Monthly Archives: November 2017

Showcase Potential

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Brussels is worried, and we should be, too, but for different reasons.  The People’s Republic of China is gaining influence in eastern Europe, and it’s doing it with one of my favorite tactics: international trade as a national policy tool.

In Hungary it is hailed as the “Eastward Opening.” Serbian authorities see it as the glue in a “reliable friendship”, while the Polish government describes it as a “tremendous opportunity.” Yet the 16+1, a grouping of 16 central and eastern European countries led by China, receives more caustic reviews in leading EU capitals, with diplomats fearing it could be exploited by Beijing to undermine union rules and take advantage of growing east-west tensions in the pact itself.

The catalyst for the group is China’s ability to finance and build the roads, railways, power stations and other infrastructure that some poorer central and eastern European countries need. But the scope of its operations has spilled over into overtly political and strategic areas, breeding mistrust among some of the western European powers that dominate the EU’s agenda.

The Financial Times piece at the first link is well worth the read, but the quoted paragraphs are the sum of it.

We should be worried, but not because Europe—the EU—is beginning to lose the contest for the hearts and minds of central and eastern Europe to the PRC, even as it’s beginning to lose the contest for the geography to an aggressively acquisitive Russia.   We should be worried because we’re not taking advantage of the opportunity the People’s Republic of China’s moves in eastern Europe presents us.   This is a contest we cannot lose, were we to enter it at all.

The way we should enter this contest is two-fold, and one of those folds also would serve to counter, and to roll back, the gains being made by that empire-seeking, domineering Russia.  One fold is to engage with eastern Europe—all of those 16, but not the +1—economically through international trade.  We should be busily pursuing free trade agreements with those 16—and contra President Donald Trump, we should be working toward a regional free trade agreement involving the 16 nations.  And Great Britain.  True enough, central Europe also is the heart of the EU, and that would complicate trade agreements, but that shouldn’t stop us from pursuing, separately and in parallel, such arrangements with the nations of eastern Europe.

There’s nothing like free market competition to increase the prosperity of the citizens involved, and so the nations involved, and from that, showcasing—again—both the fatal weaknesses of centrally planned economies in contrast with free markets, and the power of individual liberties and responsibilities for each citizen compared to the stultifying “security” of Big Government doing for the citizens, while firmly controlling what Big Government will allow those same citizens to do on their own.

The other fold is a mutual defense arrangement, much like NATO although separate from and in addition to it, with certain nations of eastern Europe.  As a first stage in setting this up, the treaty nations should include us, Great Britain, each of the Baltic States, Poland, Czech Republic, Slovakia, Hungary, and Romania.  This arrangement would profit from a second stage that would include Finland, Sweden, Norway, and Denmark.  In addition to the ties generated by trade, the mutual defense imperatives would both move toward a strong barrier to Russian expansionism, and it would spur economic development as a happy side effect—to both the nations’ benefit and further to resist PRC inroads.

Warrantless Searches of Cell Phone Data

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The Supreme Court has a case before it, Carpenter v US (it heard oral argument Wednesday), concerning the 4th Amendment and the personal data of a defendant in the form of his cell phone location data.  The data were obtained from the cell phone company by police without first getting a search warrant.  There is precedent.

The high court reasoned then [in ’70s cases involving business records that banks and landline phone companies maintain about customer transactions and that the Supreme Court then reasoned police could seize without warrants] that individuals had voluntarily revealed their financial transactions or numbers they dialed to a third party—the bank or phone company—and so had forfeited any privacy interest in that information.

Smith v Maryland is illustrative of that general position.

There is growing criticism of that position.

allowing authorities to compile such granular data about an individual’s life, without a judicial warrant, no longer meets society’s “reasonable expectation of privacy”—the touchstone of the Supreme Court’s approach to constitutional limits on searches and seizures.

The objectors’ heart is in the right place, but their criticism is wide of the mark.  Compiling data—seizing a person’s personal information, which most assuredly includes where he situates himself from time to time—without a court’s order never has met society’s or that individual’s “reasonable expectation of privacy.”

Consumers (the individuals, the particular members of society in question here) have a reasonable—indeed, a loud and vociferously stated—expectation of privacy concerning their personal data, and an equally loud and vociferously asserted ownership of those data held by third parties.  This is clearly demonstrated by the raucous and repeated hoo-raw raised every time a Facebook or a Twitter or a bank or a phone company gets caught using those personal data in ways to which the consumer-owner objects.

This is further and just as clearly established by the even louder hoo-raw raised every time one of those third parties is discovered to have inadequately protected those personal data entrusted to it by being hacked and those personal data stolen, and too often exposed.

The Supreme Court ruled erroneously then, and Carpenter is a good opportunity to correct that error.  The Court should have known at the time that revealing financial transactions or numbers they dialed to a third party was not at all a voluntary action.  The revealing was a mandatory condition of doing business with the bank or phone company, and there was no opportunity to go elsewhere—all the banks and phone companies required that: give up the financial data or the phone numbers, or don’t do business at all.  Take careful note: that the technology of the time—or today—means that [phone numbers] must be revealed to [phone companies] in no way makes the reveal voluntary: it’s still a wholly involuntary privacy exposure.  The data are owned in whole by the consumer; the third party is merely a caretaker, bound to protect the privacy and sanctity of these papers, and effects.

Prosecutors can indict ham sandwiches with their grand juries, and policemen can just as easily get search warrants, but do get the warrant.  Cell phone location data, financial transaction data, et al., all are part of the papers, and effects, of the individual.

Full stop.

It’s Only a Few

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It’s only a few Americans that we don’t like—the despicable 1% (actually the 0.2%).  That’s the Progressive-Democratic Party’s excuse for insisting that the death tax be kept in place in the current tax code reform effort.

The estate tax affects a very small—and very wealthy—number of Americans.

Only the estates of about 2 out of every 1,000 Americans who die face this tax right now.

Besides, repealing the tax, the Progressive-Democrats claim, would

unfairly provide more benefits to the wealthy over low- and middle-income Americans.

No, the real unfairness, in the minds of these persons, is that it would provide any benefits to the wealthy.  Never mind that the wealthy pay the largest share taxes, especially when compared to income earned.  A couple of CBO statistics, coarser than just the hated 1%, compiled in 2013 from 2010 data:

Quintile Share of Income, % Share of Taxes Paid, %
Top 57.9 69.3
Bottom Two, Combined 9.7 2.8

Notice, too, quite apart from that, the Progressive-Democrats’ fundamental philosophy: those not rich are not in a position to take the same tax-avoidance steps as the rich, so the rich must be denied those steps; they must be held back.  The right of each man to show the best that there is in him must be denied the successful because others cannot or do not keep up.  Can’t possibly reform the tax code so that it applies equally to all income levels.  So much for equal opportunity, according to the Progressive-Democrats.

Never mind, also, that the estate tax is a fundamentally unfair tax that taxes wealth, much of which has been taxed already in the earning.

Never mind, too, that the identity politics-centered claim is false: the death tax affects the minimally wealthy and the small businessman and small farmer whose businesses and farms reach above the threshold in asset value but that don’t have free cash, and so the businesses and farms must be sold to raise the taxman’s vig—impoverishing the heirs.

No, this is just another excuse to hammer those hated wealthy, and who cares about the collateral damage.

A State Runs a Budget Deficit

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Louisiana, run by Progressive-Democrats since Bobby Jindall was term-limited out of office, is facing a $1.5 billion deficit as “temporary” tax increases implemented earlier begin to expire.  Jay Dardenne, the center-left Republican Commissioner of Administration, Louisiana governor John Bel Edwards’ chief budget officer, says that “devastating” spending cuts would be necessary absent a renewal of the tax increases or enactment of other tax increases.

Devastating: among those are additional reductions in higher education. This is misleading from a State official whose State already objects to school choice and to successful voucher schools in the K-12 range—because they take money away from badly failing public schools.  Except they don’t.  The State funds the public schools on a per-student basis, but when a student leaves for a voucher school, he takes less than his full allotment of funds with him, leaving the “losing” public school fiscally net better off.

It’s misleading, too, because higher education has an inflated tuition and fee structure supported by all that government funding (the Feds are contributors to this inflation with their own money transfers to the higher ed institutions), leaving those students fiscally net worse off.

Other areas facing spending reductions are tear-jerker “child-welfare” programs and “other” state agencies.  Never mind that these facilities waste the funds allocated with their high bureaucratic overhead and middle-man frictions.  And in the case of welfare (not just child), through uncertain enforcement.

No, the only ones truly facing serious spending reductions are the lobbyists and the Progressive-Democrats’ (and too many Republicans’) cronies.

It’s past time for a $1.5 billion reduction in State spending.  Louisiana needs to leave the money in the citizens’ hands, and it needs to stop competing with the private sector in providing goods and services and in acquiring resources for its own (unnecessary) functioning.

Law Be Damned

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The city of Seattle passed a law earlier this year that levied an income tax on the city’s wealthiest—all in the name of equality of outcome and so…fairness.

It turns out that tax was contrary to the State’s law, which said that only the State can levy an income tax and, explicitly, cities cannot.  The question also was raised regarding whether the Seattle law was even contrary to the State’s constitution—illegitimate—as well as illegal, but the judge avoided the constitutional question.

King County Superior Court Judge John Ruhl ruled in a Wednesday that Seattle did not have the authority to impose the tax because state law prohibits tax on net income.

Seattle’s City Attorney Pete Holmes and Mayor Tim Burgess demurred.

We are also living in a time of extreme income inequality that corrodes our social compact and causes many to wonder whether wealthy individuals are paying their fair share[.]

Because their goal is worthy, so the law should be disregarded.  And

Councilmember Kshama Sawant told Fox News in July that the need for the tax is “crystal clear.”

Again, goals, but let’s skip the inconvenience of law or of adjusting particular ones.

It just doesn’t matter what the law requires.  Never mind, either, that the State’s voters have repeatedly defeated such a tax on State referendums.  The Left demand to do what they want, when they want it, because that’s all that’s…just.

As an aside, it should be noted that Holmes and Burgess, in demanding the rich pay their fair share, carefully decline to say explicitly what level of wealth constitutes “the wealthy,” although the level is implied by the erstwhile tax’s threshold, and they carefully decline to say what that “fair share” would be: what per centage of the city’s taxes should be paid by “the wealthy,” especially in comparison with what the “fair share” of the city’s taxes paid by the various levels of the non-wealthy would be.