Saturday, January 29, 2005
WARNING: Grand Conspiracy Theory Ahead
One world government is inevitable - I truly believe this. It may not come to pass in this lifetime, but it is coming, this you can world bank on. It will go one of two ways; Euro/American-Socialist hegemony, or Islamic totalitarianism. Thomas Friedman of the NY Times spoke to the former in his book "The Lexus and the Olive Tree" which was written in a pre-911 world. He generically refers to the process of globalization and treats the subject as the logical conclusion of the shrinking world that high technology and mass communications is now creating. The book focuses on the collision between the modern world of the West and the ancient cultures of the Third World. I think Friedman was as shocked as anyone by magnitutude of 911. It did away with some of his own preconceived notions - Euro/American-Socialist hegemony is not a foregone conclusion...
World government is not a new idea. President Wilson tried to create the first instance of it in modern times with the ill-fated Leauge of Nations. Truman tried to address that failure when the United Nations was chartered after WWII. It is conspicuously clear that the UN is far from a workable global governmental solution. This is why I think Friedman correctly put the onus on American-style free market capitalistic systems to drive the process of total economic integration. I don't see Europe, the Asian Pacific or even China being dynamic enough blend the world economy the way America is already doing. Though China is a wild card and can not be ruled out of anything completely, it has never been "overtly" expansionist on a global scale. Besides, an emerging China, like the powerhouses in Europe and North America will be increasingly at the mercy of corporatism. Once global economic intergration is achieved statism and corporatism will have been merged and one world govenment will be upon us.
HOW IT STARTS
It has already started in the same way we are all dying the day we are born. The consolidation of power and control is seemingly inevitable no matter where one lives. The scenario I put forth will presuppose that Islamic fundamentalism does not supplant American global dominance. If forced to choose I can only cast my vote for Euro/American-Socialism, the alternative is simply unfathomable.
This is not to say that Islam won't have a role, it will, in fact, have a huge role.
One world government will start with the airline industry. The evidence is all around us. Two of America's largest carriers are currently in bankruptcy court. The rest are one terrorist attack away. Interestingly enough it was the terrorist attacks of 911 that forestalled the demise of the American airline industry this long. Massive federal susidies helped keep them solvent for several months until the air traveling public returned. It wasn't long, of course, before United Airlines, and more recently Delta have become essentially bankrupt. With few exceptions all the other domestic carriers are struggling as well. Many carriers in other countries are state-owned and already receive huge subsidies from their respective governments.
Consider too the state of commercial aircraft manufacturing. There are really only two of any size, Airbus and Boeing. American-based Boeing is struggling on the commercial side, relying on huge defense department contracts to bolster its bottom line. Airbus is subsidized by a consortium of European nations. They are currently locked in a death battle over the commercial jet business. We could conceivably see a single manufacturer of commercial airplanes within this decade - and it will probably be Airbus.
Terrorists have correctly identified the air transportation system as being the achilles heel of the West. Even before 911 Islamic terrorists were targeting commercial jets. The explosion of the Pan Am flight 103 over Lockerbie was directly linked to Lybian terrorism. And Pan Am no longer exists. Bomb sniffing dogs and tighter airport security helped sooth the traveling public with regards to keeping bombs off the planes. But the real fear of airline and government officials are shoulder-fired SAMs. Picture a terrorist with a heat-seeking Stinger missile in a van parked just outside the airport at the end of the runway... This would truly strike terror into the hearts of the flying public.
We know that al Qeida has already attempted a surface to air missle attack on Israelli commercial jets. It happened outside of the U.S. in sub-Saharan Africa and fortunately it failed. What if it happened in America? Would the flying public ever feel safe boarding an aircraft again? They are some who say it already happened and was covered up by the government in order to save the airline industry from melting down and destroying the American economy. The controversy over TWA 800 has never died down. The Internet is rife with conspiracy theories that go all the way up to the Clinton Administration - charging it with complicity in the cover up. The fact that it happened over open water made a cover up that much easier. We may never know what really happened with TWA 800, but it is widely believed that the NTSB/CIA/FBI explanantion is spurious.
An airline industry crippled by the fear of continuing SAM attacks would open the door for a government takeover of the entire air transportation system. This, I fear, would be the stepping off point for an eventual world body set up to govern the global air transportation system. With airplane manufacturing controlled by a quasi-governmental entity in the form of Airbus Industries there will be no stopping the rationalization for more and more central control. Expense and security will be the selling points and big time liberal/socialist commentators the world over will praise it a common sense solution.
WORLD SOCIALISM IS THE GOAL
The Grand Conspiracy here is really just an extension of the Marxist agenda that continues to remake itself until it achieves its goal of world socialism. The true believers span the generations by indoctrinating our youth through the cabal of public education and universities. The Soviet experiment of blugeoning the world with its version of socialism was a failure, but it does not mean Marxism is dead. It has simple taken on new faces in the form of secular humanism, Islamic fundamentalism and radical enviromentalism, all having declared the U.S. and more precisely Judeo/Christian-based free maket capitalism the enemy. Socialist policies in Europe are well on their way to achieving these goals. Christian faith is nearly dead in France, England and Germany and the coming financial meltdown when retiree entitlements come due will seal the deal.
HOPE STILL LIVES
The United States is the last best hope for freedom against world socialism [aka one world government]. Men like George W. Bush and the beleaugered neo-cons are all that stand in it's way. Red and Blue America clearly shows us that we live in a nation with two distinct views of the world. Red America (an oxymoronic liberal media designation), the American Party, truly believes in faith, democracy, individual liberty and private property and Blue America, the European Party, believes in socialism. I sincerely hope and pray that President Bush and those who support him are not merely a speed bump on the road the world socilaism. With each election cycle I am more and more encouraged, socialist ideals are being rejected at the ballot box. However, we can never let our guard down. As we speak there are discussions on reforming American election laws. Nothing good can come of that.
Monday, January 24, 2005
This is not the first time Summers has been in trouble for being impolitic. Honestly, with views like that I don't how: 1) he got the job 2) he keeps his job. Summers, if I am not mistaken, was a member of the uber PC Clinton administration. He served as this nation's treasury secretary during the period when the federal budget was balanced and eventually slid into surplus territory. Clearly he was one of Bill Clinton's most successful appointees. Apparently male chauvinism is not detrimental to doing a good job balancing the books. But c'mon Larry you're on campus now!
I knew there was a reason I liked this man.
For starters let's see what he said that makes him a hero to me and goat to academia. He spoke at a conference called - Diversifying the Science and Engineering Workforce: Women, Underrepresented Minorities, and their S. & E. Careers. He put forth the notion that perhaps the reason women are so under represented in science and engineering was an innate or natural ability of boys to do well in these areas of study at a younger age that limits the pool of women candidates for these jobs later in life. Young girls do not apparently find science and engineering all that interesting. Makes a lot of sense to me. I know a few women who majored in mathematics in college but almost none that majored in chemistry, science or engineering. Correct me if I'm wrong but choosing a major is a voluntary act, right? I am willing to accept that fathers and boyfriends and even mothers might try to steer their daughters away from hard science degrees out a sense of protection or what have you, but I doubt any university in this day and age would deny a young women entry into these programs.
Simple common sense indicates that in general there are things that men tend to do better than women and things that women tend to do better than men. Why is this even controversial? The better question may be - why is there so little common sense in academia?
HERE NOW, THE TRUTH
The real issue here has nothing to do with the lack of women in these fields. It has to do with an agenda that has been foisted on this country since the 1970's. The agenda that wants us to believe that there are no differences between the abilities of men and women. This is so patently false that a 3-year old can root out the truth. Why is this even allowed to be debated?
This has nothing to do with relative intelligence levels between men and women, but it does have a lot to do with physiology. A quick view at the naked form of a young woman and a young man clearly demonstrates this point. Our two genders are not only different on the outside but on the inside as well. The brain, one of the organs largely imbued with the intelligence quotent (the buttocks being the other, oddly, we quite often hear people telling morons to get their heads out of their assess during our evening commute. Go figure) are actually quite different in the way they are physically wired. There are internal organs that women have that men don't. These physiological differences not only manifest themselves in the way men and women handle logical and measurable tasks but also in the way we handle soft tasks that require empathy and compassion. By and large these differences are what makes humanity whole. Why can't academia and the so-called womens movement simply embrace these truths and be proud of what woman excel at and be accepting of what men excel at?
Political Correctness is not funny anymore, it is dangerous. The sooner we stand up and support people like Larry Summers and Bill Cosby and all the other neanderthals who speak the truth regardless of who it offends the sooner we can end the tyranny of the PC police.
Friday, January 14, 2005
There's a lot to like about it, but...
On one of my favorite talk radio shows I heard a prominent congressman talking up the national sales tax proposal he has put on the table. He was really rather upset at the lack of understanding about the true potential of this monumental change in tax collection. He made some persuasive arguments for the sales tax over the income tax. For instance, he claimed that consumption was a far more stable element for revenue collection than income. He cited statistics that showed that other than during WWII consumption waxes and wanes no more than 3% whereas income as a revenue source has dipped as much as 20% during post war recessions.
The fear that this tax would raise the prices of goods and services was discounted because a sales tax does not stifle price competition and he claimed that it actually improved it. Higher prices due strictly to the sales tax were more than offset by the elimination of income tax.
When asked about the effect on the poor and working poor he acknowledged that basic subsistance level commodities had to be addressed for those without means. His proposal would keep the government out of the business of picking and choosing what constitutes basic conmmodities. Instead of exempting certain products or services his plan calls for direct government checks on a monthly basis be distributed to those classified at or near the poverty line (accounting for family size) to cover the sales tax bite. Those checks would be as good as cash, no strings attached. I like the idea of keeping government officials from tinkering with details that would only result in social engineering, but I see a huge potential for abuse and then more calls for the government bail people out of the messes they make of it. I also see something like this creating even more of a magnetic effect for illegal imigration.
The question I have is: how is abuse of this system going to be curtailed if taxpayers misreport their income? It seems to me that direct government checks would draw out the scam artists like never before. I know the current SSI system is widely abused primarily because the government doesn't have the resources to patrol the ocean of abuse.
While there is much to like about the concept of a national sales tax over income tax I will reserve final judgement until I see how these plans account for the inevitable abuse that will suely arise. Face it, the current income tax system is battered and beaten by fraud and abuse - there's no reason to assume a sales tax wouldn't be a cheater's paradise.
Saturday, January 08, 2005
Nothing would make me happier than seeing the end to the Income Tax as we know it. Income tax is a weapon used by politicians against us all. Other than politicians and certified public accountants I can't think of anyone who likes the current income tax pardigm. This gigantic bureaucracy of CPA's, lawyers and government revenue agencies will not go down easy. If we can dare to dream though, envision if you will what a world with out a progressive income tax would look like...
Smart people have been trying to devise the most efficient, fair and enforcable tax system for a millenia. Some say it is a flat tax while others call for a national sales tax. I have my own radical theory that would nearly dissolve the burgeoning national government and return the federal system to its original role. Since it wouldn't stand a snowball's chance in hell I'll save it for last.
The whole point of this exercise is to replace a ridiculously complicated and vastly abused federal income tax system with something fair, efficient and enforcable. How does the flat tax, where every taxpayer pays the same percentage of their income in tax, measure up against these criteria. No brackets, no loopholes and no deductions, just one rate for us all. It seems fair enough. If one man one vote is fair, then one man one tax is imminently fair. As for efficiency the flat tax passes muster here too. A simple pocket calculator would be sufficient to figure taxes owed. The mechanism for employers to funnel collected taxes into the government is already in place. A flat tax would essentially do away with overly cumbersome and expensive tax preparation, thereby saving taxpayers billions of dollars collectively. Enforcement would actually be easier since loopholes and deductions would no longer need to be scrutinized. All in all the flat tax seems ideal... There are a number of nations using the flat tax model and by most accounts very successfully.
There are going to be those that argue over the fairness of a flat tax on behalf of the poor and the downtrodden. Currently the poorest Americans pay no income tax and, in fact, many receive credits in the form of government checks. Under a pure flat tax system they would now have to start paying income taxes. As well they should. Everyone should have a stake in funding the government. A flat income tax does not mean the end of the social safety net. They will argue that the ending of deductions for charitable giving would destroy thousands of services designed to help those with limited means. That remains to be seen. The average taxpayer is likely to have far more disposable income and very possibly would increase the amount of charitable giving. Honestly, how many people are so callous that they only give to a charitable cause for the tax deduction? Corporations use philanthropy for public image reasons not necessarily for tax purposes.
There is an old truism that says if the government wants to encourge something then tax it less and inversely if it wants to discourage certain behaviors then tax it more. This will not go away under a flat tax. Presumably workers and entrepreneurs would increase their output without the yoke of bracket creep taking more of a bite out of them. More income for the individual means more revenue for the government. There is a universal disdain for the current income tax system eveytime an hourly worker sees what happens to his take home pay after putting in overtime. Some people do not see the benefit of lining Uncle Sam's pockets at the expense of the loss of their personal time.
There's a lot to like about the flat tax idea. Perhaps the best part is the neutering of politicians who have used the income tax system for social engineering and sweetheart deal making. Politicians could return to becoming statesmen instead of gladhanders.
NATIONAL SALES TAX
The case for a national sales tax is harder to make for me. Admittedly the idea of no federal income tax is attractive. As with the flat tax, policy makers could not use the income tax code to tinker with social policy. But can a sales tax system be fair, efficient and enforcible?
A sales tax is a consumption tax. America is a consumption driven society. Some would say we consume too much. Who's to say we do? Clearly the consumer culture is promoted incessantly. Advertizers are contantly pushing a lot of crap on us. Who doesn't get tired of the barrage of pitches on TV, radio, magazines and newspapers. Advertizing is everywhere. Yet, we are not lemmings, we can decide for ourselves which products or services we lay down our money for. We can not minimize the good that advertizing does. The consumer driven society is a dynamo largely because of advertizing dollars. Free TV, the Internet, commercial radio, NASCAR, the Olympics, cheap newspapers and a thousand other things we take for granted in our hyper society is payed for by advertizing dollars. So what does this have to do with a national sales tax? As stated earlier, if the government wants to discourage something then they tax it more. Would taxing consumption reduce consumption? Would the reduction of consumers consuming lead to an economic downturn? These are good questions. I think it can be easily demonstrated that increasing taxes does lead to a decrease in the activity being taxed. But will a consumption tax be offset by consumers having more income?
The question of a national sales tax being fair is also tricky. Sure everyone, rich or poor, old or young would pay the same tax for the same product. Seems fair as far as it goes. The question is: would products or services be priced out of reach for those with less means? Would there need to be exemptions for basics like food and shelter? The price of a home would skyrocket if subject to a sales tax. Most people pushing for this tax system do make exemptions in their plans for these concerns. OK, by that token then wouldn't we just be letting policy makers tinker with the sales tax the way they now tinker with the income tax? There are a lot of unanswered questions here...
Collecting of a national sales tax could be efficient considering that a majority of states already collect tax at the point of sale without too much trouble. Some worry about massive fraud and black market activity, but I am less inclined to believe that any legitimate business would take a chance trying to screw the federal government. If the penalty for noncompliance is steep enough under reporting would not become a serious problem. There will always be a black market wherever people conduct business, but in a nation that relies on the rule of law and the threat of serious penalties the nusiance of a black market I believe would be minimal.
Those who would argue against a flat tax on the grounds it will hurt the poor are not going to go along with a federal sales tax. Those on the lowest rung of our economic ladder who pay virtually no federal tax now are going to hit hard by a high sales tax. I have heard the numbers of 17%, 20% and 25% thrown around. At 25 percent coupled with a typical state sales tax of 6 percent a $100 jacket at Target would end up costing $131. That's quite an increase. For those with high incomes the offset between no income tax and a high sales tax would mitigate the pain of the higher cost at the checkout line. For those with low or no real income there will be no offset, just higher prices. This will make a national sales tax a hard sale.
THE STATICNOISE TAX REFORM PLAN
It seems to me that the founding fathers had a definite idea of what they envisioned for the role of the federal govenment in our lives. Where in the constitution does it call for the federal government to be involved with education, local law enforcement, housing, welfare and healthcare? In fact there are so many things the federal government does today that usurp states rights and state control that I believe everything is basically topsy turvey. I have thought for years the the way taxes are collected and monies dispursed is completely backward. If we believe that government that governs closest to the people governs best then why is this country pushing more and more resposibility to the national government instead of keeping it close to home.
I think this country would be so much better served if the tax money we sent to the federal government was sent to the states and the tax money we send to state government was instead sent to the feds. The federal government would be responsible for national security, guarding the borders, treaty making, standards and practices, weights and measures and the regulation of interstate commerce. There are thousands of federal workers and hundreds of federal agencies operating in every state and I see these people becoming state employees with a just a few retained by the federal government as liasons between Washington and the state capitols. These federal liasons would be responsible for ensuring constitutional compliance. We would make the states responsible for education, crime control and the health and welfare of its citizens. This would further the erode federally elected officials ability to pork barrel their way into permanent seats in congress. They would be forced to deal with constitutional issues and what is good for the country instead of merely bringing federal bacon back to their home districts.
The way it is today gutless local officials simply kick the can upstairs where there is even less accountability. We see it happening with school funding which is now almost completely controlled at the state capitol rather than with local school districts. It makes for convienient finger pointing when students keep performing well below those students in other developed nations. When we learn that the secret of the success of schools in Japan, India and even Europe is that they encourage and foster local control, then why are we continually going the other way?
Ideally I would envision a flat tax rate for both state and federal income tax with the larger chunck going to the states and the smaller going to Washington. Because of the massive waste and inefficiency of the federal bureaucracy we would, I believe, start to see an end to the national debt as federal liabilties decreased. State governments would likely grow but would still be 50 times more accountable to the taxpayer.
This plan, of course, makes too much sense and would never get past entrenched federal bureaucrats and politicians. Personally I don't see the down side - not even for federal workers since many would be turned into state employees anyway. As simplistic as it seems I think there is real merit in pushing responsibilities down to lowest level government as is possible, where accountability is the highest and the fingerpointing is the lowest. Please feel free to tell me what you think...
Wednesday, January 05, 2005
I am not an economist. In fact the only real economist I know thinks of me as a regular dunce and has called me so in a major metropolitan newspaper. (More on that later) If anyone had any doubt that President George W. Bush is a man of action (and ideas) then you have been holed up in a cave for the last four years. The President has bravely stepped into the deep end of the pool of American economics with a pair of radical proposals that would have even Ronald Reagan hollering for a life preserver. As if remaking the Islamic world into a democratic bastion wasn't enough Bush has not only reached out and touched the third rail he has grabbed it firmly with both hands.
Social Security reform has always meant raising taxes or raising the retirement age. This was, of course, because it was the politically safe thing to do. Because AARP crowd is historically the single largest bloc of voters it was considered political suicide to even broach the subject of fundamental change to Social Security. Personally, I would not call the President's modest plan of allowing younger workers to direct a portion of their FICA withholding into private retirement accounts as fundamental reform - it's more like advanced tinkering. Amazingly the WWII generation seems to understand that the Social Security of the FDR era can not be sustained as the status quo. Bush did well with the older generation in his re-election bid. I think the President called this aquiring "political capital".
The opponents of the President want us to ignore basic demographic facts so they can pretend to be the key masters of Al Gore's famous Social Security lockbox. No such box exists. At the time FDR put Social Security into place the ratio of workers to retirees was around 40:1. Today it is 3:1. It won't be long now until it is 1:1 and soon enough it will reach into negative territory. Compounding the worker to retiree ratio is the rising life expectancy of all Americans. Originally the retirement age was set just a few years shy of life expectancy. As a society we are fast approaching a life expectancy of over 80 years. It's hard to understand how anyone can look at these numbers and not be concerned with the future of this program and all the retirees it is designed to support. Something has to be done. My fear is that Bush won't go far enough.
The dirty little secret is that a fully private system would be a smashing success and Washington (and many other govenmental entities) know it. I say this because right now many political office holders, municipal employees and various govenment agencies already have such a system and the results are nothing short of amazing. These fortunate few pay no FICA taxes the way the rest of us do. They also "own" their retirement plan, Uncle Sam owns yours and mine. With these private accounts if one should prematurely die their families get the money. Social Security pays $256 death benefit and... No, wait, that's it. One municipal worker with just over 20 years in boasted about the nearly 3 million dollars in retirement money that awaited him. He pays no Social Security taxes. This was accomplished with a modest investment portfolio that relied on the power of compounding interest and the long term growth of the stock market.
Social Security is essentially forced savings, this is not arguable. The problem is we are forced to save it in Uncle Sam's bank account not our own. Not only is this fundementally unfair it's economically stupid. President Bush has called for his own "New Deal" and he calls it the "Ownership Society" and I personally like the sound of that.
Next: The New New Deal: Part II - Real Tax Reform