Monthly Archives: October 2013

And Justice for All…

The 19th Century saw an end to chattel slavery. The 20th Century saw an end to conscription slavery. Will we now, in the 21st Century, witness an end to the one remaining form of labor slavery, namely jury service? For those that do not consider jury service to be a form of slavery consider this: If a complete stranger sent you a letter ordering you to appear at a specific location at a specific time, what would you think? What if that person then also threatened you with imprisonment if you did not comply and with physical violence if you resisted the enforcement of compliance and you knew full well they could carry out that threat? Who would that person be, if not your master? The State is your master; the judge is merely its errand boy and the police its henchmen.

So if jury service mirrors the master-slave relationship and is thus a variant of slavery, why is there is no public outcry? Why the quiet acquiescence to our own subjugation? There are two reasons. Cost and confusion. The costs of jury service over one’s lifetime are relatively low (since many are never called and those that are get called only 2-3 times over a lifetime). For example, if the state imposed a new tax whereby everyone paid $10 a year and a randomly chosen 10 people would pay $100,000 instead, it simply would not be worth it for the vast majority of people to fight that. The odds you’ll be hit with the “big” tax are infinitesimal and the $10 tax isn’t costly enough to fight. Just because one puts up with something doesn’t mean it is ok or that consent is implied. It simply means that the costs of fighting it are greater than the burden imposed.

But if low costs are not enough to keep the masses in line, the state can rely on the modus operandi of the con artist: manipulate and confuse your victim into choosing to do your bidding. This is accomplished through public school mediated state sponsored indoctrination that convinces the masses that there exists this mystical thing called “civic duty” and that jury duty falls chief among those. There is no such thing as “civic duty” – we as individuals owe nothing to society by mere virtue of having been born and likewise “society” owes us nothing in return. Our only obligations in life are those that we explicitly consent to (employment, parenting, volunteering, etc.) But even if one does believe in the “civic duty” of jury service, does it not strike you as odd that everyone else in that courtroom (the judge, the lawyers, the bailiff, the court reporter, etc) are all there voluntarily and are being paid market rates for their service, yet the jurors are there involuntarily and are paid well below even minimum wage? Given that jurors by and large are present involuntarily the entire incentive structure of jury service is geared toward producing a low quality product as quickly as possible. That is not to say in ALL cases jurors behave this way, simply that most of the time that will be true since most of the time people just want to get back to their own lives, jobs, etc.

There are two ways the jury system can be improved. Just as we did with the military, we can move from a conscription-based model to an all-volunteer based model. I was called for jury duty last year and found the process to be fascinating. The timing was terrible so I was glad to be dismissed. However that is not to say I would be opposed to volunteering in the future. The point is I would be making the choice of when and where I serve.

The second method to improve the jury system would be to switch to a professional juror system. There is no reason that being a juror cannot be a full time paid profession just like any other. Think of it not so much as a panel of jurors and a judge but rather a panel of 13 judges with one judge guiding the proceedings. Those judges/jurors that gain a reputation for judicious verdicts would be sought out and used for more and more cases. Those that likewise had a poor reputation resulting from their unfair verdicts would cease to be used.

Today’s jury system is an anachronism. It pays homage to an era when the abuse of natural rights was commonplace. A slave may work under threat, but an employee works by desire. Which system do you want delivering you justice?

One Banana, Two Banana …

As the political pundits and state apologists breathed a sigh of relief over last week’s deal in Congress to end the government “shutdown” a subtle wrinkle in this deal went largely unnoticed. But this wrinkle, like the proverbial butterfly whose flapping wings results in a hurricane, sets the stage for the transformation of the American Empire into a banana republic and with it the ultimate collapse of that empire. How could this go unnoticed? As with all new government initiatives it is cloaked in the innocence of being “temporary.” As the astute observer of history Milton Friedman once observed, “there is nothing so permanent as a temporary government program.”

The deal that was rushed through Congress last week is, like Obamacare, now withering under the light of public scrutiny of those very details our overlords wished to keep hidden. Although laced with several “special deals” in order to buy the votes of particular congressmen, this deal carries with it something far more sinister than the usual run of the mill horse trading. It carries with it the “temporary suspension” of the debt limit until February 7, 2014. What does that mean in practical terms? Quite simply that the US Treasury may issue an unlimited amount of debt between now and February 7. They could issue treasury bonds for tens of trillions of dollars if they wished and it would all be nice and legal. Now is it likely they will do that? Not really. That is not the source of the hidden danger. The real danger lies in the fact that this “temporary” suspension of the debt limit will never end. This is because through procedural gamesmanship this component of the deal was added in such a way that it will take a two-thirds (!) majority of both the house and senate to reverse it. Considering both sides of the aisle are too craven to face the hard choice of reducing spending or increasing taxes you can lay down good money on the fact that they will never vote against something that would require them to ultimately face that quandary of a decision.

So although there will still technically be a debt-limit on the books, it will for all intents and purposes not exist since all who are bound by it have agreed to simply ignore it. Once this new reality becomes the status quo there will be absolutely NOTHING holding back Congress from spending as much as they desire. As they further inflate the currency through more and more debt creation, prices will rise year after year. This will further devalue the purchasing power of the dollar. Eventually, one day soon the United States’ largest creditors (foreign governments) will decide the US dollar is simply not an asset worth holding (would you continue to own a stock whose price dropped every year?) and will cease buying US Treasury debt and will also begin selling the debt they do own (further plunging the value of the dollar). Once that happens it will be declared a “crisis” by those in power who will once again clamor for a “temporary” suspension of even the most tenuous of rules that support the façade of separation between Fed and State. Currently it is illegal for the Federal Reserve to directly purchase US Treasury bonds (although they can do so indirectly through “the market”). However if no one is willing to buy our debt that leaves just one customer standing: the customer that has the legal monopolistic right to create counterfeit money out of thin air – the Federal Reserve. Once the Federal Reserve is “temporarily” permitted to begin buying US Treasury debt, that will be the last nail in the coffin of the American Empire. History has taught us clearly time and time again that once a government starts printing its own currency with no restraints of any kind, hyperinflation is not very far behind.

Perhaps this might seem like hyperbole to some, however if we combine the lessons of history along with our current government’s unwillingness to cut spending and face the economic failures of their socialist inroads into our economy (i.e. subsidization of ANY economic activity) there is simply no other plausible outcome. So get ready, the roller coaster is poised to plunge straight into the ground. And it all begins not with a “bang” but a mere unnoticed whimper.

The Giving Tree of Debt

It’s that special time of year once again – The Giving Tree in Washington DC sheds its last few monetary leaves as fall approaches. The congressional summer recess has left the tree starving for the one thing it needs to flourish and produce those precious greenbacks: BS. As the pontificating blowhards in Congress resume their duties there is once again a renewed hope that The Giving Tree will be restored to health via the abundance of manure spewed forth by inept congressmen and a credulous media who act merely as an amplifier for Washington inspired propaganda.

That’s right, it’s time to raise the debt ceiling. I could write an entire book on what is wrong with the system (although there is little need to do so as Tom Woods’ “Nullification” leaves no stone unturned in that endeavor) and why we are in the mess we’re in. However, space constraints compel me to simply address the two most salient points of disinformation making the rounds of the mainstream media outlets.

Fallacy 1: We have to raise the debt ceiling because we as a country are legally committed to making good on all financial obligations made by our government. It’s like agreeing to pay your credit card bill after you charged the goods on it.

FALSE: No, no, no (sound of head banging desk). It is not at all comparable to agreeing to pay your credit card bill (i.e. committing to purchases AFTER funds are secured). The more apt example would be signing a contract to buy a house BEFORE you have secured the ability to pay for it and then going to the bank and demanding a loan because you “have made a commitment buy the house.”  Clearly, the only result of raising one’s credit limit every time one goes over said limit would be to instill an overriding sense of restraint and fiscal responsibility. Even if one subscribes to the flimsy moral precept that one has a duty to repay financial obligations made by total strangers who happen to reside in the same geographical region as yourself, one must agree shifting the burden of that repayment onto one’s children is the act of a coward. If you believe we have this obligation, fine, then don’t use debt to pay for it, use taxes – raise them through the roof. Because were the present generation to bear the full financial burden of the government programs they pine for they would quickly come to realize they are not so necessary after all.

Fallacy 2: If we don’t raise the debt limit then the US government will be in default and (insert scare tactic) that would undermine confidence and collapse the financial markets.

FALSE: This is the same line of fallacious reasoning employed by Obama when he compared the only possible outcome of not raising the debt limit to being equivalent to a homeowner simply deciding to not pay his mortgage. So apparently the concept of prioritization has never occurred to Obama? Naturally if one has a pay cut or loses their job their first instinct is to cease their mortgage payments so that they can continue paying their cable bill and manicurist. Duh, no, you prioritize and pay your food, housing and utilities first, then you cut off all non-essentials remaining. So if the projected 2014 budget were $1 we see that the government now collects 84¢ in taxes and can pay out 67¢ to fully fund all debt interest, Social Security, Medicare, Medicaid and defense payments. Yes, the remaining 33¢ of spending would have to be economized over the 17¢ of remaining revenue, but the point is it would not be the “essential” obligations that for some bizarre reason are perennially assumed would hit the chopping block first.

Continuing to give the addict money because you’re afraid he won’t buy food provides him no incentive to end the addiction because it insulates him from having to make the choice between the addiction or eating. With the money he can have both. Without it, a choice must be made.

Barricading Liberty

“We’ve been told to make life as difficult for people as we can” said a National Park Service Ranger in Washington, DC recently. The revelation of this directive has only served to add more color to the canvas of a feckless presidency. What sort of leader seeks to augment, rather than minimize, the impact of a deleterious event upon those he putatively serves?

“We’ve been told to make life as difficult for people as we can”

The behavior of the Obama administration during this current government “shutdown” is reprehensible and petty. The deliberate closures of a number of “public” parks – un-manned, un-ticketed, open air parks mind you – says more about Obama than any of his self-serving oratory. These are the actions of a petulant, spoiled child. He’s not getting what he wants (unconstrained limitless federal spending) so rather than leading (engaging in and brokering a meaningful dialog between both sides) he’s lashing out at the very citizenry he is supposedly serving by using them as pawns in a game of Congressional chess. Obama and his minions are well aware that most of what the federal government does on a daily basis does not impact the public in any obvious manner. The longer the shutdown continues unnoticed by John Q. Public, the weaker his position becomes. Therefore, to strengthen his hand he must make the public squirm as much as possible, even if that means spending additional funds to pay people to barricade open-air facilities that cost nothing to keep open (bike lanes, children’s playgrounds, unmanned parking lots, etc). Even virtual resources such as websites and Twitter accounts have gone dark despite the fact that they are either free or already paid for. But the “shutdown” of public resources was not sufficient. They are now deliberately blocking access to private businesses as well because they happen to be leasing government owned buildings. These businesses make the government money (leases). They do not cost them money (Pigash Inn in North Carolina is just one example). That’s like quitting your job because you ran out of money – it simply defies all rationality! And then there is poor George Washington; he must surely be spinning in his grave because even his house (Mt. Vernon Museum) was shut down by Mr. Obama! Why? The parking lot for the facility is jointly owned by the Mount Vernon Ladies Association (the private owners of the Mt. Vernon facility) and the National Parker Service (NPS), so apparently the NPS felt it necessary to barricade an un-ticketed and un-manned parking lot that the NPS bears no daily cost to operate. How long will it be until Obama orders all US interstate highways shutdown as well?

These actions have revealed an essential truth of a state run society: there is no “public” property. There is only the property of the Royal Court – the federal government that is – and the king (Obama) may do whatsoever he pleases with his property. If he doesn’t get what he wants, then just as a petulant child would, he will pick up his ball and go home. Or rather, he’s going to barricade off the playground so no one else can play either.

The strategy here is of course plain to see. If he can’t pressure Congress, then he can pressure the public by taking away those things the federal government has so graciously bequeathed to the “people”. If the people value them, then they should rightly be mad at Congress for forcing their poor king to take away their goodies. Fortunately most people are not this blind to his manipulative strategy. In perhaps the best publicized exampled, the day the shutdown began the NPS barricaded the WWII memorial in Washington DC, preventing numerous veterans from visiting the site. However, the veterans were not so easily intimidated. These dauntless men pushed the barriers aside and again demonstrated their strength of character. Character that, ironically, is honored by the very memorial this President strove to separate them from. By fighting the will of past and present tyrants they have set an example for us all. If we value our liberty, then we have a duty to overturn both the barricades to liberty and those that would erect them.

Counting, Government Style

As Obamacare looms nigh small employers such as myself who are near the margins of the 50 employee threshold of being an “applicable large employer for Section 4980H” have found it necessary to waste time and money just trying to figure out if we have reached that threshold or not (and yes, we already provide health insurance). At face value it seems like this should be simple enough: just count. But as with most things generated via government bureaucracy nothing is ever as simple as it seems. The statute is filled with ambiguous and undefined terms such as “stability period”, “measurement period”, “standard measurement period”, “upcoming stability period”, “safe harbor”, and so on. I’m actually trying to comply with this nightmare of a law but even our accountants admit some of the questions simply can’t be answered yet. Typical government: “Here, comply with this” – “Ok, how do I do that?” – “We haven’t decided yet, but don’t worry, if you get it wrong we’ll let you know with a fine.”

For example, there are two calculations that must be done. The first determines how many full time employees there are and the second determines how many “full time equivalent” employees there are. However a full time employee is only eligible to be measured as such if they are considered to be an “ongoing employee” (meaning they are employed for at least one “measurement period”). But… if they become full time during the measurement period or otherwise have a status change then there is a whole different set of rules for counting them – except those rules have not yet been issued (insert picture of chimpanzee with pencil scratching his head).

Assuming we have figured out who the “ongoing employees” are, we are now ready to determine if they are part time or full time. This calculation procedure all too predictably betrays the fact that whoever came up with it clearly has never worked in the private sector. They are laboring under the delusion that employees are paid on a calendar monthly basis as opposed to a weekly or biweekly basis (perhaps because governments reserve to themselves the exclusive right to pay monthly – that practice is illegal for private employers). “Fine”, you may say, there are 4 weeks in a month, what’s the big deal? Well, in fact, no, there are not 4 weeks in a month – there are up to 4.42 weeks in a month. So we cannot simply add up 4 weeks of payroll hours for a part time employee and divide by 120 to see if they exceed an average of 30 hours per week (the newly defined “full time” standard under Obamacare). No, rather than simply using data we already have (weekly or biweekly hours worked) for each employee, instead we must now warehouse up to 7-times more data by saving daily hours details. Although all employers already track daily punches, smaller employers store this massive amount of raw data off-line after getting the totals for payroll. Why waste resources if there is nothing to be gained by storing the number “8” five times vs storing the number “40” one time. The storage space is not the central issue however, it’s that we must incur a cost to reprogram payroll systems – in short wasting money to rebuild something we already had.

With monthly hour data in hand, we can now count up the employees that exceed 130 hours and count them as “full-time”. For all other employees we total up the lesser of actual hours worked or 120 and then divide that sum by 120 to get the “full time equivalents”. This means, in short, that two part time employees working 60 hours in a month will count as one full time employee. This calculation subtly explains the incentive behind large employers (such as Trader Joe’s or Kroger) who already fall under Obamacare but who are nevertheless cutting back their part time employee’s hours to below 30. This allows them to reduce their potential fine exposure. For example, in the case of Kroger, if all of their 340,000 employees work at least 30 hours, then they will be counted 340,000 full-time employees. However, if this same number of employees works only 29 hours per week, then they would be equivalent to 328,666 employees or a net potential savings of $23-34 million in Obamacare fines. That’s nothing to sneeze it at, but if you do at least you’ll be covered under Obamacare.