Tag Archives: government

Some Thoughts on Government Surveillance

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Here’s the nose of the camel, courtesy of (here’s a surprise) the EPA, as reported by Fox News.  The EPA is flying drones over private property in order to “inspect” that property for government averred purposes.  Apparently, the EPA has been doing this for nearly 10 years over, among other regions, an area the EPA calls Section 7 (an area containing Nebraska, Iowa, Kansas, and Missouri).

A large concern has to do with jurisdiction.  Nebraska, for instance, has the responsibility for environment questions in its part of Section 7 through its Department of Environmental Quality; the EPA has only an oversight role.  Nevertheless, the EPA insists on conducting this surveillance with its own airborne resources—ostensibly as a cost-efficient way for it and state governments to reduce the number of on-site inspections and focus on “areas of the greatest concerns.”  Hmm….

Nebraska Congressmen Adrian Smith, Jeff Fortenberry, and Lee Terry (all Republicans) and Nebraska Senators Ben Nelson (D) and Mike Johanns (R) sent a letter expressing concerns about this hidden searchsurveillance to the EPA by that said, in part

Farmers and ranchers in Nebraska pride themselves in the stewardship of our state’s natural resources.  As you might imagine, this practice has resulted in privacy concerns among our constituents and raises several questions[.]

There’s another concern, also, though.  It’s better for us to have the on-site inspectors.  At least then the property owners/lessors know when the government’s surveillance is occurring and can accompany the government’s men.  And they can make sure, at least on the particular trip, that the government’s inspection is limited to the claimed purpose.

The convenience of the government can never be an excuse for abridging our individual liberties.

Déjà Vu All Over Again Cont’d

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In this post I continue a discussion of the advice to Reagan memo that The Wall Street Journal excerpted a few days ago.

On the matter of budgeting, the memo advised, in the context of fighting then-high inflation

Many question whether you are serious about a sizeable cut in budget outlays.  Credible FY 1981 and 1982 budgets which do that clearly and unambiguously would evoke an extraordinary response in the financial markets, and set the stage for a successful assault on inflation and a decline in mortgage and other interest rates.

This is sound advice for the next President, also.  Credible FY2013 (since the Progressives in the Senate and White House have variously refused to offer a serious budget or any budget at all for the last three years, a 2013 budget for the fiscal year then in progress will remain a necessity), FY2014, and FY2015 budgets will be as critical in demonstrating resolve in cutting irresponsible spending as it was in fighting inflation.  And it will be critical in reducing the impact of the inflation time bomb the Fed is creating, should that go off before it can be defused.

Those advisors continued in their section on the Budget:

Off-budget financing and government guarantees mount and expand programs through the use of the government’s borrowing capacity, draining the nation’s resources without being adequately recorded in the formal spending totals.

Pop quiz time: what off-budget financing and government guarantees are present today?  Bonus question: what does the continued existence of off-budget financing and government guarantees of any sort say about the sense of responsibility felt by incumbents of a Big Government?

The Reagan advisors also warn of this:

In addition, the mandating of private expenditures for government purposes has gained momentum as the spotlight has [i]lluminated direct spending. These mandates are also a clear call by government on the nation’s resources.

Boy, has it ever gained momentum.

Closely related to budgeting is tax policy.

Tax policy is properly the province of your Secretary of the Treasury.

Indeed.  And the inability of the present Treasury Secretary to pay his own taxes says far more about the unnecessary scope and complexity of current tax law than it does about his intelligence or sense of responsibility.  If we assume Geithner isn’t a tax scofflaw—and I believe he is a fundamentally honest man—his mistake should be a clarion call for simplification.  That it is not speaks poorly of the incumbents on both sides of the aisle.

Reagan’s advisors continue:

We consider that the key ingredients should be your proposals for the Kemp-Roth cut in personal income tax rates, simplification and liberalization of business depreciation and a cut in effective taxes on capital gains….  Consistent with your proposals earlier this year, the effective date for these reductions should be January 1, 1981.

Other key proposals are…reductions in…inheritance taxes and the taxation of Americans living abroad….

Again, these are remarkably prescient.  The Obama tax increase is set to take effect on January 1, 2013.  That increase, aside from raising income taxes on ordinary Americans smack in the middle of the present recession, will include jumps to usurious rates on what those same ordinary Americans would otherwise leave to their own children and other heirs of their choice—not of government’s choice.  Moreover, most sub-Federal jurisdictions only tax income earned within their jurisdiction.  Why should the Federal government be any different?

The Obama tax increase also includes major increases in business-related taxes: investment taxes on capital gains and increasing the double taxation present on dividend payouts.  These will serve only to reduce investment in American businesses, to the detriment of our already suffering economy.

I’ll have more in the coming days.

A Lack of Understanding

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Earlier this week, the Congressional Budget Office projected that if Congress fails to act [on tax policy], the U.S. economy will enter a recession next year, with a 1.3% annual rate of contraction in the first half of 2013.  It also said that if Congress extended current policy without “comparable restraint in future years,” federal debt levels would balloon, leading to negative consequences [that] include higher interest payments and less ability to use tax and spending policies to respond to economic challenges. [The CBO’s report is here.]

This is a fundamental lack of understanding—by the CBO, yet—of the role of government.

The Federal government has no business using “tax and spending policies to respond to economic challenges.”  This is nothing less than the government’s attempt to centrally manage the economy.  The Federal Reserve Bank has the goal—the responsibility—to seek price stability in our economy.  The Federal government has a responsibility to maintain a stable environment within which a free market can operate without Federal interference.  The optimal way—the only real way—for the government to achieve this is through low, and stable, tax rates that have no loopholes for special interests, and through low, and stable, spending rates that have no exceptions for special interests.  Indeed, that is the only economic challenge to which the Federal government must respond.  Moreover, answering this challenge enables the free market economy to achieve the full employment that is another claimed goal of the Fed.

And that, thereby, answers the question of what the government must do about the looming Obama tax increase.

Déjà Vu All Over Again

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This post is taken from “Economic Strategy for the Reagan Administration,” a memo summarizing studies commissioned by candidate Ronald Reagan and delivered to President-elect Reagan on mid-November 1980, as summarized in The Wall Street Journal.  The memo began

Sharp change in present economic policy is an absolute necessity.  The problems of inflation and slow growth, of falling standards of living and declining productivity, of high government spending but an inadequate flow of funds for defense, of an almost endless litany of economic ills, large and small, are severe, they are not intractable.  Having been produced by government policy, they can be redressed by a change in policy.

Aside from the high inflation of 1980, that could have been written today.  Besides, the actual inflation then is a threatened inflation today, with the Fed’s policy of deliberately depressed interest rates and rapid printing of money coupled with the administration’s prolific spending.

You have identified in the campaign the key issues and lines of policy necessary to restore hope and confidence in a better economic future:

  • Reestablish stability in the purchasing power of the dollar.
  • Achieve a widely-shared prosperity through real growth in jobs, investment, and productivity.
  • Devote the resources needed for a strong defense, and accomplish the goal of releasing the creative forces of entrepreneurship, management, and labor by:
  • Restraining government spending.
  • Reducing the burden of taxation and regulation.
  • Conducting monetary policy in a steady manner, directed toward eliminating inflation.

This amounts to emphasis on fundamentals for the full four years, as the key to a flourishing economy.

Sound like what’s needed today?

The need for a long-term point of view is essential to allow for the time, the coherence, and the predictability so necessary for success. This long-term view is as important for day-to-day problem solving as for the making of large policy decisions.

This was true then, 50 years after the start of the New Deal, a 50-year period of spendthrift policies and high taxes, and it’s even truer today, 30 years farther down that road, with this administration’s effort to raise taxes on top of its already explosive spending and debt accumulation.  It’ll take a long time, and a long-term strategy is critical, to repair the damage.

The memo went on with sound advice concerning budgeting, tax policy, regulation, energy, and monetary policy—it could have been written for delivery to President-elect Mitt Romney in mid-November 2012.  And we can certainly hope both for President-elect Mitt Romney, and that he takes this advice to heart.  The incumbent certainly has already eschewed it.

I’ll more on the Reagan memo in the coming days.

China Trade Wars and the US

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The US recently imposed a 31% antidumping tariff on Chinese solar-panel makers (“green” energy devotees object to the tariff’s impact on American “green” energy prices, but those objections are irrelevant here), and of course the Chinese demur.

But we have to keep in mind the context within which the People’s Republic of China is engaging in the behaviors that required the tariff imposition, a context in which the PRC is moving aggressively and deliberately against American interests and security concerns.

The PRC already is actively prosecuting a cyberwar against us, routinely attempting to penetrate (and succeeding at an alarming rate) American companies’ information networks to gain access to and to steal those companies’ proprietary engineering data and, especially within our financial industry, to steal our companies’ fiscal data.  Even more threateningly, the PRC routinely attacks, and too often penetrates, our Defense and State information networks, obtaining critical defense and political information.  In conjunction with these cyber-attacks, the PRC, the primary global producer of rare-earth minerals, has implemented export quotas on those minerals—minerals that are at the heart of the computing and memory chips that our companies and our government use in their information networks, and on which our weapon systems depend.

Additionally, the PRC is actively looking to block efforts to inhibit Iran’s access to nuclear weapons—weapons which the Iranians will use against Israel and us, and which they will pass on to terrorist groups for use against Europe and us.  Where impediments are implemented, anyway, the PRC actively sabotages them.  This is what is behind their continued purchase of Iranian oil, rather than satisfying their needs elsewhere in the global market, and their purchase of Iranian minerals and organic chemicals.  This is what is behind the PRC’s steady shipment of nuclear reactor parts to Iran.  This also is what is behind their decision to inhibit efforts to curb northern Korea’s expansion of its own nuclear weapon establishment.

Moreover, the PRC is actively moving against American security and economic interests in the South China Sea, claiming that body for its own right up to the border waters of the Socialist Republic of Vietnam, the Republic of the Philippines, and the other nations that border on the Sea.  This is where the PRC militarily engages the Philippine Navy as the latter moves to protect its own interests, and where the PRC militarily threatens Vietnam for objecting to Chinese grasping.  Yet these moves are not aimed at those nations, but at the US, whose interest in open seas in that body (which contains a significant fraction of the world’s commercial shipping lanes) is made manifest by our global trade imperatives (and by those of all of our allies), and so must respond or see our influence shrink further.

Against this backdrop, the PRC is threatening a trade war if we don’t withdraw our newly implemented tariff.

We fear that if these tariffs are levied in full, Chinese companies may have no choice but to exit the US market[.]

We are “urged” to

…review the facts and make the right decision without being influenced by U.S. elections….

And:

This action by the US has hurt cooperation between China and the US in the renewable energy sector, and hurt the US itself.  We hope the US will appropriately resolve this issue.

The tariff must be an opening move, and the US must respond more aggressively and with greater initiative to the Chinese conflict.