power exists, it seems self-evident that it isinevitable that it will be exercised. Indeed, by all accounts it already has been, and more than once.

We could completely liberate ourselves from individual attention from the IRS simply by switching to a system of consumption taxation, rather than income taxation. No more individual tax returns. No more income tax withholding from paychecks. No more letters from the IRS demanding extra taxes and penalties for some minor mistake three years ago. No more giving out the details of our private financial lives to some government busybody. The government would know nothing about how much money you make or how much money you have. They’d get their money when you spent yours.

Sure, there might be some quibbling about precisely what form a consumption tax would take. Maybe we’d argue a bit, too, about how to build some progressivity into it and make it revenue neutral. But both of those things are achievable. A 23% VAT that excluded non-prepared foods, clothing, and rental housing would get us in the ballpark. In return, we’d get the government’s nose out of our personal business, get a bigger chunk of our paychecks to spend each week, and turn April 15 into just another spring day.

The benefits of eliminating the income tax and switching to some sort of consumption tax seem so clear to me. I cannot imagine why anyone, of any political persuasion, would be opposed to it.


Quote of the Day: BOHICA edition

Grab your wallets, this is going to cost you plenty … for zero gain against a made up problem:

“A principal challenge to all of us of life and death proportions is the challenge of climate change…I regret that my own country – and President Obama knows this and is committed to changing it – needs to do more and we are committed to doing more.”–Secretary Kerry

And the apology tour continues.

~McQ


Observations: The QandO Podcast for 19 May 13

This week, Bruce, Michael, and Dale discuss the week’s scandal updates.

The direct link to the podcast can be found here.

Observations

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