Category: national politics & policies

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national politics & policies U.S. Constitution

Power-Grabbing In Recess?

A recent court decision has slowed—dare we hope, stopped?—the erosion of an important check on executive power. This is the constitutional provision that the president’s appointment of certain high officials be subject to Senate approval.

Trevor Burrus of the Cato Institute reminds us that presidents have sought to circumvent the advise and consent requirement since the days of Warren Harding.

The Constitution enables the president to make appointments when the Senate is in recess, i.e., between sessions. (In the days of the Founders, that hiatus lasted many months.) Starting with Harding, though, presidents began making appointments during so-called intra-session “recesses,” or breaks within a regular session. These “recesses” were as brief as ten days by the time we got to Clinton and Bush II.

In 2007, the Senate began conducting brief pro forma sessions within these “recesses” to prevent appointments from being made without its consent. Last year, President Obama counter-moved by declaring that he had authority to determine what constitutes a session. On this basis he made several appointments sans the Senate’s consent.

The DC Court of Appeals has now ruled the maneuver unconstitutional. “The power of a written constitution lies in its words,” writes Chief Judge David Sentelle. “When those words speak clearly, it is not up to us to depart from their meaning in favor of our own concept of efficiency, convenience, or facilitation of the functions of government.”

Do presidents sometimes find the Constitution inconvenient? Too bad.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Laboring for Unemployment

When you make it harder to hire people—as Obamacare does by imposing penalties on companies that fail to provide specified health insurance—you make it more unlikely that persons will be hired.

Consider the case of Automation Systems Inc., reported at National Review Online. After the economy went into a nose dive a few years back, the only way owner Carl Schanstra could keep the company alive was by slashing staff.

Automation Systems has managed to bounce back, and business is improving. Currently, Schanstra employs 37 people. He would like to hire lots more. But as soon his company employs more than 50, he’ll be socked with $40,000 in penalties and $2,000 for each additional employee. Even firms that already provide health care to employees will have to pay such penalties if they have 50+ workers and their insurance plans don’t offer as much coverage as Obamacare deems necessary.

When you must shell out $40,000 to the government—$40,000 more than all hitherto expected payout of salary and benefits—to hire your very next employee, you have a strong incentive to keep your company smaller than you might have liked. And workarounds like contracting consultants, as discussed last week, are not options for every company.

This reality may seem obvious to anyone with even modest knowledge of what it takes to create wealth and make a living. But somehow the obvious escapes the central planners in Washington.

Or maybe they just don’t care about the hardships their policies impose upon us.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies tax policy

In the Name of Loving

The aptly named decision Loving v. IRS—it’s so true, you know—provides a modest victory in the war of tax-takers versus everybody else.

The ruling, brought to our attention by the Institute for Justice, a party to the lawsuit, concerns IRS regulation of tax preparers. The IRS wants to force non-attorney, non-CPA tax preparers to take an exam, pay annual fees, and take hours of courses every year. District Judge James Boasberg has ruled the regs unlawful.

The regulations govern people hired by others. It would be really crazy if every non-credentialed taxpayer had to pass an exam, pay fees, and take courses every year just for the pleasure of filling out the forms we must complete in order to give IRS our money.

But the regulations are really crazy anyway. They violate the freedom of professional tax preparers. Also, by making it more expensive to be a tax preparer, they reduce the taxpayers’ tax-preparation choices and/or increase the costs of preparation services.

If judges regularly consulted such desiderata as our freedoms and rights when assessing assaults on them, many more regulations would be voided—say, 99.9 to 100 percent or thereabouts. Boasberg’s ruling hinges more narrowly on the important fact that Congress never gave IRS authority to regulate tax preparers.

The IRS has moved that the ruling be suspended pending its appeal. Let them lose the motion and lose the appeal, and I’ll be loving it.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Attacking Wage Employment

I don’t know what the optimum ratio of employees to independent contractors would be. No one does. But we can be pretty certain that the current skewing of the economy towards less wage employment and more independent contracting by Obamacare is not a good thing.

You see, “one consequence” of the health reform package, writes economist David Henderson on EconLog, “is an increase in contracting out to avoid the 50-person threshold.”

Now, if there were a general shift towards part-time employment and professional contracting as a result of businesspeople and workers appraising their advantages on the open market, we’d just note this with interest or a shrug and say, “whatever the market decides.”

After all, people might substitute wage contracts for performance contracts (or vice versa) for reasons given by Nobel Laureate R.H. Coase, who figured out why firms exist at all: contracting out isn’t costless. It takes time to negotiate each deal, each task, etc. My friend Dr. Henderson will correct me, I hope, if I’m wrong, but employing labor full-time — by bundling numerous tasks together — is usually easier and cheaper than seeking out specialists and consultants for each task you want done.

In recent years we’ve seen a rise in consulting professionals, in part because the Internet has reduced the costs associated with working from a distance. But today’s switch to independent contractors (as well as to part-time employment) is a result of Obamacare raising the cost of keeping full-time employees. Of course businesses will seek to . . . economize.

And we know such substitution is suboptimal because people are doing it under duress, the threat of force behind Obamacare.

This is Common Sense. I’m Paul Jacob.

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ideological culture national politics & policies

A New Leaf

There’s apparently more than one way to mess up money.

Canada’s new plastic banknotes don’t work in all vending machines, I hear . . . and there’s a less practical problem with the new C$20 note: It has the “wrong” maple leaf on it.

Some botanists are complaining that the stylized leaf logo is not Canada’s native species, but one hailing from Norway.

I’ve not seen one of these bills up close (donations would be appreciated, though), but from the photo, the thing I’d be worrying about is that the Queen, on the basis of her appearances on bank notes, looks more like Dwight D. Eisenhower every year.

Here in America, our Washington insiders mess up money both symbolically and substantively.

In the old days, before president-worship had become something of the country’s official religion, Liberty was represented by female representatives or Indians. (The fact that the U.S. government killed off and hounded remaining populations of native Americans in that time put the latter practice into some cognitive dissonance.) Now, both coins and notes feature dead presidents. Frankly, I think we should junk the presidents and go back to stylized, classical representations of Liberty.

The biggest symbolic problem is having Andrew Jackson, America’s most successful and vehement anti-central banking president, placed on our central bank’s $20 note.

That’s an insult, not an honor.

Another way to mess up money is to devaluate it by over-printing.

Or creating too much credit. Or good old-fashioned seignorage. With the Quantitative Easing and “trillion dollar coin,” we’ve got these last two covered. Alas.

This is Common Sense. I’m Paul Jacob.

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national politics & policies

Making the Rounds

The “trillion-dollar” coin proposal hit big in the last few months, even garnering a smile, a wink, and a nod from Paul Krugman. The idea was for the government to mint a high face-value platinum hunk of token money and sell it to the Federal Reserve — to weasel around congressional approval for raising the debt limit.

Something very much like it was floated by Populist and inflationist Bo Gritz back in the early ’90s, when he was running for the presidency.

Though the current president has dismissed the notion, people like it so much — perhaps because of its “just so goofy it might work” aspect — that the whole meme is still making the rounds.

As a technical matter, a one trillion dollar coin would probably be too unwieldy. If actually given the go-ahead, the Treasury and the U.S. Mint would likely opt for smaller amounts, cranking out a batch of them — a big batch, to cover the federal government’s rising debt.

My modest proposal? Mint coins at the legal tender amount of $666 million each.

The effigy of Liberty could sport a 666 tattoo on her forehead, and a neat UPC symbol on her wrist, which she could hold up instead of a torch.

That would indicate, by commonly understood symbology, just how dangerous America’s debt really is, and how anti-American the whole idea of the high face-value coinage debt ceiling workaround would be.

Another way to go would be to carve each coin out of coprolite. Another fitting symbol for the last days of our fiat currency.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies political challengers too much government

Fiscal Brinksmanship

“America,” President Obama insists, “is not a deadbeat nation.” Mounting evidence to the contrary.

He chastises Republicans for even contemplating a default on the debt. At a news conference this week, he called any attempt to use the debt limit authorization issue to negotiate federal spending down “absurd,” and akin to a hostage situation. Refusing to raise the ceiling, you see, would “crash the economy”:

He demanded that Republicans in charge of the House of Representatives approve a rise in the federal government’s authority to borrow money to pay existing obligations — without seeking policy concessions in return.

The BBC goes on to quote the president, who clarifies his stance. “While I’m willing to compromise and find common ground over how to reduce our deficits,” said the president, he insists that he will definitely not “have that negotiation with a gun at the head of the American people.”

It’s an interesting approach: accuse Republicans of dangerous brinksmanship, while continuing to overspend and increase debt to the very brink of insolvency.

What Obama won’t recognize is that fiscal conservatives, today, play the same role as a parents cutting up their college kid’s credit cards after the young spendthrift had racked up an extraordinary debt. Obama plays the role of the kid saying: I’ve already budgeted spending, you can’t cut up the credit card — that’d be irresponsible!

It was different in 2006, when Senator Obama opposed raising the debt ceiling and called the increasing debt levels a sign of “a failure of leadership.”

Now that he — and not a despicable Republican — has the leadership role, he’s changed his tune. He says his former cry of “irresponsibility!” was itself irresponsible.

The very best thing we can say about this? The president has been captured completely by the forces he once opposed.

This is Common Sense. I’m Paul Jacob.

P.S.Soon after the last period of the above squib was struck, I turned on Fox. And there was Sean Hannity, leading his nightly political opinion show with the president’s remonstrance of Republicans for daring to fix tight the debt ceiling. Hannity noticed what I noticed — indeed, what it turns out a lot of people noticed: Obama’s repudiation of a practice that he himself had engaged in in 2006.

But notice what Hannity is trying to prove: “how reckless, irresponsible and fundamentally dishonest a man [Obama] is.” Hannity sees Obama’s press conference performance as indicative of the president’s hypocrisy, demagoguery, and slipperiness-with-facts.

The case can be made, and Hannity has made it. The trouble is, the way Hannity makes it, to his audience, just skips over precisely this kind of behavior from Republicans. For, remember, Republicans repeatedly voted to increase the debt limit while their guy, Bush, was in charge. Another person to notice the differences between Junior Senator Obama and Second-Term President Obama, young Ms. Julie Borowski (“Token Libertarian Girl”), showed more savvy on Facebook than Hannity does on his primetime program:

Most Republicans are against raising the debt ceiling under Obama. But most were all for it during the George W. Bush administration.

Most Democrats are for raising the debt ceiling under Obama. But most were all against it during the George W. Bush administration.

Pssh, here’s a better idea. Dramatically cut spending. Stop manufacturing fake crises and raising the debt ceiling almost every year to finance drunken spending sprees. And why they are at it, members of Congress should pass a budget for the first time in over three years. It’s no wonder that a recent Public Policy Polling survey finds that cockroaches are more popular than Congress.

No doubt, since insecticide is cheaper and more effective than politics.

Categories
free trade & free markets national politics & policies too much government

The Great Evasion

From the earliest moments of the current, ongoing economic depression, our leaders signaled their fear by hastily concocting programs that postponed the reckoning that had to come.

Douglas French, writing about housing finance today, says a lot simply with his title: “Markets Stagnate Until They Clear.” Government policy has kept mortgages in a weird limbo, and market prices at unnatural highs. Our geniuses in power have even moved heaven and earth to reinflate the old housing boom.

Better to have let it crash and recover rather than keep it unworkably hobbling along.

But the clearing of markets scares politicians silly.

Right after the 2008 implosion, our leaders increased unemployment insurance and offered many new cushions for workers. Humanitarian? Or just another way to avoid new, lower wage rates to match the monetary collapse? I’m not sure about the latter, since the “wages” of not working proved so effective that many workers stayed unemployed voluntarily.

The cost? An extended, lengthy depression.

But that’s not all, of course. By putting more people onto the rolls of the federal government’s dependents list, the burden on taxpayers and on the debt system increases.

Meanwhile, politicians still cannot imagine a way to do what a few other countries, including Canada, have done: cut back on spending and balance budgets.

Our politicians will do anything to avoid that!

Some folks are calling the current period “The Great Recession.” I suggest a better term: “The Great Evasion.” And what’s being evaded is responsibility.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability national politics & policies too much government

A Symbolic Threat

“Medicare’s trustees estimate that the hospital insurance fund supported by the payroll tax will run out of cash by 2024,” informs a Washington Post editorial, “but this is mainly a symbolic threat: The government will draw on general revenues to keep Medicare going.”

So, what exactly does this “symbolic threat” symbolize?

It shows that Medicare — like Social Security — was set up and run in an unsustainable, even fraudulent, way. Politicians promised benefits without collecting the taxes to pay for those benefits. This left “today’s voters” getting unpaid for bennies and future voters being handed a hefty bill.

The only question is: how hefty? That depends on how quickly the imbalance gets addressed.

Already, Medicare represents 15 percent of total federal government spending, last year costing taxpayers $555 billion. Worse yet, the cost is expected to double in the next decade — in large part, because the number of seniors on the program is expected to explode, from 50 million today to 78 million by 2030.

“No structural solution is,” the editorial bemoans, “for the moment, politically possible.” Instead, the Post endorses a number of small cuts — all making seniors pay more and/or get less — that add up to slightly over $40 billion a year. That drop in the bucket would, in a decade, account for less than 4 percent of Medicare’s projected yearly cost.

Frankly, the unavoidable first step in any honest fix of Medicare’s big, structural problems, is for those in Congress and the White House to fully admit the rotten fraud they have perpetrated against us for their personal political gain.

Acknowledging their deception would be more than symbolic.

You can’t change your ways until you first repent.

This is Common Sense. I’m Paul Jacob.

Categories
government transparency ideological culture national politics & policies too much government

We’re All Bond Fans Now

The latest James Bond film, Skyfall, is so well liked that there’s even Oscar buzz about it. But it’s not just moviegoers who feel like they’ve entered a new era.

In the new flick, M, played by Judi Dench, argues before a parliamentary board that, because “the enemy” can be just about anybody these days, now’s really the time for some good old-fashioned espionage, James Bond-style. You know, with casual murders committed by men given a “license to kill.”

But things have changed. The old Bond skirmished with Russkies while fighting rich criminals who dreamed of destroying or ruling the world. Today’s Bond fights an ex-agent who wants to hurt the higher-ups in the spy biz who had hurt him.

In reality, it’s the U.S. President — Felix Leiter’s boss — who has the license to kill, exercising it by overseeing multiple drone programs, the practice of rendition, and a developing program called a “disposition matrix,” which aims to target people who are up-and-comers in the America-hating (and thus) terrorist game.

Many critics have noted that the recent Bond films starring the brilliant Daniel Craig have become more personal and less gadgety. Maybe that’s the way real-life spying plays in Britain (I doubt it) but from the American perspective, the current reality of drone strikes overseas, unregulated-by-law rendition tribunals, and database management geared to determining terrorist psychology is positively science-fictional.

And I don’t mean that in a good way.

This is not a Brave New World or a 1984, I realize. But it still frightens.

Indeed, for people in the targeted regions it must be pure horror. America’s ruling classes have upped the game. And we can expect to reap a . . . skyfall.

This is Common Sense. I’m Paul Jacob.