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Rick Perry an Odd Choice for Republicans, and Tea Party…

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Texas Governor Rick Perry, the leading GOP contender for the Presidential nomination in 2012, is a particularly odd choice for Republicans and Tea Party advocates alike. Polls consistently show him atop the pack of contenders for the GOP nomination, however there are a significant number of reasons his consideration as a Presidential nominee, as well as his standing in the polls, comes as a surprise.

Consider:

  • Mr Perry used to be a Democrat, until he concluded the path to power in Texas is paved with Republican pavement;
  • Rick Perry is a career politician. He has been in various offices since 1984, when he was first elected to the Texas House of Representatives as the Democratic representative of District 64 (he switched sides in 1989). Career politicians are not looked upon favorably by Tea Pary supporters, or Constitutionalist;
  • Mr Perry’s use of executive order to attempt to force state-ordered vaccinations on eleven year-old girls in Texas violates two concepts Tea Partiers, and libertarians, hold dear: the order was passed (and later reversed by the Texas legislature) without being put to a vote of the people’s representatives, while at the same time representing a shocking intrusion by government into people’s lives by requiring parents to actively opt out of the forced vaccination program. The notion of an individual (in this case the Governor) ordering injections of children without debate or a vote is rather shocking. Mr Perry now considers this a “mistake”;
  • Mr Perry’s policy of granting discounts on taxpayer provided education to illegal aliens in the state of Texas is anathema to most Republicans (and to taxpayer advocates as well);
  • Governor Perry has increased taxes multiple times in Texas. He voted for a $5.7 billion tax increase proposal, and refused to pledge not to increase taxes, a pledge which, notably, his Democratic opponent in the 2002 contest for Governor of Texas made;
  • Mr Perry not only supported Al Gore in 1988, he was the chairman of Mr Gore’s Texas campaign committee. It is difficult, for a whole host of reasons, to imagine Republicans embracing the chairman of Mr Gore’s Presidential committee as their nominee for President of the United States;
  • “Crony capitalism”, the latest buzzword of Republican Presidentail hopefuls, can be seen throughout Mr Perry’s tenure in politics: trading prominent appointed positions for campaign contributions has been a hallmark of the Governor’s strategy while in office.
  • While Governor of Texas, state spending grew 30.6% under Mr Perry’s leadership, after adjusting for population growth and inflation.
While campaigning on an image of the “straight talking Texan”, Mr Perry has a deep history of increasing spending, favoring tax increases, is a career politican, actively rewards campaign contributors with lucrative taxpayer funded appointments and at best has a misguided view of the meaning of “limited government”. A strange choice for Constitutionalists, the Tea Party and Republicans alike. But perhaps a known quantity for the status quo.

Written by westcoastsuccess

September 19, 2011 at 6:26 pm

Sarah Palin’s Fundamental Problem…

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UPDATE: supplementary data from Mrs Palin’s time as Alaska’s Governor:

Mrs Palin never once cut spending during her tenure as Governor. During Mrs Palin’s first year as Governor, the Alaska state budget remained identical to the prior year, at $17.67bn. During that same year, federal transfer payments to Alaska increased 2.56% to $10.68bn. The next year, the Governor increased spending by 0.57%, while federal transfer payment increased by 2.56%. The following year, Mrs Palin increased the state’s spending by over ten percent; 10.57% to be exact (to $19.57bn). That same year federal transfer payments increased yet again, and massively: this time transfer payments from the federal government went up an astonishing 32.4%, to $14.65bn (see below – it seems Mrs Palin’s gift for extracting federal money translated very well from her time as mayor of Wasilla). All state statistics can be found at usgovernmentspending.com; federal payments to Alaska can be found at census.gov.

All told, with Mrs Palin at the helm, the state spent 10.75% more by the end of her tenure than it did when she took office. During that same period, federal payments to Alaska by the federal government rose an incredible 40.74%.

All those extra dollars, of course, come from the taxpayers.

We’ll leave it to you to decide whether increasing state spending by over 10% and enjoying over 40% more federal largesse is the mark of a fiscal conservative…

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CNN today published a press release on behalf of Sarah Palin. What we mean by “press release” is that the “story” is simply about a speech Mrs Palin is planning to give in Iowa tomorrow, Saturday September 3, 2011. As such, it is a story advising readers that there is a story forthcoming at some future date. The article does, however, speculate (as these articles always do) about Mrs Palin’s ambitions to stage a run to become the President of the United States. The article goes on to state that Sarah Palin will potray herself as an “outsider” to the Washington establishment in the forthcoming speech.

The problem Mrs Palin faces, however, is that she is a qualified “tax and spender”. Sarah Palin is the former Governor of a state, Alaska, where an enormous percentage of the population is anything but “outside” government. In fact, 31% of all workers in Alaska are directly employed by government of one level or another (Gallup). Additionally, as the New York Times correctly reports, Alaska received the greatest per-capita amount of the so-called “stimulus”: the equivalent of $3,145 for each man, woman and child. Further, Mrs Palin, as Mayor of Wasilla, hired a lobbying firm which in turn extracted $25,000,000 from the Federal Government. Wasilla is a town of less than 7,000 people, which works out to another $3,571 for every man, woman and child. Sarah Palin’s political background in Alaska (and in fact the entire background of the state she hails from) is almost entirely predicated upon extracting money from the federal government. Here’s a quote from Carl Gatto, Republican, 13th District, Alaska House of Representatives: “I’ll give the federal government credit: they sure give us a ton of money. For every $1 we give them in taxes for highways, they give us back $5.76.” Of course, the extra $4.76 Mr Gatto’s state receives comes out of the pockets of workers in every other state, by way of taxes.

At root, Mrs Palin, for all her constitutionalist, small-government rhetoric, is “tax and spend”, provided, of course, it is non-Alaskans paying the bill.

Yet somehow Sarah Palin appeals to a not-insignificant subset of the Tea Party movement. And she is largely perceived as anti-tax, anti-spending. Which is consistent with her actions, provided one doesn’t look beyond her home state, where her actions have demonstrably shown the real message: “I’m not in favor of taxes except for taxes on other people, and I’m not in favor of government spending, except when it is spent in Alaska and paid for by non-Alaskans.”

A very curious and mixed message indeed. And a difficult position to translate into national policy, where there isn’t a pool consisting of 99.77% of “others” to tax.

Written by westcoastsuccess

September 2, 2011 at 3:13 pm

How FEMA Puts Americans in Harm’s Way…

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NASA Satellite Image of Hurricane Katrina

The US’ Federal Emergency Management Agency, commonly known as FEMA, may seem like both a fundamentally necessary government agency and an example of a benevolent federal government institution: among other things, FEMA provides disaster relief and a flood insurance pool. Upon analysis, however, it becomes apparent FEMA contributes directly and materially to substantial property damage, increasing the magnitude of catastrophes while, much more importantly, leading directly to lost lives.

Here’s how:

Areas routinely hit by floods and hurricanes are typically completely unable to purchase from private carriers insurance against property damage from these perils. That makes sense: would you put up your money against exceptionally poor odds not only of seeing a return but of costing you many orders of magitude more? This is the consideration made by insurance companies: the amount of premiums generated will be dwarfed by resulting claims, therefore we refuse to risk our shareholders capital in these areas. This is a good thing, and an example of the market working properly: when insurance is flat out unavailalbe, the market is signalling that there is such great risk that no investor, at any price, is willing to take on that risk. This is an important signal to the market, including consumers, lenders and others: live in these areas at your own peril. The natural consequence of this would be few or no homes built or occupied in severely high risk areas.

Enter FEMA.

With presumably noble intentions, the agency underwrites flood insurance in the most catastrophically high risk parts of the United States. In so doing, FEMA makes it possible for people to place themselves directly in harm’s way – after all, without insurance, lenders wouldn’t lend to home owners or business owners or construction companies, builders wouldn’t build and no one would live in these places (which, not coincidentally, tend to house some of the poorest and least fortunate people), and we wouldn’t have catastrophes like Katrina (Katrina would, of course, still occur, but the resultant damage would at least be an order or two of magnitude less harmful).

It may seem like compassionate policy for the federal government to backstop insurance for people unable to obtain same from the private insurance market. However the actual unintended consequences are lots and lots of dead bodies, destruction and property damage, lives turned upside down and massive economic loss which flat out could not happen without FEMA’s intervention. The availability of flood insurance from FEMA actively encourages people to reside in the worst possible locations, from the perspective of routine disasters.

One important purpose of insurance is to affix a price to risk, and in the case of places like Florida and New Orleans, the market has determined that price to be infinity (or, more precisely, the price is greater than the value of the items insured). FEMA’s position is that the price of the risk is actually very reasonable (as expressed by the premiums they charge). FEMA is demonstrably incorrect, and the existence of its flood insurance program, in actively ignoring the signals from private insurers, leads directly to death and catastrophe.

Written by westcoastsuccess

August 29, 2011 at 11:43 am

Ron Paul Gaining Momentum? Georgia Straw Poll Suggests So…

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Some interesting developments on the campaign trail indeed: in the Georgia GOP straw poll of Presidential hopfefuls, some media-annointed heavyweights fared very poorly, while the candidate the media loves to ignore, Ron Paul, again finished within a percentage point of winning the poll, narrowly losing to straw poll winner Herman Cain, who captured 26% of votes against 25.7% for Dr Paul (see our article, “Is Ron Paul Getting a Fair Shake From the Media? Watching the Watchers…” for our analysis of media coverage granted Mr Paul relative to the other candidates and also relative to his showing in the Iowa straw poll). Notably, Herman Cain is a native of Georgia, giving him the home town advantage (Mr Cain received 8% of the vote in the Iowa straw poll, against 27% for Ron Paul).

Candidate Mitt Romney, the former Governor of Massachusetts, who is widely considered to be the eventual GOP Presidential candidate (even among Obama’s staff), finished with just 6% of the straw poll votes. Michele Bachmann, whom Fox News described as having “cemented her top-tier position” after the Iowa straw poll, finished with just 3%. Rick Perry, the former Texas Governor who officially announced his candidacy the day of the Iowa straw poll, finished 5.7 percentage points (or over 22%) behind Dr Paul.

It will be interesting to see the reaction from media outlets to Ron Paul’s latest strong showing (notably, he also polls neck-and-neck with Obama). We’ll be tracking media coverage of this result as part of our ongoing series monitoring the even-handedness of US political coverage.

Written by westcoastsuccess

August 29, 2011 at 11:08 am

Remember When Speech Was Free? Me Neither…

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Two incidents this week served to highlight the fact speech is no longer free, and hasn’t been for some time. They further illuminated the hypocricy of governments who, on the one hand, praise Egyptian, Yemeni, Jordanian and Syrian rioters, yet on the other hand permit no dissent against their own establishment.

The first instance concerns England. When citizens of London rioted, there were calls from the government to restrict access to instant messaging, and to prohibit encrypted messaging, most notably Blackberry Messenger (BBM). Imagine a government calling for the outlawing of pen and paper, on the grounds that these may be used to convey messages the government does not approve of. Or that all pen and paper communication must be accessible to government watchers. The difference is one of techonology, not principle.

At the same time, a 21 year old who posted comments to Facebook encouraging violence in Norwich was sentenced to four years in prison, despite no violence occuring as a result of his postings. A victim without a crime.

Meanwhile, in the United States, the government authority which controls the Bay Area Rapid Transit systems (BART) blocked all cell phone communications in fear that protests might occur on the subway line, following events surrounding the killing of civilians by BART authorities.

Imagine if the characters in the story were changed: “Syrian man jailed for four years for encouraging resistance”; “Egyptian government disables communication systems for rebels”. If you’re busy, as you read this, trying to justify why the UK and the US should be given a pass for supressing free speech while other regimes shouldn’t, you’re clearly not in favor of free speech to begin with.

To reiterate: in both cases, no violence occured. Free speech was suppressed where such speech displeased the government, full stop. And both instances prove that “free speech” is a convenient slogan where it suits those in power, but has no real substantive meaning, other than to posit that citizens are free to speak on any topic they wish, provided government considers such topic “acceptable”.

Free speech is a binary proposition: either you have it or you don’t. It’s a little like being a little bit pregnant. The oft-cited (if incorrect) argument that “reasonable limits” apply to free speech (“One is not permitted to yell ‘Fire’ in a theatre”) serve as an effective argument against the principle of free speech in its entirety. But such arguments imply freedom is limited to those freedoms government is willing to concede, situationally. That is not, in any case, freedom. It is, instead, a prison of simply different dimensions.

Written by westcoastsuccess

August 17, 2011 at 8:48 pm

Will the US Follow Greece’s Path?

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Interesting article on the CNN web site regarding the troubling spot the Greek economy finds itself in. In the article, the author, William Antholis, managing director of the Brookings Institution and a senior fellow in Governance Studies, points out the difficulty the Greeks will have in implementing austerity measures, given that one in five workers is employed by the government – a full 20% of all employment is in the government!

But will the US suffer a similar fate? Let’s look at the numbers:

There are around 2 million people directly employed by the federal government, not including postal workers or military personnel. There are roughly 600,000 postal workers and about 1.4 million uniformed military personnel. There are about 146 million people in the workforce of the US. So that makes for 1.37% of all workers directly employed by the federal government. That rises to 2.74% if you include postal workers and the military (source: Bureau of Labor Statistics: http://www.bls.gov/oco/cg/cgs041.htm).

Employment by government at all levels is about 14% in the US (comparison: Russia: 0.59%; France: 3.5%; Greece: 20%), but varies substantially by state (top states are Alaska and Wyoming at over 20% of all workers). So about 1 in 7 workers in the US works for government (and have their salaries paid by the other 6 in 7). As of 2002, more people work for the government than manufacturing and construction combined (https://fabiusmaximus.wordpress.com/2009/01/20/milestone/).

This means that the US will likely face a similar level of protest, discontent and economic pain in enacting any meaningful cuts to government spending. For example, if the US governments at all levels chose to cut 10% of their workforces, roughly 2,044,000 workers would be out of a job. At current unemployment levels (about 9.5%), this would mean an increase in the unemployment rate of about 1.08 points (or an 11.4% increase in the unemployment rate).

The question isn’t whether governments at all levels in the US need to make serious, significant cuts. The real question is whether any politicians are willing to accept such a dramatic increase in the unemployment rate. And a 10% cut to government employment at all levels really isn’t enough to make a significant dent in America’s government payrolls, deficits, debt and pension obligations. Add in the crisis in Social Security (when it was founded, for every retiree, there were 30 workers paying that retiree’s pension; currently that ratio is three employees paying for each retiree and it’s closing in on two) and the outlook doesn’t look very rosy for the US returning to fiscal health.

How long will six in seven workers remain content paying for the salaries of the one in seven government employees? That remains to be seen. However history seems to indicate the status quo will remain until changes are inevitable, and then those changes will be difficult, painful and dramatic, rather than measured, pro-active and responsible.

Written by westcoastsuccess

June 29, 2011 at 12:57 pm

Auto Bailout Cost to Canadian Taxpayers…

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The Globe and Mail reports¹ the total cost of a so-called bailout of the “Big Three” by the Canadian government, which has committed to 20% of the US government bailout, to ultimately cost Canadians between $15 billion and $25 billion.auto-bailout

What’s that mean for the individual Canadian taxpayer?

According to Statistics Canada, there were 9,275,765 full-year, full-time earners as of 2005². That’s a pretty good proxy for the number of income taxpayers. So, let’s take the conservative figure of a bailout cost of $15 billion. That puts each full-year, full-time worker in Canada on the hook for $1,617.

Of course, if you personally believe in supporting the “Big Three”, there’s nothing preventing you from voluntarily using $1,617 of your income to either buy their products or their shares. Unfortunately, the government’s bailout proposal removes that choice from the taxpayer and forces the issue, whether any individual agrees with spending $1,617 of their income to support three private companies or not (and would perhaps prefer to spend $1,617 of their hard-earned money to bail themselves out instead)…