Big Government Has Become Self-Aware

In the fantastic Sci-Fi thriller series The Terminator, Skynet, the massive super computer that controls much of the functioning of the world becomes self-aware.  And as it becomes self aware – it then begins creating robots and weapons to defend itself and take over the world.  This is much akin to where we are today with an expanding federal government.  It exists for end in itself, beyond the means of even a President to truly control it.

 The recent scandals with the IRS and the Justice Department compel me to come back to the Politalk forum.  I only hope someone is listening and we have not abandoned this venue for too long.

We are experiencing the direct symptoms of government power run amuck and unchecked.  The biggest mistake that could be made is somehow laying the blame at the feet of the current administration.  This trivializes and will dismiss what has happened.  While all executive teams must take responsibility for the actions of their subordinates, the unbridled power wielded by government agencies has been building since the flawed decisions of the 1930’s to have government – not law – be the arbiter of our economic health.  When the slippery slope was crossed that our government had a role in architecting the economy with a goal of full employment and consumption for all – when the idea that equal outcomes became more important than equal opportunity took hold – the role of government changed from that of referee, to one of puppet-master.  Just about every President has perpetuated this idea since FDR, Republican or Democrat.

And beyond central economic planning – we have come to accept government interference/control in all parts of our lives.  Today we found out that Verizon has essential given access to the NSA of every American’s phone records on an as needed basis.  There are those (Libertarians) who would have us live in a world without regulation – this is not practical.  And that’s coming from one who considers himself Libertarian. But it’s also not wise or practical to passively surrender our liberty for the promise that government will fix it if it goes bad.

Instead of using the IRS scandal to bash the Obama administration (a lame duck administration no less) why don’t both sides of the aisle use this to demonstrate the need for substantial tax reform and an overhaul of the IRS to get it down to the size of an agency needed to administer basic flat and/or consumption based taxes that need no more than a single page form to file?

 This would achieve

1.     A more competitive international business climate for US based firms

2.     Increased tax revenue due to increased compliance of an easy to use filing scheme

3.     Dramatically reduce the size and cost of tax compliance for the IRS itself (downsize the org) and reduced cost of compliance for American businesses

When there are no loopholes or tax incentives, it does not take a team of 500 lawyers for Apple to submit their taxes.  That means more profit for Apple AND more taxes in the Treasury coffers.  If that’s not a win-win, I don’t know what is.  Calculate your profit/income, give us 25%, write a check.  No loopholes, no deductions, no subsidies.  Same for individual taxes.

Is there anyone who could really oppose a tax system free of loopholes where you pay a simple flat rate based on a reasonable progressive system?   Is there anyone who could oppose an IRS, which is half the size and still effectively administers tax policy in an un-bias manner?

Big Government has become self- aware…..

Signed – John Connor

Unlimited Power to Tax Upheld by SCOTUS

While I’m a little shocked and disappointed today at the decision on the Affordable Care Act, I have to support Justice Roberts reasoning. “The Federal government does not have the right to compel someone to purchase health insurance. The Federal government does have the constitutional right to tax someone who does not have health insurance”

So really – the mandate was struck down – but the unfettered right to tax was upheld.  The government has a right to target a category of citizens – those who do not have health insurance – and tax them.

So that’s our new starting point.  Obamacare is a tax bill with lots of other good healthcare stuff.

But what of the Medicaid issue?  The bill promised to add 17 million Americans to the ranks of Medicaid who previously had no health insurance.  In fact – this was pretty much the main goal.  The ruling on this provision has the potential of gutting the entire law.  SCOTUS ruled that the federal government cannot compel states to add additional people to Medicaid by threatening to pull all Medicaid funding if they do not comply.

From Justice Roberts. “Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”

This means that state’s are under no obligation to add these 17M people to Medicaid.  Since ACA provisions provide funding for this for 5 years, why would a Governor sign up to put hundreds of thousand of people into Medicaid knowing that he/she only had 5 years of funding?  After that – the state would be totally responsible for funding this Medicaid expansion. 

I know 26 states who will be refusing to implement a key provision of ACA with no fear of penalty. 

What will happen when these 17M people realize they are not guaranteed healthcare under this act? 

I don’t think this has sunk in yet…..

Guest Blogger Jeff

Republicans and Democrats don’t get Wisconsin….and why we still need a third party who does

The spin is entirely predictable…

Republicans – Obama is on the ropes and Wisconsin rejected big bad labor unions.

Democrats – Wisconsin voted against recalls not against unions, and BTW you outspent us 7 to 1 – thank you militant right wing supreme court.

Both takes are wrong.  Best analysis I’ve seen of the election was from – yes another one of my go-to Libertarian media outlets.  See the article here.

The net.  Voters are smart and practical.  They’ve realized – its the math stupid.  We are out of money.  Voters in Wisconsin said its completely OK for public union members to pay for their own benefits – what a radical stance!!!!  They said its OK to look at adjusting the playing field which gives unions the ability to leverage taxpayer dollars to vote out politicians that that don’t give them huge contracts.  Go figure – Wisconsin voters and FDR have something in common – they both fear the corrupting power of public sector unions.

For years I’ve been saying all voters want is for someone to tell them the tough truth about our finances.  Scott Walker told the truth and in the process became the only governor to ever survive a recall election.

And in case you missed it, San Diego and San Jose voted to curb public sector benefits as well.  So California and the state famous for having open socialists preside over a major city (several Milwaukee mayors were real genuine socialists) all voted to curb the power and benefits of public sector union.  Not because they hate teachers, puppies and the poor.  But because it made perfectly logical financial sense.

There is hope….

Guest Blogger Jeff

Moral to the Story… When the Lights Go Out, Keep Them Out

On Tuesday, March 13th, 2012, I was driving into Boston to attend an event at a venue on Boylston Street. On the way in, you could see smoke bellowing from the south end of Back Bay, which is a part of Boston. At the event, the lights went out and we were told that the venue needed to shut down due to lack of power. What I didn’t know until I got outside was that the power was out as far as the eye could see. The smoke on the way in was a power sub-station in the Back Bay that was on fire. The fire took out the sub-station and resulted in a major portion of the Boston power grid to go down with it.

Fast forward to today. I had lunch at one of my favorite family-run restaurants in Boston. It is called Moby Dick House of Boston.

The owner and head chef at Moby Dick is Moti. Moti brought her family to America from Iran to pursue the freedoms that far too many of us take for granted. Moti played by the rules and always has. She came over and became part of this country legally and quickly found that making ends meet with a young family is not so easy. Some friends encouraged her to open a restaurant because her cooking was so good. As a single mother, this was not going to be an easy task. However, she decided to take the risk and opened Moby Dick. The name was based on a popular restaurant in Tehran that Moti’s family went to when she was a child. Twenty four years later, Moby Dick has become a staple in Boston for amazing home cooked Persian dishes. Moti still cooks six days a week.

One of the reasons why I go to Moby Dick is that the food is made with love. Moti greets me with a smile and I leave the rest to her. She decides on  which special I should have and she never misses. They are all amazing.

Today, something was off with Moti. She was distraught. When I asked her what was wrong, she teared up and shared a story that moved me to want to take some action. Moti told me that the power outage affected her restaurant and they had to close down. The power was down and the Boston Health Inspectors as they should, came to all the local food outlets and made them throw away any perishable foods. Moti complied before she was asked to and had to throw away thousands of dollars of food (she mentioned $15,000).

Moti has been paying for the mandated insurance for her restaurant for 24 years. She said that she has payed over $240,000 in premiums over this time and never made a claim.

Her insurance company, Travelers (and you should Tweet them if you don’t like this), has denied her claim because she opened before a seemingly arbitrary 72 hour window. Moti, playing by the rules opened her restaurant as soon as she could when the power came back on. As I mentioned, Moby Dick is a staple of that neighborhood with local residents and students. In opening hours before the 72 hour arbitrary insurance window, her Traveller’s Insurance agent says that she cannot make the claim.

She also called NStar (the power company responsible for the outage) with no luck on getting any  kind of support. Moti also mentioned that a neighboring restaurant purposely waited and stayed closed for the entire 72 hours. Apparently they knew something that Moti didn’t and they were able to make the claim.

There is something wrong in Boston when a local business plays by the rules and ultimately is penalized for this. If you agree with this, please join me in making some noise to help Moti get the respect that she has surely earned to get a resolution to this issue.

Taking the money out of politics…

Dylan Ratigan says what many people have been feeling about both political parties.

Do you agree? What are the steps forward?

Reflections on Election Day 2011 in NYC

Election day in NYC normally means hordes of people filing in to PS-XYZ  to take part in the machine of Democracy before they scurry off to work.  Every coffee shop near the polling place is normally packed with people grabbing a quick dose of caffeine before waiting in line or heading off to the train.  Supporters of each candidate strategically place themselves handing out leaflets within inches of the designated imaginary barrier they cannot cross.

Today – ghost town.

At 9:15 when I walked into the public school my daughter attends to cast my vote, I walked up to the table to register.  I was voter #5 for my district.  Polls had been open since 6AM.  When I took my fancy new ballot to the scanner – I noticed the counter on the scanner as it electronically recorded my vote.

#19 – only 19 people had voted so far that day.

OK – so all NYC was voting on was judges and justices for the supreme court.  These are only people who actually do stuff every day, make decisions, and interpret laws.  Its not like they were legislators.

Kind of sad for me.  Now I know things will be different next year with the President, Congress, and Senate up for grabs again, but you would think that folks would care about the elected officials who wake up every day in their home towns, go to work, and make decisions that directly impact their communities.

We’ve become so disenfranchised with government that many don’t care anymore.  We send our best to fight and die for others to get the right to vote, then don’t bother showing up for our own.

Our democracy has become a direct reflection of our lack of faith in the system. Will we ever realize that we are getting exactly the system we deserve.

Here’s to both the Tea Party and Occupy Wall Street – may we take back Democracy.

Guest Blogger Jeff

Occupy Boston: The roots of peaceful protest

Video of interviews taken on September 30, 2011

On October 9. 2011, this picture-perfect Boston day, I took a walk over to a part of Boston called Dewey Square. On September 30, 2011, this little section of Boston located between the Federal Reserve Building and the Financial District became the home of a protest movement called Occupy Boston. This movement is associated but separate from the one in NYC known as Occupy Wall Street.

My only exposure to this movement was only through some press coverage in the Boston area. The interpretation that I was left with from the press is that these were a bunch of people that didn’t know how to organize of have a real agenda. I decided to find out for myself.

As you approach this meridian patch of land nestled between two main roads, it looks like the local EMS is having an outdoor tent sale. As you get closer the people come in focus, then the signs. It really is a hodgepodge of both people and messages on the signs. As I approached this urban campsite, there were spectators, “residents” and skateboarders in the mix. I was struck by hand made signs that adorned different tents. “Library”, “Sacred Space”, “Students” and of course an “Info” were the first tents I saw.

Once entering this dense collection of tents, I was struck by how organized it actually felt. There was a main path with tents and a swarm of meanderers on either side of me. I passed the food tent that was offering free food to anyone that asked. I then made my way to the “Media” tent and spoke to a few people there. It was amazing to see how connected this media tent was. Computers with social media publishing tools, some video being watched and some sound equipment accented the hum of organized chaos. You could feel the energy that people had. They were part of something bigger than themselves and they were all in!

I continued my own walkabout to discover a fair amount of young adults that dressed and smelled like many of the people that followed the Grateful Dead. While I never toured with the Grateful Dead, I did have my share of Grateful Dead experiences. However, there was one distinct smell that made it unlike a Grateful Dead show, or should I say the lack of one… pot. There was no Mary Jane adding to the experience here. Bravo for to the organizers for taking that out of the mix. Clearly some things have changed since the time of the Dead shows.

As I walked to the other entrance/exit of this mini tent city, I saw a motorcycle with a Ron Paul sticker. A young man who looked to be about 20 was holding a sign that said “End the Federal Reserve”. To be fair, he was clearly part of the Ron Paul folks there. You gotta love the Ron Paul movement, they leverage any opportunity to get their message across. Having not done a podcast with Jeff in over two months, I was itching for a good political debate. Now was my chance. End the Fed, I thought, putty in my hands.

I approached this young adult with a smile and a question “Why do you want to end the Federal Reserve?”. His answer was filled with passion, if not anything else. “Because they caused all the problems with this economy,” he said. I responded, “Can you give me an example of how they have caused this economic downturn?” Clearly struggling with an answer, he grabs his friend next to him and says, “This guy wants to know why we should end the Fed.” His friend laughs and says, “It’s all you man. You are holding that sign, not me.” While I was disappointed that I was not going to get my debate, it did emphasize something that struck me about the Occupy movement in general, they are a protest, not a solution.

This is where the press does the movement a dis-service. They are treated harshly because they don’t have a 50 pont plan to solve the economy. They are taken lightly that they can’t articulate the specific causes for the economic turmoil that we face. However, they don’t need to. At least not now. The movement needs only to maintain the vigil. This allows the conversation to be changed. It allows the conversation to not be about the wars. It need not be about how taxes can’t be raised under any condition. It IS about how people are hurting, how they are frustrated and how they feel left out of the American Dream.

I am one who prefers to debate the issues with facts and come to a conclusion on what direction we should go. This, however, is a peaceful protest that has social media savvy. As these disparate Occupy groups come together using the very social media tools that have a business model of high revenues and low numbers of employees, they also empower themselves with one of the most powerful and efficient ways to organize people and disseminate a message. If successful, these groups can tap into a generation that now finds itself in a world far less embracing than the virtual one they grew up with on XBox. If this generation mobilizes, it can have an unprecedented impact on both our political and economic environments. This could be the movement that dumps a different kind of TEA back into Boston Harbor.

Budget Control Act of 2011

It’s hard to not be cynical on this plan. Instead of putting my spin on this plan, it is now your turn. We have great thinkers who read this blog. Let’s here from you. Here is the .pdf legislative language (all 74 pages). Have a read, tell us who is the big loser politically is and give us your comments.

Check Please!

I’m at that time in my observations of what is happening in Washington DC where I just want to ask for the check and get out of this dysfunctional restaurant where the floor show and the food are both equally bad.

Last night, we saw more finger pointing. The President placed the blame on the Republicans for not wanting a balanced approach that includes cuts to spending and increase in revenues, yet earlier in the day he backed the Reid plan which contained no revenue increases.

But wait, The Speaker of the House spoke right after the President and had his own spin on things. Among other things, he claims that his plan is born out of the “bi-partisan” efforts in Congress. Well Mr. Speaker, if it were bi-partisan efforts, why can’t your plan pass the Senate? Five Democratic votes out of a total of 193 Democrats in the House does not make it a bi-partisan effort.

The sad thing is that both parties are not telling the American people the truth, the whole truth and nothing but the truth. The truth is that regardless of what happens over the next week, the US credit rating is going to go down. Why? Well, it’s not about the debt ceiling. It is about the debt and our inability to get control of it. The Democrats and Republicans talk a good game, but neither one are serious. They are both part of how we got here. They are two sides of the same coin. How else can we answer the following questions:

  • Is removing a loophole that was created by lobbyist efforts really a tax increase?
  • Does a tax system that allows a $200 billion company to pay no income tax make any sense?
  • Does a government that spends money in other countries building their infrastructure while our own is falling apart make sense?

However, the markets see this country for what it is… an over-spending entity, that does not invest in itself or its people. It is an entity that believes you can strangle your own bad habits by cutting revenue sources ’till it hurts. The result will not be a default. That is not what the markets are worried about. The result will be the belief that we cannot get our fiscal house in order. In fact that result is already there. The steady decline of the dollar was the early sign. We pay more for things now than we did last year even though demand is soft. The next step will be the lowering of our credit rating which will trigger higher interest rates for the US to borrow. This will have a domino effect on other interest rates that are tied to government rates. The average consumer will see a steady increase in some of the rates they are paying. This begins a spiral effect that is tough in a good economy and could prove to be devastating in our current sluggish economy.

Remember this at the next election. It’s time to vote out the immature kids who can’t play nice. It’s time we vote in some adults who can bring in not the “Change we can believe”, but deliver on the “Change that we need”… fiscal discipline on all fronts.

The Constitutionality of the McConnell Debt Ceiling Plan

Isn’t it odd that the in the House of Representatives, the Republicans added a rule to read parts of the Constitution that justifies any new bill while the Senate Republicans want to defy the Constitution? Senator Mitch McConnell wants to allow the President to propose an increase to the debt limit in which Congress will vote on its “approval”. Unlike a bill that would come out of Congress and allow the President to sign it and therefore become law, the McConnell plan allows the President to veto a Congressional vote that is not in favor of an approval or “Disapproves” the proposal. According to the McConnell plan, this veto would then allow the president on his own power to raise the debt ceiling.

This is wrong on multiple levels. Politically, it is cowardly to see the desire to on one hand allow the debt ceiling to be raised, but on the other hand have a majority vote against it for political cover. Politics, however, has not always been the most noble profession and this is no exception. The big problem is with the Constitutionality of this this move. The framers of the Constitution were very clear about which branch has the ability to raise debt.  It is spelled out in Article I, Section 8, of the Constitution that the branch with such power is the Legislature:

Powers of Congress
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;

The McConnell Plan would transfer this power, albeit with a time limit, to the Executive Branch by enabling the President to usurp Legislative power and rule of law with the use of a Veto. The Constitution is very clear about putting the purse strings of the United States in the hands of the Legislature.  They understood that the body to authorize spending must be separate from the body that actually spends. The concentration of both authorizing and spending power in one person’s hands is too great.

James Madison warned of this in The Federalist Papers #47. He wrote:

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny. Were the federal Constitution, therefore, really chargeable with the accumulation of power, or with a mixture of powers, having a dangerous tendency to such an accumulation, no further arguments would be necessary to inspire a universal reprobation of the system.

Madison warns us of placing powers in the hands of one branch that are not subject to the checks and balances of the others. Congress should not be able to circumvent the Constitution and cede power to the President (even if they wish to). It is odd that the very party that wants to see the President ousted from office in the next election is so willing to hand over their own power to the very same President.

Our only hope, if this plan becomes law, is that the Supreme Court in short order declares this plan to be un-Constitutional. However, that in and of itself creates a domino effect of issues surrounding any of the debt related activities that the President under the plan.

Section 4 of the 14th Amendment to the Constitution states:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

If the Supreme Court were to rule on the plan as un-Constitutional, what would happen to any debts taken under that plan? Is there a Constitutional crisis when two sections of the Constitution would conflict?

Given the limited time before the United States has to raise the debt ceiling and the Constitutional issues with the McConnell plan, I have to question the judgement of the very people considering it on both sides.