A Stitch in Haste

Supreme Court Chips Away at McCain-Feingold

Kip — 2008-06-27T17:06+00:00

"Different candidates have different strengths. Some are wealthy; others have wealthy supporters who are willing to make large contributions. Some are celebrities; some have the benefit of a well-known family name. Leveling electoral opportunities means making and implementing judgments about which strengths should be permitted to contribute to the outcome of an election. The Constitution, however, confers upon voters, not Congress, the power to choose the Members of the House of Representatives, and it is a dangerous business for Congress to use the election laws to influence the voters' choices."
--Davis v. Federal Election Commission

They weren't only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.
--Kurt Vonnegut, "Harrison Bergeron" (1961)

To review: The Supreme Court, in its schizophrenic campaign finance decision Buckley v. Valeo, 424 U.S. 1 (1976), held that it is constitutionally protected speech to spend money to get yourself elected to public office, but not to get someone else elected to that same public office. So, for example, Michael Bloomberg was able to spend $70 million to run for re-election as mayor of New York, but I was barred by law from donating 0.1% of that to his opponent's campaign.

This created a pesky problem for incumbent politicians: rich people might actually spend money to run against them. Unacceptable. So they enacted, in a patently self-serving maneuver, an exemption from the Bipartisan Campaign Reform Act (BCRA), a/k/a "McCain-Feingold." This exemption, generally called the "Millionaire's Amendment," allowed candidates to exceed McCain-Feingold's limits if their opponents (who, recall from Buckley, can always spend as much of their own money as they want) spent beyond a certain amount.

(My understanding, incidentally, is that the Millionaire's Amendment was forced upon John McCain as a take-it-or-leave-it ultimatum in order to secure enough votes to pass BCRA in the first place.)

Fast-forward to yesterday. The Supreme Court quite rightly struck down the Millionaire's Amendment as a violation of the First Amendment:

We have never upheld the constitutionality of a law that imposes different contribution limits for candidates who are competing against each other, and we agree with Davis that this scheme impermissibly burdens his First Amendment right to spend his own money for campaign speech.
...
While BCRA does not impose a cap on a candidate's expenditure of personal funds, it imposes an unprecedented penalty on any candidate who robustly exercises that First Amendment right. ... [A] candidate who wishes to exercise that right has two choices: abide by a limit on personal expenditures or endure the burden that is placed on that right by the activation of a scheme of discriminatory contribution limits.

In other words, there is no functional difference between forbidding you from spending your own money and "merely" penalizing you for it. Since the government cannot engage in the former, it ought not be able to engage in the latter. Hardly a controversial syllogism.

Meanwhile, since "campaign finance" jurisprudence is First Amendment jurisprudence, strict scrutiny applies: Is the restriction necessary to achieve a compelling government interest? Justice Alito holds no punches:

The burden imposed by §319(a) on the expenditure of personal funds is not justified by any governmental interest in eliminating corruption or the perception of corruption. The Buckley Court reasoned that reliance on personal funds reduces the threat of corruption, and therefore §319(a), by discouraging use of personal funds, disserves the anticorruption interest. [Bold added; underline in original.]

The Court also rejected "leveling the playing field" (i.e., restricting speech to equalize it) as a legitimate government interest. The Court saw the Millionaire's Amendment for what it was: Naked, brazen incumbent entrenchment.

There is a downside to the decision, however:

The advantage that wealthy candidates now enjoy and that §319(a) seeks to reduce is an advantage that flows directly from Buckley's disparate treatment of expenditures and contributions. If that approach is sound — and the Government does not urge us to hold otherwise — it is hard to see how undoing the consequences of that decision can be viewed as a compelling interest.

Translation: There appears to be no interest on the Court — or at least an insufficient number of votes — to revisit Buckley outright. That's unfortunate. (Justice Stevens, meanwhile, would resolve Buckley's schizophrenic holding by going in the "Harrison Bergeron" direction and allowing the government to restrict self-funded campaigns equally with contribution-funded campaigns — i.e., no First Amendment for anyone.)

(The Court also struck down a disclosure requirement associated with the Millionaire's Amendment on similar reasoning.)

The case is Davis v. Federal Election Commission, No. 07–320 (June 26, 2008) (PDF - 39 pages). The Millionaire's Amendment appears as an appendix in the decision. Note that Buckley v. Valeo is on my list of "Worst Supreme Court Cases."

---

Every campaign finance case is opportunity for libertarians to "stand above it all" and sigh with disappointment (disgust?). All sides in the debate seem to agree on one thing: The whole point of the exercise is to combat corruption in politics. Fair enough, and noble enough.

But it is the libertarians, and only the libertarians, who ask the precedent question of why we have so much corruption in politics. The answer is simple: Because government does so much that invites corruption, that caters to corruption and that perpetuates corruption. Things that have nothing to do with the core functions of government — the functions that the Framers did, and most people today do, associate with a free society. Things that are explicitly designed to benefit, not everyone equally or equitably, but some at the expense of others. From earmarks to tax breaks, from nanny statism to nanny subsidies, from oil wells to oil wars.

If the politicians didn't do so much that they were never meant to do, then no one would try to buy them. That would be the best "campaign finance reform" of all.

Blue State ... Red State ...

Kip — 2008-06-26T00:06+00:00

... Infra-Red State!

U.S. Rep. Chris Cannon, one of the nation's most conservative congressmen, lost his bid for a seventh term Tuesday in a Republican primary that focused on whether he was conservative enough for Utah's 3rd District.
...
The lobbying group American Conservative Union said Cannon was nearly perfect on its issues in 2007, scoring 96 percent. But [Jason] Chaffetz repeatedly pounded the incumbent, especially on immigration, and pledged to be even more conservative.

His opponent ran -- and won -- on a platform of promising to violate the Constitution:

Chaffetz said he wants the U.S. to deport all illegal immigrants and stop granting automatic citizenship to children born here if their parents aren't legal residents.

As I noted here and here, the notion that Section 1 of the Fourteenth Amendment has somehow been "misread" for over one hundred years, and that the children of illegal immigrants born on United States soil are in fact not automatically citizens, is so facially absurd that one is entitled to simply presume disingenuousness by its proponents.

But when scapegoating some subset of The Others Who Are Destroying America™, disingenuousness is good. Disingenuousness works.

And it seems to work best of all in Utah (cf., here).

More thoughts at Crossed Pond.

New York: Bruno's Replacement "Not on Record" Regarding Gay Marriage

Kip — 2008-06-24T16:06+00:00

His name is Dean G. Skelos, he represents Rockville Center, a relatively upscale Long Island community (Bruno represented Brunswick, in the very conservative upstate capitol district).

Three data points:

1. This site, the reliability of which is unclear, lists Skelos as "not on record" regarding same-sex marriage.

2. He did, however, vote against a gay civil rights bill in 2002.

3. On the other hand, he was a leading sponsor of a recent bill to make noose displays a hate crime: "There is no place for racism and intimidation in America."

In any case, my earlier observation is unchanged: Even assuming that the Republicans maintain their wafer-thin majority in the State Senate, Skelos would be entering the triumvirate from a position of weakness, and with a far different set of priorities. If Governor Paterson and Speaker Silver press the issue, it is hard not to see Skelos capitulating on allowing a vote on gay marriage -- which would very likely pass.

Stay tuned...

Obama Flip-Flopped About the Campaign?

Kip — 2008-06-21T17:06+00:00

(Why are you reading this post here and not at the new site?)

---

Don't you mean, "Obama flip-flopped about the campaign ... again?"

Please, everyone, don't embarrass yourself by acting surprised.

And also don't embarrass yourself by pretending that McCain is any better.

(Comment on this post at the new site.)

Questions — Special “Obama Donut Hole” Edition

Kip — 2008-06-16T21:06+00:00

Barack Obama has, as was widely expected, introduced a proposal to lift the cap on wages subject to Social Security tax, but with an exemption — often referred to as a "donut hole," for wages between the current cap (set for now at $102,000) and $250,000 (i.e., anyone making less than $250,000 per year would see no increase in their Social Security taxes from the Obama proposal).

The details from the Obama campaign are sketchy at best. Many questions have yet to be addressed:

--Will Obama openly credit and praise Republican Senator Lindsey Graham, an outspoken supporter and defender of John McCain, for first conceiving the "Donut Hole" approach to raising Social Security taxes?

--Will the upper bound of the donut hole, initially to be set at $250,000, be automatically increased each year in the same way that the lower bound (i.e., the current wage cap framework) is automatically increased, or will the donut hole compress over time and eventually vanish?

--Will the additional taxes paid by those earning above the donut hole earn them additional Social Security benefits upon retirement? If so, then how does it really fix anything? If not, then what is the moral justification for it?

--Stated differently, does Obama consider Social Security to be a form of "forced retirement saving" or simply another form of progressive income redistribution with an intergenerational overlay?

--Will employers be expected to go through the hassle of performing the complicated payroll arithmetic required by the donut hole, or will they be allowed to simply assess FICA taxes on an employee's entire paycheck, with the employee then reclaiming the assessed donut hole taxes, after the fact, on her federal income tax return?

--Since the Social Security "trust fund" contains no true assets and is merely a promise by the federal government to raise either taxes or the budget deficit beginning on or around 2017, which does Obama prefer from a policy perspective, and why?

--According to this analysis (summarized nicely here), over 85% of the taxpayers who would be subject to the new, higher taxes are concentrated in ten states. Does Obama consider this wise from an economic perspective? Does he consider it fair and proper from a moral perspective?

--Additionally, the eight states with the highest concentration of affected taxpayers are generally considered "Democratic" (e.g., New York, New Jersey and Illinois). Did Obama consult with the senators and representatives of those disproportionately affected states — especially senior Democrats such as Chuck Schumer, Frank Lautenberg, Charlie Rangel, his Illinois colleague Dick Durbin (or, ahem, Hillary Clinton) — before announcing his plan?

--If Obama considers what could be one of the largest tax increases in American history to be "paying a little bit more" — then what pray tell would he consider to be "paying a lot more"?

The Supreme Court and the Dueling Senators

Kip — 2008-06-14T15:06+00:00

If you didn't already know (and you probably do), would you be able to match the senator with the quote?

One recent quote:

It is one of the worst decisions in the history of this country. Our first obligation is the safety and security of this nation and the men and women who defend it. This decision will harm our ability to do that. ... I argue against it and will do what I can to at least narrow down some of the wide open aspects of this Supreme Court decision.

Another recent quote:

Congress has passed laws to protect Americans in these areas, but in case after case, the Supreme Court has ignored the intent of Congress in passing these measures, oftentimes turning these laws on their heads[.]

One quote was of course from Republican John McCain prattling about that pesky Suspension Clause; the other was from Democrat Pat Leahy prattling about that pesky Supremacy Clause.

And both were, of course, also prattling about those pesky "judicial activists" on the Supreme Court.

Consistent, Constitution-respecting, freedom-celebrating jurisprudence is non-partisan. Inconsistent, Constitution-trampling, freedom-infringing jurisprudence is bipartisan. Note the subtle, but all-important, distinction: "Non-partisan" is not the same as "bipartisan."

The only reality-based definition of "activist judge" is "a judge who disagrees with me." It's also the most mockworthy definition.

"I Know It When I See It" Quote of the Day

Kip — 2008-06-14T02:06+00:00

"There are two Lady Godivas, two women on horses with no shirt on and long hair."
--Republican delegate Robert Hurt of Texas

Or maybe not:

Actually, they are classical sculptures about war — one called Valor, depicting a male equestrian and a female with a shield, and Sacrifice, a female accompanying the rider Mars.

The statutes — on the Arlington Memorial Bridge in Washington — are apparently of great concern to Mr. Hurt:

Of all the evils in Washington that the Texas GOP took aim at this week, removing art with naked people from public view was high on the list for Mr. Hurt, a delegate from Kerrville.
...
Mr. Hurt offered statistics: He'd heard that 20 percent of the art in the National Gallery of Art is of nudes.
...
Ridding Washington of naked art didn't make [the GOP platform].

Neither, apparently, did banning the Bible — which has far more sex (not to mention rape and incest) than the Arlington Memorial Bridge. Go figure.

So what did make it into the Republican platform?

In this, a presidential year, it advocates prayer in school[,] teaching intelligent design with evolution in science classes [and] calls homosexuality contrary to "the unchanging truths" ordained by God. It opposes gay marriage, civil unions and the custody of children by gays.

And John McCain will come riding in, like Valor atop his steed, to take up this proud conservative banner into political combat, right?

There's a call to repeal the McCain-Feingold campaign finance law, sponsored by the party's presidential nominee[.]

Ouch. Anyone know of any comparable divergence between the Democratic platform and Obama's record or stated agenda?

(Via Fark.)

---

A blast from the past:

Obligatory Vice-President-Picking Post

Kip — 2008-06-11T10:06+00:00

My down-in-the-dirt political prediction skills are not particularly good. Just ask Homeland Security Secretary Giuliani. My comparative advantage lies elsewhere.

Still, here are my hasty stitches on the vice president process this go-round.

The main difference between McCain's algorithm and Obama's is that McCain needs less from his VP, but faces more constraints in whom he can select. Obama has more choices but needs more from whomever he picks.

OBAMA:

There are four benefits that a VP choice can bring to Obama. In no particular order:

1. Appeasing disgruntled Clinton supporters.
2. Executive experience.
3. Foreign policy and/or defense credentials.
4. Helping in, or creating, a "battleground state."

Note of course that no candidate brings all four qualities to the table — anyone who could would actually be the presidential nominee instead of Obama. Note also that no one I can think of — not even Clinton herself — brings any three to the table.

So the field now consists of those who offer two of the four benefits. Jim Webb? #3 & #4. Kathleen Sibelius? #2 & #4? Hillary Clinton? #1 & #3. Sam Nunn? #3 & #4.

(Joe Biden and Chris Dodd both offer only one benefit — #3 — and therefore are both highly unlikely choices. John Edwards of course brings zero out of four — and no I don't think Obama would appoint him Attorney General.)

There is one name, however, that I have left out — because I think he is the likely pick based on this analytical framework:

Bill Richardson.

Richardson is also a "two benefit" option: #2 and (especially) #4. But he also brings a bit — not much, but a bit — of #3 as U.N. ambassador. I think "defense credentials" are more important than "foreign policy credentials" in the case of Obama's choice, but U.N. ambassador is hardly inconsequential. Secretary of Energy certainly doesn't hurt either given the current circumstances. He might also have some carry-over credibility in neighboring Colorado — also widely considered a battleground state this year.

And while Richardson wouldn't do much for Obama relative to the Harriet Christian femi-racist wing of the Hillary Clinton base, he could instead help Obama with another group he's had problems with: Hispanics.

So there it is: Richardson for VP pick. Now tell me why I'm wrong.

McCAIN:

Again, I think the VP choice is much less crucial for McCain than for Obama. But the field is much narrower, because McCain faces two constraints:

1. He must pick someone at least tolerable to, if not beloved by, the Theocratic Right. He's on thin enough ice with Dobson and his gargoyles as it is. He simply cannot pick another "not one of us" personality. This is why I find predictions that he will choose Mitt Romney utterly laughable (Commerce Secretary, maybe, but not VP). He has to find someone who is at least willing to pretend to sing from the Evangelical hymnal and who has no pro-choice or pro-gay "stains" on his resume.

2. McCain cannot pick any candidate who is either too old or too young. To do either would only emphasize McCain's own geriatric situation and keep concerns about his health in the spotlight. Someone in his fifties — no younger, no older.

At the end of the day, I still think Mike Huckabee is the logical choice. He appeases the Evangelicals, alienates few if any economic conservatives (his advocacy of a national sales tax notwithstanding), and he doesn't embarrass or outshine McCain in any appreciable way. McCain was remarkably cordial toward Huckabee at the end of the primary campaign (the same apparently cannot be said for McCain and Romney — to put it mildly).

So there it is: Huckabee for VP pick. Now tell me why I'm wrong.

Where Does One Draw the "Liberal-tarian" Line?

Kip — 2008-06-09T19:06+00:00

I don't think it's supposed to be here:

Democratic presidential candidate Barack Obama sought to tap into Americans' anxiety over high gasoline prices on Monday by saying he would impose a windfall profits tax on U.S. oil companies if elected.
...
"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said.

I was sure that a post-Clinton Obama would immediately move to the center and refrain from blathering hopeless gobbledygook like this. I hope this one issue is an isolated exception and not a sign of things to come.

I especially chuckled at this -- apparently from the same speech:

Obama said he would seek a reform of the U.S. tax code if elected in November, saying the current tax system is a "10,000-page monstrosity."

But of course reform can only come after Obama first adds his "liberaltarian" 10,001st page on behalf of the ignoranti who irrationally loathe Exxon -- and, vicariously, themselves.

Linkfest: Moral Defective Watch

Kip — 2008-06-04T17:06+00:00

They wants the precious...

ITEM: After quietly running for president while insisting that he wasn't running for president, and after insisting that he had no intention of doing anything other than being a full-time philanthropist after his second term as New York City mayor ends, Michael Bloomberg has suddenly decided -- surprise! -- that, gosh darn it, he's just too important not to continue micromanaging every nook and cranny of the city and every decision the people in it make --

Mr. Bloomberg, as part of that effort, commissioned a poll recently to determine whether city voters would be open to lifting the term limits law, which forces him and other elected city officials from office after two four-year terms. The poll found that even as voters approved of his performance as mayor, they would strongly oppose any attempt to undo the limits.
...
The deliberations are occurring as the mayor expresses frustration that his agenda is unfinished and that some of his more ambitious proposals, like congestion pricing, have been blocked by lawmakers in Albany. And despite his previous public statements that he is looking forward to focusing on philanthropy full time after leaving office, people who have spoken to Mr. Bloomberg say he has clearly been bitten by the political bug and is not eager to give up the power that comes with elected office.

A hubris-drenched politician becoming hopelessly, disturbingly addicted to power? Who could possibly have seen that coming?

ITEM: Across the Hudson, very very very incumbent New Jersey senator Frank Lautenberg easily survived a primary challenge from fellow Democrat, Representative Rob Andrews. The central issue in the primary was not so much Lautenberg's age -- 84 -- but rather his hypocrisy for having used age -- 26 years ago -- against his first opponent, Millicent Fenwick (aged 72 at the time). Incidentally, the 84-year old Lautenberg is only the third oldest Senator, behind Robert Byrd (90) and Ted Stevens (84). The median age is 70; McCain is 71, Clinton is 60, Barack Obama (third youngest) is 46.

ITEM: Speaking of Hillary Clinton ... well, "Hillary Clinton." Enough said.

New HRC Summary of McCain's Anti-Gay Record

Kip — 2008-06-04T00:06+00:00

It's rare that I actually have an opportunity to say something nice about the Human Rights Campaign (cf., this post), so let me savor the moment:

As the general election kicks off, Senator John McCain will tout his reputation as a maverick, an independent, a moderate who will work with both parties to get things done. However, a look at Senator McCain's record paints a very different picture.

The bullet points: McCain

cast a deciding vote against the federal Employment Non Discrimination Act.

voted three times against expanding the federal hate crimes law to include sexual orientation.

supports Don't Ask, Don't Tell and does not believe that gays should serve in the military.

voted for the Defense of Marriage Act, which prohibits same-sex couples from receiving federal rights and benefits in any state.

campaigned for a ban on same-sex relationship recognition in his home state of Arizona — even appearing in a campaign television ad.

That last point is the most interesting, given that the Theocrat Right despises McCain for voting against the federal Marriage Protection Amendment. But neither gays nor libertarians should mistake this fleeting wisp of respect for federalism as a principled stance for gay rights. Not even close.

(I'll stop short of embracing HRC's indignation of McCain's vote to confirm Samuel Alito or his record on HIV issues. See the report for details.)

The report is "Senator John McCain: A Record of Opposing the Interests of GLBT Americans" (PDF - 7 pages) (Note: One would think that someone at HRC would have test-printed the file on a B&W printer — the colorful cover page doesn't show the title text on a laser printer copy. Issue advocacy at its most professional?)

Obligatory Barr-DOMA Post

Kip — 2008-05-29T00:05+00:00

Here is what he said:

But many of you have also come up to me and said, "Barr, why did you offer the Defense of Marriage Act? If you're so set against the Patriot Act, why did you vote for it?"

Well, let me tell you. I have made mistakes. But the only way you make mistakes, the only way you get things done is by getting out there in the arena and making those mistakes, and then realizing as things go on the mistakes that you've made.

And I apologize for that. For example, as I mentioned to you all last night with the Defense of Marriage Act. As I mentioned to you all last night and I reiterate it here today, standing before you and looking you in the eye: the Defense of Marriage Act — insofar as it provided the federal government a club to club down the rights of law-abiding American citizens — has been abused, misused and should be repealed. And I will work to repeal that.

Here is what I say:

Barr's mea culpa rings quite hollow.

Making a mistake is better than doing nothing in the first place? In the context of issues such as DOMA and the Patriot Act? Is he serious?

And to make matters worse, he says this to a crowd of self-appointed libertarian standard-bearer purists and gets — applause?

I recently called the Big-L Libertarian Party a "freak show" — and I stand by that description.

---

Barr also said in that clip that DOMA is being "abused and misused."

Um, "abused and misused" — how?

I know of no instance — none whatsoever — where DOMA has been "abused and misused." It has been, and will continue to be, used exactly the way Barr originally intended: to discriminate against gays and to legitimize anti-gay bigotry.

Please do not mistake this microphone-addicted conservative has-been for a "libertarian."

More thoughts at Republic of T., Box Turtle Bulletin, Outright Libertarians.

KipEsquire's Day Off

Kip — 2008-05-26T12:05+00:00

I mean really, what's the point? I'm not a Big-L Libertarian, I don't plan on being a Big-L Libertarian, so who gives a crap if they nominate Bob Barr? They could nominate fascist-anarchists — it still wouldn't change the fact that I don't own a car.

(Hope and pray as you might, you will not find more useful commentary on the freak show than that.)

Happy Memorial Day.

Kip's Law Sighting: "That Would Be Silly"

Kip — 2008-05-08T14:05+00:00

"A building has integrity, just like a man — and just as seldom."
--The Fountainhead

Goldilocks and the triplicate permit forms:

John Jessop earned a cult following among his colleagues after his withering comments were leaked in an e-mail which has been sent all round the country.

After being asked to fill in a "design access statement" for a storage shed on a small farm, he wrote: "The density is like on a farm, the social context is a farm in the country, the economic context is farming in the United Kingdom in 2008 (which is not very economic), the opportunities are to store equipment inside rather than the outside, the constraint is the planning system."

And under a section headed Context Analysis, he said: "The use is compatible with a farm because it is a farm building."

"It is located where it is because it is in the most convenient place, being on the farm and near the farmhouse."
...
"It can not be lower because nothing could be stored in it. It is not made any higher because that would be silly."

But since when did being "silly" stop a planning bureaucrat?

The notion that a farmer needs anybody's permission to build a farming shed on his farming land to store his farming equipment that he uses to earn his farming income shows how far the half-sibling notions of "zoning" and "environmental impact statements" have corrupted what used to be a rationally based concern for negative externalities. In the past, such reviews were cursory, common sense inquiries. Today? Yes, we the central planners have graciously allowed you to call your land a "farm," but that obviously did not mean that we would also allow you to "do farming" on it. We'll get back to you on that after we review your design access statement...

Other gems omitted from the media account:

--"Landscaping: The applicant and pervious [sic] occupants have spent a long time, probably more than a thousand years, making the countryside around the house look like farmland so that everyone can enjoy the pretty English countryside."

--"Access: There is an airport at Bristol which can be accessed by driving your tractor along the road. This gives direct access to warm sunny places all over the world."

--"Appearance: It looks like a typical modern agricultural shed in green profiled metal sheeting because that is what it is, and a great architect once said, 'Buildings should look like what they are'."

Methinks Mr. Jessop has read The Fountainhead.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Original 3-page document PDF here. (Via Fark.)

Directive 10-289 Watch

Kip — 2008-05-06T11:05+00:00

(I sincerely hope this does not become a regular feature here.)

One of the first industries the looters went after in Atlas Shrugged was, of course, oil.

And who is better at looting than politicians?

U.S. Rep. Paul Kanjorski said it's time for America to stand up to the big oil companies and shout out, "We've had enough."

Kanjorski, D-Nanticoke, was in town Monday to announce his introduction of House Resolution 5800, the Consumer Reasonable Energy Price Protection Act of 2008. The bill, introduced on the House floor April 15, would allow the federal government to tax windfall oil and gas profits resulting from historically high oil and gas prices that average Americans struggle to afford, he said.

Kanjorski said industries yield windfall profits when earnings exceed what a Reasonable Profits Board determines is rational, as laid out in the legislation.

Rational profits? As determined by a Reasonable Profits Board? Would Hugo Chavez or Robert Mugabe be eligible to serve on it? (If not, then perhaps Ms. Maureen Felix of West Orange, New Jersey, is available.)

The futility of pointing out, "reasonable to whom, by what standard" is not lost on me. The impermeability of the blood-brain barrier between politicians and reasonableness is common knowledge.

Also not lost on me is the futility of pointing out, yet again, that "big" oil companies actually consist of numerous small shareholders, either directly as individuals and households (such as those that the "reasonable" Representative Kanjorski putatively serves), or indirectly — as employees (whose pension funds own oil company stock), small business owners (who retirement accounts include index funds that include such stock), students (whose college endowment funds own such stock) or anyone else who indirectly benefits from "obscene" oil company profits.

Equally futile would, I suppose, be asking where one goes to apply for a seat on the Reasonable Taxation Board:

(Click to enlarge.)

Via Tax Policy Blog.

(For the uninitiated, Directive 10-289 here.)

If This Be Elitism, Make the Most of It...

Kip — 2008-05-06T01:05+00:00

There are certain axioms, certain fundamental pillars, upon which this blog is based. One is that all politicians are, by definition, moral defectives. Another is the ubiquitousness of the Politics of the Warm Fuzzy Feeling. Another is Kip's Law.

Yet another — one you have seen repeatedly here — is that the laws of economics are no more subject to repeal by a legislature than are the laws of physics.

Perhaps it's time to add a flying buttress to that last pillar: No truth, including economic truth, can ever be "elitist" —

Democratic presidential candidate Hillary Clinton on Sunday dismissed the "elite opinion" of economists who criticized her gas tax proposal, using a term that has dogged rival Barack Obama in recent weeks.
...
"I'm not going to put my lot in with economists," Clinton said when asked to name an economist who backed her proposal.

"We've got to get out of this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans," said Clinton, a former first lady who would be the first woman president.

When Clinton or a member of her family becomes sick or injured, does she rely on "elite" physicians for care? If she becomes president, will she dismiss the "elite" pilots who fly Air Force One? Why does she need Air Force One at all — the only thing stopping people from flying around like Superman are the "disadvantageous" views of "elite" physicists.

Economics does admittedly lie in a twilight zone between the metaphysical certitudes of the hard sciences and the subjective gobbledygook of the humanities. Point conceded.

But an economic truth such as, "all resources are scarce and must somehow be rationed" is closer to a physics-based law of conservation than to a humanities-based pronouncement that "everyone has a right to..." An economic truth such as, "people respond to incentives" is closer to a physics-based "for every action..." than to a humanities-based "from each according to..." A graph containing a supply and demand curve — and the distortions government policies impose on them — is closer to a Grand Unified Theory than to a piece of indecipherable "abstract art."

To call economists "elitist" is to call economics "elitist" — which is also to call science, logic and reason "elitist."

More thoughts from — heck, too many people to cite.

"Comment Left Elsewhere" of the Day

Kip — 2008-05-05T10:05+00:00

Obsidian Wings, critiquing John McCain's health care not-quite-reform not-quite-proposal, relays an anecdote:

Shirley Giarde of Walla Walla, Wash., was not prepared when her husband, Raymond, suddenly developed congestive heart failure last year and needed a pacemaker and defibrillator. Because his job did not provide health benefits, she has covered them both through a policy for the self-employed, which she obtained as the proprietor of a bridal and formal-wear store, the Purple Parasol.

But when Raymond had his medical problems, Ms. Giarde discovered that her insurance would cover only $22,000, leaving them with about $100,000 in unpaid hospital bills.

Even though the hospital agreed to reduce that debt to about $50,000, Ms. Giarde is still struggling to pay it — in part because the poor economy has meant slumping sales at the Purple Parasol. Her husband, now disabled and unable to work, will not qualify for Medicare for another year, and she cannot afford the $758 a month it would cost to enroll him in a state-run insurance plan for individuals who cannot find private insurance.

To which I relayed a comment:

Perhaps the problem isn't so much with health insurance as with Ms. Giarde's "Purple Parasol" business model. If her business can't produce enough income for her to pay her bills, then she's in the wrong business.

Debate a "right to health care" all you like, but don't claim that there is a right to run an unprofitable, sub-mediocre business and then get taxpayer-extracted health insurance on top of that.

P.S. What exactly was the back story of Mr. Giarde taking a job with no health benefits in the first place? Because I have no doubt that there was in fact a back story.

It's bad enough seeing starving (i.e., crappy) artists demand — and receive — forced taxpayer purchase of their "art" through public funding. Are we now to see the equivalent of forced consumption of bridal gowns (among countless other services) from inadequately profitable (i.e., badly run) bridal shops (among countless other services), through the money laundering socialist concept known as "universal health insurance"?

Kip's Law Sighting: Ms. Maureen Felix of West Orange, New Jersey

Kip — 2008-05-04T17:05+00:00

And who, you might be wondering, is Ms. Maureen Felix of West Orange, New Jersey?

She holds the prestigious position of "random interviewee on the street" — and now seeks the higher office of your mommy:

The thought of taxing a Big Mac or a Wendy's burger came up at a New Jersey Hospital Association meeting where Gov. Jon S. Corzine was asked if it could be an option to help fund struggling hospitals. At the meeting, he reportedly called it a "constructive suggestion."

A spokesperson for the governor, however, told CBS 2 on Wednesday: "The governor is open to reasonable solutions to help solve our financing problems, but there are no plans for any fast food tax."
...
"I think this country has gone too much in the direction of fast and unhealthy food, and if people are taxed they may terminate that and turn toward more healthy foods," said West Orange resident Maureen Felix.

Of course, why anyone should give any kind of a damn what Ms. Maureen Felix of West Orange, New Jersey, thinks about whether fast food (defined how? by whom?) should be taxed (to what extent? with revenues deployed how?) — or about anything else, for that matter — remains unanswered. As does the precedent question of what basis a free society has in the first place for using taxation to control behavior rather than solely to raise revenue to fund legitimate public goods.

Because to nanny-staters, no such reason is required. Ms. Maureen Felix of West Orange, New Jersey, has an opinion, damn it. The fact that her opinion is baseless, uncorroborated, un-American, anti-freedom — not to mention mind-bogglingly stupid — in no way changes the fact that Ms. Maureen Felix of West Orange, New Jersey, has an opinion, damn it. What right do you have to mock it? And, more importantly, what right does a politician have to ignore it?

She is, after all, Ms. Maureen Felix of West Orange, New Jersey!

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Via Fark. More thoughts at QandO.

On McCain's Health Care Proposal

Kip — 2008-05-01T11:05+00:00

To review: The problem with the way the Internal Revenue Code treats employer-provided health care benefits to employees is not that employers can deduct such benefits (most notably insurance premiums), thereby providing them tax-free (or at least tax-advantaged) to employees. The problem is that only employers can deduct the cost of such benefits (i.e., if the employer were to substitute more wage for less benefit, then the employee would be worse off net of taxes). The problem is not one of magnitude, but one of neutrality. An expense -- such as health insurance premiums -- either should or should not be tax advantaged. Who nominally pays the premium should be utterly irrelevant.

This is why I'm having so much trouble processing John McCain's proposal:

McCain's prescription would seek to lure workers away from their company health plans with a $5,000 family tax credit and a promise that, left to their own devices, they would be able to find cheaper insurance that is more tailored to their health-care needs and not tied to a particular job.

Under McCain's plan, $3.6 trillion worth of tax breaks over a decade that would have gone to businesses for coverage of their employees would be redirected to individuals, regardless of whether they are covered by a company plan.
...
McCain's plan is aimed primarily at giving individuals the power to make health-care decisions by granting the same tax breaks for insurance whether workers get a policy from an employer or on their own. Aides call it a "radical" rethinking of health care that would drive costs down and give people more choice.

I'm not sure that's correct:

Under current law, the federal government gives a tax benefit when employers provide health-insurance coverage to American workers and their families. ... Many workers are perfectly content with this arrangement, and under my reform plan they would be able to keep that coverage. Their employer-provided health plans would be largely untouched and unchanged.

But for every American who wanted it, another option would be available: Every year, they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best.

So which is it -- true tax neutrality or the abolition of employer-based health insurance? They're not the same thing.

And is a $2,500 tax credit a true and fair equivalent of a year's worth of employer-provided health insurance? Why should there be any limit, if the policy goal is "more health insurance"? And would the credit be insulated from progressivity in the income tax?

If McCain's answers to those questions are the correct ones, then his proposal has merit. Stated differently, when McCain says employer-based benefits would be "largely untouched and unchanged," what precisely does he mean by "largely"?

(Of course, a hypothetical "President McCain" would face a not-at-all hypothetical "Democratic Congress," so this is all academic anyway.)

More thoughts from Cato's Michael Tanner, Reason's Jacob Sullum, Rolling Doughnut.

---

Meanwhile, still no one discusses the modest first step of scrapping the absurd "use it or lose it rule" for flexible spending accounts. Oh well...

---

Also meanwhile:

We need to adopt new treatment programs and financial incentives to adopt "health habits" for those with the most common conditions such as diabetes and obesity that will improve their quality of life and reduce the costs of their treatment.

Watch your diet, walk thirty or so minutes a day, and take a few other simple precautions, and you won't have to worry about these afflictions.

Dr. McCain's Miracle Elixir: Just walk thirty minutes a day and you'll live happily forever after!

What is it about politicians that makes it impossible for them to give a speech without making at least one asinine remark? In any case, it's rather sad to see a supposed "conservative" capitulate so abjectly on the question of anti-liberty nanny statism meant to "nudge" people into the "correct" decisions. File that under "M for Maverick" I suppose.

On the Federal Gas Tax and the Candidates' Respective Panders

Kip — 2008-04-29T21:04+00:00

A self-contained comment left elsewhere:

While I certainly embrace cynicism toward the politicians, I don't entirely embrace cynicism toward the gas tax itself.

The gas tax is either a legitimate Pigou tax or it isn't. Reasonable people can disagree on that.

But what reasonable people cannot disagree on is the absurdity of suggesting that the gas tax can somehow be a legitimate Pigou tax on Thanksgiving Day but not on Independence Day.

So in that sense, "advantage Obama." (The fact that he may have flip-flopped on the issue [since his state legislator days] simply returns them to "Deuce.")

One should also note the Econ 101 truth that abolishing a per-unit tax on a good will not lower the equilibrium price of the good by the full amount of the tax, but only by a fraction of the tax — the size of the fraction determined by the price elasticity of demand for that good. Gasoline and diesel demand may be very price inelastic, but not perfectly so.

(Inspired by posts at QandO, Reason, Greg Mankiw, DealBreaker.)

---

Via Obsidian Wings:

Dean Baker: "Actually, almost all economists would agree that the tax cut proposed by Senators Clinton and McCain would save consumers nothing."

I sincerely hope that none of those "almost all economists" are teaching Econ. 101, because they are dead wrong.

Tax incidence is determined by BOTH price elasticity of supply AND by price elasticity of DEMAND.

Even if supply were highly inelastic (a questionable premise except in the very very short run), the low elasticity of demand (NOT a questionable premise under any circumstances) would far outweigh the supply effects and the bulk of the rebate would therefore be passed on to consumers.

(This is not to say I advocate any candidate's specific policy position.)

More on this from Econbrowser, which estimates that the benefit of a tax holiday would be shared roughly 50-50 by buyers and sellers.

Finally, let's also recall that:

--The federal gas tax is a puny 18.4 cents per gallon.

--There is a difference between an oil producer and an oil refiner.

--Record profits mean record taxes on those profits.

--There is more to "oil" than "gasoline." The markets for diesel and jet fuel also factor into the economics of "the price at the pump."