National ID = National Disgrace

The Washington Post’s editorial board recently opined that a national ID card would be the most effective method to thwart illegal immigration. Their idea was bolstered by the fact that both President Obama and a bipartisan group of eight senators recently put forward similar ideas (“fraud-resistant, tamper resistant Social Security card”). Superficially this makes sense. If the problem is uninvited guests crashing your party then the most logical solution would be to demand your guests show their invitation at the door. The Post then dismisses any potential concerns about civil liberties as nothing more than empty rhetoric by citing the fact that 35% of Americans already have a passport.

The Post misses the point in a grandly ironic fashion by citing the innocuousness of the tool the state uses to violate our civil liberties whilst simultaneously ignoring the actual violation. Move along, nothing to see here. The truth is that ID’s don’t harm civil liberties; rather it’s those that require them that do. Government says to step from point A to point B you must show this card. Government says to get a job you must show this card. Government says to start a business you must show this card. There is no end to what new actions the government could conceivably try to control by making one’s right to engage in an action contingent on the possession of “proper” ID. Do you want to go shopping? Buy gas? Go to a movie? Buy a car? Open a bank account? Go to the library? Go to the park? Please – show me your papers. Yes, ID is already required for many of these things. But that is the point. It should not be. Think about it. What are you doing when you show your ID? You – a grown adult – are asking for PERMISSION to engage in some action. It is one thing to ask for permission to engage in something that is not a natural right (i.e. enter a private residence or business), it is quite another to ask permission from the State to engage in an activity that is innocuous to others (traversing a border, starting a business, getting a job, etc.). We are not children, and the State is not our parent. I stopped asking for permission when I turned 18. How about you?

Sadly the real immigration “problem” has never been addressed. The problem is immigration prohibition. In fact the prohibition of anything innocuous to third parties always leads to more harm than ever could result from the prohibited activity itself (violence being the primary result). Drug prohibition is at least plausible albeit still as harmful as alcohol prohibition. But immigration? How can immigration harm anyone? By “stealing” that lucrative low wage job no American wants? Some say immigrants drive wages down. Although nominal wages for low skilled labor may decline, real wages rise for society because cheaper goods and services mean each dollar buys more. Some say immigrants are mooching off our socialist safety net. Well seeing as how it is not so much as a net as it is a luxuriant feather bed what did you expect? Turn it back into a mere net and that problem will vanish. Both big employers and low skilled workers use government to protect themselves from competition. The former uses regulation and the latter uses immigration. A few benefit at the expense of the many.

The solution to “illegal” immigration is to end the prohibition on immigration. Completely free and open borders. Chaos? The end of America? Hardly. Illegal aliens constitute a mere 2% of the US population. Even if every Mexican (all 110 million) came to live in the US (an absurd notion) “native” Americans would still outnumber them 3 to 1. Since even that outlandish scenario would not “end” America, perhaps we should face what immigration control has always been about. Fear. Fear of the unknown, of new customs, of new languages, of new competition. It is only when we humans give in to fear and allow it to guide our actions do we engage in the most reprehensible and irrational behavior. Since fear guides all immigration policy perhaps it is time to examine the rationality of such policies. If the process of entering or exiting this country is indistinguishable from the process of entering or exiting a jail, then are any of us truly free?

Resistance is Not Futile

This will be my last foray (part 1, part 2) into the whole gun debate issue and so I would like to address a common objection to “ordinary” citizens owning “military” grade weaponry. I received this question from a friend recently: “How do sovereign people adequately defend themselves from their government that has vastly superior weapons?” The assumed “gotcha” response is that such defense is obviously futile and thus having demonstrated such futility ipso facto there can be no legitimate reason for a citizen to posses such weapons. This was not my friend’s intent in asking this question though; he raised a legitimate question and was seeking a thoughtful answer.

To answer this we must first ask: What is the objective of such people defending themselves? Is it to achieve an outright resounding victory or is it to merely resist? Although the former objective may be the desire clearly the difference in weaponry would make that an unlikely immediate outcome. However, resistance is a different matter. Resistance does not require equivalent weaponry, merely minimally repulsive weaponry. The truth of this is found throughout a history replete with stories of rebelling forces that were vastly outgunned and outmanned resisting against superior forces for years on end. For example, the American Indian (various tribes) resisted the growing incursions of the United States into their various territories for decades. They did ultimately lose that battle, however there was resistance. Had they been completely disarmed the resistance of the Indians would have lasted days rather than decades.

There are also examples where resistance can ultimately translate into victory. If your goal is not to win but rather to simply wear your enemy down, then it is often possible for the “weaker” party to prevail. For examples of that look no further than our own American Revolution. An army of farmers armed with muskets defeated the mightiest military on the face of the earth. Likewise the tables were turned in Vietnam when we, with the mightiest military on the face of the earth, were defeated by a grass roots militia. Some might quibble over the details of these examples, but there are plenty of others and it does not detract from the underlying point, which is that a weaker party can overcome a stronger party even when they may only posses the most basic defensive weaponry. Don’t believe me, believe history.

So if resistance is a legitimate use of such weapons does that mean possession of such weapons by citizens should be legal? Yes. Does this mean then that everyone is going to rush out and buy their own bazooka and surface to air missile launchers? Of course not – those things are expensive! According to the Internet a bazooka costs around $50,000 and a single round costs $500. In other words the market already has a built in regulation of such weaponry as they are simply financially out of reach for 99% of the population. The 1% that can afford them have no interest in them and the 0.001% that can afford and do have an interest in them are not going to risk losing them by doing something stupid.

If our government were actually serious about restricting weapon sales they could do so today without passing any laws or regulations. Simply make it a condition of any purchasing contract with arms manufacturers that any weapon the military purchases may only be sold to them (e.g. an exclusivity contract). The arms manufacturer is free to sign such a contract or not. Violations of such a contract would entail loss of future multi-million dollar contracts and other damages. Additionally, the military should destroy all weapons when they are designated for retirement rather than selling them through “surplus” stores or to other governments that are not so careful about where they end up. This might not eliminate every instance of these types of weapons getting into the hands of citizens but even advocates of gun laws agree that gun laws won’t eliminate every instance either. So all things being equal it seems a contract based market approach coupled with common sense prevention (destroy, don’t sell, old weapons) will have greater success (today) in achieving the goal of reducing weapon supply. It would limit supply to both criminal and non-criminal alike whereas weapon laws restrict only non-criminal possession.

Breaking Bad (Rules)

Unless you’ve been living under a rock for the past week you’re probably aware of the confessional interview Lance Armstrong had with Oprah Winfrey in which he revealed that he had been “doping” in order to gain a competitive advantage (or perhaps simply leveling the playing field as it has been reported that 20 of 21 top-3 finishers from 1999 to 2005 were also doping). In another recent story HSBC was fined a record $1.9 billion by the US Justice Department due to violation of several anti-money laundering statutes .

What do these two stories have in common? Each contains an apparent villain that has been dutifully brought to light or justice. But upon closer inspection we find neither party has done anything “wrong” in the traditional Judeo-Christian morality sense. They did not kill anyone. They did not steal anything. Armstrong did lie and liars are generally not held up in our society as paragons of virtue, but consider the context. He lied about violating a policy that is irrational and thus is nearly universally ignored. Imagine that your employer established a new policy: all employees are prohibited from drinking soda at work or at home. You know this policy is just silly so you ignore it. If asked by your employer concerning your soda status what do you do? Do you tell the truth and lose your job or do you lie and keep your job? I suspect most would lie over a rule this inane. It is easy to lie when the policy in question is just plain silly, universally ignored, and enforcement is basically impossible. Is “dope” free sport a noble goal? Sure it is. And so is a world free of all weapons. But just like with guns, that genie is out of the bottle. The last guaranteed dope free sporting event took place sometime in the 18th century. Anti-doping policies are disingenuous at best insofar as they give a free pass to mechanical technologies that enhance performance (e.g. high tech bikes that cost more than your car). If anti-doping policies were truly driven by a concern about eliminating “unfair” advantages then every cyclist would be required to ride the exact same model of bike and the genetically less endowed athletes would be permitted to “dope up” to the same VO2 max as their more genetically endowed competitors. Then everyone could cross the finish line together holding hands. Cum by yah.

If private organizations like UCI (International Cycling Union) want to ban doping that is their prerogative (although international treaties banning the practice (such as the US ratified “International Convention against Doping in Sport”, attempt to remove all such discretion from athletes and their athletic organizations). Perhaps the only place where Armstrong and others like him did err is that they did agree to the rules of that private organization when they joined. The most proper way to have proceeded would have been to have not joined any anti-doping organizations but rather to have formed a new entity that did permit doping. Athletes that dope can join that group, those that don’t are free to join any of the others. However I suspect the aforementioned treaty makes “doping permitted” groups illegal. In which case government again short-circuits market based solutions.

HSBC behaved similarly to Armstrong. They simply ignored all of the silly anti-money laundering rules and regulations. To understand why money laundering is considered “bad” consider who is leveling the claim: government. Money laundering can only occur in connection with illegal activities, however it is government that defines what is illegal. It is actually easy to end all money laundering; simply make such associated activities legal. If drug prohibition were ended there would be no drug money to launder. If governments ceased their interventionist policies or did not force people to remain part of their respective unions (Northern Ireland, Palestine, Chechnya, Serbia, Kurdistan, Basques, etc) all terrorism would end (and thus the associated laundering of money toward those ends). In other words, governments (or sometimes private groups) often create the very problems they then proclaim only they can remedy. When they eventually ensnare a violator they parade it around for all to see as both a sign of their effectiveness and as a warning. But we should be skeptical of any hunter who demonstrates his prowess by bagging a Holstein on his own property.

Vaccination Cures Gun Epidemic

Those that are opposed to gun control frequently resort to the tactic of citing some statistic that demonstrates how some ordinary object (e.g. a hammer, a fist) is used far more frequently to kill someone than is a “rifle.” This approach is not particularly constructive to the debate. While it is true that hammers are used to kill more people than “rifles”, “guns” are used to kill far more than all other methods combined. Since the real debate is on gun control and not rifle control, it is a bit dangerous to argue such control is unnecessary owing to relatively low death totals. If your opponent switches from “rifle” control to “gun” control your argument will fail.

An adjunct to this argument is an appeal to common sense. Most intuitively accept the premise that that it would be silly to ban things because they might be misused (which taken to its logical conclusion would involve banning everything). However, people generally go along with banning something if it has no apparent “legitimate” use (e.g. drugs, high capacity guns, cigarettes) but bristle at banning objects that are predominantly used for “legitimate” purposes, particularly if the loss of that legitimate use would present a substantial hardship. The main problem anti-gun control advocates have is that the legitimate use and illegitimate use of a gun have the same result: death. The difference between the legitimate and illegitimate use of a hammer is obvious, not so much with guns. How does one overcome this hurdle? Always forthrightly confront any questions of the “why do you need a gun that does X?” variety. If asked why does one need more than 6 rounds, explain real life is not like the movies and one bullet does not kill someone instantly (recently a mother in Loganville, Georgia shot an intruder 6 times and he still walked away!

a disarmed population is as unprotected as an un-vaccinated child

 

The current approach of gun control advocates is equally counterproductive toward their cause. They seek to regulate the weapon and not the individual. Even the 2nd Amendment says “a well regulated militia” not a “well regulated arsenal”. So while I am no fan of the state deciding who may or may not own a weapon (by what subjective metric will it make that determination?), this approach resonates with the reasonable notion that we don’t want “crazy people” to have weapons. If the state determines I am safe and sane (how they will do that I have no idea and is unsettling prospect) what difference does it make what type of weapons I own? Similarly, if you have a driver’s license you can drive a Mini or a Ford F350 Dually. Nobody asks “why do you need that F350?” – so why do they ask “why do you need that AR-15?”. But since this is so commonly asked, allow me to answer. Those best able to answer that would be the following: Jews in pre-war Germany, civilians in Stalinist Russia, civilians in the Cambodian killing fields, or civilians in Maoist China. Guns are not merely for self-defense; they are also for defense of the sovereign people against their own (illegitimate) government when such government would seek to violate their sovereign rights. All of the 20th century genocides occurred on populations that were entirely unarmed and unable to resist. I do not believe there is some “master plan” to commit such atrocities in the US. However, a disarmed population is as unprotected as an un-vaccinated child. The first exposure to a dangerous element will be impossible to resist. Democracy is no prophylactic against tyranny: Hitler was elected through a democratic process. Those that genuinely do wish to disarm everyone (probably) have their heart in the right place. Any one of us would, if we could, wave a magic wand and eliminate every weapon on the face of the planet. Sadly that is nothing but a utopian fantasy. Once man creates technology it can never be made “unknown”. The only way to resist the misuse of technology is to maintain a level playing field so that all can access it and thereby mankind keeps mankind in check.

 

Mo’ Money, Mo’ Problems

It has recently come to my attention (thank you George Warren) that the economist Steve Keen has proposed a solution to our economic woes: the government should give people money to pay off their debts. According to Keen it is the high level of private debt (about three times that of annual US GDP ) that is causing the economy to move so sluggishly. While enormous artificial debt creation did indeed foster the previous boom and our current bust, Keen has erred in both identifying the root cause of this debt explosion as well as an appropriate solution.

It is revealing that Keen does not ask the most pertinent question: he blames the banks for the debt explosion yet he does not address how is it possible banks could collectively lend out five times the amount of money in existence ($50 trillion in private debt vs a $10 trillion monetary base (M2))? He then decries “bad lending” – lending for purely financial market speculation, but again fails to ask why it would be in a lender’s interest to make such “gambling” loans – loans that more often than not would default (hint: moral hazard).  What is the answer to these unasked questions? Government. Government interference in the market (legal tender laws, legalization of fractional reserve lending, a central bank, implied bail outs, etc) resulted in the distorted outcomes Keen identifies. Being apparently unaware that government is the root cause of the problems he cites, he then unwittingly invokes that same entity as our savior: he proposes that “government created money” (through deficits) will solve the problem of too much bank created money (loans). But government is the sole reason banks can (legally) create money out of thin air to begin with! The legality of a central bank and fractional reserve lending makes phony debt possible. In a truly free, hard money economy (where the lending of demand deposits would constitute the actual theft that it is) credit expansion and unproductive loans to gamblers would cease to exist (because loan defaults will not be bailed out.) Only time deposits are eligible to be loaned out, thus naturally regulating the debt load in an economy.

Keen falls into the trap of blaming those capitalizing on the fruits of the government created circus (speculators, brokers) with causing the circus. That’s like blaming the existence of slavery on slave traders; slave traders capitalized on a situation made possible only by governmental enforcement of the legality of slavery. It’s the same old story: government creates an artificial scenario that some other group takes advantage of and then that group is subsequently piously vilified while the root cause is ignored.

As the intricacies of lending and finance are rather opaque I shall attempt to distill what has occurred and what Keen proposes to a simple narrative. Let us imagine three friends, Dave, Bob and Gary. Dave needs $800 to buy a house. Nobody has money to lend to Dave. Gary has a solution. Gary prints money ($1000) and gives it to Bob (because Gary doesn’t want Dave to know he is the source of the money). Bob loans the money ($800) to Dave and Bob keeps $200. Dave has his house built which provides builders with money. When the house is done Dave begins paying Bob back. All the builders are sad because Dave is not paying them anymore. Others are sad because Dave buys fewer goods because he has to repay Bob. When Bob gets money from Dave he gives it to Gary who promptly burns it (to hide what he has done). Because Gary is burning the money it is not being spent and so all the sad people ask Gary to print more money (so they won’t have to lower their prices) and to give it directly to Dave so Dave does not have to pay Bob anymore. So Gary prints more money and gives it to Dave to pay Bob, who then gives it to Gary who burns it. So what is the end result here? Dave got a free house and Bob got $200 for handling the money. Seems like everyone came out ahead here, right? Almost makes counterfeiting seem noble – I wonder why it is illegal? Oh, that’s right, because it is theft. It is theft from those not mentioned in the story. It is theft from every other person who holds and is paid in dollars as their dollars become worth less (because there are now more dollars) or worthless – take your pick!

When people propose “solutions” to our economic woes that involve government bailing out some group know that it is nothing more than calls to legally do what would otherwise land any one of us in jail were we to do so individually. It is theft. To have government take from unfavored groups and give to favored groups is theft. It was wrong to bail out the banks and it is wrong to bail out individuals. The only solution is to remove all authority government has over fiscal and monetary concerns. All unfairness in our current system is attributable to crony-capitalism fostered by big government colluding with big business. Dismantle big government and you’ll dismantle the inequity it fosters.

“Wimpy” Governance

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

Words to live by for those in government. For example, the word “surplus” is supposed to denote the result of consuming less than one receives. But that is not the meaning employed by our wise overlords. Or rather, they choose to cherry-pick what constitutes “receive” and “consume” so that the difference between those terms can be any value they desire. It’s time for some myth busting: there was no Clinton surplus. The entire thing is a fabrication, an accounting sleight of hand. “Hogwash!” you’re thinking! Certainly if this had been the case the conservatives pundits would have been all over this, right? Wrong. Their collective silence speaks volumes in testament to the fact that the same “math” used to show a surplus under Clinton also shows smaller deficits under their guys (e.g. Bush Sr. claimed $1 trillion in deficits, but it was actually $1.5 trillion, likewise Clinton claimed a $62 billion surplus but actually had a $1.4 trillion deficit)

Here is the essence of the subterfuge:  Let us imagine a single mom, let’s call her, I don’t know, Julia. Julia earns $30,000 a year. She receives $5,000 a year from her ex-husband that is to be put into a savings account for her son’s education. However she has $32,000 a year in expenses and a $1,000 credit card debt. So she “borrows” $5,000 from the education account. $2,000 of it goes to the extra expenses, and $1,000 of it goes to pay off the credit card debt. Quite pleased with the situation she tells her friends she has paid off her credit cards and has a $2,000 surplus to boot! To celebrate she spends the “surplus” $2,000 on clothes and a new TV. She rationalizes owing the $5,000 to her son’s account with the idea that in the future she’ll make more money and pay it back later, but she needs it now for her and her son’s benefit, so that makes it ok. Fast forward 18 years and we find that although her pay has increased, so have her expenses, and she has continued to accumulate $5,000 IOU’s each year such that the account contains nothing but $90,000 in IOU’s. In any other arena except government this process is known as embezzlement.

One difference between what Julia did and what the government does is that the theft is legally mandated: all federal government trust funds (there are others besides social security) are required to turn over excess funds to the federal government by way of purchasing special government bonds (IOUs). The government then counts these “excess” funds as REVENUE, even though that money is obligated to future recipients. Let me repeat: the government is counting loaned money as income! That might balance cash flow but it is merely “Wimpy” can-kicking governance: “I’ll gladly pay you Tuesday for a hamburger today.” Guess what? Today is Tuesday.

“I’ll gladly pay you Tuesday for a hamburger today.”

The effect of this fake revenue is to decrease the gap between normal tax revenue and spending (the deficit), which is why every administration loves this technique. However even the government can’t hide from the effects of ignoring reality. Any money the government borrows from itself is added to the Intra-Government debt holdings account. The IG debt account is distinct from the “Public Debt” account (money lent to the government by non-government entities). The Public Debt went down under Clinton by using IG debt to pay it down (i.e. using credit card A to pay off credit card B). Adding these two numbers together reveals that total debt went up. If you don’t believe me, check for yourself; see the US Treasury data. Each and every year from 1992 to 2000 the “Historical Debt Outstanding” increases. Pundits can try and confuse the public with jargon, but at the end of the day it simply is a matter of checking just one number (total debt). If it goes up, there was a deficit, if it goes down, there was a surplus. End of story.

Human Action

In the wake of the senseless shooting tragedy in Newtown, Connecticut we attempt to ease our collective pain by latching onto the only hope of extracting anything useful from this event, that is, to learn from what is now history so that it is never repeated. But what have we learned? Superficially this shooting is no different than any of the other mass killings: heavily armed killer walks into an area designated as a “gun free zone” and then proceeds to open fire on the unarmed. For example, it is a deliberately ignored fact (or rather an inconvenient truth) in the mainstream media that the Cinemark theater chain (where the infamous “Dark Knight” shootings took place in Aurora, Colorado) had a “gun-free” policy. Several of the victims were recent veterans who could have expeditiously put down the shooter had they been permitted to carry arms into the theater. It is highly improbable that the following is mere coincidence: with only one exception (Gabrielle Giffords shooting in 2011) every public shooting in the US since 1950 in which there were at least three fatalities have occurred in gun-free areas (schools, malls, post offices, etc.) The killers may be sociopaths but they aren’t stupid. Such shootings do not occur at police stations or gun shows for a reason. If you are still unconvinced that gun-free zones simply inform evil-doers where they may proceed unmolested then I issue to you the following challenge: place a “this is a gun-free zone” sign on your front lawn. Still feel safe?

Eliminating gun-free zones is however not a panacea. It ironically suffers from the same “whack-a-mole” problem as extreme gun control. For example, if you could achieve the holy grail of gun control, i.e. eliminate all guns, then would-be killers would simply convert to other methods of mass killing (knives (see the oddly coincidental knifing of 22 children in China), explosives, gas, biological, etc.) some of which have a much greater potential for inflicting harm than guns. Yes, one could outlaw each of those weapons in turn but given their prevalence in warfare (and food preparation) it’s simply naive to think such weapons will not “leak” into the civilian population. Likewise, if would-be killers know that armed citizens could be anywhere, then they will engage in more stealthy killings. You can’t shoot back at what you can’t see. There are a lot of ways to kill people without exposing yourself to harm (it’s the entire modus operandi of warfare). So while eliminating gun free zones would help in those situations involving crazy and stupid and/or suicidal, it would not help when crazy and smart is a factor.

The sad fact is that nothing can ever solve the cancer of random mass killings. Humans are random, willful beings whose actions and interactions are impossible to predict, monitor and manipulate with 100% effectiveness. Absent the Panopticon of an Orwellian police state there is nothing government can do to “solve” this problem. If laws could actually alter human behavior then our prisons would be empty. The only possibility of a solution comes from the collective actions of all of us. To the extent all human action is influenced by the actions of others we each have it within our power to potentially alter the actions of others by making each of our own actions positive ones. For example, many of these killers were outcasts, loners, just a little bit different than the rest of us. These differences invited mocking and ridicule which only exacerbated the isolation of these individuals. The killers are not “victims” nor are their unreasonable actions in any way justified, but just because a response is not justified does not mean we should expect it wouldn’t occur. Negative actions invite negative responses (whether such responses are justified is irrelevant to the goal of eliminating such response). We should always be mindful that we do not live in a vacuum and that our actions may have far reaching consequences for others. The “Golden Rule” may not solve the problem, but I’m quite certain it can’t possibly make it worse.

This Butt’s for You

I saw you PCI 3798. I saw you blithely flick a cigarette butt out your car window whilst I was trailing you in traffic. But you’re not alone. I often see smokers discarding their used cigarettes with the casual lack of concern befitting the monarchs of old. Why do others and I find such littering so disturbing? Is it merely because of the visual damage to our surroundings? No, I think the animus runs beyond mere cosmetic harm. Our outrage toward the litterer is a result of recognizing the arrogance the litterer holds to believe they are so important that it is the job of others to clean up their mess (no, cigarette butts are not biodegradable). But wait – isn’t that what we do when we go to a nice restaurant (expect others to clean up our mess after we’re done eating)? Aren’t we expecting others to provide a service for us whenever we purchase a good or service? But this expectation is not arrogance because we in fact provide something in return by paying for such services. The litterer expects (dare I say feels entitled to the notion) that someone else should clean up after them without giving anything in return. It is this sense of entitlement, this sense of “others should bear the cost of cleaning up my mess” that we object to.

How did we as a society arrive at a framework wherein it can occur to someone to feel they are entitled to others cleaning up after themselves at no cost? What created this framework? Government naturally. Only government can create “public” resources by decree. Public ownership of resources is that paradoxical state wherein a resource is owned by everyone and no one simultaneously. Any public resource carries with it the burden of the “free-rider” problem, which is a subset of the “tragedy of the commons.” The tragedy of the commons refers to the use of “free” public resources in a disproportionate manner that maximizes individual benefit. Overuse occurs because there is no direct cost linked to such usage. Direct costs act as a feedback mechanism to meter usage. “Free” public resources have no such feedback and thus overuse results.

Whether it is roads or healthcare, anything made “public” will be utilized disproportionately by some because the over utilizers are able to acquire the goods at artificially lowered free-ride prices paid for (subsidized) by others. In the case of public road, litterers over utilize the limitless ability to litter because others bear the clean up costs. And which “others” bear this cost? Not the government. The government is a terrible environmental steward. They do not as a matter of policy clean up litter. Public roads often bear much similarity to public bathrooms for this reason. Rather, private citizens and organizations freely choose to sacrifice their time in road beautification efforts. Would there be no littering on private roads? Of course not. However the ability to shift more of the direct cost of littering (through tolls) onto the litterer would tend to decrease the frequency of littering. It is also possible behavior would not change at all, in which case road owners would simply clean up the mess and incorporate the cost of clean up into the tolls. But at least the roads would be clean. That is not the situation today.

We really can’t blame the litterer. He has rationally determined the cost of littering (to him) is $0 due to the warped incentives made possible by government interference in the market. In fact we should praise the litterer! He serves as the ubiquitous example of the result of government interference in society. If we can see that socially undesirable behavior is the result of government, then perhaps it will give us reason to reflect on what other kinds of less obvious damage government is inflicting on society (runaway housing, healthcare and education costs perhaps?).

 

The War on Droopy Drawers

It has been recently reported (here and here that the Madison City Council is exploring a new ordinance that would criminalize uncouth couture, that is, droopy drawers. The objective of said ordinance is “…. to get … appearance to be decent” (Councilman Fred Perriman). This statement of course presumes (a) decency can be objectively defined and (b) it is the proper role of government to impose arbitrary cultural notions of “decency.” Traditionally “decency” has been directly correlated with the amount of skin covered as well as the degree of looseness of said coverings. So using this metric it would seem women wearing a hijab (traditional Muslim head and body covering) are perhaps the most “decent” people around. I’m not suggesting the Council plans on imposing mandatory hijabs, however I am curious as to what underlying objective principle affords one the ability to demarcate a point between “hijabs for all” and “down with droopy drawers” wherein “decent” lies on one side and “indecent” on the other? Other than simply the subjective “I don’t like the way that looks” of course.

If we are not free to look like complete idiots, then are we truly free?

Now don’t get me wrong, I personally think saggy pants look incredibly goofy and frankly can’t figure out how they can walk around like that without tripping over themselves. But just because someone finds something to be idiotic is no justification to take advantage of the monopoly of the exclusive use of legal violence (or threat of violence) that government currently possesses in order impose his or her personal preferences on society.

Does this mean we are helpless to object to things we find offensive or undesirable? No. Private property owners are (or should be) free to impose whatever strictures they desire to anyone on their property (for example restaurants commonly have minimum dress code standards, as well as the familiar “no shirts, no shoes, no service” policy). Schools and businesses commonly have dress codes. Subdivisions as a collection of private dwellings have the right to impose any such standards as they see fit for those that enter the private domain of that subdivision (it should be noted it is not uncommon to require unanimity to make changes to homeowners association covenants, thus even in the private realm we recognize it is unfair for a majority to impose their will on a minority). In short, people are free to associate with whomever they wish and to set up rules governing those associations.

So, one might now ask, “What’s wrong with government imposing these nanny-state type rules? Isn’t this no different than a private subdivision setting up similar rules?” Actually, no, it is quite different. Firstly, these ordinances typically override private rules (i.e. if a restaurant permitted saggy pants, the ordinance would still fine the person). Secondly, even if the ordinance only pertains to the public sphere (non-private property) it is still invalid insofar as the “ownership” of such public spaces by the government is illegitimate. All public property was either confiscated directly or purchased with confiscated funds (taxes). So if “public” spaces have no legitimate owner then no one can legitimately make rules to govern such spaces without also admitting that a thief may legitimately control the use of property he has stolen.

This does not imply that all laws are invalid if they occur on “public” spaces. Laws that pertain to the protection of the natural (negative) rights (e.g. life, liberty, pursuit of happiness) cannot logically be constrained by location or time frame. “Nanny-state” laws are time and location dependent (i.e. such and such act is ok before some date and in some location but then after that date or in that location it is then magically illegal), that is, they are completely arbitrary in nature.

If we are not free to look like complete idiots, then are we truly free?

Arbitrary Fairness

With the fiscal cliff looming there has been renewed discussion of “fair share” and how it’s only “fair” to ask the wealthiest Americans to be pay more taxes. Yes, “ask”. I believe that is the same kind of “asking” a mugger engages in when he “asks” for your wallet. I have yet to have revealed to me a definition of “fair share” so perhaps it is time to offer one myself. The income tax system is built on the notion that one’s payment burden should correlate to net income. If your share of society’s aggregate income is 25% then it logically follows under such a system that it is not unfair to demand you pay at least 25% of total taxes. A “progressive” tax system (the one we have today and which is a plank in the Communist Manifesto) demands one pay more than their proportionate revenue stream. Some argue this is “fair” on the grounds that mere ability to pay more is sufficient grounds to take more because on balance society (supposedly) benefits. However there exists no non-arbitrary method that reveals precisely how much more above one’s revenue proportion one’s tax burden should be. How exactly do these wise sages propose to derive a fair ratio between tax burden and income share that results in a perfect balance between societal benefits at the expense of the individual? Is a 2:1 ratio fair, but a 3:1 ratio not fair? If not, why not?

Sadly the mainstream media leaves us (unsurprisingly) with the impression that top taxpayers are paying less than their proportionate share. Nothing could be further from the truth. For 2010 (IRS data) 3% of taxpayers (earning above $200,000/year) had a 27% share of income and a 52% share of all personal income taxes with an average tax rate of 22%. Yes you read that correctly, 3% of taxpayers pay over HALF of all personal income taxes even though they earn only ONE-QUARTER of income. Earners between $75k – $200k (18% of taxpayers) receive and pay about a third in income and taxes with an average tax rate of 11%, so in terms of balancing income and tax burden this group is perhaps the most “fairly” taxed. Those solidly in the middle class ($25k-$75k – 38% of taxpayers) earn 30% of all income and pay only 14% of the tax burden with an average tax rate of 6%. And lastly those in the under $25k (41% of taxpayers) range earn 9% of all income but pay a mere 1% of the tax burden with a 1% average tax rate. Including payroll and corporate taxes would alter the numbers somewhat however the overall analysis remains the same: there is only one segment of taxpayers paying far in excess of their share of national income and for some bizarre reason they as a group are the ones most vilified for not paying enough. I’m not suggesting those in the lower brackets pay more and the top less. What I am suggesting is we cut spending so that everyone can pay less.

Due to the persistent fairly tale that there was a budget surplus during the Clinton years people somehow imagine that if we simply let rates rise back to where they were under Clinton we will magically close the budget gap and have surpluses again. As the Democrats are fond of saying “the math just doesn’t work.” Allowing the top marginal rate to rise on 3% of taxpayers would raise only approximately $100 billion/year. Coupled with a projected $900 billion deficit for 2013 that barely scratches the surface.

Consider what a $100 billion increase in taxes means. It is $100 billion removed from the private sector where it could be spent OR used to build new factories, hire more employees or invest in R&D. All of these events occur regardless of current demand. They are the direct result of the speculation incentive, that is, the incentive to possibly make more money in the future by spending money today. Increasing taxes kills the speculation incentive on two fronts: slowing the rate of investment (as more money goes to taxes and less to saving) and decreasing the incentive to invest due to lowered potential after tax returns.

Instead the tax dollars are redirected to government favored entities. If you think this might produce a net benefit, then ask yourself: Is society really better off if we allow the government to funnel money to those businesses that are most effective at the art of lobbying and suckling at the government teat (the political entrepreneur) by taking from those businesses and individuals that are most effective at actually producing things people want (the market entrepreneur)? Until we can face the reality that wants are infinite but resources finite nothing will stop us from going over that fiscal cliff.