Posts tagged ‘RDT’

Leviathan – We Don’t Believe You

John Koskinen is the new face of beadledom in Washington, DC.

Serious as are the policy disagreements roiling Washington, none is as important as the structural distortion threatening constitutional equilibrium. Institutional derangement driven by unchecked presidential aggrandizement did not begin with Barack Obama, but his offenses against the separation of powers have been egregious in quantity and qualitatively different.

Regarding immigration, health care, welfare, education, drug policy and more, Obama has suspended, waived and rewritten laws, including the Affordable Care Act.
. . .
Some say the judicial branch should not intervene because if Americans are so supine that they tolerate representatives who tolerate such executive excesses, they deserve to forfeit constitutional government. This abstract doctrine may appeal to moralists lacking responsibilities.

Stopping a lawless president

So, do we have a coverup at the IRS? Has a crime been committed? I don’t know. What I do know is that I am deeply disturbed by all this.

Maybe it’s just sloppy record-keeping, which would be bad enough. Most of the government’s business is now conducted digitally, and those records need to be properly handled. Or is it worse? Is the IRS deliberately keeping things from the public? Excuse my cynicism, but the IRS’s penchant for secrecy is what led Tax Analysts, using the new Freedom of Information Act, to sue the agency in the 1970s to force it to release private letter rulings. There have been several subsequent lawsuits to pry records that should have been public out of the agency’s hands.
. . .
The exempt organization issue is now more than just fodder for conservative blogs. The IRS and the Treasury Department need to start being square with the American people and their Congress. Even if you hate the IRS — and I do not — a wounded and compromised tax collector (whether or not most of its wounds are self-inflicted) does no good for the country.

The Coverup Is Usually Worse Than the Crime

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Mockery and Truculence

Clueless in DC, by Phil Dragoo

Clueless in DC, by Phil Dragoo

Thank me. Thank me so very much. Even though this is ostensibly a graduation speech it is really about me. My ratings have been slipping of late and my media advisors said a photo-op in Bagram and a speech at West Point will boost the polls by about 3 points.

Among you is the first all-female command team, which I mention as an accomplishment, since there’s nothing else I can boast of. You are the first class to graduate since 9/11 who may not be sent into combat in Iraq or Afghanistan though you will probably see action elsewhere, as everything is going to hell in a handbasket. But I mention it as another kind of fake accomplishment, the only other thing I can think of other than the all-female command team.
. . .
So we must choose our enemies carefully. For the foreseeable future, the most direct threat to America, at home and abroad, is Climate Change. You might be saying WTF? But consider that it’s a whole lot easier than fighting al-Qaeda. Who would you rather go up against? Mark Steyn or Zarqawi. I rest my case.
. . .
I just want you to remember, in case you feel like blaming me, that it’s Bush’s fault.

Brother Rat

President Blah Blah Blah, Moral Preener in Chief

John Kass described in January 2014 how tired many of us are of President Blah Blah Blah:

The prospect of listening to him blah blah blah his way through three more of these annual speeches is enough to cause the nation to curl up on the floor in the fetal position and start breathing from a brown paper bag. The man is talking the country to death, and we can’t take anymore.

Please, just STFU.

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Dunbar Number, Reason Video Awards, George Washington, Rent Seeking, Fascism

The answer isn’t 42. It is 150.


Meet Puddles: The Giant Sad Clown with the Golden Voice
Walking Tall With Atlanta’s Big Mike Geier
Mike Geier
Dames Aflame!
King-sized Mike Geier continues to follow his ever-growing, ever-eclectic muse
Interview at Teatro ZinZanni

Working with the anthropologist Russell Hill, [ evolutionary psychologist Robin] Dunbar pieced together the average English household’s network of yuletide cheer. The researchers were able to report, for example, that about a quarter of cards went to relatives, nearly two-thirds to friends, and 8 percent to colleagues. The primary finding of the study, however, was a single number: the total population of the households each set of cards went out to. That number was 153.5, or roughly 150.

This was exactly the number that Dunbar expected. Over the past two decades, he and other like-minded researchers have discovered groupings of 150 nearly everywhere they looked. Anthropologists studying the world’s remaining hunter-gatherer societies have found that clans tend to have 150 members. Throughout Western military history, the size of the company—the smallest autonomous military unit—has hovered around 150. The self-governing communes of the Hutterites, an Anabaptist sect similar to the Amish and the Mennonites, always split when they grow larger than 150. So do the offices of W.L. Gore & Associates, the materials firm famous for innovative products such as Gore-Tex and for its radically nonhierarchical management structure. When a branch exceeds 150 employees, the company breaks it in two and builds a new office.

The Dunbar Number, From the Guru of Social Networks

It is also the answer to “How Many People ‘Should’ You Invite To Your Wedding?

It is impossible for Americans to accept the extent to which the Colonial period—including our most sacred political events—was suffused with alcohol. Protestant churches had wine with communion, the standard beverage at meals was beer or cider, and alcohol was served even at political gatherings. Alcohol was consumed at meetings of the Virginian and other state legislatures and, most of all, at the Constitutional Convention.

Indeed, we still have available the list of beverages served at a 1787 farewell party in Philadelphia for George Washington just days before the framers signed off on the Constitution. According to the bill preserved from the evening, the 55 attendees drank 54 bottles of Madeira, 60 bottles of claret, eight of whiskey, 22 of porter, eight of hard cider, 12 of beer, and seven bowls of alcoholic punch.

George Washington: Boozehound. Prodigious alcohol consumption by Washington and his fellow founding fathers has been whitewashed from American history.

More after the jump.

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Libertarian, Classical Liberal: Richard Epstein

Libertarians fall into two distinct groups: strict libertarians like Rand Paul and classical liberals such as myself. “Classical liberal” is not a term that rolls off of the tongue. Consequently, “libertarian” is the choice term in popular discourse when discussing policies that favor limited government. Libertarians of all stripes oppose President Obama’s endless attacks on market institutions and the rich. The umbrella term comfortably embraces both strands of libertarian theory vis-à-vis a common intellectual foe.

It is important to understand the differences in views between the strong libertarian and classical liberal position. Serious hard-line libertarian thinkers include Murray Rothbard and Karl Hess. Rothbard believes nonaggression is the sole requirement of a just social order. For Hess, “libertarianism is the view that each man is the absolute owner of his life, to use and dispose of as he sees fit.” There are large kernels of truth in both propositions. It is quite impossible to see how any social order could be maintained if there were no limitations against the use, or threatened use, of force to enslave or butcher other people, which Hess’s proposition of absolute self-ownership strongly counteracts.

Yet the overarching question is how does a group of people move from the Hobbesian “war of all against all” toward a peaceful society? Hess claims that stable institutions are created by “voluntary association and cooperation.” Again, strong libertarians are on solid ground in defending (most) private contracts against government interference, which is why Lochner v. New York (1905), reviled as it is by most constitutional thinkers, was right in striking down New York’s sixty hours per week maximum labor statute. Yet the hard-line libertarian position badly misfires in assuming that any set of voluntary contracts can solve the far larger problem of social order, which, as Rothbard notes, in practice requires each and every citizen to relinquish the use force against all others. Voluntary cooperation cannot secure unanimous consent, because the one violent holdout could upset the peace and tranquility of all others.

The sad experience of history is that high transaction costs and nonstop opportunism wreck the widespread voluntary effort to create a grand social alliance to limit the use of force. Society needs a coercive mechanism strong enough to keep defectors in line, but fair enough to command the allegiance of individuals, who must share the costs of creating that larger and mutually beneficial social order. The social contract that Locke said brought individuals out of the state of nature was one such device. The want of individual consent was displaced by a consciously designed substantive program to protect both liberty and property in ways that left all members of society better off than they were in the state of nature. Only constrained coercion can overcome the holdout problems needed to implement any principle of nonaggression.

The flat tax is preferred because it reduces private incentives to game the tax system and, likewise, the ability of government officials to unfairly target their opponents. The optimal theory of taxation minimizes the distortions created by the need to fund the government activities that maintain public order and supply infrastructure. The classical liberal thus agrees with the hard-line libertarian that progressive taxation, with its endless loopholes, is unsustainable in the long run. At the same time, the classical liberal finds it incomprehensible that anyone would want to condemn all taxes as government theft from a hapless citizenry. The hard-line libertarian’s blanket condemnation of taxes as theft means that he can add nothing to the discussion of which tax should be preferred and why. The classical liberal has a lot to say on that subject against both the hard-line libertarian and the modern progressive.

My Rand Paul Problem: Why classical liberalism is superior to hard-core libertarianism.

Acton Institute, Cato Institute

Wikipedia: Libertarianism | Classical Liberalism | Christian Libertarianism

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We’re from the government, and we’re here to help.

Newspapers are filled with stories (example) about how Russia’s Sochi Olympics construction has cost a lot of money due to “corruption.” I asked my in-apartment Russian experts what this might mean. It turns out that cronies of the government are getting paid more-than-standard-commercial rates to build stuff. So taxpayer funds are being transferred to the politically connected.

I’m wondering how this is different than the U.S. military, which is ridiculously expensive but not typically labeled “corrupt.” TIME reports that the cost of a USAF Boeing 757 (C-32A) is about $43,000 per hour to the taxpayers; Conklin & De Decker says that $12,000 per hour is about what an airline would spend to fly one extra hour in the same airplane. In December, I wrote about how the U.S. Army is planning to do primary helicopter training in $6 million Eurocopters (foreign militaries and private flight schools get this done in aircraft that cost about 1/20th as much)

Is Russia’s Sochi project more corrupt than the U.S. military?

Sochi cf. military industrial complex

‘What Eisenhower Said About the Military-Industrial Complex Is True’

“Politics itself is nothing but an attempt to achieve power and prestige without merit.”
P.J. O’Rourke

The War on Drugs, another disaster. A half century, billions of dollars, countless stupid laws, Mexico a war zone. Result? Every drug known to man, woman, or hermaphrodite is for sale at great prices in every high school in America. Another triumph of private enterprise over governmental regulation. If Washington tried to provide free drugs, it couldn’t come close. No one would be able to get so much as an aspirin.

Infinite Arrogance, Infinite Incompetence

Downsizing Government


Yeah! Studebaker!


Yeah! War on Drugs!


Yeah! Big government coalition!

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The Crony Class Includes the Political Class

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Beltway Shakedown

Welcome to the buckraking phase of the Obama era. If the campaign was about hope, and the early presidency was about change, increasingly the administration has settled into a kind of normalcy in which it accommodates itself to Washington far more than Washington accommodates itself to Obama. That’s not necessarily a bad thing when the result is a bipartisan schmooze-fest at the Jefferson Hotel. But when it comes to the D.C. custom of trading a White House security clearance for a private-sector sinecure, there’s a lot to be said for not going native so easily.

Within Obamaworld, there are a few unwritten rules about how to parlay one’s experience into a handsome payday. There is, for example, a loose taboo against joining a K Street lobbying shop and explicitly trading on administration connections. And while joining a consulting firm is acceptable, those who do are reluctant to work for clients reviled by liberals: gun makers, tobacco companies, Big Oil, union busters. Above all, there is a simple prohibition against excessive tackiness.

Get Rich or Deny Trying How to make millions off Obama

Avoiding tackiness is a big virtue. Hope and change! Forward!

Washington’s `revolving door’ – the movement from government service into the lobbying industry- is regarded as a major concern for policy-making. We study how ex-government staffers benefit from the personal connections acquired during their public service. Lobbyists with experience in the office of a US Senator suffer a 24% drop in generated revenue when that Senator leaves office. The effect is immediate, discontinuous around the exit period and long-lasting. Consistent with the notion that lobbyists sell access to powerful politicians, the drop in revenue is increasing in the seniority of and committee assignments power held by the exiting politician.

Revolving Door Lobbyists,” by Jordi Blanes i Vidal, Mirko Draca, and Christian Fons-Rosen, CEP Discussion Paper No 993, August 2010 (61-page PDFPDF)

An investigation by Sen. Carl Levin and a grilling of Apple CEO Tim Cook on Tuesday by the Senate’s Permanent Subcommittee on Investigations were ostensibly about Apple’s low tax bill. But nobody accused Apple of breaking the law. The company moved money around to minimize the tax it owed and then paid the amount the law required. Apple didn’t write the tax law or even lobby very hard to shape it.

And that’s just the problem. The grilling of Apple is best understood as a shakedown by politicians upset with Apple for not playing the Washington game that yields contributions, power, and personal wealth for congressmen and their aides.

Apple doesn’t have a political action committee to fund incumbents’ re-elections. Apple doesn’t hire many congressional staff or any former congressmen as lobbyists. Apple mostly minds its own business — and how does that help the political class?

The Beltway Shakedown is an old game. Microsoft may be its most famous victim. In the 1990s, while the Federal Trade Commission investigated the software giant for supposed antitrust violations, the Senate Judiciary Committee, run by Republican Orrin Hatch of Utah, held hearings to beat up CEO Bill Gate

Apple becomes latest target of the Beltway Shakedown

How does Apple respond?

Apple CEO Tim Cook announced at a tech conference yesterday [May 28, 2013] that it was hiring President Obama’s EPA director, Lisa Jackson, as a VP for environmental initiatives.

Obama Revolving Door: Former EPA head Lisa Jackson to Apple

The Beltway Shakedown is a bipartisan game. That’s one reason we need a Revolving Door Tax (RDT).

Ozymandias

Unfortunately, it seems that the future Aldous Huxley predicted in 1932, in Brave New World, is arriving early. Mockery, truculence, and minimalist living are best, then enjoy the decline. However, we do need a Revolving Door Tax (RDT), learn what Members of Congress pay in taxes, and prosecute politicians and staff and their “family and friends” who profit from insider trading.

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Crony Capitalism Index

Crony capitalism is another reason we need a Revolving Door Tax (RDT).

Would this be a money-making proposition, allowing an investor a piece of the upside as the companies use the power of the government to their advantage? Or would it be a money-losing proposition, because the companies whose CEOs are spending their time cultivating government relationships are doing so only as a desperate tactic because their firms are otherwise unable to compete successfully in the marketplace on the basis of the value they offer their customers?

So I spent some time running the numbers. Suppose one began this strategy at the beginning of the Obama administration, buying one share of each publicly traded company with an executive appointed by the president on February 6, 2009 to the President’s Economic Recovery Advisory Board. That would be UBS, GE, CAT, and ORCL. In the nearly two years since then (using the Monday February 7 closing prices, and using Yahoo! Finance historical price data that adjusts for splits and dividends), the gain would have been 145% — far outperforming the 52% return of the S&P 500 Index over the same period.

Suppose that later that year, you decided to buy one share of each American publicly traded company that had a top executive attend President Obama’s first state dinner at the White House, in honor of Prime Minister Singh of India. GE and CAT are on the list again, along with Honeywell, Pepsi (CEO Indra Nooyi) and Ethan Allen (ETH) CEO Farooq Kathwari.The return through day’s end February 7, 2011 would have been 46%, versus a 19% gain for the S&P 500 over the same period.

Or suppose you wanted to invest in the publicly traded companies whose executives President Obama appointed on July 7, 2010 to the President’s Export Council. Buying UPS, Boeing, Met Life, Disney, Pfizer, Dow Chemical, Ford, Verizon, United Airlines, ADM, and Xerox would have earned a 30% return over a period in which the S&P 500 gained 24%.

So far, it looks like a pretty good way of outperforming the market.

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Rent Seeking

You can’t give money away.

“Rent seeking” is one of the most important insights in the last fifty years of economics and, unfortunately, one of the most inappropriately labeled. Gordon Tullock originated the idea in 1967, and Anne Krueger introduced the label in 1974. The idea is simple but powerful. People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors. Elderly people, for example, often seek higher Social Security payments; steel producers often seek restrictions on imports of steel; and licensed electricians and doctors often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.

Rent seeking

Examples of rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other special advantages upon them at the expense of the taxpayers or of consumers or of other groups or individuals with which the beneficiaries may be in economic competition.


Rent-seeking behavior

[M]y 1967 paper (Tullock 1967) was not received well by an economics profession that largely perceived government to be an omniscient and impartial enforcer of the public good. It was rejected both by The American Economic Review and by The Southern Economic Journal ostensibly on the ground that it made no contribution to knowledge. Eventually I had it published in a relatively obscure, new journal, The Western Economic Journal, where it remained largely unread for the better part of a decade. This self-same paper is now one of the most widely cited papers in economics – an ultimate triumph of science over ideology.

The Fundamentals of Rent-Seeking

Tullock, G. (1967). ‘The Welfare Costs of Tariffs, Monopolies and Theft‘ Western Economic Journal, 5, pp. 224-232. (9-page PDF)

If a case of soap is pilfered from a U.S. military base here or pinched from a NATO shipping container, it will probably, sooner or later, end up for sale in the Bush Market, a sort of thieves’ outlet mall in central Kabul.

Named after George W. Bush, the U.S. president who launched the war in Afghanistan, the bazaar has flourished for more than eight years, thanks to the long presence of foreign troops that provided war booty aplenty. But in the Obama era, with its steady withdrawal of U.S. forces, the good times are ending in the sprawling hive of vendors who hawk mountains of Pop-tarts and enough Head & Shoulders shampoo to combat the dandruff of untold army divisions.

In a way, the market serves as a microeconomic barometer of the concerns of Afghans across class lines when 2014 ends — and with it, the U.S.-led coalition’s combat mission. President Obama’s announcement in his State of the Union address Tuesday of the accelerated pullout of 34,000 troops in the coming year has only heightened many merchants’ worries about what happens after Western forces finally step on their air hose of cash and material support.

Kabul vendors of stolen U.S. goods fret about future

Ozymandias

Mockery, truculence, and minimalist living are best, then enjoy the decline. We also need a Revolving Door Tax (RDT).

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Imperial Capital on the Potomac

Look on my works, ye Mighty, and despair!

Crony capitalism is another reason we need a Revolving Door Tax (RDT).

Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison, By Peter Schweizer (Google Books)

OpenSecrets.org

[T]he regulatory superstate depends on inflicting pain on the rest of the country, pain that only Washington itself can relieve—if you pay up and have the right connections, that is. Washington’s fortunes and America’s are increasingly at odds. The region is prospering because it’s becoming something that would have horrified the Founders: an imperial capital on the Potomac.

Hail Columbia! The federal government’s relentless expansion has made Washington, D.C., America’s real Second City.

From time to time my colleague David Boaz posts about the many ongoing ways in which the economy of Washington, D.C. continues to outpace that of the rest of the country, thanks to a well-paid and layoff-resistant workforce of federal employees and contractors, a thriving lobbying sector, and so forth. Thus David noted this week [December 9, 2010] that the Washington, D.C. metro area has now attained the highest family median income of any major city, and last month [November 2010] that, according to Census Bureau figures analyzed by Newsweek, “seven of the 10 richest counties in America, including the top three, are in the Washington area.”

Rise of an Imperial City, Cont’d

Dr. Benjamin Carson and proportionality

Tithing is a good model

America the Beautiful: Rediscovering What Made This Nation Great (Google Books)


Ah yes, the 1st Amendment.

The country is in the very best of hands.

Ozymandias

Mockery, truculence, and minimalist living are best, then enjoy the decline. We also need a Revolving Door Tax (RDT).

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