If Congress Ran The Super Bowl

Americans love sports - it is one of the last vestiges of competition where merit determines outcome. One set of rules, and best person wins.

Congress must hate that.

So enjoy this week’s Super Bowl while you can, before Congress steps in to regulate it. The ACLU will find some 10 year old kid whose mom told her to be offended by players pointing to the heavens after a touchdown, and the nagging will begin about separation of church and state over the public airwaves or some such nonsense.

For starters, they will need to enact affirmative action so that the game is improved through diversity. Quotas for women, disabled, over 50’s, gay, and minorities – oops, no quotas for minorities, that would go the wrong way. Maybe racial quotas for offensive linemen, they seem to be mostly fat white guys - their dads probably got them the jobs.

Next they need to redistribute the wealth - can’t have a “point gap”. How about a tax on touchdowns that takes three points away from the team who earned it and gives it to the team “left behind”. And a field goal tax that puts one point into a strategic reserve trust fund to be used for emergency shortages of scoring – say if Tennessee ever plays Tampa Bay. Except they will raid the trust fund during the season to give some help to Nancy Pelosi's 49ers.

And then they will have to put whole sections of the field off limits to play – somebody will discover a mutant strain of endangered slug in the dirt under the south end zone and we will make the whole red zone on that side a wildlife refuge. Driving for a score towards that endzone? Too bad, get green. Maybe you can build a windmill and blow the ball across the goal line or put a solar panel on it and let it power itself to victory.

You think CEO’s make outrageous salaries - what about Larry Fitzgerald making $40 million, while some blue collar guy has to work two jobs – punting and holding for extra points – just to scrape up a measly $650k league minimum? Raise the minimum wage to $2 million and tax the quarterbacks – there are only 32 of them, so who cares if they vote Libertarian.

Let’s put IRS in charge of the referees, so there can be loopholes and exceptions to every rule. Holding? Claim an exemption if you weigh under 300 pounds; if over 300 pounds, multiply the penalty yardage by .06 times each pound up to 325, then use the Alternative Minimum Penalty. What happened to pass interference? Effective lobbying by National Cornerbacks Association got it written out of the code. The wide receivers' lobbyists are working to put it back.

The game would take quite a bit longer, after each play the democrats and republicans would have to grab the mike and claim credit and/or blame the other, depending on the outcome of the play. Somehow, it will be George W Bush's fault no matter what.

And for the team who loses because they partied the whole night before and didn’t watch game film or practice for two weeks? Bailout.

Won't that be a fun game to watch? Enjoy the game this Sunday while you can.

The Argument For Markets

There are only three ways to get what you want. You can exchange something for it, you can steal it, or you can beg for someone to give it to you.

Exchange is moral, stealing is immoral, and begging is dehumanizing. There is a definite pecking order of desirability among the three alternative means of getting what we want.

In the free market, goods and services are exchanged between buyer and seller at a price that is determined through direct negotiation between the two parties to the exchange. That price is necessarily fair, for unless both sides benefit, the exchange can not take place.

That is the chief argument for markets. Of the three alternative means to get what we want, it is the only one in which both parties benefit. And it is the only one that does not involve coercion.

Government doesn’t work that way. It steals from one person when it taxes, and it dispenses the loot to someone else who has successfully begged for the benefit received. The terms need not be fair, as they are dictated by only one party to the transaction - the government.

That is why markets are a better choice than government in all but a few instances. Of course, we need government to provide national defense, enforce contracts, build roads, maintain a currency - all sorts of things that benefit all citizens and could not be effectively purchased through private exchanges.

But for most things, markets are more efficient than government, and markets are more responsive to changes in wants and needs of the public. Markets are less prone to corruption, and are better able to weed out incompetence and failure.

Markets are also more democratic. Each transaction is a vote, a determination of value among those competing for your purchasing power. The fortunes of Pepsi and Coke are determined by a billion choices of a dollar each – Bill Gates gets one vote per can, and so does the day laborer in Peru. The most powerful capitalist on earth can not force his will on the market.

Pepsi and Coke must compete for your purchase of each can of soda; they also compete for your investment dollar. Millions of investors decide whether Pepsi or Coke is a better company to invest in; the CEO’s of each company are powerless over the price of their stock. You will decide what a share of Coke is worth, you and one other person who will decide to sell you their share at a price you both agree is fair.

The other key advantage of markets is that power is spread out over millions of people, instead of being concentrated in the hands of a few, as is the case in government. This is important because people make mistakes - always.

When a local bank president makes a mistake, the worst that can happen is one bank will fail – one out of thousands. When the Chairman of the Federal Reserve makes a mistake, the entire banking system fails. As if we needed another reminder.

Long before Congress got to consider a bailout for General Motors, millions of people voted on that very question. Car buyers decided to buy other products, and investors decided to buy other stocks. Millions of people decided not to exchange their labor (wages) for a GM product or a share of GM stock - they voted not to bail out GM.

So GM went to the government to get through begging for stolen dollars what it could not earn through voluntary exchange and competition. And the government obliged, dispensing billions of dollars taken from the very same citizens who had already said “NO!” to GM products and stock shares. So much for government of the people, etc. etc.

In the end, by going to the government, GM got its billions of our dollars without having to give us a car in exchange. None of us likes to haggle over a car deal, but any of us could have done better than that.

Say Please

Congress and President Obama are busy crafting the economic stimulus bill in Washington; the basics are pretty well worked out, just have to add a few billions of pork now to get it passed.

Since we don't have it stuffed under the mattress, Congress is going to have to borrow all of the trillion plus dollars they will be appropriating. Who is going to lend it to them?

We can rule out the American people, governments of the developed countries, the undeveloped countries, and the developing countries - none of them have any money to lend.

Corporations don't have much money left after all the losses they took last year. And besides, they look to invest their money in ventures that will return profits, not to give it to a government that will use it to regulate, tax, and harass them.

A year ago we could have gone to the OPEC countries, but now that oil is below $40, they don't have much cash left - even Dubai is in recession.

So who has trillions of dollars that we can borrow? The Chinese.

All these years of us buying Chinese goods has left them with quite a stash. Has anyone asked them if they will lend some of it to us? We should probably find out before we make all these plans to spend it.

And I wonder what kind of strings they will attach to the loans? If I were the Chinese, I would tell the U.S. to kindly shut up about all that human rights and environmental stuff, and then ask me for a loan - ask nicely, say please and pretty please.

Pretty please without all the lectures about how bad we are. You ran your country into the ground, so we probably aren't so interested in your ideas about how we should run ours.

The real Chinese are probably too polite to talk like that......but you know they are going to be thinking it.

And you know they are also thinking it will take a lot higher interest rates to get them to buy our debt than what the Fed is paying now. They are the only game in town and they know it; where else are we going to go for a trillion dollars - Denmark? Think Payday Loan kind of interest.

What are we going to do if they say no? Maybe they will decide that there are better things to do with a trillion than to give it to Barney Frank, Nancy Pelosi, and Hary Reid. Maybe they will decide to do some infrastructure projects of their own. They are under no obligation to lend us money, and there is nothing that we can do to force them to do it.

So it would be wise for Mr. Obama to learn a little Mandarin - starting with please and pretty please .

Congratulations, Mr. President

Today, Barack Obama became the 44th President of the United States of America.

There is a time and place for everything. This is the time to extend to President Obama our sincere best wishes for a successful term in office. It is the time to pray for him, for his family, and for this great nation as he accepts the mantle of leadership.

President Obama may not share our Libertarian views, but he shares our Constitution. He is our President, and he deserves our respect and support.

We will save our disagreements for some other day; today we congratulate him on his achievement, and we celebrate yet another peaceful transition of power from one party to the other.

Congratulations, Mr. President.

The Income Gap

You will start to hear more about the income gap now that Democrats are in charge of everything in D.C. Whenever a socialist wants to take a poke at capitalism, they point to the income gap to show how awful it is.

The income gap is the difference in average incomes between the top 20% of households and the bottom 20%. I, for one, don’t think an income gap is bad. In fact, I think it is a wonderful thing. I would go as far as to say the bigger the better.

What the income gap tells us how high the ladder of opportunity is in this country - higher is better, not worse. The income gap tells us how rich poor people can become as they climb up the ladder - richer is better. No income gap means they stay poor. Why do we want that?

The government's most recent report of household incomes showed the bottom 20% average $18,000 per year and the top 20% average $132,000. When politicians go off about the unfairness of this "gap", the implication is that the people at the top got there by stealing it from those at the bottom. It doesn’t work that way.

The top 20% got there by doing things like going to school, staying married, working a long time, staying out of trouble, inventing things, and starting businesses. They earned it.

A significant portion of the bottom 20% don’t work – whether by choice or by circumstance - and many of those who do work are young and just starting out, when they are just beginning to acquire skills and experience that will allow them to earn more later in their lives.

It's not so hard to figure out that people who work will have higher incomes than those who don't work. Likewise, there is nothing mysterious about people making more at the end of a career than those just learning a trade or profession.

When I was 20, my first job paid minimum wage. I was in the bottom of the bottom 20%; but I didn’t stay there, and most of us don’t. Long term studies show that people move up – more so here than in any other country on earth.

Not only do more of us climb up out of poverty, but we climb higher. America has produced more billionaires than the rest of the world combined. All those billionaires push up the average income of the top 20% - they make the income gap bigger, but is that really a problem?

If you make $20,000, you’re going to make $20,000 whether some other guy makes $100,000 or $200,000 or $2,000,000 or $2 billion. You should be hoping he does make $2 billion, because he will pay taxes you don’t have to, and his spending will create more jobs and higher wages for everyone.

Realistically, the only way to reduce the income gap is to enact a "maximum wage" that limits the amount that someone could earn in a year. This always seems like a good idea to Democrats, until they realize that such a scheme would hurt Madonna, George Clooney, George Soros, and other big time campaign donors.

Worst of all, a statutory maximum wage denies the essential freedom to own one's labor. The market will decide what compensation is fair - whether it is the compensation of a CEO, or Madonna, or the author of Bill Clinton's autobiography. Limiting income in the name of reducing the income gap denies opportunities for those most able to contribute to our national prosperity.

Not every child can be President, and not every child can be a billionaire, but every child should have the opportunity to be either one or both. The income gap tells us that hope is alive. That's a good thing.

Since You Asked.........

This week, President-elect Obama asked critics of his $1.2 trillion economic recovery plan to propose an alternative. Well, since you asked, here is mine.

Cut the corporate income tax to 10%. That would only “cost” $150 billion and would work better and faster.

Mr. Obama’s plan would create or save 3 million jobs for $1.2 trillion - $400,000 per job. 600,000 of those jobs are going to be government jobs, where we will have to pay salaries, benefits, and pensions into perpetuity.

Cutting the corporate tax rate would create the same 2.4 million private sector jobs for 1/10 the “cost” to the taxpayer with no perpetual liability for a new legion of make-work government jobs.

There is actually no “cost” as history shows that every time tax rates are cut, the total amount of revenues increase. Businesses use the money not taken in taxes to invest in growth and jobs. Those new jobs pay taxes and even though a smaller slice of the pie is taken by the government, the pie is much bigger, so everybody has more.

The U.S. has the highest corporate taxes in the world at 35%. Ireland has the lowest at 11%. We need look no further to understand why jobs are leaving this country at an alarming rate, while Ireland enjoys the highest rates of job creation and personal income growth in the developed world.

Isn’t that the objective – create jobs and increase income? Then why not do what works, instead of what doesn’t. We should be like Ireland, not like France. The European Union countries have over-regulated their way into higher unemployment, and lower per capita income than us – why are we trying to copy them?

While we are at it, let’s eliminate the capital gains tax. Candidate Obama promised to raise the capital gains tax rate by 30%. To receive the same return on an investment under the new higher tax rates, you would have to pay 10% less for any stock you would purchase. Conversely, if you were thinking of selling stock, you would make the same net profit by selling this year , before the new tax rates took effect, at a 10% lower price.

I made a friendly wager that if Mr. Obama won the election, the market would drop 10% in 30 days - it dropped 11% in 3 weeks. This was a rational consequence of the economic policy that the democrats ran on and won in this election - there was a change that the market obviously believed in.

Fortunately, math and cars not manufactured in Michigan dependably work in reverse. Just like increasing the capital gains tax rate causes the price of stocks to go down, cutting the rate makes them go up - this is not a theory, it has happened every single time, the rate has been cut.

So cut the capital gains rate and stock prices will soar – everyone's 401(k) will be back in the chips and the balance sheets of businesses, banks, and pension funds will be strong again. Besides, capital gains is triple taxation - we took a bite of the income we earned to have money to invest, we taxed dividends that stocks paid while we owned them, and then we tax a third time when we sell the stock. Many countries have no capital gains tax, and we should follow suit.

So there is your alternative, Mr. Obama. My plan would create more jobs, raise incomes higher, and restore the value of our 401(k), and it would cost a fraction of the $1.2 trillion you want to spend to accomplish far less. We would see immediate results, not have to wait "years and years" - your words, not mine.

There is a price, however. Government does not get to expand, and government does not get to take more of our money. Sorry, government, you don’t get to add 600,000 new jobs, and you don’t get to decide who wins and who loses as the economy transitions - we will do that for ourselves.

So there's your better plan - and thanks for asking.

Tim, Not Tammy

The purpose of this blog is to initiate my 2010 campaign to unseat Tammy Baldwin as the representative of Wisconsin's 2nd District in the U.S. House of Representatives.

I have no personal axe to grind against Ms. Baldwin; in fact, I believe she is an honorable woman who is sincere in her beliefs about what is best for our country.

It is those beliefs that separate Tim from Tammy - Tammy believes in Government, and I believe in Liberty.

Tammy believes it is a proper role of government to protect you from yourself, while I believe that you need to be protected from government.

Tammy believes the government should take more of what you earn and should re-distribute it to others as the Democrats see fit. I believe you should keep what you earn, and you should decide how to spend it, save it, invest it, or gift it to others as you see fit.

Tammy is pro-choice on abortion. I am pro-choice on everything - schools, pension, union affiliation, recycling, guns, religion, health care, charity, trade, speech, property, drugs.

Tammy voted for all the bailouts. I oppose any government intervention into the markets for the benefit or detriment of one firm or industry over another - bailouts are a horribly stupid.

Tammy is an internationalist. I'm a free trader. No more military interventions, no foreign aid, no international trade deals that strip us of our sovereignty. My 2-part foreign policy is really simple - we will buy your stuff, and we will sell you our stuff. That's it.

The Democrats have been in control of Congress for the past two years, and in a couple of weeks they will have full control of the federal government. If more government and higher taxes is the right answer, we will know soon enough.

But when we discover that Tammy's bigger government was the wrong answer, then 2010 will be Time For Tim.

Tim, not Tammy.

Saving Social Security

2012 is a watershed year for the social security system.

That is the year that outlays begin to exceed receipts as the front edge of the baby boomer generation reaches the age of eligibility for retirement benefits. It's only three years away.

There was supposed to be a trust fund built up from surplus payroll tax collections over the last 20 years, but the government used that money for other things. The piggy bank is empty.

A 2007 government study reports that the social security system is underfunded by $6.8 trillion dollars - that is the size of the gap between social security taxes collected and benefits paid out over the next 75 years.

That shortfall must be bridged by either a) increasing payroll taxes from the current 12.4% to nearly 40%, or b) by cutting benefits in half, or c) by greatly extending the age of eligibility. Or some mix of all three.

So here we are, just 3 years from going over the brink, and did you hear social security mentioned by either party in the election just past? Radio silence.

The reason you did not hear democrats or republicans talk about their plans for fixing social security is that they have no plans. At least Al Gore had that loopy lock-box idea in 2000 - that was better than nothing.

The only way to save social security is to make it voluntary, and transition it from a universal public pension system to a system of personal retirement accounts.

Workers would choose to either stay in the current system or to opt out and contribute to their own personal retirement accounts - money they would own and control, similar to the way 401(k) plans work today.

For a transition period of 20 years or so, those who opt out would gradually shift their payroll contribution over from 100% funding of the current social security system to 100% funding their own personal retirement account.

Viewed as an investment, the current social security system is lousy - a return of around 1% on the amount paid in to the system. Workers in their 40's who opt out, would get a return double that of the existing system. Those in their 20's would see returns 3 to 4 times what they would receive under the current system, assuming there would be a system for them to receive benefits from - a dubious assumption.

Workers who choose to remain in the current system will receive the benefits promised to them. Workers who opt out would get a better return on their payroll tax contributions. Current retirees would not have their benefits cut. Everybody wins - except of course, the government bureaucrats who would give you back control over trillions of your own dollars.

Converting from a current-pay social pension system (like social security) to a individually owned retirement savings accounts is not impossible - many nations have done so recently, Chile and Great Britain come immediately to mind. Chile did it in 15 years.

In 1994, the World Bank urged all nations to privatize their retirement security systems to encourage economic growth. Had we acted then, it would have been a much more comfortable transition period, and it would have been less costly.

Yes, there is a cost associated with transitioning over from one system to the other - it has been estimated at $5-6 trillion. That is less than the cost of doing nothing, which would be $7 trillion.

And the transition cost can be paid by selling some of the more than $6 trillion of federal government lands. And no, I'm not talking about selling Donald Trump Mt. Rushmore or Arlington Cemetery, I'm talking about the millions of acres of undeveloped dirt that you drive through up North and out west - the scenery you miss while you are sleeping on the drive.

A federal land sale would not only fund the transition to private retirement accounts and save social security, but it would also alleviate state and local budget deficits by adding trillions of dollars to the property tax rolls.

That's a Libertarian answer to a problem made intractable by the two major parties. Do the Republicans or Democrats have a better idea? Why not ask them, and see what kind of answer you get.

Vote Libertarian.