Questions and Observations

Free Markets, Free People

Economic Statistics for 25 Aug 14

The Chicago Fed National Activity Index, a gauge of overall economic activity and inflationary pressure, rose 0.27 points to 0.39 in August.

The PMI Services Flash for August fell -1.5 points to 58.5.

New home sales rose for July rose less than expected, coming in at an annualized rate of 412,000.

The Dallas Fed general business activity index fell from 12.7 in July to 7.1 in August.


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Politicians feel businesses work for government and their only function is a source of tax revenue

I’m not sure how else you interpret this “inversion” nonsense.

Burger King Worldwide Inc. is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc., a deal that would be structured as a so-called tax inversion and move the hamburger seller’s base to Canada.

The two sides are working on a deal that would create a new company, they said in a statement, confirming a report on the talks by The Wall Street Journal. The takeover would create the third-largest quick-service restaurant provider in the world, they said.

The point of this sort of a merger, beside the business aspect, is to move the headquarters of Burger King to a lower tax nation:

Inversion deals have been on the rise lately, and are facing stiff opposition in Washington given that they threaten to deplete U.S. government coffers. A move by Burger King to seal one is sure to intensify criticism of them, since it is such a well-known and distinctly American brand.
[...]

By moving to a lower-tax jurisdiction, inversion deals enable companies to save money on foreign earnings and cash stowed abroad, and in some cases lower their overall corporate rate. Even though many of the headline-grabbing inversion deals of late have involved European companies, Canada has also been the focal point for a number of them, given its proximity and similarity to the U.S. Canada’s federal corporate tax rate was lowered to 15% in 2012.

And surprise – Canada’s economy is picking up steam and corporations are eyeing it as a place to locate.  Imagine that.

Canada’s corporate tax rate in Ontario of 26.5% (the federal rate of 15% plus Ontario’s provincial corporate tax rate of 11.5%) is considerably favorable to the American corporate tax rate of 35% thanks in large part to the conservative Canadian government led by Stephen Harper. The Harper government lowered the federal tax rate to 15% in 2012 down originally from 28% since it took office in 2006.

In fact, a recent KPMG Report, Focus on Tax, ranked Canada as the #1 country with the most business-friendly tax structure among developed countries when adding up a wide range of tax costs to businesses from statutory labor costs to harmonized sales tax. When comparing developed countries to what companies pay in the U.S.; Canada came in at 53.6%, the U.K. came in at 66.6%, and the Netherlands at 74.5% of the U.S. corporate tax burden.

Meanwhile, our politicians are trying to find a way to prevent that, because, well because they apparently think corporations work for them and exist to pay whatever tax rate they deem necessary.  Of course, in a free country, this wouldn’t even be an issue.  Corporations, like people, have the right to move wherever they wish.  It is their call, not the government’s.

But, here that’s not the case:

Burger King’s possible merger to obtain the favorable Canadian corporate tax rate is a true reflection of the American corporate tax rate being the highest in the OECD. However, rather than taking the same stance on outright cutting the corporate tax rate as the Harper government did to keep the U.S. a competitive place to do business, President Obama calls tax inverting companies like Burger King “corporate deserters who renounce their citizenship to shield profits”. At the urging of President Obama, Congress is considering a bill to make it harder for companies to change addresses abroad. Treasury Secretary Jacob Lew called for a “new sense of economic patriotism,” asking Congress to pass curbs to inversions. The Treasury Department currently is also preparing options to deter or prevent corporate tax inversions potentially on its own.

“Corporate deserters”.  “Economic patriotism”.  It’s Orwellian Newspeak at its finest.  Imagine anyone trying to “shield profits” from a grasping and out-of-control government. It is also another, in a long line of indicators, that this is no longer a free country in the sense we used to believe it was.  It is now a country where every other entity is subservient to the needs or wants of intrusive, controlling government.

~McQ

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Exactly how often do cops shoot people?

Well, actually, we really don’t know.

D.Brian Burghart is the editor of the Reno News & Review, the city’s alt-weekly. Driving home one day, he came across the aftermath of a police shooting, and became curious about it. So he started to look for the figures on how often officer-involved shootings happen. And he couldn’t find them. Anywhere.

Nowhere could I find out how many people died during interactions with police in the United States. Try as I might, I just couldn’t wrap my head around that idea. How was it that, in the 21st century, this data wasn’t being tracked, compiled, and made available to the public? How could journalists know if police were killing too many people in their town if they didn’t have a way to compare to other cities? Hell, how could citizens or police? How could cops possibly know “best practices” for dealing with any fluid situation? They couldn’t.

So, he decided to create one. He’s spent the last two years building a crowd-sourced database of officer-involved shootings at Fatal Encounters. And it hasn’t been easy, as he explains:

The biggest thing I’ve taken away from this project is something I’ll never be able to prove, but I’m convinced to my core: The lack of such a database is intentional. No government—not the federal government, and not the thousands of municipalities that give their police forces license to use deadly force—wants you to know how many people it kills and why.

It’s the only conclusion that can be drawn from the evidence. What evidence? In attempting to collect this information, I was lied to and delayed by the FBI, even when I was only trying to find out the addresses of police departments to make public records requests. The government collects millions of bits of data annually about law enforcement in its Uniform Crime Report, but it doesn’t collect information about the most consequential act a law enforcer can do.

I’ve been lied to and delayed by state, county and local law enforcement agencies—almost every time. They’ve blatantly broken public records laws, and then thumbed their authoritarian noses at the temerity of a citizen asking for information that might embarrass the agency. And these are the people in charge of enforcing the law.

Frankly, I find this all too easy to believe. After all, a database of officer-involved shootings would be an enormously useful thing to have for the police, in order to draw lessons about best practices. But, an even more important use is for the public to use the data to provide better visibility and accountability for police operations. And the latter reason, I strongly suspect, is precisely why the police don’t want such a database. The police interest in coming up with best practices is far outweighed by their interest in preventing increased transparency.

The attitude of the police seems to be that of Colonel Jessup in “A Few Good Men”:

I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, and then questions the manner in which I provide it.

But, here’s the thing: The very essence of a free society is the open ability to question the manner of how those we entrust to defend us provide that defense. It’s what prevents us from becoming a police state. I would argue that we’re already on the cusp of becoming one.


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How do you argue a point with a side which hasn’t a clue how the real world works or what a logical “non-sequitur” is?

I think we all know which side that is.

Here’s the premise put forth by an article in The New Republic:

“Libertarians Who Oppose a Militarized Police Should Support Gun Control”

Here’s a sketch of the argument:

There is indeed agreement between many liberals and libertarians that the militarization of the police, especially in its dealings with racial minorities, has gone too far. But this consensus may crumble pretty quickly when it’s confronted with the obvious police counter-argument: that the authorities’ heavy firepower and armor is necessary in light of all the firepower they’re up against. At that point, many liberals will revert to arguing for sensible gun control regulations like broader background checks to keep guns out of the hands of violent felons and the mentally ill (the measure that police organizations successfully argued should be the gun control movement’s legislative priority following the Newtown, Connecticut shootings) or limits on assault weapons and oversized ammunition clips. And liberals will be reminded that the libertarians who agree with them in opposing police militarization are very much also opposed to the gun regulations that might help make the environment faced by police slightly less threatening.

But it doesn’t “crumble” at all.  You have to buy into the premise that it is a more lethally dangerous out there for police than it appears to be.  But it isn’t:

The number of law-enforcement officers killed by firearms in 2013 fell to levels not seen since the days of the Wild West, according to a report released Monday.

The annual report from the nonprofit National Law Enforcement Officers Memorial Fund also found that deaths in the line of duty generally fell by 8 percent and were the fewest since 1959.

According to the report, 111 federal, state, local, tribal and territorial officers were killed in the line of duty nationwide this past year, compared to 121 in 2012.

Forty-six officers were killed in traffic related accidents, and 33 were killed by firearms.

The number of firearms deaths fell 33 percent in 2013 and was the lowest since 1887.

And the drop is credited to bullet proof vests, not SWAT Teams and MRAPS. Pretending that the threat is any higher now than it always has been seems obviously wrong, given the facts.  Certainly there are toxic cultures within our society who believe that violence is the answer to whatever they encounter as a problem. And yes, police have to face that potential threat all the time.  Do I think police should be armed adequately?  Yes, but that doesn’t at all begin to cover what we see among today’s police forces in terms of both equipment and tactics.  In fact, I believe it is all of these “wars” on everything from drugs to terrorists which have had a hand in helping to militarize the police.

That said, agree or disagree with that point, gun control is essentially not only been shown to be ineffective but is a non-sequitur in this “argument”.  See Chicago, Detroit, Washington DC for proof the ineffectiveness of the ban.  But you have to ask, who in this day and age but a clueless journalist would even begin to believe that “broader background checks” are going to keep guns out of the hands of “violent felons?”  Have they in the past (their answer is they just haven’t be stringent enough)?  Honestly, do they really believe a felon is going to waltz into a gun store to buy what he wants knowing full well he’ll have a background check run?  Really?

Have these rubes never heard of a black market (they can buy guns from Mexican cartels, thoughtfully provided by the DoJ)?  Do they not realize that any “violent felon” who wants a gun isn’t going to even try to get one legally?  So, knowing that, why in the world would any libertarian grant the absurd premise knowing full well that doing so only limits the freedom of the law abiding citizenry?  It’s absurd on its face.  And, logically, it is a non-sequitur to any libertarian (again, libertarianism isn’t about shrinking rights and freedoms for heaven sake).  How does making it more inconvenient for citizens who aren’t “violent felons” to buy a gun for self-protection going to stop a felon from obtaining his gun illegally?  It isn’t.

Because, of course, that’s not what they really want (i.e. incremental change via “broader background checks”).  They want a total ban on guns, for government and felons to be the only people with guns and to essentially outlaw then outright.  Obviously they are oblivious to the danger of only government having guns and they certainly don’t seem to be able to wrap their heads around the fact that felons aren’t going to pay any attention to the law.  Nor will the black market in illegal guns.  So why, again, should anyone grant this argument credence?

I swear, you just wonder at times what goes on between their ears all day, because it certainly has nothing to do with the real world or reason.

~McQ

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Economic Statistics for 21 Aug 14

The PMI Manufacturing Index Flash for August rose 1.7 points to 58.0.

The Philadelphia Fed Survey for August rose a sharp 4.1 points to 28.0, a rise not supported by the report’s underlying indices. Both new orders and shipments slowed by half, while unfilled orders are shrinking and delivery times are improving. All of these are symptomatic of slowing activity. The headline number is not a a composite of components but is based on a single subjective question in the survey. This month, at least, the answer to that question seems at variance with the other indices in the report.

Existing home sales rose 2.4% to an annualized rate of 5.15 million units in July.

Initial jobless claims fell 14,000 last week, to 298,000. The 4-week moving average rose 5,000 to 300,750. Continuing claims fell 49,000 to 2.500 million.

The Bloomberg Consumer Comfort Index fell -0.2 points to 36.6 in the latest week.

The Fed’s balance sheet fell $-19.0 billion last week, with total assets of $4.412 trillion. Reserve Bank credit fell $-3.7 billion.

The Fed reports that M2 Money Supply fell by $-8.7 billion last week.


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Cupcake policing

I think George Will is on to something:

In physics, a unified field theory is an attempt to explain with a single hypothesis the behavior of several fields. Its political corollary is the Cupcake Postulate, which explains everything , from Missouri to Iraq, concerning Americans’ comprehensive withdrawal of confidence from government at all levels and all areas of activity.

Washington’s response to the menace of school bake sales illustrates progressivism’s ratchet: The federal government subsidizes school lunches, so it must control the lunches’ contents, which validates regulation of what it calls “competitive foods,” such as vending machine snacks. Hence the need to close the bake sale loophole, through which sugary cupcakes might sneak: Foods sold at fundraising bake sales must, with some exceptions, conform to federal standards.

What has this to do with police, from Ferguson, Mo., to your home town, toting marksman rifles, fighting knives, grenade launchers and other combat gear? Swollen government has a shriveled brain: By printing and borrowing money, government avoids thinking about its proper scope and actual competence. So it smears mine-resistant armored vehicles and other military marvels across 435 congressional districts because it can.

Examples?  Will provides plenty of them.

Here’s the point though:

A cupcake-policing government will find unending excuses for flexing its muscles as it minutely monitors our behavior in order to improve it …

“Improve” should be in scare quotes, because the deeper the medling, the more it “minutely monitors our behavior”, the less it improves it and the more it interferes with it.

But … that’s the state of being now in the US.

Nick Gillespie at Hit and Run agrees with Will but issues this warning:

He’s right that confidence in government is plummeting mostly because of the simultaneously stupid and overreaching actions of politicians, administrators, and bureaucrats at all levels. Recognizing such a reality may be the beginning of (libertarian) wisdom, but as I’ve written before, it also carries a very serious potential risk. Counterintuitively, distrust in government may lead to calls for more government.

And that’s one of the reasons we suffer Leviathan today.  Many of our “problems” in the past have had their roots in government interference or over-reach.  The real problem is we petition government for relief and government’s answer is always more government.

Here’s a clue: when you ask government to fix any problem it will always answer with more government, regulations, laws, whatever – nature of the beast.  Unfortunately, we’ve been conditioned to look to government for relief from all our problems. The end-state of that is always more government control and less citizen control.  And here we are.

But:

A major ray of hope—indeed, the beam of sunshine that’s warming up this libertarian moment—is really the ways in which people are creating workarounds that simply bypass government whenever possible. Taxi regulations screw consumers? Create Uber. Public-school educators are unresponsive? Create your own curriculum or even your own school. Can’t sell unpasteurized milk products? Create a buyers club. Major parties won’t listen? Create the Tea Party. And on and on.

As Matt Welch and I discussed at length in The Declaration of Independents, workarounds are a great thing and easier to pull off than ever, but they have serious limitations (witness foreign policy, Ferguson, the drug war, and so much more). It’s well past time that we start insisting on a limited, trustworthy government that is actually competent and restrained at the few things that it should be doing. That will not only reduce the desire for more government, it will free up even more time and resources for the free-range experiments in living that will actually make the world better, more interesting, and more prosperous.

Btw, I disagree this is necessarily a “libertarian moment” (although like the “Tea Party”, I see the liberals loading up the rhetorical guns to shoot down anything that might take flight suggesting it).  However, what Gillespie talks about above is where this sentiment that has grown tremendously over the past 6 years (surprise, huh?) needs to be herded.  Whether that’s possible or not will tell us all how “libertarian” the moment has been.

Until then, enjoy your cupcakes.

~McQ

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