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VIDEO: The Rise of America’s First Muslim Brotherhood Political Party

April 19, 2016/in Elections, Must Read, National Security, Policy, Politics, Religion/by Lyle J. Rapacki, Ph.D.

The wolves have been at work for a while preparing for such a time as now. These wolves are cunning, patient, low profile, and terribly focused like a laser beam on their target; only their target is not simply a herd of sheep but an entire country that daily becomes increasingly like a herd of sheep. The country is the United States, and the wolves that have been at work are members of the Muslim Brotherhood and affiliate Islamic groups sworn to fulfill the Quran’s commandment to establish a Caliphate; a One-World Muslim religion, culture, law, and maniacal allegiance to their Prophet Mohammed. Any obstacle standing in their way of total achievement and domination is to be fully and completely eliminated – not tampered with, coddled or made friends with, but eliminated.

While a prodigious number of elected officials work diligently to make nice to all people everywhere, and struggle to bring about “political correctness” to win favor and reelection rather than lead for the sake and safety of the citizens to which elected them, and many citizens mumble and resent political correctness but go along with the ever multiplying tentacles, the wolves continue to pick off an institution or significant politician here and there, as they never once stray from their intended target, the elimination of our country! Many law enforcement senior commanders and chiefs have become politically neutered from being the once strong, respected, and proud sheepdog that historically stood post placing himself between the vulnerable flock and the wolves. Add the many facets of “transformation and change” Obama has brought forward, and very few have aggressively opposed, and the public herd is all the more confused and overwhelmed, and simply returns to eating and enjoying life for the moment. Thinking past the moment is too difficult, too scary, too mind boggling so the herd simply continues to enjoy the moment. All the while the wolves continue to focus on their target(s). One target in particular that has been illuminated is the American political process. The wolves’ intention is to become their own political force, but only insofar as to use this force to establish the Islamic Faith form of government and law supplanting the Constitution of the United States with Sharia Law!

You scoff and say this can’t happen! My very good colleague, Clare Lopez, Senior Vice President of The Center for Security Policy in Washington, D.C. shares the evidence to demonstrate otherwise. Watch the five minute YouTube presentation below. Please take steps to understand what is transpiring all around you as the culture and fabric of America is deliberately being shredded. Some of us “sheep dogs” have already engaged in the fight against the wolves consumed with diabolical schemes to eliminate the whole herd, America. While a remnant of the herd have heeded our warnings and have responded to being educated on the clear and present danger, most of the herd continues to eat placidly with not a care on their mind – just as the wolves would like.

Star Spangled Shariah: The Rise of America’s First Muslim Brotherhood Political Party

“The U.S. Muslim Brotherhood’s stated goal in America is to ‘destroy the Western civilization from within.’ Star-Spangled Shariah: The Rise of America’s First Muslim Brotherhood Party reveals the newest weapon in their arsenal for doing so – a self-described Political Party called the U.S. Council of Muslim Organizations (USCMO). This new monograph connects the dots between the Muslim Brotherhood’s secret plan to impose Sharia in America, and the insidious use it intends to make of our democratic political system to that end.”

EDITORS NOTE: The Muslim Brotherhood centrist US Council of Muslim Organizations (USCMO), which is holding a Muslim Capital Day during the week of April 18th is made up of: American Muslims for Palestine (AMP), Council on American-Islamic Relations (CAIR), Islamic Circle of North America (ICNA), Muslim Alliance in North America (MANA), Muslim American Society (MAS), Muslim Legal Fund of America (MLFA), Muslim Ummah of North America (MUNA), The Mosque Cares (Ministry of Imam W. Deen Mohammed).

Two-Thirds of Americans Believe Money Buys Elections by Daniel Bier

February 5, 2016/in Elections, Must Read, Politics/by Foundation for Economic Education (FEE)

Everybody knows that money buys elections. That’s what opponents of theCitizens United decision have been ominously warning us for six years, and their message resonates. A CNN poll found that 67 percent of Americans think that “elections are generally for sale to the candidate who can raise the most money.”

The trouble is that there is very little evidence for this. Even though the candidate with the most money usually wins, the general rule is that moneychases winners rather than creates winners. People give to candidates they think are likely to win, and incumbents (who almost always win) and candidates in safe districts still raise money, even if they’re not challenged. On the flip side, donors and parties don’t waste support on long-shot races.

More importantly, money never guarantees any election. For instance, billionaire Meg Whitman spent $144 million of her own money on the California governor’s race; Jerry Brown spent just $36 million but crushed Whitman, 53 percent to 40 percent.

Mitt Romney, the GOP, and their PACs outspent Barack Obama and friends by over $120 million, and we know what came of that. Anthony Brown (D) outspent Larry Hogan (R) almost five to one in the 2014 Maryland governor’s race and lost, in a state that is two to one Democrat.

We can likely add Jeb Bush’s candidacy to this list. The Jeb! campaign and pro-Jeb groups have collectively raised $155 million. Only Hillary Clinton has raised more. According to the New York Times, he’s dominating “the money race” among Republicans.

But in the actual race, he got a dismal sixth place in Iowa, with 2.8 percent of the vote. Polls put Jeb fifth in New Hampshire and fifth nationally. Currently, Betfair places his odds of winning the nomination at 5.2 percent.

In fact, the whole Republican race shows that money can’t simply buy votes. Scott Walker raised $34 million in three months, spent all of it — and then dropped out, five months before Iowa. Meanwhile, Donald Trump has dominated news coverage and polls for months with only $19 million.

When you plot money vs. poll numbers, what jumps out is how little correlation there is:

… And money vs. Iowa caucus votes:

… And money vs. odds of winning the nomination:

Jeb and Jeb-PACs have spent $89.1 million so far and received 5,238 votes — over $17,000 per vote received. Trump has spent just $300 per vote.

This is not to say that money doesn’t matter — you can’t run a campaign without it, and campaign finance laws are designed to make it difficult for upstart challengers to become competitive. But after a certain amount (about $500,000 for a typical congressional race), there are rapidly diminishing returns, and dumping more money on a failing campaign will not save it.

There’s a lot of baseless fears about free speech, but the idea that the people with the most expensive microphone will always get their way is one of the easiest to disprove. More speech, more discussion, and more competition in the field of ideas is not what’s wrong with American politics — but they might be part of the solution to it.

Daniel Bier

Daniel Bier is the editor of Anything Peaceful. He writes on issues relating to science, civil liberties, and economic freedom.

Why Bernie Sanders Has to Raise Taxes on the Middle Class by Daniel Bier

February 3, 2016/in Elections, Featured, Policy, Politics, Regulation, Taxes/by Foundation for Economic Education (FEE)

Willie Sutton was one of the most infamous bank robbers in American history. Over three decades, the dashing criminal robbed a hundred banks, escaped three prisons, and made off with millions. Today, he is best known for Sutton’s Law: Asked by a reporter why he robbed banks, Sutton allegedly quipped, “Because that’s where the money is.”

Sutton’s Law explains something unusual about Bernie Sander’s tax plan: it calls for massive tax hikes across the board. Why raise taxes on the middle class? Because that’s where the money is.

The problem all politicians face is that voters love to get stuff, but they hate to pay for it. The traditional solution that center-left politicians pitch is the idea that the poor and middle class will get the benefits, and the rich will pay for it.

This is approximately how things work in the United States. The top 1 percent of taxpayers earn 19 percent of total income and pay 38 percent of federal income taxes. The bottom 50 percent earn 12 percent and pay 3 percent. This chart from the Heritage Foundation shows net taxes paid and benefits received, per person, by household income group:

But Sanders’ proposals (free college, free health care, jobs programs, more Social Security, etc.) are way too heavy for the rich alone to carry, and he knows it. To his credit, his campaign has released a plan to pay for each of these myriad handouts. Vox’s Dylan Matthews has totaled up all the tax increases Sanders has proposed so far, and the picture is simply staggering.

Every household earning below $250,000 will face a tax hike of nearly 9 percent. Past that, rates explode, up to a top rate of 77 percent on incomes over $10 million.

Paying for Free

Sanders argues that most people’s average income tax rate won’t change, but this is only true if you exclude the two major taxes meant to pay for his health care program: a 2.2 percent “premium” tax and 6.2 percent payroll tax, imposed on incomes across the board. These taxes account for majority of the new revenue Sanders is counting on.

But it gets worse: his single-payer health care plan will cost 80 percent more than he claims. Analysis by the left-leaning scholar Kenneth Thorpe (who supports single payer) concludes that Sanders’ proposal will cost $1.1 trillion more each year than he claims. The trillion dollar discrepancy results from some questionable assumptions in Sanders’ numbers. For instance:

Sanders assumes $324 billion more per year in prescription drug savings than Thorpe does. Thorpe argues that this is wildly implausible.

“In 2014 private health plans paid a TOTAL of $132 billion on prescription drugs and nationally we spent $305 billion,” he writes in an email. “With their savings drug spending nationally would be negative.”

So unless pharmaceutical companies start paying you to take their drugs, the Sanders administration will need to increase taxes even more.

Analysis by the Tax Foundation finds that his proposed tax hikes already total $13.6 trillion over the next ten years. However, “the plan would [only] end up collecting $9.8 trillion over the next decade when accounting for decreased economic output.”

And the consequences will be truly devastating. Because of the taxes on labor and capital, GDP will be reduced 9.5 percent. Six million jobs will be lost. On average, after-tax incomes will be reduced by more than 18 percent.

Incomes for the bottom 50 percent will be reduced by more than 14 percent, and incomes for the top 1 percent will be reduced nearly 25 percent. Inequality warriors might cheer, but if you want to actually raise revenue, crushing the incomes of the people who pay almost 40 percent of all taxes isn’t the way to go.

These are just the effects of the $1 trillion tax hike he has planned — and he probably needs to double that to pay for single payer. Where will he find it? He’ll go where European welfare states go.

Being Like Scandinavia

Sanders is a great admirer of Scandinavian countries, such as Denmark, Sweden, and Norway, and many of his proposals are modeled on their systems. But to pay for their generous welfare benefits, they tax, and tax, and tax.

Denmark, Norway, and Sweden all capture between 20-26 percent of GDP from income and payroll taxes. By contrast, the United States collects only 15 percent.

Scandinavia’s tax rates themselves are not that much higher than the United States’. Denmark’s top rate is 30 percent higher, Sweden’s is 18 percent higher, and Norway’s is actually 16 percent lower — and yet Norway’s income tax raises 30 percent more revenue than the United States.

The answer lies in how progressive the US tax system is, in the thresholds at which people are hit by the top tax rates. The Tax Foundation explains,

Scandinavian income taxes raise a lot of revenue because they are actually rather flat. In other words, they tax most people at these high rates, not just high-income taxpayers.

The top marginal tax rate of 60 percent in Denmark applies to all income over 1.2 times the average income in Denmark. From the American perspective, this means that all income over $60,000 (1.2 times the average income of about $50,000 in the United States) would be taxed at 60 percent. …

Compare this to the United States. The top marginal tax rate of 46.8 percent (state average and federal combined rates) kicks in at 8.5 times the average U.S. income (around $400,000). Comparatively, few taxpayers in the United States face the top marginal rate.

The reason European states can pay for giant welfare programs is not because they just tax the rich more — it’s because they also scoop up a ton of middle class income. The reason why the United States can’t right now is its long-standing political arrangement to keep taxes high on the rich so they can be low on the poor and middle.

Where the Money Is – And Isn’t

As shown by the Laffer Curve, there is a point at which increasing tax rates actually reduces tax revenue, by discouraging work, hurting the economy, and encouraging tax avoidance.

Bernie’s plan already hammers the rich: households earning over $250,000 (the top 3 percent) would face marginal rates of 62-77 percent — meaning the IRS would take two-thirds to three-quarters of each additional dollar earned. His proposed capital gains taxes are so high that they are likely well past the point of positive returns. The US corporate tax rate of 40 percent is already the highest in the world, and even Sanders hasn’t proposed increasing it.

The only way to solve his revenue problem is to raise rates on the middle and upper-middle classes, or flatten the structure to make the top rates start kicking in much lower. You can see why a “progressive” isn’t keen on making more regressive taxes part of his platform, but the money has to come from somewhere.

The bottom fifty percent don’t pay much income tax now (only $34 billion), but they also don’t earn enough to fill the gap. Making their taxes proportionate to income would only raise $107 billion, without even considering how the higher rates would reduce employment and income.

The top 5 percent are pretty well wrung dry by Sanders’ plan, and their incomes are going to be reduced by 20-25 percent anyway. It’s hard to imagine that there’s much more blood to be had from that stone.

But households between the 50th and the 95th percentile (incomes between $37,000 to $180,000 a year) earn about 54 percent of total income — a share would likely go up, given the larger income reductions expected for top earners. Currently, this group pays only 38 percent of total income taxes, and, despite the 9 percent tax hike, they’re comparatively spared by the original tax plan. Their incomes are now the lowest hanging fruit on the tax tree.

As they go to the polls this year, the middle class should remember Sutton’s Law.

Daniel Bier

Daniel Bier is the editor of Anything Peaceful. He writes on issues relating to science, civil liberties, and economic freedom.

Tech Sector Bears Brunt of Capital Taxes, Random Regulation by Dan Gelernter

February 3, 2016/in Economy, Policy, Religion, Taxes/by Foundation for Economic Education (FEE)

According to our president’s final State of the Union, we’ve recovered from the economic crisis and now enjoy the strongest, most durable economy in the world. Obama does acknowledge that startups and small businesses may need some help, so he wants to reignite our “sprit of innovation” — which he plans to do by putting Vice President Biden in charge of curing cancer.

But the problem facing startups is not a lack of innovation. We are being killed by the economy, which, for those of us who have to live in it, is not good at all. Young entrepreneurs may have spent last year working hard, innovating and building, only to find their companies are worth less now than when they started.

The market is adjusting downwards. Valuations are sinking. The investors I’ve spoken to feel the Fed’s free-money policy has created a dangerous over-valuation of companies and stocks and, now that the rates are coming back up, the air is being let out. 2015, they say, was a tough year because we knew this was coming. 2016 is going to be even tougher.

There is something else weighing on the minds of entrepreneurs and investors alike — regulatory uncertainty. No startup can deal with compliance by itself — not even software companies with no physical products to sell. Startups have to hire lawyers and compliance experts to help them, and this is money we’re not spending on product development or marketing or making our prices more competitive.

The way Obamacare is being implemented, for example, makes our hair white. The rules seem to change with bureaucratic whim; various parts of the law are suspended by executive order. How will we comply next year, and what will it cost? Nobody knows.

In the meantime, the Democratic candidates for President are proposing large hikes to the capital gains tax, which increases effective risk for investors and depresses valuations. Will these hikes ever take place? We don’t know, and that uncertainty carries an additional price.

We’re already seeing more investors decide to weather the storm on the sidelines, keeping an eye on their current affairs and declining to invest in companies they would have snapped up a year ago. A tech startup with a working product will find it harder to raise money today than it would have two years before with nothing but a concept. Not only are we faced with a weak market now, the trend is even more disturbing.

The problem is easier to diagnose than to repair. As an entrepreneur, I’d like to see less regulation and lower taxes. And not just lower taxes on the companies themselves, but on the people who can afford to invest in them. This may come as a surprise, but it’s the hated “one percent” that invests in startups and helps entrepreneurs’ dreams come true. When taxes cut deeper into the pockets of the wealthy, it most negatively affects us — the entrepreneurs and the people we would have hired — not the wealthy.

Regulation remains erratic, and the policies of the next administration cannot be foreseen. 2016 is going to be a hard year for the startup. Investments will continue to decline until investors see a stable market. And they’re not looking at one right now. Companies will die as a result, and not for lack of innovative ideas.

Dan Gelernter

Dan Gelernter is CEO of the technology startup Dittach.

VIDEO: Excuse Me, Professor! Correcting the slant on campus

January 9, 2016/in Education, Policy, Politics, Regulation/by Foundation for Economic Education (FEE)

Too often, the message students get in college is that government is the answer to all social and economic problems. This happens in classes on history, sociology, politics, literature, and even in economics. You can graduate having heard only one narrative: the market has failed, so it must be replaced by all-controlling government bureaucracies.

FEE president Lawrence Reed is the editor of a wonderful collection of essays that address myth after myth. The book is Excuse Me, Professor (buy it from FEE). The essays deal with a huge range of issues that confront students every day. Unless young thinkers have an alternative paradigm in mind, the cause of human liberty will continue to lose the intellectual battle.

In this presentation at the Acton Institute, Reed discusses his new book and why it is an important contribution to setting the record straight. (Talk begins around 4:30 mark.)

Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook.

Snopes during White House visit produces Barack Obama’s genuine birth certificate

December 24, 2015/in Commentary, Satire/by The Peoples Cube

Snopes.com, which brands itself as “the definitive Internet reference source for urban legends, folklore, myths, rumors, and misinformation,” has recently made a claim that any stories about its alleged ties to the White House, as well as to Democratic activist groups and donors, are nothing more than “urban legends, folklore, myths, rumors, and misinformation.”

Snopes.com representatives, hereinafter referred to as SNOPES, made this statement at a recent meeting with Democratic activist groups and donors that happened at the White House.

SNOPES further promised to up their game debunking anything “fishy” anyone says about Obama, his administration, the Democratic activist groups and donors, or their proxies, as well as about their alleged ties with SNOPES.

SNOPES supported their statement with a substantial list of news stories and rumors they had discredited without any joint effort or coordination with Democratic organizations, which should serve as definitive proof of the Internet company’s uncoordinated, disjointed, and disorganized position on political issues.

In one example, SNOPES had proven without a shadow of a doubt that when a young Barack Obama registered at Columbia as a foreign student, it didn’t mean that he was a foreigner, or a student, or Barack Obama. Being registering at Columbia as “Barack” didn’t mean he was registered as “Barry Soetoro,” or anyone else impersonating anyone else, and that a man who was born in Nairobi wasn’t also simultaneously born in Honolulu and Jakarta; it should appear reasonable that a man with audacity can be born in several places at any one time, or “reborn,” or beamed to Earth from the dreams of his father, or someone else’s father – an explanation that should have satisfied anyone not totally deranged.

SNOPES had also clarified the confusion over the social security card issued to young Barry in Connecticut, a state that only gives such cards to those who were born and lived there. According to SNOPES, the fact that young Obama never visited Connecticut didn’t mean that he was the John Smith who had the same social security number and who had died decades before Barry was born, as clearly evidenced by the undeniable fact that the deceased had never filed a complaint of identity theft, nor had there been any record of a police report filed against Barry Soetoro in 1922. Furthermore, a dead man in one state having the very same number as one living in another didn’t mean that that Barack Obama’s younger self was not born ever, or that he never lived somewhere, which proves, ipso facto, that Barack Obama was indeed born and lived somewhere sometime.

Proving the skeptics wrong, SNOPES further produced Barack Obama’s genuine birth certificate printed from a real PDF file with five certified and notarized digital layers, which they copied from the Daily Kos website and reproduced on a vintage Hewlett-Packard inkjet printer using authentic 1961 HP ink cartridges. That the certificate contained a computer font from Microsoft Word was later explained in a signed statement from Bill Gates, assuring SNOPES readers that Windows operating system existed prior to Obama’s birth, as further evidenced by the 1954 movie Rear Window, directed by Alfred Hitchcock and starring James Stewart with Grace Kelly.

The SNOPES statement was followed by a short Q&A, during which former broadcast professional, Dan Rather, insisted that Obama’s four known birth certificates, as well as his multiple social security numbers and his sealed student records at Columbia contained proof that George. W. Bush was in Kenya during the Mau Mau uprising and could not have landed on the moon at the same time to meet with Dick Cheney, who was an extraterrestrial organizing the hobbits to assassinate JFK as Oliver Stone had claimed.

Before leaving the room, SNOPES took a moment to wipe off their fingerprints from the microphone and the podium, as well as to thoroughly debunk the allegation that they had ever been in that room, or ever met with the White House team, or contributed money to Barack Obama’s campaigns of 2007 and 2011 respectively – a statement that the White House immediately confirmed, adding, “but it wasn’t enough.”

EDITORS NOTE: A special thanks to Komrade Kommissar General Vassily Ilyich Chernobylski for major contributions to this reporting. This political satire column originally appeared on The Peoples Cube.

Katniss vs. Power: The Hunger Games Finale by Jeffrey A. Tucker

November 23, 2015/in Culture War, Elections, Featured, Policy, Politics/by Foundation for Economic Education (FEE)

Now that the final movie in the series is out, we know that The Hunger Games is not just a pop movie series for young adults, a fantasy tale about about a young girl’s heroism. It is far more sophisticated than that: It is a political allegory, one of the best known of our time, about power and the complications of its displacement.

In this way, it covers the same intellectual terrain as Aristotle’s Politics, Machiavelli’s The Prince, and de Jouvenel’s On Power, but in a way that is more penetrating for readers and viewers, and particularly relevant for our times.

The final installment is a fitting and dramatic end to the tale. It deals with the greatest conflict in history, that between liberty and power. Those who have followed the story until the last movie might have supposed that the problem was rather stark. One man, President Snow, held all the power. He was a cruel man and he used every means to keep his power. He sat at the center of a capital city that pillaged the districts of resources and held power through fear.

If that is all there is to the problem, the solution would be clear: President Snow has to be killed. The source of the problem out of the way, all will be well.

The Plot Thickens

This was the thinking of heroine Katniss Everdeen for most of the series. And one can see why she would believe this. Snow was a ghastly figure, and he was personally responsible for vast cruelty and crimes. He deserved to be overthrown and for justice to prevail.

Plus, she supposed that everyone she knew shared her vision: a normal life without oppression, without violence, without pillaging, without rigid geographic and caste classifications, and without televised death matches orchestrated to instill fear in the population.

Previous installments had strong hints, however, that there was more going on beneath the surface. The capitol city Panem was an autocracy but also the center of a nation-state, which is to say that the bureaucracy, the administrative apparatus, a standing military, and its methods of rule could survive the death of the leader. This is the difference between a personal state and a nation state. The power apparatus of the nation state seeks immortality, a continuing life regardless who happens to head it.

The problem of creating a world without power, then, is more complicated than the overthrow of the existing autocrat. In every revolutionary situation, those who are most motivated to achieve the aim are those who seek to hold power themselves. So long as the machinery of legal violence exists, there will be those who seek to control it — and, as Hayek said, it is usually the worst who make it to the top. Therefore, it is not just those who rule but also those who seek to rule who constitute a threat to liberty. This is how the existence of powerful nation-states end up creating multiple layers of dangers.

Revolutionaries as Bad as the Regime?

Anyone who seeks to end oppression has to keep his or her eye out for those who would use the chaos and confusion of political upheavals to seize and exercise power in the future. This is what Katniss learns, as she gradually discovers that her one-time allies had become skilled in the conduct of war, appreciative of the status that comes with leadership, and lusty for exercising state power themselves.

She learned that great lesson of history: It is not just despots who need to be kept at bay but also those who most passionately seek to overthrow despots. In order to realize liberty, you need more than just loathing of those in charge; you need the ascendance of the love of true liberty itself.

Once Katniss catches on to what is happening around her, she has to make a decision. Does she comply with the dictate of the increasingly centralized revolutionary forces or take a different turn and go her own way? The urgency of this decision is what turns The Hunger Games from being a simple Manichean struggle between one good and one evil into a real-life version of a Massive Multiplayer Online game.

US Foreign Policy

Let us apply this principle.

In the 1980s, the US sought to drive the Soviets out of Afghanistan by supporting Islamic fundamentalists, who were then called “freedom fighters,” and they were given weapons and massive logistical support. After the Soviets left, the rebellion gradually metastasized into the Taliban, who ruled with an iron hand, and were then overthrown after 9/11, leading to 15 years of US occupation, which has stirred resentment among the population.

This saga coincided with a similar situation in Iraq after 2003, following a decade of embargoes, intermittent bombing, and harsh sanctions. The overthrow of the brutal dictator Saddam Hussein brought to power not liberty-loving constitutionalists, but rather a Shiite majority that oppressed in turn on the Sunni minority that Hussein had represented.

The Sunni insurgency against the Iraqi state caused a bloody civil war in Iraq that eventually spilled over into the rebellion against Syrian dictator Bashar al-Assad and mutated into the Islamic State. Over the course of 25 years, Iraq went from a defeated and relatively quiescent state to a seething hotbed of poverty, violence, and hatred.

Fast forward to the Libyan case where the overthrow of another evil dictator Muammar Gaddafi sparked a grim populist blowback. Combined with all the other interventions, and alongside a surreptitious attempt to boot the Syrian overlord, we’ve seen the spread of ISIS into a region-wide insurgency that truly intends to rule through bloodshed.

Such is politics. You think that getting the bad guy will end the problem. What this doesn’t consider is the possibly that something even worse is waiting in the wings. This is not a case for tolerating tyranny, but it is a case for a good dose of humility to go with revolutionary impulses.

The Problem of Democracy

And it’s not just about foreign regimes. A famous trait of democracy is that the urge to kick out one group of leaders is necessarily tied to bringing another group into power. The latter are often no better and sometimes worse than the former. This is one of the reasons for so much political nostalgia in US politics: a look back almost always provides a better picture than a look at the present.

I can’t count the number of times I heard people tell me how much they long for the good old days of Reagan or Clinton — people who loathed them at the time… until their replacements came along. Or think of the number of people who believed that getting rid of Bush and replacing him with Obama would lead to peace, prosperity, and understanding, only to find that the new regime continued the practices of the old. And heads up: it seems like this history is likely to repeat itself in the case of Obama.

The simple lesson of The Hunger Games is that powerful people can do terrible things. We must resist in order to stop them. The more complicated lesson is that powerful institutions themselves corrupt, and that there will always be those lacking in moral scruples who are willing to assume the mantle of power.

At the end of the movie, we see Katniss out of battle gear, sitting in the grass, at her home, being bathed by sunlight, tending to her own life, cultivating her own personal vision of freedom, out of the limelight. Ruling herself, not others. Perhaps that scene offers the best lesson of all.

Jeffrey A. Tucker

Lebanon: Unraveling the Enigma

August 31, 2015/in Culture War, National Security, Policy, Politics, Religion/by Jerry Gordon

To paraphrase Winston Churchill, “Lebanon is a riddle wrapped in a mystery inside an enigma.” Unraveling the Lebanese enigma is the objective of a new book by Dr. Mordechai Nisan, Politics and War in Lebanon. Nisan is an accomplished Israeli political scientist and retired Hebrew University lecturer. His body of work covers Zionism, Islam, Arab history, minority peoples, Lebanon, U.S. Middle East policy and the Arab-Israeli conflict. It is rare that a book achieves its objective of unraveling the complex nuances of the Lebanon puzzle in both an astute and yet literate manner. Dr. Nisan has views on many issues including why the 80 year old confessional political system persists and has resilience. It has a lot to do with the adoption of the Maronite Christian independence ethos arising from the historic resistance against centuries of Muslim and later Ottoman rule under Islamic Sharia law.

The confessional political system maintains, a Maronite as President, Sunni as Premier and Shiite as Speaker of the Lebanese National Assembly. The Lebanese Parliament has 128 members split equally between Christians and Muslims elected to four year terms in multi-member constituencies, which often produces unexpected alliances. Nisan writes: “the idea of a numerical democracy for Lebanon, as for all typical democratic states, had been, as we know, rejected in favor of political confessionalism by assigning office according to a sectarian key.” Of course the Lebonese paradox was assisted by the fact that it only had one census back in 1932 that reflected a Maronite Christian majority which has since dwindled due to war, emigration and the demographic rise of both Sunni and Shia. Even during the period of the internal wars triggered by Palestinians against the Maronite hegemony that began in 1975, there were episodes where Druze, Shia and Sunni militias protected the precinct of the Maronite patriarch. The confessional political system remains durable despite the inroads made by external enemies like Syria, the Palestinians and internal ones, like Iran’s proxy Hezbollah dominating the country’s southern border and Eastern Bekaa Valley adjoining Syria.

There is also the long standing history of Maronite Christian – Zionist mutual respect that has never been recognized in formal agreements. Yet that figures prominently in understanding the role of Israel in episodic military operations in Lebanon – dislodging PLO-Fatah terrorist armies, only to have them replaced with Shia Hezbollah forces occupying the Southern security belt that the IDF abandoned in 2000. Now, that Southern border is crenellated with underground fortifications and tunnels, equipped with over 150,000 Iranian-supplied rockets and missiles. That could figure significantly in a new Middle East War arising from a possible nuclear deal with Hezbollah’s creator, Iran. Nisan considers that episode one of Israel’s most abject geo-political failures.

Among the issues addressed in Nisan’s timely and cogent book is the political disintegration triggered by the Palestinian war on the Maronites in 1975. He addresses the Israeli incursion in 1978 and First Israeli Lebanese War in 1982 that ousted Yassir Arafat and Fatah-PLO leaders sending them packing under UN auspices to Tunisia and nine other countries. Nevertheless, he is critical of Israel’s pell mell abandonment of the southern security belt, held by the IDF and the South Lebanese Army (SLA) in alliance with Israel. The evacuation was ordered by former Israeli Prime Minister Ehud Barak in May 2000. That catastrophe gave rise to the Hezbollah takeover and ethnic cleansing of South Lebanon. There is also the nearly 20 year predatory Syrian occupation of large sections of Lebanon that began in 1976.

Nisan has nothing but contempt for the behavior of the Assad Syrian regime of both father and son in what could only be characterized as the virtual looting of Lebanon’s economic and natural resources. There were Syrian companies grabbing Lebanese tenders, Syrian officials pocketing tax revenues and running a protection extortion racket with local businesses. The results were a once vibrant economy faltering, with unemployment and poverty soaring. He notes that Syria never recognized an independent Lebanon in 1946. He considers the Syrian occupation the equivalent of the Nazi Anschluss of Austria comparing Lebanese Sunni and Orthodox Christians as the equivalent of pan-Germanic Austrians, because the latter identified strongly with both Syria and being Arab.

Nisan contends that the Israeli justification for the Southern withdrawal in 2000 was faulty. It was based on the following logic:

Israel had to dismantle the SLA to comply with UN Resolution 425 of March 1978 that called for Israel to withdraw its forces from all Lebanese territory.
Hezbollah would overwhelm and murder its Christian and Shiite elements prompted by the memories of the 1982 Sabra and Shatila Palestinian refugee camp massacres.
That if the SLA put up resistance against Hezbollah that it might complicate withdrawal leading to a possible return by Israel to assist its former allies.
Israel sacrificed the SLA as a necessity to assure that Hezbollah not interfere with Israel’s withdrawal from the South.

Nisan believes that the debacle that occurred in the wake of the Israeli withdrawal might have been prevented if:

Israel had bolstered the SLA as an independent force.
Israel might have disarmed both the SLA and Hezbollah.
Israel had called upon Syrian Forces to withdraw simultaneously with the IDF.

He concludes, “In Lebanon, Israel was drained of its political and public energy, had done little strategic planning, and in the end lacked a moral compass.”

Nisan notes the three signal events that occurred in 2000:

In May the Israeli Army withdrew from Southern Lebanon and likewise forced the collapse of its SLA ally there.
In June President Assad of Syria died and was succeeded by his son Bashar.
Maronite Patriarch Nasrallah Sfeir, Walid Jumblatt, the Druze leader, and a variety of political personalities, both Christian and Muslim, called for Syrian withdrawal from Lebanon.

In mid-July 2015, a worldwide gathering of Lebanese activists occurred in Washington, DC in the First Convention on the Cedars Revolution. It was the commemoration of the 10^th Anniversary of the Cedars Revolution. Several sessions were held with Members of Congress, the State Department and the Pentagon. The issues they addressed concerned the preservation of democracy in Lebanon’s confessional political system, military and security matters with the incursion of Syrian forces, reminiscent of original issue that ignited the Cedars Revolution in March 2005. It is indicative of the abiding concerns of the Lebanese and largely Christian diaspora, estimated at upwards of 14 million.

Even during several Arab Israeli conflicts, Lebanon stayed out of the conflicts. After the failure of the 1970 Black September campaign between PLO-Fatah forces and the Kingdom of Jordan, Yassir Arafat and Palestinian resistance leadership were given sanctuary in Lebanon. Less than five years later, Arafat fomented open warfare on Christians in a ferocious and bloody conflict. It was during that period that Lebanese Maronite leaders like Etienne Sakr (Abu Arz) and Pierre Gemayel reached out to Israel whose military covertly provided training and equipment to Christian militia forces. There were hopes of an eventual enduring peace between Lebanon and Israel. That possibility ended with the assassination on September 15, 1982 of Maronite President-Elect and leader of Lebanese Forces Bashir Gemayel of the Phalange Party. He was allegedly on his way to conclude a treaty with Israel in Jerusalem.

Nisan addresses the transformation of Lebanese Shia under Sayyid Fadlaallah from willing confessional participants to Sharia infused support of an Islamic state, reducing the dominant Maronite and other Christians to dhimmi status. Along with that, Fadlaallah denied Israel’s legitimacy and boosted the Palestinian cause against the “Zionist enterprise.” Instead of involving himself in the Lebanon political structure, Fadlaallah sought out the means of supporting jihad, through zakat, Muslim charity. The person who completed the transformation of Lebanon’s Shia was Imam Musa al-Sadr who, in the political chaos of the mid-1970’s, created the Movement for the Disinherited (al Harakat al-Muhrimum) to promote Shiite social equality and political activism and its companion military wing, Amal (“Hope”). Sadr disappeared in 1978 on a flight to Rome under mysterious circumstances. Leadership of Amal fell to successors Hussein al-Husseini, who later became Speaker, and ultimately, lawyer Nabih Berri. Berri sought resistance against the PLO in the 1970’s and 1980’s including laying siege to Palestinian refugee camps. However, the ultimate destination of Lebanon’s Shia community was to Iranian theocratic influence emanating from Shia seminaries in Iraq. The pro-Khomeinist returnees from Najaf provided fertile grounds to build Hezbollah – the party of God, a Qur’anic designation. Nisan notes that the ultimate leadership of Hezbollah was drawn from Southerners like Sayyid Hassan Nasrallah and Abdul Karim Obeid, graduates of the apocalyptic Twelver seminary in Qom, Iran. By 1982, 1,000 Iranian Revolutionary Guards were stationed in the Bekaa Valley training young Lebanese Shia fighters in Khomeinist doctrine and providing them with weapons and millions in funding. Syria under the Assad family became a strategic ally during the Iran–Iraq War of the 1980’s allowing Damascus to become a transfer point for Iran to supply its proxy, Hezbollah. Hezbollah became Iran’s global terrorism arm. That is reflected in Iran’s support for Lebanese Shia émigrés in the Latin American tri-border area that provided a base for the 1992 Buenos Aires Israeli Embassy and 1994 Jewish AMIA blasts. The later is still roiling Argentine politics with the recent mysterious death of Argentine Jewish prosecutor Alberto Nisman and accusations of involvement at the highest political levels in both Iran and Argentina.

The Israel invasion of 1982 launched a series of terrorist spectacles by the late Imad Mughniyahin. In Beirut in 1983 he killed over 400 French paratroopers, US Marines and US embassy staff. That was followed by the 1986 TWA flight hijacking and killing of a US Navy diver hostage. Mughniyah, went big time with the Khobar Towers blast in Saudi Arabia in 1995. He had links to the East African US Embassy blasts in 1998 and a major role in training and facilitating the travel via Iran and Germany of the 19 Sunni perpetrators of 9/11. Mughniyah’s leading terrorist role ended in Damascus in February 2008, when his vehicle exploded in what many believe was a Mossad revenge attack.

The big breakthrough for Hezbollah was its campaign of attacks in the South of Lebanon and Israeli border incursions in the late 1980’s to 2000. Nisan notes that Hezbollah undertook 1,030 military operations over the period from 1990 to 1995, escalating to more than 4,928 operations from 1996 to 2000.

Nisan links Hezbollah’s political rise with the adoption of the triumvirate Lebanese Presidency system with the Taif agreement. That enabled Hezbollah to secure seats in the Chamber of Deputies in competition with the Shia Amal party. Its further rise to power was the product of one of its three expressed objectives of a 1985 Open Letter:

Accepting Ayatollah Khomeini as leader of the world’s Muslims.
Wiping out Israel and opposing America.
Forming relations with Christians in Lebanon while calling them to embrace Islam.

Nisan noted the impact of the third objective expanding the 128 member Assembly split 64 Christian/64 Muslim. He wrote, “many Muslim voters were electing Christian deputies in the South, while Christians elected a Shiite in Jbayl and Sunnis were elected by Maronites and Druze in the Shouf.”

By 1999, when the US State Department designated Hezbollah a foreign terrorist group, Hezbollah was a mini-state within a state. In May of 2000, the ring of fate was sealed in Southern Lebanon with the Israel evacuation and collapse of the SLA resistance. Under a secret agreement between Hezbollah and the IDF, the former agreed not to attack Israeli forces as they completed their retreat. That action, as Nisan notes, led Yassir Arafat to instigate the so-called Temple Mount Second Intifada triggered by the visit of Israel PM Sharon on September 28, 2000. Sharon was the Defense Minister who undertook the invasion of Lebanon in 1982.

At the conclusion of Nisan’s book, he posits three scenarios:

The Iranian Shiite axis could collapse with a short time.
The Arab world could continue its slide into fissured decay while distracted from its historic and national vision.
The Arab-Israeli conflict will likely remain intractably irresolvable according to the tried and tested formulae for peace.

In the midst of Nisan’s speculations he draws attention to the aftermath of the Maronite Patriarch a-Ra’I 2012 visit to Jerusalem. That enraged Hezbollah, but brought commendation from Druze leader Walid Jumblatt. Maronite President Sleiman whose term ended in 2014 paid a visit to Jumblatt’s home town of Mukhtara before he stepped down. The message was one of reconciliation within the confessional system that might bring the sectarian groups together and avoid a civil war. With a vacant presidential post and parliamentary elections postponed until 2017, trouble looms for the country caught up in the vicissitudes of the Syrian civil war spilling over its borders, bringing in a flood of refugees. Currently, Lebanon is embroiled in a highly politicized trash crisis involving a protest Group “You Stink” that some believe may cover a possible power grab by the Hezbollah party and Michael Aoun’s Free Patriot Movement. The concern is the crisis might bring down the National Unity Government of Sunni Prime Minister Tammam Salam.Reuters reported both Saudi Arabia and Iran gave their blessing to the present government with a Cabinet composed of Sunni Muslim former Prime Minister Saad al-Hariri’s Future movement, Shi’ite Hezbollah and Christians. Nisan wrote about a hopeful sign, “The March 14 camp asked Patriarch Beshara a – Ra’I to suggest names for the presidential post. Maybe somehow two Maronites – patriarch and president would help save the country from oblivion.” The expression in Hebrew is, alevai. Its English meaning, “that should only be.”

EDITORS NOTE: This column originally appeared in the New English Review. Also see Jerry Gordon’s collection of interviews, The West Speaks.

On Privatizing Marriage: No, Matrimony Is Not Irreducibly Public by Max Borders

August 25, 2015/in Culture War, Must Read, Policy, Politics, Religion/by Foundation for Economic Education (FEE)

Marriage is society’s primary institutional arrangement that defines parenthood. – Jennifer Roback Morse

The idea of marriage privatization is picking up steam. And it makes strange bedfellows.

There are old-school gay activists suspicious that state marriage is a way for politicians to socially engineer the family through the tax code. There are religious conservatives who are upset that a state institution seems to violate their sacred values. Don’t forget the libertarians for whom “privatize it” is more a reflex than a product of reflection.

But they all agree: it would be a good idea to get the government out of the marriage business. Principle, it turns out, is pragmatic.

First, let’s disentangle two meanings for one word that easily get confused. When we say “marriage,” we might be referring to:

A. a commitment a couple enters into as a rite or acknowledgment within a religious institution or community group (private); or

B. a legal relationship that two people enter into, which the state currently licenses (public).

Now, the questions that follow are: Does the government need to be involved inA? The near-universal answer in the United States is no. But does the government need to be as involved as it is in B? Here’s where the debate gets going.

I think the government can and should get out of B, and everyone will be better for it. This is what I mean by marriage privatization.

Some argue that marriage is “irreducibly public.” For Jennifer Roback Morse, it has to do with the fate of children and families. For Shikha Dalmia, it has to do with the specter of increased government involvement, a reinflamed culture war, and a curious concern about religious institutions creating their own marriage laws.

First, let’s consider the issue of children. According to Unmarried.org:

39.7 percent of all births are to unmarried women (Centers for Disease Control, 2007).
Nearly 40 percent of heterosexual, unmarried American households include children (Child Protective Services, 2007).
41 percent of first births by unmarried women are to cohabiting partners (Larry Bumpass and Hsien-Hen Lu, 2000).

Does the law leave provisions for the children of the unmarried? Of course. So while state marriage might add some special sauce to your tax bill or to your benefits package, family court and family codes aren’t likely to go anywhere, whatever we do with marriage. This is not a sociological argument about whether children have statistically better life prospects when they are brought up by two married parents. Nor is it a question about gender, sexuality, and parental roles. It’s simply a response to the idea that marriage is “irreducibly public” due to having children. It is not. (I’ll pass over the problem for this argument that some married couples never have children.)

Dalmia is also concerned that “true privatization would require more than just getting the government out of the marriage licensing and registration business. It would mean giving communities the authority to write their own marriage rules and enforce them on couples.”

It’s true. Couples, as a part of free religious association, might have to accept some definition of marriage as a condition of membership in a religious community. But, writes Dalmia, “This would mean letting Mormon marriages be governed by the Church of the Latter Day Saints codebook, Muslims by Koranic sharia, Hassids by the Old Testament, and gays by their own church or non-religious equivalent.” And all of this is could be true up to a point.

But Dalmia overstates the case. Presumably, no religious organization would be able to set up codes that run counter to the civil laws in some jurisdiction. So if it were part of the Koranic sharia code to beat your wife for failure to wear the hijab at Costco, that rule would run afoul of criminal laws against spousal abuse. Mormon codes might sanction polygamy, but the state might have other ideas. So again, it’s not clear what sort of magical protection state marriage conjures.

What about Dalmia’s concern that in the absence of state marriage, “every aspect of a couple’s relationship would have to be contractually worked out from scratch in advance”? Never mind that some people would see being able to work out the details of a contract governing their lives as a good thing (for one, it might prevent ugly divorce proceedings). There is no reason to think that all the functions normal, unmarried couples with children and property have in terms of recourse to “default” law would not still be available. Not only would simple legal templates for private marriage emerge, but states could establish default civil unions in the absence of couples pursuing private alternatives.

There is no reason to think that all the functions normal, unmarried couples with children and property have in terms of recourse to “default” law would not still be available.

Indeed, if people did not like some default option — as they might not now — there would be better incentives for couples to anticipate the eventualities of marital life. People would have to settle questions involving cohabitation, property, and children just as they do for retirement and for death. Millions of gay couples had to do this prior to the Supreme Court’s ruling on marriage equality. Millions of unmarried couples do it today. The difference is that there would be a set of private marriage choices in a layer atop the default, just as people may opt for private arbitration in lieu of government courts.

In the debates leading up to marriage equality, an immanently sensible proposal had been that even if you don’t like the idea of hammering out a detailed contract with your spouse-to-be, simply changing the name of the entire statutory regime to “civil unions” would have gone a long way toward putting the whole gay-marriage debate to bed. The conservatives would have been able to say that, in terms of their sacred traditions and cultural community (as in A), “marriage” is between one man and one woman. Gay couples would have to find a church or institution that would marry them under A. But everybody would have some equal legal provision under the law to get all the benefits that accrue to people under B. You’d just have to call it a “civil union.”

And that’s fine as far as it goes.

But I like full privatization because “marriage” is currently a crazy quilt of special privileges and goodies that everybody wants access to — unmarried people be damned. But marriage should confer neither special favors nor goodies from the state. We can quibble about who is to be at the bedside of a dying loved one. Beyond that, marriage (under definition B) is mostly about equal access to government-granted privileges.

Not only does the idea that marriage is irreducibly public represent a failure of imagination with respect to robust common law, it also resembles arguments made against privatization in other areas, such as currency, education, and health care. Just because we can’t always envision it doesn’t make it impossible.

Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also co-founder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Can We Afford ‘Affordable Care’? by D.W. MacKenzie

August 12, 2015/in Culture War, Economy, Healthcare, Policy, Religion/by Foundation for Economic Education (FEE)

Does the Supreme Court decision upholding health insurance subsidies prove that Obamacare is here to stay?

With its legality settled, the longevity of the healthcare program is supposed to be politically inevitable. The millions of voters who receive subsidies from the Affordable Care Act will not tolerate the loss of this money. Insurance companies will no doubt also lobby to prevent any loss of ACA subsidies, as stockholders and employees are major beneficiaries of this program.

Political factors may well preserve the ACA in the short run. But the Court’s ruling came on the heels of a gloomy report from the Congressional Budget Office that may prove to be more decisive for the law than all of Chief Justice Roberts’ legal gymnastics.

The CBO forecasts anemic economic growth and rising public debt for decades to come. Projected revenues and projected spending indicate a growing imbalance in federal finances, driven by long-term unfunded liabilities in old entitlement programs — mainly Social Security and Medicare.

The Affordable Care Act was supposed to control health insurance costs — hence the name. Unfortunately, things are not working out that way, and insurance companies are pressing for significant rate increases.

Consumers might hope that government officials would resist pressure for rate increases, but such actions are unlikely: Stock prices for major health insurers rose sharply after the Supreme Court ruled in favor of the Obama administration. Clearly, investors expect the ACA to benefit health insurers. And in Oregon, state regulators actually raised premiums higher than insurers requested, just to keep companies in the market. Rising premiums will likely drive more subsidies, worsening the looming debt and entitlement crisis.

Politicians have ignored these issues for decades because they seemed like “long-term” problems, and political pressures from elections and lobbying force them to be shortsighted. The short-term financial situation is being shored up by the willingness of investors to buy federal debt at low rates.

The trouble is that the long term isn’t as far off as it used to be. The CBO indicates that the fiscal situation in the federal government worsened significantly over the past few years, even as the deficit was declining. Further deterioration in federal finances is expected over the next decade. How much longer will private investors continue to finance this soaring debt?

A large part of the problem with rising debt is that financing it requires steady economic growth, but large public debts can crush growth. Federal debt is a millstone on the economy, the burden of which could at some point lead to national bankruptcy. The ACA, with its enormous subsidies and regulatory compliance costs, will simply pile on an already unaffordable mass of federal spending programs.

The bottom line is that Supreme Court maintained the ACA subsidies legally,but the American people will not be able to maintain them financially.

The passage and continued defense of the Affordable Care Act is an example of the rank irrationality of public budgeting. The outcome of our political and legislative processes over the past few decades has been to create a myriad of wasteful and financially unsustainable federal programs. Meanwhile, the analytical office the legislative branch of government has been quietly raising the alarm about to the direction and sustainability of government finances. It would seem that delirium is winning out over reason.

There is, of course, nothing truly inevitable about the growth of federal spending. Federal spending developed into its present irrational state because many people pressed for this growth.

But spending can and will be curtailed. Citizens can push for real spending cuts through the electoral process. Otherwise, investors in financial markets will at some point put a sharp and sudden stop to government excesses.

D.W. MacKenzie

D. W. MacKenzie is an assistant professor of economics at Carroll College in Helena, Montana.

Politics in One Page: Elections Are Great Illusions by Jeffrey A. Tucker

August 11, 2015/in Elections, Featured, Politics/by Foundation for Economic Education (FEE)

In every election season, a new generation comes of age and experiences the political theater for the first time. The experience is formative. It challenges you to decide what you think about the world. Which candidate best represents my values and shares my sense of how things ought to be? More fundamentally, how should things be in politics?

As time goes on and you experience successive presidential election cycles, illusions begin to fall away. You start to see the whole thing for what it is.

So this article is for those who do not yet see. It is a quick tutorial in political reality, and a way to avoid the pain and suffering that comes with gradually discovering that reality on your own.

Lesson 1: Your Vote Cannot Change the Election Outcome

It’s not that your vote doesn’t matter at all. It might matter, but the odds are incredibly thin. If you live in a swing state, you might have a 1 in 10 million chance of swinging the election. But on average, “a voter in America had a 1 in 60 million chance of being decisive in the presidential election,” concludes one statistical analysis in Economic Inquiry. As the authors indicate, you are more likely to die in an car crash on the way to the polls.

Why do so many people vote anyway? Are they deluded? Maybe, but many people treat voting as a consumption good, which is to say they enjoy it. It makes them feel patriotic. There’s nothing wrong with that, but if you are still voting in an attempt to affect the outcome — and are still spooked that your failure to vote might ruin everything — here is a solution. Find someone who will vote differently, and you can both decide to grab a drink together instead.

Lesson 2: You Are Voting for People, Not Policies

There are elections in this country in which people really do decide on issues. In state and local elections, there are referenda on bond issues, taxes, pot decriminalization, and so on. Exciting stuff! But at the federal level, no way. You are voting only on personnel. Sure, the candidates can promise this or that, but how they behave after the election is something over which you have no control — and there is no recourse if something goes wrong.

Wouldn’t it be grand if there were real national elections on issues? Let’s say that the ballots had lists of spending priorities, policy ideas, and methods of government management. How many people would vote for their smartphones to be surveilled? For ever-less choice in health care? For higher gas taxes? I don’t know the answer here, but it would be interesting, for once, to see. Direct democracy on issues is technologically feasible today. It is even possible to give people the government they actually want through subscription services. We don’t do it because the ruling class likes the system the way it is.

Lesson 3: These People Are Not Actually the Government

Last year, I calculated the number of government employees who are actually running the state and compared it to the number of people we elect. Depending on how you calculate this, we are permitted to elect between 0.02 percent and 0.0004 percent of those who are in charge of our lives. The unelected constitute the deep state that no one wants to talk about. You could ship the whole class of elected rulers to Zimbabwe for four years and it would make no difference.

But wait: Aren’t the elected rulers in charge of the rest? Not really. Most of the permanent bureaucracy can’t be fired, no matter what. In any case, delegation to professionals is what elected rulers specialize in. The first act of the president is to fill 3,000 positions with political appointees. Congressional offices are managed by DC hacks. Politicians are specialists in what they are doing now: trying to get elected. The day they take office is the day the next election begins.

Lesson 4: These Are Not the Only Options

The beginning of political wisdom comes with the realization that the mainstream candidates do not exhaust the ideological options. Candidate A says that health care policy should be this way, and candidate B says it should be that way. What neither candidate ever says is that perhaps health care should not be the responsibility of government at all. And this goes for every other issue in national life: communications, labor, energy, environment, foreign policy, and so on.

The whole conventional political debate is premised on the idea that government should be running things. What’s left out here is the greatest single idea ever discovered in the history of the social sciences: society runs itself better than any authority can run it.

This is true in economics but also in culture, security services, religion, and family life. Liberty just works better. The discovery of this truth built civilization. But that idea is absent from the options we are given. No matter: you can discover it on your own if you are brave enough to step outside the partisan paradigm.

Lesson 5: Social Change Happens Outside of Government

Every candidate will speak about his or her vision for America. They talk as if they want to be, can be, will be, in charge of pushing history forward. But look around: the progress you experience in your daily life has nothing to do with the political class. Think about the mobile applications you use to stay in touch with family, find directions in a new city, monitor your health, communicate with your network. These services were not granted by the political class. They came to us via entrepreneurs and enterprise, working themselves out in the course of social evolution.

In “Is Politics Obsolete?” Max Borders and I chronicled all the ways the world has changed over the last four years. It’s remarkable what’s happening today. It’s revolutionary. None of this was anticipated by the last election. And none of it is inspired by politicians. The change is coming from within the fabric of the social order. And that change is continuing by the day. If you want to be part of it, to make a difference in the world, the realm of enterprise and individual action is the sector for you. In many ways, the political theater is a distraction — a learning opportunity, yes, but ultimately not decisive for the kind of life we want to build.

The tendency to treat elections as personal moments in our lives might be a product of democracy. We are encouraged to believe that we are running the system. So we flatter ourselves that our opinions matter. After all, it is we the voters who are in charge of building the regime under which we live. But look deeper and you discover a truth that is both terrifying and glorious: the building of the great society can’t be outsourced. It is up to you and me.

Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook.

Scandinavian Myths: High Taxes and Big Spending Are Popular by Nima Sanandaji

August 8, 2015/in Culture War, Economy, Policy, Politics, Regulation/by Foundation for Economic Education (FEE)

As I have explained in previous columns for CapX, there are a number of myths surrounding the Nordic countries that don’t stand up to scrutiny. These include the notion that long life span in Nordic nations arose as the public sector expanded, the idea that generous public programs alone explain low levels of Nordic poverty and the myth that Nordic countries are bumblebees that defy gravity by not being adversely affected by high taxes.

But surely the Nordic countries do show one leftist theory to be correct: that social democrat policies can be popular with the electorate.

Although the Social Democrats have recently lost much of their previous support, they did manage to dominate Nordic policies for long. Sweden was sometimes referred to as a one-party state, since the Social Democrats ruled it almost consecutively from 1932 till 2006 (interrupted by two short spells of centre-right rule during 1976-1982 and 1991-1994).

It is sometimes puzzling to the outsider why the Nordic public repeatedly have elected tax-raising governments to power. The obvious answer is ideological support for welfare state policies.

However, there is also another reason worth examining in greater detail: the general public has not been fully aware of the price tag, in terms of higher taxes, attached to expanding public sectors. Politicians have created a fiscal illusion which has resulted in higher levels of taxation that the population would otherwise have accepted as feasible had taxes been levied in a transparent way.

Before policies radicalised in the late 1960s, the tax levels in Nordic nations were around 30 percent of GDP – quite typical of other developed nations. At the time, the tax burdens were quite visible. Most taxation occurred through direct taxes, which showed up on employees’ payslips.

Over time, an increasing share of taxation has been raised through indirect taxes. The latter are less visible to those paying them, since they are either levied before the wage is formally given to the employee or are included in the listed price of goods.

Finland is worth considering as an example. The country’s tax level was 30 percent of GDP in 1965. Indirect taxes in the form of VAT and mandatory social security contributions amounted to a quarter of total taxation. In 2013, the total tax take had increased to 44 percent of GDP, half of which was hidden taxes.

As shown below, Finnish governments have funded the expansion of the public sector by raising the hidden, but not the visible, tax burden. Denmark has followed a route wherein both hidden and visible taxes have been hiked.

Hidden and visible taxes in Finland (percentage of GDP)

Source: OECD tax database and own calculations.

Hidden and visible taxes in Denmark (percentage of GDP)

In Norway and Sweden, visible taxes are today lower than in the 1960s, although the true taxation is considerably higher. As can be seen below, it is clear that governments in both countries have followed a strategy based on replacing visible tax income with hidden tax incomes.

Thus, whilst the average worker has paid progressively more to the government, the payslips of the same worker have misleadingly shown a reduction in taxation.

Hidden and visible taxes in Norway (percentage of GDP)

Hidden and visible taxes in Sweden (percentage of GDP)

In other words, except in Denmark, the rise in taxation has occurred fully through an increase in hidden taxation.

This is in line with the predictions of fiscal illusion made by Italian economist Amilcare Puviani in 1903. Puviani explained that politicians would have incentives to hide the cost of government by levying indirect rather than direct taxes, so that the public would under-estimate the cost of policies.

The illusion can thus be created that an expanding state benefits individuals and families and yet costs less than it actually does. Nobel laureate James Buchanan and other researchers have expanded on the idea that it is easier for politicians to raise hidden, indirect taxes rather than visible ones.

Perhaps it comes as no surprise that those who believe in a higher tax rate in other parts of the world have followed a similar strategy as the Nordic nations. The American left-liberal think tank the Roosevelt Institute openly recommends “less-visible taxes that Americans are more likely to support.”

The Obamacare system launched in the US represents a form of indirect taxation – through an overly complex system – that is even more difficult to comprehend for the average taxpayer than in the Nordic systems.

I don’t doubt that less visible taxes in the US, the UK or other parts of the world would prove an easier route to raise the tax burden than visible taxes. This is indeed a lesson that the left can learn from the Nordics.

But the question remains if this is a good route to venture on. Shouldn’t politicians strive for systems where people are aware of how much they are paying for the government?

Nima Sanandaji

Dr. Nima Sanandaji is a research fellow at CPS, and the author of Scandinavian Unexceptionalism available from the Institute of Economic Affairs.

EDITORS NOTE: This article was originally published at CapX.

How Economic Control Threatens Political Liberty, Free Speech and the Rule of Law by Jon Guze

August 8, 2015/in Economy, Policy, Politics, Regulation, Taxes/by Foundation for Economic Education (FEE)

John Cochrane (aka “The Grumpy Economist”) has posted a long meditation entitled “Rule of Law and the Regulatory State,” in which he makes a very important point:

The United States’ regulatory bureaucracy has vast power. Regulators can ruin your life, and your business, very quickly, and you have very little recourse. That this power is damaging the economy is a commonplace complaint. Less recognized, but perhaps even more important, the burgeoning regulatory state poses a new threat to our political freedom.

What banker dares to speak out against the Fed, or trader against the SEC? What hospital or health insurer dares to speak out against HHS or Obamacare? What business needing environmental approval for a project dares to speak out against the EPA? What drug company dares to challenge the FDA?

Our problems are not just national. What real estate developer needing zoning approval dares to speak out against the local zoning board?

Readers who doubt that this is an urgent problem should read the whole thing, which includes numerous chilling descriptions of regulatory abuse, but here I want to focus on an issue he raises in passing: how best to refer to this urgent problem?

Cochrane says he hasn’t found “a really good word to describe this emerging threat of large discretionary regulation, used as tool of political control.” He considers “socialism,” “regulatory capture,” and “cronyism,” but he rejects all three. Regarding the last two, he notes:

We’re headed for an economic system in which many industries have a handful of large, cartelized businesses — think 6 big banks, 5 big health insurance companies, 4 big energy companies, and so on.

Sure, they are protected from competition. But the price of protection is that the businesses support the regulator and administration politically, and does their bidding. If the government wants them to hire, or build [a] factory in unprofitable place, they do it.

The benefit of cooperation is a good living and a quiet life. The cost of stepping out of line is personal and business ruin, meted out frequently. That’s neither capture nor cronyism.

The fact is, we’ve seen this system of political economy before — most notably in Mussolini’s Italy and in Hitler’s Germany — and there’s a commonly used term for it. It’s fascism. Maybe Cochrane thinks that term is too emotionally charged. However, I’d have thought a bit of emotional charge was warranted. As Cochrane says:

The power of the regulatory state…lacks many of the checks and balances that give us some “rule of law” in the legal system. …

The clear danger we face is the use of regulation for political control. Each industry gets carved up into a few compliant oligopolies. And the threat of severe penalties, with little of the standard rule-of-law recourse, keeps people and businesses in line and supporting the political organization or party that controls the agencies. …

A return to economic growth depends on reforming the regulatory state. But… preservation of our political freedom depends on it even more.

Read the rest here.

This post first appeared at the John Locke Foundation.

EDITORS NOTE: See Steve Horwitz’s “Why the Candidates Keep Giving Us Reasons to Use the “F” Word“; Jeff Tucker’s “Trumpism: The Ideology“; and Jason Kuznicki’s “The Banality of Donald Trump.”

Jon Guze

Clinton’s Startup Tax Will Crush New Businesses by Dan Gelernter

August 4, 2015/in Economy, Elections, Policy, Politics, Taxes/by Foundation for Economic Education (FEE)

Hillary Clinton has announced that she will, if elected, raise the capital-gains tax to a maximum that equals the highest income tax bracket. She hopes to promote long-term investments by penalizing short-term ones with a tax rate that gets lower the longer an investment is held, reaching the current 20% rate only after six years.

This, Ms. Clinton says, would allow a CEO to focus on the company’s true interests rather than just making the next quarter. It is, unfortunately, exactly the sort of plan you would expect from someone who has never started a company — and who doesn’t seem to know anyone who has.

The CEO of a startup is unlike the CEO of an established business. He is not the head of a chain of command: he is the spokesman or agent of a few colleagues, entrusted for the moment to represent them. The startup CEO has one primary job, which is raising money. It is the hardest thing a young company has to do — and it is an unending process.

Most germinal startups never raise any money at all. The ones that get seed funding are already breathing rarified air, and can afford perhaps a day of celebration before they start pursuing the next round.

The picture is especially tough for tech startups. A startup that builds software doesn’t have any machinery or physical supplies to auction off if the company fails. This means that banks won’t make the kind of secured business loans of the sort small companies traditionally get.

As a result, tech startups are wholly reliant on a relatively small number of investors who are looking for something more exciting than the establishment choices and are willing to take a big gamble in the hope of a big, short-term payoff. Though Ms. Clinton’s proposal would only affect those in the top income bracket, she may be surprised to learn that those are the only people who can afford to make such investments.

Professional investors think in terms of risk: they balance the likelihood of a startup’s failure against the potential payoff of its success. Increasing the tax rate reduces the effective payoff, which increases risk. Investors can lower that risk by reducing the valuation at which they are willing to invest, which means they take a larger share of the company — a straightforward transfer of risk from investors to entrepreneurs.

Ms. Clinton’s tax therefore will not be borne by wealthy investors: it comes out of the entrepreneur’s payday. The increased tax rate means a risk-equivalent decrease in the percentage of the company the entrepreneur gets to keep. And that’s just the best-case scenario.

The other option is that the tax doesn’t get paid at all, because the investor decides the increased risk isn’t worth it — the startup can’t attract funding and dies.

That sounds melodramatic, but it is no exaggeration. A startup company never has more offers than it needs; it never raises money with time spare. Even a slight change in the risk-return balance — say, the 3.8% which Obamacare quietly laid on top of the current capital-gains — kills companies, as investors and entrepreneurs see the potential upside finally shaved past the tipping point.

A tech startup has short-term potential. That is a major part of the attraction to investors, and that makes Ms. Clinton’s proposal especially damaging. In the tech world, we all hope we’ll be the next Facebook or Twitter, but you can’t pitch that to an investor. A good tech startup takes a small, simple idea and implements it beautifully.

The most direct success scenario is an acquisition by a larger company. In the app world — and this is the upside to not having physical limitations on distribution — the timescale is remarkably accelerated. A recent benchmark example was Mailbox, purchased by Dropbox just two months after it launched.

Giving investors an incentive to not to sell will hurt entrepreneurs yet again, postponing the day their sweat equity finally has tangible value, and encouraging decisions that make tax-sense rather than business-sense.

If Hillary Clinton really wants to help entrepreneurs, she should talk to some and find out what they actually want. A lower capital-gains tax — or no capital-gains tax — would be an excellent start.

Dan Gelernter

Dan Gelernter is CEO of the technology startup Dittach.

Who Is Doing More for Affordable Education: Politicians or Innovators? by Bryan Jinks

August 3, 2015/in Budget and Finance, Education, Policy, Politics, Taxes/by Foundation for Economic Education (FEE)

With a current outstanding student loan debt of $1.3 trillion, debt-free education is poised to be a major issue leading up to the 2016 presidential election.

Presidential candidate Bernie Sanders has come forth with his plan for tuition-free higher education.

Senator Elizabeth Warren supports debt-free education, which goes even further by guaranteeing that students don’t take on debt to pay other expenses incurred while receiving an education.

Democratic Party front-runner Hillary Clinton is expected to propose a plan to reduce student loan debt at some point. And don’t forget President Obama’s proposal to provide two years of community college to all students tuition-free.

While all of these plans would certainly increase access to higher education, they would also be expensive. President Obama’s relatively modest community college plan would cost $60 billion over the next decade. What makes this an even worse idea is that all of that taxpayer money wouldn’t solve the most important problems currently facing higher education.

Shifting the costs completely to taxpayers doesn’t actually reduce the costs. It also doesn’t increase the quality of education in a system that has high drop-out rates and where a lot of graduates end up in low-paying jobs that don’t use their degree. Among first-time college students who enrolled in a community college in the fall of 2008, fewer than 40% earned a credential from either a two-year or four-year institution within six years.

Whatever the other social or spiritual benefits of attending college are, they don’t justify wasting that so much time and money without seeing much improvement in wages or job prospects.

Proponents of debt-free college argue that these programs are worth the cost because a more educated workforce will boost the economy. But these programs would push more marginal students into college without any regard for how prepared they are, how likely they are to graduate, or how interested they are in getting a degree. If even more of these students enter college, keeping the low completion rates from falling even further would be a challenge.

All of these plans would just make sure that everyone would have access to the mediocre product that higher education currently is. Just as the purpose of Obamacare was to make sure that every American had a health insurance card in their wallet, the purpose of debt-free education is to make sure that every American has a student ID card too — whether it means anything or not.

But there are changes coming in higher education that can actually solve some of these problems.

The Internet is making education much cheaper. While Open Online Courses have existed for more than a decade, there are a growing number of places to find educational materials online. Udemy is an online marketplace that allows anyone to create their own course and sell it or give it away. Saylor Academy and University of the People both have online models that offer college credit with free tuition and relatively low examination fees.

Udacity offers nanodegrees that can be completed in 6-12 months. The online curriculum is made in partnership with technology companies to give students exactly the skills that hiring managers are looking for. And there are many more businesses and non-profits offering new ways to learn that are cheaper, faster, and more able to keep up with the ever-changing economy than traditional universities.

All of these innovations are happening in response the rising costs and poor outcomes that have become typical of formal education. New educational models will keep developing that offer solutions that policy makers can’t provide.

Some of these options are free, some aren’t. Each has their own curriculum and some provide more tangible credentials than others. There isn’t one definitive answer as to how someone should go about receiving an education. But each of these innovations provides a small part of the answer to the current problems with higher education.

Change for the better is coming to higher education. Just don’t expect it to come from Washington.

Bryan Jinks

Bryan Jinks is a ?freelance writer based out of Cleveland, Ohio.