Recently in Ayn Rand Was Right Category

Yup. I'd say that pretty much says it all.

(H/T GraniteGrok)

On a number of occasions I have mentioned the Laffer Curve, an illustration of the relationship between tax rates and tax revenues and how once tax rates fall above or below a certain point tax revenues fall off. It is a simplistic illustration but no less correct for its simplicity. Simply stated, if the tax rate for a given tax is either 0% or 100%, the amount of revenue collected will be zero. As the tax rate moves away from either extreme the amount of revenue increases. The trick is to figure out the magic tax rate that maximizes the revenue collected. And that magic number will be different depending on what kind of tax is being imposed, meaning the tax rate on income that maximizes revenue will be entirely different from the tax rate on sales of goods and services, and so on.

It can be argued that the taxes we pay to the federal government are well above the sweet spot, meaning that when the government increases taxes the expected revenues will not meet projections. Others seem to believe no tax rate is too high and that the rich, meaning those of us with jobs that actually pay taxes, should have even more of our money taken from us to fund things we neither need or want.

Now comes what is being called Hauser's Law, which states that regardless of the total tax burden of the American taxpayers (this includes all taxes imposed, and not just on individuals), the revenues collected will be less than 20% of Gross Domestic Product. The chart below, created by using the National Income Accounting method rather than the CBO or OMB methods, shows that since 1929 the revenues collected have always been below 20% of the GDP. (The chart isn't all that clear, but it is readable...sort of.)


Click on image to enlarge

As tax rates increase economic activity slows when billions are siphoned out of the economy and used for non-wealth producing activities. The more money siphoned out of the economy, the more economic growth declines and the less revenue is collected by the government. Hauser's Law implies the Laffer Curve, showing revenues fall as taxes rise or fall above a certain point.

What's the origin of this limit beyond which it is impossible to extract any more revenue from tax payers? The tax base is not something that the government can kick around at will. It represents a living economic system that makes its own collective choices. In a tax code of 70,000 pages there are innumerable ways for high-income earners to seek out and use ambiguities and loopholes. The more they are incentivized to make an effort to game the system, the less the federal government will get to collect. That would explain why, as Mr. [W. Kurt] Hauser has shown, conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenue.

Far too often those projections fall victim to the Law of Unintended Consequences, where higher taxes on some economic activity discourages that activity, in turn lessening the activity being taxed and reducing the revenues expected. (Ayn Rand wrote about that over 50 years ago in Atlas Shrugged, though she's not the first to do so.)

But we know that won't stop our tax and spend Congress from taxing the hell out of everything that moves in an effort to pay for all the 'free' programs they and the President are trying to shove down our throats. Too bad they'll be limited by Hauser's Law, meaning they'll keep spending far more than they will ever be capable of collecting in taxes.

I attended the Tea Party in Manchester, New Hampshire this afternoon/early evening and got back just before 9PM.

I'll have an honest to goodness post about it tomorrow Saturday.

I've seen all kinds of reports and so-called exposés about the TEA party movement in MSM. Many were derisive, a few tried hard to be neutral, a few more were big supporters, and some were outright hostile.

But then, out of nowhere, comes a piece that even a cynic like me has to admit was pretty well balanced, and from a source I never would have thought of as fair.

Ben McGrath does a pretty good job covering the rise of TEA party activism for the New Yorker, resisting the urge to paint everyone involved with the TEA party activities as inbred right-wing rednecks beholden to Big Oil, Big Finance, and Big (place name of latest scapegoat du jour here).

My first immersion in the social movement that helped take Ted Kennedy's Massachusetts Senate seat away from the Democrats, and may have derailed the President's chief domestic initiative, occurred last fall, in Burlington, Kentucky, at a Take Back America rally.

About a thousand people had turned up at the rally, most of them old enough to remember a time when the threats to the nation's long-term security, at home and abroad, were more easily defined and acknowledged. Suspicious of decadent élites and concerned about a central government whose ambitions had grown unmanageably large, they sounded, at least in broad strokes, a little like the left-wing secessionists I'd met at a rally in Vermont in the waning days of the Bush Administration.

If there was a central theme to the proceedings, it was probably best expressed in the refrain "Can you hear us now?," conveying a long-standing grievance that the political class in Washington is unresponsive to the needs and worries of ordinary Americans. Republicans and Democrats alike were targets of derision.

Addressing McGrath's last point, more than a few Republicans have made the mistake of thinking the TEA party movement is a phenomenon automatically supportive of the GOP. They're wrong. Most Americans are sick and tired of being ignored or marginalized by both political parties. TEA party activists like me see both the Democrats and Republicans as being part of the problem, so GOP congresscritters, governors, and state legislators are no more immune from our displeasure than Democrats. (It's just that there are so many more Democrats in office these days that they're taking the brunt of our pushback.)

McGrath credits Rick Santelli, a CNBC reporter, as being the spark that started the TEA party fire with his rant on the floor of the Chicago Mercantile Exchange last February. The rant, reminiscent of Peter Finch's portrayal of Howard Beale in the movie Network, expressed the frustration so many of us were feeling at being ignored by the very people we put in office to serve us. Instead, they decided that we served them, and as such, all that was ours was theirs to use or misuse as they saw fit.

They were wrong.

And so the movement grows, as McGrath has shown.

There's something terribly wrong with this whole concept.

How is it the President can impose a tax (a fine fee) on responsible financial institutions that wisely and carefully shepherded their depositor's/client's money through the financial meltdown, required no TARP funds, didn't have to declare bankruptcy, nor required any other government 'help' because they were solvent and didn't get involved with the financial shenanigans? Yet the irresponsible institutions and corporations that squandered hundreds of billions of dollars get a walk and won't have to pay the fine fee?

Doesn't this send the wrong message? The President is saying, in effect, "If you do well and make money for your clients/depositors/shareholders while also providing sensible and responsible financial services we will punish you!. But if you are spendthrift and get involved with high risk financial strategies and investments and lose all of your money, will give you all the taxpayer money you need to stay afloat."

Like that will help stimulate the economy in any kind of sustainable fashion. But then, the looters never look at such things from an economic point of view. It's always about being "fair and just". But who decides what is fair and just? The looters, or course.

It has become quite apparent that our so-called representatives in both chambers of Congress have ceased to represent us and instead have gone off in a radical direction that will, in the end, cripple America with crushing debt, destroy an imperfect but working health care system that rivals that of any place else on the planet, erode even more of our rights, and create economic roadblocks that will do nothing but further weaken our ability to compete in the world's marketplace. It is the nightmare of Ayn Rand's Atlas Shrugged come to life. With all of this in mind, is it any surprise a large majority of Americans are so angry with Congress and their Leftist Overlord?

We're trying in every way legally and officially possible to make clear that we don't want the radical meal we're being forced to eat. We fervently do not want to "fundamentally transform" America. But there is such a huge disconnect from our world to our representatives'. It's as if we are ghosts whom they can't see or hear! When someone refuses to listen, going so far as to ignore you, don't you shout louder? Doesn't it anger you? When you're attacked and belittled because you have to shout to be heard and you're still ignored, doesn't that infuriate you? These people miss that we passionately don't want what they want. The more they refuse to hear us, the more we try to make them. We are not going away.

We're justly and increasingly angry because our reps not only refuse to hear us, but they also chastise us for wanting to be heard. How else would they expect us to react when we feel so helpless and hopeless? No matter what we want, say, or do, our government is going to force us to eat a meal we never ordered. In addition, we keep saying, "no, we don't want this," but they keep putting affirmations in our mouths and proceeding with their radical agenda anyway. We are not enjoying the governmental rape of our country. We said "no," and "no" means "no" in every language. Why doesn't this matter? Every poll reflects the president's rapidly declining approval rating -- for good reason. And still, Robert Gibbs flippantly dismisses it. How are "we the people" supposed to feel? Certainly we do not feel happy, or even just mildly upset, about being disregarded. Far-left ideologues who supposedly espouse "compassionate" causes have no compassion for how we feel, nor do they have a clue that we are an angry mob of their own creation.

I certainly feel angry, particularly with my Congressional Representative, Carol Shea-Porter (D-NH1), who has shown a penchant for dismissing any of her 'constituents' who do not ascribe to her particular political beliefs. On more than one occasion she is alleged to have referred to those of us non-Democrats living in her Congressional District as not being her constituents. That's funny as I thought everyone living in her district was her constituent, whether we agreed with her politics or not. So much for being our representative. Instead she represents only her own points of view and the hell with the rest of us. (I have a feeling Ms. Shea-Porter will have a very rude awakening come next November when she's booted, bag and baggage, from her seat.)

Obama's falling poll numbers certainly indicate a lot of our anger, particularly when his approval rating after a little over 11 months in office is worse than George W. Bush's after eight years.

Yet there's another twist that might make we angry Americans even angrier: Pelosi and Reid's move to short-circuit the normal conference process, where differences between House and Senate versions of a given bill are hammered out. Instead, reconciling the differences between the two health care reform bills will likely be done behind closed doors, out of the public eye, with little input from members of either house. In other words, the fix will be in.

When Democrats took over Congress in 2007, they increasingly did not send bills through the regular conference process. "We have to defer to the bigger picture," explained Rep. Henry Waxman of California. So the children's health insurance bill passed by the House that year was largely dumped in favor of the Senate's version. House Ways and Means Chairman Charles Rangel and other Democrats complained the House had been "cut off at the knees" but ultimately supported the bill. Legislation on lobbying reform and the 2007 energy bill were handled the same way -- without appointing an actual conference.

Rather than appoint members to a public conference committee, those measures were "ping-ponged" -- i.e. changes to reconcile the two versions were transmitted by messenger between the two houses as the final product was crafted behind closed doors solely by the leadership. Many Democrats grumbled at the secrecy. "We need to get back to the point where we use conference committees . . . and have serious dialogue," said Rep. Artur Davis of Alabama at the time.

But serious dialogue isn't what Speaker Pelosi and Majority Leader Reid are interested in right now. Look for the traditional conference committee to be replaced by a "ping-pong" game in which health care is finalized behind closed doors with little public scrutiny before the bill is rushed to the floor of each chamber for a final vote.

Is there any wonder why things like the TEA party movement have been growing? Is there any wonder why confrontations between members of Congress and the public have been becoming more heated and less polite? Why are the Democrats so surprised when far too many of them have been ignoring their constituents back home, ignoring their wishes, ignoring their phone calls, letters, and e-mails, and following the lead of Pelosi and Reid, neither of whom has the best interests of the American people at heart. Instead they have their own Leftist Utopia-driven agenda that has nothing to do with what the American people want or need.

And the anger grows.....

Do you want to see the future of the US under the policies Obama, Pelosi, and Reid are trying to impose upon us? Then check out this video, courtesy of PJTV.

After 50 years of leftist policies and politics, Detroit has gone from the peak to the valley, having shrunk in population by 50%. Is that's what in store for us under leftist leadership for the rest of the country?

Watching what's happening to our economy today it's easy to forget that this isn't the first time we've been through this, with government trying to spend its way out of a recession. The effort back in the 1930's failed miserably, extending the Great Depression for years, as did the 'stimulus' of 1962, which prompted Ayn Rand to comment on the error on the part of government in thinking such spending would do anything but have negative effect, that our economic IQ was sadly deficient. From her column in the L.A Times back in 1962:

Since "economic growth" is today's great problem, and our present Administration is promising to "stimulate" it--to achieve general prosperity by ever wider government controls, while spending an unproduced wealth--I wonder how many people know the origin of the term laissez-faire?

France, in the seventeenth century, was an absolute monarchy. Her system has been described as "absolutism limited by chaos." The king held total power over everyone's life, work, and property--and only the corruption of government officials gave people an unofficial margin of freedom.

Louis XIV was an archetypical despot: a pretentious mediocrity with grandiose ambitions. His reign is regarded as one of the brilliant periods of French history: he provided the country with a "national goal," in the form of long and successful wars; he established France as the leading power and the cultural center of Europe. But "national goals" cost money. The fiscal policies of his government led to a chronic state of crisis, solved by the immemorial expedient of draining the country through ever-increasing taxation.

Colbert, chief adviser of Louis XIV, was one of the early modern statists. He believed that government regulations can create national prosperity and that higher tax revenues can be obtained only from the country's "economic growth"; so he devoted himself to seeking "a general increase in wealth by the encouragement of industry." The encouragement consisted of imposing countless government controls and minute regulations that choked business activity; the result was dismal failure.

Colbert was not an enemy of business; no more than is our present Administration. Colbert was eager to help fatten the sacrificial victims--and on one historic occasion, he asked a group of manufacturers what he could do for industry. A manufacturer named Legendre answered: "Laissez-nous faire!" ("Let us alone!")

Apparently, the French businessmen of the seventeenth century had more courage than their American counterparts of the twentieth, and a better understanding of economics. They knew that government "help" to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.

Regardless of the purpose for which one intends to use it, wealth must first be produced. As far as economics is concerned, there is no difference between the motives of Colbert and of President Johnson. Both wanted to achieve national prosperity. Whether the wealth extorted by taxation is drained for the unearned benefit of Louis XIV or for the unearned benefit of the "underprivileged" makes no difference to the economic productivity of a nation. Whether one is chained for a "noble" purpose or an ignoble one, for the benefit of the poor or the rich, for the sake of somebody's "need" or somebody's "greed"--when one is chained, one cannot produce.

There is no difference in the ultimate fate of all chained economies, regardless of any alleged justifications for the chains.

It seems that we still haven't learned that lesson four decades or four centuries later. As the late Ronald Reagan said more than once, "Government isn't the answer. Government is the problem." It was true back during Louis XIV's reign and it's true today. Our government is bent on controlling more businesses, either through direct take over like GM, Chrysler, the banks, and health care, or through onerous regulation and taxation, all in the name of 'stimulus' and 'fairness'.

Apparently our leaders have learned nothing from past attempts to tighten control over economies and businesses that their attempts won't work, won't create the results they want, and won't lead to anything but more poverty, less business, and a weaker economy than if they'd just left everything alone. But government is incapable of not fiddling about with things they really don't understand. And that's our biggest problem today.

As John Stossel writes, it's not the taxes that are the problem, it's the spending.

Last week on "The O'Reilly Factor", we talked about California's and New York's enormous budget deficits and planned tax increases. Those states would have big surpluses had they just grown their governments in pace with inflation. But of course they didn't. Now the politicians act like their current deficits are something imposed on them by the recession.

But that's nonsense. They created the problem with their reckless spending.

--snip--

O'Reilly told me that America is ready for a tax revolt. I hope he's right. But I don't think it will happen until more people see the ruling elite for what it is: a gang of arrogant bullies that has the audacity to believe that they know how to direct our lives better than we do.

That's why, bad as the taxes are, I'm more upset about ObamaCare, Medicare, the "stimulus," the auto bailout, the bank bailouts, the Fannie/Freddie bailouts, the trillions in guarantees, and on and on.

The need for all those extra taxes would be reduced if government at state and federal level could get their spending under control. For the most part that's not going to happen because far too many of those in power like to "bring home the bacon" regardless of the actual costs to their constituents. Only those states forced to address their spending issues, like California, New York, New Jersey, and Michigan, to name a few, will actually have the opportunity to trim spending by billions of dollars. They won't have a choice because if they don't cut spending higher taxes won't fill the empty coffers and the states will face bankruptcy. They simply don't have the money to pay for all those really 'neat things' everyone thought they could afford during the good times. But the good times are gone and with them, the revenues the states had gotten used to having.

To paraphrase James Carville, "It's the spending, stupid!"

From the November 5th issue of Machine Design comes this eye opening observation about our economy, specifically in regards to the Law of Unintended Consequences.

As the official unemployment rate tops 10% in more than one quarter of all states, the hot topic of the day increasingly moves toward how to stimulate more hiring. This is particularly true in states hit the hardest in the economic downturn.

With this in mind, consider the annual trade show put on by the Packaging Machinery Manufacturers Institute last month. Despite the punk economy, show attendance was healthy. Many exhibitors reported a lot of interest in the packaging and food-processing equipment they had on the show floor.

One might wonder why, with manufacturing companies in such terrible shape, makers of food-processing and food-packaging equipment seemed to be doing relatively well. Part of the answer, according to a longtime PMMI board member, is that makers of automation equipment for the food industry are being helped along by recent legislation, but not in the way you might think.

This board member, who has held management positions in the foodprocessing- equipment industry for many years, wasn't referring to stimulus spending. He was alluding to the rise in the minimum wage which took effect this past summer. The food industry is characterized by a significant number of low-wage workers, he points out. In the past, he'd noticed that every increase in the minimum wage resulted in an up-tick of orders for automation equipment designed to eliminate a few more jobs. He figures this past summer's wage hike is shaping up to be no different. Of course, you'll likely never read this explanation for economic activity in newspaper headlines. One suspects that machinery manufacturers asked to publicly explain their improving business conditions tend to avoid giving politically incorrect answers. It is generally unwise to point out that your own good fortunes are partly due to missteps by politicians that have brought misery to others.

(emphasis added - ed.)

Of course it was the politicians in Congress that pushed through the raise in the minimum wage, using the excuse that no one could support a family making the minimum wage as it was before they took action. However, it is rare that anyone making minimum wage is also supporting a family. Such jobs are usually entry level positions for people taking their first jobs. But with the increase of the minimum wage over the past couple of years many of those jobs have disappeared. As illustrated above, when the costs go up employers find ways of cutting costs. Whether that means trimming jobs or replacing personnel with machinery, the end result is the number of jobs at minimum wage shrink.

I have no doubt the members of Congress that ramrodded this change will now claim the decrease in the number of minimum wage jobs is solely the fault of the greedy business owners. But the one thing they constantly overlook is that businesses, particularly small businesses, are not charities. If they don't remain profitable they go out of business, and those working for them will be out of jobs. This is something that seems to have escaped the notice of the Congresscritters when they passed the minimum wage increase legislation.

Professor Russ Roberts of George Mason University gave the House Committee on Oversight and Government Reform an earful earlier today when he testified in front of the committee about executive compensation and the serious imbalance that exists in regards to over-the-top compensation given to high level executives of failing or failed firms.

While I have a problem with the government setting the pay scales and other compensations for corporations and financial institutions, Roberts does make a case for reining in giving incompetent or corrupt executives excessive pay and perks while everyone else takes it in the wallet.

Americans are angry about executive compensation.

Rightfully so.

The executives at General Motors and Chrysler don't deserve to make a lot of money. They made bad products that people didn't want to buy.

The executives on Wall Street don't deserve to make a lot of money. They were reckless with other people's money. They made bad bets that didn't pay off. And they wasted trillions of dollars of precious capital, funneling it into housing instead of... a thousand investments more valuable than bigger houses.

Everyday folks who are out of work through no fault of their own want to know why people who made bad decisions not only have a job but a big salary to go with it.

No wonder they're angry at Wall Street.

But if we keep getting angry at Wall Street, we'll miss the real source of the problem. It's right here. In Washington.

We are what we do. Not what we wish to be. Not what we say we are. But what we do. And what we do here in Washington is rescue big companies and rich people from the consequences of their mistakes. When mistakes don't cost you anything, you do more of them.

(Emphasis added - ed.)

For far too long we have taken a path that privatized profits but socialized risks, meaning the risks businesses were willing to take became greater because they knew they really wouldn't have to pay the price if things didn't work out. All we need to do is look at the housing crash, Fannie Mae, Freddie Mac, and the string of failed banks holding non-performing loans, mortgages, and mortgage backed securities. And we have Congress to thank for that, Barney Frank's protestations to the contrary notwithstanding.

The question is, have we learned anything from this? Probably not.

Capitalism is a profit and loss system. The profits encourage risk-taking. The losses encourage prudence. Is it a surprise that when the government takes the losses, instead of the investors, that investing gets less prudent? If you always bail out lenders, is it surprising that firms can borrow enormous amounts of money living on the edge of insolvency?

I'm mad at Wall Street. But I'm a lot madder at the people who gave them the keys to drive our economy off the cliff. I'm mad at the people who have taken hundreds of billions of taxpayer money and given it to some of the richest people in human history. I'm mad at Bush and Obama and Paulson and Geithner and Bernanke. And I'm mad at Congress. You made sure that risk-takers continue to expect that the rules that apply to the rest of us don't apply to people with the right connections.

You have saved the system, but it's not a system worth saving. It's not capitalism but crony capitalism.

And therein lies the problem. If we were truly a capitalistic economy, the meltdown we experienced never would have happened because the banks, investment firms, and mortgage lenders would never have floated the amount of tainted paper that caused it all. They would have been prudent because they knew no one would bail them out, would get canned (without the golden parachute), and possibly go to prison. But the government intervened with "incentives"and gave them a license to be foolish, to push the edge of the envelope, and to waste money that wasn't theirs to begin with. They knew that if they lost it the government would bail them out, which means that we - the taxpayers - would ultimately foot the bill.

While a "pay" czar may sound like it would stop the insanity, it is merely window dressing that does nothing to solve the problem. Dictating what salaries and other perks high level executives will receive may be a sop to those calling for the government to "Do something!", but it doesn't address the underlying cause of the problem: the government itself.

The regulations and laws passed by Congress that forced lending institutions to make loans to people unlikely to pay them back was merely one aspect of what led to the economy into a deep recession. Changes in lending practices at the behest of the government and government guarantees for sub-optimal loans merely added fuel to the fire that was the banking/credit and housing market collapse.

From what I've been hearing, seeing, and reading, Congress seems disinclined to actually do something substantive about it. They will make the appropriate noises, tell the media that they'll be tackling the issue(s), pass some legislation that sounds like it will take care of it but in the end will do very little to actually fix the problem, and then they'll move on to making sure they get re-elected in 2010.

Thus endeth the lesson.

Here's yet another timely quote from Robert Heinlein's Lazarus Long, one that is certainly close to the truth, particularly in regards to our present President and Congress.

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded---here and there, now and then---are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as "bad luck".

It certainly seems to fit in with the times, with Obama, Pelosi, Reid, and the other leftists heaping scorn and derision upon those actually employing our citizens and creating abundant wealth. With the proposed taxes on "the wealthy" looming as well as other anti-business legislation, would it be any wonder if our nation's aggregate wealth were to decline as these people were prevented from doing what they do best - create jobs?

Daniel Henninger is calling it the Revolt of the Masses, and rightfully so.

In a number of countries around the world the status quo is being upset by voters, turning out long established political parties from power and bringing new blood into their legislatures. Old leaders are being replaced with those that have had enough of creeping socialism and growing indebtedness.

It's no different here in the US, with the public becoming increasingly disenchanted with those in Congress as well as the present occupant of the White House.

In the U.S., political handicappers are predicting heavy Democratic losses in the House next November. This just four years after ending GOP control of Congress in the 2006 elections and two years after sweeping into office Barack Obama and his Democratic partners.

Congress's approval rating remains stuck around 30%. This number may be more important as an indicator of public sentiment toward the nation's leadership than presidential approval.

Some search for an ideological trend toward the left or right in these votes, but the only evident trend is to strike out at whichever blob is currently in power. Even as Americans turned over their country to liberal Democrats, opinion polls showed that the British people were turning toward the Conservatives for relief from listless Labour.

I have a feeling the American people will reverse that decision and move away from the big spenders presently sitting in Congress. It doesn't take a genius to figure out spending far more money than we really have is no way to run a country, particularly when the deficits created will be so much bigger than we've ever experienced.

One commenter to Henninger's piece thought he missed the actual cause of the growing discontent. Steven Flint wrote:

The author is on the right path, but he stopped short of the destination. He is blaming a symptom, not the root cause. He is correct that the problem isn't directly about left and right, but he misses the big picture -- its about up and down.

Lets start here in America. Let's throw all of the writings and lessons of the Founding Fathers into a big pot and bring it to a boil. Add in all of the reasons we fought our wars against ourselves and others, toss in the battles we fought at home for rights and freedom, and heck, even shovel in the adolescent rebellion of the boomers, and let the whole thing reduce to its most elemental. What you'll find when the rhetoric and the posturing is boiled away is the essence of America... a simple idea.

It is this: That everyday common people can run their lives and build a prosperous and fair nation without the ruling hand of their "betters"... whether those "betters" are aristocratic or meritocratic. That is the root of all freedom and all rights. Without that core idea all you have left are temporary dispensations to act and think and talk a certain way... until further notice. But that is not freedom, and those are not rights.

We don't want rulers, only temporary leaders. We don't need kings, be they hereditary or philosopher.

Other nations have their own balancing points, of course. They all have their own social compacts delineating what belongs to the people and what belongs to the elite. But in almost every nation, the political/academic/media/business elite have unilaterally abrogated these understandings. Not all at once, of course, but bit by bit, over the past 4 or 5 decades. We, the people are given empty promises, heavier chains, and shrunken horizons, while the elites gather power and privilege for themselves.

They've gotten good at selling slavery. Most folks volunteer for it, and feel noble while doing it. We have no problems anymore, only crisis. Catastrophe is always right around the corner. Flood the airwaves with experts (those with the "correct" opinions, of course). Cue the stock footage of the approved stock victims. Install the big, blinking guilt-button in the minds and hearts of the people, and press it repeatedly, until the people believe the world is a zero-sum game and they must nobly sacrifice for the good of society. But most of all, get 'em to hand over power and control... no, not to the approved victims, silly... upward! Pass it upward!

Maybe the folks are waking up around the world. Maybe they've noticed that, despite all of the noise and the drama, the elites haven't really fixed anything. Maybe they've noticed that the top-down, expertly planned society is a faux society, more dead than alive. Maybe they've noticed it only produces stagnation and decay. Maybe they realized that all of that debt is meant to cover up all of that stagnation and decay... to create an illusion of growth as their nation is hollowed out, by their own elites, all in the name of some sort of global equality... an equality the elites have no ability to create, but their egos prevent them from admitting so.

Maybe they remembered that the elites get all of their legitimacy from the people, and to withhold it is the greatest power of all.

Maybe.

I couldn't have said it better myself, so I'm not even going to try.

From a comment to this piece about Michigan's financial straits:

"You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation. You cannot multiply wealth by dividing it."

- by Adrian Rogers in 1931

This parallels much of what Jefferson and Franklin wrote about in their day. The truth of their statements haven't changed in all that time. It's just that those who believe that government can cure all ills and is the spring from which all flows have chosen to forget them, if they ever knew them at all. Knowing the state of our education system, I'd say it was the latter.

I was a bit lazy tonight, so I'm going to borrow some words of wisdom from people far more wise and foresighted than I. These came from someone commenting on a WSJ piece about Pelosi's Health-Care Payroll Tax.

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship" --Alexander Tyler

"Our democracy will cease to exist when you take away from those who are willing to work and give to those who would not" -- Thomas Jefferson

"The problem with socialism is that you eventually run out of other people's money" -- Margaret Thatcher

"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle" -- Winston Churchill

Much what we have been warned about by these great people is coming to pass. The Congress and the President denigrate and disparage the people actually making the money, creating the wealth and the jobs that go with it, pandering to the Have-Nots, many whom Congress and the President have created, and they expect the producers of the wealth to take it silently, in other words to "pay up and shut up."

Should they succeed, then we will be living in the hell that is Ayn Rand's Atlas Shrugged, a hell of our own making because we voted these glad-handing looters into office based upon their promises to 'stick it to the rich'. But these same thieving elite never bother to let us know that they define the rich as anyone with a job. They may not tax us today. They may not tax us tomorrow. But they sure as hell will tax us to the point of bankruptcy and tell us it's for our own good.

Arthur Laffer, he of the Laffer Curve, and Stephen Moore wrote one of the more definitive pieces about taxes and 'soaking the rich', opining that if the rich are taxed too much, they will pick up and leave, taking their money with them. The forum related to that piece has been abuzz with those agreeing with Laffer and Moore, and those condemning them for fearmongering, as if Laffer and Moore were trying to justify the rich not paying their fair share.

One of my questions: How much do the rich have to pay in order to pay their fair share? I get the impression that to many of the more leftist commenters, 100% would not be enough. Do you think I'm kidding? Merely saunter over to the forum and read for yourself.

But one of the most egregious comments took me aback, making me wonder if it was a joke or a troll. After reading other comments akin to this one I realized this joker was probably quite serious.

The problem is that big business and greedy rich people are once again finding new ways to avoid paying their fair share. A business or individual should not be able to exploit a loophole in the law by packing up and moving across state lines to avoid taxes. For example, a business or individual who has made their money in California and enjoyed plentiful state services in growing wealth should not be allowed to greedily abandon ship just to save a few dollars.

The solution is to require states like Texas to levy some kind of minimum sales / property / income taxes. Right now the situation is a joke, Texas is basically saying "all greedy tax dodgers, move HERE". If Texas were required by the Federal government to increase their taxes then this incentive to cheat would not exist.

Texas and others have already stolen billions from California, which is why we have such a large budget deficit and such poor schools.

So rather than California putting its financial house in order, this jerk wants to force other states to raise taxes they don't need just to make him feel better and to leave a free people with no place to run. How is it the ability (and freedom) to pack up and leave at will should be eliminated just so the Socialist Dystopia of California can spread the misery? This guy needs to be deprogrammed.

Notice how he blames problems California has with profligate spending and confiscatory tax policies on other states that have exercised fiscal restraint and kept spending and taxes under control? He calls it theft. Psychologists and psychiatrists call it projection. He calls people not willing to stay in California so the state can bleed them dry "greedy". But it is he who is the greedy one, the jealous one. He wants to enjoy the fruits of someone else's labor, steal the money from someone else's bank account because he figures he's entitled. But we call it something else. Theft. It is he who is the thief.

It is obvious that, if this individual is serious, he is delusional, uneducated, and a danger to society because of his beliefs. He'd probably feel right at home in the old Soviet Union...until he did something to piss off the KGB and ended up in a gulag.

Unfortunately the opinion expressed by this person, SR, isn't all that different from a lot of other leftists who fancy themselves as some kind of all-knowing economist or sociologist. The problem is that they are woefully ignorant and more than happy to remain that way. That way they don't have to take into account the human factor when it comes to their economic or sociological prognostications.

I've seen more than one economist make a fool of themselves over the years because more often than not they look at just the numbers when making a projection, ignoring what really motivates people to do one thing or another. They wrongfully assume a large portion of the populace will act altruistically rather than in their own self interests, which is why they are wrong such a large percentage of the time. Such is the case with SR, who expects business owners and wealthy individuals to passively accept their lot in regards to confiscatory taxes and onerous regulations and remain in a state that seeks nothing more than their ruination. How naïve is that?

Obviously SR hates the business owners and the wealthy, looking upon them as someone to be exploited. It's no wonder someone like him/her will end up going through life being constantly disappointed.

The present situation (and SR's intense dislike of the producers wealth) reminds me of quote from Lazarus Long, aka Robert A. Heinlein, about society and its attitude against those who actually produce wealth.

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded -- here and there, now and then -- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as "bad luck".

Sound familiar?

When I saw the headline, I almost did a double-take. But I realized that it should not have been surprising at all. After all, why wouldn't Obama's first economy-busting budget have a $1.8 trillion deficit?

For those of you out there that are Economics 101 deprived (or are incapable of reading a balance sheet), the projected deficit for the first year is 150% above all of George W. Bush's deficits (6 years worth) combined. Does anyone one on the Left care to explain how Obama's creation of a single year deficit of almost $2 trillion (with a follow on $1.3 trillion deficit next year) is somehow more fiscally responsible than George Bush's now minuscule-by-comparison deficits?

Anyone? Anyone? No?

I thought not.

Again it appears the Left still believes the money to finance this incomprehensibly huge debt will appear by magic. Certainly the Chinese won't buy into it. Neither will anyone else. And we already know the rich don't have enough to pay for it even if Obama took every penny they make (the funds collected would barely cover a fifth of the total deficit). That means he'll go after the businesses that employ us, and then he'll come after us. And still it won't be enough to pay for all of the Left's dystopian programs.

Atlas Shrugged indeed.

It seems that over the past 30 years or so the Democrats have been decrying the poor state of health care here in the US despite the fact that we have one of the best (and most expensive) health care systems in the world. They keep bandying about the "47 million Americans have no health insurance" canard without explaining where they came up with that misleading claim. They also don't explain how their cure for this "problem" is to ensure the destruction of our health care system in the name of fairness and to turn it into an even bigger disaster than the Canadian or British National Health Service.

How is it that providing equally poor or non-existent health care to everybody is a fair to anyone? The Democrats won't bother to answer that question because we know how in love they are with the idea of 'equal outcome' even if it means destroying something that works pretty well, even though it's not perfect.

One thing we know is when a British member of the European Parliament is warning us not to go down the same path as the UK in regards to health care, we should listen:

[John] Prescott is trying to fabricate a row out of my interview with Sean Hannity on Fox News, in which I warned Americans against adopting a socialist healthcare system along British lines.

I wonder whether anyone still falls for this sort of stuff. For a long time, Labour politicians had two slogans which they would trot out whenever healthcare came up: "Envy Of The World" and "Free At The Point Of Use". These phrases were not intended to be arguments. Rather, they were ways of playing your trump, of closing down the debate.

The NHS, he says, is Britain's "greatest creation". Really? Greater than parliamentary democracy? Greater than penicillin? Greater than the discovery of DNA, or the abolition of slavery, or the common law? John, the NHS produces some of the worst health outcomes in the industrialised world. Britain is the Western state where you'd least want to have cancer or a stroke or heart disease. Ours is now a country where thousands of people are killed in hospitals for reasons unrelated to their original condition. If this is our "greatest creation", Heaven help us.

As for the second slogan, which [Prescott] renders as "need and not ability to pay", there is no health system in Europe or North America that leaves the indigent untended. What is at issue is not whether we force poor people to pay, but whether we prevent wealthier people from doing so. The British system treats everyone equally, it's true: we queue equally, we wait weeks for operations equally, we are expected to be equally grateful for any attention we get.

Any time government takes over a previously private enterprise, just about everybody suffers (except for the bureaucrats that end up running it...into the ground). And claims about how government will merely be another provider of health insurance to the contrary, the government will undercut the private health insurance providers until they pull out of the business or go under, and then "fill the gap" left by their departure. Once that happens, we'll be stuck with a massively inefficient and uncaring government bureaucracy that will see to making sure no one gets the health care they would otherwise be able to afford. This system will also drive people out of the medical profession, much as it has in Canada and the UK, creating a shortage of personnel that cannot be filled because of the disincentives the government has created for going into medicine.

A public program won't compete in a way that any normal business would recognize. As an entitlement, Congress's creation will enjoy potentially unlimited access to the Treasury, without incurring the risks or hedging against losses that private carriers do. As people gravitate to "free" or heavily subsidized care, the inevitably explosive costs will be covered in part with increased outlays to keep premiums artificially low or even offer extra benefits. Lacking such taxpayer cash, private insurance rates will escalate.

Much like Medicare, overall spending in the public option will be controlled over time by paying less for medical services, drugs and technology. With its monopsony purchasing power, below-market fees will be dictated on a take-it-or-leave-it basis -- an offer hospitals and physicians won't be able to refuse. Medicare's current reimbursement policies pay hospitals only 71% of private rates, and doctors 81%, according to the Lewin Group.

What we will end up is not health care, but access to a waiting list for health care. And like Canada and the UK, access to a waiting list is not access to health care, as far too many people in both countries have found out. Too many have died waiting for routine medical care that is readily available in the US. How is it the morons in Congress have come to believe this option is a solution to a problem that doesn't really exist? It's obvious they really don't understand the economics of what it is they're trying to do.

By controlling the prices and keeping the reimbursements artificially low (they call it keeping the price of services low), they are stimulating above normal demand for those services while at the same time ensuring the available supply of those services will dwindle. They will have created a shortage of health care providers in their efforts to make sure everyone has access to health care. That's what happens when people that haven't a clue about the laws of supply and demand start tearing apart a system they don't understand and replacing it with one they believe will work because they have the best interests of the people at heart. Their intentions are good.

We all know where that road leads. Unfortunately they're willing to drag us down there with them.

With Tax Day approaching and literally hundreds of Tax Day Tea Party protests scheduled to take place all over the country, we have to ask ourselves a number of questions. Some are simple. Others are profound.

One of the more interesting ones we should be asking our representatives in Washington is this:

Why is it you think that we, the American taxpayers, work for you? It is you who works for us, and we are hereby giving you notice that you better shape up and remember who's paying the bills, including your salary. Because if you don't, you're FIRED!

This is something the Founding Fathers tried to instill in all Americans when they authored the Constitution and its 'user guide', the Federalist Papers.

Here's a little reminder of what it is we're up against: