Another Thought on Clinton’s Death Tax

This one by Brad Anderson, ex-Best Buy CEO.

This is a devastatingly stupid idea…. I worked for a guy who was a high school graduate, created a company—it didn’t make money for 20-years. And after 20 years it finally starts to build up. He has a dream that he’s trying to build, that includes passing some of it along to his family and if you take that away, why does he pay the price?

And why does that man’s family pay an even bigger price?

Enterprises that are left to heirs with value above Clinton’s death tax threshold very often have insufficient cash from the nature of the business—a farm, for example, or a physical plant-heavy enterprise—to pay up.  As a result, the heirs must sell their inherited business to raise the money for her vig.  And so the heirs are left without their inheritance—and so too often destitute.

Never mind this insult added to that injury: this wealth has already been taxed in real time, and often several times, as it was being created, earned, and distributed.

A Misbehaving Judge

Federal Judge Nicholas Garaufis went on an epic rant Thursday against the white-shoe firm Kirkland & Ellis for sending a rookie lawyer to defend media giant Facebook against two lawsuits filed by more than 20,000 plaintiffs accusing the social network of facilitating terrorism.

How dare they!?  Don’t they know that Garaufis is important?

He filled in that gap in their knowledge, though.

You tell your folks back at Kirkland & Ellis that if they think so little of this court that they didn’t send a partner here to talk about this kind of problem which implicates international terrorism and the murder of innocent people in Israel and other places.  I think it’s outrageous, irresponsible, and insulting.

I’m important, dammit!

Then he gave away his ruling on the case—developed even before the case had been heard in his august court.

Garaufis suggested that Facebook has a “social responsibility” to solve the problem raised in the suits. But when Burcher blandly replied that a lawsuit was not the proper vehicle, the judge unliked that answer.

“I’ve been a lawyer for 41 years and a judge for 16 years and I’m not having this discussion with you,” he said.

Never mind the importance of that particular discussion in this pretrial conference.  The judge is a very important man, and Facebook’s lawyer just wasn’t a big enough deal to be worthy of His Eminence’s presence.

This is a judge who needs to be removed from the case, and very likely should be removed from the bench.

It’s Not the Family’s Money

It’s the Government’s.  Never mind that Government didn’t build and earn that wealth, the family did, along with their associates.

Democratic presidential candidate Hillary Clinton would impose a 65% tax on the largest estates and make it harder for wealthy households to pass appreciated assets to their heirs without paying taxes, according to an updated version of her tax plan released Thursday.

This is the Progressive view of property rights and property ownership.

Some Data on the Obama Economic Recovery

And on Democratic Party Presidential candidate Hillary Clinton’s policy impact on that recovery from the Panic of 2008, since Clinton has promised, proudly, to continue and extend President Barack Obama’s (D) economic policies.  These data are via Robert Barro’s (Harvard University economics professor and American Enterprise Institute visiting scholar) piece in The Wall Street Journal.  He and a colleague, Tao Jin, looked at

macroeconomic disasters in 42 countries, featuring 185 contractions in GDP per capita of 10% or more. These contractions are dominated by wartime devastation such as World War I (1914-18) and World War II (1939-45) and financial crises such as the Great Depression of the 1930s.

Among other things, they found that blaming the slow- to non-recovery on the Panic’s severity or on global financial crises, in their gentle phrase, “conflicts with the evidence.”

Among the specifics of their findings:

The growth rate of total nonfarm payrolls averaged 1.7% a year from February 2010 to July 2016, despite the drop in the labor-force participation rate. The post-2009 period is not a jobless recovery; it is a job-filled non-recovery.

And

[T]he drop in the unemployment rate—from 10% in October 2009 to 4.9% in July 2016—has been impressive, though overstated because of the decrease in labor-force participation.

Never mind that half the GDP lost during the contraction is typically recovered within two years of a recovery’s start.

So, what policies led to this failed recovery?  There have been lots, ranging from attacking hydrocarbon-based energy production and the destruction of jobs with the subset of the Democratic administration’s war on coal (and growing war on oil and natural gas), the Obama EPA regulations intruding onto private property (no cattle ponds on private ranches, recall), Labor Department’s and NLRB’s restrictions on non-union labor, and so on.  The primary policy, though, has been this administration’s increase in government transfer payments.

Federal social benefits to persons (things like Medicaid, Medicare, Social Security, and food stamps) as a fraction of GDP rose from 8.7% in 2007 to 10.9% in 2015.  That’s a 25% rise in the fraction of GDP that’s money taken out of the private economy, washed through a middleman government, and the remainder then passed along to others.  In real dollar terms, that’s an increase from a skosh over $1.3 trillion in 2007 to a skosh under $2 trillion in 2015, an increase of more than 50%.

That’s money not applied to actual economy-stimulating and job-creating activities: free trade, rolling back inefficient regulations, fiscal discipline, and, yes, public infrastructure such as highways and airports.  That’s money not applied to enhancing productivity.

The growth rate of GDP per worker from 2010-15 was 0.5% per year, compared with 1.5% from 1949 to 2009.

Instead, Clinton not only wants more of the same.  She was for the Pacific and Atlantic free trade deals on offer (and one soon to be before Congress) before she lately found it politically expedient to be against them.  She favors increasing regulation—evil Wall Street and political speech are her targets du jour—not reducing it.

Her idea of fiscal discipline is increased spending, partially paid for with higher taxes.  She wants “free” education, paid for with higher taxes; reduced borrower liability for student loans, paid for with higher taxes; free day care, paid for with higher taxes; free health care—single payer, yet (never mind that contradiction)—paid for with higher taxes; free family leave from employment, paid for with higher taxes and higher prices since the employer must pay, also, if only through reduced output and so reduced sales; and on and on.

And that infrastructure work?  She is for that—so long as it’s done by Government approved union labor, and not by the most cost efficient contractors.

The Entire Island

Repair crews worked through the night trying to restore electricity to Puerto Rico’s 3.5 million people early Thursday after a fire at a power plant blacked out the entire U.S. territory.

Officials said they hoped to restore service by morning….

It turns out that they didn’t make by the morning, and the outage extended into a second day—lengthened not just by the severity of the problem, not unique in itself to Puerto Rico, but also by Puerto Rico’s lack of money with which to fund repairs or even parts and equipment to replace the damaged/failed parts and equipment.

I have to wonder about similar vulnerabilities, similar single points of failure, extant on our separated States and other separated territories and within CONUS.  I have to wonder about these vulnerabilities not only in our power distribution grids, but in our communications grids, and cascading from those, in our financial networks and our government effectivity networks.

As Governor Alejandro Garcia Padilla said,

The system is not designed to withstand a failure of this magnitude.

Neither are any of our systems.  Nor are they designed to any large degree to minimize, if not eliminate, single points of failure.