“The truth hits everyone like a million atom bombs, and I can’t understand how everybody can be so calm. Time is running out and we all just sit around. So leave your message at the beep, ’cause I am leaving town.” –Leave a Message, Get Dead

Yesterday was Tax Freedom Day, although here in California it’s April 14th if you consider our higher-than-average income taxes. Divide up the days you work: the first hundred days are for the government. The balance are for you to spend on yourself, if you ignore all the other extortion you pay as sales tax or other fees.

It’s impossible to “get by” in the US now. The average family is left with $100/month after mortgage, food and health insurance, a scenario assuming no vacations and one car! So many people are out of work and leaning on government to take care of them, that 33 states are out of money to fund jobless benefits. California is at the top of the list. When income can be variable, a rational approach is to save during times of plenty to cover the lean times. Government does not work this way. Government moves by political pull and the expedient solution of the moment.

As all odds mount against any rational, moral person being able to make his way through life here, the Galt Meter tilts into the red zone. Can you imagine a meter that shows how close we are to the nightmare world described at the end of Atlas Shrugged, a doomsday clock that shows how close we are to destruction by weapons of immorality? It seems we’re now at a 53/47 split. Nearly half of us work so the other half can loaf and tell us what to do. Furthermore, the top 10% of producers pay 73% of taxes.

Mark Steyn calls tax-payers suckers, the rubes filling PT Barnum’s pockets. In fact, we are livestock. Within the system, we have little choice but to pay. You can choose self-destruction in the form of unbending resistance, or you can choose self-destruction by exchanging your soul for a whip in your hand. Disobey or obey. This dichotomy is false. The alternative is to stop participating.

The way forward is out. An incredible opportunity approaches. Statism is dead!  What was a theoretical conclusion will soon be demonstrated empirically. Because of its imminent failure, statism’s captains will lose sanction, and no longer be recognized as authority. That inspires fear and excitement, similar to jumping off a high cliff into deep water. Are you ready to swim?

References

• http://www.taxfoundation.org/taxfreedomday/
• http://www.investors.com/NewsAndAnalysis/Article.aspx?id=529854
• http://money.cnn.com/2010/04/08/news/economy/state_funds_jobless_benefits/index.htm
• http://www.gainspainscapital.com/index.php?view=article&id=80
• http://directorblue.blogspot.com/2010/04/galt-meter-hits-red-zone-as-half-of-all.html
• http://www.youtube.com/watch?v=PGIgOIFdnMQ&fmt=18
• http://www.amazon.com/gp/product/0452011876?tag=leonatkinson-20
• http://www.youtube.com/watch?v=4b6YbkG5-W4

I would like to respectfully take issue with one word in that conclusion: only. Certainly, a rollback of entitlements would slow the inevitable decline of the state, but it’s not the only way, nor the most likely. Imagine the federal government coming to a consensus such as, “we just can’t afford it right now, so we’re halting subsidies for agriculture.” That’s an unlikely fantasy. What seems more plausible is a sudden disappearance of multiple programs, and the ones who’s beneficiaries have the least pull. Realistically, you can already see this. Big corporations get giant bailouts but schools want for funding.

It seems more likely that we will find decisions to cutback left unmade but made for us thanks to the hard facts of reality. These government programs will meet their just ends, and there will certainly be strong emotional reactions, tantrums even. I’m speaking euphemistically–I won’t be surprised when there are riots.

Some of these basic services our parents and grandparents handed over to the government are necessary and desired. (Being able to drive around on pavement is nice!) When the government fails to provide them, an opportunity might be seized. Without the a gun-powered monopoly chasing entrepreneurs away, what kind of wonderful solutions can we expect? I’m not sure, but I have been considering how I might help. Is anyone else thinking about how a collapse will provide an unprecedented chance to be productive?

Today, I noticed a new take on this upsidedown theme. This time, Patrick Corrigan shows Obama as pleading for help from the U.N. as the weight of the world bears down on him.

Truthfully, the weight of the nihilistic policies of the people who imagined the U.N. are crushing the wealth-producers of the world. Portraying Obama as Atlas is doublethink. Because it’s the same image Rand used for her famous novel, the misuse of this metaphor is particularly galling.

The logic of Obama’s address to Congress went like this:

“Our economy did not fall into decline overnight,” he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care, and education — importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.

The “day of reckoning” has now arrived. And because “it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,” Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.

But Krauthammer misses the key principle in action here. Obama is making a fervant plea to our religious emotionalism. We’re paying for past sins? It’s a day of reckoning? This is the type of argument you’d expect from Mike Huckabee, who’s argued that we’re stewards of the earth who shouldn’t wreck something that doesn’t belong to us. Or Pastor John Hagee who claimed the disaster in New Orleans as a result of Hurricaine Katrina was punishment from God for sinful behavior.

Obama leaves it vague as against whom we’ve been so sinful. Let the religious assume it’s God. Let the environmentalists assume it’s nature. It doesn’t matter. It’s the same nihilist rhetoric: you’re inherently evil, you’ve been doing evil things and the universe is trying to crush you.

The only sins we’ve committed are individually against ourselves when we agree to this irrationalism.

Paulson is quoted as saying, “There was only one way that we could reassure the markets and deal with a very significant and broad-based freezing of the credit market. There was no political calculus. It was overwhelmingly obvious.” To call the solution obvious is to insult your intelligence and bully you into not responding. It’s a great tactic if you’re selling used cars.

George Will has a brilliant piece today, in which he states “The essence of this crisis is lack of knowledge, including the inability to know who owes what to whom, and where risk resides. In such a moment, government’s speed should not vary inversely with its information.” He goes on to argue that handing over such a gigantic sum to Paulson for spending as he wishes, answering to no one, essentially creates a fourth branch of government.

This is exactly what what I was warning of in my last post, Don’t let this “crisis” be another excuse to give away your rights.

Congress has been handing over responsibility to special appointees of the executive branch for many years, which is arguably unconstitutional. Congress passed the laws that created this crisi. Congress approves the appointments of Bernanke and Paulson. Congress has failed and should be replaced unless they somehow get the guts to stop this insanity right now.

Bush has failed, too. His team has been meddling with the market and created this immediate crisis. Recall that they argued that they needed to bail out Bear Sterns in March 2008 in order to avoid what we’re going through now. Given that it hasn’t worked, why are we even considering more of the same?

I sincerely hope that our elected officials do not hand over the power and responsibility we’ve given them to these unelected, anti-thinking hucksters. I hope they wake up and realize most of us do not want a bailout for failures. What we need now is careful, thoughtful deliberation in public.  If congress chooses to fail, there should be no bailout for them either. We should sweep them all out of office.

Update: Is this crisis even a crisis at all? It’s possible that banks are simply measuring their worth according to misguided regulation. Read Maybe the Banks Are Just Counting Wrong from Saturday’s WSJ. That makes me hope there’s deadlock on this bailout plan for long enough for everyone to figure out we don’t need it.

1. The government enacts new laws that subvert natural behavior for the good of society
2. The government waits for this subversion to create a crisis
3. The government rushes in to trade your liberties for security from the crisis

We saw this pattern seven years ago. Leading up to 9/11, the government willfully ignored the threat of terrorism. I suppose the excuse was to keep people of the world happy with America. We wouldn’t want to upset other countries by responding to attacks by terrorists. Unfortunately, this timebomb went off in the most spectacular way. And many of us rushed to hand over out liberties to protect us from another attack.

We’re seeing it again. About 16 years ago, the government started enacting policy to force lenders to stop “discriminating” against high risk borrowers. They appealed to a sense of egalitarianism and argued that everyone deserved a chance to own their home. They made it so that it was impossible to be a lender and refuse to lend to people who obviously could never pay back the loans.

The fruit of this misguided vine began to ripen over the past year or so as we’ve seen defaults rise.  The government has been trying desperately to push back the tide with mountains of interference in the markets. In recent years they have been pushing the prime rate down in an effort to draw capital into the market and cover for mounting losses. Now we’ve reached the end of the line. The waiting is over and we’ve got the crisis.

Naturally, our most visible representatives of government, presidential candidates McCain and Obama, are offering the bargain that always comes in part three of this pattern. They spin a story about how businessmen have acted like gamblers, recklessly risking everything on higher profits. And now is the time, they say, when government must step in and take control. McCain went so far as to call for the firing of the head of the SEC, a position that the president cannot hire or fire. Furthermore, when both parties are offering the same solution with only degrees of severity to distinguish them, it’s likely they are wrong.

The people who need to get pink slips work in the House of Reprentatives and the Senate. They are the real source of this crisis. They pass the laws that screw up the natural market forces. They approved Greenspan and Bernake as successive chairmen of the Federal Reserve. It was under their watch that the Fed published guidelines such as Closing The Gap:A Guide To Equal Opportunity Lending. On page 15 of this document, there are the following guidelines for lenders, including this insane paragraph about sources of income (emphasis mine).

Sources of Income:  In addition to primary employment income, Fannie Mae and Freddie Mac will accept the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits.

Any reasonable person would conclude that being on welfare or drawing unemployment is a sure sign of someone who will likely not be able to make mortgage payments!

What we desperately need now is a swift pullback of control of the markets. Losers need to fail now, more than ever. We should not be swayed by the creators of crisis offering to bail us out. We should not believe them when they say, “we just need to suspend the constitution until we fix this.”

The insult to women is obvious. Michelle Malkin launched an attack on the media who would continue this line of argument while failing to question the many successful mothers we see every day on news programs.

What struck me is the implied insult to fathers packaged up in this meme. When I was growing up, the culture typicall accepted that fathers spent their time working, came home expecting dinner and flopped down in front of the TV for the rest of the evening. Mother’s took care of raising the kids, preparing meals, cleaning house. A mom was liberated if she had a job in addition to all of this.

It doesn’t work that way any more.

Every father I know works his ass off participating in the family. Yes, most of us have full time jobs, but we come home to help out with the cooking, cleaning and nuturing. Perhaps it’s just the crowd I associate with, but we understand that being a father includes getting up in the middle of the night to change a diaper. And if my wife is busy with some other obligation, I am perfectly capable of caring for our two little kids.

When I hear the argument that Sarah Palin’s family is somehow suffering for lack of attention from her, it implies that any contribution from her husband is discounted. Futhermore, it implies that fathers, in general, make no contribution. We do.

I am proud that made it through washing out cloth diapers in the toilet! There’s hardly a more macho job for a dad than dealing with the dirtiest jobs. Ultimately, it’s this meme that ought to be flushed down the drain.

In an interview with MEMRI, ElBaradei said “If Iran wants to turn to the production of nuclear weapons, it must leave the NPT, expel the IAEA inspectors, and then it would need at least…six months to one year. Therefore, Iran will not be able to reach the point where we would wake up one morning to an Iran with a nuclear weapon.”.

Given that his estimate of two years ago was 5 to 10 years, and the new estimate is 6 to 12 months, does this almost suggest that Iran virtually has nuclear weapons already? Does 12 months seem like enough time to prepare for an attack on Iran? There have been hints that our government has made some preparations, but it’s also clear that the Bush administration makes no plan to take action before its term is through. We can only hope that Israel will defend itself when there appears to be no alternative.

As with four years ago, the threat of totalitarian governments is the one greatest issue of the presidential campaign. We needed Bush, not Kerry, to execute the Iraq war. He’s fought it with one hand tied behind his back, but our military has made slow progress. I don’t feel any better about McCain than I did about Bush, but it’s very clear to me that Obama would be incapable of handling the crisis we’re headed for.

Last year, McCain joked about bombing Iran to the tune of the Beach Boys song, “Barbara Ann”. Our best hope is that this represents McCain’s true resolve, that he won’t paralize us with endless negotiation. The overwhelmingly important task of the next president will be helping the people of Iran to shed the chains of their totalitarian government, and therefore restoring security to the rest of the world.

I’ve found that this approach applies equally well to optimizing money. For example, when you’re running a business, you have a range of expenses. Some of them are for tangible goods, some of them are for outside services and some of them are for salaries. Imagine an office with a fancy coffee maker. Everyone might think it’s a waste of money and a luxury, but the cost of that expense is likely minuscule compared to salaries. You’re usually better off figuring out how to improve efficiencies in your work process than going with cheapo amenities.

Of course, once you know how this work, you can use it deceptively. Politicians do it all the time. Watch how they talk about earmarks, or the apocryphal $100 hammer. You might agree that it’s not a good idea for a congressman to request a $1mil earmark for his wife’s employer, but even $1mil is nothing compared to the most significant costs to the U.S. budget: Social Security and Medicare. If you check the measurements, you’ll find that all the earmarks together total about 1% of the budget, which Social Security and Medicare are about a third. (Total federal spending is about $2.9tril, and Social Security plus Medicare is about $900mil).

I’m a relatively young person in my late 30s. I wonder if I’m not alone in counting on getting absolutely nothing from Social Security by the time I might need it. I’m not taking that chance. I’m saving money in a 401K plus whatever else I can beyond the annual limit of a 401K. I really wouldn’t mind if my taxes were 30% lower and I had to take responsibility for my own retirement.

I enjoy the minor thrill of the bargain involved in some forms of recyling. I buy lots of second hand books and CDs. The moment that it’s some kind of duty that induces shame when we don’t comply with the dogma is the moment one should really feel shame for indulging in such a stupid, self-destructive habit. Choose logic over doctrine, choose pleasure over unaccepted obligations, and choose life over death.