Nanny State Cell Phone Ban

From the Nanny State Department of Backseat Drivers (a.k.a. the National Transportation Safety Board) comes a recommendation to nationally ban the use of cell phones by drivers. It applies to handheld and hands free devices, but not apparently to manufacturer-installed equipment (which I guess would be Bluetooth-connected car stereo systems).

It’s about time. This ban would save lives.  Finally we can extend the benefits of bans in some states to the remaining ones.  Just look at these 2010 results.  A Highway Loss Data Institute study found “car collision rates didn’t change after bans went into effect—and they didn’t change for nearby states without such bans, either.”

Whoops. 

But how can that be? How is it that our wonderful state government can pass laws to micromanage our lives, and yet have no tangible, measurable change in outcomes?

“Hands-free device are no less risky than using a handheld phone," said Russ Rader, spokesman for the Insurance Institute for Highway Safety, which sponsored the study. "And this indicates that the issue is really about the distracted driver. It's much bigger than drivers using cell phones."

So what matters is whether the driver is distracted, not what causes the distraction.  Hmmmm. So a driver could be just as a distracted sipping coffee, playing with the radio, talking to a passenger, putting on makeup – or talking on the phone.

But surely, if cell phones can cause drivers to be distracted, there would be an uptick in accidents?  That is, if we look at accident rates before and after cell phones became broadly adopted, we should see more accidents today than before.

Again from Russ Rader: “[E]ven though cell phone usage nationally has exploded over the past several years … there has been no uptick nationally in the number of car accidents.”

According to this data, the period from 1997 to 2005 showed no increase in fatal vehicle crashes nor in the number of fatalities. In other words, cell phones showed no statistical significant impact.

So let’s see.  Cell phone use has no measurable impact on fatal accidents. Statewide bans show no measurable change in the risk of accidents. Therefore, we should ban them everywhere!

That’s some awesome logic there.

Surely the big government agency, with a deep trough of funding, is aware of these statistics.  Why then push the issue?

In an age of budget cuts, every department has to fight for funding. The specter of dire consequences (“People will die if we don’t ban cell phones!!”) make projects sound Very Important. It allows agencies and departments to defend their budgets, even in the face of facts to the contrary.  Maybe the discussion could go something like this:

Congress Critter: “Mr. NTSB representative, we followed your suggestion and banned cell phones. We weren’t sure the ban would make a difference, but we had nothing to lose by the ban, so we went ahead and did it.  Now, several years later, we see there’s no change in the fatality rate. How do you account for that?”

NTSB representative: “Why, just imagine how high the fatality rate might have gotten! It’s a good thing we stepped in when we did. Think of all the lives we’ve saved! Now please give us lots of money to continue finding ways to save lives!”

Too which, one could rightly point out that one can’t prove a negative: the absence of evidence (in this case, the absence of an uptick in deaths) is proof of nothing.  The onus of proof is on the NTSB to show that cell phones increase the risk of death.

Another reason such bans are adopted: politicians have to look busy to get re-elected. If a politician did nothing, many would conclude he wasn’t doing enough to save lives. (Of course, some of us would gladly vote for “do-nothing” politicians who would butt out of our lives.)

Another reason: we feel good. Damn the consequences and the facts, it’s the intention that matters. We intend to save lives. Our hearts are in the right place. So what if it doesn’t actually accomplish anything? We’re trying to save lives!

Except it does accomplish something. There are plenty of good, productive uses of cell phones. Long commutes can be made productive through phone calls with clients, or we can stay in touch with friends and relatives, and so on.  Today’s smartphones are supplanting stand-alone GPS devices for navigating.

Many conservatives use the “unintended consequences” argument to rail against such measures. They say the intensions may be good, but the unintended consequences are not considered. That’s true, but the deeper point is that government agencies like the NTSB don’t have a trade-off. They do their job by maximizing one factor (safety) without regard to other issues, such as the cost of compliance.  Cell phones provide a big benefit to many of us who drive long distances; where’s the just compensation for the losses we incur under such bans? If I have to install a new stereo system, that is essentially a tax on the use of cell phones.

Conservatives also correctly point to the loss of a certain aspect of the American spirit – the idea that people should be left alone to pursue their own interests, so long as they didn’t infringe on the rights of other people. If someone wants to ride his bike without a helmet, or drive without a seat belt, or not go to the dentist for 10 years – that’s his right.

Bans such as this gnaw away at that spirit. As drivers, we should always be responsible and pay attention to the road. If we endanger ourselves, that’s one thing. We should be free to take what risks we choose, so long as we accept the consequences; we are not entitled to someone else taking care of us if we screw up.

We’re too accepting that the Nanny State will take care of us, and that it ought to.  Once upon a time, we had a sense that government should not do so, that it was limited in its powers. That was outlined in the Declaration of Independence, and written in to law as the Bill of Rights. We understood that the government could only do certain things, which were in essence to defend the rights to life, liberty, property, and the pursuit of happiness. We understood that individual rights placed a limit on the scope of what a government could properly do: if some action would violate our rights (say, infringe on our right to free speech) then it could not do it.

This ban is just one little instance of a government strayed too far from its proper purpose. The ban should not be enacted because it violates our rights as individuals. The ban makes no logical or factual sense, but that is besides the point.  Even if cell phones do increase the risk of death, we should be free to choose to drive in such a manner. 

If we drive recklessly, in such a manner that imperils others, then that is what the focus should be. Arrest someone for driving poorly, not for using a cell phone.  After all, which is worse: someone driving carefully while on the phone, or someone without a phone swerving all over the road?

In the end it doesn’t matter what the cause of the distraction is, if the distraction is creating a threat. Instead of demonizing a new technology, let’s take a moment to consider the actual facts: cell phones don’t increase the risk of death; existing bans show no decrease in death rates; the real culprit is irresponsible driving.

When the next ban panders to the hysteria of the moment, remember to look at the facts before jumping on the bandwagon. Take a few minutes to think about the issue.  Ask yourself: Does the alleged cause make sense? Could other causes account for the same effect? Is there existing data I could look at? What are the results of similar actions? Have other states or countries tried this, and what resulted?

And above all, ask yourself the most important question: does this infringe on my rights?

Capitalist Pride

If you read only one Wall Street Journal editorial this year, read today's "Romney's Guilty Republican Syndrome" by Kimberley Strassel.  She hits the nail on the head: Romney would make an ineffective candidate against Obama, because he accepts an unearned guilt for his wealth, and only timidly offers a semi-defense of freedom.  He would be an easy target for Obama’s more consistent anti-capitalism.  Even if he won the election, he would not fight hard or effectively for freedom.

She writes: 

"Mr. Romney is clearly hoping that his own passive form of class warfare will head his opponents off at the blue-collar pass. Really? The 2012 election is shaping up to be a profound choice. Mr. Obama is making no bones about his vision of higher taxes, wealth redistribution, larger government.

Mr. Romney has generally espoused the opposing view—smaller government, fewer regulations, opportunity—but only timidly. This hobbles his ability to go head to head with the president, to make the moral and philosophical case for that America."  

and:

"Mr. Romney isn't the first Republican to develop Guilty Syndrome, and one option would be to form a support group with, say, George H.W. Bush. A better cure might be the tonic of Ronald Reagan, who never let his own wealth get in the way of a good lower-tax argument. Reagan's message, delivered with cheerfulness and conviction, was that he wanted everyone in American to have the opportunity to be as successful as he had been."

Speaking 50 years ago at Princeton, Ayn Rand identified the same phenomena but gave a much deeper analysis of the problem.  The speech – “Conservatism: an Obituary” – was later reprinted in Capitalism: The Unknown Ideal.  To understand the importance of a moral defense of capitalism, as opposed to just an economic defense, read this essay.  (And if you haven’t already, read her novel Atlas Shrugged as well.)  

The timid defense of capitalism is thus nothing new.  My focus here is the importance of it and to use it to evaluate the GOP candidates.  Are there better alternatives than Romney if we want to defeat Obama next November, and return to a smaller, individual-rights-respecting limited government that doesn't muck around with the economy?

To turn the economy around, we need to turn hard and quickly away from statism.  That requires strong leadership.  It is not enough to have the right positions, politically or philosophically.  It requires projecting confidence, certainty, and pride in one’s positions.

I’m not a fan of Sarah Palin, but what attracted many to her was exactly that emotional chord.  It also caused her opponents on the left to respond so strongly.  On some level both sides got it: she acted as if she wasn’t going to compromise.  In the one speech that made her an overnight sensation, she proudly refused to cower before attacks from the left.  She proudly promised to fight back.

Consider the current crop of GOP candidates.  The debates have been telling.  Look not only at the positions they take (and how consistent they are with capitalism, individual rights, and Objectivism), but pay attention to their behavior.  Who projects confidence?  Who inspires a willingness to fight for one's values?  Who can generate real enthusiasm for their cause?

Mitt Romney is the extreme case of the compromiser: nobody believes his alleged support for capitalism.  It comes across as weak and timid, and given his record (especially on health care) he has zero credibility to advocate for limited government.  He also projects, more than any other candidate, the too-polished, too-rehearsed, lack of authenticity of a politician.  I suspect, ironically enough, that it is that very polish which many of his supporters find attractive, as if they are more comfortable with the devil they know then with taking a risk of rocking the boat to make substantial change.

Rick Perry projects confusion and an inability to effectively argue for a position.  Even if he supported capitalism, he is unable to fight for it.  (He recently came out for a flat tax and got support for it from Steve Forbes, but Perry is not capable of an intellectual defense of it, and certainly not for the moral case.  If elected, such a person, immersed in Washington politics, would not be capable of a principled stand for anything.  The HPV vaccine case was particularly telling: he ignored individual rights and forced girls to get it, until he lost the political fight and compromised.  He is no champion of rights.)

Newt Gingrich projects a respectable intellect (at least compared to the rest of the field) but he also projects a lack of motivation.  He doesn’t behave like someone “in it to win it.”  Some speculate he’s running now in order to raise his speaking fees later on.  It’s telling how many of his comments were about the nature of the debate, as if he were already an outside commentator rather than a participant.  That aspect doesn’t communicate a more intellectual side; it says he’s disengaged.

Gary Johnson has some surprisingly good ideas for domestic policy but is very weak on foreign policy.  He’s in a race with Ron Paul when it comes to blaming America and not being willing to fight a war against Islamic radicalism.  Here again we see a timid, apologetic appearance.  He doesn’t stand out from the field.  He projects the image of a nice guy who is very sincere, authentic, and considerate, but not a rough-and-tumble fighter.  His domestic policy ideas are the best, and he has a good record as NM governor, but he doesn’t come across as a leader.

Ron Paul is the kooky grandfather of the bunch.  He’s the only one in the debates to use the “b-word” (broke) to describe the American economy and to correctly advocate for real radical change: ending the Fed, returning to a gold standard, and cutting $1 trillion from today’s budget.  Nobody else is coming close to that.  However he has the usual libertarian baggage of holding a mish-mash of positions, from wanting to outlaw abortion to blaming America for war in the Middle East.  He has a zealous following, but that devotion comes without intellectual depth.  He has spent 30 years advocating the end of the Fed and has only recently via the Tea Party movement gotten some broader discussion. 

The blame-America game for Johnson and Paul will not get them elected.

Jon Huntsman is Romney-lite (extra lite?).  He doesn’t seem to stand for much at all and doesn’t stand out from the pack.  When people discuss the debates, he is one of the “other candidates.”

Bachmann and Santorum are trying to hide the depth of their religiosity and not succeeding.  Their poll numbers show Americans aren’t buying it. 

Herman Cain projects pride in having worked hard his whole life and achieved real success.  He speaks clearly and confidently. The subtext of his candidacy is the American dream of a man pulling himself up by his bootstraps.  That message resonates with Americans and the poll numbers show that.

He's best known for his 9-9-9 tax plan, which may be more fair and more simple than what we have now.  But interestingly, he's also pushing to end Social Security by following the Chilean model.  That means he is at least promising to fight for a substantial reduction in the size of government.

He has stumbled on a few points, from debate about an electrified border fence to his stand on abortion (he’s against it personally but thinks it is a personal choice, so seems to oppose a ban).  Time will tell whether he can maintain the image he projects, or whether his lack of political experience will undermine him.

I fully expect Huntsman, Bachmann, Santorum, and Johnson to drop out soon as they are too far behind the leaders and aren’t gaining ground.  Gingrich is slowly gaining ground but I expect him to drop out later.

That leaves Romney, with Cain, Paul, and Perry competing to be the anti-Romney.

Of those three, on a sense of life basis, Cain projects the American spirit, with Paul looking confused and Perry looking insincere and ineffective.  The contrast with Romney is the greatest with Cain.

The country will not follow someone who apologizes for his position, who scampers away from any tough stand against bleeding heart appeals.  Reagan is often praised for his “morning in America” message.  Americans want to be proud of their country and of themselves.  It is to this emotional issue that candidates need to appeal, and nobody does that better than Cain.

It is not enough to elect someone with a similar philosophy or simply a few good political positions.  In this election, the brink of economic collapse is coming so fast that it will take real leadership to turn things around.  A good leader must project moral certainty and confidence.  He must inspire people to action.  He must be willing to fight.  He must appeal to the American spirit of individualism and to the idea that hard work pays off.  Most Americans don’t hate the rich, they want to be one of them, despite hearing a constant refrain about the evil of money.  A leader who will be able to turn things around must inspire people to not apologize for wealth, but to take pride in having earned it.

Cain is far from perfect and I disagree with some of his positions.  In the end he may not take radical enough positions.  But part of the package to consider is the image projected, and the implicit moral stand imbedded in it.  

From that perspective Herman Cain is the best candidate.

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10/22/11 Correction:

I struck out a sentence above where I alluded to a "blame America" foreign policy held by Johnson.  After looking into it further, I see no basis for that conclusion.  Paul has publicly declared that much of the Middle Eastern animosity toward America comes from America's actions in the region (a view I do not agree with).  Paul and Johnson have a great deal of their policies in common, so I mistakenly assumed they shared this view as well.

Mea Culpa.

That said, there isn't much to say about Johnson's view on the "war on terror" or dealing with Islamic radicalism, because he really hasn't said much on it.  In watching several video interviews and reading many interviews, foreign policy is not given nearly as much coverage as are Johnson's views on legalizing drugs or his interests in running, biking, and mountain climbing.

In general, Johnson offers the right platitudes -- we should have a strong military for national defense and not get into unnecessary wars.  Problem is, who disagrees with that?  I don't get a sense that he has thought enough about foreign policy, especially for a candidate for POTUS.

He has said two very troubling things in foreign policy: (1) Iran is not a threat to America and (2) that the killing of AnWar al-Awlaki "raises questions."

1.  Since 1979 Iran has declared war on America and has been the top state sponsor of terrorism.  They have repeatedly attacked America.  They are developing long-range missiles and nuclear weapons.  To say they are not a threat is absurdly naive.

From his website:
"Governor Johnson largely blames Iran’s ascendancy in the Middle East on the unintended consequences of U.S. foreign policy. “Iran had one, real military foe, and they were completely consumed with thwarting that military foe, and that was Iraq,” he said. “Iran is rearing its head right now because it doesn’t have to worry about Iraq.” While he believes “we should be vigilant,” he maintains at this time “there is no military threat from Iran.”

Notice that here Johnson suggests an ascendent Iran is indirectly and unwillingly aided by America taking over Iraq.  I agree with that, but that is not equivalent to the usual meaning of the "blame America" idea.  I think our actions in Iraq will encourage Iran because we have removed the largest regional opponent to Iran.  I do not think that blames America, however, as the real culprit -- the initiator of the use of force -- is Iran, not America.

The "blame America first" crowd puts the moral blame for the initiation of force on America's shoulders, rather than on those of our enemies.  Johnson implies our actions in Iraq are exacerbating the existing situation, but not blaming America for causing it in the first place.

2.  The killing of an American citizen by the American government should raise concern -- except when that citizen has openly declared war on America, in the middle of a global war on America, and has been linked to multiple attacks.  It should be clear that a decade after 9/11, the radical Islamists of the world have declared a war on America.  The matter should be treated as a war, not as a criminal or legal matter.  For someone running for POTUS, who would be in charge of that war, it should be crystal clear.  We should be glad this person is dead, rather than questioning ourselves over it.  Does that project moral certainty over the conduct of the war?  What does that portend about Johnson as Commander in Chief?

Some of his stands, such as against nation-building in Iraq and Afghanistan, are warranted, and are at least worthy of discussion.  It concerns me that more candidates aren't looking at how to end our stay in those countries or defining more specifically what our role ought to be.

(My view is if we are to go to war with Iran, having a military presence in both countries serves us well.  But if we aren't going to war with Iran, or perhaps Pakistan, then I don't see any reason to be there.  Once we leave those nations will likely revert back to enemy hands: Iraq to Iran, and Afghanistan to the Taliban who are biding their time in Pakistan.)



I know many Objectivists find a lot to respect in Johnson's views, but I see him as too weak on foreign policy.  He has a wonderful record of cutting spending in NM and would hope to see him replicate that in Washington.  Yet the theme of this piece is the personality of the candidates and their ability to inspire and lead.  Given how Johnson has run his campaign (by often being too timid  to let people know he's even running), and his low-key manner, I don't think he's capable of turning around a country of 300 million, even if he had all the right policy positions.

That said, I'd love to see a run-off election between Cain and Johnson, whose policies are at the moment the closest to my own.

Buffett's "Fair Share" Smokescreen

Buffett’s “Fair Share” Smokescreen

Warren Buffett’s taxes are front and center of a new round of class warfare.

The image of a large group of fat cats, living lavish lifestyles while others face layoffs and rising costs of living, is being used to push for more taxes. 

Increasing taxes on the rich is unjustified.

Their argument appeals to some people through its vague innuendo.  But look carefully and it falls apart, leaving nothing but the desire to punish the rich because of their wealth.

The argument hinges on the notion that the rich don’t pay their “fair share.”  The claim is that some people making more than $1 million a year are paying lower tax rates than middle-income workers.

Not according to IRS data.

As the Wall Street Journal points out, the rich don’t pay a lower average federal income tax rate.  Earners with an adjusted gross income of $50,000 - $100,000 pay 8.9%, while $500,000 - $1,000,000 earners pay 24.1%.  So as a group, the rich in fact pay higher taxes, in both relative and absolute terms.

Buffett has argued the rich derive most of their income from investments, paying a long-term capital gains tax rate of 15%.  Those earning as much as $200,000 pay on average 12.7% in federal income taxes. 

Even on those terms, Buffett is wrong: in general terms, the more money you make, the more you pay in relative and absolute terms. 

There is not a big group of fat cats avoiding the tax code.  The folks at Motley Fool  found that only 20,000 people in 2009 earned more than $1 million and paid a lower rate than the middle class.

The Cato Institute came to the same conclusion: Buffett is wrong. 

The “fair share” argument is a package deal, counting on the undefined meaning of tax fairness.  The term could mean all sorts of things: a more progressive tax, a flat tax rate, or a simplified tax code.

When the details of a package deal like this one are made explicit, it falls apart.  The political value lies in keeping it ambiguous and non-specific.  Let voters interpret it as they wish.  After all, that approach worked for “Hope and Change” in 2008.

Notice that the details don’t matter in another respect: the goal is to raise taxes on the rich.  The point is the increase, regardless of exactly how much or on what precise basis.

If the issue really were fairness, the debate would be about the tax code as a whole, not about how (supposedly) wrong it is for some to pay less than others.

If it were really about fairness, the debate would focus on how to make taxes fairer, and different approaches would be suggested.

Some would suggest a simple, flat tax rate.  Others would counter that that isn’t fair because the rich would be paying more in absolute dollars, so the tax should be a fixed dollar amount for everyone.

Some would argue for closing loopholes and ending exemptions, as they unfairly benefit a few.  Others would push to end tax credits for the same reason.

Some would point out that the rich have a greater ability to pay taxes without impacting their lifestyle.  Following Marx (“From each according to his ability, to each according to his need”), they’d push for a far more progressive and redistributive tax code, with the wealthy paying a much higher rate, and the poor actually receiving a subsidy.

A debate of this kind would be healthy, as the tax code needs a major overhaul.  Instead we are debating how much more the wealthy should be paying.  It panders to envy and class warfare.

If the goal really were fairness, it would not necessarily follow that taxes should go up on one group.  Lowering taxes on others would achieve the same end.  If Buffett is paying less than his secretary, why raise his taxes when you could lower hers?

Raising taxes punishes the taxpayer.  That is the idea behind “sin taxes” on cigarettes, gambling, “gas guzzler” cars and the like.  The tax code is used as an enforcer of moral judgment, punishing bad behavior through taxes or rewarding good behavior through credits, deductions, loopholes and subsidies.

Recall that the tax code is very progressive.  It taxes higher incomes at higher rates; the harder one works, the more one pays.

The tax code also redistributes wealth; the less one works, the more one is rewarded.  Many poor are literally living at the expense of the wealthy. 

If anyone should be morally condemned, it is those living on the backs of taxpayers.  They treat taxpayers as slaves, with themselves entitled to the benefits of the actions of others.

This is a condemnation not of poverty, but of the attempt to justify slavery.  No person is entitled to live at the expense of another.  That flies in the face of the notions of a free society, of equality before the law, and of individual rights.

The current code is an indecipherable, unknowable, and contradictory web bought and paid for by lobbyists.  Some see this aspect of the tax code as the least fair, and for good reason.  Those with political pull use the force of government to benefit while those without it suffer.

It is important to keep this in mind when discussing a “fair share” of taxes.  The context is an omnipotent government with its tentacles in every aspect of our lives.  To fund this requires enormous amounts of money, so there is a lot at stake with the details of how that money is raise – that is, with the tax code.

But consider the situation with a smaller government.  Suppose we didn’t have an alphabet soup of regulatory bureaucracies and departments.  Suppose we had a government whose sole job was protecting the rights to life, liberty, and property of its individual citizens – and no more. 

Such a government could operate on a tiny fraction of today’s tax revenue.  In which case, all taxpayers could pay less.

For many people, it wouldn’t matter if someone else paid less or more than he did, so long as his taxes were substantially reduced.  If his total tax burden was only 5% it wouldn’t matter if his neighbor paid 1% or 10%.  He would be far better off than he is today, regardless of whether his neighbor was in even better shape.

In other words, the issue of tax fairness arises only in the context of a government far larger than it should be, doing things it should not be, and requiring vast sums to fund it.  The tax fairness issue pits one group of citizens against another only because they feel they are paying more than they should be, and resent those that they feel are not.

This is why the “fair share” argument is a smokescreen.  The issue is not that a few rich people are paying less than some other people, but that we all are paying far too much.

Shrink government.  Stop it from micro-managing the economy through regulations.  Get it back to only defending our liberties.  Then the issue of whether a tax is fair or not becomes a very minor issue.

Even in that case, the nature of a tax as such raises another issue in regards to fairness.  A tax is involuntary – we are compelled under penalty of law to pay it, whether we wish to do so or not.  In the middle ages the king’s representatives would knock on doors and take money by force.  Today it is indirect and subtle, but it is still ultimately taken by force.  It is still theft of one’s wealth.

With that in mind, “tax fairness” is really an issue of “theft fairness.”  The debate is over how much money the government ought to steal.

This provides a clear answer: no amount of theft is moral.  On that basis, there is no such thing as a “fair tax” in the most objective, most literal meaning of the words.  All taxes are unfair.

The “fair share” of taxes that everyone – Buffett and his secretary, the middle class and the poor – ought to pay is none.

Shrink government and the amount of money needed will be small.  End taxes and find an alternative, voluntary means to fund that smaller government.

That would be fair for everyone.

JOHN BOLTON ON 9/11 + 10

John Bolton spoke Sunday at the American Freedom Alliance event 9/11 +10: IS THE U.S. ANY SAFER TODAY?

He had some interesting comments.  (The following paraphrases are based on my notes. He discusses the same topic in this article at AEI's website.  Much, but not all, of what he said Sunday is in this commentary.)

RESPONSE TO KRUGMAN

Paul Krugman's blog post on Bush and Giuliani is the view of someone deep in the heart of the establishment, not some fringe element.  It is typical of the "blame America" view.  Why are our responsibilities so great?  Consider Krugman and his ilk who deny our right to defend ourselves.

ARE WE SAFER TODAY?

Yes and no; there’s no simple answer.  There are several variables in play with more forces unleashed against us.  Our military has had amazing successes overthrowing the Taliban in Afghanistan and Hussein in Iraq.

However, we are not yet fully safe despite these big victories.  We need to wage war against the direct and indirect state sponsors of terrorism.

Bush was correct in saying shortly after 9/11 that this would be a “long war.”  The proper comparison would be to the long war we won against communism.

In today’s “world of ambiguity” we can never be fully safe.

LAW ENFORCEMENT VERSUS WAR

An important decision post-9/11 was to reject the metaphor that terrorism is a law enforcement issue.  This doesn’t capture the nature of the threat.  As an act of war against us, we can marshal the nation to action.  The fact that Obama maintained or extended several policies of the Bush administration (keeping Gitmo open, increasing drone attacks in Pakistan, etc.) means the debate of war versus law enforcement view of terrorism is now resolved in the U.S.  This is not the case in Europe.

NATURE OF THE THREAT

The threat from “radical Islam” is growing and metastasizing because the overthrow of autocrats in Egypt, Libya, and elsewhere are releasing the repressed forces, which include radical Islam.

The threat from radical Islamist governments comes not just from the direct violence but also from their policies.  There is a philosophical and political component, not just a military one.

American weakness, not strength, is provocative.

We face the alternative of fighting them in America or in the Middle East, which is why we need to maintain a strong American presence there.

Changes since 9/11 have raised new worries.  Most notably, WMD proliferation opens the door to their use by terrorists.  This threat is real: computers captured in Afghanistan show in great detail the long-term goal of Al Qaeda to use WMDs.  Al Qaeda in the Arabian Peninsula, for instance, is working to develop the capability to use Ricin.

ROGUE STATES

The rogue states are cooperating against America.  Iran and North Korea are potential sources of nuclear proliferation to terrorists.  Pakistan is estimated to have 60 – 200 nukes, which could fall into the hands of the radical Islamists if they seize control of the government. 

North Korea has shown itself to be a major player in the Middle East.  For instance, it was their nuclear reactor blown up in Syria not too long ago.

[Bolton is] very worried that the Obama administration has given up trying to prevent Iran going nuclear.  There are fundamentally different ideas running the Iranian government than run that of the USSR.  We can’t contain and deter them the way we did with the Soviets.  This leads to the Saudis, Egypt, and others getting nukes, and eventually the terrorists getting them.

GREAT POWERS

The “Great Power” politics from the Cold War haven’t gone away.  We have a resurgent Russia, using oil to influence Europe.  China is developing for the first time a blue-water navy, including subs and aircraft carriers.  They are already fighting for mineral claims in the South China Seas.

DEFENSE BUDGET

Over the next few months we face an important defense budget battle.  The economic crisis has spurred the need to reduce government spending, taxes, and regulations.  The Congressional “supercommittee” appointed to specify budget cuts may trigger dramatic budget cuts.  The Obama administration has already cut $350B from defense.  As part of the debt ceiling fight, another $400B has already been cut.  If the trigger is pulled, we’re looking at a total $1.5 Trillion in defense cuts.

Such drastic cuts are contrary to a proper view of war, such as that articulated by JFK: “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty.”

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My comments: 


It was great to see an enthusiastic audience cheering many of these points.


Bolton made many good points with which I agree.  He has an excellent grasp of the dangers we face from terrorists and their state sponsors, and the problems we're having in dealing with them.  Some of the information was new to me, but the general assessment was not.  He did a good job of assessing how unsafe we are, but didn't provide new insights into how to deal with the problem.  It also isn't clear what he thinks the long-term future shape will be: will we find a permanent solution to the radical Islamist threat, or learn to become like Israel, under constant threat?

WHAT THE GOVERNMENT SHOULD DO ABOUT JOBS

Suppose you run a small store employing a few people.  Your business is growing and you find yourself swamped with work.  Should you hire another employee?

This decision is something businessmen confront often. Projecting this issue across the country, to all industries and to companies of all sizes, gives us a perspective on the persistent high unemployment rate.  What issues should the businessman consider?  What causes him to decide to hire or not?

Let’s examine this issue in detail and see how government policies impact hiring.

Will there be work tomorrow?

At the moment, you certainly have enough work to keep someone busy full time.  But is the growth temporary, or do you project it to last for the foreseeable future?  If it is temporary, then it makes more sense to avoid taking on the long-term obligation of hiring a full-time employee.  Maybe you hire a temp or offer extra pay to encourage current employees to work longer hours.

To answer this, look at the source of the growth in business.

Suppose the growth is due to a spending stimulus package from Washington.  What type of hiring would that encourage?  If your customers are buying more because of a one-time surge in extra cash, they won’t continue once it is spent.  A full-time employee, without the extra business, may need to be laid off.  Could you count on another stimulus, then another, in an unending series?

Suppose instead it is a permanent income tax cut.  The customers now have extra cash, and you can project they will have more cash next year as well.  Hiring a full-time employee makes more sense.

What’s the job worth?

You need to offer at least enough to motivate someone to work for you.  Yet the work that needs to be done is worth only so much to you, and you can’t pay someone more.  These facts set a range for an offer.

You also have to factor in the overhead costs.  You have to rent the space from the landlord, pay benefits, keep the lights and air conditioning on, buy supplies, carry insurance, time to comply with business regulations, and so on.  Add these up and spread the costs across your staff, and you have to reduce the offer.

A lot of these overhead costs – benefits, taxes, insurance, regulations – are directly driven by government policy.  Every increase in these rates makes the case for hiring new employees less compelling.

Medical Benefits:

ObamaCare has unleashed massive changes to the health care system in this country.  Every business has to look carefully at the details and determine its impact.  They have to calculate the cost of benefits for every employee. 

It is not clear that an individual business comes out ahead on this.  An interesting point is the deluge of demands for waivers from large corporations like McDonald’s to small companies with political connections to unions.  If this is such a good deal, why the exemptions?  (Curiously, there is a disproportionate distribution of waivers to Nancy Pelosi’s district.  One would think the electorate that chose Pelosi, who championed ObamaCare, would eagerly accept the law.)

Taxes:

Every time a “windfall profit” tax is proposed on a company, consider the impact to potential new hires.  Will ExxonMobil or Chevron be able to expand if they are taxed at a much higher rate?  What about Citibank or Bank of America?

If a city like Los Angeles raises its local sales tax, some shoppers will cross into neighboring Orange County to save a little.  Does that help or hurt employment in L.A.? 

Don’t forget to add all the taxes employers and employees must pay – Social Security, Medicare, state and federal income, state disability and unemployment.

Regulations:

Think of the ridiculous regulations businesses face, from San Francisco’s fight to ban McDonald’s “Happy Meals” to the Los Angeles ban on disposable paper and plastic bags from grocery stores.  If you make Happy Meals or grocery bags, you won’t be hiring anyone soon.  If you use grocery bags in your store, you’ll have to figure out how to comply with the new law, dispose of the existing bags, figure out from whom to buy new bags (or whether to offer them at all).

These burdens make the case to hire harder to make.  In some cases, the profit margin may be so large that it is an easy question to answer, and one needs to hire quickly or lose business.  In some cases the profit margin is so small that it clearly isn’t worth it.  But there is a great middle ground where it is too close to call without looking very closely at the numbers or taking unnecessary risk.

These are all contributing factors, but so far I’ve treated them as if they are objective – well understood, predictable, and objective.  In reality they are rarely so.

More often, the taxes, regulations, laws and other business burdens change with the political winds.  It may depend on who is in the White House, but often they come down to anonymous government bureaucrats deciding who gets investigated (Gibson Guitar) and who doesn’t, whose taxes deserve extra scrutiny, what types of industries curry political favor ("green" tech companies like Solyndra) and which get targeted (coal-fueled power plants).

Consider Obama’s deals to bailout GM.  Decades of established contract law and bankruptcy rules were thrown out when the government ignored the rights of GM bondholders, leaving them empty handed.  If this can happen to one of the biggest companies, what’s to stop the government from stepping on your property rights as a business owner?

Consider the Defense industry.  In August, a deal was struck to establish a special committee to cut the federal budget.  Failing to find agreement in November means automatic cuts in the Defense budget in hundreds of billions of dollars.  Consider the uncertainty that creates for defense contractors, who won’t know – who CAN’T know – whether or which programs may get funding or get cut.  In such an environment, would a contractor seek to hire staff?

Consider how long we waited for the last Democratic Congress to pass a budget; in all that time, businesses had no way of knowing how much tax they’d have to owe.  In such an environment, would your business hire?  Or would you wait until the budget was passed, and your accountant could determine the cost of each employee and how much profit (if any) you could anticipate with a larger staff?

You can begin to see why it is not just the amount of taxes or costs of laws that cut into hiring, but the sheer uncertainty in planning for the future that is a significant burden.  This is not just a financial or business issue, but fundamentally a cognitive issue.  A businessman cannot function long term in a market ruled by arbitrary laws and regulations; a businessman who cannot function long term will be less likely to make the long term investment in new employees.

This is why the best way to reduce long-term unemployment is to get government out of the way.

A small tax reduction, a moratorium on new regulations, a repeal of ObamaCare, Dodd-Frank, Sarbox, and the like will help, but it is the sum of all of it that contributes to the Great Uncertainty that keeps businesses from expanding. Repeal of the major regulatory legislation of the last few years would be an important step.

While each little improvement is good, what’s needed is a major overhaul of the tax system and regulatory environment.  It will take a dramatic step to change the mood of the country and give businessmen the confidence that they will be able to forecast without government intervention arbitrarily changing things.  They will see the potential return on their investments in new employees.

Above all, reduce uncertainty.  Restore the rule of law and respect for the property rights of businesses and businessmen – loudly and clearly so that all will hear the message and understand.  This will unleash a flood of new hiring.

POSTSCRIPT

A 9/7/11  Wall Street Journal article (“Private Ideas on How to Create Jobs”) asked business leaders for their views on how to spur job creation.  (What a radical idea: to find out how to create jobs, ask people who create them!)

A few excerpts:

CEOs:

“Chief executives … support repairs to aging infrastructure… and point to lower taxes and fewer business restrictions…”

“… U.S. infrastructure is simply not competitive.” – Rio Tinto CEO Tom Albanese

“The CEOs also want lower corporate taxes… and a moratorium or rollback of business regulations.”

“U.S. companies need the ability to recruit the best workers…. We must increase the number of H1-B visas available and reform the employment-based green card process.” – Bob Greifeld, CEO, NASDAQ-OMX

SMALL BUSINESS:

“Carey O’Donnell, chairwoman of the Chamber of Commerce of the Palm Beaches, said that the lack of access to capital is the top impediment to growth… Loosening financial regulations for banks, she said, could make it easier for business in her area of Florida to grow.”

O’Donnell adds that “… cuts in her tax burden would prompt her to add to her own 14-employee staff. ‘It would reduce the risk of hiring more people, even if it was temporary.’”

And finally, there’s this:

“Republican Douglas Holtz-Eakin, a former director of the Congressional Budget Office and president of the American Action Forum think tank, said measures such as tax credits for new hires and extending emergency unemployment-insurance benefits won’t encourage hiring. ‘They’re all one-time things that don’t genuinely raise the long-term growth capacity.’”

Bingo.

POSTSCRIPT NO. 2

Here's a list of taxes Obama has imposed on us since he's taken office.  Is it surprising?

Hello World

WELCOME!
My main focus on this blog will be political and economic commentary.  These posts will be directed at issues of the day, with sufficient background information to put daily events in a proper context.

I'm gravely concerned about the political and economic direction of America away from freedom.  There is so much happening daily that I can't let things pass without comment.  I want to note ongoing developments, put them in context, explain their causes, and identify solutions.  As bad ideas pop up, I want to identify them as such, explain their deeper meanings, and offer a better alternative.  I'll look at ongoing developments and determine whether they are good or bad signs for future freedom and prosperity.

A secondary interest of mine is the world of ideas: philosophy and history, economic theory and psychology, movies and literature, and so on.  There are so many exciting ideas in the world to bring to the attention of you, the reader, in so many fields.  My focus in these posts will be to share the adventure of exploration and the joy of discovery. 


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The name of this blog has multiple meanings.  The focus is on identifying root causes and principles -- themes -- to explain events, uniting abstractions and concretes, theory and practice.  


"Strike" has several relevant meanings (from Dictionary.com): 
to impress strongly; 
to inflict, deliver, or deal (a blow, stroke, attack, etc.); 
to declare or engage in a suspension of work against (a factory, employer, industry, etc) until certain demands are met.  (Readers familiar with Ayn Rand's ATLAS SHRUGGED should see the relevance of the last definition.)


"Striking Themes," then, is focused on:
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- using Ayn Rand's philosophy of Objectivism to explain political and philosophical topics.


In particular, this blog is aimed at going on strike against the broad cultural themes and philosophical ideas that have led the world to its present precarious state.

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