The IRS scandal: it's even worse than we feared

Last week the Heritage Foundation held a lunchtime conference to discuss the latest developments in what it calls 'Taxing the First Amendment: Using the IRS to Censor Speech?'.  I'm going to post the entire hour-plus video of the conference below, but I wanted to first highlight five very short excerpts from a post-conference interview provided to the Powerline blog by one of the speakers, Cleta Mitchell.  She's an attorney who's represented several clients facing IRS abuse over the past few years.  In these short excerpts, she highlights an agency that appears to be completely out of control, and blames both the Democratic and Republican parties for their blind refusal to apply the law to the bureaucrats concerned.  The five clips together total less than twelve minutes in length, and are well worth your viewing time.

Here's the full 1 hour 10 minute video of the lunchtime conference presentation.  I recommend that if you take constitutional government seriously, you make the time to watch it - because if these practices aren't stopped now, we won't have even the semblance of constitutional government that we have now.

This is perhaps the clearest possible evidence that 'going Galt' is no longer an adequate option.  When the organs of government can be suborned to prevent you doing as you please according to your constitutional rights, and to exert illegal and unconstitutional pressure on you to conform, it's too late to found a Galt's Gulch.  It'd just get a tax lien placed on it.

My solution is simple - and some would doubtless describe it as simplistic.  It's in three parts, all of which would be necessary.  It goes like this:

1. Institute a flat tax rate of 10% on all income - corporate, private, whatever - with no deductions or exemptions whatsoever.  Earn a dollar?  Pay 10c to Uncle Sam.  Simple, direct, efficient.
2. Institute a flat consumption tax of 5% on all purchases - corporate, private, whatever - with no deductions or exemptions whatsoever.  For every dollar you spend, you pay 5c tax to the Feds.  (You may pay more for local sales taxes, of course.)
3. You now no longer need massive, complex calculations about what any person or company owes the government.  It's a simple calculation that anyone with a few functioning brain cells can do in their heads (or use a calculator or spreadsheet if they must).  Therefore, abolish the entire IRS and the entire tax preparation industry.  You'd save the country billions in unnecessary and useless overhead at the stroke of a pen - and taxes would be lower, besides.

Not that complicated when you think about it, is it?  Unfortunately, the politicians and the bureaucrats will never agree.  They'd argue that you have to provide for 'income redistribution' or 'welfare assistance' or all the rest of that sort of crap that's never mentioned in the constitution at all.  To that, my answer is simple.  If someone is in need of welfare or other assistance, that's not an IRS issue - so why keep the agency around to address it?  Why make it a federal issue at all?  It can be dealt with by state welfare agencies.

To statists, the issue isn't about taxation efficiency at all.  It's about control.  When that control gets out of control . . . you have the present IRS catastrophe.





Peter

I need a legal citation, please

I need some help from the lawyers and legal-minded readers out there.

I understand the Supreme Court has ruled on more than one occasion that to exercise a constitutional right is not, in itself, grounds for suspicion.  For example, if someone wants to buy a gun, and they're asked all sorts of intrusive questions by local law enforcement (probably acting on instructions from NICS) about why they want it, that's out of line.  They're legally entitled to buy it, so why the questions?

Unfortunately, law enforcement is often notoriously heavy-handed in cases like this.  I want to help the person concerned (one of my students) by being able to cite that Supreme Court ruling.  (If there are other rulings along the same lines, either from lower levels of federal courts or from state courts, those would be useful, too.)

If you can help, please leave a comment with that information.  Thanks!

Peter

Inflation is hitting harder - but not officially

I've written a lot about inflation in these pages over the years.  In particular, I refer readers to an analysis of the elements of inflation that I published in 2012.  It's still valid.  Furthermore, those relying on government benefits to pay their monthly bills have seen their overall purchasing power either flat-line or gradually reduce over the past decade, even as food and fuel have increased significantly in cost.

A report at CBS drives home this reality.

Writer Jen Singer, the mother of two teenage boys, wrestles with her grocery list every week to keep the household budget from getting away from her.

"I'd like the government to stop by my house, come food shopping with me and see where the real costs are," she said.

. . .

It's not her imagination. While the government says prices are up 6.4 percent since 2011, chicken is up 18.4 percent, ground beef is up 16.8 percent and bacon has skyrocketed up 22.8 percent, making it a holiday when it's on sale.

. . .

Many are concerned that while economists paint a benign picture, middle-class families are quietly struggling.

"The disconnect is severe, because it's the economists that make policy but it's the people who have to live with the outcome of that policy and that disconnect is growing to the point where I think it has to break soon," Colas said.

There's more at the link.

In case you missed it in my earlier articles, let me point out again that the official rate of inflation, as calculated by the US government, excludes food and fuel costs.  Would you please tell me how that can in any way be an accurate reflection of the prices we're actually paying?

Sooner or later - probably sooner - the economic chickens are going to come home to roost.  When they do, it's not going to be pretty.

Peter

Looks like Big Brother's at it again . . .

Here's a news report about a school in Wisconsin where the authorities seem to have an inflated idea of their own importance, and the amount of control they have over the children entrusted to their educational care.

I can fully understand the concerns of the parents.  Consider:

• What business does the school system have in asking kids such intensely personal questions?  It's none of their business!
• Young children are very impressionable.  They can be coerced or pressured into saying things about their families that are simply untrue.
• What guarantee is there that what the kids say in class won't be reported to Child Protective Services or some other organ of the state, that might decide to remove the kids from their parents' custody while they investigate what may be a spurious charge or complaint?  (Just do an internet search on 'CPS abuses' to see what I mean.)

Sounds like these particular incarnations of Big Brother need to be slapped down hard . . .





Peter

Good riddance!

So Ray Nagin finally got what was coming to him.  It's long overdue.  He was one of the most egotistical blowhards ever inflicted upon New Orleans by its voters, and proved utterly incompetent during the Hurricane Katrina crisis.  Like Edwin Edwards and other corrupt Louisiana officials, his dishonesty was legendary.  Everyone knew what he was up to, but no-one in the State of Louisiana criminal justice system would do anything about it.  It took Federal prosecutors to nail him down.

I hope he spends the rest of his life behind bars . . . in a prison in a high-risk area for hurricanes . . . with no prospect of evacuation if one comes ashore.





Peter

Politicians and central bankers are lying in their teeth

Grant Williams has an outstanding newsletter this week (link is to an Adobe Acrobat document in .PDF format) dealing with the current crisis in emerging markets, the effects of the Fed's 'tapering', and the implications of current policies (both political and fiscal) for the world (and the US) economy.  His conclusions are very like those I posited recently.  Here's an excerpt.

Everywhere you look, concern is rising amongst those charged with applying the copious amounts of sticking plaster that are vital to ensuring the world financial system doesn't fall apart...

. . .

... a big problem is that, over the course of the ongoing financial crisis (yes, it is), the power wielded by central bankers has reached unprecedented levels as one extraordinary measure after another has been implemented simply in order to maintain the status quo.

. . .

... central bankers lie. The job demands it. That means that they join politicians in the category marked "cannot be trusted," and yet investors the world over are not only relying on the promises made by these individuals but also trusting them to be both transparent and honest when the job demands they be neither.

Given that they lie to us, and given that they are making two key representations to us, should we not perhaps take a moment to think about the two inputs to this particular equation?

Politicians across the globe are assuring us that (amongst other lies things):

1) The "recovery" is either here or right around the corner.
In fact, it is neither.

2) Remaining in the EU is the best option for Greece, Spain, Italy (and France).
It is not.

3) Soaking the rich is the answer to a multitude of problems.
It isn't.

4) Raising taxes will generate the necessary revenue without having a negative effect on the economy.
It won't.

5) Future promises of entitlement payments are solid.
They aren't. Defaults are inevitable.

Meanwhile, the central bankers of the world are promising us that:

1) Interest rates will remain low for a very long time.
In the end, it's not central bankers' choice to make.

2) Quantitative easing has no ill effects and can be withdrawn at will without causing any problems.
It can't be.

3) Printing money will not translate into higher inflation.
It will. It just hasn't yet.

4) They will do "whatever it takes," and that will be enough.
There is a limit to what they can do, and it will ultimately not be enough.

5) They are all in this together.
They're not. It is every man for himself now, and the Fed will screw them all.

So here we are.

Having established that, like politicians, central bankers are required to lie to us in order to be able to do their jobs, we are left facing a couple of crucial questions. First, IS tapering tightening, or not? Secondly, what does all this chaos in emerging markets in the wake of The Tighten Taper mean, and where does it take us from here?

. . .

Not only is tapering most definitely tightening (don't listen to what they say, watch the results), but we have likely seen just the beginning of the fallout from the Fed's new course.

Will they stick to it? No. They won't be able to. They MAY taper another $10 bn in March when Janet Yellen's first rate decision is announced, but I suspect that by then markets will be in such a state of disrepair that excuses will be made as to why the taper has been suspended. You can bet your bottom dollar that there will be some frantic calls put in to Ms. Yellen's office by her peers around the world between now and March 20, all of which will be begging calling for an end to The Taper.

Ultimately, QE will continue to be expanded until it implodes in a fireball the like of which has never been seen before. There's no choice, I am afraid, because the alternative would involve the telling of some very harsh truths by politicians and central bankers and the bestowing of some serious pain on an electorate that already holds them in contempt.

Think those truths are going to be volunteered?

Me neither.

The splintering of central bank policy is just the beginning.

There's much more at the link.

Folks, I said a couple of weeks ago:  "I begin to think that the economic chickens may finally be coming home to roost".  Mr. Williams' analysis dovetails very neatly with what I see in the markets today.  He who has ears to hear, let him hear . . . and let him batten down the hatches, economically speaking, while he's about it.

As Paul Singer said in his January newsletter:

As we and others have said, the Fed is overly reliant upon models that do not account for real-world elements of instruments, markets and traders in the derivatives age. Models cannot possibly take into account unpredictable interactions among huge positions and traders in new and very complicated instruments. Thus, the Fed should be careful, humble and conservative. Instead, it is just blithely plowing ahead as if it knows exactly what is going on. Intelligent captains sail uncharted waters with extra caution and high alert; only fools think that each mile they sail without sinking the vessel further demonstrates that they are wise and the naysayers were fools. This is a formula for destruction. The crash of 2008 should have been smoking-gun evidence of the folly of this approach, but every mistake leading up to the crash, especially excessive and “invisible” leverage and interest rates that were too low, has been doubled down upon in the years since.

We're about to reap the bitter fruit of that doubling down.

Peter

A look inside a gold vault

In the light of speculation about the whereabouts (and security) of Germany's gold reserves, I found this video clip interesting.  It was filmed in the Bank of England's gold vault in 2012.

I wonder how much of that gold is still there?

Peter

The disconnect between liberal/progressive academics and reality

I'm still shaking my head at the sheer, utter stupidity on display in a US News discussion about the impact of Obamacare on jobs.  Here's an excerpt.

What the truth might be, and what few politicians would dare say, is there might simply be some value in lower economic growth.

. . .

Initially, says one expert, there will be benefits in the fact that there is plenty of slack in the labor market. The combination of many unemployed Americans and many people finding jobs just to get insurance means that if a few people cut back their hours, there will be more hours for the people who want them. In and of itself, that theoretically means people will be much happier, says Ken Jacobs, chair of the Labor Center at the University of California-Berkeley, though that effect would dissipate as the job market improves.

“GDP growth isn't a good in and of itself,” he says. “The question here is what's going to create the most happiness for the greatest numbers of people. Being in a situation where people have to work full time or 40 hours a week at a job that may not be the best match for them because that is the only way to get health insurance is not the way you create the greatest happiness for the greatest number of people.”

. . .

The ultimate question is a question of philosophy of government: especially at a time of economic weakness, can any more hits to growth be tolerated, or is the populace’s welfare the ultimate good?

There's (unfortunately) more at the link.  Bold underlined text is my emphasis.

The obvious, screaming, in-your-face problem with this perspective is simple.  Who decides what constitutes "happiness"?  Who decides what constitutes "the populace's welfare"?  Who determines what is (or what should be) "the ultimate good" of the populace, or a society, or a nation?  Clearly, the 'enlightened' (doubtless including Mr. Jacobs) would opine that we can leave those decisions in their hands.  Personally, I'd rather fire every one of these academics in their left-leaning ivory towers, and trust those who've actually worked for a living.

Meanwhile, in the real world:

• For the true impact of Obamacare on the job market, free of socialist and/or progressive and/or left-wing and/or Marxist rhetoric, see here.
• Guess what all those newly jobless or those with reduced hours of work are going to do?  They're going to demand government handouts to subsidize them.
• Guess who's going to be asked to pay for those handouts?  The taxpayers of America - you and I.
• Finally, care to guess the reaction of more and more of those taxpayers?

Word.





Peter

Do we really want Detroit everywhere?

I note with extreme displeasure that the United Auto Workers trade union is trying with might and main to unionize the workforce at Volkswagen's plant in Chattanooga, TN.  The process is not without controversy.

I have no objection to trades unions that exist for the legitimate support and protection of their members.  I've been a member of a union myself, and it was of great assistance to me during a very difficult episode at work.  However, the UAW is one of the most corrupt, self-seeking and egregiously grasping unions in the history of such organizations.  You don't have to take my word for it - just do an Internet search on the subject 'UAW corruption' and read the resulting linked resources for yourself.

Many individuals and organizations share the blame for Detroit's current economic woes and infrastructural collapse . . . but the UAW is right up there with all the rest of them, and probably bears more responsibility than most for that mess.  I confidently predict that any city allowing the UAW to unionize its industrial plants has already set its joint and several feet on the same slippery slope.  I can only hope that the organization's current efforts fail, for the sake of the city of Chattanooga and my home state of Tennessee.





Peter

Big Brother wants to shut down your vehicle on command

Earlier this month I wrote about so-called V2V technology, which would allow (mandate?) your car to broadcast a complete record of your driving habits, routes, destinations, etc.  In due course it's likely to make possible completely automated journeys from start to finish, where your car is controlled by a traffic system and you're merely a passenger along for the ride.

Now it looks like the European Union has ideas of its own.

The European Union is secretly developing a "remote stopping" device to be fitted to all cars that would allow the police to disable vehicles at the flick of a switch from a control room.

Confidential documents from a committee of senior EU police officers, who hold their meetings in secret, have set out a plan entitled "remote stopping vehicles" as part of wider law enforcement surveillance and tracking measures.

"The project will work on a technological solution that can be a 'build in standard' for all cars that enter the European market," said a restricted document.

The devices, which could be in all new cars by the end of the decade, would be activated by a police officer working from a computer screen in a central headquarters.

Once enabled the engine of a car used by a fugitive or other suspect would stop, the supply of fuel would be cut and the ignition switched off.

The technology, scheduled for a six-year development timetable, is aimed at bringing dangerous high-speed car chases to an end and to make redundant current stopping techniques such as spiking a vehicle's tyres.

The proposal was outlined as part of the "key objectives" for the "European Network of Law Enforcement Technologies", or Enlets, a secretive off-shoot of a European "working party" aimed at enhancing police cooperation across the EU.

Statewatch, a watchdog monitoring police powers, state surveillance and civil liberties in the EU, have leaked the documents amid concerns the technology poses a serious threat to civil liberties.

"We all know about the problems surrounding police stop and searches, so why will be these cars stopped in the first place," said Tony Bunyan, director of Statewatch.

"We also need to know if there is any evidence that this is a widespread problem. Let's have some evidence that this is a problem, and then let's have some guidelines on how this would be used."

. . .

The introduction of stopping devices has raised questions of road safety. David Davis, the Conservative MP for Haltemprice and Howden, warned that the technology could pose a danger to all road users.

"I would be fascinated to know what the state's liability will be if they put these devices in all vehicles and one went off by accident whilst a car was doing 70mph on a motorway with a truck behind it resulting in loss of life," he said.

"It is time legislators stopped believing technology is a form of magic and realised that is fallible, and those failures do real harm."

There's more at the link.

The Nanny State will stop at nothing to exercise greater and greater control over its citizens subjects.  Expect this project to be enthusiastically welcomed by our bureaucratic wannabe overlords on this side of the Atlantic, too.

I predict a roaring trade in rebuilt older-model engines fitted with carburetors, and no computer control whatsoever.  In response, look for the authorities to tighten emission control standards, so that no car not fitted with a 'black box' can pass them . . .

Peter

Obamacare - the musical!

I think this is priceless.

Peter

Big Brother is getting more intrusive than ever

Two articles this week highlighted how ridiculously intrusive Big Brother is getting.

First, readers probably are aware of the incident where a Florida man, who holds a concealed carry permit in that state but was not armed while traveling, was stopped and subjected to oppressive, possibly illegal search of his person and vehicle in Maryland.  The question was, how did the Maryland officer know about his Florida CCW permit?  Now we know.

Obviously for the driver, John Filippidis, and his family, this was alarming.   What would prompt the Maryland Transportation Authority Police (MTAP) to randomly select their vehicle?

Because the first question to Mr. Filippidis was about his gun ownership, and the police search for the gun was based on his gun ownership, the Florida CCW permit that Filippidis holds was identified as the most likely impetus for the stop, questioning and search.

. . .

Maryland State has invested heavily in Homeland Security technical capabilities, and they have structured their law enforcement community to engage in very specific activity surrounding their investment.

Maryland State has a network of technical security databases which access the databases of all other states who comply and coordinate with them.   For states who do not willfully comply, or those who are not set up to align technically, Maryland mines data from various LEO systems.

Maryland has a rather innocuous sounding name for the intelligence hub which contains this data, it’s called Maryland Coordination and Analysis Center. 

The intelligence analysis hub has access to, and contains, Florida’s CCW list (among other identification systems) and mines the state’s database systems for vehicle plate numbers of the holders.    These license plate numbers are then stored in a cross referencing database within the Maryland Coordination and Analysis Center.

The database is directly connected to another Maryland technological system – Their ALPR (Automatic License Plate Reader) system is synergized with the MCAC Hub.

Every time one of the flagged license plates are detected by the ALPR an alert is generated.

Mr.  Filippidis license plate was picked up at the Fort McHenry Tunnel on I-95 as he noted within the article.    The Maryland Authority Police pursuit car was probably positioned a couple miles from the ALPR camera.

. . .

Once the pursuit car was alerted by the ALPR system the simple chase was on.  As the Tampa Tribune indicated in the article, the patrol car came abreast of Filippidi;  this was to allow the MTAP officer to visually confirm the driver ID from the high resolution photo from  Filippidis driver’s license which was automatically on the officers on board computer screen.

Mr. Filippidis was identified by the database, his license plate cross referenced to his Florida CCW permit, an alert transmitted to the patrolling Maryland officer, and the rest is outlined in the article.

There's more at the link.

Note that Mr. Filippidis was stopped without any probable cause whatsoever.  The fact that he holds a Florida CCW permit does not mean that he may or may not be carrying a gun at any particular time.  It's illegal in terms of the Fourth Amendment for an officer to assume that someone's acting illegally in the absence of any evidence to suggest that he is - but that's what the Maryland officer did.

Maryland has subsequently apologized for the incident, but to my mind that's not enough.  I can only suggest that legal, law-abiding firearms owners should consider Maryland 'enemy territory' from now on.  We can't assume our constitutional rights will be observed there - in fact, this incident demonstrates that they're more likely than not to be violated.  I've enjoyed previous visits to that state:  but from now on, Maryland can do without my tourist dollars, and I won't be buying from Maryland-based businesses if I have any choice in the matter.

The second article discusses the TSA's behavior monitoring program at US airports.

The Transportation Security Administration has about 3,000 officers trained to detect behavioral clues of "mal-intent." They eye travelers at checkpoints and throughout the airport for signs of above-normal stress, fear and deception, and sometimes engage in casual conversation to measure reactions. After the fatal shooting of a TSA officer in Los Angeles in November, the Behavior Detection Officers, or BDOs, have increased roaming in public areas of airports.

The Government Accountability Office, the auditing arm of Congress, concluded in a recent report there is no credible evidence that TSA's behavior-detection program, which costs about $200 million a year, is effective.

. . .

TSA Administrator John Pistole, a former FBI official, likens the BDOs in 176 U.S. airports to cops on a beat ... "A lot of it is common sense," Mr. Pistole said in an interview last month in Houston. Effectiveness can be seen in arrests, he said. "We've found hundreds of people who had false IDs, who had drugs or cash or warrants or were in this country illegally. They demonstrated suspicious behavior and any one of them could have been a terrorist."

. . .

The program, which started at airports in 2007, has been criticized for snaring people who pose no threat to aviation. Most arrests are for fake IDs and drug possession.

TSA has also faced complaints of racial profiling, or simply being too subjective with its referrals. Anecdotal evidence in the GAO report seemed to back this up. The GAO said 21 of the 25 BDOs it interviewed said some behavioral indicators are subjective. Five of the 25 said they believed some profiling was occurring.

Again, more at the link.

The obvious problem with Mr. Pistole's perspective is very simple.  The TSA is not a law enforcement agency.  Therefore, if its agents are not law enforcement officers, why are they behaving like them?  Why are they using police tactics and techniques which are not legitimate to their proper role and function?

That goes double for the arrests of which Mr. Pistole is so proud.  The TSA's statutory function is transportation security.  Why, therefore, is it referring people to law enforcement agencies for arrest over matters that are not threats to transportation security?

I'm beginning to think that, since our legislators have failed so miserably to rein in the apparatus of the Security State, the only recourse open to us as citizens will be to ostracize all those involved in its operation and administration.  We'll have to shun those who perpetrate such abuses, and all who support them.  Shut them out of everyday discourse.  Refuse to have any contact with them, except that which can't be helped, such as when traveling.  Treat them with the icy disdain they deserve - not to mention contempt, scorn and derision.

These bureaucratic goons aren't keeping us safe at all.  They're merely playing bit parts in security theater - and very badly, at that.  We should treat them as precisely that - bad actors, unworthy of respect.





Peter

Obamacare - the hidden details

Warren Meyer has done an excellent job of breaking down the raw data on Obamacare enrollments, to reveal that it's costing us - the taxpayers of America - a whole lot more than its proponents want us to know.

As you can see, of the nearly 3.7 million people who have selected a private plan or been put in Medicaid or CHIP, fully 88% are on the government dole (subsidized or full Medicare).

The interesting new data is on the plan selection breakdown between subsidized and un-subsidized.   This leads to an interesting finding that is a bit non-obvious from the report itself because the data is spread all over the report.  But lets look at conversion of applicants to plan selection based on whether folks are subsidized or subsidized.

For the 2,383,131 applicants who find they are no going to be subsidized, only 436,603 have selected a plan, for a 18% conversion rate

For the 2,756,667 applicants who find they will get supported by the taxpayer, 1,646,237 selected a plan, far a 60% conversion rate.

In essence, applicants are more than 3 times more likely to sign up if they are getting taxpayer money.  The exchanges are not selling health care, they are selling subsidies.  People sign up, check to see if they have money coming, and go away if they don't and stay if they do.

There's more at the link, including a diagram showing the progress of visitors to the Obamacare Web site as they move through the application process.  Bold underlined text above is my emphasis.

I understand it was intended for many more young and financially self-sufficient people to enroll in Obamacare, thereby subsidizing those who couldn't afford the premiums.  Gee, that's working well, isn't it?

Peter

Political Ideology versus objectivity

A classic example of political ideology versus objective analysis is playing out over a book about California.  'Taxifornia' is described as follows on its Amazon.com page:

In Taxifornia, James V. Lacy identifies and examines the true causes of California’s decline.

Californians are victims of the heaviest taxation in all of America, and those high taxes are now steadily destroying the state’s economy.  Tax-and-spend liberals who are in control have created a state that taxes and regulates more than any other state in the country, and have engineered a rotting economy with among the highest unemployment of any state in the nation.  Its high taxes hurt all Californians by making the state too expensive for business to turn profitable.  Business flight has become endemic.  California’s over-regulation of businesses depresses employment in the state.  A widely accepted tenet among liberal politicians, political science academics, and the media in California is that no development at all is a good thing.

It is a state that educates the worst but pays the best to its teachers, a place that is widely considered by most CEOs to be one of the worst locations in the nation to run a business, where local governments are going bankrupt, and where an out-of-control public employee pay and pension system threatens to gobble up and divert almost all available taxpayer resources to a point where cities and counties simply cannot afford to pay for police, fire, or road maintenance anymore.

California has an outdated environmental policy and an energy policy that makes the state almost totally dependent on one source of power:  imported natural gas.  It is a place where the public employee union worker who controls traffic in the Bay Area Rapid Transit District maintenance yard in poverty-stricken and near bankrupt Oakland is paid more annually than the Chief Justice of the United States Supreme Court in Washington, D.C.

There's more at the link.

The first thing I noticed is that the author blames California's woes on 'tax-and-spend liberals'.  This is true prima facie, but it's not the entire truth.  Both major political parties in California have advanced a tax-and-spend agenda.  Sure, the present party in power there (Democratic) must carry the can for present policies;  but don't forget that the previous governor (a Republican) was equally guilty of spendthrift behavior, and Republican elected representatives have voted for similar policies on numerous occasions.  Even if in recent years they appear to have repented of such behavior, I've no doubt that if they ever find themselves in power again, the temptation to spend other people's money to shore up their political fortunes will prove as irresistible to them as it has to the Democrats.

The second thing I noticed is the comments from readers (either real or purported) of the book.  Of the ten reviews posted at the time of writing, six are five-star;  four are one-star.  There are no two-, three- or four-star reviews at all.  A clearer indication of partisan perspective couldn't be desired.  Those damning the book with one-star reviews clearly approve of the current California government and administration.  They're not assessing the book on its merits at all - only on the basis of their preconceived value judgments.  Those praising it don't appear (on the basis of their comments) to be as dogmatically prejudiced, but there's doubtless an element of that at work too.

I've no doubt that the author's thesis about California being a 'failed state' in many ways is accurate.  We've discussed the subject in these pages on more than one occasion.  However, I wish he weren't so quick to blame liberalism alone.  Let's not forget that the real boom in US government deficit spending began during the presidency of (Republican) Ronald Reagan, and subsequent administrations, both federal and state, have taken their cue from him:

California's merely the best illustration (for now) of what happens when the philosophies and politics of 'big government', the 'welfare state' and statism become dominant.  It's a warning sign, and a prediction of how this entire country will look unless we change course now.  Liberalism is merely one symptom of those larger problems, which are not exclusive to left-wing or progressive views.  Just witness the actions of the Republican-controlled Congress in passing the latest omnibus spending bill, with its still-outrageous spending levels, to see what I mean.

Neither Republicans nor Democrats have the answer to our present situation.  Both parties are in it for what they can get out of it - not for us, and not to look after our interests.  The sooner more Americans wake up and realize that fact, and do something about it, the better.

Peter

The mystery of central banks' gold reserves

For several years there have been allegations that central banks (including those of all First World nations) have been hiding the fact that they've sold off their gold reserves, or treated them as the foundation for gold futures sales that may have resulted in each physical ounce of gold being pledged 'on paper' more than once - perhaps many times more than once.

Grant Williams has put together the rumors from the 1990's onwards, and linked them to known facts about related companies, banks and commercial dealings (link is to an Adobe Acrobat document in .PDF format).  He also examines the German Bundesbank's attempts to repatriate its gold from New York - attempts that have to date been singularly slow and relatively unsuccessful, almost as if the Federal Reserve didn't have the gold available to return to them.

To add to the fun and games, Zero Hedge has a long article examining the Bundesbank's dilemma in the wider context of gold reserves.  It suggests that there may be a lot going on behind a veil of secrecy, and offers suggestions as to what that might be.  It's speculation, certainly, but there are solid grounds for a great deal of that speculation.

When one puts these articles into the context of central banks' rampant money-printing, a.k.a. 'Quantitative Easing', over the past few years, one has to ask:

• What if there's little or nothing in the way of hard assets backing up the 'full faith and credit' of those central banks, or the nations they represent?
• What if the 'fiat currency' they issue with such gay abandon is all they have in the way of assets?
• Is this why China is importing as much physical gold as it possibly can, even as it holds the world's largest reserves of foreign currency?  (It's been suggested that China may hold as many as 7,000 tons of gold by now - many times more than any other nation.)
• Has China realized that those piles of 'fiat currency' - and, therefore, its huge foreign currency reserves - may be worth only as much as the paper on which they're printed?

That's all speculation, of course . . . but with that much smoke around, I get the distinct impression there's a bloody great fire behind it.  Fellow blogger Silicon Graybeard appears to share my impression, judging by two articles (very good ones) he's posted over the past couple of days.  The present situation makes me wish I had enough in the way of reserves to buy some physical gold of my own, because if all this speculation is true, there's a 'fiat currency' meltdown brewing of seismic proportions.  Go read all four of the linked articles for yourself, and make up your own mind.

Peter

Technology and the militarization of America

After providing a link in last night's Around The Blogs segment to Vox Day, who pointed out that the USA is effectively already a police state, I wanted to research the subject a little more, out of personal interest.  I came across this article at TechCrunch that seems ominously appropriate.  Here are a few excerpts.

Over the last decade, pretty much every arm of American authority invoked “homeland security” as an excuse to acquire boatloads of new technology, and used it to help expand their power and authority to unprecedented levels. There is nothing at all exceptional about the NSA’s massive overreach. It was only keeping up with the Joneses — FBI, DEA, Border Patrol, police forces everywhere — who have all been busy doing exactly the same thing.

. . .

And it’s not just equipment. It’s ethos and attitude. Police across America have increasingly begun to apply the military doctrine of using overwhelming force whenever possible. So SWAT raids rose over two decades from 3,000 a year to 50,000, including SWAT raids on illegal gambling, underage drinking, and Tibetan monks who overstayed their visas. Seven-year-olds are handcuffed and interrogated for hours over a missing five dollars (which they did not steal).

. . .

This collective power grab — I really don’t think that’s too strong a phrase — isn’t actually about security; it’s about organizations like the NSA concluding that since they can use new technology and novel legal interpretations to increase their power (and their budgets), therefore it’s imperative that they do.

. . .

The anthropic law of bureaucracies dictates that the ones which thrive are the ones which make self-perpetuation their first priority. And so now the police, and just about every American agency you care to name, and the contractors who supply them — call them the “security-industrial complex” — are implicitly colluding in the business of fear. The more shadowy enemies we have, and the more dangerous they seem, the more money the security-industrial complex gets, the bigger and more powerful it becomes, and the more secrecy it can justify.

There's more at the link.  Worthwhile reading, albeit disturbing.

Peter

Has the FBI terminally discredited itself?

Investor's Business Daily thinks it has.

The FBI says it won't prosecute anyone at the IRS for its admitted targeting of the president's political foes. This just as the agency claims the law is no longer its main mission. So it's a political goon squad now.

. . .

The reality is, the acts reeked of political targeting, the most illegal of acts, a corrupt use of government power, and a worthy target of checks and balances provided by the FBI in the name of law and order.

But for some reason, the FBI has neither interviewed the Tea Party activists targeted for intrusive scrutiny, nor has it noticed anything amiss in light of the White House's rabid attacks on Tea Party activists ... And it hasn't picked up the clue from the Center for Responsive Politics showing that IRS employees donated to Obama's campaign by more than 2 to 1 over Tea Party-tied Republicans — let alone that the prosecutor chosen by the president to look into this case is a fat-cat donor to Obama.

If New Jersey Gov. Chris Christie can be criticized for a traffic jam, then the White House's attacks on political opponents are in a league with what goes on in Venezuela. That the FBI won't get involved in this and is willing to wreck its reputation for apolitical probity suggests this investigation is leading to a place the bureau would rather not go — namely, the White House.

There's more at the link.

I think that perhaps the most damaging achievement of the Obama administration has been to discredit so many agencies of the federal government by suborning them for partisan political ends.  Apart from the FBI's unconscionable conduct, consider:

• The ATF and its manifestly criminal smuggling of guns to drug cartels in Mexico, leading to the murders of at least two officers from other federal agencies;
• The use of the IRS to target political opponents of the Administration;
• The NSA scandal, which admittedly began under earlier Administrations but has been defended and continued by the present one;
• The cover-up of the Benghazi affair and other foreign 'adventures', to the very public discredit of the State Department;
• And a host of other issues.

Personally, I think that all these scandals add up to what the constitution refers to as 'high crimes and misdemeanors' . . . but I doubt whether anyone will do anything about that.  Our politicians just don't care - or, if they do, they care that it was the other party that got away with it.  They won't make too many waves, because they can hardly wait for the opportunity to get away with the same things themselves in due course.





Peter

Bureaucrats! GRRRR!

Utah Senator Mike Lee posted this picture on Facebook today, with the following caption:

Behold my display of the 2013 Federal Register. It contains over 80,000 pages of new rules, regulations, and notices all written and passed by unelected bureaucrats. The small stack of papers on top of the display are the laws passed by elected members of Congress and signed into law by the president.

Uh-huh.  Regulations enacted by often faceless and nameless bureaucrats, accountable in practice to nobody, binding on all of us.  Is it any wonder this country sinks deeper into the mire under such burdens with every passing day?





Peter

Cars, technology and privacy

It looks as if the electronics in modern vehicles may soon be snooping on us to an ever greater extent.  We spoke about this a couple of months ago.  Now Eric Peters Autos warns:

V2V is the next technological Great Leap Forward – the critical element necessary to erect a nationwide grid of completely self-driving, autonomous cars. And also broadcasting and recording cars. V2V-enabled cars could  transmit  and record every detail about your trip, such as how fast you’re driving at all times (not just a “snapshot”) as well as how rapidly you accelerate and how rapidly you brake, your direction – and whether you’re in motion or stationary – to a central database. Or to whomever happens to be listening in. The potential for abuse is staggering; the diminution of our already almost nonexistent private space a certainty.

. . .

But there’s a fly in the soup – from NHTSA’s perspective: Older cars do not have the technological wherewithal to “talk” to other cars, much less be part of an autonomous grid. Nor are they set up for continuous monitoring.

And control.

What will happen to them?

In this era of Submit & Obey, of the immutable and unchallengeable Safety Cult, I expect what will happen is that a few years after V2V becomes mandatory in new cars, there will be talk – followed by action – requiring that all cars be V2v enabled or be relegated to the museum.

Or the crusher.

It will be argued that cars without V2V are unsafe – because they are independent of the grid, controlled by their drivers, not by Big Brother.

It may not even be done formally, via a law or regulation. The insurance mafia could simply add a surcharge to the policies of cars without V2V. They do this already for policies issued – that is, forced upon us – for high-performance cars (and motorcycles) making them unaffordable for most drivers and riders under 35. The same justification could be used to shove pre-V2V vehicles into the proverbial dustbin of history.

Crazy talk? The insurance mafia has been aggressively pushing in-car monitoring of policyholders’ driving habits for several years now (see here). It is something made technologically cheap and easy to do via the data recorders and onboard diagnostics systems that virtually all new cars have already. The insurance mafia has not insisted – yet – that everyone’s car be monitored. In part because the concept of monitoring still bothers enough Americans to keep it at bay. But when the government mandates it, via V2V, the insurance mafia will have what it needs to force-feed monitoring by way of surcharges for those who resist by not buying a new car ready-made with V2V GPS transmitting/recording capability.

V2V is a surge – an escalation – against older cars still under the control of their owners, whose driving is not subject to real-time, 24-7 monitoring and pre-emption.

Yes, pre-emption.

As already mentioned, V2V – integrated with automatic braking/steering and so on – will enable not just crash avoidance but also driver usurpation. Your Future Car could just as easily be turned off – remotely – as it is turned on by you. This is something “law enforcement” is champing at the bit for. Ostensibly, it would mean the end of the high-speed chase. And this is how it will be sold. Once again, safety. But it will also mean your car – all our cars – could be rendered inert/immobile at any time, for any reason. And in a police state – which is what America has become, by any reasonable standard – that’s scary.

. . .

V2V will also facilitate tax-by-mile and “congestion pricing.” The former would replace anonymous, pay-as-you-go motor fuels taxes with in-car monitoring of how many miles you’ve driven, your debit account dunned accordingly (and automatically). The latter would hit you with variable-rate dunning depending on when and where you drive. Such a system is already in place in the UK. If you want to drive during certain times (rush hour) or to a certain place, you are charged a special (higher) fee as an incentive to not drive at those times or to those places.

. . .

NHTSA claims we ought not to worry; that V2V will never be abused, that our comings and goings will not be monitored, controlled and taxed.  “NHTSA has no plans to modify the current V2V system design in a way that would enable the government or private entities to track individual motor vehicles,” a NHTSA spokesman said.

No one will force out us out of cars that don’t have V2V capability.

In another time, we might well have trusted such claims. To trust such claims today is to ask too much.

Of us – by them.

The atrocities already committed against our right to privacy, to anonymity, to freedom of movement and freedom from arbitrary, unreasonable searches are too well-known to trust yet another “just trust us” from government officials.

There's more at the link.

I hope the author is wrong about the future of V2V . . . but I fear he's not.  It may turn out to be yet another manifestation of Big Brother.  The time may come when we look back on the carefree days of unmonitored driving and weep for the freedom we've lost.

For myself, the thought of buying an older pickup with low-technology electronics and fixing it up, rather than buying a modern vehicle with its 'black box' privacy-killing potential, is looking more and more attractive.  At least Big Brother can't short out a carburetor!

Peter

The failure of the 'War On Poverty'

In an article in the Wall Street Journal, Robert Rector illustrates how the government can screw up almost any program, no matter how well-intentioned.  In this case, it's the half-century-old 'War On Poverty'.  Here's an excerpt.

On Jan. 8, 1964, President Lyndon B. Johnson used his State of the Union address to announce an ambitious government undertaking. "This administration today, here and now," he thundered, "declares unconditional war on poverty in America."

. . .

The federal government currently runs more than 80 means-tested welfare programs that provide cash, food, housing, medical care and targeted social services to poor and low-income Americans. Government spent $916 billion on these programs in 2012 alone, and roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient. (That figure doesn't include Social Security or Medicare benefits.) Federal and state welfare spending, adjusted for inflation, is 16 times greater than it was in 1964. If converted to cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the U.S.

LBJ promised that the war on poverty would be an "investment" that would "return its cost manifold to the entire economy." But the country has invested $20.7 trillion in 2011 dollars over the past 50 years. What does America have to show for its investment? Apparently, almost nothing: The official poverty rate persists with little improvement.

. . .

To judge the effort, consider LBJ's original aim. He sought to give poor Americans "opportunity not doles," planning to shrink welfare dependence not expand it. In his vision, the war on poverty would strengthen poor Americans' capacity to support themselves, transforming "taxeaters" into "taxpayers." It would attack not just the symptoms of poverty but, more important, remove the causes.

By that standard, the war on poverty has been a catastrophe. The root "causes" of poverty have not shrunk but expanded as family structure disintegrated and labor-force participation among men dropped. A large segment of the population is now less capable of self-sufficiency than when the war on poverty began.

There's more at the link (the article may be behind a paywall, in which case, see here).  You can also read more at the Heritage Foundation.

This is a repellent yet fascinating illustration of how bureaucratic inertia and organizational rigidity have condemned generations of Americans to misery and hopelessness.  If we want to win the 'War On Poverty', my immediate suggestion is to remove it from government control.  That'll be a good start!

Peter