Americanly Yours

Hypocrisy.  Thats all this is.  That and an unprecedented intrusion into your personal privacy by the federal government.  RIP 4th Amendment.  It was fun while you lasted.

What am I talking about?  I am talking about the proposed Cybersecurity Act of 2009.  This bill was proposed by 2 Democrats–Jay Rockefeller and Bill Nelson–and 1 Republican–Olympia Snowe and grants the administration sweeping powers over the internet.  It establishes the Office of the National Cybersecurity Advisor and grants that office, the President, and the Commerce Secretary unprecedented powers.

Under this bill, the President will be allowed to declare a cybersecurity emergency and shut down or limit traffic in in any “critical information network” when the President declares it to be in the “interest of national security.”  Of course, the bill defines neither a critical information network nor a cybersecurity emergency and leaves this power up to the President.

However, to me, the scary part is found in the new powers of the Commerce Secretary:  the Secretary will be given “access to all relevant data concerning networks without regard to any provision of law, regulation, rule, or policy restricting such access.”

Ummmm… what?  Thats a scary sentence.  I think the worst part is… well… the whole thing is just awful.

You can find the complete text of the bill here.

From liberal blog Mother Jones: “This means he or she can monitor or access any data on private or public networks without regard to privacy laws.”

This proposed law doesnt just disregard privacy laws, it also disregards the 4th Amendment to our Constitution.

The 4th Amendment reads as follows:  “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

Allowing the government the right to search internet records, without defining the scope of the governments search powers is a blatant violation of the 4th Amendment.

The hypocrisy argument comes in here:  the same people that opposed President Bush for signing the Patriot Act, implementing a warrantless wiretapping program, and keeping records of all phone calls made are the people supporting this measure.  If it is wrong under President Bush, it is wrong under President Obama.

I actually thing that this is a much bigger intrusion into privacy than was President Bush’s program.  While President Bush looked at records of phone calls and made the occasional (so we are told) warrantless wire tap, this plan could give the government unlimited access to an amazing amount of private information.

This is just too much power for the government (and especially one person in the government) to have.

Can anyone imagine how vocal the public opposition to this would have been if this had been supported by the Bush administration?  Can you imagine how loud the media would have been screaming about this if it was supported by President Bush?  Instead, Im willing to bet that unless you are a political junkie, you probably havent heard about this.

I opposed warrantless wiretapping and domestic spying under President Bush.  I oppose it under President Obama.  There is no need for this type of bill and I hope it fails.  However, I am hopeful that if this bill passes, it will be significantly pared down and hopefully vetoed by President Obama.

Americanly Yours,

Phred Barnet

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If you are a regular reader, you will remember that I wrote earlier that the total amount committed to the bailouts by the government equaled $8,800,000,000,000 [$8.8 trillion].

Thats a ton of money–to put it lightly.  But, unfortunately for your wallet, it didnt end there.

Bloomberg recently reported that “[t]he U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion” over the past 20 months.  “The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.”

This means that in the past 20 months, the government has committed about 90% of our country’s GDP to bailouts and “stimulus.”  [emphasis added by me] Roughly 1/3 of this money has already been spent, while the remaining 2/3 has been committed but not yet spent.

The article breaks the spending by category.  This is pretty scary stuff.  Please pass this along to your friends and family.  Also, get involved.  There are Tea Parties coming up across the country on April 15th.  The Facebook group representing the Tea Parties has over 24,000 members.  We are expecting between 5,000 and 10,000 protesters in Atlanta for next weeks event.  These protests are being held in cities, both large and small all across the country.  Here is a map listing the locations of many of them.  Join the struggle before they spend another $42,105 of your money!

Americanly Yours,

Phred Barnet

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If you arent a smoker, you might not have heard about the huge increase in cigarette taxes which took effect on April 1st.  On the first of this month, Federal excise taxes on cigarettes went up from 39 cents a pack to $1.01 per pack–an increase of 62 cents a pack.  This is an increase in the tax by about 159%.

It is not fair to target one group of people–a group who are disproportionately from the lower class and who are addicted to a a product–and tax them for the benefit of others.

From the article I linked to above:

“The rate of adult smoking in the United States is, in fact, directly related to household income, dropping in linear fashion as income rises. Overall, 21% of American adults smoke… A different way to look at this smoking-by-income data is that slightly more than half of today’s smokers (53%) earn less than $36,000 per year — making cigarette taxes highly regressive.”

Here is a chart from the CBO on what percentage of taxes are paid by what range of wage earners.  I found this about a year ago when I was looking for evidence that President Bush’s tax cuts benefited the rich way more than the poor.  It turns out that I was wrong about that, but more on that in another post.

I want you to look closely at this chart.  It will make the next couple of paragraphs make a lot more sense.  The lowest 20% of wage earners pays .8% of all federal taxes, the second 20% pays 4.1% of all taxes, the third 20% pays 9.3% of all federal taxes, the fourth 20% pays 16.9% of all federal taxes, and the top 20% pays 68.7% of all federal taxes.

This includes all income taxes, social insurance taxes, and excise taxes.

I like this chart because it allows you to look at excise taxes by themselves.  Scroll down to the bottom of the chart and they have the numbers for who pays the excise taxes in this country.  In this case, the bottom 20% pays 11.1% of excise taxes, the second 20% pays 14.4% of excise taxes, the third 20% pays 18.1% of excise taxes, the fourth 20% pays 21.9% of excise taxes, and the top 20% pays 34.1% of all excise taxes.

You can easily see that excise taxes fall much more heavily on the poor than do the average federal taxes.  In fact, you can see from the chart that the bottom 40% actually pay no income taxes and even received money back from the government, while the third 20% pays only 4.4%.  Combined, the bottom 60% of wage earners pay only .6% of federal income taxes, but pay 43.6% of all excise taxes.

The point here is that excise taxes excessively burden the poor when compared to other taxes.  As the numbers from Gallup above showed, smokers are disproportionately poor.  It sounds simple, but increasing taxes on a product used primarily by the poor amounts to an increase in the taxation of the poor.

This brings me to my next point.  Here is an article from the AP criticizing Mr. Obama for raising cigarette taxes and calling it a violation of campaign promises.

A couple of key quotes from the article:

“”I can make a firm pledge,” he [President Obama] said in Dover, N.H., on Sept. 12. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. [emphasis added by me]””

“No one making less than $250,000 under Barack Obama’s plan will see one single penny of their tax raised,” Joe Biden said, “whether it’s their capital gains tax, their income tax, investment tax, any tax. [emphasis added by me]”

To me, the word “any” means “any.”  I dont have ANY idea why it wouldnt.

And of course, this tax was enacted in the name of the “public good.”  The money will go to fund S-Chip–a program which gives medical care to children of the poor.  I find this ironic for two reasons.  The first is that the government is essentially taxing the poor to provide their children with a service.  The second is that the government is also claiming that an increase in the tax on cigarettes will lead to a decrease in the number of smokers.  Im sure that this is a correct assumption, but the government is missing (or masking) the point here.

From the Danville Register and Bee:

“The twisted logic of this tax increase as a way to modify behavior shouldn’t go unnoticed. If higher cigarette taxes convince more people to quit smoking, won’t the S-CHIP program need a new source of federal dollars in the future? Won’t that lead to different taxes being raised to continue to cover the same number of children?”

The cigarette companies themselves realized that an increase in federal cigarette taxes would decrease the number of consumers using their products.  Can you guess how they responded?  Altria, the maker of Marlboro, increased their prices by 71 cents per pack for Marlboros, but 81 cents per pack for their menthol cigarettes (which tend to be smoked more often by the poor than other cigarettes) to cover the anticipated losses in smokers due to the new tax.  This means that those who dont quit are being forced to spend at least an additional $1.33 per pack of cigarettes.

I have a friend who supports the cigarette tax increase–he said “its about damn time smokers pay their share.”  But he is missing the point too.  Smokers pay their share–they have the same income tax rates as everyone else in the country.  They are being taxed to pay for a program that they may not use.

Our system of government is supposed to protect citizens against tyranny of the majority, and so I must reiterate my point from above:  It is not fair to target one group of people and tax them for the benefit of others.  It sets a bad precedent and only sounds good until the government decides that it wants to tax a product that you enjoy.

Americanly Yours,

Phred Barnet

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Check out this chart from Coyote Blog before reading on:

http://www.coyoteblog.com/coyote_blog/2009/02/voting-with-their-feet.html

I find this to be very interesting.  With the exception of Louisiana, every one of the States listed in the bottom 10 is a State that is heavily unionized, has more social programs, and higher corporate taxes (and even Louisiana has high corporate tax rates).

The States with the highest positive net migration, however, are all “business friendly” states.  In these States, unionization is minimal, corporate taxes are generally low, and social programs are not as abundant.

You might think that people would want to live in places where corporations are taxes at a higher rate (so that they pay their “fair share).  You might think that people want to live in a place where there are more social programs to help those who are less fortunate.

The numbers, however, tell a different story.  While sticking a faceless corporation with a higher tax bill sounds great, higher taxes mean more expensive goods and either fewer jobs, or jobs that pay less (or give fewer benefits).  Social programs might help people temporarily, but they are no substitute for jobs.  The States above that taxed their corporations at higher rates and spent more of their budgets on social programs saw people leave.  Those people came to States like Georgia, Texas, and Tennessee.  States with low (or no) corporate income taxes and little if any union control over jobs.

While automakers in Detroit are moving out and leaving the country, foreign automakers from Toyota, to Kia, to Honda have built plants in the South where labor unions do not have an iron grip and corporations are not taxed for the “social good.”

There was an interesting article in the Wall Street Journal back in September comparing the economic policies of Michigan with those of then-Senator Obama.  Here is an interesting excerpt from that article:  “While the population of the three highest-performing states grew twice as fast as the national average, per-capita real income still grew by $6,563 or 21.4% in Texas, Florida and Arizona. That’s a $26,252 increase for a typical family of four.”

Policies of higher corporate taxation, heavy union control, and costly government programs impede economic growth. Would you rather have a government run safety net, or an extra $6,563 for each person in your family each year?

And more importantly, will people begin to leave this country if we pursue these policies on a national level?  They just might.  I just might too…

Americanly Yours,

Phred Barnet

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It has been common for conservatives and libertarians to criticize President Obama lately, especially for his economic policies.

The attacks from fiscal hawks (myself included) have been relentless.  But, what is becoming increasingly more common is to hear attacks on the President’s economic policies from the left.

I wrote earlier that Nobel Prize winning economist Joseph Stiglitz criticized the bailouts and argued that the type of government intervention proposed by President Obama could lower our standards of living for the next 20 years.  As I mentioned in that previous article, Joseph Stiglitz has advised both President Clinton and President Obama.  Interestingly enough, Joseph Stiglitz is a liberal who has been very critical of the free market and free market economists in the past.

Dr. Stiglitz is hardly the only liberal economist to criticize President Obama’s economic policies.  In fact, he is not even the only liberal Nobel Prize winning economist to criticize the President’s economic policies.  Recently, 2008 Nobel Prize in economics winner Paul Krugman has become a vocal critic of President Obama’s economic policies.

Paul Krugman is very much a liberal economist.  He is a strong advocate of European style “social democracy” as well as welfare programs, and the welfare state.  He even said of the welfare state:  “I was then and still am an unabashed defender of the welfare state, which I regard as the most decent social arrangement yet devised.”

I dont agree with Krugman’s proposed solution–a nationalization of the banking industry, but I do agree that Mr. Obama’s plans will hurt the economy and the country in the long run and that his plans are the wrong way to go.  Here are a few articles written by Mr. Krugman criticizing the Administration’s plans.

2/22/09

3/8/09

3/29/09

In one of my classes this semester [right before the passage of the “stimulus” bill], we had a guest speaker who was a labor economist who eventually became an Assistant Secretary of Labor under President Jimmy Carter.  This man was very critical of Reagan, Republicans, and conservatives in general.  However, he came out strongly against the “stimulus” plan.  He complained that it was very expensive, that it was spending money too slow, and that it was spending money on things that wouldnt lead to job creation or real stimulus of the economy.  A similar argument can be found in this writing by Robert Samuelson.

As I said above, you can expect conservative and libertarian economists to oppose the President’s economic plans.  However, it is somewhat disturbing when prominent (Nobel Prize) winning liberal economists begin criticizing the President’s economic policies.  Even supporter Warren Buffet has criticized the President’s plans.  These liberal critics of the President’s policies, combined with the conservative and libertarian critics leads to an important question:  are there any prominent economists who are not a part of this administration who support President Obama’s economic policies?  I have yet to hear from any.

Americanly Yours,

Phred Barnet

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