Supporters of Liberty Are Always Attacked

Members of the tea party have been called tea baggers, extremists, racists, and Nazis by opponents of the grass-roots pro-liberty movement. While this shows the lack of “civility” of the left, supporters of liberty are always attacked for their beliefs.

Socrates spent his life fighting for freedom of speech and freedom of religion and became a martyr for these causes. In 399 BC, Socrates was charged and put to death for disbelieving in the official Greek pantheon and for corrupting the youth of Athens. But Socrates had also angered most of Athens for praising Sparta while the two were at war with each other, insulting the intellectuals of Athens by claiming he was the wisest man alive, criticizing the leaders of Athens, and arguing against democracy. Admitting that he enjoyed stirring up trouble, Socrates said at his trial: “For if you put me to death, you will not easily find another, who, to use a rather absurd figure, attaches himself to the city as a gadfly to a horse, which, though large and well bred, is sluggish on account of his size and needs to be aroused by stinging. I think the god fastened me upon the city in some such capacity, and I go about arousing.” [Plato, Apology 30e.] Socrates’ criticism of ancient Athens’ political system and leadership got him killed.

Demosthenes fought bigger government, higher taxes, and political corruption in ancient Athens. But he is best remembered for his opposition to Philip of Macedon and his son Alexander the Great. For years, Demosthenes spoke constantly against Philip, but had little success gaining allies. Nevertheless, Demosthenes demanded action, arguing it is “better to die a thousand times than pay court to Philip.” [Demosthenes, “Speeches” 9.65.] When Philip finally marched against Greece, his army easily won the battle and occupied Thebes but spared Athens. When Philip was assassinated, Demosthenes again attempted to form alliances and encouraged the territories under Macedonian control to rebel. But Philip’s son Alexander marched on Thebes, which immediately submitted to him. Thebes and Athens rebelled yet again upon mistakenly hearing that Alexander was dead, at which Alexander destroyed Thebes and placed Athens under Macedonian control. When Alexander the Great died, Demosthenes again tried to rally the people for independence, but Antipater, Alexander’s successor in Greece and Macedon, defeated the Athenians in battle, forced them to dissolve their government, and Demosthenes committed suicide before he could be arrested and executed.

Cicero was one of the most powerful men in ancient Rome and its Senate. Cicero fought for property rights, arguing “I do not mean to find fault with the accumulation of property, provided it hurts nobody.” [Cicero, De Officiis 1.25.] Cicero also fought against government-provided welfare, abolition of debts, and redistribution of land and wealth. But he is best remembered for his fight against imperial power. In his quest for power, Julius Caesar asked Cicero to join his Triumvirate with Pompey and Crassus, but Cicero declined, fearing it would hurt the Republic. When Julius Caesar was assassinated, Cicero as leader of the Senate and Mark Antony as consul and leader of those who supported Caesar became the two leaders of Rome. Cicero opposed Antony and made a series of speeches against him, known as Philippics for the similarity of his speeches to those of Demosthenes against Philip of Macedon. Mark Antony formed the Second Triumvirate with Octavian, Julius Caesar’s heir, and Marcus Aemilius Lepidus, a former consul and strong supporter of Julius Caesar. They immediately sought to exile or kill their political opponents, especially Cicero. Cicero was captured on his way to the coast, where he had hoped to escape to Macedonia. Cicero’s capturers “cut off his head, by Antony’s command, and his hands — the hands with which he wrote the Philippics.” [Plutarch, Parallel Lives Cicero 48.6.]

Cato the Younger was a very stubborn man who vehemently opposed corruption, demagoguery, and immorality. In the Senate, Cato focused especially on taxes and wasteful government spending. When Caesar, Pompey, and Crassus created the First Triumvirate, Cato was an immediate opponent. Cato opposed Caesar’s first major proposal to distribute public lands to the people. “No one spoke against the law except Cato, and him Caesar ordered to be dragged from the rostra to prison.” [Plutarch, Parallel Lives Cato 33.1.] Though the Senate disagreed with Cato’s position, they forced Caesar to free him from his unjust imprisonment. Seeing the growing tyranny, “Cato warned the people that they themselves by their own votes were establishing a tyrant in their citadel.” [Plutarch, Parallel Lives Cato 33.3.] But the people refused to listen to Cato and continued to support Caesar. Ten years later, Caesar and his army crossed the Rubicon, thus declaring war on the Roman Senate. The Senate fled and Caesar chased after them. Seeing that Caesar had won and knowing Caesar would have him executed, Cato committed suicide.

When you are attacked for supporting liberty, know that you stand on the shoulders of giants. And let us thank God and country, for we live in a society in which we have freedom of speech and in which the supporters of government tyranny can do no more than insult their opponents.

Sovereign debt implications of Middle East turmoil

Disregarding the discussion about the political effects of the protests in the Middle East, how about the financial implications?

The cost of protecting sovereign debt against non-payment in northern Africa and the Middle East continued to rise Tuesday as investors reacted to ongoing turmoil in Libya. Morocco was hardest hit, with the spread on five-year credit default swaps widening to 200 basis points from around 184 on Monday, according to data provider Markit. That means it would cost $200,000 annually to insure $10 million of Moroccan debt against default for five years, up from $184,000. The Egyptian CDS spread widened 19 basis points to 375, Markit said, while Bahrain’s spread widened 10 basis points to 317. The Israel CDS spread widened to 163 from 154.

Losses by banks in this region will only hurt the important countries’ fiscal situation.

Looking at Portugal, now the key country, interest rate are new highs.

The turmoil in the Middle East just adds a new twist to the sovereign debt crisis. Until nations reduce their debt levels, which none are doing right now, this story is far from over and will be around for years to come.

How much does an education really cost?

I thing the 7% expected annual return may too high, but otherwise Mr. Bill Walker has a very good point. Are we really getting our money’s worth with our public schools?

US Education: Show Us the Money!

by Bill Walker

According to the 2009 OECD figures, the US government spends more per pupil than any nation in the world except Switzerland. The US spent an average of $149,000 for the K–12 education of every 2009 public high school graduate. That works out to $11,461 per year or so.

So the solution is obvious: shut down the schools and invest the money instead. Just let the kids stay home and study on the Internet. Let’s even save some money to reduce the deficit, and only invest $11,000 per year. At 7% return, each child would have a $391,000 IRA when they’re 18. That way, even if they spend the next 50 years surfing or hiking the Appalachian Trail, they would all retire at 68 with $12,512,000 (assuming the same 7% average yearly return). This solves not only the education crisis, but the Social Security problem (they wouldn’t need it) AND the health-budget crisis (how much heart disease could there be, if everyone spent their time surfing and hiking?)

Continue reading…

An obvious defense of Scott Walker against the smears

Protestors in Wisconsin have compared Governor Scott Walker to Hosni Mubarak. But it’s not just the protesters. Even former Rep. David Obey (D-WI), a 41-year veteran of the House, said:

“All I know is that last week, when people were asking where Mubarak was — whether he had gone to Sharm el-Sheikh or Paris — I was saying he was ensconced in the governor’s mansion in Madison.”

Let’s compare the two.

• Hosni Mubarak was an autocrat who ruled over Egypt for 30 years without fair elections and no checks and balances on his power.
• Scott Walker is the duly elected governor of Wisconsin. He has been in power for a month and a half. He cannot enact any laws without bills first being passed by the state legislature.

The comparison is laughable. But then again, these very same people have compared Scott Walker to Mussolini and Adolf Hitler. Some even say he is Mubarak and Hitler combined.

As one who has been called a Nazi for supporting the tea party (I am an active member of the North Phoenix Tea Party), I know what it feels like. And for those who don’t know, I’m an orthodox Jew. If you are going to insult somebody, at least be tactful. These attacks against Governor Walker are tasteless, historically inaccurate, and make the protesters look bad. But then again, maybe the protesters are bad…

Teachers Unions only care about money

With the massive teachers strikes and protests in Wisconsin, I am very afraid for this country. The Bolshevik Revolution began with protests and union strikes. The Fascists in Italy and Nazis in Germany took over in part to stop the socialist/communist strikes. This country hasn’t seen strikes like these since the 1920s.

The teachers in Wisconsin don’t care about their customers: the students. We hear the cry over and over that “it’s for the children,” but when the teachers’ benefits are called into questions, they abandon the children during the school year to protest about money.

Just so you know, US Airways is protesting today down at Phoenix Sky Harbor over some contract dispute. Airline employees complain they aren’t making enough money. What about your customers? Airfares have gone up and quality of service has declined as we are packed into planes like cattle, and we now are poked, prodded, scanned, and molested to get through airport security. And through taxes and airfares, we pay for the right to do so.

Teachers unions. Airline unions. All other unions. All you care about is money, so stop pretending otherwise. “Fairness.” “Quality education.” “Safety.” You don’t care about any of that. You just want your share, more than your share, of the money.

Why should those struggling to make ends meet subsidize unions. Why can’t union employees compete in the free market like the rest of us? Because they are not worth what they are being paid? When did the land “of the people, by the people, for the people” become the land of “from the people, against the people, at the expense of the people?”

Bill of Rights. Good, bad, or indifferent?

In Federalist No. 84, Alexander Hamilton writes:

I go further, and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution, but would even be dangerous. They would contain various exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do?

I can see both sides of this argument:

• By listing certain rights, other are ignored and those in power will infringe on those unlisted rights, even if they are included in the ninth and tenth amendments.
• On the other hand, it is possible the government would have more easily infringed on our rights if they were not written down for posterity.
• Maybe the Bill of Rights has made no difference in either direction as the Constitution is increasingly ignored and reinterpreted. The government has simultaneously grown its power and reduced our rights so that the Federalist argument against bills of rights and the Anti-Federalist argument for them turn out to be the same thing: different methods of limiting the growth of government, both of which failed over time, but only after working well for many decades.

I must admit that I have an ulterior motive in bringing this up. I am writing about this in my next book. I’d love to hear your thoughts. (And if you have a great idea or quote, I may even quote you in my book.) So please, comment below.

New York ruling changes tax law. Get ready for a marginal tax rate of 288%.

New York has decided that owners of property living in another state may still have to pay income taxes in New York. The Wall Street Journal reports:

Connecticut and New Jersey residents with a Hamptons summer cottage or a Manhattan pied-a-terre are about to get a nasty surprise: New York state wants more taxes from them.

A New York court ruled last month that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million.

Tax experts and real estate brokers say this ruling could boost the tax bill for thousands of business executives who own New York City apartments they use only occasionally. It could also hurt sales in the Hamptons and New York’s other vacation-home communities.

I want to focus on this line:

Under the ruling, if an owner doesn’t spend a single a day in a home it could still count toward a permanent residence.

If every state applied this ruling and federal court does not overturn it, a person could in theory own housing property in every single state and thus owe income tax in every single state and the District of Columbia. By my rough calculation using the top marginal federal income tax rate of 35% and the sum of all the top marginal state income tax rates, a person could theoretically be taxed at a rate of 288%. (Yes, I recognize it is absurd for somebody to have property in all 50 states and DC, but the whole notion of paying income taxes in every state you own property is equally absurd.)

I urge the federal courts to overturn this ruling. A permanent residence should be and must be the state in which the person lives the most. Income should only be taxed by states once, either by residency or by where it is earned. Not both and certainly not in a state where a person is neither a resident nor an income earner.

Isn’t this why we have the interstate commerce clause in the first place? To stop states from conducting commercial and financial warfare against other states or residents of other states?

We don’t want democracy in Egypt! We want republicanism.

Now that Hosni Mubarak has stepped down, the media, analysts, politicians, and just about everybody else is calling for democracy in Egypt. For example:

• Marketwatch: Real democracy has a chance in Cairo
• CTV: Will U.S. help Egypt transition to democracy?
• Washington Post: U.S. must take the walk to democracy with Egypt
• Joe Biden: “The transition that’s taking place must be an irreversible change in a negotiated path toward democracy.”

I believe these calls for democracy are made out of ignorance of the word’s real meaning. While we want a democratic system over there, we don’t want true democracy. Alexander Hamilton said at the Constitutional Convention:

“We are now forming a republican government. Real liberty is neither found in despotism, nor in the extremes of democracy, but in moderate governments.”

Here are some more quotes about the evils of democracy:

“Now the first of these to come into being is monarchy, its growth being natural and unaided; and next arises kingship derived from monarchy by the aid of art and by the correction of defects. Monarchy first changes into its vicious allied form, tyranny; and next, the abolishment of both gives birth to aristocracy. Aristocracy by its very nature degenerates into oligarchy; and when the commons inflamed by anger take vengeance on this government for its unjust rule, democracy comes into being; and in due course the licence and lawlessness of this form of government produces mob-rule to complete the series.” [Polybius, The Histories 6.4.7-13.]

“And hence when by their foolish thirst for reputation they have created among the masses an appetite for gifts and the habit of receiving them, democracy in its turn is abolished and changes into a rule of force and violence. For the people, having grown accustomed to feed at the expense of others and to depend for their livelihood on the property of others, as soon as they find a leader who is enterprising but is excluded from the houses of office by his penury, institute the rule of violence; and now uniting their forces massacre, banish, and plunder, until they degenerate again into perfect savages and find once more a master and monarch.”[Polybius, The Histories 6.9.7-9.]

“And a democracy, I suppose, comes into being when the poor, winning the victory, put to death some of the other party, drive out others, and grant the rest of the citizens an equal share in both citizenship and offices.”[Plato, Republic 557a.]

“Democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.” [James Madison, Federalist No. 10.]

“I do not say that democracy has been more pernicious on the whole, and in the long run, than monarchy or aristocracy. Democracy has never been and never can be so durable as aristocracy or monarchy; but while it lasts, it is more bloody than either. … Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide. It is in vain to say that democracy is less vain, less proud, less selfish, less ambitious, or less avaricious than aristocracy or monarchy. It is not true, in fact, and nowhere appears in history. Those passions are the same in all men, under all forms of simple government, and when unchecked, produce the same effects of fraud, violence, and cruelty. When clear prospects are opened before vanity, pride, avarice, or ambition, for their easy gratification, it is hard for the most considerate philosophers and the most conscientious moralists to resist the temptation. Individuals have conquered themselves. Nations and large bodies of men, never.” [John Adams letter to John Taylor, 1814]

“The one pervading evil of democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds, by force or fraud, in carrying elections.” [Lord Acton]

I for one shall hope that Egypt forms a republican and moderate government, just as Alexander Hamilton recommended for our own country more than 220 years ago.

Global Climate Volatility disproven

Previously, I wrote about how Global Warming has morphed into Global Climate Change, then Global Climate Chaos, and my preferred term of Global Climate Volatility.

According to a story in the Wall Street Journal, The Weather Isn’t Getting Weirder:

Last week a severe storm froze Dallas under a sheet of ice, just in time to disrupt the plans of the tens of thousands of (American) football fans descending on the city for the Super Bowl. On the other side of the globe, Cyclone Yasi slammed northeastern Australia, destroying homes and crops and displacing hundreds of thousands of people.

Some climate alarmists would have us believe that these storms are yet another baleful consequence of man-made CO2 emissions. In addition to the latest weather events, they also point to recent cyclones in Burma, last winter’s fatal chills in Nepal and Bangladesh, December’s blizzards in Britain, and every other drought, typhoon and unseasonable heat wave around the world.

But is it true? To answer that question, you need to understand whether recent weather trends are extreme by historical standards. The Twentieth Century Reanalysis Project is the latest attempt to find out, using super-computers to generate a dataset of global atmospheric circulation from 1871 to the present.

As it happens, the project’s initial findings, published last month, show no evidence of an intensifying weather trend. “In the climate models, the extremes get more extreme as we move into a doubled CO2 world in 100 years,” atmospheric scientist Gilbert Compo, one of the researchers on the project, tells me from his office at the University of Colorado, Boulder. “So we were surprised that none of the three major indices of climate variability that we used show a trend of increased circulation going back to 1871.”

In other words, researchers have yet to find evidence of more-extreme weather patterns over the period, contrary to what the models predict. “There’s no data-driven answer yet to the question of how human activity has affected extreme weather,” adds Roger Pielke Jr., another University of Colorado climate researcher.

Story continues…

That’s it! The science is settled. I expect to never hear about Global Climate Chaos, Extremes, Variability, or Volatility ever again!

Yea, right…

Favorite quotes from the best book every written on investing: “Reminiscences of a Stock Operator”

Even though it was written way back in early 1920s, Reminiscences of a Stock Operator is still the best book ever written about investing/speculation/trading. Here are my favorite quotes:

“The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to.”

“They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.”

“Stocks are never too high to buy or too low to sell.”

“The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear…. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”

“And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine—that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”

“A loss never bothers me after I take it. I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul.”

“The only thing to do when a man is wrong is to be right by ceasing to be wrong.”

“It was very curious how, after suffering tremendous losses from a break of fifteen or twenty points, people who were still hanging on, welcomed a three-point rally and were certain the bottom had been reached and complete recovery begun.”

“Speculation is a hard and trying business, and a speculator must be on the job all the time or he’ll soon have no job to be on.”

“Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature.”

“A man has to guard against many things, and most of all against himself – that is, against human nature.”  Reminiscences of a Stock Operator

“When I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.”

“Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position.  But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities.”

“Among the hazards of speculation the happening of the unexpected–I might even say of the unexpectable–ranks high.”

“The big money was not in the individual fluctuations but in the main movements—that is, not in reading the tape but in sizing up the entire market and its trend.”

“There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily—or sufficient knowledge to make his play an intelligent play.”

“They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.”

 

Yes, that’s quite a few quotes, but it’s such a great book that is full of great lines. (I will have to reread it for the zillionth time once I finish the book I am currently writing.)