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Think about this before you vote - but vote!

Posted by MarcusEverett on Monday, September 06, 2010 9:34:21 AM

PARTISAN POLITICS

The following piece was originally published on OpEds.com just before the 2004 elections. Although it would have been even more relevant in 2008, it still merits repeating now.

Well, boys and girls, here we are again in the middle of another name-calling, lying, blustering, posturing, hand-shaking, baby kissing election cycle. Who will win the big prize, Gladstone Gander or Elmer Fudd? [this dig would have been perfect in 2008].

Seriously, though, there are some considerations that voters should keep in mind as the pathetic spectacle unfolds. In a perfect world, one would vote for the candidate with the highest morals, character and intelligence, hoping that he or she would put the welfare of the constituency above personal gain and power. However, we have far from a perfect world, and voting for the best candidate - even one of impeccable character and wisdom - is not necessarily the best choice.

As has been demonstrated all too often in recent years, the spoils system perks for the majority party of each House of the Federal Legislature drastically changes the game. The eligibility for positions of Leader of the Senate, the Speaker of the House, and all of the various Committee Chairmanships, together with the tendency for most party members to vote as a block, has resulted in the partisan makeup of Congress being much more important than the qualifications of any particular member. This obviously implies, unfortunately, that on voting for your Senator or your Congressman, you should carefully evaluate which party represents those values that you hold dear, and vote accordingly along party lines. Even if there is, to quote a famous Alabaman, "not a dime's worth of difference" between the two parties, you must determine the few pennies difference that does exist and encourage it. To do otherwise will guarantee that the general trend will not be in the direction you desire.

In voting for the President, however, the situation is quite different. Although party pressure is sure to have some influence, if either candidate exhibits a clear advantage in terms of character and a dedication to principles that you support, then you should vote accordingly, even if it means crossing party lines. The nature of the Presidency is such that party affiliation is of concern only if the office is held by a petty partisan politician. [as is, for example, currently the case in 2010].

For local elections, the considerations above may or may not be applicable, but one should give some thought as to whether qualifications or party affiliation is the more important parameter. It is sad that our political system as degenerated to such a state, but it is the fact of the matter.

MarcusEverett

marcus.everett@citlink.net

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Controlling the Beast

Posted by MarcusEverett on Sunday, March 07, 2010 12:00:00 AM

It is painfully late in coming, but Americans are beginning to understand that their government is out of control. Currently (March 2010), almost 80 % of a polled sample responded that government spending is out of control. So with a citizenry that seems to be ready to face the problem, the question is what is the solution, or more specifically, what must the American citizenry do to effect a solution.

A government is only as powerful and dangerous as its spending limitations will permit. A government with limited financial resources poses little threat to the liberties and freedom of its subjects. Proponents of big government will argue that without adequate resources a government is unable to accomplish desirable goals, but history has shown that such desirable goals are rarely met regardless of the magnitude of resources squandered in the attempt. In the meantime, powerful governments have also been shown by history to quickly become self-serving and tyrannical. Thus those that subscribe to the philosophy of the Founding Fathers that the only justification for any government is to protect the liberty of the individual must seek to control government from becoming powerful and tyrannical. The necessary and sufficient condition to accomplish this is to control its access to financial resources.

Ignoring the historically popular method of financing government by conquering and looting other countries, the primary methods used by modern governments are taxing, borrowing and currency inflation. All three methods can be used at strictly limited levels with minimal damage to the economy. The problem is that our Constitution fails miserably in placing the necessary strict limits. Allowing Congress to determine the tax limits, the debt limits and the currency, plus giving them the authority to determine how such largess is spent is one of the most blatant errors of the Founding Fathers. Talk about the ultimate conflict of interest!

Taxation is the primary method of funding government. Since, if one accepts the principle that some minimal government functions are necessary, some method of financing it is also necessary and thus taxes are virtually inevitable. Unfortunately, unless unbreakable restraints are imposed as to the type and level of taxation, governments will just spend more and increase taxes to draconian levels if they think they can get away with it.

In a sense taxes are self-limiting. Oppressive taxation produces less revenue than a reasonable and moderate level. Thus excessive taxation alone would probably only weaken the underlying economy until the loss in revenue sufficiently weakened the government. Proper restraints would be much healthier, but tax and spend government is probably not intrinsically doomed.

The prognosis is much bleaker for out-of-control borrowing and currency inflation. It could be argued that borrowing is also self limiting. Sooner or later it becomes impossible to find anyone to buy the debt. Even so debt does not go away merely by stopping borrowing, and the inevitable bankruptcy could well be disastrous. Whereas the decrease in financial resources resulting from excessive taxation is gradual and weakens the government, a bankrupt government loses all control and is vulnerable to takeover by any opportunistic despot.

In principle a growing economy could support a modest currency inflation rate that only exceeded the economic growth rate by a very small percentage or, better still, equaled the growth rate. But history has shown that once a government gets a taste of inflationary blood, it soon becomes addicted to it. Thus inflation of a fiat currency seems to have no limiting mechanism short of hyperinflation and complete repudiation of the currency. Since the incentive for runaway inflation is quite often monetization of an unsustainable debt level, the combination of out-of-control borrowing and currency inflation is almost certain economic chaos.

Which brings us to the United States in 2010. We have a government debt level that is probably unsustainable. The political class gives lip service to trying to solve the problem with additional taxes, but it is very likely that the marginal return on increasing taxes will be negative. Even if it is not, the most likely scenario is that any additional revenue would be spent on more government programs, not on reducing the debt. And in what may be the final nail in the coffin, the Federal Government has begun what appears to be an attempt to monetize the debt. Things look grim.

A political joke making the rounds on the Internet goes something like: Politicians and Political Parties are like diapers; they need to be changed often and for the same reason! While throwing them all out in 2010, 2012, and 2014 would be an excellent idea, it is unlikely that it would solve the problem in the long run. Referring back to the beginning of this essay, control of a government’s financial resources is both necessary and sufficient to control the government.

A Constitutional Amendment setting strict limitations on the type and especially the amount of financial resources available to the government is what is needed. Anything less will be at best a short-term respite. Borrowing should also be either strictly limited or probably forbidden. And even though a rigorously controlled (by Constitutional definition, not by government agency) fiat currency is possible, a safer alternative is to define a national currency fully backed by gold.

We the People can’t get there directly under the current Constitution. Constitutional Amendments require State and/or Federal Legislative action. At the Federal level, the citizenry can only vote for their representatives – there is no equivalent of a referendum. Thus it is imperative to throw out virtually all of the current politicians and their successors UNTIL we get a Congress that will propose Fiscal Restraint and Term Limit Amendments, and State Legislators that will ratify them.

 

Let’s hope we can get there before we collapse.

 
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Should We Consider Third Parties

Posted by MarcusEverett on Saturday, January 09, 2010 10:00:00 AM

Third Parties

The growing dissatisfaction of the American people with the current Congress and Administration has revived a considerable interest in third parties. In addition to the standard roster of Libertarians, Greens, Communists, Socialists and the like, we are now hearing proposals of Tea Parties, Goooh Parties and more. Rush Limbaugh has railed loudly against third party movements, and Bill O’Reilly thinks they’re a good idea. If you agree with the opinion that the current situation has to go, should you support third party movements or not?

Limbaugh and O’Reilly are both wrong, or both right, depending on what form a third party takes. Limbaugh fears the splintering or spoiler effect of minority third parties, a problem that was demonstrated with emphasis in the 1992 presidential election. Conservatives split between the Republicans and Ross Perot’s Reform Party, and liberal Democrat Bill Clinton won the race with only 41% of the vote. The underlying fact is that, as long as we have a plurality electoral process that awards the prize to the candidate with the largest vote, the only viable political process is a two party system. Third party candidates only create the risk that a candidate who appeals to less than a majority of the electorate can win.

On the other hand, O’Reilly is right that the current system has enough problems that something new is needed. As implied above, one change would be to require a majority, not a plurality, to win an election, and therefore to resolve elections with no candidate having a majority with a runoff between the top two contenders. This, however, requires a Constitutional change, and therefore is neither a practical nor an immediate solution.

What is proposed herewith is a third party that DOES NOT field a candidate. This is a variation on the ‘throw them all out’ theme, but with a little more organization and discretion possible. The default objective of the proposed party (we need a name!) would be to end the reign of career politicians. The party would, on occasion, recommend an incumbent for re-election (Democrat or Republican) that adheres to Constitutional government (maybe we could call it the Constitutional Party), but party members would be free to throw them all out if desired. Currently incumbents enjoy a 90% or more re-election rate. A re-election rate of less than 10% would be much healthier for the country.

One subtle argument in favor of this approach is that, for a third party candidate to win, it is necessary to garner at least a plurality of the votes. This is very difficult in the current American political arena, as has been demonstrated many times over the years (e.g., the Perot example above). But since most two party elections in America are fairly close between Republican and Democrat contenders, a relatively small minority could likely swing the result to the challenger over the incumbent. As little as 5% of the electorate could be formidable.

To summarize then, the proposed party would never field a candidate, but would only recommend between the incumbent and the challenger, ususally in favor of the latter. This is much more compatible with the present plurality based system, and should go a long way to break the hegemony of the current career political class. It is worth noting that this proposal basically implements Term Limits without requiring a Constitutional Amendment.

As a final word, in anticipating the argument that it might be risky to throw them all out at once, it should be apparent to most people that the situation couldn’t get any worse. Besides, it is only possible to get rid of a third of the Senate in any one election, and the President every other time. It’s worth a try! Midterm elections are less than a year away!

Let’s form the CONSTITUTIONAL third party!

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HEALTHCARE RATIONING

Posted by MarcusEverett on Wednesday, August 12, 2009 6:19:44 PM

 

One of the major arguments against the proposed healthcare reform bill (now health insurance reform??) is the concern over the possibility of 'rationing'. It is obvious that, especially since the advertised objective of the government's intrusion into healthcare is to make it available to everyone regardless of their ability to pay, there will have to be decisions by someone as to who gets care and how much.

This is certainly a valid concern. The idea that someone else is making decisions which are critical to your life and health is not satisfactory to most people. And the thought that the 'someone' will be an unknown bureaucrat in D.C. is both galling and scary. It does not appear at all compatible with the Rights to 'Life, Liberty and the pursuit of Happiness' declared in the Declaration of Independence.

What does not seem properly understood, however, is that healthcare, like all other goods and services, MUST be rationed in some manner. There is a finite amount of everything, so the eternal question is who gets what. Therefore, the question before 'We The People', represented we hope by our government, is whether the rationing will be done by bureaucrats, OR whether it will be done by FREE MARKETS.

Historically the American Way has been to look to free markets to determine not only the rationing of goods and services, but also the supply of goods and services. Unfortunately, over the last century healthcare has drifted little by little from free markets to a government controlled and regulated supply of both services and drugs. It is this writer's belief that the current runaway costs of healthcare are primarily the result of such government interference. Thus, after creating a 'crisis' (Rahm Emanuel's desired condition) in healthcare costs, the government proposes to cure its crisis by assuming the role of rationing the overpriced and inadequate supply.

In addition to returning the 'rationing' decisions to those that are directly affected, the free market approach has other benefits. The government solution requires a huge (always) bureaucratic empire to implement the rules (made by bureaucrats) for rationing. This empire adds considerable cost to the total for healthcare, which ultimately means less care for the available funds. The empire will determine what goods and services are provided, with the certain result that innovation will dry up. The empire will try to dictate prices which will also reduce supply. Oh, what a tangled web we weave!

To summarize then, the choice being presented to the American people is not whether everyone will have unlimited healthcare, but whether we look to the government or to free markets to provide and ration the necessarily limited supply of healthcare goods and services. To me the choice is a no-brainer - America's globally envied healthcare to date has been made possible by what free markets have been allowed to exist, and all attempts in other countries to implement the government solution inevitably fail or are failing.

What is needed is not ObamaCare. What is needed is to remove the current government interference in the healthcare market.

Marcus Everett

marcus.everett@citlink.net

August 12, 2009
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More Thoughts on Term Limits

Posted by MarcusEverett on Wednesday, April 29, 2009 10:00:29 AM

There has recently been increased interest in Term Limits for elected offices. It has become blatantly obvious to even the rank and file citizenry that career politicians are a large (if not the largest) part of the problem in all levels of government. However, there are several problems with getting from here to ANY semblence of term limits, and in addition there is of course considerable disagreement as to what such limits should be.

At the Federal level, the first problem - how to get there - is a very high hurdle. To begin with, it is virtually inconceivable that any Legislative body is going to cut its own head off by passing term limit legislation. No one is likely to vote themselves out of a job, especially one as lucrative and cushy as political office. Since such a vote would have the same effect as firing them, threatening to throw them out has no real clout. Furthermore, at the Federal level, there is no such thing as a referendum that would allow the citizenry to pass term limit legislation, and even if there were, the next bunch of crooks in office would just repeal it. Worse yet, at the Federal level, passing a Constitutional Amendment (which is what is ultimately needed) requires either two thirds of Congress (not gonna happen) or two thirds of the Legislatures of the States (also very unlikely) to propose such an Amendment. And then three forths of the States must ratify it. Prospects are dim.

Even though hope of such a Constitutional Amendment is vanishingly small, let's take a minute to look at what such Term Limits might be. Most suggestions are for two or three terms, somewhat akin to the two term limit that was passed for the Presidency. (Note that this Amendment probably was successful only because most of Congress and the State Legislatures had little hope of winning the Presidency.) Some suggestions at the Federal level have been for a fixed time limit, with 12 years (6 terms of the House or 2 terms of the Senate) being the favorite.

Unfortunately, the problem with the career politician is that he (or she) is always running for the next election. The minute that the current election is won, the campaign for the next election is the primary focus for not only most of his time, but for what his vote is going to be on any bills that come up. To me, this is the root of the problem. With this in mind, it seems obvious that the proper term limit is ONE.

Even passing a Term Limit Amendment limiting all terms of elected office to one term still leaves a gaping hole. This was blatantly illustrated in the last Presidential election. ALL of the contenders were currently holding office at the time, and most spent the better part of two years campaigning rather than addressing the task they had been elected for. Ironically, since the winner had only just been elected to the Senate in the previous election cycle, he basically reneged on his obligations to his constituents to campaign for a better job. As a blurb that circulated on email suggested, try that on YOUR job.

My proposal for a Constitutional Amendment, albeit probably unattainable, is the following. Since the problem is not only that the career politician sucks off the public teat all his life, but in addition the fact that he is also constantly campaigning for the next election, there is only one way to end the farce. To wit:

No person shall be eligible to be a candidate for any public office while currently holding any elected public office. This restriction shall be in addition to any other qualifications for the particular office.
That oughta 'git er done'!

In the meantime, the ONLY thing the citizenry can do is VOTE OUT THE INCUMBENT.  We can't pass the above Amendment, BUT WE CAN IMPLEMENT IT!  Pass it on!!  Check out www.tenurecorrupts.com.

Marcus Everett

marcus.everett@citlink.net
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Three Facts the next Administration had better understand

Posted by MarcusEverett on Sunday, December 07, 2008 9:47:31 AM
Senator Barack Obama’s rhetoric during the campaign often stressed his plan to tax the rich (the top 5% of incomes) to pay for several giveaways of new spending. Furthermore, the famous response to 'Joe the plumber' of 'sharing the wealth' further implies that he believes it possible for the government to transfer wealth from the 'rich' to the 'poor' with a net gain to the latter. Based on the three facts discussed below, it is hard not to conclude that either the president-elect is lacking in a fundamental understanding of economics, or that he was inclined to demagoguery in his campaign rhetoric. For the sake of the American economy in the next few years, one must hope that he comes to embrace reality.

The first fact is that YOU CAN'T TAX THE RICH. This is not to say that it isn't possible for the government to commandeer some of their wealth. The problem is that the effect of doing so is to reduce the standard of living of the poor much more than that of the 'rich' that have been taxed. To see this, let's consider three levels of income. The lowest level is the amount of income necessary to provide basic needs: food, shelter, energy for heat, minimum transportation, etc. The next level is income available for discretionary spending, which includes anything from a spiffier suit to a luxury car or boat. The third level is income left over from the first two that is invested, whether for a rainy day or for additional income. Now if you tax the middle class or lower, you almost certainly will reduce their discretionary income and therefore will directly reduce their standard of living. Those poor enough to have only income to cover basic needs would be hurt the most. But, unfortunately, any tax on the truly rich short of draconian confiscation of wealth would certainly not affect their basic needs, and furthermore would have little to no impact on their discretionary spending. What it would do is reduce the amount of income that they invest. The question then becomes whether it is better for the individual to invest his own income, or for the government to take his income to spend or invest. Most likely the stolen funds will only be squandered in some entitlement or pork barrel scheme. But even if the government 'invests' the money, and even if the bureaucrats that decide how to invest it are as competent as the individual robbed, the overhead of having a middleman in the process guarantees less efficient use of the funds. The net result is that overall productivity is reduced, reducing the standard of living of all. Jobs are lost and the guy at the bottom feels the impact most. The rich guy's portfolio may not be as fat, but his standard of living is reduced least by the inefficiency.

The second fact that the president-elect needs to ponder is that YOU CAN'T SHARE WEALTH THAT DOESN'T EXIST. Since, by virtue of the first fact, trying to 'share the wealth' by confiscating it from the rich only impoverishes everyone, the result of such an attempt at wealth transfer is completely counterproductive. The wealth transfer recipient may get more money, but since the economic system produces less, increases in prices will more than cancel out any possible increase in standard of living. Meanwhile more of the rich man's income must be used to maintain his standard of living, and therefore even less of his income after taxes is invested. The negative effects of such taxation schemes are magnified. The net effect is a transfer of poverty, not a transfer of wealth.


A third fact that bears on the ones discussed above is that PAPER ASSETS ARE NOT WEALTH. To the extent that they can be liquidated at any particular time for real wealth (goods and services), they may rightly be considered a form of wealth. But not only may the time value of paper assets change drastically, their ability to be liquidated at any particular time may be an illusion. A perfect example of this is Bill Gates' wealth. The portion of his net worth computed by multiplying the current value of Microsoft stock by his huge holdings is illusory. If he tried to liquidate any significant portion at any one time, it would depress the stock price drastically. That is why, that over a period of several years, he dumped only a few million shares at a time. Even now, his ability to liquidate all of his paper assets at one time is probably severely restrained. In a similar vein, the claim that billions of wealth were lost in the most recent stock market crash, or that more billions were lost in the real estate crash, are also erroneous. The problem is that the liquidation value of a single stock or home at any instant may be represented by the current market value, but not all stocks or homes can be liquidated at that price at one time. In this respect not only paper assets (stocks) but also real assets (homes) can have a time value significantly different from current market price. In both cases the real wealth (the home or the company's real assets) are not destroyed, but rather that large wealth transfers occur as a result of such booms and busts, depending on who buys or sells and when.

The fluctuating value of paper assets with time also applies to fiat currency. And, once again, attempts to transfer wealth by creating more currency penalize the poorer members of society much more than the rich. Inflating the money supply, in the final accounting, transfers real wealth from those who have savings in cash, usually the poorer members of the economy, to those who invest in real assets.

The moral of all this is clear. If the soon-to-be President Obama really wants to share the wealth, he must push for more, not less, laissez faire capitalism. This has been proven over and over throughout history to be not only the best but also the only way to increase total wealth. And, as they say, a rising tide lifts all boats.
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