Category Archives: Economics

Animal’s Daily Hidden Tax News

This just in from libertarian scribe John Stossel:  Hidden Taxes.  Excerpt:

Yesterday was “Tax Day.” It was April 17 this year because April 15 fell on Sunday and Monday was Emancipation Day. But by calling April 17 “Tax Day,” the media miss the big picture. Income taxes make up less than half the tax most of us pay.

We also must pay payroll tax, corporate tax, gift tax, gambling tax, federal unemployment tax, gas tax, cable and telecom taxes, plane ticket tax, FCC subscriber line charges, car documentation fees, liquor and cigarette taxes, etc.

People can’t keep track. For my latest YouTube video, Tate asked people, “What’s your tax rate?” Tourists in Times Square said that they thought they paid about 20 percent. But they left off the hotel taxes, airline taxes, etc., that push Americans’ total tax load to almost 50 percent.

And yet, with all these taxes, the Imperial government is still 20 trillion dollars in debt.

There are two sides to this problem.

  1. Most people have no idea how much they are actually taxed, at all levels.  Here in the Casa de Animal we probably have a better idea than most, as we have been small business owners for years and have to make quarterly payments.  But payroll withholding has effectively ‘hidden’ direct taxes, and most folks aren’t bothered to add up all the various taxes and fees that suck away income.
  2. The scope of government is out of control.  No matter how much of our resources the government confiscates under threat of force (try not paying your Imperial taxes and see how long it takes them to send men with guns out after you) the governments spend more, and more, and more.  The answer is obvious and I’ve said it many times here:  Fuck you, cut spending.

There’s an answer to all this, at least at the Imperial level:  The balanced budget amendment and the FairTax.  But the odds of the Imperial Congress voting to strip themselves of that much power is so small as to be immeasurable; you’d have better odds counting neutrinos.

Animal’s Daily Government Waste News

Nobody should be surprised by this, but the Imperial government is going to audit the progress of Californey’s high-speed train to nowhere, and things aren’t looking good.  Excerpt:

Gee, I wonder what federal auditors will find — besides a phantom train set and a lot of wasted money? With a new study out showing that California doesn’t have the funding to complete even the first phase of their high-speed rail project, the Inspector General for the Department of Transportation will open the books to see how federal monies have been spent:

California’s high-speed rail project is facing an audit from the U.S. Department of Transportation’s as costs continue to climb.

The inspector general’s audit, announced Thursday, will examine the Federal Railroad Administration’s oversight of nearly $3.5 billion in federal grant money awarded to the project.

That’s bad news for a project that has already had plenty of bad news over the last several years. The IG will apparently focus mainly on how the FRA has performed in reporting on California’s progress rather than the performance of the California High-Speed Rail Authority. At issue will be whether the FRA has enforced project performance requirements, but that will still point out the lack of progress California has made despite all of the cash it received:

The federal money awarded to California comes with specific conditions that Kelly has promised to meet. They include completing a 119-mile (192-kilometer) segment of track now under construction in the Central Valley and finishing environmental reviews for the full line by 2022.

The audit will specifically evaluate how the Federal Railroad Administration determines whether California has complied with federal guidelines.

Out on a limb.

Let us all hazard a guess, shall we?  The state of this project’s finances will, very likely, be grounds for multiple prosecutions, if not a full-blown RICO investigation.  This is a cluster-fuck of, well, Californian proportions.

And the bad thing is this:  It was doomed to failure from the start.  A high-speed rail network will work in a country like Japan, where 200 million people live in a land the size of California.  Trains are even useful in the densely populated northeaster USA.  But in the wide-open Western states, where there are miles and miles of miles and miles?


This entire project wasn’t thought up and pushed through for any practical reason.  It was state-wide virtue signalling, nothing but, in a heavy-handed attempt by government to wean people off their cars (which allow a pesky amount of independence and freedom of movement) and shove them into rail travel.

Doomed to failure, True Believers.  I’m sure you didn’t hear it here first, but it’s nonetheless true.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks once again to Pirate’s Cove and The Other McCain for the Rule Five links!

File this under “so obvious it’s not funny”:  Science Proves Communism Makes Nations Poorer and Less Healthy.

Duh.  Excerpt, with my comments interspersed:

Researchers testing historical connections between cultures found that whether a country had been under communism was the biggest factor for those with lower health, income and educational levels.

In the first undertaking of its kind, they analyzed the fortunes of 44 countries across Europe and Asia and looked at geography, religion, systems of government and a more intangible quality called “deep cultural ancestry.”

I wonder how you quantify “deep cultural ancestry?”

Writing in the journal Royal Society Open Science, they matched these factors against where they ranked on the United Nations Human Development Index, which measures per-capita income, life expectancy at birth and the number of years its citizens spend in education.

Actually those seem like pretty fair measures of how prosperous a society is.  I can think of many more, but it’s a start.

Most of the issues they looked at appeared to have little or no effect on the disparities between the countries, except for Islamic countries scoring a little worse on education.

Instead, the single strongest predictor for a country’s health, and the second-strongest for its wealth, turned out to be whether its rulers had embraced communism.

Who knew?  Well, anyone who has read about the history of communism – or anyone who has read a recent news story about conditions in North Korea.

I don’t have numbers, but I have a strong suspicion, backed by fifty-six years of direct observation, that the converse is true as well:  You can probably draw a direct correlation between per-capita income, life expectancy at birth and education and liberty.  That is to say, the free-est nations are almost certainly the most prosperous.

Why hasn’t anyone studied this?  Oh, wait – a big group of people have been studying it for over two hundred years.  We’re called Americans.  As supporting evidence, I offer the fact that people in every other nation of the world, including those who claim to hate us, all want to come live here.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks once again to Pirate’s Cove for the Rule Five links!

Moving on:  File this under “really good ideas that will never happen.”  Excerpt, with my comments:

The House is slated to vote next week on a balanced budget amendment to the Constitution after lawmakers return from their Easter recess.

The decision to bring the measure — which would require Congress not to spend more than it brings in — to the floor comes just weeks after the passage of a $1.3 trillion spending package that is projected to add billions to the deficit.

Irony, thy name is the United States Congress.

The amendment, introduced by House Judiciary Chairman Bob Goodlatte (R-Va.), would require a “true majority” in both the House and Senate to pass tax increases and a three-fifths majority in both chambers to increase the debt limit.

And that would be a great idea.  But:

The measure has virtually no chance of becoming law as it would need Democratic support in the Senate and ratification from the majority of states. While conservative hard-liners largely support the proposal, critics argue adding a constitutional amendment could weaken economic activity and exacerbate recessions by limiting the government’s ability to spend money.

Good.  Good!  My response to that complaint from the “critics” takes the form of four words:  Fuck you, cut spending.  There are entire Cabinet-level departments that are not authorized by the Constitution and therefore prohibited by the Tenth Amendment:  Education, Commerce, Environment, and so on.  Wipe them out.  RIF the bureaucrats, let them find honest jobs.

The decision to take up the measure stems from an agreement struck between Speaker Paul Ryan (R-Wis.) and Republican Study Committee Chairman Mark Walker (R-N.C.) in October. Ryan agreed on a vote on the amendment in exchange for conservative support on a procedural budget measure needed for Republicans to move forward on tax reform.

And of course Ryan agreed; it doesn’t cost him anything, as he knows it won’t go anywhere.  I don’t agree about the ratification argument; I think it’s very likely that 38 states would vote to rein in Imperial spending.  But in the current Senate, no way.  It’s not going anywhere.

It’s a fine pass we’ve come to – that such a proposal, requiring the Imperial government to live within its means like all of the citizenry must do, is doomed to failure before a single vote is called.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to The Other McCain and Pirate’s Cove for the Rule Five links!

On to something less pleasant than Rule Five totty:  The Imperial spending omnibus bill, which President Trump has signed and which I can only describe with two words:  Fucking disgrace.  Excerpt:

The massive, 13 percent increase in discretionary spending was prefigured by the agreement on budget caps that congressional leaders reached in February. It remains remarkable that, even with control over the branches of elected government, the GOP cannot secure funding for the military without dangling such unnecessary spending for domestic programs.

The specifics of the spending aren’t much better. The bill provides funding for immigration enforcement both internally and at the border, but the devil is in the details. Set aside that the dollar amount falls far short of what the Trump administration had requested: There are onerous restrictions even on the money that is appropriated, limiting, for instance, the number of illegal aliens that Immigration and Customs Enforcement can detain. Even with the leverage of DACA, Republicans failed to meaningfully tighten the immigration system.

On health care, the hope of deregulating the individual insurance market to counteract rising premiums has been dashed. It seems increasingly likely that the GOP has given up on repealing and replacing Obamacare and is unable even to reduce its continuing burdens on the public.

Meanwhile, the $21 billion in infrastructure funding is not offset with permitting reforms that could spur private investment. We welcome the defense spending, and the funds devoted to combating the opioid epidemic might make a difference. But if this bill winds up being the only major piece of legislation Congress passes in 2018, this year will be a legislative waste.

Apparently the GOP, who like to portray themselves as the grownups in the room where fiscal responsibility is concerned, have abandoned any pretense of budgetary restraint.  Imperial profligacy is rising to ever-greater heights no matter which party has control of Congress.

For some years, even though I have been and remain a minarchist libertarian, I have regularly voted Republican at the Imperial level, mostly because the GOP more closely approximates my views on a number of issues than do the Democrats.  That’s getting harder to swallow.  What options are left to an actual minimal-government advocate anyway?  Vote Republican and hope they send us into bankruptcy a little slower than the Democrats?  Or vote third-party and consign our votes into meaninglessness – or worse, in a closely contested state like our own Colorado, effectively vote for the candidate we hate more?

We, as a nation, are fast running out of options.

Animal’s Daily New Confederates News

This just in from national treasure Dr. Victor Davis Hanson:  The Confederate Mind.  Excerpt:

Progressives, in fact, seem to like the protocols of the old Confederacy in lots of ways. Southern antebellum chauvinists once claimed that the culture south of the Mason-Dixon line was innately superior to the grubby, industrial wasteland of the north. A two-class system of masters and slaves allowed an elite the leisure and capital to pursue culture without the rat-race competition of a striving middle class. So blinkered was southern arrogance that its pre-war youth insisted that southern manhood, with its innate moral superiority, could defeat a much larger, richer, and more industrial North — a myth dispelled early on at Shiloh.

Now the new cultural divide is not North vs. South, but the blue-state coasts versus the red-state interior. The map has changed, but the new mindset of the chauvinist, mutatis mutandis, is eerily the same. In blue-state doctrine, a sinking middle class in the interior deserves to fail. But an upscale hip and cool professional elite is properly thriving on the East and West Coasts as never before — itself often supported by legions of poorly paid and mostly minority gardeners, housekeepers, and nannies who free up their supposed betters to pursue higher things without tending to the drudgery of diapers, cooking, and mowing.

Pyramidal California has some of the wealthiest people in the world living within the coastal corridor of Hollywood, Malibu, Stanford, Silicon Valley, and San Francisco — even as one-fifth of the population lives below the poverty line, along with a third of the nation’s welfare recipients and half its homeless population.

It’s important to note that Dr. Hanson is part of a multi-generation Central Valley farm family.  He loves California and has written regularly and often about the decline of the once-Golden State at the hands of Left Coast urban progressives.

But his point here is well taken.  The American political Left has become weirdly race-obsessed.  For quite a few years now, many on the leftward side of our political system has held the belief that one should think, speak and vote a certain way solely because of minor, secondary regional characteristics such as melanin content – characteristics that have no real phenotypic significance, and which comprise an utterly insignificant portion of our DNA.

Humans have less genetic variability than chimps.  And folks like those running California seem willing to drag the country into another 1861 over the issue.  Have we learned nothing?

Animal’s Daily Ethanol Subsidy News

I’m a big fan of ethanol.

That is, ethanol in the form of a good Scotch or a nice rye whiskey.  Ethanol has some advantages when blended into gasoline, true enough; but why the hell is the government subsidizing it?  Why not let ethanol fend for itself?  Excerpt:

The East Coast’s largest and oldest oil refinery is declaring bankruptcy. In its January 22 filing, Philadelphia Energy Solutions (PES) — whose facilities can process 335,000 barrels of oil per day — cited the economic burden of complying with the Renewable Fuel Standard (RFS) as a primary contributor to its fiscal woes. Regardless of the merits of PES’s claims, the RFS is an economic and environmental burden on the United States and ought to be repealed.

The RFS, first passed in 2005 and expanded in 2007, mandates that fuel blenders mix ethanol into fuel supplies at increasing levels until 2022. Interest in ethanol peaked during the George W. Bush administration for an amalgam of reasons stretching from rising oil prices, to a belief that plant-derived fuels would be environmentally superior to fossil fuels. With ethanol production then sitting at just a few billion gallons, the law sought a 10-fold increase in ethanol production over less than two decades. In the early years of the policy, complying with the standard was fairly inexpensive. Renewable Identification Numbers (RINs), the tradable compliance credits generated when ethanol is produced, sold for 10 cents or less.

Sometime within the past few years, the fuels industry began to heave under the pressure of steadily mounting RFS requirements. With the exception of rare 85 percent ethanol pumps only usable by specially-designed engines, U.S. pumps can generally only sell blends up to 10 percent. This puts a hard cap, referred to as the “blend wall,” on how much ethanol can realistically be blended.

Full disclosure:  I come from a long line of farmers.  The Old Man farmed for much of his life, and both of my grandfathers farmed, although one of them gave it up for a career as a Ford mechanic.  So I know a little bit about farming and farm life.

With that said:  There is a tendency among some well-meaning folks, including plenty involved in agribusiness, to consider farming as a sort of holy calling.  It isn’t.  Yes, it is a vital industry.  Modern technological societies can’t exist without industrialized agriculture.  But farming is a business like any other.  Methods and technologies change, and the best way to determine which changes are economically feasible is not government; it is the free market.

Yes, the ethanol subsidy should end.  All such subsidies should end.

Animal’s Daily Hooray for Capitalism News

Actual illustration from the article. Go, capitalism!

Free markets are a wonderful thing – here are a few of the reasons why.  Excerpt:

When the Great Recession hit, late capitalism came back into vogue. Finally, markets and economies were collapsing all around the globe, comrades! And yet…here we are, a decade or so later and capitalism is still doing pretty well. To be sure, it’s nowhere near perfect, but what economic historian (and Reason contributing editor) Deirdre McCloskey calls “the Great Enrichment” proceeds apace, with fewer and fewer people living in what the U.N. calls “extreme poverty.” As everyone except Pope Francis will tell you, that’s because of free-er trade and more (not fewer) markets. As Ronald Bailey has documented, higher levels of economic freedom correlate strongly with longer lives, less disease, better environmental indicators, and even higher rates of life satisfaction.

Communists, socialists, progressives, and critics ranging from Fredric Jameson to Bernie Sanders to Thomas Frank to Naomi Klein to Hans Magnus Enzenberger continue to marvel at and grouse about the ways in which capitalism “absorbs” economic and philosophical challenges, “commodifies” them, and then keeps on truckin’. Capitalism’s genius, it turns out, is a form of repressive tolerance that, as economist Joseph Schumpeter observed, brought more and more stuff to more and more people. “The capitalist achievement,” he wrote, “does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls.”

Or, to put it in slightly different terms, capitalism allows more people to express themselves through work and live relatively high on the hog. Which brings to me three examples torn from today’s headlines that show why capitalism persists—and why that’s not a bad thing at all.

Here’s an example for you:  Wal-Mart (or, as it’s known these days, Walmart.)  Some years back, the Old Man had to buy tools, construction stuff and housewares from the old Coast to Coast store in Decorah, Iowa, the nearest town of any size to his old homestead.  He remembers buying a toaster-oven form there for $65, a year or so before the massive Walmart Supercenter opened on the edge of town.

At first, the Old Man didn’t care for the Walmart, thinking (correctly) that it would put some small locally owned stores out of business.  He was a convert when next he needed a toaster-oven, and was able to buy one at Walmart for $25.

Markets, given time, usually get things right.  No person or body of people could ever hope to “manage” the tens of billions of individual daily decisions that make up a national economy; only the people, freely deciding for themselves what they want to do with their money, their time, their talents and abilities, can properly make up an economy.  And that’s the only way an economy should exist -free people making their own decisions freely.

If you disapprove of my choices, then you are free to piss right off, and the same applies in reverse.  That’s the wonder of liberty, True Believers; that’s the wonder of liberty.

Animal’s Daily Blue Flight News

File this under “big surprise:”  People who advocate for statist policies increasingly flee the places where their preferred statist policies are in place.  Excerpt:

According to United Van Lines, the top 10 states people are leaving include the blue states Wisconsin, Ohio, Massachusetts, Connecticut, New York, New Jersey and Illinois. Only three red states made the list; Kentucky, Utah, and Kansas.

The top 10 states people are moving to include the red states Idaho, South Dakota, South Carolina, North Carolina, Alabama, Nevada and Colorado (the last two are purplish states). Only three solidly blue states made the list, Vermont, Oregon and Washington. In 2017, Vermont slipped, with its inbound and outbound moving becoming about equal. Notably, all three of those states used to be much more moderate, only turning blue within the past 25 years or so. Longtime residents in Washington and Oregon regularly rant about Californians taking over their states and turning them blue. People in Vermont complain about Democrats from Massachusetts and New York moving into their state. The bluer those three states become, the fewer people will move there as we’re already seeing with Vermont.

Last week, CBS in San Francisco reported that the number of people leaving the Bay Area reached its highest level in more than a decade. Topping the list of reasons for moving was the high cost of housing. Democrats are more reluctant than Republicans to allow permits for homebuilding, and pile on regulations.

A comment on the linked article expressed the hope that the people leaving those blue states would contemplate why they left and vote accordingly on their arrivals in their new residences.  While that may happen in some cases – California has made life pretty unhappy for anyone to the right of Leon Trotsky, and part of that state’s polarization is due to the departure of right-of-center types – the opposite is more often the case.

I can point to my own Colorado as an example.  Having lived in Colorado for almost thirty years, I can attest to the transformation of that state from a right-of-center state with some strong libertarian influences to a purple state today.  And that purple is increasingly turning blueish; the state went for Her Imperial Majesty Hillary I in 2012, even as many purple states (Michigan and Wisconsin, among others) answered to President Trump’s populist message.

When I first moved to Colorado, I figured I’d probably stay there for the rest of my life.  That was before I saw Alaska.  Hopefully The Last Frontier will stay clear of such nonsense; urban illiberals that try a move there generally don’t seem to last through their cheechako year.  Alaska may remain one of the few good places left.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks once again to Pirate’s Cove and The Other McCain for the Rule Five links!

Moving right along:  Sometimes, you know, the difference between the political Left and the political Right really starts to blur.  Here is one such incidence, in which PJMedia’s Michael Walsh calls for the breakup of the Big Four tech companies by the force of the Imperial government, because, reasons.  Excerpt:

Monopolies themselves aren’t always illegal, or even undesirable. Natural monopolies exist where it makes sense to have one firm achieve the requisite scale to invest and offer services at a reasonable price. But the tradeoff is heavy regulation. Florida Power & Light serves ten million people; its parent company, NextEra Energy, has a market cap of $72 billion. However, pricing and service standards are regulated by people who are fiduciaries for the public.

The Four, by contrast, have managed to preserve their monopoly-like powers without heavy regulation. I describe their power as “monopoly-like,” since, with the possible exception of Apple, they have not used their power to do the one thing that most economists would describe as the whole point of assembling a monopoly, which is to raise prices for consumers.

Nevertheless, the Four’s exploitation of our knee-jerk antipathy to big government has been so effective that it’s led most of us to forget that competition—no less than private property, wage labor, voluntary exchange, and a price system—is one of the indispensable cylinders of the capitalist engine. Their massive size and unchecked power have throttled competitive markets and kept the economy from doing its job—namely, to promote a vibrant middle class.

Not all of us, Mr. Walsh, have a “knee-jerk antipathy towards big government.”  Some of us have a thoughtful, carefully-considered antipathy towards big government, and part and parcel of that antipathy is due to people like you flipping over to the side of more Imperial intrusion at any perceived “wrong” on the part of private enterprise.

If you don’t like Amazon, don’t use it.  If you don’t like iPhones, don’t buy one.  If you don’t like Google, use another search engine.  If you don’t like Microsoft, set up a computer on Linux.  There are alternatives to all of these things that Mr. Walsh decries as the “Big Four,” and what’s more, more will arise.  Nobody had heard of Microsoft before about 1984, and in another thirty years, Microsoft may well have been supplanted by some other software company with products that appeal to more people – you know, in the marketplace.

In the meantime, Mr. Walsh would be well advised, if he wants to continue to claim to advocate for liberty and free markets, to stop calling for Imperial power to shut down private enterprises.  It’s not the role of government to pick winners and losers in the marketplace – it is the place of consumers.  Hands off my free market!