Government Power Springs Forward

Victory-Cigar-Congress-Passes-DST.jpegDaylight Savings Time (DST) is a great example of how the government is slow to deal with change (if it ever does), and pushes wasteful and ineffective policy solutions – sometimes even on a bipartisan basis.

Although DST has been with us since the dawn of the 20th Century – and traces its roots earlier in time – the current incarnation of DST began in 2007, following implementation of the Energy Policy Act of 2005. The law was passed in a largely bipartisan (85-12) vote in the Senate with more controversy arising in the House (249-183) from House Democrats who took an ideological stance that the proposed law did not go far enough to place mandates requiring energy producers to use more expensive but politically friendly renewable energy in their overall energy production mix by 2020.

The arguments we often hear in favor of DST are that it saves energy. And of course the federal government knows best how to direct the activities of individuals from a national level. Have no fear, Department of Energy (DOE) “experts” conducted a study which estimates that the policy results in a savings of 1.3 billion kilowatt-hours.

The government produces the most optimistic case for DST resulting in actual (albeit scarce) energy savings. Multiple sources across the ideological spectrum cast doubt on the effectiveness of the government’s DST policy for saving energy.DOE sheepishly acknowledges, “this might not sound like a lot.” And at least it is right on this point. The US produces more than 4,000 billion kilowatt-hours of energy on an annual basis. Meaning the nation’s DST policy puts everyone on edge for a net savings of about 0.03% of total energy produced in a year’s time. This doesn’t even amount to finding a penny on the sidewalk; it is finding about 3 hundredths of one.
DOE DST Savings
But despite the Department of Energy’s optimism produced by their “experts”, the litany of scientific studies and arguments against the effectiveness of DST changes are overwhelming.

Let us Google that for you!

Virtually all sources from the resulting search screen show no support for the widely held belief that DST results in energy savings. In fact, contrary to the DOE’s experts, another 2008 scientific study suggests that the government’s manipulation of our clocks may actually increase energy use when compared to doing nothing. The National Bureau of Economic Research issued a report demonstrating that “contrary to the policy’s intent — DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent.”

Rather than a savings of 0.03%, there appears to be a cost of about 1 percent of energy consumption. Not surprisingly, this follows another pattern from government “experts” who claimed that government control of health insurance would result in $2,500 in annual savings to the average family, when in fact, the opposite has taken place, and the average family has experienced a net cost increase of $7,500.

Apart from energy savings, the DST-imposed time changes have been associated literally with killing people. One study associates the loss of an hour sleep with additional risk for heart attacks. Another links DST to increased street crime. And another study attributes driving fatalities to drivers having to re-acclimate themselves to darker driving conditions.

Other studies have determined other, harder to quantify costs and impacts such as the expense of changing software, managing transit schedules, even hindered agricultural production. One of our favorite articles from the list we perused was by Tom Zeller at Forbes.com. His summary of the critics’ positions says it best:

“But critics of DST also argue that most energy-use analyses fail to account for a variety of potential costs associated with routine time changes. These would include everything from impacts on human health and crime rates to the costs of adjusting mass transit schedules, hindering agricultural work, and, well, putting a large segment of the population into a foul mood.”

If energy savings was the stated goal of the Energy Policy Act of 2005, the government failed miserably in its attempt. So why was the Energy Policy Act of 2005 necessary? It must have done something worthwhile. The text of the legislation tops 550 pages, so surely there is something in there that was beneficial for the public good. Right?

Of course not.

As we leaf through the legislation and associated analysis, we find that like many other laws the federal government produces, the Energy Policy Act of 2005 does little more than spend money we don’t have for questionable purposes. Questionable, but profitable – from the point of view of politicians and their lobbyist allies.

Public Citizen offers a succinct summary of the law’s winners, and what it cost in terms of political contributions to receive such generosity from the treasury.

Oil and Gas Subsidies: $6 Billion
Coal Subsidies: $9 Billion
Nuclear Power Subsidies: $12 Billion
Electric Power Company Subsidies: $1.7 Billion

All told, the estimated value of subsidies and special tax deals totals $28.7 billion from 2007 to 2015. Not a bad return on investment considering that energy industry lobbyists contributed approximately $115 million in campaign contributions from 2001 to 2005 with about 75 percent of that cash going to the political party in power at the time – Republicans.

Once again, the public was sold a bill of goods, citing a national urgency to curb energy consumption and be responsible stewards of the environment. Studies have demonstrated that rather than decreasing energy demand, DST actually increases energy usage. Additionally, the policy has been linked to inefficiency, higher costs of doing business, higher crime, even death. While many people continue to believe that they’re doing their civic duty to this end in the twice-per-annum ceremony of adjusting clocks, the only real accomplishment appears to be the government giving away money it does not have to energy producers that had already been adequately incentivized by the free market – considering the high prices of energy during this time.

Americans should take away two things from their semi-annual Daylight Savings Time ritual. First, both political parties, even one claiming to be for limited government, are more interested in growing their own power and collecting political tribute than they are in effective policy-making. The second, following from the first, is the fewer things the government is in charge of, the better off we all will be.

Photo Credit: “Victory-Cigar-Congress-Passes-DST” by United Cigar Stores Company (sponsor); artist unknown – Library of Congress, Prints & Photographs Division, WWI Posters, LC-USZC4-10663

Atlas Shrugged Part III

2014_08_08_Wallpaper_WIJGBY VAL MULLER

Atlas Shrugged Part III (Who Is John Galt?) is now out in theatres, and I’m looking forward to it.

I donated to the Atlas Shrugged Kickstarter campaign (you can even find my name on the Producer’s Wall at http://www.atlasshruggedmovie.com/kickstarter?p=19) because I think the ideas in the novel are important to share. Although I’m not sure a three-part movie can concisely deliver the ideas of the book to those who aren’t already fans, I was glad to hear it was finally being made into a movie.

For those who haven’t read the book, I wanted to share why I think Rand’s philosophy is such an important concept.

First, a bit on Ayn Rand. Rand was born in Russia in the early 1900s and moved to America in the 1920s. In Russia, her father worked hard to run and own his own business, but under Lenin, that business was confiscated. Seeing the damage done by fanaticism, including seeing thugs take over the college she was attending, Rand dedicated herself to reason above all else. Her experience in Russia allowed her to see how damaging “groupthink” can be as well as what happens when people stop being guided by reason and let other, more emotional, concerns lead them.

In her writing, Rand liked to make sure the reader got the point. That’s why her novels are so long. She had a definite idea of what she wanted her novel to be, and she was uncompromising in seeing that idea to fruition—in some ways, she is like her main characters. The problem is, this makes for a long-winded novel, the length of which intimidates most would-be readers.

I have taught The Fountainhead and Atlas Shrugged several times. The main lessons my students gather from these texts is not something I taught them—it’s something they came to on their own, and it surprised me. But they are right: They have learned that our society tends to value people’s intentions over results.

As a broad example, if a politician institutes a program with the intention of helping the poor, but that program becomes bankrupt or backfires or ends up making the people it’s trying to help too dependent or even worse off, we tend to reward that politician for wanting to help the poor—regardless of the results. On the other hand, if a business owner produces dozens of jobs—thus helping people in need of work—we still look critically at him because his intention from the start: to make money for himself. Even if the result is that consumers now have goods to purchase and people now have jobs, his intent from the start was inherently selfish, and thus we judge him as a bad person.

Our society has it backwards. We should judge results rather than intent. After all, wasn’t Hitler trying to make the world a better place (at least in his own mind)? Should we judge his intent, or the results?

In Atlas Shrugged, we see a war between government and business. The government in the book is one not dissimilar from our government today: one rooted in crony capitalism and nepotism, one that encourages the public not to think but to blindly follow emotions. The government in Atlas Shrugged, in short, over-regulates the country to (literal) death. In The Fountainhead, the media—controlled by a small group of powerful people—puts out so many pointless stories that people aren’t even able to think about what truly is important anymore. In fact, they blindly follow what they are told to think by their preferred media source. Sound familiar?

Like our government today, those in power in Atlas Shrugged pick the winners and losers. If one company is becoming too successful, the government creates new regulations that cripple that company, all in the name of giving other companies a fair chance. The result of this is that those with prowess in business—those who are able to provide quality products for low prices—are punished. Those who are unable to provide quality products for low prices are rewarded with subsidies and other protections. The end results, of course, is mediocrity that hurts everyone. Now, instead of some people having minimum wage jobs and other people living like Carnegie, Jobs, or Gates, no one has jobs. Everyone suffers and misery is shared equally.

I can’t help thinking about GM (at present, I own a Chevy, which has greatly disappointed me despite my desire to “buy American.”). The government recently subsidized the Volt through various incentives and tax credits, both for buyers and for manufacturers at each step of the process. This is an example of the government deciding on a “good intention” (electric cars). The results, however, were not what was desired. Electric cars, even today, are not very efficient. And they ignore the fact that electricity is usually produced with the same non-renewable sources electric cars are trying to avoid. Again, moving to electric cars is a good intention, but the result of government interference was not useful. The same is true for the government’s movement to produce gasoline using corn (ethanol). Remember when corn used to be so cheap at the grocery store? Not anymore. Even environmentalists have come out to say that producing gas from corn is not efficient—it costs too much energy to produce. Again, the intention was “good”—to help shed our dependency on foreign fuels. But the result was actually harmful.

Borough Market cake stall, London, England - Oct 2008

If an electric car were made by a big company with no subsidies, or a new form of gasoline were created by a private company, both businesses would probably be criticized because of their “greed” and their desire to make money. But in business, decisions must be made based on logic. Whereas the government has an “unending” supply of (tax) money and borrowed debt it can throw at pet projects, businesses need to make economic sense. In a true free-market economy, an electric car would only be produced if it could be made as a reliable car for a price people would be willing to pay.

The government can force its “customers” to buy a product or service that it creates or that it permits businesses to offer (an obvious example is the Affordable Care Act). Some health insurers quickly gave their support to the idea of government-mandated insurance because it would bring them a steady supply of customers forced into their storefronts by the threat of government fines, higher taxes, even imprisonment or men and women with guns showing up to enforce the government’s will.

As long as an insurance company met the mandatory minimum coverages of the health law, there would be customers and guaranteed revenue. In the absence of free markets and competition, businesses lack incentive to provide a better quality, more affordable product. As a result prices increase and customer satisfaction suffers. In the free market, a business earns its customers because a transaction in the free market does not take place unless both parties derive some benefit from it. With several choices and healthy competition, prices remain low over the long term and innovation brings people new and exciting products such as smart phones and smart watches.

But in Atlas Shrugged and in our world today, people complain because of the “unfairness” of businesses (those heartless, greedy capitalists!). Remember when cell phones first came out? They were quite the status symbol. Only the very wealthy could afford the brick-sized phones. It wasn’t fair to people who couldn’t afford them. But in the long run, they made things better for everyone. Now, cell phone technology has improved so that almost everyone has one. (Though the government is still messing around with the cell phone market, as with most things today).

The point Rand made in Atlas Shrugged is that people need to use common sense—logic—and not be persuaded by emotions that are often exploited to take greater control of our lives. The events in the book—which lead to starvation and freezing to death when food and fuel become scarce—seem so outlandish as to be a hyperbole. But they were based on Rand’s personal experience following the upheaval in Russia where she saw deaths from starvation and freezing as the government seized businesses in order to eliminate “unfairness.” The events Rand witnessed and used in her book illustrate the potential end result of crony capitalism and allowing the government to manipulate us and give up our freedom of choice.

She also saw the greatness that could happen when people are allowed to produce within a free market—when consumers are allowed to willingly pay for something they desire as a way of rewarding insight and punishing shoddy products. And this is the bottom line. If everyone simply used logic in everyday interaction, most bad decisions would be eradicated from the start. But in Atlas Shrugged, as in our modern culture, we transfer the responsibility to think for ourselves to media outlets with deep agendas on both sides of the spectrum, and we reward intentions rather than outcomes. In both cases, we’re just asking for trouble.

Val Muller started writing as soon as she could hold a pencil. Teacher, writer, and editor, Val pens a children’s mystery series, Corgi Capers, inspired by her growly-dog Leia and her fraidy-dog Yoda. Her supernatural chiller, Faulkner’s Apprentice, is her most recent outlet for purging her nightmares, with her young adult novels, The Man With the Crystal Ankh and The Scarred Letter, forthcoming. Her favorite novel is Orwell’s 1984, and she believes strongly in promoting freedom and celebrating individual achievement as a way of bettering the lives of all. Stalk her at www.ValMuller.com

Photo Credit:

“Borough Market cake stall, London, England” By Diliff (Own work) [CC-BY-SA-3.0 or GFDL], via Wikimedia Commons

Slavery Is Freedom?

Harry Reid Argues Government-Induced Languidness Is Freedom

The Congressional Budget Office released a report revising employment projections under the Affordable Care Act (aka Obamacare). The report was not so good for defenders of the health care law.  The CBO projects approximately 2 million full time jobs lost by 2017, due to the provisions of the law, with another 500,000 full time jobs lost by 2024.

Then-Speaker of the House Nancy Pelosi sagely remarked in 2010 that “we have to pass the bill so you can find out what is in it…”

As it turns out, what’s in there is a host of tax and regulatory provisions relating to income taxes and insurance subsidies provided by the federal government (i.e., the taxpayer) such that 2.5 million people will eventually make the decision that not working is more preferable to working.

The remarkable takeaway from the report is that it doesn’t quantify how many jobs might have been created by employers absent the tax and regulatory scheme that is Obamacare.  Instead, the report analyzes individual choices people make with respect to the level of free subsidies received from tax payers, the cost of insurance coverage, income levels, and what is available as public assistance.  The CBO proves an age-old adage that mankind generally wants what he wants, and he wants it in exchange for the least possible effort.

Perhaps competing with Nancy Pelosi for the dunce’s crown, Harry Reid is reported to have said at a meeting with the press, “We have the CBO report, which rightfully says, that people shouldn’t have job lock. If they — we live in a country where there should be free agency. People can do what they want.”

Generally we would agree, but this statement is about as dumb as they come.

Harry Reid is advocating that having a job to pay for one’s expenses represents  a kind of slavery from which one should be freed. “There should be free agency,” he says. But free agency refers to being “able to act freely without being controlled by someone else.” The good folks at Merriam-Webster even published that, maybe just for Harry!

People who make their decisions based on the coercion of government tax policy are not acting freely without being controlled by someone else.  They’re being controlled by the government and its policies. When the government makes a life of mooching mathematically valid and more profitable than a life of holding a job, three things are certain. One, the person giving up work for life on the public dole is definitely being controlled by government policy. Two, there are a healthy number of people who will take the government up on their offer. Three, someone else must pay the bill.

Is it truly freedom or slavery when a government-created policy creates a disincentive to work and favors collecting public welfare as a new career path? What about the person who faithfully maintains a job, pays his or her own bills, and pays taxes?

Is it freedom or slavery to take away the fruits of his or her labor and give them to someone who has made a conscious choice not to work and to collect tax-payer funded benefits?

wiley-reidWhat about the man who stands in front of you, and with all sincerity tells you that giving up your job in exchange for government benefits somehow sets you free? Is he showing you a tunnel to freedom and new opportunities? Or is he setting a trap for you to run at full speed into a boulder face? Is he offering you freedom? Or is he offering you slavery?

One thing is certain: it’s anything but “free agency” or “freedom.”

This…Actually Won Money…Money…Money…

The US Department of Health and Human Services and Young Invincibles teamed up to spend a sum of some thousands (we think $5,000 but it’s not clear, if you can interpret the beaucra-speak from the contest prizes rules and press release let us know) on this mess…


Even the White House joined in the fun of ripping off a pop song to try to turn it into political propaganda for an age group that so far  is largely not interested in buying into Obamacare.

Here’s why the video isn’t worth whatever price the government and its unwitting partner paid:

1. The video, which received financial compensation, makes heavy and unattributed use of a copyrighted song by Jessie J without attribution. We’re pretty sure if a Tea Party group had used a copyrighted song to illustrate a point against the Affordable Care Act, that concerted teams of IRS agents, left-wing activists, media types, lawyers, FBI swat teams, heavily armed Predator drones, even Eric Holder himself would descend on the Tea Party group to capture those involved and dispense whatever mob justice seemed appropriate at the time.

2. The video’s chorus asks you to “Forget About the Price Tag” for a program that’s been plagued with upward cost estimate revisions since the president claimed it would cost only $90 billion per year. Coming up on 5 years and 5 revisions later the current estimate stands at $2.7 trillion (3 times the president’s original figure) factored in a 10-year CBO projection. Forget about that price tag, indeed…

3. The program’s signature product website healthcare.gov cost taxpayers more than $600 million, and was nowhere near ready for prime time on the administration’s launch date of October 1 of this year. Negligence and gross mismanagement abounded, but no one has been held accountable. But forget about the price tag; we guess it “ain’t about the uh-cha-ching cha-ching.”

4. Speaking of “cha-ching cha-ching,” the $600 million the federal government blew on a non-working website still has NO payment transfer mechanism to pay insurance companies those subsidies the federal government promised. As one observer has pointed out, the Armed Forces of the United States mobilized, deployed, fought, and defeated the Axis Powers, winning World War II in less time than it took the government to develop a non-functional website.

5. In a lilting exhortation, our singer says “there’s no excuse to be uninsured.” But the law applies to all Americans. You get a government-approved health plan, or you get fined. But “just stop for a minute to think.”  Do the super-wealthy like Bill Gates, Oprah Winfrey, Mark Zuckerberg, and Warren Buffet really need to purchase individual health insurance?

6. “Keep your mind at ease and get some security.” Like the 5 million+ people who had an individual health insurance policy and have had their plans cancelled due to the Obama Administration’s implementing regulations for the Affordable Care Act? But don’t worry about the “yeah bla-bling bla-bling”!

7. “We just wanna make it more fair with affordable health caaaare.”  But having an insurance policy that has the Obama administration’s gold (or maybe even red!) star seal of approval, does NOT mean you will be getting any health caaaare. It means you have coverage and now have to find a doctor that participates with that insurance program.

8. When coverage expands? Well coverage so far has only contracted with millions of cancellation notices and the president’s extra-legal request that insurers extend policies that his law, as his administration has chosen to implement it, are barred from having…  Even as Obamacare enters maturity as a federal program, the CBO projects we will still have 30 million some uninsured Americans.  But wasn’t that close to the number of uninsured before the government seized control of the health insurance industry?

9. “Take advantage of this opportunity!” What opportunity? Insurance actuarial tables work thusly: a population or risk pool pays premiums. Premiums are used to pay for the bad things that happen to members of the risk pool. Young people in general have far fewer health care requirements–and thus many could benefit from a plan offering catastrophic coverage and socking money into a Health Savings Account, which they control, for later in life when their needs, unfortunately, are destined to change. But like Social Security, the young are paying higher premiums into a program that will pay NOW for sicker people and will not have enough future money coming in to pay for the young when they advance in age and require more costly care.

10. “Why is everyone so oblivious?” Well, many aren’t. A recent poll suggests that only 1 in 4 young people (the target of the video) plan to sign up for “Obamacare,” suggesting that at least the remaining 3 out of 4 aren’t so oblivious and can do the simple math above and see that the program is not a good deal for them. It’s too bad we can’t count the video author among the un-oblivious.

11. “I know we’re in our prime. About time we opened our eyes.” Agreed!

We think the video’s author, Erin McDonald, could have gotten more benefit and closer to the truth if she had stuck with words from the original song:

“Seems like everybody’s got a price” (Like the Louisiana Purchase–Right, Sen Landrieu?)

“…when the sale comes first, and the truth comes second” (Ain’t that the truth? Right, Pres Obama? And your close to 40 recorded promises of “if you like your doctor/health plan you can keep your doctor/health plan.”

“It’s not about the money, money, money//We don’t need your money, money, money.” While Obamacare is precisely about the money, money, money, we’d much prefer a government that espoused this idea!

“Money can’t buy us happiness//can we all slow down and enjoy right now.” This sounds an awful lot like freedom to us. If government would stop worrying about what you and I do with our money and stop trying to steal it to buy votes, corruption, and political power, perhaps we could all just “make the world dance.”

Health Law Disproves Obama’s Rejection of “The Voices”

In May of this year at a commencement address, the president did his best to cast dispersions on his critics who say that government is too big and that tyranny lurks around the corner. The “voices” of criticism need to be rejected. Rejected because they have no validity. “Voices” warning of tyranny need to be rejected. Rejected because there is no truth to them of course. The “voices” aren’t even deserving of names–despite the fact that millions of people believe what the “voices” warn against. Because to give the “voices” an identity humanizes them and gives some sense of legitimacy to their concerns and their cause.


The Affordable Care Act (aka “Obamacare”) provides a confirmation of what the “voices” warn against: that tyranny may indeed be around the corner. That perhaps the “voices” should not be rejected but should be heeded

Tyranny is the exercise of power by a king, despot, or government that is either cruel, arbitrary, or both.  During the Affordable Care Act legislative debates in 2009, an amendment was added to the bill that requires members of Congress and their staff to purchase health insurance plans from the exchanges.

Various news reports confirmed that over the summer, the president personally involved himself in how the law should be applied to Congress. The decision he made, via the Office of Personnel Management, was that taxpayers would pay a subsidy for senators, congressman, and their staff members.

The president has been stating since the beginning of the healthcare debate and continues to say that his signature law lowered insurance premiums for people who will buy insurance on the healthcare exchanges. So if the president and many who support the healthcare law truly believe that the rates are on their way down (by as much as 3000% the president exclaimed in one speech), then why was it so important for taxpayers to provide a subsidy to elected officials? [Of course the premiums are not going down. The promised savings are turning out to actually be an increased cost.]

Why does Congress deserve special treatment? So much so that the president made the law say what he wanted it to say with regard to subsidies for Congress. If they really wanted to raid the public treasury to pay for their healthcare costs, all they need do is pass a law to that effect. The president meanwhile exercised power he doesn’t have, to alter a law he didn’t like. It wasn’t the only aspect of the law he took it upon himself to enact–he also granted a one year delay for large businesses to comply.

Republicans recently made the argument that this exemption should also be extended to small businesses and to individuals, and be enacted as a law instead of relying on a presidential whim. But the president and his party did not want to negotiate that point.

So in effect we have the president, arbitrarily altering provisions of his own law when politically advantageous to him and offering unequal treatment to different classes of citizens. And we have Congress not living under the laws that it passes. Where are the subsidies (again, written into the law by the president and his administration–not authorized by Congress) for people who share similar income levels as Congress and their staff? Why are elected officials deserving of subsidies when the people who actually pay taxes are not?

All of which leads us to what James Madison wrote in Federalist 57:

I will add…in the situation of the House of Representatives, restraining them from oppressive measures, that they can make no law which will not have its full operation on themselves and their friends, as well as on the great mass of the society. This has always been deemed one of the strongest bonds by which human policy can connect the rulers and the people together. It creates between them that communion of interests and sympathy of sentiments, of which few governments have furnished examples; but without which every government degenerates into tyranny. If it be asked, what is to restrain the House of Representatives from making legal discriminations in favor of themselves and a particular class of the society? I answer: the genius of the whole system; the nature of just and constitutional laws; and above all, the vigilant and manly spirit which actuates the people of America — a spirit which nourishes freedom, and in return is nourished by it.

If this spirit shall ever be so far debased as to tolerate a law not obligatory on the legislature, as well as on the people, the people will be prepared to tolerate any thing but liberty.

In the health care law, we have a law the congress did not have the constitutional authority to enact, a law the president had no authority to sign, and a law the supreme court had no authority to uphold as a tax.

It is up to the people to vote out those political actors who promote themselves above the constitution and the rule of law. It is up to us to insist that politicians and people in government live by the same laws that they require the rest of us to live by.

Voters must consider whether to elect politicians who will repeal the Affordable Care Act or not. But regardless of that decision, the only acceptable outcome is for Obamacare to be applied to all three branches of government. The president, all members of congress, the justices of the supreme court and their families should all get the same opportunity as the rest of us to log into the non-functioning healthcare.gov website and begin the tedious process of selecting an insurance provider or preparing to be guilty of not complying with the law and paying a fine. Without raiding taxpayer’s wallets for subsidies for themselves.

“That Government of the People, by the People, for the People, Shall Not Perish from the Earth”

Seven and a half score (150) years ago, Abraham Lincoln delivered his Gettysburg Address, commemorating the Battle of Gettysburg in the American Civil War.

He closed his speech by saying:

“It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.”

Fast forward from 1863 to 2013 and consider a Fox News Poll released yesterday 10/3. The last question of the poll is disheartening: “In the United States, the people are supposed to be in charge of the government. What do you think is happening today?”  Eighty-eight percent of those polled said “the government is in charge of the people.” Eight percent said the people are in charge of the government.

Set aside any passions you may have for the new healthcare law or the government shutdown for a moment and consider where “We the People” currently stand in our relationship with our federal government:

-It openly admits, in glaring contrast to the guarantees of the Fourth Amendment of Constitution, to a domestic spying program, with surveillance of American citizens’ web-browsing, email, and telephone calls.

-It has mortgaged the future of young Americans, amassing $17 TRILLION in debt and another $126 TRILLION in promises made to current tax payers with no realistic ability to pay them.

-It has hoarded an arsenal of billions of rounds of ammunition–more than would be needed for 24 Iraq Wars, and refuses to provide a justification for the purpose for such purchases. (With one purchasing official advocating a race war and still on paid leave…)

-It has, via the Internal Revenue Service, engaged in active harassment, tax audits, and discrimination against persons and organizations who do not agree with the current administration’s political views and policies.

-It has engaged in armed raids on private property, using heavily armed tactical agents at civilian agencies such as the Environmental Protection Agency.

-it has enacted a complex, confiscatory, and redistributive scheme of federal taxation, spanning nearly 74,000 pages, ensuring that even honest, law-abiding citizens are guilty of some unintended offense.

-It has denied farmers operating on federally managed lands their proper allocation of water because of rabid adherence to an arbitrary environmental policy.

-It has engaged in surveillance of journalists, with a keen interest in those who do not support the current administration’s politics.

The list could go on and on and on. And as the details of the anti-constitutional Affordable Care Act become known, the government is going to assert more control than ever before over the supply and demand of medical services. To make matters worse, enforcement of the ACA will be overseen by the same agency that has a documented history of bias against the current administration’s political opponents.

All this begs the original question from the poll: Should the government be in charge of its citizens, or should the citizens be in charge of the government? Are Americans citizens, or are they subjects ruled by their betters from a dysfunctional and corrupt capital?

Reading the Declaration of Independence and the Constitution, we know that the United States federal government was established for one purpose:

(Declaration of Independence): We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

(US Constitution): We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

It is time to remind government of their purpose. By calling, tweeting, “Facebooking”, and writing to your elected officials at all levels, by holding them accountable with your votes, and by speaking out against government injustice, we the people must retake our birthright of freedom and ensure that it is the government who works for us, and not we who work for them.

John Quincy Adams once remarked, “Posterity: you will never know how much it has cost my generation to preserve your freedom. I hope you will make good use of it.” And so we must. We must make good use of our freedom. We must do our part now to ensure “that government of the people, by the people, and for the people shall not perish from the earth.”

US Senate Says “Presto” And Free Money Appears!

Senate Proposed Marketplace “Fairness” Act Limits Personal Freedom, Choice

Freedom Forge Press

Yesterday the US Senate approved its version of the “Marketplace Fairness Act.” The proposed law seeks to require online retailers to collect and pay sales taxes to state and local jurisdictions. On the face of it, it seems like a good idea. After all, shouldn’t individuals buying goods across state lines have to pay sales tax? It’s only fair because if they went to their local store they would have to pay sales tax. Right? People who rudely seek a deal across state lines rob schools, police, and firefighters of their state and local tax funding.

Enter Senators Mike Enzi (R-Wyoming), Lamar Alexander (R-Tennessee), Dick Durban (D-Illinois), and Heidi Heitkamp (D-North Dakota) with the “Marketplace Fairness Act,” which should be renamed the “Free Money from Thin Air Act.”

In the world before the bill, retailers did not have to collect and pay sales taxes on goods sold online to out of state customers. That is, unless, and we are over simplifying here, a) the seller had a physical location in the same state as the buyer; or b) the seller’s state had an agreement with the buyer’s state that would require sales taxes to be collected and paid to the buyer’s state.

The National Conference of State Legislatures (NCSL) is one group lobbying Congress in favor of the law.  According to the NCSL, states lost an estimated $23.3 billion in 2012 alone from their inability to collect taxes on online and out-of-state purchases. $11.4 billion of that figure is estimated to be lost from an inability to tax online sales. To make up for lost revenue, many states passed “sales and use” tax filing requirements. When filing state tax returns, residents would have to report on the amount of goods and services they purchased from outside their home state and pay their state’s sales tax. That attempt was about as successful as starting a fire with two wet sticks.

As a solution, states could opt to step up enforcement on their own residents who were not paying the sales and use taxes.  But we can only imagine how well the voting public would reward their politicians for dumping this increased tax bill on their laps. Plan B would be to impose the tax collection requirements on the seller of the goods and services. This is a more attractive option for politicians because the out of state sellers often have no local representation and no ability to hold politicians accountable for their actions. The only problem to date has been that if the seller resides in another state it is well outside the reach of the clutches of the home state’s taxing agency thanks a Supreme Court ruling that said such taxation was not constitutional unless authorized by Congress,

Enter the Senate with its “Free Money from Thin Air Act,” which if passed by the House of Representatives and signed by the president would provide the very authorization needed to overrule the Supreme Court and permit states to levy taxes on out of state businesses.

And it is only out of fairness (the bill’s name is the Marketplace FairnessAct didn’t you know?!) that states are requiring out of state Internet sellers collect and pay the same taxes as their in-state competitors. The politicians say it’s very unfair for the “bricks and mortar” store to have to inconvenience their customers by collecting taxes when the buyer can order the same item from an out of state online seller and avoid the sales tax. This argument completely overlooks the problem of shipping costs from the out of state seller’s point of view. Many customers have come to expect free shipping from online retailers. So adding a local sales tax on top of a shipping cost will place the online out of state store at a disadvantage. Where is the “fairness” now?

More than once, advocates of the law say, it’s not a new tax, it’s a “due” tax. But if the tax bill hasn’t been collected in the past, it seems like the Senate is expecting the $23 billion to materialize out of thin air–with no impact to consumers. If the issue is state budget pressures, one solution could be to stop dumping unfunded mandates (e.g., Obamacare) onto state budgets. This would relieve the pressure from state budgets without expecting consumers to fork over another $23 billion in “taxes due.”

Of course there’s no reasonable way to comply with the law without some complex tax accounting software. This may explain why Amazon.com made a sudden U-turn from its vigorous opposition to applying state and local taxes to its sales and now supports the law. Trying to find the answer to this reversal and new found friend for politicians doesn’t require much sleuthing. Amazon isn’t looking for tax fairness, it’s looking for customers. Amazon’s convenient new Tax Collection Services offers online merchants a convenient 3% fee for figuring out all that tax mess.  Three percent of $11.4 billion is likely a rich enough potential customer base to come out in support of the new taxing measure.

As usual, Congress, and in this case Democrats and several Republicans in the Senate show an abysmal intelligence of how commerce works outside of their DC dreamland. A few oversights that the Senate made:

1. Complexity. Suddenly, online retailers would be required to have a working knowledge of nearly 9,600 state and local tax laws and regulations affecting everything from different tax rates for different goods and whether certain items are exempted from sales taxes.

2. Enforcement. The bill authorizes state taxing authorities to target online retailers with audits to verify compliance. Businesses simply do not have the financial resources to put into defending and answering auditor’s questions from a variety of taxing authorities.  Not to mention that responding to audits takes them away from much more efficient uses of their time, like running their businesses. The Senate was generous to limit the audits to one from each state. (The Government speak looks like this: “single audit of a remote seller for all State and local taxing jurisdictions within that State”)

3. Ambiguity over what a “State” means. Most people grew up (at least those who were in school since 1959) understanding there are 50 states. This bill extends the “state” definition to include the District of Columbia, Puerto Rico, Guam, American Samoa, US Virgin Islands, Northern Mariana Islands, and “and any other territory or possession of the United States.”

4. Native American Tribes recognized as state taxing authorities. “And any tribal organization (as defined in 18 section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)).” There are 566 such tribal organizations.

5. What does an “audit” mean. State taxing authorities–to include the 550 new states the Senate found–can engage in all kinds of harassment of businesses without initiating a formal audit.

The bill introduced by Sen. Enzi was supposed to limit a small business’s risk of visits from state tax auditors to one per state. But with final bill markup, a small business is potentially at risk of more than 600 audits with the expanded definition of what a “state taxing authority” means.

The Wall Street Journal reports asking Senator Enzi’s office for clarification on the above issue. When the answer (today!) was that the Senator was still trying to figure out the answer when the bill was passed last night reminds us of the “have to pass the bill in order to find out what’s in it” stupidity started by then Speaker of the House Nancy Pelosi when referring to ambiguity in the Affordable Care Act.

The proposed law serves as another example of Washington ignorance of the private economy. It also illustrates the politicians’ ongoing search for free money at the expense of the freedom of small business owners who operate across state lines. While the search goes ever on and on, 69 Senators waved a magic wand and expected “free money” to come flying out of a magician’s hat. Sixty-nine Senators want you the taxpayer to believe their illusion that they’ve found a cost-free way to fund state and local budgets without harming consumers–ignoring the fact that the money will come from somewhere.

These politicians think they’ve done their part to spread the pain of state and local sales tax in a way that makes the process “more fair” for brick and mortar and online retailers. But they’ve failed to consider a more reasonable alternative–that instead of simply spreading around the tax pain, they could have acted to reduce or eliminate the tax pain by eliminating wasteful spending, ending duplicate government programs, and pretending that unfunded federal mandates such as education, Obamacare, and environmental regulations magically fund themselves

Government Pays Hospitals to Let Patients Die?

UK-based The Daily Telegraph printed a story illustrating one of the dangers of socialized medicine. Based on a Freedom of Information Act request, the report demonstrates financial incentives were paid to National Health Service (NHS) hospitals to employ a controversial treatment, called Liverpool Care Pathway, for patients believed to be dying. The treatment can involve withholding diagnostic tests and “nonessential” treatments. In some cases “can involve the removal of hydration and nutrition from dying patients.”

In a sample, NHS hospitals were paid at least an equivalent of $20 million (£12.4 million), and potentially in excess of $32 million (£20 million) as an incentive for putting patients on the “treatment” course. As the debate over government’s proper role in healthcare in the US continues, this example from “across the pond” shows us exactly why Americans should be distrustful of a greater role for government in the healthcare sector of the economy.

We’ve heard the argument before. It goes something like, “well healthcare in the UK is so much better and efficient than here because they don’t give you medical services until you really need it.” Or so the argument goes.

The fundamental flaw for the pro-government approach to health care delivery is that politicians and government bureaucrats tend to see “healthcare” as a finite resource that must be distributed as “fairly” and as equitably as possible to the voting constituencies (or an even more cynical view, campaign donating constituencies). In dessert terms, government views healthcare as a cake and its mission is to decide who will get how big of a piece.  We’ve heard ad nauseum from one presidential candidate about fairness. We’d like to point out that our founding documents, the Declaration of Independence and the Constitution, which describe the roles and powers of government does not discuss “fairness.” They do, however, mention “freedom.”

And freedom is lost in a government-controlled healthcare system. As seen in the bureaucratic machinations of the Affordable Care Act, an unelected, appointed group of bureaucrats serving on the Independent Payment Advisory Board will wield power (not subject to Congressional override) to determine anything from a list of accepted treatments to an overall “per capita funding level” in the event that the growth of medical payments exceeds targeted amounts.

Government fails to efficiently allocate resources because it is subject to political pressures. Would government mandates have lead to the creation of “minute clinics” now popping up in various pharmacies and discount stores across the US? No, of course not. Because rather than finding a way to more efficiently deliver service–and thus find a way to increase the size of the healthcare cake available to all, government is locked into its finite resource mentality of allocating scarce resources. It’s the incentive to reap the rewards of their innovation that has inspired US companies to research and develop new medical technologies–technologies that other countries benefit from (even those with socialized medicine). If the US turns to socialized medicine, who will be left with any incentive to develop new and life-saving medical innovations?

Sarah Palin is noted for coining the phrase “death panels” and was savagely criticized for it. But the reality is she’s far closer to the truth than those who attacked her for using the phrase to describe the future of government-managed care in the US. The UK health system uses a metric called “quality adjusted life years” to determine if a disabled or elderly patient will be eligible for various treatments. One of President Obama’s healthcare advisers, Ezekiel Emanual, is noted for his contributions to the Complete Lives System, which evaluates a patient’s future overall value to society in decisions of allocating healthcare resources.

Which leads us to our conclusion. If government is permitted to decide what treatments are available to certain patients, healthcare in the US becomes an entirely new proposition, not unlike the relationship many people have with their cars. When a car needs a new transmission or another expensive repair, many owners (excepting true car lovers!) either resort to a do-it-yourself option or often weigh the cost of a repair against how many useful years a car “realistically” has left. If the fix is determined to be more expensive than its worth, the car owner evaluates trade-ins or how to finance a new car.

This is the undeniable reality of government-managed care that we see coming via “Obamacare.” Government management of the healthcare system chases political rewards rather than economic ones. If a company finds a low cost and profitable way to deliver care via a minute clinic, patients win by finding a low cost provider, and the company wins by earning profits. But instead of engaging in this market-based behavior, the UK government established financial rewards to ease a patient’s passing and allocate scarce healthcare dollars to other areas. It kind of reminds us of another group, also from the UK:

(Warning: Strong Language at close of clip, but very funny!)