Coyote Blog

Apparently, conservative Republicans are gearing up for a big Congressional push on "border security", hoping to decouple it from any discussion of immigration liberalization.

I know from my email and comments that many of my readers disagree with my stand for open immigration.  Reasonable people can disagree, but the hypocrisy of the "border security" and its linking to the war on terror really set me on edge.

If you are a "border security" supporter, then say what you mean -- that you want to string a lot of razor wire and enlist the US Army to secure the border from ... poor people looking for a job.  I get email every other day from the "minutemen" who triumph their brave defense of the border.  I will virtually guarantee that they have not found a single terrorist and probably have not found a single person coming over the border solely for criminal intent, and that 100% of their impact has been to set the authorities on people who are looking for work.  Yes I know that foreign born people looking for work in the US without the proper paperwork is currently illegal, but so is speeding and making a rolling stop at a stop sign  (which are, by the way, a lot more dangerous).  The question is, who is being harmed?  To be precise, the government's job is not to "secure the borders" but to "secure its citizens".  Doing so presupposes we can clearly state, "against what?"

Yeah, but what about the terrorists?  Don't make me laugh.  There are so many other, easier ways for a terrorist to get into the US that every terrorist act to date has been committed by people who came through normal border checkpoints and not across the Sonoran desert.  And I have written several times about open immigration would actually make it harder on known terrorists entering illegally, by eliminating the camouflage of other people crossing the desert for them to hide in.  And besides, every plan I have ever seen of late involves a wall along the Mexican border, but nothing along the Canadian border.  A terrorist can sneak over either just as easily, so a plan that was really aimed at terrorism would be putting walls on both borders.

I am sympathetic to the argument that you can't provide full government handouts, err, benefits to everyone who shows up at the border.  So fix the eligibility rules on government benefits, as I suggested in my plan here.

So lets be honest.  If you want border security, lets not pretend that a wall along the Mexican border  is about terrorism or security.  Its about stopping people who were not born in this country from working here.  Though I am opposed to the efforts, it is actually kind of refreshing to see nativist groups going after day labor centers.  This at least represents an honest and open statement of their intentions, that they want to prevent a certain class of people from getting work.

Update: Kerry Howley at Reason has some similar thoughts

I sense I am in the minority on this (what's new) but I just don't understand the outrage directed at the decision to let Muhammad Khatemi into the US for some speaking engagements.  I guess I am enjoying the spectacle, though, of conservatives attacking McCain-Feingold for limiting free speech and then attacking the state department for letting a former head of state (albeit a fairly crazy one) into the country to, uh, speak.

The letter says that allowing
Mr. Khatemi to visit America "undermines U.S. national security
interests with respect to Iran and the broader Middle East." It also
says permitting Mr. Khatemi's "unrestricted travel through the United
States runs contrary to U.S. priorities regarding homeland security."

Taking the first part of this objection, I suppose they are arguing that granting this person a visa is somehow a reward, and we don't want to reward Iran.  Now, I will confess that Iran sucks, but I don't get how this rewards them or sets back our cause.  Yes, if he was received in the White House or by a prominent government official, I can understand it, and I would oppose doing so.  Besides, when our former head of state Jimmy Carter goes to other countries, the trips always seem to have the opposite effect that people fear here, as he tends to hurt rather than somehow advance his home country's interests every time.

As to the second part, I could understand it if someone had a legitimate concern that this was a terrorist leader and he would be spending his time visiting and organizing terrorist cells, but I have not seen anyone make that claim.  Besides, if I was in the FBI, I would love it if he was here to do that, and would follow him all over the place.  The CIA and FBI often leave known agents in place, because it is much easier to stay on top of the person you know about than the person you don't.  A high profile visit by Khatemi should be the least of our security concerns.

This just strikes me as one of those silly political loyalty tests that Democrats seem to like to conduct on domestic policy and Republicans conduct on foreign policy.  If you let this guy in, you are branded as a supporter of terrorism and fascism and whatever else. 

As I said just two days ago:

I am constantly irritated by efforts to ban a certain speaker from
speaking or to drown out their message with taunts and chanting.  If
you think someone is advocating something so terrible - let him talk.
If you are right in your judgment, their speech will likely rally
people to your side in opposition.  As I like to tell students who want
to ban speakers from campus -- Hitler told everyone exactly what he was
going to do if people had bothered to pay attention.

By the way, in explanation of the title of this post, I was reacting to something quoted from Rick Santorum.  Now, I often hesitate to react to comments by Santorum, because, like Howard Dean and a few others, he is sort of a human walking straw man.  But here goes:

On it, Mr. Santorum, who
has cut his deficit against his Senate challenger in Pennsylvania to
single digits, wrote that he should be granted a visa only if Iran
allows their people to hear "free American voices."

Mr. Santorum wrote: "We should insist, at a minimum, that the
Iranian people can hear free American voices. Iran is frightened of
freedom. They are jamming our radio and television broadcasts and
tearing down television satellite dishes in all the major cities of the
country. It seems only fair that we be able to speak to the Iranians
suffering under a regime of which Muhammad Khatemi is an integral part."

So now are we going to allow people free speech only if their country does so in a bilateral manner?  All you Americans of North Korean, Chinese, Iranian, Saudi Arabian, Venezuelan, etc. decent, Beware!   This logic betrays a theory of government that rights don't extend from the fact of our existence, but are concessions granted by the government.  By this logic, people have free speech only as long as the government allows it, and the government has the right to trade away an individual's free speech as a part of a negotiation.    

Kevin Drum takes the following statistic:

As a result, wages and salaries no longer make up the smallest share of
the gross domestic product since World War II. They accounted for 46.1
percent of all economic output in the second quarter, down from a high
of 53.6 percent in 1970 but up from 45.4 percent in the spring of 2005.

And declares it to be a bad thing.  He doesn't really explain, but as a frequent reader of his site I can guess his issue is that he interprets this statement as a sign of the weakening fortunes of the American wage earner.

Isn't it really dangerous to leap to such a conclusion?  I can think of a number of perfectly innocuous, even positive trends that would cause such a shift:

• Aging of population means more people retirement age who take their income in form of dividends, investment returns, pensions, social security, etc., none of which are included in "wages"
• Ownership of investment assets, and thus income from these assets, has spread from just the rich to the middle class, meaning most people get more of a share of their personal income from investments and asset (e.g. house) appreciation
• Entrepreneurship rates are way up since 1970.  This means many more people, particularly in the middle class, have given up working for someone else for a wage and now work for themselves for a business profit.

I know Drum wants to interpret it as a "the poor are poor because the rich take all the money" zero sum game.  Anyone know what is really going on behind these numbers?

I have written a number of times that one of the problems with the Katrina aftermath was not that the federal government did too little, but that they try to do too much.  For example:

While turning down offers to help, when everyone agrees not enough
is being done, may seem unthinkable, these are actually predictable
outcomes from a [government] bureaucracy of technocrats.  Technocrats value process
over results, order and predictability over achievement.  More
important than having problems fixed is having an ordered process,
having everything and everyone under control.  In this context, you can
imagine their revulsion at the thought of having private citizens
running around on their own in the disaster area trying to help
people.  We don't know where they are!  We don't know what they are
doing!  They are not part of our process!  Its too chaotic! Its not
under control!

Nearly everyone who is in government has a technocratic impulse -
after all, if they believed that bottom up efforts by private citizens
working on their own was the way to get things done, they would not be
in government trying to override those efforts.  But most emergency
organizations are off the scale in this regard.  99% of their time,
they don't actually have an emergency to deal with - they are
planning.  They are creating elaborate logistics plans and procedures
and deployment plans.  Planners, rather than people of action,
gravitate to these organizations.  So, once a disaster really hits, the
planners run around in circles, hit by the dual problem of 1) their
beautiful plans are now obsolete, since any good general can tell you
that no plan ever survives first contact with the enemy and 2) they are
by nature still planners, trying to get order and process underway and
create a new updated plan, rather than just getting every possible
resource out there fixing the dang problem.

Kerry Howley in Reason's Hit and Run discusses a similar problem in Southeast Asia in the aftermath of the deadly Tsunami:

A year and a half after the deadliest tsunami in recorded history, a
pan-Asian warning system seems about as likely as, say, competent
airport security stateside. So Sri Lankans have poured donations into
DIY monitoring stations, using the Web and volunteers to watch for quakes...

How do officials react to the exciting new world of distributed warning technology?

But the government does not want ad-hoc tsunami warning centres handing out advice to local communities.

"Only the Met Department is authorised to give tsunami warnings and
evacuation orders. They cannot do it. It is illegal. That creates
unnecessary panic," Darmaratne said.

Just as in the Katrina aftermath, the government answer is that we would rather have nothing happen than positive efforts occur that we don't control (or take credit for).

I'm not really into all that crime drama and true crime stuff.  I have not watched a singled episode of either CSI:Whatever or America's Most Wanted.  I don't even know what the whole Scott Peterson thing was about.  But from 1996 to 1999, I lived in Boulder, Colorado.  And for much of that time, the murder of JonBenet Ramsey dominated the news.  You may think you got tired of hearing about it, but in Boulder we lived in it like a fish lives in water.  There was no escaping it.  One could become an expert on the case just by osmosis.  The local paper seemed to have a whole section dedicated to the case.  The US could have invaded a small nation in Asia and I would have missed it in those years.

That being said, I can't believe this guy they arrested in Thailand did it.  Or at least did it alone.  There is just too much evidence in the case that if the murderer was not one of the parents, it at least had to be someone very close to the family.   I won't bore you with specifics:  If you don't know it all by heart, you certainly don't want to hear it from me.  But someone will somehow have to explain all the ransom note stuff.  Someone who knew JonBenet would have an incentive to fake up the ransom note as a way to create a motive for the killing that diverted police attention away from people close to the child (who are always the police's first suspects).  But why would a mysterious third party feel such a need, and how did the ransom demand exactly match the amount of Mr. Ramsey's recent bonus check?  And if the Ramseys are entirely innocent, they have a lot of explaining to do about why they did absolutely everything they could to impede the investigation into the daughter's death.   Already his story is breaking down.  I guess the guy could conceivably be involved but in that case expect the story to be bizarre.

Update: In searching for news on this case, I found this insightful analysis of her murder based on astrology:

This opposition squares another opposition: the
opposition between the Sun and the Moon. The Sun often represents the
father in a birthchart
and the Moon the mother, and here it appears that the father was the
more nurturing parent and the mother was more dominant. Jonbenet's Moon
conjuncts the Midheaven, or cusp of the tenth house of career and
public life, showing Patsy Ramsey (Moon) was instrumental in Jonbenet's
young stage life (having herself been a beauty queen). The Sun, or the
father, is conjunct the cusp of the fourth house of the home and
Jonbenet may have been close to her father, but the square of both Mars
and Pluto to both the father and mother archetypes (Sun and Moon) shows
that there was very little safety in the relationship with either
parent. Pluto in particular, when in challenging aspect to the Sun (the
essential Spirit) and the Moon (emotional security and safety), can be
deeply frightening and there is a sense that the parents, and life
itself, are dangerous.

LOL, this is only a short taste of a much longer analysis.

For those who, like me, have trouble decoding why certain SCOTUS justices make the rulings that they do, Richard Epstein propounds an interesting theory in the WSJ ($) today.  He says that you can't relay on traditional conservative or liberal monikers to predict when a justice will back an expansion of government and when she/he will rule to reign it in.

In principle, it would nice if both sides of the
ideological spectrum displayed a sound and consistent position on
statutory construction. Unfortunately, each bloc is opportunistic. The
litmus test for this erratic behavior boils down to a factor not found
in any statute: trust.

The court's two wings share one trait: They defer only
to the government officials they trust. Otherwise, they read a statute
carefully to rein in the authority of officials they don't trust. The
two factions don't differ in their philosophy of language, or in their
on-again, off-again adherence to the rule of law. Rather, the court's
liberal wing profoundly distrusts this president, but has great
confidence in the domestic administrative agencies that regulate
matters such as the environment. The conservative wing of the court
flips over. It willingly defers to the president on national security
issues while looking askance at expansionist tendencies of the
administrative agencies.

This feels as right as any theory I have read of late.  And I certainly can get behind this:

Our Constitution starts out with a presumption of distrust of all
government actors, which is why it drew a sharp line between the
legislative and executive branches. We can argue until the cows come
home whether national security or environmental protection presents the
greater threat of executive or administrative misuse. But that ranking
really doesn't matter, because there is no reason why the Supreme Court
has to defer to overaggressive public officials in either context.
Justice Stevens rightly chastised the president for flouting the rule
of law in Hamdan. But he was tone deaf on the easier question
of statutory construction when blessing the Corps' extravagant reading
of the statute in Rapanos.

More than any subject on Coyote Blog, my immigration posts have engendered more disapproving comments than anything else I have written.  I won't repeat my position except to say that I don't care if immigration is currently illegal, because my point is that it should be legal.  In short, my stance has been that our rights do not flow from the government but from our basic humanity, and therefore activities like association, employment decision-making, and property purchase should not be contingent on citizenship.  Its one of those arguments where I wish many on my side of the argument would shut up -- If the best argument you can muster for immigration is 'who will pick the lettuce', you are not helping very much. 

For the first 150 years of this country's history, our country was basically wide-open to immigration.  Sure, there were those opposed (the riots in NYC in the 19th century come to mind) but the opposition was confined mainly to xenophobes and those whose job skills were so minimal that unskilled immigrants who could not speak English were perceived as a threat.   It was only the redistributionist socialism-lite of the New Deal and later the Great Society that began to make unfettered immigration unpopular with a majority of Americans, who rightly did not wish to see the world's poor migrate to the US seeking an indolent life of living off of government handouts.

But, as Congress debates a series of immigration plans that make not sense and don't seem internally consistent, I will propose my own.  I hope that this plan will appeal to those who to date have opposed immigration because of the government handout problem.  I am sure it will continue to be unappealing to those who fear competition in the job market or who don't like to be near people who don't speak English very well.  This is an elaboration of the plan from this post:

1. Anyone may enter or reside in the US. The government may prevent entry of a very short list of terrorists and criminals at the border, but everyone else is welcome to come and stay as long as they want for whatever reason.  Anyone may buy property in the US, regardless or citizenship or residency.  Anyone in the US may trade with anyone in the world on the same terms they trade with their next door neighbor.
2. The US government is obligated to protect the individual rights, particularly those in the Bill of Rights, of all people physically present in our borders, citizen or not.  Anyone, regardless of citizenship status, may buy property, own a business, or seek employment in the United States without any legal distinction vs. US "citizens"
3. Certain government functions, including voting and holding office, may require formal "citizenship".  Citizenship should be easier to achieve, based mainly on some minimum residency period, and can be denied after this residency only for a few limited reasons (e.g. convicted of a felony).  The government may set no quotas or numerical limits on new citizenships.
4. All people present in the US pay the same taxes in the same way.  A non-citizen or even a short term visitor pays sales taxes on purchases and income taxes on income earned while present in the US just like anyone else.  Immigrants will pay property taxes just like long-term residents, either directly or via their rent payments.
5. Pure government handouts, like Welfare, food stamps, the EITC, farm subsidies, and public housing, will only be available to those with full US citizenship.  Vagrancy and squatting on public or private lands without permission will not be tolerated.
6. Most government services and fee-based activities, including emergency services, public education, transportation, access to public recreation, etc. will be open to all people within the US borders, regardless of citizenship status, assuming relevant fees are paid.
7. Social Security is a tough beast to classify - I would put it in the "Citizen" category as currently structured (but would gladly put it in the "available to everyone" category if SS could be restructured to better match contributions with benefits, as in a private account system).  But, as currently configured, I would propose that only citizens can accrue and receive SS benefits.  To equalize the system, the nearly 8% employee and 8% employer social security contributions will still be paid by non-citizens working in the US, but these funds can be distributed differently.  I would suggest the funds be split 50/50 between state and local governments to offset any disproportionate use of services by new immigrants.  The federal portion could go towards social security solvency, while the state and local portion to things like schools and medical programs.

With this plan, we return to the America of our founding fathers, welcoming all immigrants who are willing to take the risk of coming here.  We would end the failed experiment of turning citizenship from a voting right into a comprehensive license that is required to work, own property, or even associate and be present within the US border.  Since immigrants today who are "illegal" pay no income or social security taxes into the system today (they do pay sales and, via rent, property tax), this plan would increase tax revenues while reducing some welfare state burdens.

I think if you asked many prospective immigrants, they would agree to this deal - no handouts, just a fair chance to make a living and a life.  However, immigrant advocacy organizations are hugely unlikely to accept this plan, as most seem today to have been co-opted by various Marxist organizations who are opposed to anyone opting out of the welfare state (it is no coincidence that the recent immigration policy protests all occurred on May Day, the traditional Soviet-Marxist holiday).

Finally, I would like to offer one thought to all those who worry about "absorbing" ten or fifteen million new immigrants.  First, I would argue that we have adopted many more immigrants than this successfully in this country's history, including my grandparents and probably yours.  Second, I would observe that as recently as the last several decades, we managed to absorb 40 million new workers quite successfully, as I wrote here:

Check this data out, from the BLS:

• In 1968, the unemployment rate was 3.8%.  22.9 million women were employed in non-farm jobs, accounting for 34% of the work force.
• In 2000, the unemployment rate was 4.0%.  62.7 million women were employed in the work force, accounting for 48% of the total
• In these years, the number of women employed increased every single year.  Even in the recession years of 1981-1983 when employment of men dropped by 2.5 million, women gained 400,000 jobs

This is phenomenal.  After years of being stay-at-home moms or whatever, women in America decided it was time to go to work.  This was roughly the equivalent of having 40,000,000 immigrants show up on our shores one day looking for work.  And you know what? The American economy found jobs for all of them, despite oil embargos and stagflation and wars and "outsourcing".

A pair of news stories has me spooked tonight.  This first is via Instapundit, and is a story of human pettiness that would be funny if the stakes were not so high:

President Chirac and three of his ministers walked out of the room
when Ernest-Antoine Seillière, the leader of the European business
lobby UNICE, punctured Gallic pride by insisting on speaking the
language of Shakespeare rather than that of Molière.

When M Seillière, who is an English-educated steel baron,
started a presentation to all 25 EU leaders, President Chirac
interrupted to ask why he was speaking in English. M Seillière
explained: "I'm going to speak in English because that is the language
of business."

Without saying another word, President Chirac, who lived in
the US as a student and speaks fluent English, walked out, followed by
his Foreign, Finance and Europe ministers, leaving the 24 other
European leaders stunned. They returned only after M Seilière had
finished speaking.

That's the silly part, but the underlying issue that was being discussed is not so silly:

In the absence of his President, M Seillière gave warning about the
dangers of the "economic nationalism" being pursued by the French
Government. The summit, aimed at restoring confidence in the future of
the EU, has been overshadowed by a row over the tide of protectionism
sweeping the continent, with Tony Blair and Angela Merkel, the German
Chancellor, cautioning about the danger of raising barriers to foreign
competition.

What has me really worried is that the US, the only vaguely consistent defender of free trade in the world for the last 60 years, is having the same discussion, initiated not so much by the economic problems in Europe but by security issues.  As I warned earlier, Congress seems ready to use the events of the Dubai ports mess and the fear of 9/11 to clamp down on foreign investment (sorry, $ required I think):

Building on their win in the Dubai ports deal, U.S.
lawmakers are moving to gain leverage over a swath of foreign
investments in the U.S., an effort that business leaders and President
Bush's aides warn could harm the U.S. economy.

In the first serious legislative move, Senate Banking
Chairman Richard Shelby (R., Ala.) released the summary of a bill
Friday that would greatly expand the array of foreign acquisitions
subject to automatic scrutiny and would require the administration to
notify lawmakers as soon as it begins to review any foreign
transaction. The bill also would require the administration to rank all
countries according to their relations with the U.S. and their support
for weapons-control deals. Approvals would then depend in part on the
ranking of a company's home country.

The administration would have to report to Congress on
why it approved or rejected any transaction, but the bill wouldn't give
lawmakers the power to veto a deal, as many critics feared.

Business groups and Bush administration officials
expressed immediate alarm over several provisions in the bill, which
Shelby aides claim has the support of other members of the Banking
Committee. In a letter to Sen. Shelby this week, seven groups
representing the nation's top banks and finance companies warned that
legislative proposals making the rounds of Congress "would threaten
job-creation prospects for the U.S. economy" and "reduce U.S. economic
growth."

Building on their win in the Dubai ports deal, U.S.
lawmakers are moving to gain leverage over a swath of foreign
investments in the U.S., an effort that business leaders and President
Bush's aides warn could harm the U.S. economy.

In the first serious legislative move, Senate Banking
Chairman Richard Shelby (R., Ala.) released the summary of a bill
Friday that would greatly expand the array of foreign acquisitions
subject to automatic scrutiny and would require the administration to
notify lawmakers as soon as it begins to review any foreign
transaction. The bill also would require the administration to rank all
countries according to their relations with the U.S. and their support
for weapons-control deals. Approvals would then depend in part on the
ranking of a company's home country....

The administration would have to report to Congress on
why it approved or rejected any transaction, but the bill wouldn't give
lawmakers the power to veto a deal, as many critics feared.

Business groups and Bush administration officials
expressed immediate alarm over several provisions in the bill, which
Shelby aides claim has the support of other members of the Banking
Committee. In a letter to Sen. Shelby this week, seven groups
representing the nation's top banks and finance companies warned that
legislative proposals making the rounds of Congress "would threaten
job-creation prospects for the U.S. economy" and "reduce U.S. economic
growth."

This sucks, particularly in the light of a president who has at best been only a luke-warm defender of free trade and who seems to have entirely misplaced his veto pen.  It is an interesting statement on how far this president has wandered from his party's traditional roots that I would greatly prefer to have his predecessor Bill Clinton in office for this fight.  Clinton was certainly a mixed blessing for us anarcho-capitalists, but he was always a strong and articulate defender of free trade, even to the extent of opposing the strong protectionist wing of his party.

In addition to the security issues involved, I have also tackled the overblown fears about trade deficits here, among other places.  For those of you in Arizona concerned about free trade, I know that Congressman Jeff Flake, one of the few remaining folks in Congress who understands free markets and small governments, shares some of these same concerns about rising protectionism.  I hope those of you in his district will continue to send him to Washington to serve us, and I would like to see where our other AZ Congresspersons stand on free trade.  I don't want to pre-judge, but this is one of those issues where I have no trust that McCain (for example) will land on the correct side of the issue.  I fear that conservatives are going to feel the need to flog the security horse right through the November elections, no matter what other principles get trampled in the process.

As a final note, I could add the current backlash against immigrants as
the third leg of this story on rising economic nationalism.  One of the
things that has surprised me the most in getting comments to this blog
is how many people who accept global free trade as right and beneficial
in turn support strong restrictions on immigration (Cafe Hayek comments on economist Robert Samuelson as one such person).
I see free trade and free immigration as having exactly the same
philosophic roots, based in the fact that our rights to trade,
associate, etc. stem from our humanity, not our citizenship.  I won't repeat my argument but you can read it here;
if you are pro-free-trade but anti-immigration, I ask that you give me
five minutes to make the case that no one else seems to want to make
today.  And even if you don't accept the philosophic similarities,
economicly open immigration and free trade are nearly identical issues,
each involving the free flow of labor, capital, and goods across
borders.  If you still can't see the similarity, here is a quick
example:  If I decide that my best sourcing decision is to subcontract
my tech support to Claude in France, I can do this equally well by
either straight outsourcing to Claude where he lives today (global
trade) or by encouraging Claude to move to the US to do the work for me
here (immigration).

As a followup to this post on security as a Trojan horse for protectionism, I wanted to link this article in the WSJ($) called The Perils of Protectionism:

Fifty-six percent of the economists polled in the latest WSJ.com
forecasting survey -- conducted in the aftermath of a flap over foreign
management of U.S. ports -- say protectionism will lead to some
slowdown in U.S. growth over the next several years, and 8% predict
that the slowdown will be significant....

The ports controversy came at a time of growing concern about
protectionism around the world. It followed the blocked bid by China's
Cnooc Ltd. to acquire Unocal Corp. last year and emerged as European
governments angle to prevent high-profile utility deals within their
borders. The fear is that if governments take steps to shield their
countries' businesses, international trade and investment flows could
be reduced. Corporations will find it more difficult to reach new
markets.

Protectionism is unambiguously bad," said David Berson, chief economist
at Fannie Mae. Indeed, the free flow of capital across national borders
is conventionally looked upon by economists as a long-term good, and
69% of those surveyed say foreign ownership of U.S. assets is positive
for the economy in the long run.

One example of why the protectionist arguments are short-sighted is demonstrated by this passage from the same WSJ article:

While the ports row has receded, the U.S.'s large bilateral trade
deficit with China, which was $17.91 billion in January, remains a
flashpoint. Some lawmakers complain the imbalance has been inflamed by
an artifically low exchange rate for China's yuan against the dollar.
Though Beijing modestly revalued the yuan last summer, allowing it to
float in a narrow range against a basket of foreign currencies, critics
have continued to lash China's currency policy and call for further
revaluation.

So the Chinese government is artificially subsidizing the US economy through reduced prices of Chinese goods via a low valuation for the yuan vs. the dollar.  And that's a bad thing?  If the Chinese government is holding down the exchange rate, then they are in fact taking their money and the money of their citizens and pumping it into lower prices for US consumers and lower interest rates on US government debt.  Ooooh, color me really concerned.

As far as the "well, we're going into debt to pay for our consumerism" argument, I and others have tried and tried to educate the world that the trade deficit is not a debt, and running a trade deficit is not bad.

There have been any number of stories about how provisions of the Patriot Act are used more routinely to proecute drug cases than to pursue, you know, terrorists.  Note, however, this provision in the Patriot Act that has nothing to do with national security (via Overlawyered).

Quietly slipped into the reauthorization of the Patriot Act:
first-time-ever authority for the Justice Department to engage in
wiretapping and bugging of private premises for purposes of going after
antitrust violators.

Given the fact the the feds regularly prosecute companies with large market shares for A) raising prices (i.e. monopoly pricing); for B) lowering prices (i.e. predatory pricing); and for C) keeping prices the same (ie price fixing), this becomes an open mandate to listen into any private conversation at any company with a non-trivial market share.  Have fun at your next staff meeting over there at Microsoft or Exxon. 

From the Incredible Bread Machine by G.W. Grant:

"Now let me state the present rules,"
The lawyer then went on,

"These very simple guidelines,
You can rely upon:
You're gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!
"A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!

I can't help but suspect of late that the whole Dubai ports mess signals an intent by protectionists of many stripes to hop on the security bandwagon as a way to repackage protectionism.  One had but to observe the many Congressmen who up to date have shown very little interest in security issues suddenly becoming born-again hawks with on the Dubai issue.  Democratic politicians who up to this point had opposed any actions targeted at Arabs or Muslims as profiling and hate-based suddenly saw the light and opposed the deal based on absolutely no other evidence than the fact the owners were from Dubai.  I particularly laughed at the quote by Howard Dean lamenting that "control of the ports of the United States must be retained by American companies" (funny, since Dubai-ownership was taking over operations from a British company, not an American company).  The Dubai ports deal opposition was first and foremost protectionism, begun at the behest of a domestic company that lost a bid in Miami and a number of domestic unions.

Now we can start to see this bandwagon grow.  I was in the airport and saw one Congressman (Duncan Hunter, I think, but I am not positive) on CNN proposing new legislation to ban foreign ownership of any infrastructure deemed security-sensitive.  He specifically mentioned power plants, which told me that he was thinking pretty expansively. This is rank protectionism, pure and simple.  You can quickly imagine everything from power plants to oil companies to telephone providers - really just about anyone - coming under the auspices of a critical industry that should be all American.  Just check out the case of low-cost airline upstart Virgin America to see how this security dodge is being used to protect companies from competition and prevent consumers from getting more choices and lower prices (also see WSJ$).

Xenophobia, in terms of this protectionism and the new immigrant backlash, appears to be one of the few bipartisan issues that politicians from both sides of the aisle can get behind.  I fear a new McCarthyism in the works.

I have an experiment I would love to run.  I would love to compare the actual winners of Olympic events with the pre-event favorites, in two categories:  Those events with objective standards (time, distance, etc) and those that are judged (e.g. skating).  My hypothesis is that in judged events, barring a disaster (e.g. falling in a skating jump) judges tend to give high marks to those who they come in expecting to win.  I would expect that for people deeply tied into a sport (which Olympic judges are) it is impossible to totally separate the contestant's past body of work from their current performance.  I therefore would guess that favorites fail to win at objectively measured events more often than in judged events (again barring Michelle-Kwan-like falls).

Update: In another great moment in Coyote's reinventing the wheel, a reader emails to say that this phenomenon is called "anchoring":

Anchoring or focalism is a term used in psychology
to describe the common human tendency to rely too heavily, or "anchor,"
on one trait or piece of information when making decisions.

During normal decision making, individuals anchor, or overly rely,
on specific information or a specific value and then adjust to that
value to account for other elements of the circumstance. Usually once
the anchor is set, there is a bias toward that value.

This apparently occurs even when the number has nothing to do with the decision:

according to Daniel Kahneman if an audience is asked firstly to memorise the last 4 digits of their social security number and then to estimate the number of physicians in New York the correlation between the two numbers is around 0.4"”far
beyond what would be expected by chance. The simple act of thinking of
the first number strongly influences the second, even though there is
no logical connection between them.

I would presume that a number that was more related, like a figure skating pairs couple's world ranking upon entering the competition, would have an even greater impact on the decision.

Over the past few days, I have posted a lot on first and fourth amendment issues, from wiretaps and detentions to free speech to prosecutorial abuses.  It turns out I could have saved my self a lot of time and just linked this great interview with former Judge Andrew Napolitano.

We are in a fit of
constitutional chaos when the government views constitutional guarantees as
discretionary. As Americans, we order our lives on the belief that we have
extraordinary freedoms. We believe those freedoms don't come from the
government. They come from our humanity. The government doesn't give freedom; the government
under the Constitution is restrained from interfering with it. I can
basically say whatever I want about the government. I can basically travel
wherever I want to go. I can basically worship however I see fit. If the
government comes to the view that those freedoms are discretionary, no matter
how noble the stated [reason to restrict them] may be, then we're in a state of
constitutional chaos. We will not be able to order our lives based on freedom.
We won't know who will be prosecuted or who'll just be swept away.

On the Patriot Act:

Let's put aside all of
the procedural problems with enacting it. Forget about the fact that there was
no debate. Forget about the fact that most members of Congress didn't even have
an opportunity to read it. It is a direct assault on at least three amendments
to the Constitution: the First Amendment, the Fourth Amendment, and the Fifth
Amendment. The PATRIOT Act legitimates the notion that if we
give up certain freedoms, the government will keep us safer. I reject that
notion from a moral and legal point of view. I also reject it from a practical
point of view. It doesn't work. The government doesn't need our freedoms to
keep us safer. No one"”no lawyer, judge, or historian"”can point to a single
incident in American history where national security was impaired because
someone insisted on their right to free speech or their right to privacy or
their right to due process.

The PATRIOT Act encourages what the
government calls "national security letters""”basically, self-written search
warrants. It violates the Fourth Amendment, which prohibits self-written search
warrants. The PATRIOT Act and two of its predecessors, the Foreign
Intelligence Security Act of 1977 [FISA] and the Electronic
Privacy Act of 1986, authorized the government to obtain search warrants by
bypassing [longstanding tradition in] the courts. Today an FBI agent investigating a
person need only satisfy her or himself that the person under investigation is
a threat to national security. The agent doesn't have to demonstrate evidence
to a judge

On the regulatory state:

[The FDR era] began, in my view,
the dark part of American history where the federal government believed that it
could solve any problem that was national in scope, irrespective of whether it
was a federal problem. A federal problem is one arising
under the 18 specific enumerated powers given to the federal government under
the Constitution. A national problem is something
that exists in New Jersey and California and Texas and Illinois. But just
because it's national doesn't mean it's federal and therefore can be addressed
by the federal government....

In terms of the
government control of our lives, in terms of the percentage of our income that
the government takes from us, in terms of the types and the areas of human
behavior we let the government regulate, we are infinitely less free. And as
Jefferson once said, it is in the natural order of things that the government
should be greater and human
liberty lesser.

Women have
much more freedom. African Americans have much more freedom. Gays have much
more freedom. The discrimination that was rampant, and often caused by the
government, 40 or 50 or 60 years ago"”there's been progress in those areas. But
the destruction of federalism, the centralization of power in Washington, the
belief that Washington can regulate all aspects of our lives will, if not
checked, lead us to a totalitarian form of government. Freedom is the power and
ability to obey your own free will and conscience rather than the free wills
and consciences of others.

The interview also has a very useful short summary of the history of FISA and the Patriot act, and demonstrates how the incremental assaults on the fourth amendment have added up.  I encourage you to read it all.  In addition to this interview, Reason also had a good debate on the Patriot Act here.

I've gotten mail and comments on some of my surveillance- and detention-related posts, particularly this one here, that boil down to "but warrant-less national security eavesdropping is legal". John Hinderaker at Powerline makes this argument fairly compellingly.  To which I can answer, fine, but whether it is narrowly legal or illegal is a topic for partisan blogs who want to score points for or against Bush.  As one of those weird libertarian guys, my intention was to stand aside from the question of legality and instead pose the question of "yes, but is it right?"

Foreigners are People Too

It is interesting that I have to make this point more and more nowadays: Foreignors are human beings too.  For example, this idea that non-US citizens have (or should have) the same rights we do was one I highlighted in my defense of open immigration:

The individual rights we hold dear are our rights as human beings, NOT
as citizens.  They flow from our very existence, not from our
government. As human beings, we have the right to assemble with
whomever we want and to speak our minds.  We have the right to live
free of force or physical coercion from other men.  We have the right
to make mutually beneficial arrangements with other men, arrangements
that might involve exchanging goods, purchasing shelter, or paying
another man an agreed upon rate for his work.  We have these rights and
more in nature, and have therefore chosen to form governments not to be
the source of these rights (for they already existed in advance of
governments) but to provide protection of these rights against other
men who might try to violate these rights through force or fraud

Speech, commerce, property, association, and yes, privacy -- these are all rights we have as human beings, so that the fact of citizenship in the US should not have any bearing on whether our government should respect these rights (except in the case of war, which we get into in a while).

These issues are oh-so-much clearer when we flip our perspective.  For Americans reading this, ask yourself:

• Does the government of Great Britain (or Russia, or Iran) have the right to wiretap your phone calls at will without warrant or review just because you are not a citizen of their country?
• Does the government of Great Britain (or Russia, or Iran) have the right to detain you indefinitely without access to a lawyer or embassy if a powerful person in their government declares you an enemy combatant?

If you answered "yes", then recognize that the 1979 capture of the US embassy staff in Iran was probably legal by your rules, as was nearly every other detention of American citizens by another country.  If you answered "no", then you need to be worried about what the US is doing in the name of national security, for certainly both Bush and Clinton, among others, claim(ed) these rights.  And if you answered "no" for all other countries but "yes" for us, presumably because you trust our guys but not theirs, I will admit you have some historical precedent, since the US for all its faults has generally acted more honorably than 99% of the other nations of the world over the last 100 years.  But you do need to think about the meaning of the rule of law, and why its always a bad idea to give good men power that you don't want bad men to have.

By saying this, I realize that am I not only out of step with the US appellate courts (as Hinderaker points out) and with the Supreme Court (at least on the detention issue, since they haven't ruled on the warrant-less search powers) but also perhaps with the founding fathers.  While most of the folks who wrote the Constitution understood the notion of rights that are derived from nature rather than from the state, the Constitution is mute on the laws of the US vis a vis foreign citizens (excepts where it comes to war).  It is interesting to note that the Bill of Rights doesn't make any distinctions between citizens and non-citizens - there is nothing, for example, that modifies the prescriptions of the fourth amendment to apply only to searches of US citizens.  One could easily interpret the Bill of Rights as proscribing the actions of the US government against any person of any nationality.  Anyway, if I am in conflict with the founding fathers, so be it -- the Constitution is a fabulous document as totally ahead of its time as would be having 19th century India put a man on the moon, but it was not perfect.

The Magic Words: National Security

You may notice that defenders of these presidential powers tend to play a little verbal slight of hand (in addition to the one discussed here):  They translate the president's powers as CinC to mean "carte blanch for national security issues".  You hear this slight-of-hand so often, one starts to think its written that way in the Constitution, so it is probably good to remind ourselves what that document actually says:

The President shall be commander in chief of the Army and Navy of the
United States, and of the militia of the several states, when called
into the actual service of the United States

That's it.  The president can give orders to the military  -- whether that means he can do anything he wants in the name of national security is a whole other issue.  Folks also seem to want to argue that this CinC power cannot be modified or limited in any way, but that's silly.  The third amendment is aimed solely at the limiting the power of the military.   And certainly the folks who first adopted the constitution and the Bill of Rights believed that the 4th amendment applied to the military as well.  In fact, they would have said especially the military.

The Right Way to do Searches

Here is how we have generally interpreted the 4th amendment:  The legislative branch sets the ground rules, as followed by the Administration.  The administrations selection of targets is reviewed by the Judiciary (warrants) and is also subject to later review at trial (via the admissibility of evidence).  What we try to avoid is allowing the same person to set the rules, choose the target, and perform the surveillance, all in secret and without outside review.  The problems with the NSA wiretapping program is not that it is wrong per se, but that it may violate this process.  The administration is claiming the right to choose the target and perform the surveillance under the own rules and in secret with no possibility of review.   

Declaration of War Needs to Mean Something Again

If there is any part of the constitution that has really gone by the wayside in the last 50 years it is the provisions around declaration of war.  Over the past decades, president's have claimed the power to move forces into action, not just defensively but offensively, without a Congressional declaration of war.  And Hinderaker sees the declaration of war, or the Authorization to Use Military Force
(AUMF) as irrelevant to the legality of warrant-less national security
searches.  He is arguing that the President in his CinC power may search without warrant if it is substantially to fight an enemy.  And, absent an AUMF or a declaration of war, who decides if a group or nation or person is an enemy?  why, the President does.  And, who determines if a surveillance is necessary to fight this enemy? Why, yes, the President does as well.  And who reviews these decisions to make sure the President hasn't chosen to search or wiretap, under the pretext of national security, communists in Hollywood, Martin Luther King, or a self-generated "enemies list" -- no one, I mean, no Administration official in this country would ever do those things, would they?

I have increasingly come to the belief that the AUMF, or declaration of war, is supposed to mean something. (I am not a Constitutional scholar, and don't want to hear about how I don't understand such and such precedent* -- this is my own interpretation).  If one goes back to my first argument above, that all people, not just citizens, are constitutionally protected from our government searching or detaining them without warrant, then the declaration of war is that formal step that is necessary to free the CinC from these restrictions vis a vis a certain named and defined enemy.  The declaration of war, or AUMF, is effectively then the mass warrant, that gives the president the right in his role as CinC to attack those folks with our troops and detain them and spy on them, etc.  And even then, this is not without limit, since none of us are very happy with the Japanese detention precedent in WWII.  This view of the declaration of war is more consistent with the original notion of separation of powers than is the "administration can do anything to protect national security" view.  It allows the President pretty free reign to fight an enemy, including the types of tactics under dispute, but only after the body the founders considered the most sober had approved the war and the enemy (by sober I mean as envisioned by the founding fathers, and not as demonstrated in recent supreme court nomination hearings).

This obviously makes a declaration of war a BIG DEAL, which it should be, rather than just a set piece vote ratifying what the president seems hellbent to do anyway or a statement of moral support, along the lines of a "we support the troops" resolution.  It means that the Congress, god forbid, actually needs to treat the vote with some responsibility and understand the implications of what they are voting for, or else modify the AUMF or articles of war with specific limitations of scope.  And it means Congress needs to think twice and maybe three times before authorizing war against something as nebulous as "A Qaeda" or "terrorism".  And it means that GWB probably is doing nothing illegal, at least in the programs as discovered, but it doesn't mean that the courts or Congress can't change that in the future.

* Constitutional scholars live and die by the great god "precedent", and certainly the legal system would be thrown into disarray if court decisions did not provide precedents for later decisions.  All predictability in the system would vanish.  However, it is more than OK from time to time to go back to the original words of the Constitution to see if the march of serial precedent has somehow taken us off course.  I often liken this to a copier machine.  If you take a plain piece of paper, and copy it, and then copy the copy, and then copy that copy, etc. through twenty or thirty generations, you will end up with a paper that is supposed to be a copy of the original, but in fact is covered with spots and other artifacts that were not on the original.  A series of court precedents can also create such artifacts that can only really be identified not from looking at the last precedent it was built on, but going all the way back to the original Constitution.

A number of years ago, I heard someone (George Carlin maybe?  Commenters help!) ask "What's the worst thing that can happen to you if you smoke pot" and the answer was "Get thrown in jail".  The not so subtle message was that the preventative measures applied to prevent marijuana use were worse than the drug use itself.

I would say this fairly summarizes my fears about government responses post 9/11.  Reason's Hit and Run quotes T.J. Rogers along the same lines:

What's the worst thing that Al-Qaida can do to America? We have
probably already seen it. Of course, the government can talk about
bigger things, like the use of weapons of mass destruction, to justify
its use of totalitarian tactics.

I would much rather live as a free man under the highly improbable
threat of another significant Al-Qaida attack than I would as a serf,
spied on by an oppressive government that can jail me secretly, without
charges. If the Patriot Act defines the term "patriot," then I am
certainly not one.

By far, our own government is a bigger threat to our freedom than any possible menace posed by Al-Qaida.

The worst thing the terrorists can do is not another 9/11, but to push America into abandoning its separation of powers and its traditional protections of individual rights.

Reasonable people can disagree whether the Patriot Act goes too far in violating civil rights.  I personally opposed most of the measures in that act when Bill Clinton proposed them the first time and opposed them again this time around.  However, whether I support the Act or not, at least the Act and its provisions are still following the separation of powers script written into our country's DNA:  Congress proposes new administrative powers vis a vis searches, the administration and justice organizations follow the procedures, with certain oversight and appeals rights granted to the courts.

What worries me more than the Patriot Act is the administration's claiming of broader and broader police state powers in the name of combatting terrorism, whether it be detaining people indefinitely without a warrant or eavesdropping on citizens without a warrant.  I understand that both of these programs have practical goals related to security, but I think that most of these goals can still be reached by continuing to respects separation of powers.  Congress must still set the rules for a program such as detention of suspected enemy combatants, and these rules should include a role for the judiciary to review individual cases.

Per the BBC News:

More than 5% of the net's most popular domains have been registered using "patently false" data, research shows.

A US congressional report into who owns .com, .net and .org domains found that many owners were hiding their true identity.

Congress has just discovered that people, knock me over with a feather, do not always include all their correct personal private  and personal confidential information in online web databases that can be read by everyone:

The report found that owner data for 5.14% of the
domains it looked at was clearly fake as it used phone numbers such as
(999) 999-9999; listed nonsense addresses such as "asdasdasd" or used
invalid zip codes such as "XXXXX".

In a further 3.65% of domain owner records data was missing or incomplete in one or more fields.

I personally am a fan of (555) 555-5555 in filling out web forms.  For years, I never, ever put my correct phone number in the WHOIS registry, and only correctly filled in enough blanks to get my credit card authorized.

As is usual with every privacy reduction effort, it starts with an honest desire for better law enforcement:

Increasingly whois data is being used by law enforcement
and security companies to find out who is running a website involved in
spamming or some other scam....

The GAO recommended that more effort be made to verify
the information by domain owners and that greater use be made of
commercial software tools to check who runs a website.

                   

I get the law enforcement issue, but I think it is dwarfed by the privacy and free speech issues.  There are a lot of really good non-illegal reasons not to want the detailed personal and private information of web site owners plastered all over public data bases, and there are particularly good reasons that web site owners might not like the government to know who they are.  Like every blogger in China, for example.  I don't think that US Government bodies (or major corporations, or political groups, or fringe groups like the KKK) are above seeking some type of retribution (e.g. audits) against folks online who criticize them, and I am sure China and Saudi Arabia are not above it.  If you start a web site criticizing your current employer, do you really want to reveal your name?  I for one thought for a long time about whether to blog as myself or anonymously.

As for hunting down phishing and other such scams, liscencing web owners in a way similar to say gun owners is not necesary.  Scams are illegal because somewhat is defrauded of money, and that money leaves an easier trail to follow than any electronic trail, even with better ICAHN data.  You can use zombie computers and other techniques to defeat most electronic tracing, but the money WILL end up in the bad guys hands and can be found.

Next up:  Requiring background checks before you can register for a web site.

Running for-fee campgrounds on public lands often gets us into some controversy.  For example, many people wonder, sometimes in a fairly excitable manner, why they have to pay for camping on public lands when they have already paid their taxes.  The simple answer to this is that Congress and administrations of all flavors have consistently ruled for years that fees rather than taxes should support developed campgrounds.  Read this post for more, or call your Congressman if you don't agree.  Also, here is my company's FAQ on camping fees and private companies operating on public lands.

However, there ARE many free camping opportunities on public lands, but because of Forest Service terminology, these are sometimes missed by the public.  In most cases, when the Forest Service has a named campground, it requires a fee because it has a number of minimum features for the facility:

• Graded, and sometimes paved, roads and spurs
• Bathrooms, and sometimes showers
• Picnic table, tent pad, and fire ring / grill at each site
• On-site host / security to enforce rules (e.g. quite time)
• On-site operator with property and liability insurance
• Water supply that is frequently tested and treated when necessary
• Hazard tree removal
• Trash and (for campgrounds not on a sewer system) sewage removal
• Leaf blowing from trails and roads, site raking, painting, etc.

This stuff does cost money, and so the typical campground we run charges $12-14 a night, with 50% off for Golden Access patrons (i.e. senior citizens).  Heck, the insurance alone costs about $1.50 per night's stay, thanks to our friends in the tort bar.

However, most National Forests offer what is called dispersed camping.  This is camping out in the wilderness, without any amenities, and, at least in most cases, is totally free.  Most of these camping areas don't have names, just locations and boundaries.   Expect to give up all of the above amenities, and be ready to pack your trash out, but you can still pitch your tent out in nature without charge.  And in many of these locations, you can get far away from other campers.  Just call the local ranger district (contact info here) and ask them for information on dispersed camping.

One proviso - the biggest problem with these dispersed, non-hosted areas is, if they are heavily used, they can be a worse experience than the paid campgrounds.  They can accumulate trash from thoughtless patrons, and they can get very rowdy.  Dispersed campgrounds attract the best of campers - those truly trying to get a natural experience; and the worst of campers - those who don't want to follow rules, don't clean up after themselves, and who don't want to shut down their loud partying just because it is two in the morning.  Many people who initially opposed paid camping are now big believers, since they have learned to value campgrounds with rules and security after a few late nights listening to loud generators and drunken parties.  Talk to the ranger district to know what you are getting into at a particular site.

Here is my update on Iraq:  We are still there, and will be there for a while.  And we are still spending nearly every available financial and human resource, not to mention all of our national attention and available goodwill, on the effort to make Iraq a prosperous and successful free and independent nation, to the exclusion of being able to bring much change about anywhere else in the world.

I can't tell you whether the effort in Iraq is going well or poorly.  Certainly if I pay attention to the major media alone I would assume it's a disaster, but we all know the media has a bias toward negativity that trumps any political biases it might have (after all, your local news station learned long ago that "your kids are happy and healthy, story at 11" is not a very good way to tease the evening news).  Being familiar with alternate sources on the Internet, I know that there are successes as well as failures on the ground.  In fact, you can even sort of deduce the successes from the major media coverage.  When the NY Times stops writing about blackouts in Iraq, you know that the electrical system is fixed.  When the WaPo stops writing stories about shortfalls in re-enlistment rates, you can infer that the rates are back up.

But to me, all this back and forth over success and failure in Iraq is only peripheral to my main problem with the war.  Let's for the sake of argument posit that things are going swimmingly, and we are able to start removing assets and support from Iraq next year.  That will mean that for four or five years, the entire attention and resources of the only country in the world that is able to substantially influence the behavior of other countries will be focused on just one country. 

During the Iraq war and occupation, we have not had the "bandwidth", either in attention or moral authority or resources, to help stave off Sudanese genocide, to steer Zimbabwe off its destructive path, to influence the course of events in Iran or North Korea, to change the behavior of terrorist sponsors like Saudi Arabia, or even to head off Russia's apparent slide back toward totalitarianism. 

Now, one could easily argue that its not our job to fix these things.  And I go through phases of agreeing with this.  However, our invasion of Iraq is predicated on the assumption that it should be our foreign policy to try to fix the worst of these problems.  And if it is, does it really make sense to invest everything we have and more on one country for four or five years (or more?)  From the first days of the war, I have called this my "cleaning of the Augean stables argument".  There are just too many messes in the world to head them all off by military invasion.  Afghanistan probably justified such a military effort, given its direct connections to 9/11, but I am still confused as to why Iraq justified this attention more than 20 or so other nations I could name.  Afghanistan  convinced the world that the US was ready to use the military if it had to, and helped to reverse the perception of weakness left by Carter's response to the Iranian hostage takers, Reagan's bailing out of Lebanon, and Clinton's running form Somalia and refusing to respond to the Cole attacks.  9/11, for all its horors, gave us a certain moral authority in the world to try to clean things up.  This credibility and authority could have given new life to non-military efforts, but we chose not to use them.

Now that we are there in Iraq, I tend to be in the stay the course camp.  There are too many recent examples, such as those cited above, where bailing out has created a perception of weakness that have encouraged our enemies to more boldness.  The situation we are in with the Iraqi people is much like the obligation the police have to a mafia informant that the police have convinced to turn state's evidence with the promise of protection against retribution.  If you suddenly throw the guy back out on the street to be killed publicly, its going to be really hard to get anyone else to trust you in the future.

I will confess that there are two things that from time to time cause me to have some doubts about my  stance.

The first was the seeming cascade of good news from surrounding countries in the middle east last January, as a successful Iraqi election emboldened opposition forces in a number of countries, including Lebanon, Egypt, and Iran.  If the neocons are right, and successful democracy in Iraq leads to a cascade effect in the surrounding nations, then my argument about spending too much time and effort on one country loses some of its power.

The second and perhaps more powerful input that sometimes causes me to rethink my opposition to the Iraq war is the insanity that tends to emerge from others who are anti-war, and with whom I do not want to be associated.  Take Cindy Sheehan and her beliefs, since she seems to have been adopted as a spokesperson and mascot by much of the vocal anti-war left. (I promised myself I would never mention Cindy Sheehan in this blog, but if she can meet with the president once and later claim that the president won't meet with her, then I guess I can write about her once and then claim I won't ever mention her).

Ms Sheehan has stated, as have many others in the anti-war movement including Michael Moore, at least five reasons for their being anti-war that drive me nuts:

Insurgents are Freedom Fighters:  Sorry, but no.  Most of the insurgents are ex-Baathists or Muslim extremists who want to reinstate a fascist state in the mold either of Saddam's more secular version or Iran's more fundamentalist version.  The insurgency is the equivalent of what Germany would have been like had the SS followed through on its promise to continue fighting a guerrilla war from the Bavarian Alps.  The world is a better place without the Baathists in power, and the insurgents do not have good aims for the Iraqi people.  Period.

Its all a Jewish plot:  Everything old is new again, and this particular brand of anti-Semitism, seeing Jewish cabals everywhere pulling strings of the government, seems to be back in vogue.  However, is there any particular reason Israel would want to shake the tree in Iraq?  After all, the last and only time they were attacked by Iraq directly was the last time the US went to war with Saddam.  Israel is still surrounded by enemies, with or without Saddam in power in Iraq.  In fact, one could argue that what Israel should really want is for Iraq and Iran go back to beating the crap out of each other in war after war.

It was all for oil:  How?  People always say this, but they can never explain to me the mechanism.  If it was to put US companies into ownership positions over Iraqi oil, we did a damn bad job since the Iraqi's seem to still own all their own oil (though we did head off the French from grabbing the oil).

War is never justified:  I don't think war was justified in this case, but never?  If you make this statement, then it means you have to be willing to live with anything, from genocide to totalitarianism, up to and including in your home country.  As long as there are people who only know how to live by force and wish to rule me, war always has to be an option.

Iraqis were better off under fascism when they had security:  I am not an Iraqi, so I won't try to make this trade-off for them.  However, I would like to point out a huge irony about the folks, mainly on the left, who make this argument.  The very same folks who make this argument for the Iraqis have been faced with the same choice themselves over the last few years:  Would you rather an increased risk of domestic terrorist attack, or greater security at the cost of reduced freedoms via the Patriot Act, more random searches, profiling, surveillance, etc. etc.  Most on the anti-war left have shouted that they will take the extra risk of violent attack in order to retain their individual liberties.  I agree with them.  The difference is that I don't project exactly the opposite choice onto the Iraqi people.

Update:  Professor Bainbridge seems to be in roughly the same boat.

Since I went to two Ivy League Schools (Princeton undergrad, Harvard MBA), I get asked by parents a lot about how to get their kids into an Ivy League school.  My answer is the same one that I think many of my friends from college give:  "I'm not sure I could have gotten into Princeton if I did it today, rather than 20 years ago".  While the number of bright, qualified students seems to have gone up tenfold over the last decades, the number of admissions spots at Ivy League schools has hardly changed, and few new schools have emerged as Ivy League equivalents (if not in fact, at least in the perceptions of the public).

I have recently discovered this really nice blog by Kurt Johnson, who recently got accepted to attend Wharton business school next year.  He has several good posts about school rankings and admissions, including this one here.  The curves showing that only about 20% of applicants in the top 1 percentile of test scores get into Princeton is scary.  Yes, I had good SAT scores, somewhere in the 1500's  (I would never have believed at the time I would have forgotten the number, but I seem to have).  At the time, that was pretty much a layup for getting into the Ivy League, though I had some decent sports and activities as well.  Now, the odds are I wouldn't make it.

Today, parents are downright crazed in trying to figure out what it takes to get in.  For example, any of the 11 year olds at our elementary school do community service, which I guess is fine though it seems to be driven more by setting up early resume wins rather than saving the world.  Things like piano and violin are out:  Parents are pushing their kids into more unique, differentiated instruments like bagpipes or the xylophone.  My old college roommate, whose kids go to a college prep school in DC, joked that he planned to send the other school parents into a jealous hysteria by telling them his kids were competing in falconry.

Kurt also makes a good point about one of my pet peeves of performance measurement:  that is, measuring a process based on inputs rather than outputs.  You see this all the time, for example, when the department of homeland security talks.  They say things like we have xx thousand agents making xx checks with xx equipment blah blah.  Yes, but are we safer?

Postscript: By the way, after reading Kurt's work, he is basically going to Wharton for a piece of paper.  He already appears to be at least as thoughtful an analyst of business issues as most poeple I know with Ivy League MBA's.  OK, this is a bit unfair.  I learned a lot that was useful in my first year of busienss school, then I entertained myself in the second year with a lot of material that was interesting but I never used much.  My MBA was sort of a 1-year technical degree with an extra year in "business liberal arts".  I have talked to lawyers that say the same thing about law school.

In my post on "Respecting Individual Decision-Making",  which to-date I consider my favorite post, I wrote:

As a capitalist and believer in individual rights, one of the things
I notice a lot today is just how many people do not trust individual
decision-making.  Now, I do not mean that they criticize other people's
decisions or disagree with them -- in a free society, you can disagree
with anybody about anything.  I mean that they distrust other people's
free, private decision-making so much that they want the government to
intervene.

Interestingly, most people don't think of themselves as advocating
government interference with people's private decisions.  However, if
you ask them the right questions, you will find that they tend to fall
into one of several categories that all want the government to
intervene in individual decision-making in some way:  nannies,
moralists, technocrats, and progressive/socialists.  Though the
categories tend to overlap, they are useful in thinking about some of
the reasons people want to call in the government to take over parts of
people's lives.

I then spent a lot of time with examples from each category.  On Sunday, Keith Thompson in the San Francisco Chronicle (of all places) wrote an article about his disaffection with the left, which said in part:

A certain
misplaced loyalty kept me from grasping that a view of individuals as morally
capable of and responsible for making the principle decisions that shape their
lives is decisively at odds with the contemporary left's entrance-level view
of people as passive and helpless victims of powerful external forces, hence
political wards who require the continuous shepherding of caretaker elites.

I'm not sure that he and I are in exactly the same place, but we are both looking for allies who are consistent in their defense of classical liberal values and individual rights.

In a related post, Mickey Kaus, who I seldom read because he spends more time than I care on inside-the-beltway political tactics and media stuff, has an interesting related post about the left and trusting people to do right by their own lives.  Kaus resists permalinks, but the gist is:

Two good critiques of the ubiquitous, left-pleasing menace, George Lakoff--by Marc Cooper and Noam Scheiber. Oddly, neither attacks Lakoff at what would seem to be his central weak point, namely his conflation of politics and parenting--identifying "conservative" values with "the strict father" and "liberal" values with the "nurturant parent."

Is a country really like a family? Isn't that an idea with a ... checkered
history? A family is a relationship between inherently unequal,
not-completely-free people--parents and children. A country, at least
in one American conception, is the relationship of equal, autonomous
people. Using the family as the template for politics stacks the deck against social equality (the value I'd suggest as the liberal touchstone). For one thing, it lends itself all too easily to the condescending liberal notion of compassion,
an anti-populist idea if there ever was one. It's also horribly
misleading as a guide to practical policies--no wonder that when
Scheiber asks Lakoff about President Clinton's welfare reform, Lakoff
responds "Why did he have to do that? ... I still don't understand it
fully." In Lakoff's mind, Clinton wasn't changing the welfare system,
he was beating his family's children! Aren't there values that aren't
family values?

A good example of that in recent debate has been social security.  As I argued before:

Advocates for keeping forced savings programs like Social Security in
place as-is by necessity argue that the average American is too stupid,
too short-sighted, and/or too lazy to save for retirement without the
government forcing them.  Basically the argument is that we
are smarter than you, and we are going to take control of aspects of
your life that we think we can manage better than you can.  You are
too stupid to save for retirement, too stupid to stop eating fatty
foods, too stupid to wear a seat belt, and/or too stupid to accept
employment on the right terms -- so we will take control of these
decisions for you, whether you like it or not.  For lack of a better
word, I call this intellectual welfare.

Given these fairly accurate descriptions of the state of liberalism in America, it is ironic that several weeks ago, Kevin Drum made the following observation:

Whenever I talk about the underlying principles that should guide liberals, as
I did a couple of days ago, one of the ideas that always pops up is privacy
rights. In fact, it comes up so often that it strikes me that we're missing a
bet by not making a bigger deal out of it.

The reason, Mr. Drum, is that a true privacy right defined as you are considering it (in particular, one defined broadly enough to give women an absolute right to abortion) would undermine much of the left's statist agenda.   A true privacy right would force the government to respect individual free decision-making, and require that the government allow individuals to make what elites might consider are bad decisions for themselves. 

Does the Left really want broad privacy rights, or just a constitutional justification for abortion?  If they really want a general primacy of a woman's decision-making over their bodies, why do they support abortion yet oppose letting women choose breast augmentation or the use of Vioxx?  Why do the same leftist politicians that oppose parental approval or even notification for teenage abortion simultaneously support requiring parental permissions for teenagers to use tanning salons?  Why do they resist random searches for terrorists but support such searches to enforce seat belt laws?

As I wrote here,

A true privacy right would allow us complete freedom over who we sleep
with, what we do with our bodies, where we work, and what we pay for
goods.  And, not incidentally, how we choose to invest for our
retirement.  Both parties want the government to control parts of our
lives, so don't expect either Conservatives or liberals to be pushing
the privacy issue very hard.

The government is not our parent, not our boss, not our priest, and not our partner.  It is our servant.  Unfortunately, a large element behind creeping statism in this country is a desire by both left and right to "correct" individual decision-making, even when those decisions affect no one but the actor himself.

The original purpose of this blog was to pass on my experiences and lessons-learned running a small business.  Over time, though, since I have the attention span of an 8-year-old boy mainlining Hershey bars, I have gone many different places with this blog, well beyond day-to-day experience of a small business.

However, today I will return to this original goal, at least for one post, by asking the question "what's on my desk this morning?"  I tackle this question for two reasons.  First, it is interesting to compare how different the issues I struggle with day-to-day are as compared to my previous life as an executive at several Fortune 50 companies.  I am sure I did more, but all I can remember from my daily activities at large companies seems to involve either working on PowerPoint presentations or traveling to give them to somebody.  The second reason for visiting the contents of my desk is to reinforce my usual libertarian political points, which I think will be made sufficiently obvious just in the description of my to-do list that I won't need to editorialize further.

So here is what's got to get done today [ed note -- while published on Sunday, this is based on my worklist on Friday morning, May 13.]

• Sales tax returns have to be completed, which I usually do myself.  We file monthly returns in six states, but one of those is Florida, where we have to file multiple returns county by county.  This month I also must complete a lodging tax return for two counties.  If it was the end of the quarter, an additional three state returns and two county returns would be due.

• We are nearly completed with a sales tax audit from Washington state.  I have written before how complicated the WA sales tax return is, but the funny part was seeing a trained tax accountant from the state of Washington sit in my office for nearly 6 hours and still not be able to figure out how much tax I owed.  She kept encountering crazy exceptions like "such-and-such county requires 2% lodging tax unless the facility has more than 63 rooms or campsites and then it owes 50 cents per room-night except if it is in the Seattle convention district where it owes an additional .25% or if it is on a metro bus line where ... etc."  When tax law is too complicated for the paid employees of the tax department to figure out, it is too complicated.  Wonder of wonders, though, we may get a refund!

• Also sitting on my desk from Washington is a notice that I did not pay my leasehold excise tax last year.  For those who don't know what that is, it is a way that states like WA and CA effectively charge property tax on the US government, evading the federal rules against such (basically, I have to pay the tax for the Feds, and then I take it out of the rent I bid to the Feds).  Actually, though, I did pay it.  Well in advance of the due date.  The state has spent the last 2 weeks trying to decipher their own records, and so I need to call them back today to see if they have figured everything out yet.

• The department of Health in one California county is holding up my building approval because the condensate line from a refrigerator condenser coil runs out and drips fresh water on the ground (about a gallon a day).  If you have an air-conditioning system at your home, it is very very likely your air conditioning condenser does the same thing.  Unfortunately, the county wants this to run into the sewage system.  Why the county wants extra load on the sewer system, I don't know, but fortunately my builder caught this early so the change won't cost us much money.

• Speaking of inspections, the ADA inspector at another California facility ruled yesterday that our sales counter was an inch too high and our ramp a half-degree too steep to the front door, so I spent part of this morning already getting the original contractor out there to tear these improvements out and redo them.  Interestingly, we previously had the bathroom that was originally in this modular building ripped out, because it could not be made ADA compliant.  This was not a big headache for our employees, because there is a public bathroom building next door.  However, the local health inspector is now reluctant to approve the building because... it has no bathroom and hand-wash sink.  The only food we sell is packaged (think Twinkies) but some health inspectors still want you to follow the same requirements as if you were a restaurant.  I am not sure how we are going to resolve this.

• I just got a call from a customer who was mad that the county Sheriff would not respond to several complaints about drunk and disorderly conduct in the early morning hours at one of our campgrounds.  A few of our campgrounds, like this one, are too small to justify a live-on-site staff, and the rowdies seem to get the word out which campgrounds do not have on-site security.  I promised the customer a refund, and made a note to myself to talk to our manager about having one of our employees come by a few times in the night on a security sweep.

• I have a meeting at 3:00 to meet with my accountant to finish up our income taxes.  Since we have to file a federal, 9 state, and a number of county tax returns, our total company return fills two 3-inch binders.   Today we are trying to sort out the depreciation schedule, which in and of itself is hundreds of pages long given that we have so many small assets.

• We are still trying to get a liquor license approved for our store on Lake Havasu.  The whole liquor license process is one of those funny holdovers.  Coming out of prohibition, most states wrote tough procedures to make sure that the organized crime figures who control liquor during prohibition did not receive licenses.  As a result, to get a license, my wife and I and my managers have to be finger-printed and have FBI background checks.  The applications tend to be long and tedious and small errors cause the application to be returned for corrections. Worse, though, I have found that many towns use the licensing process as an anti-competitive protection for incumbents.  In California, if a County is "over its limit" (set fairly arbitrarily) in terms of licenses, it requires the county board of supervisors to meet and approve the new license.  In one California county I was told that this was really for my protection - they are protecting me from getting my business in a situation where I might fail due to too much competition.  Anyway, I suspect that the strong powers-that-be in Lake Havasu City may be holding up our license, and I need to try to figure out what is going on,though I am not sure how to go about it.

• While I have been writing this, I got a call from a county DA in Arizona.  Most states have bad check programs where, if you have a bounced check and can't collect, you turn it over to the courts and they seek collection.  In extreme cases, they will arrest and try the offender.  I have never been entirely comfortable with this situation.  Sure, bounced checks irritate the heck out of me, but arresting people for a $20 bounced check feels like sending someone to a Victorian debtors prison.  This morning, I spent about 30 minutes trying to talk the DA out of prosecuting the heck out of some guy who claims that he paid us and we lost his check.  I give his story about a 30% possibility, but whatever is the case I have no desire to prosecute the guy.  The DA's blood is up, so it takes me a while to talk him out of it.  I am adding to my worklist something I have put off for a while, which is to investigate 3rd party NSF check collection. 

• My bank just called and still needs yet more paperwork before they can complete an equipment financial loan.  AAARRRRGGGG. 

• I just finished my annual rant with Arizona Game and Fish about fishing licenses.  We sell fishing licenses at a number of locations.  We only sell fishing licenses, we don't sell hunting licenses or duck stamps or all kinds of other special licenses that the state seems to sell.  Unfortunately, if you are a Game and Fish registered license seller, you can't get just fishing license inventory from them.  You have to take their full range of licenses, which they send you piles of in January.  We take all this stuff we don't want to sell and put it in the safe, and hope that we can keep track of it for the next 12 months.  If we somehow misplace anything and don't return it the following year, we pay for it (and some of those stamps and licenses cost hundreds of dollars).  Many of you  will recognize that this practice of the state government would in many situations be illegal for a private company.  There are many laws out there that limit a manufacturers ability to force a retailer to carry their full line of inventory, or worse, their ability to send the stores a bunch of inventory they did not order.

• I have been putting off registering our 15+ trucks in Washington, but I am going to have to get to it today or this weekend.  Last year Washington passed a law that vehicles had to be registered with an in-state physical address (no PO Box).  I am not sure if this is a tax or terrorism thing, but it is obviously awkward for an out of state corporation, so they have finally relented a bit and said that you can still have to have an in-state physical address but they will mail paperwork to an out of state address.  I or my assistant will need to spend a couple of hours soon typing in two addresses each on all these vehicles before we can register them.

There are a million other things going on, but that is what is burning me up today.  In fact, since I have been spending the last hour writing this post, these tasks will probably also be occupying me this weekend.  An alien from another planet in reading this post might question whether I am really working for myself or this "government" entity.

Again, small government libertarians like myself, who held their nose and voted Republican in the last election, have been used.  From the NY Post today:

THE Republican promise of smaller,
less-intrusive government is getting harder and harder to believe.
Especially when a more plausible plot line is unfolding every day: that
the GOP has put aside the ideals of Reagan and Goldwater in order to
pursue a political strategy based on big spending.

For the latest, check out a report just released by the
libertarian Cato Institute that tells a striking story about just how
out-of-control spending has gotten under President Bush.

Cato finds that:

* Bush has presided over the largest increase in federal spending since Lyndon Johnson.

* Even excluding defense and homeland security spending, Bush is the biggest-spending president in 30 years.

* The federal budget grew from 18.5 percent of the Gross
Domestic Product on President Bill Clinton's last day in office to 20.3
percent at the end of Bush's first term.

Add to that Bush's massive Medicare prescription-drug
benefit, expected to cost $720 billion-plus over the next 10 years.
(The money for that new entitlement, the first created by a president
in a generation, will start flowing this year.)

It is not in the least bit comforting to have my suspicions confirmed by Cato, whose whole report is here.  Bring back divided government!  I will take Reagan-Democrat Congress or Clinton-Republican Congress over this any day.

Earlier this week I posted my thoughts on taxation, which included thoughts on taxation and class warfare and linked this recent WSJ editorial on tax shares paid by the rich.

Today, Kevin Drum rebuts the WSJ editorial with a post of his own.  Though I find Mr. Drum's consistent socialism and the-rich-will-be-first-against-the-wall rhetoric tedious, he is a smart guy and does have a point.  There is, as usual, a mixed message in the data.  However, this also means, as I will point out in a second, that Drum is guilty of picking and choosing his data points just as much as does the WSJ.

Drum points out, rightly, that while the share of taxes paid by the "super rich" (his term for the top .5% of income earners) has increased, their share of income has increased faster, such that their rates have gone down (god forbid that anyone violate the left's rule of the tax ratchet that says that tax rates may always go up but can never ever come down).  Using the same study as the WSJ, he rebuts this table of share of tax burden...

...with this chart , including Drum's subtle annotations in red:

His point is that the Super Rich actually pay lower rates now and the middle class pays higher rates, or as he puts it:

So shed no tears for the super rich in America. Their incomes have tripled in
the past couple of decades and at the same time their tax rates have decreased
by 9 percentage points. That's a pretty sweet deal in anybody's book.

Here are some thoughts on Drum's rebuttal:

Drum cherry-picked data too:  I will get back to the folks in the top 1 percentile in a minute.  Leaving them aside for a minute, note that Drum's storyline breaks down for everyone else.  If you compare the merely rich in the 1-20th percentiles, they got a smaller reduction in the Bush tax cuts than anyone in the middle and lower quintiles.  For example (comparing the 1999 before tax cut and 1999 after tax cut lines) the 1-5% richest got a rate reduction of 0.21%, while Kevin's favored group at 40-60% got a 1.45% rate reduction.

Don't blame this administration for previous tax increases:  Drum is correct in saying that the tax rate has risen for the middle class over 20 years, but incredibly disingenuous not to explain why.   Note that the 1 point rise (which presumably Drum wants to hang on the current administration) actually consists of a 2.5 point rise from past tax increases, AMT creep, and payroll tax changes (passed by Democratic Congresses and generally supported by Drum) offset by a 1.5 point cut courtesy of the current administration.  Drum is in fact using data that clearly disproves his ongoing "tax cuts for the rich" mantra.  By the way, it is also interesting to see a good "progressive" ignoring progress on the lower two quintiles to decry higher taxes on the upper middle class -- seems like an interesting shift in focus.

Payroll taxes skew the picture:  Including payroll taxes (social security and Medicare) in these numbers causes funny things to happen.  Why?  Because social security tax is straight-out regressive since it is flat up to about $90,000 in income and then zero after that.  This means that the total tax rate shown for the lower quintiles will include nearly 8% for payroll taxes (if this looks funny to you because it seems to imply that the lowest quintile must be paying negative income taxes, you are right, they are paying negative income taxes via the EITC).  However, as incomes rise above $90,000, taxpayers get an effective total rate reduction.  For an income of $180,000, a taxpayer only is effectively paying 3.1% to Social Security.  At $1 million, they are only paying 0.56%.  So, even if income tax rates were perfectly flat with no deductions for anything, those in the 1% category of richest people would have a total rate including payroll taxes over 5.5% points lower than the middle class.  If you recast the numbers above leaving out payroll taxes, you would not see the decrease in rates into the 1% group, the numbers would continue to increase, as can be seen here (from government data):

So, for income tax rates, there is still progressivity all the way to the top.  If you want to argue Social Security taxes, fine, but don't use Social Security tax effects to make a point about income taxes

By the way, in terms of the regresivity of Social Security, the defenders of that program need to stick with a story - is it a transfer payment or is it a government run insurance program?  If it is a government run insurance program (as defenders want to argue, since that seem more palatable to the public) then the $90,000 income cutoff makes sense:  Since the program does not pay benefits based on any incomes higher than this, "premiums" shouldn't be based on higher incomes.  Update: Kevin Drum says in this post that Social Security is

a modestly progressive social insurance program that's paid for by everyone and
that benefits everyone. If it ever stops being that, if it ever stops being
universal, it will eventually cease to exist.

OK, but stop lumping the "premiums" of this program in with income taxes to try to prove a point about the income tax system.

All that being said, there may be something funny going on in the top 1%:  As pointed out above, a portion of the apparent rate reduction for the top taxpayers is in fact due to the odd math surrounding Social Security taxes.  Any income tax cut, even if it is progressive, can make total taxes more regressive by shifting the mix to the very regressive social security tax. All that being said, the taxes of the very very rich are odd, because their income streams are so very different than those of you and I.   In particular, that weird mess of targeted tax reductions that I have decried on any number of occasions come much more into play in the very rich's tax returns, with results that are almost impossible to understand or forecast.  If Drum wants to use this data to argue for flat taxes and an elimination of deductions, I am all ears.

Generally, in any discussion of taxes, I focus on the foundations of
property rights, to argue that taxation is no different than
stealing.    Most of us agree that grabbing someone else's money at
gunpoint is immoral.  I do not hold to a theory of government that says
that this immoral action is suddenly moral if 51% of my neighbors
sanction it.

Anyway, I am going to leave behind the moral basis (or lack thereof)
for taxes and focus instead on five practical problems that a
well-crafted tax system should be able to avoid.

1.  Complexity and Preparation Time

I probably don't need to go into great depth on this one to convince you that taxes and tax returns are ridiculously complex.  We all know how complicated even the individual 1040 has become, so much so that using tax preparation software is nearly de riguer for most middle class taxpayers.  Last year, our federal and state income tax returns for the company were over 400 pages long.

For a small business, the tax preparation burden goes much further.  For example, the burden of payroll tax preparation, not to mention staying on top of compliance issues, is so high that no sane business person does payroll in house any more.  Quarterly state and federal unemployment and withholding tax returns must be filed, with salary detail to the last penny for every single employee.   As a result, everyone uses a service like ADP, and though this solves the workload problem, it still costs money - about $12,000 a year in our case.  That's not the tax bill, just the cost to keep up with the government paperwork. 

But with payroll taken care of, businesses still must file sales tax returns, excise tax returns, detailed property tax returns, census data requests, labor and commerce department surveys, and of course income tax returns.  Each of these typically have to be done at the state level and in many cases separately for every single county and city where we do business.  Each in and of itself is horribly time consuming - see this example for property taxes, this one for sales taxes, and this one for government surveys. 

In Kentucky, for example, we have to file quarterly state withholding tax returns, quarterly payroll withholding returns in each county we operate in, a quarterly state unemployment return, an annual property tax return in each county, and annual income tax return at the state level, an annual income tax return in each county, a monthly sales tax return, a monthly survey for the US Department of Labor about Kentucky headcount levels, an annual foreign corporation renewal, a new hire report whenever we hire a new employee, and a monthly report to the workers comp state fund

2.  Disguising the Tax Load

Quick, how much total do you pay in taxes?  Perhaps the greatest innovation of statists in the 20th century was the tax load shell game - the clever balkanization of the tax load that makes it nearly impossible for the average person to truly know how much they pay in taxes to the government.

Start with income taxes.  OK, April 15 has just passed, but even so, how many people know how much they paid in income taxes last year?  For many people, this is the single largest expense they have, but the total amount is disguised by the fact that most income taxes are taken out as direct payroll deduction.  Statists and leftists everywhere in the US should get up in the morning and give thanks for direct payroll deduction -- without it, if every American had to write a single check once a year for the sum total of their annual income taxes, there would have long since been a revolution.

OK, so you don't know how much you paid in federal, state and local income taxes.  But in addition to that, how much did you pay in social security and medicare (typically about 8% of salary)?  Property taxes (typically 1-2% of your home value)?  How about sales taxes (typically 6-9% of your purchases)?  What about vehicle licensing fees and special taxes on hotels and airfare and rent cars?  If you add all these up, the average American pays about 30% of his/her salary in taxes.  The Tax Foundation has a great chart summarizing this shell game, with relative burdens expressed as days of work each year required to pay the tax.  Note that on average, your federal income tax is only 1/3 of the total of what you are paying:

 
So those are the direct ones, but how much are you also paying in higher prices due to government import duties?  What about the 8% FICA and medicare that employers pay on your behalf - how much higher might your salary be if they did not have to pay these?  What about corporate taxes - you may not pay them directly, but they certainly get passed on to you in the form of higher prices and lower dividends.  What else? - try this list on for size.

3.  Taxes on Wealth and Savings

Most taxes are on income or sales, and so they are at least marginally calibrated with an individual's cash flows.  The exceptions to this are property taxes and inheritance taxes.  These two taxes both go after an individual's savings -- property taxes mainly on the home, the primary savings vehicle for most Americans, and inheritance taxes on everything you've saved when you die.

Lets take property taxes first.  Many people complain that modern life has become a treadmill, forcing families to work harder and harder to keep up their lifestyle.  To a large extent, I think this is a myth - people may be working harder but their effective standard of living is way, way higher than say 30 years ago.  But one of the things that definitely creates a treadmill are property taxes. 

Many people have worked hard to pay off their mortgage, thinking they could settle down into their retirement in a paid off house.  Unfortunately, they may find that their home has increased in value so much that their property taxes at retirement are actually much higher than their original payment on the house.  Take the case of a couple who bought their house in an urban area for $25,000 and find its now worth $375,000 forty years later (this is an average urban price increase over the last 40 years).  For simplicity, we will assume the effective tax rate has stayed at $1.50 per $100 for these forty years (though its more likely to have gone up).  In 1965, they paid $375 a year in taxes.  Today, they have to pay $5,625.  In other words, their property taxes today are over 22.5% a year of the original price they paid for the house.  Now, this is all fine if the couple strove to work up the corporate ladder and get promotions and grow their income proportionately.  But what if they didn't want to?  What if they just wanted to buy that house, pay it off, and live modestly selling driftwood sculptures at farmers markets, or whatever.  The answer is, because of property taxes, they can't.  Likely they will have to sell this house, give up the urban life they wanted, and either move to an urban dump they can afford the property taxes on, or they move out to the country.  Here is an example, via Reason, of this process of property taxes forcing out urban residents living small in favor of yuppies living the dream.  It is ironic that a tax initially invented for populist reasons to cut back on wealth accumulation hurts the lower income brackets and those trying to step off of the capitalist treadmill the most.  In fact, it was the poor in the Great Depression who typically lobbied for laws to put moratoriums on property tax collections.

The estate tax has many of the same origins and issues.  The biggest downside of the estate tax is that it tends to force premature sales of productive business assets to pay the tax.  Rather than leaving small businesses in the family, who have the experience and passion to make them work, they typically must be sold to third parties outside the family to pay the estate taxes.  Again, the law of unintended consequences crops up - estate taxes and the sales they force have done more to contribute to merger and acquisition activity, which in turn drives consolidation of economic assets into fewer and fewer corporations.  The tax meant to stifle wealth accumulation among individuals has in fact spurred wealth accumulation among corporations.  While used for many purposes today, LBO's, that bogeyman of the left, were invented to manage this estate tax forced sale problem.

Asymmetrical Information has a thoughtful series of posts going on estate taxes.

4.  Picking Favorites for Special Treatment

One of the defining characteristics of statist politicians of both the left and the right is that they think they are smarter and more moral than the average American, and certainly than the average American businessman.  Statists and technocrats distrust markets and assume that they can succeed in managing the economy in general and individual decision-making in particular where markets have "failed" to reach whatever end-state politicians would prefer.

Therefore politicians insist on using tax policy to reinforce (or discourage) certain behaviors or to influence certain outcomes or to frankly enrich some favored group.  Examples are all around us, but include:

• Subsidizing farmers and propping up farm commodity prices for no apparent reason than because farmers somehow have a moral halo around them that other businessmen do not.  This is not a big-small issue, since much of these subsidies go to huge conglomerates and millionaires.
• Subsidizing corporations in many industries
• Subsidizing local relocation of favored industries
• Subsidizing billionaire sports team owners  and the local lodging industry
• Subsidizing billionaire movie producers
• Taxing certain non-politically-correct products (and more)
• Subsidizing home buyers vs. home renters
• Subsidizing corporate debt vs. corporate equity

5.  Class Warfare and Punishing Success

Many of the taxes we pay - income, property, estate - have strong class warfare origins.  Heck, the income tax and the Constitutional Amendment that made it possible because Americans were told that only the richest 1% or so would ever have to pay it.  Today, tax debate is littered with class warfare arguments. 

Today, the richest 1% of Americans pay about a third of the total individual taxes, and the richest 10% pay two-thirds.  The richest 50% of Americans pay 100% of the taxes (in the other half, some pay a bit, and some get a bit back in EITC, but the net is zero).  So, a small percentage of Americans pay for the services and government
cash subsidies enjoyed by the majority.  So how do we treat these
people?  As heroes, or benefactors, or as the most productive?  No we treat them as evil parasites who are not
doing their fair share.

By the way, These shares paid by the rich actually went up after the Bush tax cuts (yes, that's not a typo).  The very fact that this statement might seem unbelievable points to how much ridiculous class warfare demagoguery permeated the last election.  By the way, these numbers are for income taxes.   The numbers for total taxes, including the regressive payroll taxes, yields slightly different numbers but the same results, as outlined in TaxProfBlog today.

The fact is that most "progressive" taxes are in fact punishing the successful and most productive.  The Left loves to wave Paris Hilton around as an example of the useless and unproductive rich who presumably should be taxed into poverty.  They want to obscure the fact that 99% of the rich got to be rich honestly, through hard work, and via the uncoerced interaction with others.  Because saying that your government rewards success with its highest tax rates and confiscates the vast majority of its operating funds from the people who would employ this money the most productively, um, doesn't sound very good.

UPDATE:  I have more here, including a rebuttal of Kevin Drum.

Marginal Revolution notes a recent piece by Jeffrey Rosen about potential libertarian supreme court nominees.  In particular, they noted this quote:

...Epstein was promoting a legal philosophy far more radical in its
implications than anything entertained by Antonin Scalia, then, as now, the
court's most irascible conservative. As Epstein sees it, all individuals have
certain inherent rights and liberties, including ''economic'' liberties, like
the right to property and, more crucially, the right to part with it only
voluntarily. These rights are violated any time an individual is deprived of his
property without compensation -- when it is stolen, for example, but also when
it is subjected to governmental regulation that reduces its value or when a
government fails to provide greater security in exchange for the property it
seizes.

Whoa, how crazy is that?  I find it depressing that believing in the right to part with property "only voluntarily" is today considered so wildly out of the mainstream that it is necessarily a disqualification to be a Supreme Court judge.  The courts today are terribly important battle ground in protecting individual rights against both creeping socialism and paternalism.  Unfortunately, neither Republicans nor Democrats can be trusted with leading this battle.  Each wants the judiciary to protect individual rights in one area and restrict them in another.  The left supports limitations on political speech via campaign finance restrictions and an unfettered right of government to invade personal property.  The right wants limitations on non-political speech via "community standards" on entertainment and hopes to regulate America's sexual practices.

Most people interested in politics are constantly hoping their party is the winner in the race to power.  I just wish I had a horse in the race.