Sarasota County, FL Public School District: Allegations of fraud, waste and abuse answered

Sarasota County School Board Members

Sarasota County School Board. Front row: Todd, Zucker, Brown. Back row: Goodwin, Kovach

I received a letter from a Sarasota County School District employee. The letter contained a number of concerns/allegations in it. I asked Sarasota Superintendent Lori White to respond to three of those concerns/allegations directed specifically at district activities.

Here are the specific Sarasota County school district allegations (bolded) verbatim and the RESPONSES from Scott Ferguson, Communications Specialist, Sarasota County Schools:

I have never seen such waste as what this [Sarasota school district] administration does with tax money. We have seen them toss brand new books in the dumpster that are still wrapped in cellophane.

RESPONSE: Below you will find the language from the state statute regarding disposal of instructional materials. We are very frugal in our purchasing efforts and buy only what is needed and will be used by our teachers and students. Textbooks typically rotate on a five-year purchase cycle. If textbooks or ancillary materials are still in reasonably good condition after the five years, we offer them to our charter schools on a first- come, first-served basis and they are responsible for boxing them and picking them up. During last year’s replacement of elementary reading materials, we also encouraged teachers to keep the leveled readers as additions to classroom libraries or send them home with students. One school raised money to ship some of the old materials to a school in Guatemala and some books were donated to local churches and after-school programs.

This year’s adoption of English-Language Arts materials for grades six-12 will replace 11-year-old resources. Older materials will all be recycled due to their condition. Our district implemented a new recycling program at each school last year; the district earns a small rebate based on the weight of goods recycled. Incidentally, older textbooks are often shrink-wrapped before being stored; the fact that a book is shrink-wrapped does not mean that it is new.

Language from state statute 1006.41: Disposal of instructional materials

(1) Instructional materials that have become unserviceable or surplus or are no longer on state contract may be disposed of, under adopted rule of the district school board, by:

(a) Giving or lending the materials to other public education programs within the district or state, to the teachers to use in developing supplementary teaching materials, to students or others, or to any charitable organization, governmental agency, home education students, private school, or state.

(b) Selling the materials to used book dealers, recycling plants, pulp mills, or other persons, firms, or corporations upon such terms as are most economically advantageous to the district school board.

(2) The district school board may prescribe by rule the manner for destroying instructional materials that cannot be disposed of as provided in subsection (1).

(3) All moneys received for the sale, exchange, or other disposition of instructional materials shall be deposited in the district school fund and added to the district appropriation for instructional materials.

An outrageous amount was spent on basketball hoops at an area high school so that they could be electronically lifted up after hours so that no one could use them when school was out. (How does the sum of $40,000 seem to you)

RESPONSE: The most recent gymnasium project is at Venice High School. It includes electronic basketball backboards; six backboards and system/hardware/wiring was about $39,000. We have similar systems in all of our comprehensive high schools. They are not there to prevent people from using the courts, but rather to respond to various changing needs of the space. Gym floors are first and foremost instructional spaces, used for classes like physical education. In addition, they support a large number of extracurricular activities, which often require different configurations of the space, including, in some cases, the use of the gyms as emergency shelters. Home games and assemblies in gyms require the four side basketball backboards to be lifted up, so that bleachers can be pulled out. Electronic basketball backboard lifts allow staff to change the configuration more quickly and safely than the previous manual systems.

Over $25,000 each was spent on several people to train them in the same course. One of these people is set to retire this coming month [March-April]. I guess now the schools will hire him as a consultant at an outstanding price – let the taxpayers beware!

RESPONSE: We know of no training for district employees that cost over $25,000 per person. We can research specific allegations but without specifics of what training the person alleges cost this much, we can’t further address this allegation.

I appreciate the candid replies from the School District and employees who voice concerns about expenditures of property taxpayer dollars. I will leave it up to the readers of this column to decide if Sarasota County School Board is properly supervising district expenditures or not.

Hard Times that Need Hard Answers

I am paying more for everything these days and this is brought home to me every time I go to the supermarket and contemplate buying anything from an avocado to a London broil. I can’t imagine what it must be like to feed a family with two or three children.

I never imagined living in a nation where an 18-year-old girl would move out of her parent’s home and then sue them to pay for her college tuition and other support. A judge put an end to that nonsense.

I often feel like I am drowning in nonsense. I delete upwards of eighty emails I receive every day because they tell me that I am going to receive millions of dollars from people I do not know, offer dubious business propositions, loans, or they are from companies in foreign countries whose language I neither read, nor speak.

The news media deluged me with constant speculation and rumor about a missing Malaysian jet liner that is likely at the bottom of the Indian ocean and not likely to be found for years, if ever. I feel sorry for the passengers, but this occurred while Russia’s Putin was breaking a whole bunch of treaties to reclaim Crimea.

What the media has not told you is that the Ukraine has been run by a seriously corrupt group of people who routinely plundered it and that, in taking over the Crimea, Putin has taken on a new financial burden and a region that receives its power from the Ukraine. So, while he has secured control of the Russian naval ports and some military installations, he has also added to Russia’s cost of operation when its economy is not that strong to begin with. The likelihood that he would invade Lithuania, Estonia, and Moldova is small and, in fact, he has spurred a sleepy NATO and European Union to gear up militarily.

The same media has managed to largely ignore the lies the President and his former Secretary of State, Hillary Clinton, told about the killing of a U.S. ambassador and three security personnel in Benghazi, Libya. It has largely ignored the corruption of the Internal Revenue Service by politicizing it into an instrument to deter Tea Party and patriot groups from being granted the same non-profit status that liberal groups routinely receive. There were other scandals such as Fast and Furious in which guns were provided to Mexican drug cartels that then were used to kill a U.S. Border Patrol agent and countless Mexicans.

When he lifted the sanctions against Iran in order to negotiate their cessation of efforts to build their own nuclear weapons, Obama ignored their decades of declared hatred of America and Israel, and the fact that Iran is the world’s leading sponsor of terrorism that is keeping the Middle East in turmoil. Syria is just one example. Why would anyone want to negotiate with Iran? Decades of negotiations with the nuclear armed North Korea achieved nothing.

The strength of the United States since the end of World War Two allowed nations to move toward greater democratization. It resisted the Soviet Union during the Cold War for some four decades and saw its collapse in 1991. Our record is not perfect. The decision to go to war in Vietnam was wrong. The decision to go to war with Saddam Hussein’s Iraq after he invaded Kuwait was right, but the later war to remove him from power achieved that goal while ending in total withdrawal from a nation with no experience of self-governance. The “red line” asserted for Syria when its dictator used poison gas was withdrawn within a day.

Hard times call for hard answers and hard decisions. America’s hard times, economically, are the direct result, not only of Obama’s failure to put right the financial ills of the 2008 banking crisis, but of piling on trillions in more debt with government “stimulus” programs that had never worked in the past.

Not only did the President deliberately lie repeatedly about Obamacare, its passage has played havoc, generating unemployment as companies large and small responded to the rescinding of existing health insurance programs and new rules of how many can be employed, full and part time. It literally forced the cancellation of health insurance that people liked in order to force them to purchase more expensive insurance they could barely afford and didn’t like.

Hard times have been made much harder for millions who are unemployed and have ceased looking for work because of the scarcity of jobs. Instead, the government expanded welfare programs from unemployment compensation to food stamps. It destroyed the self-reliance that Americans have believed in from its founding.

At home and abroad, the hard times have gotten harder and the President, protected by a compliant news media, has found plenty of time to play golf and vacation continually, while displaying an indifference to the welfare of Americans and others around the world that is breathtaking. As Putin was annexing the Crimea, the President was shown working on the “brackets” predicting the outcome of the NCAA men’s basketball season.

The only hope for the future now rests with the outcome of the November midterm elections. If disaffected Democrats and independents join with Republicans, returning power in the Senate and expanding it in the House holds some hope of responding to our economic malaise.

I have paid my taxes and my only thought while doing so was the realization that most of the nation’s budget is now devoted to “entitlement” programs that are predicted to be insolvent in the near future.

© Alan Caruba, 2014

RELATED STORY: The Real Inflation Fear – US Food Prices Are Up 19% In 2014 | Zero Hedge

“The IRS Is A Joke”

As of today, you have 14 days to get your 2013 tax return finished and dropped in the mail.

But ironically, in the year when a plethora of Affordable Care Act tax code regulations came into effect, the IRS put out the word that American taxpayers should not call them for help. Those are the same taxpayers who pay the salary and generous benefit packages of every single IRS employee!

That’s right. Our nation’s tax administrator, fiduciary agent and chief tax enforcement agency has said don’t call us this tax season. But if you insist on trying to be in the 61% of calls the IRS was able to answer last year, you will most likely hear a busy signal or a recorded message saying call someone else.

It’s infuriating that in 21st century America – when you simply need a hand with a mandatory or go to jail tax return – the agency that should provide you with a modicum of customer service while you navigate over 77,000 pages of tax code, – takes its’ 1% pay raise and bonus and thumbs its nose at you.

To recap: The IRS is a 100-year-old weaponized political agency tasked with collecting information on every person and business in the United States. They barely answer half of their phone calls while targeting political enemies and peering into every aspect of taxpayer’s financial lives.

As one commentator put it, “The IRS is a joke… an expensive, unproductive one at that.” The congressionally twisted tax code makes this joke especially cruel.

Speaking of the IRS, the tug-of-war between the House Oversight Committee and former IRS senior manager Lois Lerner continues. The Washington Examiner noted this week that another “tool” might be available to entice Ms. Lerner to finally disclose what she knows – the jail in the U.S. Capitol.

Put simply, the FairTax legislation completely eliminates the need for an outdated and abused tax code, as well as the IRS, the bureaucratic weapon used to enforce it.

There is only one reason our corrupted tax code and an agency like the IRS is allowed to do what it does: Not enough Americans have said, “ENOUGH!” and taken action to replace this embarrassment to our nation.

If only enough people will say ENOUGH, they can transform our nation by demanding their representatives enact the FairTax. If you agree, please take a few minutes this week to advance the FairTax Plan with some suggestions from the “Take Action” sidebar on the right.

Finally, on a personal note, after weeks and weeks and weeks of gathering documents and data, followed by expensive CPA compilation, today I mailed my 2013 tax return. Ironically, at the same time I’ve also started getting mail and phone calls from candidate representatives asking for my support in the 2014 elections (and it is only March).

As a private citizen, here is what I want to know about any candidate who seeks my personal support. Do you support the FairTax Plan?  Are you proud to publicly acknowledge your support of the FairTax?Can and will you defend the FairTax?  If the answers to my questions are not an enthusiastic yes, yes and yes, then I have one simple answer for them – see ya!

EDITORS NOTE: The featured image is titled “The End of a Bad Show”.

The Austrian Influences on Bitcoin by Jeffrey A. Tucker

There is a bit of Menger, Mises, Hayek, Rothbard, and Kirzner in every satoshi.

Bitcoin seemed to emerge out of the blue in early 2009 as a unified monetary and payment system, something anticipated by no one. It’s true that the people who saw its merits and viability early on were code slingers and hackers. They posted their masterworks in strange places, and they are not available at university libraries. It’s all a little much to get your mind around, and there’s no academic literature about it. But then, the beauty of bitcoin is that you can jump in, start using it, and learn from the ground up.

For my part, I was incredulous about Bitcoin for two years after I heard about it. It just seemed crazy that money could somehow be created by a computer without any external or physical foundation. In some ways, this seems contradictory to everything we know about money.

But now that the currency has taken hold, its infrastructure is being built, cash-to-Bitcoin machines are going up everywhere, and mainstream opinion is gradually coming around. Cryptocurrency is real and not going away.

It’s time for a retrospective on exactly who among economists anticipated such a radical idea that markets themselves could discover and sustain a money independent of the State. When looking for economists, we need to begin with those who regarded money as a market good, created through entrepreneurial experimentation.

That points directly to the Austrian School.

Carl Menger (1840–1921). “Money is not an invention of the state,” wrote the great founder of the Austrian School. “It is not the product of a legislative act. Even the sanction of political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.”

This runs against most of what we think we know. Money is produced by the State today and has been in most places in the world for the better part of one hundred years. This creates an illusion that the State is the reason for money’s existence.

This is untrue. Money was nationalized away from markets, just as the roads and schools were. None of the reasons for this development are good. Government likes to control the money because it can depreciate it and thereby have another revenue source besides taxes. It can guarantee its own debts to prevent markets from evaluating them realistically.

The banks oblige this wish. In exchange, they are protected from market competition and enjoy protection against bank runs. In essence, the government grants banks the right to counterfeit so long as government can enjoy the first fruits of the printing press.

Once you release yourself from the myth that government created money, new possibilities emerge. Menger describes the emergence of money in evolutionary terms. There is trial-and-error. There is innovation. There are fits and starts. Something can be money in one place and not in another. Its emergence is gradual and goes through many iterations. “This transition did not take place abruptly, nor did it take place in the same way among all peoples.” This is a good description of the emergence of Bitcoin.

Ludwig von Mises (1881–1973). In a book published in 1912, Mises deepened and broadened Menger’s original theory about the origin of money. He was seeking an answer to the question of money’s original price in terms of goods and services. He explained that at any one time, there are many goods competing for money status—that is, that the good would be acquired not just to consume but also to trade for other goods.

He explained that it is impossible for anything to just be labelled money and for it to obtain value. There must be more to it than that. Gold and silver, for example, obtained their money value by virtue of their prior use in barter. In this sense, money must extend from a living market experience.

How does this apply to Bitcoin? The underlying value of Bitcoin is connected to its incredibly innovative payment system. The technology combines a distributed network, a ledger updated and verified for each transaction, cryptography, and a direct peer-to-peer system of exchange to create the blockchain. Users played around with the results for fully 8 months before the attached currency (Bitcoin) obtained its first market value.

Giving value to this digital currency was not something that could be done by government or social contract. It takes real market experience with a value good—or, in the case of Bitcoin, a wonderful service that the whole world needs. Such is the origin of Bitcoin’s value. In fact, if there were no payment network bound up with the currency, the currency itself would have no value at all.

In my experience in explaining this to people, this is a real sticking point. Most people think of money and a payment system as different entities (dollars vs. Visa). With national money, this is entirely correct. But Bitcoin is different. It unites the two in one. That’s hard to think through.

Mises made two additional contributions. He said that central banking was not necessary and predicted that it would be detrimental to the soundness of money. History has proven him right. In his ideal, money would function entirely apart from the State—just as Bitcoin does. Also, Mises closely tied the cause of sound money to freedom itself. He compared sound money to constitutions that guarantee fundamental human rights.

F.A. Hayek (1899–1992). Hayek was Mises’s colleague in pushing for fundamental monetary reform for many decades. Together they warned of the dangers of central banking. They demonstrated how expansionary credit policy leads to price inflation and business cycle, and also fuels the growth of government. They begged and pleaded to reverse course. But they were doomed to be prophets of decline.

One year after Mises’s death, Hayek decided to take a different course. In 1974, he wrote “The Denationalization of Money.” He gave up on the idea of government involvement in money at any level and concluded that there had to be a complete separation, even at the level of reform. He suggested a revolution from below.

He once favored the gold standard, but with this book he said, in effect, “We certainly can do better than that, though not through government.” He explained that “we have always had bad money because private enterprise was not permitted to give us a better one.” He endorsed a system of privately created monies based on a variety of technologies, included indexes of commodity baskets. These monies would all compete for market dominance, same as with any other good.

This book seemed mind-blowing at the time. But with Bitcoin, it’s not so crazy. The technologies were not around during Hayek’s day but now we can see how much we’ve been missing in the age of nationalized money. Money has gotten worse rather than better—and this is different from other private commodities, like phones, cars, and computers. Money can indeed be a product of private enterprise. The right reform plan is to just forget about the government’s system and move onward to something more wonderful. In the competition for money and payment systems, the market system will win.

Murray Rothbard (1926–1995). The first I ever heard of the idea of private coinage, it was from Rothbard’s 1963 book, What Has Government Done to Our Money. The idea astonished me, though, again, the notion seems not entirely outlandish now. New research has emerged that has shown that private currency is a huge part of modern history, from England in the Industrial Revolution to the American nineteenth century.

This wasn’t his central contribution. Rothbard was a theorist of the idea of private property, spelling out its implications for the whole of the social order. It is private property that brings order, secures liberty, rationally allocates resources, keeps conflict at bay, allows for the adjudication of disputes, incentivizes production, and generally shores up human liberty. Rothbard firmly established that money is and must remain private property.

Why does that insight matter? It comes down to one word: banks. They first existed as warehouses, made necessary because of safety and the costs of transport. The function of banks as lenders is really something different. In either case, the rights to who owns what ought to remain clear. Alas, it was not to be the case. Banks love ambiguity over ownership. If they can warehouse your stuff and make money lending it out at the same time, that’s all the better for them. If they can get government backing for the practice, that’s even better.

Rothbard’s best idea of reform—spelled out at great length in his 1983 book The Mystery of Banking—was to re-institutionalize property rights in the realm of money. No more should there be confusion and uncertainty about the titles to money property. Just as in the rest of the world, there should be clear distinctions. You can warehouse your money or your can loan it to a lender at a risk but there should be no mixing of the two. In today’s world, no one has a clue who has a right to what.

Now consider Bitcoin. When I own it, you don’t. When you own it, I don’t. There are no intermediaries, no charge backs, no confusions about how many there are or to whom they belong. To pay is to transfer, not just on some fictional ledger that may or may not reflect. This is a Rothbardian dream come true.

To be sure, Mt. Gox muddied the situation substantially, but that is not intrinsic to Bitcoin itself. It was a result of one firm that was poorly run, and this firm was compromised by a hacking theft, a cover up, incompetence, or outright fraud (it’s still just starting to be sorted out—for instance, Mt. Gox just found 200,000 BTC it didn’t realize it had). But the beauty of the situation was that even with that institution’s obfuscation, users knew of the foul play. For years prior to bankruptcy, it was obvious that something was amiss. Bitcoin is still being traded. The newest firms are going the extra mile to make it clear that they hold all your property at all times. Plus, with paper wallets and cold storage, you don’t have to use third parties at all.

Unlike the gold that Rothbard favored as currency (he died in 1995, just as the web was privatized and began to mature), Bitcoins are both weightless and spaceless. This means that the warehousing function of Bitcoin is technically unnecessary. Every owner can be his or her own banker. This is a dream in many ways, since the the warehousing function is technologically contingent, not an eternal feature of the world.

Israel Kirzner (1930– ). Kirzner is a student of Mises’s who has dedicated his life’s work to understanding and expanding upon an insight of his teacher. Mises saw that economics resisted formal modelling for many reasons but a major factor was the presence of entrepreneurship. There is a reason that textbooks neglected this topic for decades. It contradicts the goal of perfect prediction and perfect control. Entrepreneurship introduces an element of chaos that defies every expectation. Kirzner elaborated.

This is the act of discerning unmet technologies and needs in a market setting and bringing them to life for consumption and production. Entrepreneurship means introducing something new that had previously been unknown. There is an element of surprise that is essential to entrepreneurship that drives forward the process of market development.

When we think of Bitcoin, how can we not think of entrepreneurial surprise? It was released not as a traditionally capitalist product but rather on a free forum. Anyone could download it and starting “mining” Bitcoin. But only those super-alert to the opportunity did so. One of those was the inventor himself, who is a very rich person today. This is what it means to be alert to and discover an opportunity.

Today there are many thousands of businesses that have grown up around Bitcoin. There are wallets, exchanges, retail and wholesale stores, service companies, and so much more. Each one represents a risk. Most will not make it. But some will. What determines their success or failure (leaving aside government regulations) is whether they meet the needs of the consuming public. No one can know the results in advance.

Kirzner is the master of describing this process, one that Menger said is at the heart of causing a new money to emerge. Thus have we come full circle: 120 years of scholarship that describes the very economic heart of cryptocurrency. To most people it is mystifying and amazing, and truly it seems that way. But there is a logic to it all, even if it is only obvious in retrospect.

How many years will it be before the economic science of the non-Austrian variety catches up? For now, most professionals in this field are politely ignoring the fact that Bitcoin has blown up nearly all conventional wisdom about monetary theory and monetary policy. (Konrad Graf, though, is already on the story). Indeed, Bitcoin was necessary in part because the current State-based system has utterly failed to keep up with the times. Had the market been allowed to work all along, instead of being restricted and truncated by state control, the system would likely be further along than it is.

Now is a good time to look back, dust off those neglected books, and rediscover the school of thought that anticipated all the core of what makes Bitcoin so incredible.

RELATED STORY: IRS Rules Bitcoin is ‘Property,’ Subject to Tax

20121129_JeffreyTuckeravatarABOUT JEFFREY A. TUCKER

Jeffrey Tucker is a distinguished fellow at FEE, CEO of the startup, and publisher at Laissez Faire Books. He will be speaking at the FEE summer seminar “Making Innovation Possible: The Role of Economics in Scientific Progress.”

Open Letter to Florida Power and Light CEO James L. Robo on Smart Meters

The Memory Hole blog published an open letter by James F. Tracy to James Robo, CEO of FP&L concerning its push to install smart meters on all of the homes of its customers. Memory Hole reports, “The letter below was sent to Florida Power and Light Chairman/CEO James L. Robo this week upon reviewing FPL’s policy to ‘opt out’ of Smart Meter technology for an ‘enrollment fee’ and subsequent monthly payments. Such payments amount to mob-style extortion that utility customers are forced to pay, simply to remain free from potential harassment or harm.”

James L. Robo
Chairman and Chief Executive Officer
Next Era Energy / Florida Power and Light
700 Universe Boulevard
Juno Beach, Florida 33408

Dear Mr. James L. Robo,

I am writing with regard to the “Smart Meter” appliance that your company, Next Era Energy / Florida Power and Light (NEE/FPL; NYSE: NEE) placed on my home and households throughout my Boca Raton neighborhood in April 2011, and your present bid for my family to “opt out” of exposure to such technology. As you are likely aware, after doing extensive research on the device and its implications for privacy and human health, in addition to conducting periodic measurements with my HF35-C RF Analyzer, I discovered how your Smart Meter apparatus was discharging microwave radiation on my family (which includes small children) in excess of 10,000 microwatts per square meter every thirty-to-ninety seconds. I requested that NEE/FPL remove the meter. NEE/FPL complied only after being repeatedly telephoned and furnished with my own observations delivered via certified mail and accompanied by copious scientific research that such “Smart Meter” technology poses a serious health hazard and privacy-related concerns (hereherehere, and here).

Yet Mr. Robo, as you are aware, even with this knowledge you have consciously chosen to act in a grossly irresponsible fashion by maintaining that the meters in question are safe, and have proceeded to keep them on millions of NEE/FPL customers’ homes throughout Florida without their awareness or express consent. This flagrant act demonstrated to such a manifold degree arguably constitutes fraud, negligence, and reckless endangerment on a truly astounding scale.

NOTE: An important interview with Take Back Your Power documentary producer Josh Del Sol:


In your most recent paraphernalia to customers you disingenuously assert that there are “no credible studies” concluding that “Smart Meter” radiation is dangerous to human health. As you are well aware, the body of research on the negative health effects of microwave RF dates to the 1960s and consists of several thousand military and scholarly scientific studies. In fact, the only studies that lack credibility and defy basic scientific standards are those commissioned by NEE/FPL and its peer utilities throughout North America to avert public concern over such risks.

Mr. Robo, as a Harvard Man twice over one might conclude that you hold scientific inquiry and proof thereof in high regard. Your irresponsible conduct in this matter suggests that any such intellectual training is not only placed in abeyance but wholly betrayed. Moreover, your most recent proposition to allow families to “opt out” for a fee of what is essentially a gigantic scientific experiment is tantamount to mob-style extortion.

I will appreciate the opportunity of meeting and conversing with you in person so that you may explain to me whether you have a “Smart Meter” attached to your office, living room, or bedroom wall, as so many of your customers’ families do. I am also interested to know how you are able to proceed with a clear conscience given that you are presiding over such a dangerous health-related trial that will almost certainly cause countless health problems and an overall deteriorating quality of life on unsuspecting millions.

An honest Fourth Estate vigorously airing the perils of the technology you have unilaterally mandated for every single Florida resident might result in a far more circumspect if not hostile citizenry. Such inattention by the press has allowed you to successfully bamboozle the Florida Public Utility Commission into approving the widescale deployment of this dangerous system and the uncertain effort to allow customers to “opt out.”

If the “Smart Meter” technology you stipulate were really safe and beneficial, your customer base would be clamoring to pay the $95.00 initiation and $13.00 monthly fee to “opt in” to the “Smart Grid.” Yet because the technology is unproven, hazardous, and perhaps even useless you must foist it on your customers without their knowledge and then proceed to confuse them, even as you disingenuously offer the option to say, “No.”

Mr. Robo, I once again offer you my emphatic “No!” “No!” to the fraud, “No!” to the guile, “No!” to the invasion of privacy, and “No!” to the assault on my family’s health that your outrageous and unfounded technology poses.


James F. Tracy

COUNTDOWN TO TAX DAY VIDEO: How does the FairTax Impact the Price of What I Buy?

A young man asks Steve Hayes when you buy a car is the price going to be higher under the FairTax®? No, because of the elimination of withholding from salary and increased take home pay you have more money to spend. Combine that with the cost savings to car makers, car sellers and transporters and everyone involved in bringing that car to market competition in the market will cause the base cost of that item to go down as those businesses are no longer paying income tax, matching withholding, or paying the cost to comply with the taxes. Your purchasing power will increase.


Intimidation from the U.S. Patent Office: They Want Our Name!

fair tax april 15 is comingIt is often said that imitation is the sincerest form of flattery. That is, unless that imitation runs afoul with federal trademark law.

Since the mid-90’s, Americans For Fair Taxation® has owned and utilizes several FairTax® trademarks registered with the U.S. Patent and Trademark Office.

These trademarks have been an integral part of our public awareness campaign on the need for tax reform, and in our educational efforts to provide information regarding taxation, tax reform and HR 25 / SR 122, “The FairTax Act of 2013.”

Currently, in the state of Illinois, the “A Better Illinois” coalition and others are conducting a high-profile public awareness campaign themed, “A Fair Tax.” This tax reform plan promotes a differentiated tax system that subjects citizens to varying levels of income taxes.

This is in stark contrast to the FairTax®, which eliminates federal income taxes in their entirety, and replaces them with a single rate, national consumption tax.

Americans For Fair Taxation (AFFT) fully respects the right of individuals and organizations to advocate for the tax reform plan of their choice, using all lawful means.  We reject, however, any notion that advocacy initiatives may be conducted using any of (AFFT’s) federally protected marks, most especially when that advocacy causes confusion among consumers as is currently happening in the state of Illinois.

AFFT has spent nearly two decades building goodwill in and national recognition of the FairTax marks.

We will not allow that goodwill to be destroyed through any unauthorized usage of the same or confusingly similar marks for any tax reform plan except The FairTax – HR 25/S 122, and FairTax inspired and modeled state tax reform initiatives supported by state FairTax organizations.

We will always seek first to amicably resolve infringement situations while respecting AFFT’s exclusive right to use the FairTax marks; and when required, will initiate legal action to enforce our rights.

RELATED VIDEO: What is the FairTax legislation?



EDITORS NOTE: The featured image is from the Robert N. Dennis collection of stereoscopic views of the Patent Office, Washington, D.C. circa 1860-1895.

Frustrating Michael Moore by Sheldon Richman

The filmmaker needs to discover truly radical political economy.

If Michael Moore would study a little political economy he might turn into a potent champion of individual liberty.

As we see in Moore’s new movie, Capitalism: A Love Story, Moore is offended by some truly offensive things: banks engaging in wild speculation without concern for the risk, taxpayer bailouts for banks and other businesses, cozy relations between Wall Street and Washington, politicians getting favors from companies that want benefits from government, and big institutions pushing less powerful individuals around. True, he’s offended by some inoffensive things as well, such as the cut in the 90 percent top income-tax rate nearly 30 years ago. But by and large, what he rails against should be railed against.

(Update: Moore gets the tax-rate story wrong, and I let it get by me. The 91 percent top marginal rate fell to 77 in 1964 and 70 in 1965; this was the Kennedy tax cut — I wonder why Moore didn’t say that Democrats John Kennedy and Lyndon Johnson were the rate cutters. Under Republican Ronald Reagan, whom Moore wishes to demonize for cutting taxes for the rich, the rate dropped to 50 and eventually to 28 percent. HT: Gary Chartier.)

Had he called his movie State Capitalism: A Love Story, I might be applauding (with some reservations). But he’s targeting the more ambiguous “capitalism,” which he uses interchangeably with “the free market.” He can be forgiven for this, however. Most people would say that the current U.S. economic system is capitalist. Moore has probably heard that all his life. He’d hear if he watched a Fox financial program. Would Ben Stein or Lawrence Kudlow disagree? Moore has also heard Republican politicians, George W. Bush, for example, praise the existing system, with all its deep government interventions, as capitalist. He did this even as he and Treasury Secretary Henry Paulson, former chief of Wall Street behemoth Goldman Sachs, stampeded Congress into passing the $700 billion TARP bailout last year. Moore takes such people at their word: The free market is capitalism, and capitalism is what we have today.

Can we blame him for thinking this way?

Yes, it’s sloppy thinking, and had he been more curious and read beyond the confines of “Progressive” literature, he could have gotten the straight story. But many knowledgeable advocates of the free market contribute to the confusion by exhibiting what Kevin Carson calls “vulgar libertarianism,” or what Roderick Long describes as “the tendency to treat the case for the free market as though it justified various unlovely features of actually existing corporatist society.” How often have you heard a free-market advocate condemn pro-business intervention in one breath, then defend existing dominant corporations in the next — as though they did not arise in the interventionist environment just condemned? Pro-market is not the same as pro-business. If some market advocates don’t understand that, why should Moore? Vulgar libertarianism is a disconnect that makes the free-market philosophy look like a corporate apologetic. It’s done incalculable damage to the cause of freedom, in part by alienating potential allies. Who knows, maybe even Michael Moore.

Aversion to Profit

This may go a long way in explaining Moore’s aversion to profit — at least other people’s. He associates profit with business, which he associates with (state) capitalism. So for him, profit per se is suspect. But he should see a problem here. Does he think he’s exploiting moviegoers when his production company ends up with a profit? Do the co-ops and worker-owned firms he loves exploit their customers when they sell their products for more than their money costs? When two people barter, are they mutually exploiting each other because each gets more value than he gives up? To consistently oppose profit, one would have to oppose all human action, since every action aims at a surplus of subjective benefit over subjective opportunity cost.

Cornered like this, Moore might say he’s only the against excessive profits that capitalist market power permits. But now we’re back where we started. To the extent that intervention hampers competition by erecting barriers to entry — which is the usual effect, intended or not — protected firms are free to charge higher prices and reap more profits than would have been the case in an open market. Corporate power and privilege derive from political power and can’t exist without it. In contrast to existing capitalism, the truly free market would have no legal barriers to competitive entry, assuring that prices and returns are economically justified and not the fruits of privilege. Strictly speaking, entrepreneurial profit in a true market gets competed away because the very process of capturing them reveals valuable information to others and invites imitation. It takes innovation and efficiency — that is, superior service to consumers — to create new profits. Only the State permits business to make profits by withholding benefits from consumers.

But Moore doesn’t know this. What he “knows” is that the choice is between the current corrupt system — and it is corrupt — and some vaguely defined scheme of control by benevolent politicians, which he calls socialism and democracy.

In his movie Moore expresses affection for socialism, but he’s not clear what he means. He never advocates collectivization of the means of production or the abolition of markets. Instead he suggests that socialism means workers having a say in how the companies they work for are run. But why assume that’s anti-free market? He praises worker-owned companies and notes that hundreds of them exist in the United States today. He might be surprised to learn that these things are entirely compatible with the free market. In fact, it’s a perfectly libertarian intuition to abhor being subject to the arbitrary whim of anyone — yes, even a private employer. If government regulatory and tax obstacles to new competition and self-employment did not exist, workers would have their maximum bargaining power and widest array of alternatives. I imagine we’d see more departures from the traditional firm. People used to get their “social insurance” from mutual aid societies. Maybe in a true free market, we’d see a bigger role for the employment counterpart to these public, yet not governmental, organizations.

What would Moore think about a system in which no one could collude with politicians to legally plunder the rest of us for their own benefit and everyone was free to enter into any cooperative arrangements to produce and offer goods to others in voluntary exchange? Michael, that’s the free market!

FDR’s Second Bill of Rights

Of course, Moore naively looks to government to provide things. His movie laments that FDR died before he could see his Second Bill of Rights enacted. Roosevelt wanted government to guarantee everyone a good education, job, home, health care, and so on. Has Moore ever wondered where government would get the resources for this? He can’t really believe that somewhere there’s a massive pot of collective wealth waiting to be distributed. He must realize that the tax system would provide the money. But how can he not know that if government appears to penalize wealth creation with confiscation, less wealth will be created?

Moore is unaware that he commits the “Nirvana fallacy.” This is the erroneous idea that our choice is between the admittedly imperfect world we’re bound to live in if government leaves us alone and an imagined utopia in which benevolent and all-wise rulers oversee and regulate everything. Of course that is not the choice. Moore’s preferred system, whatever he calls it, would be run by individuals whose insight into the public interest would be no sharper and whose motives no purer than other people’s. However, since they would wield political power — which is the legal authority to compel obedience– they would be far more dangerous than anyone in a free market could ever be. He knows how corrupt politicians are. Why does he think different people would run things in his utopia? Does he really want them in charge of everyone’s job, education, healthcare, housing, pension, and the rest? It’s hard to understand why he isn’t uncomfortable with the idea of the people being tenants and employees of the State.

Whether he realizes it or not, Moore favors a system in which an elite necessarily would make critical decisions for the rest of us. He’d be incredulous to hear that, but if he ever comes to understand it, libertarians might end up with an unlikely ally.


Sheldon Richman is the former editor of The Freeman and, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America’s Families.

EDITORS NOTE: The featured photo of Michael Moore is by Andrew McFarlane. This file is licensed under the Creative Commons Attribution 2.0 Generic license.

Beyond Crony Capitalism by Sandy Ikeda

Some libertarians don’t like the term “crony capitalism.” They complain that cronyism—the use of political power for private gain—is incompatible with capitalism, so why conflate the two terms? While they may have a point, I’d like to look beyond the issue of terminology and focus on the underlying phenomenon: The problems with interventionism go far beyond cronyism.

On Facebook and other places, libertarians talk among themselves with a heavy, almost exclusive focus on cronyism over other forms of interventionism. It troubles me.

What Is Crony Capitalism?

The idea behind crony capitalism is what we used to call “special-interest politics” or the more technical “rent seeking.” The politically powerful, or those with connections to them, use that power to channel wealth from other people to themselves.

Examples of cronyism aren’t hard to find, of course. Here in New York, our new mayor wants to tax high-income earners to fund pre-kindergarten programs in public schools in order to reward teachers’ unions for their help in getting him elected. Erecting trade barriers to protect the textile industry has a long and dishonorable history. And aspects of President Obama’s Affordable Care Act (ACA) seem to have been designed to privilege well-established insurance companies, who can afford to lobby, at the expense of smaller ones who can’t.

I don’t want to go over this well-trod ground again. I raise the issue of cronyism for two reasons.

Imputing Bad Motives

First, the charge of cronyism or political opportunism assumes that those who favor interventionism do so for narrowly selfish, even venal reasons. Painting your opponents as crony capitalists puts you on the side of virtue—a free-market good guy who really wants to promote the general welfare.

Don’t get me wrong: I’m certainly not saying that free-market advocates don’t have good intentions. What I am saying is that imputing bad intentions to your opponents from the get-go may be fitting for a street fight—and I know there sometimes are street fights—but it’s a bad idea if you want constructive dialogue or debate.

F. A. Hayek explained that he dedicated his great book The Road to Serfdom “To Socialists of All Parties” not to mock his opponents but to open a conversation with them. Like his mentor Ludwig von Mises, he typically chose to treat people with whom he disagreed as men and women of goodwill. In other words, he refrained from assuming his adversaries were intellectually dishonest, unconquerably stupid, or plain evil. I know many of you will say, “But these people are evil!” Sorry, I don’t go there because it’s unnecessary, and if you want to know why, read this and this. When you foreclose honest dialogue, bullets replace ideas.

Ideas Inform Interests

Ultimately what underlies crony capitalism is bad ideas.

A common idea is that getting very rich from voluntary trade is tantamount to getting very rich from political redistribution. If the ways in which Vladimir Putin and Bill Gates each became billionaires are morally equivalent, the former mostly through threats of violence and the latter mostly by selling stuff, then what’s wrong with using aggression to get rich? Or, if they are equivalent, then can’t political power serve as a countervailing force against “economic power”? It’s easy to see how such ideas might appear to legitimize political power for special-interest pleading.

So bad intent may not always motivate even cronyism. I believe most of us, whatever our ideology, want to do good—for ourselves, our families, our friends, and our communities—most of the time. Mises wisely pointed out that the dichotomy between “interests versus ideology” is unhelpful because “it is not sensible to declare that ideas are a product of interests. Ideas tell a man what his interests are.”

Thus, as Henry Hazlitt argued long ago, preferring short-term gains for a small group of people over long-term improvement to the general welfare is just a bad idea because it ultimately runs counter to the interests of those who favor it.

Other Forms of Interventionism Are at Least As Important

The second reason I’m raising this issue is that the study of interventionism also includes looking at the unintended consequences of interventionism. Interventions are subject, to one degree or another, to what are called knowledge problems. Because knowledge in both the private and governmental spheres is imperfect, it’s simply not possible to be aware beforehand of how people will respond to an intervention. Knowledge problems generate perverse incentives that tend to frustrate the intentions of even well-meaning interventionists.

Perverse incentives refer to things such as people driving more recklessly as a result of mandating airbags in all cars, which is an example I used in a recent column. It also includes the spectacle of people losing their low-cost insurance because under Obamacare their coverage doesn’t meet the new minimum standards. (NBC news reported that the Obama administration may have known this would happen, but unlike crony capitalism it’s hard to see how this particular aspect of the ACA benefits anyone systematically, especially politically.)  Advocates of raising the minimum wage to $10.10 an hour don’t realize the negative impact this increase would have on already disadvantaged low-wage workers, who will now be priced out of the labor market. For example, Time magazine reports that it could “lift 4–6 million out of poverty” but fails to mention that it could also increase unemployment by hundreds of thousands.

It’s hard to change the minds of hard-core proponents of interventionism (and of hard-core proponents of any ideology, including libertarianism) but there have been important examples. A recent one is the surprising change of heart by the activist/rock star Bono on the value of capitalism in developing countries. If changing minds through ideas isn’t possible, then I’m in the wrong business.

I don’t think I am.

I’m a Misesian on many issues, including this one. But here I’m also a Keynesian. In the closing paragraphs of his General Theory, Lord Keynes famously wrote:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. . . . I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.

I worry that focusing so narrowly on crony capitalism feeds into the very human but very misguided tendency to feel contempt for anyone who doesn’t believe as you do. Of course, there are those who do mock and tease, or worse, in arguments. But if you’re facing serious opponents, it’s better to regard them as people with gaps in their knowledge (which we all have) than to dismiss them as invincibly ignorant. Better to patiently point out the weaknesses of their arguments and to listen to what they have to say.

That’s hard, but it’s the only way to win. And by “win” I mean maintaining respect for yourself and being able to improve your position by seeing the weaknesses, as well as the strengths, in your own ideas.


Sandy Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism. He will be speaking at the FEE summer seminars “People Aren’t Pawns” and “Are Markets Just?

Time to Lower Corporate Tax Rate

I earned my undergraduate degree in tax accounting from Oral Roberts University (ORU). Upon graduation, I spent a decade working in tax accounting, both for government and the private sector.

So, in this week’s column, I want to take advantage of my education and training to write about tax law. Let me start by giving the example of how our welfare state has crippled our economy and destroyed the family unit.

Back in the day, if a girl was on welfare, she could not be married or have a male living in the house. If the girl was discovered to be in violation of these rules, she was immediately removed from the welfare rolls, even if that meant hurting her children.

So, in a perverse way, the government was rewarding single motherhood and discouraging marriage with their policy. In simple economics, if you tax (or penalize) something (marriage), you get less of it. If you reward something, you get more of it (fewer single mothers and more marriage).

In a similar manner, governments reward and punish corporations and entrepreneurs by the way they tax earnings. Some industries are more sensitive (elastic) to changes in the tax code than others (inelastic).

You raise taxes on cigarettes and sales will not drop because those who smoke are addicted and they will always find a way to get their next smoke (inelasticity—their behavior is not sensitive to price). But if you raise taxes on sodas, sales will decrease because it is considered a discretionary purchase (elastic—they can buy a cheaper fruit drink, they are very sensitive to price).

Currently, our economy is anemic in its growth, unemployment is still above 7 percent, and job creation is almost nonexistent; but just imagine if someone magically injected more than $ 2 trillion into our economy. What would happen?

Well, you don’t have to imagine this scenario because Obama and the Congress can make this a reality.

As in my earlier example, the more of something you have, the cheaper it becomes. So, if the U.S. economy is infused with $ 2 trillion, banks would have more and cheaper money to loan to small businesses (who are the biggest job creators in our economy); these businesses would hire more people; as more people begin to work, they will spend more money in our economy; thereby increasing our gross domestic product (GDP). The beginning of a growing economy.

Recently Bloomberg News analyzed the security filings of 307 multinational companies headquartered in the U.S. Bloomberg estimated that these companies have almost $ 2 trillion sitting in offshore accounts (all legal based on current tax law). Their offshore companies pay taxes in the country they operate in and those taxes are deducted from their U.S. taxes.


Graph courtesy of Bloomberg News.

But they don’t pay U.S. taxes on their foreign profits until they bring the money into the U.S. The current tax rate for foreign income is now 35 percent, one of the highest in the world (along with China and South Korea).

So, companies are docking their profits in countries like Ireland, whose tax rate is 12.5 percent; or Bermuda whose rate is 0 percent.

According to the Congressional Research Service estimates, giving incentives for these corporations to repatriate their profits back to the U.S. would generate an additional $30-$90 billion in tax revenues.

But why pay a 35 percent tax rate to bring money into the U.S. when you can borrow money at 5 percent to expand your foreign operations; plus the interest you pay on the loan is deductible as an expense on your U.S. tax return. In essence, you are making interest on the money you will eventually have to pay U.S. taxes on. Defacto, the U.S. government is giving these corporations interest free money to play with.

Chairman of the U.S. House’s Ways and Means Committee, Dave Camp (R-MI) submitted a bill last month that would reduce the corporate tax rate from the current 35 percent down to 25 percent); unfortunately, it has absolutely no chance to pass in an election year.

Camp’s bill is a good starting point. I think consensus can be reached to lower the corporate tax rate to 25 percent in order to get companies to repatriate some of their profits back to the U.S. I would mandate that the new revenue be earmarked for an infrastructure fund that can only be used to repair our bridges, roads, etc.

This would create jobs and fix up our deteriorating infrastructure at the same time. I think both parties can agree on this.

FairTax Ushers In New Governance

Painting by Jan Matsys, 1509-1575, titled “Beim Steuereintreiber” (At the tax collector)

Eight months ago, 21 seasoned FairTax® grassroots leaders responded to an invitation from Americans For Fair Taxation® (AFFT) Vice President Leo Linbeck III, to meet in Houston and discuss the FairTax campaign.

After more than two days of spirited discussions the team, which became known as “C21”, reached consensus on a plan to transfer governance of the FairTax campaign and AFFT from the current board of directors to volunteer grassroots supporters.

Since that remarkable weekend, this dedicated team, guided by Linbeck and Steve Hayes, a member of the Florida FairTax Educational Association board of directors, hammered out a comprehensive plan embodied in a Memorandum of Understanding (MOU), License Agreement and amended bylaws.

It is now expected that governance of AFFT will be transferred by the end of April in accordance with the terms set forth in the MOU.

The C21 leaders and AFFT took great care to define fair and equitable requirements for both a state FairTax organization and the process for them to nominate delegates who may be elected as directors of AFFT. This process includes both organizational qualifications and minimum AFFT contribution requirements.

The organizational qualification requires that state FairTax organizations operate as a legally recognized, non-profit entity in compliance with state and federal laws, have written and published bylaws, and maintain a board of directors and a defined organizational structure, a checking account and operate under the AFFT umbrella.

The contribution requirement includes minimum individual donations of $10 per donor made directly to AFFT. These donations may be made online through, in response to an AFFT online or direct mail solicitation, or by donating to AFFT with a personal check, money order or through the banking system.

Qualified states may elect up to three delegates who will become voting directors of the AFFT board of directors. The number of state delegates will depend on the number of contributors to AFFT in 2013, and through March 31, 2014, and the total amount of money donated from the state to AFFT during this same time period.

Additionally, a state that does not meet the minimum donation requirements, but which is otherwise qualified will be able to elect a non-voting delegate. This non-voting delegate may attend AFFT board meetings, but may not vote on board matters.

It is important to note that this process is limited to the election of directors to AFFT and does not affect the way states select their own leadership.

Next Step Highlights

In early April, all donors to AFFT in 2013 and through March 31, 2014, will receive an email providing detailed next steps for the AFFT board of directors election.

If you want to want to be included, you must do two things right now. 

First, as stated, only those individuals who have donated a minimum of $10 to AFFT in 2013 or 2014 will be allowed to nominate or vote for delegates. If you have not donated and would like to you may go here to donate. Second, ensure your contact information is current at by logging in here.

Once delegates have been selected a national meeting will be convened in Houston to confirm the election of the AFFT board of directors.

Finally, to show their continued support and to help ensure the new grassroots board has every opportunity to succeed while assuming leadership of the FairTax campaign, the current AFFT board of directors has generously offered to establish a post-transition, dollar-for-dollar matching fund up to $100,000 for AFFT.

The FairTax is the largest, single-issue grassroots tax reform movement in the nation. It is therefore fitting that the grassroots assume governance for both AFFT and the campaign.

We want to thank everyone who has assisted AFFT and the grassroots with this massive undertaking. And on behalf of everyone who supports the FairTax, may I express our profound appreciation to the AFFT board of directors – past and present – for their steadfast leadership in founding and governing AFFT and the FairTax campaign.

If I Had a Million Dollars by Sarah Skwire

Dorothy Parker. “The Standard of Living.” 1941.

From the very first sentence, Dorothy Parker’s “The Standard of Living” awakens not only admiration in the lover of literature, but attention in the lover of economics. “Annabel and Midge came out of the tea room with the arrogant slow gait of the leisured, for their Saturday afternoon stretched ahead of them,” she writes. In one simple sentence we are given a perfect picture of these young women. We know instantly, for example, that Annabel and Midge (and those names, when Parker was writing, were the equivalents of Brooklyn and Madison today) are not leisured. They have assumed the “arrogant slow gait of the leisured” because this is their afternoon off. And indeed, we are informed in the following paragraph that the young women are stenographers. “Annabel, two years longer in the stenographic department, had worked up to the wages of eighteen dollars and fifty cents a week; Midge was still at sixteen dollars. Each girl lived at home with her family and paid half her salary to its support.”

These are young, middle-class working women, about to enjoy a hard-earned afternoon off. And they will enjoy it by playing their favorite game.

Annabel had invented the game; or rather she had evolved it from an old one. Basically, it was no more than the ancient sport of what-would-you-do-if-you-had-a-million-dollars? But Annabel had drawn a new set of rules for it, had narrowed it, pointed it, made it stricter. Like all games, it was the more absorbing for being more difficult.

Annabel’s version went like this: You must suppose that somebody dies and leaves you a million dollars, cool. But there is a condition to the bequest. It is stated in the will that you must spend every nickel of the money on yourself.

…It was essential, of course, that it be played in passionate seriousness. Each purchase must be carefully considered and, if necessary, supported by argument. There was no zest to playing it wildly.

And so the young women window shop. But they do so with “a seriousness that was not only proper but extreme.” When Annabel declares that she would spend some of her money on a silver fox coat, “It was as if she had struck Midge across the mouth. When Midge recovered her breath, she cried that she couldn’t imagine how Annabel could do such a thing—silver-fox coats were so common!” The friends do not speak to each other or play their game again until Annabel revises her decision and elects to imagine purchasing a mink coat instead. (As Virginia Postrel reminds us in her book The Power of Glamour“Glamour is subjective.”)

But the crisis of this particular episode of the game is a different one. On a hot September day when it is far too uncomfortable to think about fur, the girls pause outside the window of a Fifth Avenue jewelry store. (In my mental movie of this story, the store is Tiffany & Co., of course, because there is no more glamorous jewelry store.) In the window, Annabel and Midge spot a necklace, “a double row of great, even pearls clasped by a deep emerald.” Instantly, the fur coats are forgotten.

On a dare, Midge goes into the store to price the pearls. Told that the price is $250,000, the girls react at first with disdain:

“Honestly!” Annabel said. “Can you imagine a thing like that?”

“Two hundred and fifty thousand dollars!” Midge said. “That’s a quarter of a million dollars right there!”

“He’s got his nerve!” Annabel said.

And then with despair they realize that their game of endless wealth has become subject to the chilling effects of scarcity.

But Parker knows that the effervescence of youth cannot be contained for long. And the final sentences of the story begin the game again. But this time:

Look. Suppose there was this terribly rich person, see? You don’t know this person, but this person has seen you somewhere and wants to do something for you. Well, it’s a terribly old person, see? And so this person dies, just like going to sleep, and leaves you ten million dollars. Now, what would be the first thing you’d do?

I don’t know about Annabel and Midge, but I’d buy that necklace.

Virginia Postrel has observed that glamour “focuses preexisting, largely unarticulated desires on a specific object, intensifying longing. It thus allows us to imaginatively inhabit the ideal and, as a result, to believe—at least for a moment—that we can achieve it in real life.” She adds later that “glamour leads us to imagine ourselves in the other: another person, another place, and another life. . . . Glamour’s promise of escape and transformation can create an enjoyable but transient experience, provide a source of solace in difficult circumstances, or offer direction toward real-world action.” Highly unlikely ever to have the opportunity to spend $10 million, $1 million, or even, at their salaries, $100 on something glamorous and desirable, Annabel and Midge play their game to soothe their frustrations and escape their daily grind.

Guy de Maupassant’s story “The Necklace” must have been on Parker’s mind when she wrote “The Standard of Living.” Here Madame Loisel, the beautiful young wife of a middle-class Parisian clerk, is invited to an expensively elegant party. She borrows a diamond necklace from a wealthy friend and loses it. She and her husband must then borrow the money to replace the necklace. They spend the next 10 years in grinding poverty while they repay their debts. At the end of the story, we discover that the lost necklace was made of artificial stones, and Madame Loisel has destroyed her youth, beauty, and happiness to attain something that was never real.

All of this reminds me of my favorite economic fairy tale—the episode of the poor man’s son in Adam Smith’s Theory of Moral Sentiments. This young man, “whom heaven in its anger has visited with ambition,” is discontented with his poverty.

He finds the cottage of his father too small for his accommodation, and fancies he should be lodged more at his ease in a palace. He is displeased with being obliged to walk a-foot, or to endure the fatigue of riding on horseback. He sees his superiors carried about in machines, and imagines that in one of these he could travel with less inconveniency. He feels himself naturally indolent, and willing to serve himself with his own hands as little as possible; and judges, that a numerous retinue of servants would save him from a great deal of trouble.

The poor man’s son then labors his whole life to attain these luxuries, enduring “more fatigue of body and more uneasiness of mind than he could have suffered through the whole of his life from the want of them.” After a lifetime of this work, and of toadying and obsequiousness to “those whom he hates,” he ends in despair and misery. “He begins at last to find that wealth and greatness are mere trinkets of frivolous utility, no more adapted for procuring ease of body or tranquility of mind than the tweezer-cases of the lover of toys; and like them too, more troublesome to the person who carries them about with him than all the advantages they can afford him are commodious.”

We should not fault the poor man’s son for his ambition. We should, however, fault him for the technique he uses to pursue his ambitions. “For this purpose he makes his court to all mankind; he serves those whom he hates, and is obsequious to those whom he despises.” Caught up in the glamour of wealth and ease, he sacrifices his character and his comfort in order to procure it. As Postrel comments, “The young man’s picture of the good life—the glamorous vision that inspires his quest—omits important details. It leaves out years of laborious effort, showing only the result of hard work. . . .Glamour always obscures the difficulties and distracting details of life as it is really lived.” Chasing an impossible dream of wealth without work, the poor man’s son destroys his happiness.

Annabel and Midge are much wiser than Madame Loisel and the poor man’s son. Annabel and Midge know that wealth without work is a dream. They know they will almost certainly never have the necklace in the window. Their game—like my grandmother’s Depression-era trips to the movies—provides them with a brief time of fantasy and escape that allows them to return to their work with renewed energy and inspiration. Midge can hope to climb the ladder of the stenography pool the way that Annabel has. Annabel can hope to manage the pool one day. They can help make their families, and themselves, better off, bit by bit and by working hard. They understand how to balance their ambition with their reality. And they know that you can take a great deal of pleasure from fur coats and expensive necklaces without ever needing to own them.

20121127_sarahskwire (1)ABOUT SARAH SKWIRE

Sarah Skwire is a fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis.

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

IRS currently employing convicted associate of jihad terrorist

This is insane, but it is also completely consistent with the way that the Obama Administration has operated from the beginning. It purged counter-terror trainers who spoke honestly about jihad terror (including me) from counter-terror training programs, while turning a blind eye to the unsavory connections of people like Mohammed Elibiary and Arif Alikhan.

“(EXCLUSIVE) IRS Currently Employing Convicted Terrorist Associate,” by Patrick Poole for PJ Media, March 6 (thanks to Jerk Chicken):

While IRS officials were targeting Tea Party groups for special scrutiny of their 501(c)3 tax exempt applications, the IRS also hired a policeman who had been prosecuted by the Justice Department — and convicted in federal court — of using his access to the FBI’s NCIC system to tip off a terror suspectabout the bureau’s surveillance. The leak wrecked a major terror investigation.

He is still at the IRS.

Weiss Russell (he has changed his name from “Weiss Rasool,” the name under which he was convicted), is currently employed as a financial management analyst in the IRS Deputy Chief Financial Officer’s Office.

In 2008, Russell/Rasool was prosecuted for his role in tipping off Abdullah Alnoshan, a close associate of al-Qaeda cleric Anwar al-Awlaki and a friend of Russell’s from their mosque. According to the Justice Department’s Statement of Facts filed at the time of Russell’s indictment, Alnoshan provided license plate numbers to Russell for cars he believed were conducting surveillance on him. Russell then checked those plate numbers in the FBI’s NCIC database, which came back to a leasing company which federal prosecutors claimed would have tipped off Russell to the bureau’s surveillance.

He left a phone message for Alnoshan that the FBI intercepted.

Prosecutors also claimed that on more than a dozen instances, Russell checked his name, the names of relatives, and other friends to see if they were listed on the Violent Crime and Terrorist Offender File on NCIC without an authorized reason for doing so.

According to the Washington Post, Russell’s tip-off to Alnoshan actively obstructed their investigation:

The target was arrested in November 2005, then convicted and deported, according to court filings in Rasool’s case. Assistant U.S. Attorney Jeanine Linehan said that the target and his family were already dressed and destroying evidence at 6 a.m. when agents arrived to make the arrest, indicating that they had been tipped off.

Alnoshan was deported to Saudi Arabia in December 2005. Russell was indicted in January 2008, and pleaded guilty in April 2008.

While prosecutors had requested jail time for Russell after he failed a polygraph just a week before sentencing, the judge sentenced him to two years of probation. He continued on the Fairfax County police force while an internal affairs investigation was conducted. Reportedly, he was eventually given the choice to resign or be fired. He resigned in August 2008.

Chris Farrell, director of investigations at Judicial Watch, told PJ Media:

Somebody like Russell who betrayed his oath as a police officer and was convicted in court essentially for aiding and abetting the subject of an open terror investigation has absolutely no business with any position of trust and responsibility with the government.

If as reported he holds a top financial analyst position within the IRS, it’s not just a disgrace to a discredited agency but an insult to the American public. Russell has already betrayed his country and shown that he can do enormous damage and abuse his authority and powers, which he is now free to do within the IRS….

Read it all.

Passenger Trains: A Cancer in Florida that Keeps Growing

I guess as children we all loved playing with trains. Why this has become a fascination as adult taxpayers is hard to understand. It’s probably because we don’t look behind the curtain to see what this habit is costing society. Once you do the investigation, it turns out that passenger trains are consistent in one area only, eating up taxpayer dollars.

All Aboard Florida (AAF) is the newest passenger line being presented as an investor backed privately funded entity. It is difficult to understand why a private company as big as Florida East Coast Industries, and with their knowledge of the business, would follow the public sector into this debt laden industry. Their plan is for a high-speed passenger train to service Miami, Fort Lauderdale, West Palm Beach and Orlando. We already have passenger trains that service this route, their names are AMTRAK and Tri-Rail. Let’s examine their profitability for the 2013 operating year.

AMTRAK has state supported routes and long distance routes, that service most of the major areas of the United States. Examining their FY 2013 Budget Statics by Route we note that they have fifteen (15) long distance routes. The one thing that is consistent with all of these long distance routes is that they all lose on average Forty-Million dollars ($40,000,000) per route each year. Just the long distance routes create a Six-Hundred Million dollar ($600,000,000) loss every year.

One of these passenger routes is the Auto Train, which is familiar to citizens in Florida. This route lost Forty-Eight Million dollars ($48,000,000) in 2013 an average of One-Hundred, Eighty dollars ($180.00) lost for every passenger who traveled on the Auto Train. This route does show employment of 34 core employees. That equals out to a loss of One Million, Four-Hundred, Twelve-Thousand ($1,412,000) per employee!

AMTRAK does better on its state supported routes. It only looses One-Hundred Million dollars ($100,000,000) per year on these operations. One of these state supported lines is the Silver Star that provides services to Miami, Fort Lauderdale, West Palm Beach and Orlando. In 2013 they had revenue on this route of Thirty-Nine Million ($39,000,000) and expenses of Eighty-Six Million ($86,000,000) for a loss of Forty Seven Million dollars ($47,000,000).

Where does the money come from to support these heavy losses? According to their 2013-2017 projected operating summary, AMTRAK received Four-Hundred, Fifteen Million dollars ($415,000,000) from Federal Appropriation Support otherwise known as TAXPAYER SUPPORT. Look at the bright side, their projections are for a Two-Billion dollar ($2,000,000,000) loss over the next five years! At least they are leveling off at a consistent loss every year into the future.

The other train that services south Florida with passenger service is Tri-Rail. Tri-Rail does not go to Orlando but it will compete with All Aboard Florida for the passengers who travel Miami-Dade, Broward and Palm Beach. How well has Tri-Rail been doing? Let’s examine their 2013 revenue and expenses.

Tri-Rail had a 3% increase in revenue in 2013 bringing total operating revenue to Twelve-Million, Five-Hundred Seventy-Five Thousand, Six-Hundred Fifty-Two dollars ($12, 575,652). That’s the good news. The bad news is they had total operating expenses of One-Hundred Million, Two-Hundred Forty-Nine Thousand, Six-Hundred Fifty-Eight dollars ($100,249,658) for an operating loss of $87,674,006. To be fair it should be noted that $30,214,462 of this loss is attributed to depreciation of assets, so the true loss for Tri-Rail is only Fifty-Eight Million dollars ($58,000,000).

The good news about this statement is we can track where Tri-Rail balances its budget. Non-Operating Revenue allows Tri-Rail to continue to operate. Where does this non-operating revenue come from? THE TAXPAYER! Here is the breakdown:

  • Federal Transit Administration (FTA) $19,163,234
  • Federal Highway Administration 4,000,000
  • Florida Department of Transportation (FDOT) 30,613,700
  • Other Local Funding 184,795
  • Broward County 1,565,000
  • Miami-Dade County 1,565,000
  • Palm Beach County 1,565,000
  • Interest Income 139,080
  • Total Non-Operating Revenue $58,795,809

What a way to break even. It’s nice to know that you get the support of federal, state and local tax dollars to run your train. How much would just the Tri-Rail loss buy in better education, emergency services, medical advances or other areas that service our citizens.

By the way, did someone mention that a private investment group wants to get into the train business because they want to make a profit? I know I heard that somewhere. The only profit is in raiding the public coffers.

FP&L – No “Choice” of Meters for 36,000 Floridians

By now many of you that refused the installation of FP&L’s smart meters have received a “Dear Customer” letter telling you that you have a choice of meters. The letter goes on to say that if you don’t take their smart meter that you will be charged $95 upfront and $13/month to retain your old meter. If you haven’t received such letter, you will shortly.

On January 7, 2014 the Florida Public Service Commission (FPSC) approved this deal. Although, it is being contested by two separate citizen petitions (one of which I am leading), the rules state that FP&L can continue as planned with the stipulation that fees collected are “subject to refund”. That is, if the FPSC Order is overturned, they must return the fees charged to the customers.

Why the fees? Well you resistors are “cost causers”. It is a long-standing principle that is invoked at will when they want to get you to comply with the game plan. In 1987/1988 they invoked the same principle when they transferred the ownership of meter enclosures and associated cost burdens (maintenance/replacement) to you the customer. The order (PSC Order # 18893) stated that:

“Since self-contained meter enclosures are not a part of the utility function, but simply house the meter itself, their costs should be borne by the customer when the structure is initially wired for electric service or when it must be replaced due to obsolescence or wear. The burden of maintaining and repairing the enclosures’ must likewise rest with the customer.”

As we all know by now, a smart meter is not “simply a meter” but contains lots of additional components that are part of the utility function. It establishes a wireless Neighborhood Network and sends messages back and forth amongst neighbor meters, remotely disconnects services and monitors your usage. In the future they will turn on the second transmitter to establish your Home Area Network to connect with your Home Energy Controller or Smart Thermostat and will give your smart refrigerator the ability to text you. It collects more data than is needed to bill you for your current plan. But why fuss over details!

If you don’t enroll in their plan, they will slap a smart meter on your home. If you think you got that covered (i.e. you already caged/locked your meter or have restricted access to your meter) think again. You will be automatically enrolled and charged the fee.

The process to fight this will be long and painful. If you don’t want a smart meter you need to:

Retain your analog meter. Once they take it, you will never see it again. (Remember you will get an undefined “non-communicating” meter in the future.) You may want to send a certified letter to FP&L stating that you do not consent and that you are enrolling under duress.

File a formal compliant with the FPSC.  Here is the complaint page

Write/call your Florida State Senators/Representatives. They are in session right now. Make your voices heard. Senate –, House:

Contact the Energy committees that oversee the FPSC. House Energy & Utilities Subcommittee – and Senate Communications, Energy, and Public Utilities

Contact Gov. Scott –

For those who still believe smart meters save money, ask FP&L how much net operation and maintenance savings are in the current rates you pay.

What they said in the 2009 rate case:

2009 rate case schedule

What they reported in the 2012 rate case:

2012 rate case schedule

The lack of cost savings was confirmed by the Office of Public Counsel who said on October 12, 2012 “However, to OPC’s knowledge, no studies, analyses, or quantification of the benefits or cost savings from the implementation of smart meters exist at this time. OPC is still waiting on the promised cost savings benefits of smart meters to be realized and shared with the customers.”

Think smart meters prevent outages? Check out Northeast Utilities initial comments in a recent Massachusetts Department of Utilities investigation – “Meters do not reduce the number of outages” (page 4)

And finally, how many of you run home from work or golf and check your FP&L energy dashboard each night? Apparently not many. The last annual report from FP&L showed that as of the end of 2012 with over 4 million meter installed, only about 15% accessed the dashboard about 2 times.