Thursday, May 28, 2009

There Is Nothing Wrong With Your Vision! (part II)

In the posting "There Is Nothing Wrong With Your Vision," the Chicago Freedom Forum discussed the troubling phenomena that 43.4% of Americans do not pay federal taxes. One economically, politically and socially relevant question is: what are the general demographic dimensions of the federal transference of wealth. Or in other words, from whom is wealth being transferred from and to whom is wealth being transferred to? After searching through the footnotes of other research I found:

Age: More than one-third (35 percent) are younger than age 25, and 54 percent are younger than age 35. So, to a certain extent wealth is being transferred from older to younger generations.

Race: When we combine the populations of non-payers and non-filers and look to see what overall percentage of each group is not paying taxes, we find that: 50.7 percent of African American households pay no income taxes, 35.5 percent of Asian American households do not, 37.6 percent of White American households do not, and roughly 52 percent of Hispanics pay no income taxes. So, to a certain extent wealth is being transferred from Whites and Asians to Blacks and Hispanics.

Family Structure: Among the population of non-filers, female-headed households are even more dominant. Roughly two-thirds of these households are headed by women, whereas 37 percent are headed by men. So, to a large extent, wealth is being transferred from traditional two parent families to families headed by single mothers.

Not surprisingly, the demographic groups that most benefited from the transference of wealth most strongly supported Obama, so to a certain degree they were simply voting themselves a raise. After having studied the history of other nations, I am absolutely certain that regimes that transfer wealth across ethnic, cultural and social lines in diverse societies increase social and political tension. Yet politicians like Obama do not hesitate to do so, because the number one rule of demagoguery is to reward your followers and punish your opponents.

There Is Nothing Wrong With Your Vision!

No, there is nothing wrong with your vision...for the 1st time, the Chicago Freedom Forum has taken the position that some Americans are paying too little federal taxes. A report that was jointly issued by the generally liberal Brookings Institute and Urban Institute expressed concern that a growing number (43.4%) of Americans do not pay federal income tax. Or more specifically, after rebates and tax credits are issued, these individuals bear no tax liability or are even net beneficiaries of federal tax funds. If you count the bloated ranks of federal employees, the number of net beneficiaries surges past the 50% mark. Although most of them are technically net contributors, they are clearly dependent on a massive transference of wealth, so most of the economic and political implications of non-contributors hold true for them as well.

The economic and political implications of this are staggering: those who do not bear the cost of the federal government have zero incentives to pursue fiscally sound policies. They will vote for whoever promises more "free" government benefits regardless of how high the deficit soars and how heavy the burden on productive citizenry becomes. And as the pool of productive tax payers shrinks, so shall the burden that they face increase. Also of importance is the fact that those who are beneficiaries of the state are certainly less vigilant of the misdeeds of politicians, something that is essential for the health of democracies and civil societies.

The Income Tax System is Broken
43 Percent Of Americans Pay No Federal Income Tax, A Sign That Somethings Wrong, Writes

By Declan McCullagh

April 15, 2009

(CBS) On April 15, don't be surprised if the line at your local post office is a bit shorter than usual. That's because your neighbors may not be paying any income taxes this year.

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes. The number of single or jointly-filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million, out of a total of 151 million.

Those numbers come from an analysis published yesterday by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. Neither is a low-tax or conservative advocacy group; the Urban Institute was created under the Johnson administration during the Great Society era, and it receives most of its funding from the federal government.

You've got a larger and larger share of people paying less and less for the services provided by the federal government," says Roberton Williams, a senior fellow at the Tax Policy Center. "The concern is that the majority can say, 'Let's have more benefits, spend more,' if they're not paying for it. It's 'free.' That's not a good thing to have."

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.

But then politicians began another round of tinkering with the tax code, adding reams of new pages to an already incomprehensible set of rules that even the guy overseeing the IRS can't seem to figure out.

Democrats wanted to lower taxes on the least affluent, while Republicans wanted to lower taxes on everyone. The result was bipartisan enthusiasm for tax credits aimed at everything from children (1997) and college students (1997) to hybrid cars (2005) and homebuyers (2009). Many of these credits dole out cash to people even if they report no income, making them mere government handouts.

"There's no difference at all in terms of the effects on the federal deficit," says Williams of the Tax Policy Center. "It's perfectly equivalent. It's just easier to say, 'I cut your taxes' as opposed to 'I created a new federal program to send money to people.'"

I'm talking here about federal income taxes, not other taxes like Social Security, Medicare, state income taxes, sales taxes, or car registration taxes, some of which are extracted through payroll deductions. The owe-no-money crowd tends to get hit by at least some of those.

The perils of today's situation should be obvious. The United States is close to a tipping point - where most people can skip the post office run on April 15 to mail a check because they're expecting one from the government instead.

"It is somewhat odd that you have a decreasing number of folks paying into the federal income tax system, a decreasing number of folks who have a stake in what the government pays for," says Matt Moon of the non-partisan Tax Foundation in Washington, D.C.

It then becomes tempting to vote for politicians promising more and more handouts, paid for by money forcibly extracted from an ever-shrinking number of their neighbors. In addition to being immoral, it's poor public policy: people who pay no taxes but nevertheless get benefits are less likely to be careful overseers of their elected representatives.

"At some point people become less and less invested in making sure their government is accountable and frugal," says Peter Sepp, vice president for policy and communications at the National Taxpayers Union, a lower-tax advocacy group. "If you pay very little for getting all kinds of government benefits, you might view those programs as a bargain, even though they may waste tens of billions of dollars a year."

As a candidate, President Obama promised still more tax credits, including ones aimed at child care, "clean cars," and savings accounts. As the Wall Street Journal explained at the time: "You can receive these checks even if you have no income-tax liability. In other words, they are an income transfer - a federal check - from taxpayers to nontaxpayers. Once upon a time we called this 'welfare,' or in George McGovern's 1972 campaign a 'Demogrant.'"

A recession, the stimulus, and innumerable bailouts have placed Mr. Obama's plans on hold. But the expiration of the Bush tax cuts at midnight on December 31, 2010 will renew interest in a tax law rewrite.

That will be an opportunity to gut the current system and replace it with something simpler and fairer. After all, if government is important enough to force most of us to work until April 13 to pay its bills, why shouldn't everyone share the pain?

Declan McCullagh is the chief political correspondent for CNET and a CBS News EconWatch contributor. Previously, he was Wired's Washington bureau chief and a reporter for and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives with his wife in the San Francisco Bay area.

An Honest & Insightful Socialist?

Pictured Above Norman Thomas

Norman Thomas (1884—1968), a six time presidential candidate for the Socialist Party of America was honest and insightful when he stated:

"The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened."

If only our messiah Barack Hussein Obama was this honest!

Wednesday, May 27, 2009

Indirect Taxation

Pictured Above: Predecessor of the IRS

The public has allowed for the destructive growth in the size of the state because most people are unaware of the extent of the tax burden that they face. Politicians accomplish this through widespread indirect taxation. And while most Americans are troubled by the rising costs of goods and services, widespread economic illiteracy prevents them from drawing a connection between government intervention and their declining living standards.

If these taxes were eliminated, politicians would be forced to fund the state through direct taxation on the earnings. This would allow Americans to truly understand the extent to which the government usurps their labor. And certainly this would prompt the majority of Americans to adopt a greater level of fiscal conservatism and prioritize on which programs and policies are worth funding.

Here are but a few examples of indirect taxation that raises the cost of basic goods and services: Sales Taxes, Business Licenses, Electricity Taxes, Natural Gas Tax, Phone Taxes, Cable Taxes, Bottled Water Taxes, Liquor Tax, Amusement Tax, Hotel Accommodation Tax, Fountain Soft Drink Tax, Airport Departure Tax, Corporate Taxes, Import Tariffs.

Here are a few taxes that make housing more costly for all Americans: property taxes, property transfer taxes, rehab permits, capital gains taxes, dumpster fees.

Here are some taxes that raise the cost of driving, as well as basic goods and services: Gas Taxes (in Chicago this raises the cost of gas by (on average) $0.80 a gallon). City Stickers, Tire Tax, Parking Tax, Parking Meters, Tollway Etc.

Here are a few more taxes that further usurp your earnings: Capital gains taxes, Inheritance taxes, Social Security Taxes, Medicaid Taxes.

And by recklessly printing money the government imposes an inflation tax on all Americans who save money.,+engine+has+been+restarted&

Message From Kim Jong IL

Hero America! After ristening to obama's speech I promise not to make another nucrear bomb, don't berieve crazy conservatives, dipromacy works!

Tuesday, May 19, 2009

Littering as a Litmus Test

One of my greatest pet peeves is littering. It is not simply unaesthetic but it also represents a thoughtless, selfish, lazy way of life. And interestingly, the explanation that one offers for littering serves as a litmus test for key philosophical positions.

As an experiment ask a few people you know why certain individuals, groups and neighborhoods litter so much. The further left the respondent, the more they will engage in acts of mental gymnastics to extricate individuals and groups from responsibility for their behavior. Ironically in their efforts to avoid the cardinal sin of racism, they will imply that certain ethnic and social groups have no control over themselves or their environment, which is an implicitly racist position.

A conservative respondent's position will be based on the belief that individuals are active agents in shaping their personal and communal reality. And conservatives, such as the blogger who refers to himself as the 'Logical Meme' counter the leftist explanation by correctly stating that littering is not so much the consequence of poverty as it is "part of a cultural value system which causes and perpetuates poverty."

Either way, I hope to catch the bastard who threw his beer bottles on my lawn.

Sunday, May 17, 2009

On Merit & Meritocracies

Most "progressives" are deeply resistant to a belief in the power of merit and the existence of meritocracies. Merit being defined as the ability that we are born with, the effort that we excerpt and the choices that we make in the face of life's constant challenges.

The primary reason for the unwillingness of progressives to accept the power of merit, is because it is incompatible with their faith in "victimology" and "socio-economic determinism." Generally, the left attributes the success and failure of individuals as almost exclusively being determined by systematic bias and pre-existing economic and social inequality. The left correctly believes that aptitude and effort are not the sole determinants of success and failure; the socio-economic environment in which an individual is born into is very important. Accordingly, it's unsound to attribute the economic and social reality of individuals entirely to their ability and efforts.

The problem with this narrative is that it does not factor in the millions of individuals in the United States that have ascended up or descended down the socio-economic ladder due to their choices, efforts and ability. Also, this narrative does not take into account the dramatically different performance of individuals of the same social, economic and racial backgrounds. Different groups may face different levels of discrimination, but within those groups there exists a wide range of economic and social economics, which is largely determined by merit.

As someone who has worked with countless immigrant landlords, I can attest to power of individuals to defy socio-economic determinism. These mostly Mexican, Polish, Greek, Serbian, Albanian and Romanian landlords arrived in the United States with no money and little or no English. They started at the bottom of the economic ladder, earning meager wages, mostly as janitors and handymen, but through years of hard work, long hours and fiscal austerity, they were able to save impressive amounts of money. From there, they were able to purchase their first building. In addition to their full time jobs, they served as their own building's plumber, painter, janitor and landscaper, using the savings to buy building after building. And finally after years of hard work they were able to provide their families a nice home and a better life in the suburbs. In many cases their children went on to be doctors and lawyers, further rising up the socio-economic ladder. Needless to say their native born and immigrant co-workers who chose to frivolously spend, rather than save and invest their money have economically stagnated or even declined.

Merit is not only manifested in economic affairs, but also in educational and cultural development. During my time as a teacher in various public and private schools, I witnessed students of the same social and economic background, in the same classroom demonstrate radically different performance. In this case, merit largely equalled the extent to which students were willing to utilize the resources that were presented to them. In good and bad, rich and poor schools, those who chose to commit their time and energy towards educational betterment surged ahead and no matter how much resources were directed their way, those who were lazy languished.

Unfortunately we are seeing that merit also effects the economic and social welfare of entire nations. As America's emphasis on hard work, savings and education has declined, so has our competitiveness.The end result of this shift has been a decline in America's wealth and welfare that no amount of state intervention can stem. In fact the state intervention we have witnessed under BushBama has expanded the sense of dependency and entitlement that has weakened every facet of our society from the classroom to the corporate boardroom, hastening our decline.

Saturday, May 16, 2009

Don't be a Dick!

Pictured Above: Dick Durbin,
Another Fine Illinois Politician.

As most of my readers are aware, the Fairness Doctrine was a law that greatly increased government intervention in the media by mandating that radio stations provide "countering viewpoints." Thankfully its reinstatement was voted down.

But Senator (D-IL) Dick Durbin responded by attaching an amendment that accomplishes almost every aspect of the Fairness Doctrine to a benign bill that would grant Washington D.C. a vote in the House of Representatives. Unfortunately the bill passed.

The stated purpose of the bill is to encourage "local ownership" and "diversity in media ownership." According to Durbin, “When we talk about diversity in media ownership, it relates primarily to gender, race and other characteristics of that nature.”

While I am somewhat sympathetic to "progressive" concerns about media consolidation, I am deeply troubled by the means that they seek to remedy this. Greater government intervention in the media is a path that the left and the right alike should be deeply concerned about. It will not lead to greater choice and we can be certain that decisions will be based far less on the perceived public good and far more on partisan power and political interests. And while you may be happy how the "enlightened" leader of today would wield this expanded power, you open the door for terrible abuses by tomorrow's leaders.

The Chicago Freedom Forum asks that you don't be a Dick (Durbin) and fight this dangerous move towards greater government control of the media.

Kind to the Cruel

One of the greatest challenge that governments face, especially democracies, is how to address violent threats without compromising its values. Unfortunately these reservations have allowed the very worst tyrants to gain power. The Talmud discusses this in Qohelet Raba, 7:16"Kol mi shena`asa rahaman bimqom akhzariSof shena`asa akhzari bimqom rahaman."Which is roughly translated as:

"Those who are kind to the cruel, in the end will be cruel to the kind."

If the social democratic leader of Russia Alexander Kerensky had massacred a few thousand Bolsheviks he could have saved millions of Russians from the horrors of Lenin, Stalin and the Soviet Union.

If Rezah Shah Pahlevi of Iran had not shown mercy to Khomeini and the leftist revolutionaries, he could have saved a million Iranians from the dual horrors of the islamic revolution and the Iran-Iraq war.

So, I for one will not lose sleep over the water boarding of a few jihadists.

It's Not Fascism When We Do It!

December 04, 2008

It's Time to Speak Out Against The 'Mormon Boycott'

By William A. Jacobson

Supporters of gay marriage have reacted with anger at the passage of California Proposition 8, which amended the California state constitution to provide that only marriages that fit the traditional definition (one man, one woman) will be recognized. The resulting protest movement has devolved into anti-Mormon bigotry which has been met with silence by liberal civil rights groups. The anti-Mormon fervor has become so nasty, and is growing at such a pace, that it is time to speak out against the "Mormon boycott."

The use of boycotts in support of gay marriage, including by some law professors, preceded the passage of Prop. 8. These boycotts, which aim at suppressing political speech, are distinct from the boycotts of the black civil rights movement in the 1950s and 1960s. The civil rights boycotts sought not to suppress speech, but to provide access to goods and services by targeting those people withholding the goods and services.

Regardless of whether one supports the use of boycotts in the Prop. 8 context, the targeting of Mormons is gross hypocrisy considering that other groups, such as Blacks and Latinos, likely were the decisive electoral factor. A persuasive argument can be made that Mormons have been singled out because they are a relatively small group with political power mostly in one state. The irony of singling out a religious group which has itself been the victim of discrimination appears lost on anti-Prop. 8 boycott groups.

The anti-Prop. 8 boycott efforts have not been limited to Mormons, but Mormons have been the primary focus of public vitriol and at the center of the boycott movement. The evidence is mounting daily that the "Mormon boycott" efforts of pro-gay marriage groups have gone too far, and have devolved into anti-Mormon hate speech.

While the web is filled with hate speech by fringe elements directed at many groups, the anti-Mormon efforts are openly embraced and promoted by a wide range of anti-Prop. 8 groups. Anti-Mormon hate speech no longer is on the fringe, it is at the heart of the post-election anti-Prop. 8 campaign. The examples are too numerous to list completely. This sampling reflects the breadth and increasing scope of post-election anti-Mormon activities:

The creation of a boycott list of Mormon-owned hotels. The creator of the list states as follows: "I personally won't do business with any Marriott hotels, as they are owned by Mormons. I'm done with this shit. They just use the money against us."

Additional calls for a boycott of all Mormons: "While much ado is being made about the overwhelming support of prop 8 by black voters in California, there is little ado being made about getting even with the Mormons...."

A boycott of the entire state of Utah because of the high percentage of Mormons, and other efforts targeting Mormons as "hate's banker, and we need to make sure that their moral bankruptcy becomes a fiscal one as well."

Protests at Mormon churches around the country, including New York City, Salt Lake City, and Los Angeles.

Postings on Daily Kos and elsewhere calling for boycott of Mormon owned businesses: "Businesses owned by Mormons, who tithe to the Church, should also be boycotted. Large amounts of Church income comes from tithings. Vote with your wallets! Every dollar less that you give to a tithed Mormon is a dollar less that can be tithed and spent on anti-gay activity."

Postings on YouTube of blatantly anti-Mormon videos calling on people to "Boycott the Utah Hate State and the Mormons."

The creation of high profile websites devoted to portraying Mormons as having betrayed the U.S. by taking control of the Boy Scouts and other devices: "The Mormon people have been able to flourish because of this country's generous spirit. But now, history has reversed, and it is the Mormons who have become the oppressor."

The production of an anti-Mormon musical by the creators of South Park, which is expected to start rehearsals soon.

Calls not to tip Mormon waiters: "Now do not tip, hire, or do any business with a Mormon. 10% of their income goes to the church that worked tirelessly to take the civil rights away from people. They are a Nazi organization who only what their point of view followed. I asked my waiter if he were a Mormon, when he said he was I did not tip him, telling him, I was sorry but I can not support bigotry."

Suggestions that Mormon businesses that do not wish to be harassed should post signs in their windows against Prop. 8: "Any business, Mormon or otherwise, can take the simple step of posting a sign on the premises urging the repeal of Prop 8, or make a public statement against it."

Calls to fire a Mormon employed by the American Jewish Congress because he supported Prop. 8.

The forced resignation of the Mormon director of the Los Angeles Film Festival for support of Prop. 8.

The investigation by the State of California of the Mormon Church's tax exempt status, even though religious organizations routinely support or oppose political causes without losing their exempt status.

A hotel in New Mexico luring visitors away from Utah by using a web address that incorporates the words "mormon-boycott-utah."

A call to boycott businesses, including Macy's and Nordstrom, which plan to open stores at a shopping mall owned by the Mormon church: "The Mormon Church came after our rights, and if we don't stop them, they will be back again and again."

A call to boycott businesses which have Mormons in senior positions: "Universely [sic], we need to avoid putting any more money into the Church's coffers by boycotting all companies where a Mormon church member holds an officer's position or a large majority interest."

Efforts to create and distribute lists of businesses "either owned by the Church, owned by Mormons, having a Mormon in a high executive position, or generally benefiting Mormons," including on Facebook and elsewhere.

The boycott of Mormon business has been likened to a war: "There is a war cry being sounded in gay communities all across America - Boycott Mormon owned businesses. This is a war cry that should be heeded."

The singling out of Mormons, and the hateful nature of the boycott, is not coincidental. Prop. 8 is being used as an excuse to vent pent-up anger at the Mormon Church, and the traditional lifestyle of Mormons. With each passing day, it seems that the web is filled with more and more hate speech directed at Mormons. As others have noted, the attacks on Mormons would not be tolerated if directed at other religious or ethnic groups.

What is most disturbing is that there has been complete silence from groups that normally defend religious freedom. The Anti-Defamation League has not stepped forward to defend Mormons against the current boycotts, even though the ADL has spoken out against anti-Mormon hate crimes in the past.

The silence of the ADL and other Jewish groups is unconscionable. Economic boycotts of Jewish businesses in Germany starting in 1933 were a precursor to the Holocaust. Boycotts aimed at Israeli goods and academics have been condemned as veiled anti-semitism by ... the ADL.

In the end, the supporters of gay marriage who engage in anti-Mormon hate speech will realize that they have damaged their own cause. Lashing out at others and engaging in religious bigotry does not constitute an argument in favor of gay marriage.

Regardless of one's position on gay marriage, it is time to speak out against the "Mormon boycott." There simply is no one else who will, if we don't.

William A. Jacobson is Associate Clinical Professor of Law at Cornell Law School in Ithaca, NY, and author of the Legal Insurrection Blog. The views expressed here are his own, and not on behalf of the university.

Friday, May 15, 2009

Tocqueville - A Great Biologist?

Pictured Above: American Sheeple waiting
to be cared for by their shepherd.
My associate Dr. Tim brought it to my attention that not only was Tocqueville a greater writer, but he apparently was also a great biologist. Tocqueville predicted that Homo Sapien Americanus would evolve into Sheeple Americanus.

In "Democracy in America," he anticipated people being governed by "an immense, tutelary power" determined to take "sole charge of assuring their enjoyment and of watching over their fate." It would be a power "absolute, attentive to detail, regular, provident and gentle," aiming for our happiness but wanting "to be the only agent and the sole arbiter of that happiness." It would, Tocqueville said, provide people security, anticipate their needs, direct their industries and divide their inheritances. It would envelop society in "a network of petty regulations — complicated, minute and uniform." But softly: "It does not break wills; it softens them, bends them, and directs them" until people resemble "a herd of timid and industrious animals, of which the government is the shepherd."

Corporate Welfare Dude...

Pictured Above: A Supporter of Corporate Welfare.

All it takes is populist rhetoric and scare tactics to make "progressives" support corporate welfare. The left rightly criticized Bush for the subsidies that he offered allied corporations, but is strangely silent when our lord and savior Barack Hussein Obama undertakes the same behavior.

Thursday, May 14, 2009

Waving Goodbye

Pictured Above: Obama Waving Goodbye

To Yet Another Core American Value.

The respect for the rule of law and the sanctity of contracts are two core American values that are missing in most nations. Obama's subversion of laws and contracts for perceived social and economic gain may be attractive in the short run, but in the long run it undermines America's economic and social foundation. By arbitrarily overturning legal contracts and obligations on behalf of his political allies, Obama is creating an environment in which investors will think twice before investing in the United States, which means less jobs for Americans. And even more ominously, it opens the door to more arbitrary, heavy handed exercise of power from Obama.

Chrysler and the Rule of Law

The Founders put the contracts clause in the Constitution for a reason.

The rule of law, not of men -- an ideal tracing back to the ancient Greeks and well-known to our Founding Fathers -- is the animating principle of the American experiment. While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak.

Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?

Until Chrysler.

The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies."
The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

The absolute priority rule is a linchpin of bankruptcy law. By preserving the substantive property and contract rights of creditors, it ensures that bankruptcy is used primarily as a procedural mechanism for the efficient resolution of financial distress. Chapter 11 promotes economic efficiency by reorganizing viable but financially distressed firms, i.e., firms that are worth more alive than dead.

Violating absolute priority undermines this commitment by introducing questions of redistribution into the process. It enables the rights of senior creditors to be plundered in order to benefit the rights of junior creditors.

The U.S. government also wants to rush through what amounts to a sham sale of all of Chrysler's assets to Fiat. While speedy bankruptcy sales are not unheard of, they are usually reserved for situations involving a wasting or perishable asset (think of a truck of oranges) where delay might be fatal to the asset's, or in this case the company's, value. That's hardly the case with Chrysler. But in a Chapter 11 reorganization, creditors have the right to vote to approve or reject the plan. The Obama administration's asset-sale plan implements a de facto reorganization but denies to creditors the opportunity to vote on it.

By stepping over the bright line between the rule of law and the arbitrary behavior of men, President Obama may have created a thousand new failing businesses. That is, businesses that might have received financing before but that now will not, since lenders face the potential of future government confiscation. In other words, Mr. Obama may have helped save the jobs of thousands of union workers whose dues, in part, engineered his election. But what about the untold number of job losses in the future caused by trampling the sanctity of contracts today?

The value of the rule of law is not merely a matter of economic efficiency. It also provides a bulwark against arbitrary governmental action taken at the behest of politically influential interests at the expense of the politically unpopular. The government's threats and bare-knuckle tactics set an ominous precedent for the treatment of those considered insufficiently responsive to its desires. Certainly, holdout Chrysler creditors report that they felt little confidence that the White House would stop at informal strong-arming.
Chrysler -- or more accurately, its unionized workers -- may be helped in the short run. But we need to ask how eager lenders will be to offer new credit to General Motors knowing that the value of their investment could be diminished or destroyed by government to enrich a politically favored union. We also need to ask how eager hedge funds will be to participate in the government's Public-Private Investment Program to purchase banks' troubled assets.

And what if the next time it is a politically unpopular business -- such as a pharmaceutical company -- that's on the brink? Might the government force it to surrender a patent to get the White House's agreement to get financing for the bankruptcy plan?

Mr. Zywicki is a professor of law at George Mason University and the author of a book on consumer bankruptcy and consumer lending, forthcoming from Yale University Press.

Did I Do That???

Pictured Above: Todd "Urkel" Stroeger

Lately it seems as if the most avid proponents for hike taxes and big government are most lax on the payment of their taxes. The latest act of douchebaggery being Todd Stroeger's failure to pay nearly $12,000 in federal taxes.

Most people believe that this stems from individual hypocricy or corruption, but I find it the logical outcome of the interventionist state. Beneath the caring rhetoric lies the core impulse of the interventionist state: the transferrence of wealth and power from productive sectors of society to politicians and their supporters.

So, of course Stroger or Geithner should resist paying taxes, when they believe that it is their right to determine who is penalized and who is rewarded by the state. The only thing they are guilty of is not going through the charade of paying into the system and then later becoming net beneficiaries of the massive and arbitrary transference of wealth.

Wednesday, May 13, 2009

Quiet, But Not Content

My faithful readers probably are wondering why I have not written.

Perhaps they are thinking that I have become content with our current political and economic situation.

Rest assured that is certainly not the case. I, like anyone who loves and understands our great nation is deeply troubled by the direction we have taken. Almost every day the Obama administration undertakes actions that confirms my worst fears that our constitutional, economic and cultural foundations are rapidly being undermined.

My silence highlights one of the fundamental problem of the conservative movement.

Students, government workers, community activists and other addicts of government cheese form the core of movements that promote the expansion of the state. The said groups generally have liberal schedules that grant them enough time to protest and organize. In addition, their desired programs offer tremendous financial incentives to their constituencies. For example, an individual who receives housing, food and medical subsidies stands to gain a minimum of $25,000 a year.

On the other hand, married small business owners, private sector professionals and socially conservative blue collar workers form the core of the conservative constituency. The said groups tend to work very long hours and have very little time to protest and politically organize.

My wife and I are small business owners who work 14 hours a day, 6 days a week. I would love to write and protest more, but my time is limited. Furthermore my vision of economic and social freedom and limited government offers few financial incentives. This program does not guarantee wealth and welfare, it merely allows Americans to pursue their dreams and enjoy the fruits of their labor or learn from their failure.

As the economic burden on the productive sectors of America grow, most respond by working harder and longer, rather than turn to the state for assistance, hence the inherent advantage of "progressive" partisans. But, we are reaching a turning point in which hard working Americans can no longer remain silent, because they realize that the greatest burden is being placed on their children and grandchildren...stay tuned for more.

Wednesday, May 6, 2009

Return to Kirkuk

As most of my readers realize, I generally am not a supporter of American intervention in the affairs of other nations. And in particular, I was not a big fan of the American invasion of Iraq.

But, I do take issue with people who paint the invasion of Iraq as a simple back and white affair.
I recently viewed the Frontline Documentary "Return to Kirkuk." This piece centered around the return of exiled Iraqi Karzan Sherabayani to his hometown of Kirkuk. What blew my mind was the exuberant praise that Kurds heaped upon George W Bush and the invasion of Iraq, some going as far as declaring that "statues of Bush should be placed in every city in Iraq." Groups of Kurds spoke of the horrors of ba'athist rule: massacres of civilians, chemical weapons attacks, torture, deportation and destruction.

Interestingly most did not place the blame of the waves of violence on Americans. They spoke of the nobility of American efforts to help the Iraqi people achieve democracy. Most laid the blame on the unwillingness of the Sunni Arab minority to relinquish their former monopoly on power and (to a lesser extent) the majoritarian tyranny exercised by the Shi'ite Arabs majority. This leads me to believe that the greatest error on GW Bush was his overestimation of the capacity of Arab Moslems to seize hold of the opportunity for democracy and prosperity that the occupied Germans and Japanese did before them.

The Zeitgeist

Pictured Above, Border Agents Ramos and Compean

The zeitgeist, the spirit of a people, the spirit of a time, is rarely defined by a single event.

Rather, various occurences serve as small pieces that astute observers gather to form a mosaic, that point to the cultural and spiritual state of a nation.

Many of the pieces that I have gathered point to the lack of faith, love and loyalty that a large segment of America's elite, hold towards the United States. Many of these occurences embody an inverted sense of right and wrong that harkens me to the Talmudic Verse, Qohelet Raba, 7:16

"Kol mi shena`asa rahaman bimqom akhzari
Sof shena`asa akhzari bimqom rahaman."

Which is roughly translated as:

"Those who are kind to the cruel, in the end will be cruel to the kind."

One event that comes to mind is the arrest and imprisonment of Border Patrol Agents Ignacio Ramos and Jose Compean for shooting a Mexican drug smuggler, in his buttocks, with 800 lbs of marijuana. After 2 years of intense public pressure, GW Bush commuted their sentences in his final days in office. Most shamefully, the government not only failed to prosecute the trafficker, but also promised permanent legal status in exchange for his testimony against the officers.

Interestingly when I spoke with Mexican friends of mine about this incident, they were simply amazed that any government would prosecute its own law enforcement agents for an assault on a drug trafficker who had violating its sovereignty. They could not fathom how anyone could be so kind to such a loathsome individual and so cruel to people who were risking their lives to protect their country. And on a broader level, it was self evident to them that our misplaced kindness surely is eroding our law enforcement capacity, which is cruel to law abiding citizens who are robbed of their sense of safety and security.

While they did not believe that one should automatically and unconditionally support one's countrymen in a dispute, they found it unsettling how it's not the 1st instinct of some members of the American elite to support their country and their people. This is not a question of mindless loyalty, it is one of values. Even the great Socrates saw the problems of unconditionally placing "universal values" over the value of love and loyalty for one's one people, when he criticized Euthyphro's desire to prosecute his own father for the murder of a criminal. In the case of dictatorships patriotism is usually the expression of dark, undemocratic impulses. But, in the case of the United States, it is the love and affirmation of positive values and visions, of freedom and opportunity.

Creeping Socialism

May 6, 2009

The Obama administration brokered (or forced) a deal with GM in which it would forgive half of what it is owed and receive a 50% stake in the company, his close ally the United Auto Workers would receive 39% and other private lenders would forgive 100% of what they are owed and only receive 10% of the company. So, in effect nearly 90% of GM was nationalized.

There is zero question that the raison d'être of the Obama Administration is expanding government control over the economic and social life of the United States.

The only question is if this is detrimental to the welfare of the United States.

For socialists and eurovestites (those who want to remake the United States into the imagine of a sickly European social democracy), this is positive.

For those who believe that constitutional rule, limited government and economic liberty made the United States the freest, most prosperous nation on earth, this is a nightmare.

Tuesday, May 5, 2009

Assault on Freedom of Speech

Pictured Above: Michael Savage

Historically, the left was a staunch defender of freedom of speech.

But, in this day and age, most assaults on freedom of speech originate from the left.

The most recent case being the British Government banning talk radio host Michael Savage from entering the United Kingdom. Dr. Savage was included in a list of neo-nazis, criminals and islamic terrorists.

While Dr. Savage can certainly be abrasive and histrionic, not once has he advocated violence. For those who want to discredit Dr. Savage and his viewpoints, the appropriate strategy would be to invite him to a public debate and subject his viewpoints to the marketplace of ideas. Instead, the British government seeks to eliminate the presentation of viewpoints that it finds distasteful. Interestingly, but not surprisingly, this same government has been very lax about allowing incendiary, anti-semitic and anti-western muftis and sheiks to immigrate to England.

What I am most curious about is how the American left would react if Dr. Savage was banned from the airwaves. I am betting that the value of liberty has eroded in the left to the point where few left-wingers would defend him.

Monday, May 4, 2009

Dig A Little...

Obama's masterful rhetoric presents an image of a political moderate, of someone who wants reform but within the context of American constitutional and political traditions. But, if you dig a little you will find evidence of a dangerous radical who views the constitution as an impediment to his socialist designs, rather than as a guiding document.

This is readily seen in a 2001 interview with NPR. In this interview he laments the fact that the courts have limited the redistribution of wealth by (correctly) interpreting the constitution as a document of negative liberties (for example, the government cannot impede your freedom of speech & freedom of religion), as opposed to one of positive liberties (what the government should do on your behalf). Here are some excerpts from the interview; to listen to the actual interview, click on the link at the bottom of the page:

The Supreme court never ventured into issues of redistribution of wealth. As radical as people try to characterize the Warren Court it didn't break free from the essential constraints that were placed by the founding fathers of the constitution...Warren court interpreted the constitution as in the same way that generally the constitution is a charter of negative liberties says what the states and the federal government or the state government must do on your behalf..."

One of the tragedies of the civil rights movement is because the civil rights movements became so court focused I think that there was a tendency to lose track of the political ands community organizations on the ground that are able to put together the coalitions of power through which you bring about redistributive change and in some ways we still suffer from that.

Someone asked: Is it too late for that reparative economic work. Is that the appropriate place (the courts) place for reparative economic work to take place..."

I'm not optimistic about bringing about major redistributive change through the courts.

Sunday, May 3, 2009

Dissolve the People!

Pictured Above: Bertolt Brecht

Right wing or left wing, the majority of politicians are driven by power rather than principles. Even when we agree with a politician, we should seek to determine the ulterior motives that compel them to support a policy.

In prior posts I have documented that the Obama Administration is pushing for an amnesty for undocumented immigrants and for a maintenance of the record numbers of low skilled documented immigration, even in the midst of record unemployment. With this current path European-Americans are expected to be a minority in the United States by 2050. So, why are these largely unpopular policies being so energetically pursued? I am quite certain that it is not because Obama has any great love for Latinos or hatred towards whites. I believe that the answer can be found in the works of the East German poet Bertolt Brecht, who after the uprising of 1953, satirically stated that the communist government should "dissolve the people and elect a new one." This opens up the question - how does the Obama administration stand to benefit from the dramatic demographic change that it is pursuing?

Before I go on I must adamantly state that this is NOT an issue of race. America is defined by culture, values and vision. An immigrant of African, Asian or Hispanic descent can be even more American than a native born American as long as they embrace the core culture and traditions of the United States. Such individuals may change the complexion and cuisine of the country, but as long as they assimilate to and transmit the fundamental cultural and political values to their descendants, the United States will maintain its essence and continue to be the greatest nation on earth. And without a doubt, cultural assimilation is closely tied to economic assimilation. In other words, families that assimilate mainstream American values and behaviors regarding work, education and investment, will have economic and social outputs that are virtually identical to those of stable, middle class Americans. And it's very important to note that economically and culturally assimilated families will tend to support existing political and economic policies, rather than push for fundamental change.

But, when demographic change is not accompanied by profound cultural and economic assimilation, a country is irrevocably changed. For a multitude of reasons, large segment of immigrants and their descendants are not culturally and economically assimilating towards traditional American values and behaviors. This is demonstrated by the growing economic (rate of poverty and welfare use), educational (drop-out rate), cultural (out of wedlock births) and political (voting pattern) divergence seen between Hispanics and European-Americans.

The answer to Obama's support of radical demographic change can be found in the growing political divergence between (on one side) African-Americans, immigrants and their descendants and (on the other side) European-Americans. Up to 96% of African-Americans and 67% of Hispanics voted for Obama, versus 45% of European-Americans. In other words, the key to Obama's victory was overriding the conservative majority of white voters, through the overwhelming support of left leaning African-Americans and Hispanics. In the electoral world, demographics clearly equals destiny. So, as a man of strategy, Obama realizes that the surest way he can expand his power base and ensure future victories for the Democratic Part, is by significantly expanding the size of the Latino population. And most significantly, Obama's expanded ethno-political coalition will offset the loss of support he will face among middle class voters who become weary as his policies fail to address our continued economic ills, the spiralling deficit and the growing tax burden. Recipients of entitlements are rarely concerned about the increasing tax and regulatory burden that they impose on tax payers.

And just as the Democratic Party has strengthened their hold over African-American voters by maintaining widespread dependency on government jobs and programs, they are fostering this same dependency by holding the carrot of an amnesty over the heads of the Latino electorate. And although Hispanic culture has many positive aspects (strong sense of work, family, and tradition), a beneficent culture of political and civic culture is not one of them. For the most part, a tradition of limited government, economic freedom and rule of law are sorely lacking and a political culture of passiveness, patronage, populism and a belief in a powerful state are found, especially among the poor and uneducated masses. So, outside of true assimilation to America's core values and traditions few Latinos will resist the Obama administration's continued expansion of the state and erosion of the constitution. Obama wisely sees that the surest way to expand his power, in the face of growing disenchanment of his failed policies is to dissolve the people and elect a new one..."

Gospel Music: Another Great American Art Form

Pictured Above: The Talented And Beautiful Mahalia Jackson

Dishonest? Opportunistic? Hateful?

One of the flaws of modern Americans is a remarkably short attention span. With our current economic ills, the Reverend Wright debacle seems like a brief footnote in American history, but I believe that it defines Obama's fundamental character.

Before I consider I want to vanquish any doubt that the Reverend Wright's speech goes far beyond the patriotic practice of constructively criticising the United States. If you analyze the content and the manner of presentation it there is absolutely no doubt that he detests the United States. Beyond his declaration of "G-d damn America," he expressed the belief that that the 9-11 attack was a justified attack against a fundamentally wicked and oppressive country. In addition, it's worth noting that the church gave a lifetime achievement award to Louis Farrakhan who stated that "Judaism is a gutter religion," "Hitler was a very great man," "white people are potential humans, they haven't evolved yet." In addition Mr. Farrakhan travelled to Zimbabwe to back the oppressive, racist dictator Robert Mugabe.

The 20 years that Obama attended this church indicate one or more of the following:

1. Obama is completely dishonest, because he claimed that he was unaware of his Reverends anti-American speeches.

2. Obama shares some of Reverend Wright's hateful vision of the United States. Or at least his love of country is low enough to allow him to tolerate his reverends venom.

3. Obama is an opportunist who did not necessarily agree with the Reverend, but attended the church for strategic reasons, because of the influence it has in Chicago's African-American community.

Either way, this reveals some disturbing flaws in President Obama.

Racism & Risk Management

In my essay "It Didn't Ad Up," I discussed the clear and consistent pattern of credit scores in different ethnic groups and how they are indicative of values and behaviors that determine economic and social outcome far more than racism. Applying these principles to and reflecting on my experience in the residential rental market, I found the "progressive" narrative on housing discrimination to be very flawed.

In the past, before the widespread access to affordable, instantaneous credit and criminal background checks, most landlords lacked a reliable way to assess the potential risk of applicants. Accordingly, landlords had to base their decisions on general statistical trends. Most of the time when landlords factored race into their decision, they were in effect utilizing a flawed form of risk management that all people rely on. My experience has shown me that once a landlord or any other individual has access to risk management tools (such as credit check systems), the vast majority will eliminate race as a factor in their decision making process, in other words they will cease their discriminatory behavior.

Since this is certainly a contentious issue and my explanation runs counter to commonly held "progresive" mantras, I will explain it point by point:

1. The 1st rule of risk management is: the less data an individual has, the more their decision will be based on general statistical trends. For example, a landlord who can check the background of three applicants will be able to base their decision on concrete factors like credit and criminal background checks. But, the landlord who lacks the said capacity will choose the 70 year old man who wears a suit and tie, over the 20 year old man with torn jeans and tattoos. The well dressed elderly man may end up being a horrible tenant and the disheveled young man may end up being an ideal tenant, but we know that statistically the latter option is a better bet.

2. The 2nd rule of risk management is: when an individual lacks risk management tools, the
greater the potential negative ramifications that a decision holds, the more likely an individual will base their decision on general statistical trends and demonstrate discriminatory behavior. For example, if a landlord rents out a parking space and the individual doesn't pay, the landlord stands to lose no more than $100 a month and more importantly, the landlord can quickly terminate the parking agreement at little or no cost. But, if a residential tenant doesn't pay rent for an apartment, the eviction could cost the landlord several thousand dollars in lost rent and legal fees, not to mention in time. So, we can expect the landlord to be far less discriminatory in deciding who they rent the parking to space, because he has a lot less to lose.

3. Poor credit almost always indicates a history of non-payment and / or late-payment of bills.

4. Therefore, the lower mean credit score and the higher per-capita rate of crime in the African-American community indicates that statistically, landlords were more likely to face issues of non-payment and / or late-payment of rent if they rented to African-Americans.

5 . Although the majority of African-Americans are good people and good tenants, with no criminal antecedents, as a group they posed statistically a greater risk.

6. Before landlords had easy access to credit and criminal background checks, statistically it was a better bet to choose a white or Asian applicant over an African-American one. A few of the older landlords I worked with voiced sentiments like "we have nothing against any ethnic group...we are just out to pay our mortgage, but to be honest with you the vast majority of evictions that we have dealt with involved our previous African-American tenants, so we are a little reserved about to renting to them..."

7. But, once I showed these landlords that I was able to eliminate their risk through credit checks, all reservations about renting to African-Americans disappeared. When presented with hard data on the individual, they did not have to rely on general statistical trends. In fact, many landlords felt relieved when they encountered applicants that "broke the mold," because few people are truly comfortable being discriminatory.

8. Although the decision making process was now non-discriminatory, unfortunately the outcomes of the application process were almost identical, because most of the African-American applicants had awful credit.

Ultimately, the problem with the flawed "progressive" explanations of racism is that those who do not understand the nature of an illness are rarely able to cure it.

Happy Polish Constitution Day!

Did you know that Poland was the 1st country in Europe and the 2nd country in the world to have a constitution?

The Constitution introduced political equality between townspeople and nobility (szlachta) and placed the peasants under the protection of the government,[4] thus mitigating the worst abuses of serfdom. The Constitution abolished pernicious parliamentary institutions such as the liberum veto, which at one time had put the sejm at the mercy of any deputy who might choose, or be bribed by an interest or foreign power, to undo legislation passed by that sejm. The Constitution sought to supplant the existing anarchy fostered by some of the country's magnates with a more democratic constitutional monarchy.[5] The document was translated into Lithuanian.[6]

Russia, Prussia and Austria were threatened by this political liberalization and jointly invaded, forcing Poland to retract the constitution. Some lose their constitution through invasions, others permit their politicians to slowly erode it. How sad.,_1791

Saturday, May 2, 2009

Predatory Lending?

The NAACP and other "progressive" organizations have labelled banks that issue sub-prime mortgages and credit cards with high interest rates as "predatory lenders."

As someone who has engaged in unwise financial practices, such as an excessive use of high interest credit cards and habitual refinancing, I can tell you that this is BS.

Any financial institution that engaged in fraud or a violation of stated contractual terms should be prosecuted to the full extent of the law. But, by definition, any financial transaction that is free of fraud or contractual violations does not constitute predatory lending, because in a free society:

1. It is the right of each individual of sound mind and body to determine if the benefits of a financial transaction outweigh the costs. The state does not have the right to make this determination. No one forced me to utilize the financial tools that were presented to me. At the time I wrongly judged them to be my best options.

2. It is the responsibility of each individual to understand the terms of a financial contract that they have agreed to partake in. Those who undertake contracts without understanding them have no one to blame but themselves. Although the terms were not to my financial benefit, they were stated in the contract.

3. If it is beyond their capacity to understand the stated terms, it is their responsibility to seek the assistance of a lawyer or any other individual to help clarify the terms. Those who do not fully understand terms should not undertake an agreement. Because I recognized my inability to understand complex contracts, I hired a lawyer to check the home purchase and home loan contract.

4. It is the right of a financial institution to determine the rate of return (interest rate) of a transaction, based on the statistical risk of prospective participants via a credit, income and assets analysis. The higher the statistical risk, the more individuals in that category (for example people with credit scores of 600 or less) will default. Accordingly, to offset the higher default rate, it is reasonable for a financial organization to charge higher interest rates to members of that category. In other words banks charge higher interest to rates to people with poor credit because they are a greater risk.

5. The most significant factor in higher defaults of individuals with sup-prime loans is not the higher interest, but the general track record of financial irresponsibility borrowers. The mere fact that they chose to partake in, rather than opt out of a sup-prime transaction is a further indication of their irresponsibility.

6. To have the government mandate that financial organizations offer more favorable terms (such as lower interest rates) to higher risk groups will result in a dramatic decrease in the access of the said groups to capital. In other words, mandating lower returns on groups with higher default rates (lower credit scores) will result in a sharp decrease in the supply of credit to individuals of those groups, which will disproportionately affect African-Americans and Latinos.

7. If the government mandates that financial institutions provide an equal number of loans to "underrepresented communities" with with statistically lower credit scores, the default rate (foreclosures) will result. And the financial institutions will have less capital to provide loans to lower risk individuals and groups.

Friday, May 1, 2009

Beauty and the Beast

I have often spoke about the contempt I have for Iran's' beastly government, which represents the darkest impulses in Iranian culture. But, I have not spoken enough about the beautiful elements of Iranian culture and Iranian people. Here is a small sample of Persian classical music. In addition to music, Persian poetry, architecture and cuisine has soared to great heights.

The Great Dilemma (part III)

The leftists who have mercilessly hammered away at religion and tradition in Europe and the United States are correct that the said phenomena have had some negative consequences. But, they have failed to ask some very important questions:

1. Does man and society have the need for beliefs and traditions that transcend the individual?

2. Can a society optimally function without shared values and beliefs and conversely, what are the prospects of a society driven by moral relativism and individual philosophies?

3. Perhaps educated elevated individuals can function in the vacuum of cultural relativism, but how does the absence of shared values and traditions effect the mass of people who lack the education or desire to create their own viable, individual moral philosophy?

4. If you doubt the importance of values in determining behavior, tell us - why do some poor and hungry people maintain high levels of conduct, while some wealthy individuals continue to steal from their fellow man?

5. Shared values, traditions and institutions have served to govern the behavior of many individuals and communities. Tocqueville believe that the unique combination of domestic tranquility and limited government found in the United States was a distinct product of the power of religious values and institutions in America.

So, could it be said that the price we are paying for our "liberation" from less coercive traditional values and institutions is the growth of coercive state authority?

6. Is it by coincidence that the most horrific violence of the last century was propagated by regimes (communist & nazis) that sought to overturn the Judeo-Christian foundation of their societies?

7. The manner in which many individuals have pursued communism, anti-racism, environmentalism, consumerism etc. have had a distinct religious impulse. Does this imply that perhaps man is born with a religious impulse? If not expressed through traditional religion, will it will be channeled through any number of

It's Not Them, It's You!

I recall a discussion with an Iranian friend of mine who related to me how most Iranians blamed their leaders for the endemic corruption that plagued and impoverished Iran.

His response was "it's not them, it's's us...from the lowly police officer who accepted small bribes to get out of traffic the petty bureaucrat who granted state jobs to incompetent family the already wealthy politicians who stole billions in oil's the political's the social values that permeate society..."

The point of this is not to pick on the Iranians (who hold great affection in my heart) because these principles hold true in all countries, even the United States. We have leaders that spend us into oblivion, because we rarely vote for true fiscal conservative who openly speak of the necessity to cut government programs and raise taxes. We have leaders who usurp our constitutional rights, because we do not guard them, because we value security and certainty over freedom.

It's not them, it's's us...for good and for bad, politicians represent the spirit of a people, the spirit of our times...we get the change that we ask for...we get the change that we deserve.

The Paradox of Entitlements

Mmmm...government cheese!

Here is my deep dark confession: I believe that the government has a role in taking care of the downtrodden. Section-8, food-stamps, medicaid etc. all serve important purposes. But, I have extreme reservations about these programs because of the paradox of entitlements:

An entitlement system only functions when the majority of people feel that they are not entitled to entitlements.

In the various documentaries on the Great Depression that I viewed there interviews with the children of men who lost their jobs. In virtually every interviews they stated how much shame unemployment and especially being "on the dole" caused for their fathers. Because of the stigma of welfare use, for most people it was the last resort and those who used it sought to minimize the time and amount of their use. On a macroeconomic level, this stigma served to minimize the use and cost of welfare, which ensured that more funds were available for people who truly needed assistance.

But, in my rental business, I have clearly seen that in many communities welfare use and idleness no longer carries a stigma. For example, an able bodied single woman who some how inherited her mother's 2 bedroom voucher applied for a 2 bed / 2 bath luxury condo. If this woman's had any reservations about usurping the labor and tax dollars of hard working Americans, she would have rented a clean, basic studio apartment for less than half the cost of this luxury condo, for the minimum amount of time. But, someone she felt no shame living in luxury at the tax payers expense and utilizing limited resources that could have been directed towards the many physically or psychologically ill individuals that were in dire need of social services. If this individual were an isolated case, this would not be a significant issue. But, with millions of people possessing such a shameless sense of entitlement, the cost of misdirected social services runs in the billions. And perhaps more importantly, most good willed citizens hold deep reservations about supporting social welfare programs, knowing how much money is wasted on those who feel that they are entitled to entitlements.