The IRS Crimes: a Gift from Providence to Libertarians

[Cross-posted at Facts Matter]

Anyone who has libertarian sentiments, in the Libertarian Party or outside of it, in the Republican Party, or elsewhere; anyone who sees himself as supporting the non-existent, imaginary “Tea Party,” is familiar with the difficulty of explaining even basic libertarian principles. There are three problems:

First, most people are lazy, especially when it comes to re-examining the creeds they absorbed in childhood or youth.

Second, libertarianism is paradoxically too familiar to draw interest. It’s more or less what you learned in high school about the work of the Founding Fathers. (Digression: It’s more interesting for immigrants like me than for the US-born precisely, because we had no superficial exposure to it at the time we had acute testosterone poisoning.)

Third, libertarianism is not sexy. It does not enjoy the emotional ease of access that big words procure: “Revolution,” “Justice,” “Fairness,” “the Future.” In other words, it’s not a cartoon; it ‘s not a reality show; it’s not a vampire movie. It’s an intellectual stance for adults only. Tough call!

Sometimes, though Providence throws us a lifeline. Now is such a time. A libertarian Hollywood scriptwriter, if there were one, could hardly come up with a better script than the current controversy regarding the IRS role in singling out conservative organizations, in persecuting them, in forcing them illegally and immorally to disgorge private information about opponents to the Obama administration. Or about imagined opponents. (more…)

The IRS and Fascism

[Cross-posted at Facts Matter]

If I wanted to set up a secret police in the US, would I try to create a Gestapo from scratch? Would I call it “Gestapo,” or “NKVD,” or “KGB”?

Or would I rather take an existing, comparatively efficient agency, familiar though unloved by the mass of the people, and simply extend the reach of such an agency? I mean the Internal Revenue Service, of course.

Do I believe that President Obama  ordered the IRS to discriminate against Tea Party-sounding groups and others identified as conservatives? No, I do not.

I think he is responsible for the actions of low-level underlings because he created a statist, totalitarian atmosphere. He did this a lot through his non-actions regarding his old friends, in particular, including the bomber- terrorist Bill Ayres. He is responsible for allying himself with out-and-out extremist groups in his first election. The mainstream press is light-heartedly helping him erode democracy in this country.

None of these important actors is fundamentally evil (not even Ayres today). The president is a man who looks so good in a suit that he is the suit itself in the end, an empty suit. The liberal press is silly in the manner intelligent people who are seldom contradicted become silly. Many of the ordinary Americans who voted for Mr Obama are keeping their eyes and ears tightly shut in an effort to keep believing that everything is alright because they elected a man of color. I mean even college professors, aside from journalists. Black voters have been trained to have low expectations. They tell themselves it’s good enough that the president is (more or less) African-American.  Another kind of supporters, unions, is as corrupt as ever. Take all the teachers’ unions, for example….or, rather, don’t!

I think Mr Obama is the non-Fascist leader of a genuine, grass-root American Fascist movement. The recent discoveries at the IRS are just one manifestation of creeping fascism.

The Second Amendment has rarely been more relevant.

Around the Web

Hope y’all like the new layout of the blog. Take a few minutes to get comfortable. Take off your coat, your shoes and your troubles. Now have a glass of red wine and a look around.

  1. IRS specifically targets conservative Tea Party groups; So the Washington Post‘s Ezra Klein naturally defends the IRS for not doing more: Listen to the fascists sing
  2. Ken White has an update on the man who made the anti-Islamic film “The Innocence of Muslims”
  3. Dear life (gun control and gun violence). Again and again: gun violence has been declining for about two decades now.
  4. The Crushing of Middle Eastern Christianity
  5. A Brutal Peace: the Postwar Expulsion of the Germans
  6. Barack the buck-passer. A laudatory account of Obama’s foreign policy that I largely agree with.

Eye Candy

Just beneath the fold. (more…)

University Graduation Rates are Too High

A proposal has surfaced to “punish” California state universities, including San Jose State where I teach, if they either (1) continue to raise tuition rates or (2) fail to raise their graduation rates. The punishment would take the form of reduced state support.

First of all, we taxpayers (including me; I’m a net tax payer) should rejoice at such “punishment” as it would lessen the burden on us. Taxpayers aside, how might the state universities respond to such punishment? On the fiscal side, they could recruit more out-of-state and foreign students who pay full freight. The UC campuses are already cutting admissions of in-state students in favor of out-of-state full payers – will UC eventually become UNC – University of Non-Californians? Furloughs are unlikely; they were tried once and didn’t work. They can’t cut salaries; there’s a faculty union. They’ll never cut out administrators. No, all bureaucracies, when forced to cut expenses, make cuts that are most painful to the public. Therefore, in addition to recruiting more full payers, they will cut classes.

What about graduation rates? They can’t raise admission standards because that would be “unfair” to racial minorities who are disproportionately ill-prepared for college work. They already have programs to try to coax students to study, with marginal results, and the obligatory special privileges for students with “learning disabilities.” It’s not clear what more could be done along those lines. No, I contend that the most humane policy for state universities would be to cut graduation rates. Here’s why.

It is indeed unfortunate that so many students, more than half at SJSU and other state universities, fail to graduate within six years. Those students have paid a big price in terms of money spent, debt incurred in many cases, and foregone income, with almost nothing to show for it. A bachelor’s degree from a state university, unless it’s in engineering, is worth little enough; two or three years of class work is worth nothing. Those who do make it all the way to the sheepskin gain a marginal advantage; their degree signals a certain amount of persistence. Their value to an employer remains uncertain; many, I fear, couldn’t be trusted with such simple tasks as reading with understanding, writing, doing simple calculations or, perish the thought, critical thinking.

All too many students who enter SJSU are ill-prepared and/or poorly motivated. Large numbers must take remedial math or English because they learned nothing in their public high schools. Many have little or no idea why they are there – some seem to view college as a way to delay their entry into responsible adulthood.

A good number surely have aptitudes for jobs that may require some specialized training, but not a college degree. I’m thinking of welders, hospitality workers (wait – you can get a B.A. in hospitality!), tile setters, carpenters, electricians, roofers, beauticians, nannies; the list goes on and on. What a tragedy that such students fall into the sinkhole (for them) that is a university campus.

Since admissions standards aren’t likely to be raised, the only humane thing to do is to get these students out the door as fast as possible. I expect to give a lot more D’s and F’s in my class this semester than I normally do, not because I’m pursuing any agenda but because they won’t have learned the material. Those students will be hurt, short term, but it’s the right thing for them, long term, especially if it hastens their exit from a university where they don’t belong.

Cyprus, the EU and Competing Currencies

There have been many critiques over the European Union from many different quarters over the decades since its inception. With the seizure of cash from customers of banks in Cyprus, the worst threat imaginable has now come to pass for Euroskeptics. Economist Frederic Sautet explains how the heist has so far gone down:

Some depositors at Cyprus’ largest bank may lose a lot of money (e.g. see article in FT). Those with deposits above €100,000 could lose 37.5 percent in tax (cash converted into bank shares), and on top of that another 22.5 percent to replenish the bank’s reserves (a “special fund”). Basically “big depositors” are “asked” to pay for (at least part of) Cyprus’ bailout (the rest will be paid by other taxpayers in the EU).

I cannot think of a faster way to completely destroy a banking system than to expropriate its depositors. This is the kind of policies one would expect from a banana republic, not from a political system that rests on the rule of law. But this is the point: the EU does not respect the principles upon which a free society is based.

An economist over at ThinkMarkets also has a good piece on the Cyprus heist. The EU has taken an incredibly good arrangement – free trade throughout Europe – and turned it into an attempt to unify Europe into a single behemoth of a state. And all under the auspices of “federalism.” This is a bad development for a number of reasons. (more…)

A Free Market in Medical Services

There are two directions for the reform of the U.S. medical services systems. One is towards welfare statism, the control of the medical system by the federal government, and the other is towards economic freedom, providing individuals and families a free choice in medical care.

Economic theory points to a pure free market providing the most productive and equitable economy and therefore medical services. Central planners lack the knowledge to efficiently allocate resources, and politics skews the outcome towards special interests.

Here are the reforms need to have a really free market in medical services: (more…)

Humanitarian Wars can be Unjust too

If you hate evils committed by individuals as much as you hates evils committed by institutions, and vice versa, as I think most people who are even remotely libertarian — wait, no! remotely human! — do, does it truly follow that you must condone one in order to combat the other? Maybe it does, at least in the short term, in a place and time where relationships between all these things have been so distorted. In this case, the distortion is caused primarily by the monopolization of not only judicious force, but very nearly all force, initiative and responsive, at every level, by a single institution (with many manifestations and interlocking jurisdictions). If you haven’t guessed already, that institution is the state.

Taking my cue (I swear there was no collusion!) from Brandon and going with the flow. Jacques Delacroix of Facts Matter and Notes on Liberty has this to say:

No one doubts that the Taliban, both in Afghanistan and in Pakistan, and Islamists in general, want to implement barbaric policies and that they do implement them whenever they have a chance. (Remember, their harsh, extremist rule in parts of Iraq contributed to turning the Sunni population against them.) Among other rolling atrocities, the Taliban close, and often firebomb schools, overwhelmingly girls schools. They are overtly working on perpetuating obscurantism and the savage treatment of women that is undeniably common in much (but not all) of the Muslim world.

He then asks: (more…)

Unemployment: What’s To Be Done?

In Part 1 I outlined natural unemployment, government-caused unemployment, and the attempts to measure these. We saw how ambiguous and subjective some of the concepts of unemployment are and how the government, specifically the Federal Reserve, is charged with managing it. Now we turn to current conditions and what can be done about them.

There have been huge advances in technology and substantial declines in trade barriers in recent years. While these developments have raised living standards they have been hard on people whose skills were rendered obsolete or uncompetitive. When changes evolve gradually, as when so many people left farming in the last century, the disruption is not so great. Changes are now coming faster and are extending to some high-paid professional jobs. Automated systems can now handle at least the routine aspects of some legal research and medical diagnosis.

Time and time again new doors have opened to workers as old doors closed. Machines replace workers, but they raise productivity and produce new employment opportunities. We can expect this pattern to continue for a long time to come. Still, it is within the realm of possibility that robots and computers could take over so much work that the demand for human workers would shrink drastically. But those very machines would mean higher productivity and thus higher living standards.

A great deal of work can be now be done remotely, providing an advantage to areas with low living costs. Substantial outsourcing of such jobs to foreign countries has occurred (though that trend may be reversing as low-cost areas of the United States become competitive and as customer dissatisfaction and problems with managing offshore workers come up). The benefits of outsourcing and other productivity enhancements are spread across all consumers, but the job losses are concentrated among small and sometimes vocal minorities. (more…)

How to Extirpate Poverty

To “extirpate” means to complete eliminate, from the Latin word meaning to pull out by stem and root. To extirpate poverty means to eliminate its cause, so that it does not come back. Fundamentally, poverty comes from a low wage level, so we need to examine what makes a wage level low.

The wage level of an economy can be thought of as the wages paid to unskilled people. Those with greater skill and talent get higher wages, so some think that the solution to poverty is better education. But a stagnant economy also depresses the return to human capital, the extra wage for those who are more productive. In a thriving productive economy, even those with few skills are better off than skilled labor in a depressed economy. Indeed, in an unproductive economy, those with skills often find little market for their human capital.

The wage level of an economy is set by marginal labor, those who work at the least productive land in use. The classical “law of wages” says that when workers are mobile, the wage at the margin of production will set the wage level for the rest of the economy.

The margin of production has several edges. There is the horizontal extensive margin of land that is just barely worth using, land so unproductive it fetches no rent. There is the vertical extensive margin of the space above a city, into which taller buildings can rise, without increasing the site rent. There is also the intensive margin of adding more workers to land already being used. The wage at the intensive margin will equalize to that of the extensive margin. Workers are paid what they add to production, which is called their marginal product. (more…)

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