Category Archives: Economics

Jason Lewis Goes Galt; Quits Halfway Through Show on Air

Activism, Civil Liberties, Culture, Economics, Libertarians, Media, Multimedia, Quote of the Day, Strategies For Advancing Liberty, Taxation, The Welfare State, Theory and Ideas

Over the past week, talk show host Jason Lewis has been letting on that something big was going to happen on his show. July 31, 2014 he dubbed “Judgement Day.”

Being an avid listener of his, I thought it probably had something to do with his political activism site Galt.io* and probably something to do with his cause called “Starve the Beast.” Was he going to announce that he was going to move his show from the high tax progressive state of Minnesota to a more tax friendly/liberty friendly state?

As it turns out, I wasn’t too far off but he took his “starve the beast” thing a step further. You could say he had “gone Galt” on the air halfway through his radio show.

The following was his epic final monologue:

All over the continent of Europe there are castles. Castles that children are taught to admire. But these monuments are not shrines to liberty but are a stark reminder of an oppressive past that we are quickly forgetting. These elaborate fortresses were built to honor the riches of royalty. Such wealth was not derived from the cooperation of capitalism but from the conquest of collectivism. It was stolen through taxes and fees collected from the serfs. It was not earned.

We have apparently learned little from history for today we have our own royalty dressed up in the robes of compassion. A false altruism that merely enables the mob and crushes the individual. We have erected a shrine called the welfare state and as a result, we now resemble a nation with more takers than makers. Crony capitalists who preach the virtue of community service while acting like economic parasites who live off the system. Indeed the real entrepreneurs are no longer valued. Only the political ones who loathe them. Profit is a dirty word while one’s obligation to society regulates the most productive to second class status. We are it seems endlessly told to live for others. Endlessly told. Taxes are patriotic. We are told to apologise for our own existence. The pursuit of happiness has been replaced by the mandate of self sacrifice. This is not freedom, it is tyranny.

And so we, I, you are faced with a choice. The choice that all people in all times must make: to fund the beast or to starve the beast. To host the parasite or walk away. To participate in the system that punishes the value of your own existence or boycott that system.

Ladies and gentlemen, I have now chosen the latter. They can now feed off one another.

I quit.

 

Just after Lewis uttered the words “I quit” there was silence followed by his confused producer getting on the air “Um…Jason?” and then announcing that Jason had left the mic. They then went to commercial and found another talk host to fill the remaining hour and a half remaining in the show.

From there there was a flurry of calls and people going to this website and the Galt.io homepage. Was this some kind of stunt? Did Jason Lewis really quit halfway through his syndicated talk show?

Personally, I wasn’t sure. It does now seem that Jason Lewis indeed did quit and decided he was no longer willing to keep feeding the beast.

Okay, so a talk show host who would likely be retiring soon quit in dramatic fashion, what’s the big deal?

For me, it is a bummer. Jason Lewis was one of the few talk show hosts that didn’t tow the party line or spend three hours a day attacking Barack Obama for everything under the sun. Its true that he did attack Obama’s policies with gusto but he didn’t spare the Republicans either. He brought insights that no other syndicated show offers.

And maybe this going Galt is more symbolic than anything else. But what if his message resonates to other high achievers who could stop the motor of the world if they followed this example?

I for one hope this inspires such a revolution even if its on a smaller scale than what took place in Atlas Shrugged.

*I have a cause and a group that I started within Galt.io: The Non-Aggression Principle (educates people about the NAP) and my group called Restore Everyone’s Property And Individual Rights (REPAIR). Contact me via Twitter @s_littau if you would like to join Galt.io and these and other causes.

Stephen Littau
http://fpffressminds.blogspot.com/

Activism, Culture, Democracy, Economics, Strategies For Advancing Liberty, Technology, Theory and Ideas

Bring Reading Rainbow Back for Every Child, Everywhere.

First thing… THIS is how you do a kickstarter.

This is the kind of thing that kickstarter can be great at, and do great things with; being done by people who understand their medium and their audience, and who design their campaign properly around it.

If this doesn’t become one of the most overfunded kickstarters in history, I would be amazed.

I’ve been watching it for about 2 hours, and it’s gone from $100k to over $500k in that time.

… And this is something I’m backing… even as little as I can afford right now. It’s a good idea, and it’s something I’d like to see done. I can’t do much, but I pledged… It’s the price of a cup of coffee or a little more than a gallon of gas. You should too if you can.

Anything we can do to increase the net level of education, intelligence, and reading in this country… on this planet… we should be doing. If it’s a smart, well designed, well implemented way of doing so, even better.

Long term, I’d like to see what their fee schedule and sustainability model is, are they organizing long term as for profit, not for profit etc… but let’s get this off the ground at the very least.

Now… for my more skeptical, and more conservative friends and readers… yes, liberals, education blah blah blah.

THIS IS A GOOD THING – IGNORE THE POLITICS

This is an essentially libertarian thing, using the power of private enterprise and initiative, and the power of market preference, to fund education. Using market research tools, they can evaluate the preference share for education, find a way to use funds properly, and ignore the noise coming from politics.

WE WANT MORE OF THIS. LOTS MORE OF THIS.

There is one specific issue that I personally have a problem with… but I can get over it, because I understand the issue, and why it’s presented as it is.

So for my fellow skeptics, and numbers geeks…

Ignore the claim that 25% of children don’t learn to read in this country…

That is not an outright lie… it’s also not the absolute truth. It’s a matter of how we define literacy, and to what degree we count someone literate based on that definition.

That’s a concept that takes more than 30 seconds, and more than one paragraph to explain… so it gets simplified here as “1 in 4 children don’t learn to read”.

It a political number, not a real number. A classic example of using definitions to make things scarier, to emphasize the problem.

Don’t let that stop you from the core message here, or from supporting what looks to be an excellent idea.

Oh and, be sure to watch the video to the very end… priceless…

Chris Byrne
I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

http://anarchangel.blogspot.com

Ron Paul: Bitcoin Skeptic

Bitcoin, Culture, Currency and Monetary Policy, Economics, Federal Reserve, Individual Rights, Libertarians, Monetary Issues, Property Rights, Republicans, Strategies For Advancing Liberty

The virtual currency known as Bitcoin is beginning to become accepted by more and more businesses. Once it was limited to underground websites such as the recently shuttered Silkroad but now legitimate establishments have taken up transactions in the coin. For example online casinos like 1xbit allows customers to can pay in and cash out with Bitcoin. Many investment firms buy into Bitcoin and other cryptocurrencies because of the apparent potentials for short-term profit. Internet-based retailers like Overstock.com (one of the more ‘mainstream’ of internet retailers) have started to accept transactions in Bitcoin. On their first day Overstock.com sold $126k in merchandise exclusively in Bitcoin transactions. If you needed an indicator on whether the public are using Bitcoin and not just investing it, that may be it.

On top of this, investors are also investing in cryptocurrency miners like the kd 5 gold in order to maximize their profitability. Instead of buying Bitcoin, they are mining it themselves and cutting out any middle man.

Originally, bitcoins were used for trading and mining. Now, several Bitcoin casinos are available online, where players can utilize this digital currency to leverage their winnings. Crypto Snack and other similar websites recommend a few of the best Bitcoin casinos in the world of gambling. A key reason for its popularity could be that it tends to offer safe and secure playing options. Furthermore, unlike other currencies, they can be easily withdrawn or deposited. Bitcoin has even crossed from online into real life as a few Las Vegas casinos have followed in the footsteps of online ones and jumped on the bandwagon. No doubt there will be even more merchants participate in this experiment in 2014.

Many in the liberty movement are very bullish on what they believe is or will be an alternative to the dollar but there are a few notable skeptics within the movement. Among the high profile Bitcoin skeptics are Peter Schiff and Ron Paul.

Just over a month ago, Ron Paul expressed his skepticism of Bitcoin in his weekly podcast (Episode #43).

I’m suspicious. I don’t fall into the category and say ‘Hey, this is it. This is the solution. This is going to replace the dollar.’

I mean I certainly wouldn’t put all my eggs in the Bitcoin basket, there are other kinds of currencies you can trade on crypto platforms like Independent Reserve after all. But I probably wouldn’t worry about a little experimentation with Bitcoin. Though Ron Paul has something to clarify regarding his position on Bitcoin:

One time somebody quoted me in the media saying ‘I believe that Bitcoin was going to destroy the dollar’ and that’s not quite my position. But the Bitcoin could be a participant in a process where the dollar destroys itself…or that is the Federal Reserve policy destroys the dollar. Then people have to leave the dollar and go into something else.

Ron Paul went on to say that he believes Bitcoin (along with any other medium of exchange) should be legal currency for those who wish to accept it as such but wondered out loud why the government hasn’t cracked down on Bitcoin in a significant way.

The reason I’m hesitant to say ‘Hey, this Bitcoin sounds like the answer’ is that it’s hard for anybody who knows a lot more about Bitcoins than I do to tell me what it really is. If I had to, and you had never heard of gold as money I could show you a gold coin and you could put it in your hand and you could feel it and then we could look at some history. That’s not the case with Bitcoin.

[…]

But right now the Fed hasn’t come down hard on Bitcoin so you wonder what’s going on. Why haven’t they? Because I am absolutely convinced that the federal government and our central bank does not permit, will not permit competition in currencies. They’re not going to let you and I mint some gold coins and put them out in circulation. You can go to jail for that. […] It must not seem at the moment to be a threat to the Federal Reserve and to our system.

Paul also expressed some doubts that Bitcoin could become a preferred medium of exchange with a crash of the dollar:

This is why Bitcoin is around is to offer an alternative [to a weak dollar]. […] I’m a skeptic on that but I certainly think it’s fascinating. I try to keep up with it the best I can but I would feel much better having some gold coins in my pocket than a little computer that I can carry around and recover my Bitcoin. I wouldn’t feel very secure doing that.

However one feels about Bitcoin, I think it’s important that Ron Paul’s views on the subject be reported accurately. I’m personally intrigued by Bitcoin and hope it turns out to be everything its supporters hope but I do think some skepticism is warranted (for the reasons Paul gave and more).

Stephen Littau
http://fpffressminds.blogspot.com/

Don’t you wish YOUR job had raises like this?

Economics, Government Incompetence, Government Waste, Politics

This whole government “shutdown” thing has brought out a lot of talk about federal pay.

A liberal of my acquaintance posted something on facebook a couple days ago:

“A Republican I know said, ‘If you got furloughed because of the shut down, maybe you should get a real job.’
Yeah… about that…”

‘pon which he linked to a story about the cops, border patrol agents, etc… who were not being paid while protecting congress, and our country.

It’s a good point. There are plenty of people doing real, important jobs, who are not being paid… Some of them have gone home, but a LOT of them… actually about 2/3 of the federal non-military workforce, hasn’t. They’re still doing their jobs, they just aren’t getting paid for them.

I don’t have a problem with good people doing as best they can at their job…

The problem I have is… there’s too damn many of them… And they are doing too many things, that they don’t need to be, or shouldn’t be doing.

So, I said something which I think is fairly well known in libertarian circles:

“A good friend of mine is a border guard with ICE… yeah, he’s got a real job.

That said, there IS a point when the most liberal liberal in America has to think ‘why in the hell do we have 50% more federal government payroll than 1998… we’re not getting more than we got then… at least not more good useful stuff….’ That’s just non-military federal staff payroll by the by, not any other spending…”

His commenters didn’t believe me, or just said inflation or homeland security etc…

I clarified, no, federal non-military payroll; meaning the total compensation (wages/ salaries, non-cash compensation and benefits) of full time permanent non-military federal workers, has increased, by at least 50%, in constant dollar terms, from 1998 to today.

Oh and homeland security is only a fairly small portion of that increase (Only 9% of the federal workforce, though it is the single largest federal agency – excluding the civilian employees of the military and veterans affairs – in terms of manpower).

To which he said, quite reasonably “Would you care to source that?“.

Gladly sir….

Congressional Reporting Service report on trends in the federal workforce:

http://assets.opencrs.com/rpts/RL34685_20110419.pdf

Congressional Reporting Service report on average wages etc… in the federal workforce:

http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1702&context=key_workplace

Several other primary sources in the footnotes of this article, notably from the Bureau of Economic Analysis:

http://www.downsizinggovernment.org/overpaid-federal-workers

So… let’s break it down shall we?

The CRS reports there was a 17%… actually 16.7% increase in the federal workforce between 2000 and 2010.

I don’t have the numbers from 1998, 1999, 2011, 2012, or 2013, but other sources indicate that it’s probably not much, because there were hiring freezes and reductions that make it pretty much a wash. 17% is probably good for 1998 to 2013.

So, a 17% increase in non-military federal staff from appx. 1.8 million to appx. 2.1 million (excluding the civilian employees of the Army, Navy, Air Force, and Veterans Affairs; currently about 900,000).

Oh and it’s important to note that these numbers do not include contractors. Contractors compensation does not count against federal payroll, and they are not counted as federal workers… which is one of the major reasons there are so many of them…

How many?

In 1998 there were approximately 1.8 million federal workers, and only 6.5 million contractors.

Well, as of 2013, there are appx 2.1 or million federal non-military workers… and appx 17 million contractors.

Contractor compensation DWARFS the federal payroll. It’s well over 20 times federal payroll in fact… though we really have no exact idea how much, because it’s buried in hundreds… or possibly thousands… of different budgets, and literally millions of line items (many of which are gray, or black).

So, let’s talk money…

First, let’s talk about total compensation.

Total compensation includes both wages and other cash compensation, and non-cash compensation such as benefits.

Bureau of Economic Analysis reported average total compensation for federal employees went from appx. $67k in 2000 to appx. $115k in 2012.

In constant dollar (that is, adjusted for inflation) terms that is a 29% raise.

Oh but that’s just from 2000-2012 I don’t have the exact numbers here from BEA for ’98,’99, and 2013…

Purely from a trendline analysis, you see a 2.15% annual average constant dollar compensation increase. Extend the trendline from 1998 to 2013, and instead of 29% it’s about 38%.

A 17% workforce increase and a 38% raise, is a 60% increase in total payroll…

Now… even if you just take cash compensation, BEA reports an increase from $56k to $82k; a constant dollar increase of 16%.

That’s much lower than the increase in total compensation, but still quite respectable… And remember, this is in constant dollar terms, so that’s over and above inflation and cost of living increases.

Again, thats 2000-2012. Extending the trendline from 1998 to 2013 and you get 21%.

21% raise times a 17% workforce increase, is a 41% total increase in constant dollar terms; for just cash compensation.

Now… those are BEA numbers, what about CRS numbers?

Hmm… I don’t have the exact numbers on total comp increases from those years… But I do have their percentages… in fact I have every percentage increase, and the inflation percentage, for every year since 1969…

Federal Average salary and wage increases year over year, 1999-2013 (1998 would reflect increases from 1997):

1999: 3.4% over inflation
2000: 2% over inflation
2001: 0.3% under inflation
2002: 0.4% under inflation
2003: 0.2% over inflation
2004: 2.0% over inflation
2005: 0.2% over inflation
2006: 1.4% over inflation
2007: 1.6% over inflation
2008: 1.8% under inflation
2009: 1.6% over inflation
2010: 1.9% over inflation
2011: 1.8% over inflation
2012: 1.8% over inflation
2013: 1.8% over inflation

Official numbers have not been released for 2011, 2012, and 2013; the 1.8% is from news reports and other websites stating that though federal salaries have been in a base rate freeze, the average salary has increased 1.8% over inflation in each of the last 3 years. This is consistent with previous increases.

So, from purely federal internal sources, we have an average wage/salary only, increase of 24.8%. Times a workforce increase of 16.7% (also from the CRS), we have a 45.6% increase.

So… there’s the CRS’s own estimate, of average wage and salary alone.

Unfortunately, the CRS doesn’t estimate total compensation, but if we assume the BEA numbers are reliable, non-cash compensation has increased from appx 22% of cash compensation in 1998 to approximately 40% of cash compensation in 2012.

This estimate is not out of line with other trends and percentages well known in HR (noncash compensation, particularly benefit costs, have doubled or more in the last 15 years)… so I think it’s a good and reasonable approximation.

Oh… might be useful to summarize here.

I’ve got two different sets of numbers, which are different enough to be noticeable, but not enough to completely contradict each other.

Note: The difference between the BEA and CRS may include slight differences in the way they calculate compensation; and they definitely include differences in the way inflation is calculated. The BEA numbers used BLS inflation adjustment. CRS uses CPI based inflation adjustment (CPI is a component of the BLS inflation adjustment, but there are other elements included as well).

Workforce increase 16.7%

BEA: cash compensation increase 21% total comp increase 38%
CRS: cash compensation increase 24.8% total comp increase 42.8%

Total payroll increase cash/comp

BEA: 41%/61%
CRS: 46%/66%

So… no matter which numbers you believe, total comp increase is WELL over 50% in 15 years, and according to the CRS cash comp is up nearly 50%; and the lowest estimate is 41%…

Over and above inflation…

Yeah… don’t you wish your job had raises like that?

Oh and one more thing…

From the late 1960s, through the 80s and into the early 90s, federal workers as a whole were actually paid quite poorly, as compared to comparable private sector jobs. Their wage scales were originally set at bottom of market to begin with (generally though of as a tradeoff for their better job security and benefits), and the unusually high inflation from 1968 to 1984 had private sector wages rapidly increasing, while federal cost of living adjustments were significantly under the rate of inflation.

This left a population of workers who were dramatically underpaid in comparison to the private sector, all the way through the early 1990s.

Many still are. Those in the bottom 2/3 of the federal pay scale are generally still significantly UNDERPAID, not overpaid as compared to private sector; sometimes dramatically so (permanent non-contractor federal IT staff make less than half industry comparable salary for example).

Those in the top 1/3 though make quite a lot more than comparable private sector jobs.

…Well, that is, until you get to the “senior executive” level, where, once again, they make 1/2 or less what they would in the private sector ($190k a year is the top out. Private sector workers at those levels of education, experience, responsibility etc… typically make anywhere from $200k to over a million, with $400k+ not uncommon).

It is only from the mid 90s that the federal payroll, and specifically average pay (skewed by the top 1/3), began to dramatically outpace private sector pay.

The bottom 2/3 of the federal workforce didn’t get very much of that increase.

The top 1/3 of the federal workforce got much larger increases.

Also, there are far more workers in the top 1/3 of the pay scale than there were in 1998. Far more making more than $100k a year, and far more making more than $150k a year.

The middle 1/3 shrank significantly.

So there’s more low end, more high end, and less middle…

Not exactly shocking…

Chris Byrne
I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

http://anarchangel.blogspot.com

It isn’t, wasn’t, aint ever gonna be…

Corruption, Dumbasses and Authoritarians, Economics, Fiscal Policy, Government Incompetence, Government Regulation, History, Know Your Rights, Legal, Politics, Supreme Court, Taxation

I mentioned Social Security as an entitlement payment in my post on the government shutdown, and it raised a fairly common objection in several who read it:

They don’t think of Social Security as an entitlement, or a welfare payment; they view it as their right, by virtue of having contributed to the system for their entire working life.

So, time to correct a very major, and unfortunately common, misconception.

Social Security, is NOT a pension, nor is it insurance.

Now, I realize that the majority of the American public believe this is so, because they have been deliberately defrauded by our government…

First read this to understand the scope and scale of the fraud, and the problem it (now only vestigially) masks:

The Greatest Fraud in the History of the Human Race

Ok… so, by now, most people understand that Social Security, as it is, is essentially a legal Ponzi scheme (whether they accept that, or admit it… if they can do basic match, they at least understand it).

What I really didn’t fully appreciate until recently, is that often, even people who understand this is true, don’t understand why or how it got that way.

There is a very common misconception, even among otherwise economically, historically, and legally well informed and educated people, that the current state of Social Security is somehow a twisting of what it was intended to be, or taking advantage of loopholes etc…

Many people believe that Social Security was set up to be an annuity based insurance and pension plan. That paying FICA contributions was supposed to buy you into a long term annuity, or investment plan, and that your Social Security payments were intended to be the product of that investment.

They think that the “trust fund” exists, and was set up to collect and invest the contributions of the workers who paid into it, so that the investments would fund the workers retirements.

They believe that the problem with Social Security is that congress has been raiding the trust fund since 1958 (most don’t know it was since ’58, but they are sure that’s why Social Security is broke).

Unfortunately, every bit of this idea is entirely incorrect… and people who hold that idea generally do so, because they were deliberately misled.

I’s simply not true… though many… perhaps most… people believe it is; but in fact, Social Security was always nothing more than a pyramid scheme, and an entitlement.

They misunderstand entirely… Because they have been deliberately deceived; as has been the majority of the population.

Social Security was NEVER, EVER, an annuity, pension, or insurance.

Actual insurance, annuities, pensions etc… were not part of the legislation that created it, or anything thereafter.

Also, there never was an actual “trust fund” as such… simply an accounting of surplus contributions which were, in theory, to be placed into low yield “no risk” treasury bonds.

Note, I said “surplus contributions”… this means contributions in excess of payouts to existing recipients. Because benefit payments are not made from the proceeds of investment, they are made using the payroll taxes of those currently paying in today (this is why we call Social Security a ponzi scheme… When Bernie Madoff does it, it’s fraud and he goes to jail. When the government does it, it’s… well it’s still fraud, even worse fraud… but no-one goes to jail sadly).

The sham of it, particularly the sham of the accounting trick they called the “trust fund” was publicly proclaimed as early as 1936 (by Alf Landon in his presidential campaign).

Social Security is, and always has been, a tax and entitlement distribution scheme.

The government lied, and called it insurance, but in fact it has never been anything other than a payments and distributions pool, funded by taxes.

You can look it up, in 42usc (the section of U.S. code defining the various programs known as Social Security).

The programs collectively known as Social Security are referred to as insurance several times, but in fact they very clearly are not. The legal definitions and descriptions make this very clear. Social Security is a tax and entitlement disbursement scheme, by act of congress.

There is no individual ownership, no accrued value, no capital gain, it cannot be transferred, and it can be changed (or removed), at will, by congress; without being construed as a taking without due process.

It is NOT INSURANCE.

Perhaps I am not explaining this properly…

It’s not that congress went against the intent, or written provisions of the law, and changed Social Security from what it was supposed to be, to what it is…

It’s that in fact, the law was NEVER what they told the American people it was.

In fact, if the law HAD been what they sold it as, then that law would have been declared unconstitutional by the supreme court (as had the earlier railroad pensions act, which actually DID created a property based pension scheme). It was specifically because it WAS a tax and distribution, that congress had the power to do it; and was argued thus before the court in 1937.

Helvering v. Davis clearly defines Social Security “Contributions” as a tax, and social security “benefits” as welfare payments. This is the basis for it’s constitutionality.

Fleming v. Nestor in 1960, reaffirmed that FICA is a tax, and that the “contributions” are government property, to be done with as the government sees fit; and that “contribution” through FICA did not cause one to accrue a property right to any asset, pension, or insurance scheme, nor did it create a contract consideration, right, or obligation on the part of the government. Further, it affirmed that “benefits” were NOT insurance or pension disbursements, but entitlements by act of congress, and that congress could change them at any time in any way they chose, without being construed as a taking under the 5th amendment (though they did say that they must have cause and due process to do so… but any legitimate cause within their purview would do).

Justices Black and Reich, specifically dissented from the majority opinion, explicitly and expressly addressing the issue of property rights. They believed that such contributions, to such a program, SHOULD as a matter of moral and public good, be considered property, and have property rights attached. They acknowledged however that the law as written did not, and that by strict interpretation the majority was correct… They just thought it was better to make it property anyway.

Unfortunately, it’s not… It is neither a pension or insurance, and never has been, from the very beginning.

However, almost every explanation ever given the public, and in most documentation, it is referred to as insurance, or even a pension.

All as part of the greatest fraud in the history of the human race.

Chris Byrne
I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

http://anarchangel.blogspot.com
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