Sunday, June 30, 2013
It keeps getting worse
European officials lash out at new NSA spying report http://news360.com/article/190600430
Friday, June 28, 2013
Keynes v Hayek
It is common practice for liberal democrats to suggest increasing taxes
on the rich in order to reduce the deficit. It is said that the ‘rich’ need to
pay their ‘fair share’ and contribute more in tax revenue. President Obama himself
said in the beginning of the year,
“I will ask for more tax increases on the rich later[1].”
On the other hand, conservatives typically want to reduce taxes and cut
spending. Also, conservative economists typically point to times in history
where reduced tax rates led to increased tax revenue[2].
Recently, there has been more talk from conservative and libertarian political
pundits that spending cuts coupled with decreased tax rates are the solution
for putting America on a sound economic path. Economists, such as Paul Krugman,
disagree with these suggestions and warn that ‘austerity’ measures will only
hurt the US economy and more deficit spending is needed[3].
At the core of US tax policy is the debate is between the Keynesian and
the Austrian view of economics. Krugman sides with the Keynesians, while
economists like Friedrich Hayek are in the Austrian camp. The debate has been
raging between the two since their inception. Each camp will point to specific studies
or periods in history to prove their theories.
In my opinion, the Keynesian view doesn’t make logical sense. Keynesians (Krugman) argue for additional
government spending to boost economic activity. This part makes sense; money in
the hands of consumers is good for economic growth and encourages economic activity.
The problem is the way in which money is given to the consumer. Under the
Keynesian view, money is typically distributed by government ‘stimulus’
programs; however, in order for the government to be able to distribute this
money it needs tax revenue. This is the major flaw in the theory. Typically,
Keynesian economics are employed during an economic recession or depression.
Aggregate demand needs to be increased, so the government decides to flood the
economy with stimulus. However, in times of economic depressions, money becomes
scarce among the middle and lower classes, so where are they supposed to find
the tax revenue to fund the stimulus? High income earners are tapped for their
wealth and are told they need to ‘pay their fair share’ to help out the rest of
the country. The issue here is, do increased tax rates on the rich actually
produce additional tax revenue? By just looking at the theory, simple math makes
it easy to assume that increased rates will produce more revenue – more money
being taken by the government means the government has more money, right? But, the problem is, it doesn’t.
Conservative economists have found that when you increase taxes on the
rich, they tend to either find additional loopholes to avoid paying taxes or
shelter their money in other countries. This then reduces government revenue
and leads to an increased deficit. It strains families who are trying to get by
because the tax increase shifts costs to middle-class consumers. The
conservative/Austrian view advocates for across the board reduction in tax rates
as the means with which to put money in the pockets of Americans.
Given the constant debate between the two economic camps, I decided to
find some data on my own and do some analyses.
In my search, I used married-filing-jointly tax rates from 1970-2012
from the Tax Foundation[4].
For government revenue, outlays, and surplus/deficit information, I used information
from the Office of Management and Budget (OMB)[5].
I decided to run a correlation analysis, which provides a numerical
representation of the relationship between two items, to see if there was a
correlation between tax increases and overall government revenue, and also to
see if tax increases reduces the overall budget deficit. The first analysis I
ran was between tax revenue and the top income tax bracket. I did this in order
to see if higher taxes on the rich did actually generate higher tax revenue. In
a correlation analyses, the closer the correlation value is to 1 or -1, the
stronger the relationship; the value for my first correlation analysis was R = -.763.
In other words, those who pay the highest taxes under the married-filing–jointly
status is significantly (p=.00)
negatively correlated with tax revenue.
So, as tax rates increase on the wealthy earners, tax revenue decreases.
This fits within the conservative view of economics and is also at odds with
the President’s current insistence that we need to increase taxes on the
wealthy in order to increase government revenue. At least in this instance,
married-filing-jointly tax rates should be reduced to increase revenue
(counterintuitive, I know).
Now, let’s continue and see how tax rates on the rich affect the
overall deficit. When I ran the correlation analysis between the overall
deficit and highest tax rates, the results were a little different than
expected, with a correlation value of R =
.387.
The results of this analysis show that as tax rates on the rich are
increased, the surplus also goes up. There is a statistically significant (p=.01) relationship between increased
tax rates and deficit reduction, although it is weak. This doesn’t exactly make
sense given the first test. If it is true that increased taxes reduce
government revenue, how can increased taxes reduce the government deficit? In
order to figure this out we need to adjust the correlation test. For the first
test I ran a bivariate correlation because tax rates have a direct link to
government revenue. Because the deficit depends on both tax revenue and
spending, I decided to control for spending (outlays).
When we control for government spending, the correlation returns to
negative (R=-.334) and is
statistically significant (p=.03). This
result makes sense given the results of the first test. Since government
revenue is reduced from tax increases, the overall surplus of the government is
reduced as taxes are increased.
The results of the tax rates and revenue test are important. Due to the high correlation value (p=-.763) of the initial analysis looking
at tax rates and government revenue it is clear that increasing tax rates on
the rich reduces government revenue. The results from the tax rates and deficit
test are not as important; the correlation is there, but it isn’t strong enough
to be conclusive. The issue with making the case that taxes on the rich will
reduce the deficit is that it’s overly simplistic. There are many factors that
come into play when looking at the budget deficit. New government entitlements,
as well as wars, have a much greater influence on budget reduction than
increased tax rates.
What can be learned from this information is that low tax rates do
actually increase government revenue. When you start to increase tax rates on
wealthy Americans, the job creators, their investments are taken elsewhere[6].
All of the political rhetoric in Washington about taxes and revenue has nothing
to do with actual numbers. It’s all a game – a way to win votes. If only our
politicians stopped the partisan bickering and looked at some hard numbers,
they would come to an agreement on tax policy. Keep taxes low, and in a time of
crisis, drop them even lower and promote growth.
Sunday, June 23, 2013
Response to Washington Times’ Jennifer Rubin on Rand Paul
On June 19, 2013 Jennifer Rubin published an opinion piece
in The
Washington Post in regards to Rand Paul and his praise of Edward Snowden. The
main purpose of the piece was to discredit Paul and come down hard on the
actions of Snowden. First, she overstates the praise of Snowden by claiming “leftists
and libertarians” praise him as a “hero and a martyr.” Some have suggested his
actions are in a sense heroic, and if you take the word as meaning someone who
exhibits courage he is most definitely. As for a martyr, well given that Snowden
isn’t dead (yet), that term doesn’t really fit.
The article then goes on to quote Paul from his appearance
on Hannity on Monday, June 17. Paul talks
about how parts of the NSA spying program were already public and then goes on
to say that there are fourth amendment rights issues that need to be
considered. Then, he links Snowden to MLK for his action of civil disobedience.
Rubin then goes on to criticize Paul because not long ago
Paul was talking about how the NSA spying program (PRISM) was top secret and
didn’t have oversight, but is now saying aspects of the program were public.
This criticism is somewhat accurate; the President himself has said on numerous
occasions that data collection and the FISA court were nothing secret[1].
What wasn’t so well known was the extent of information collected on American
citizens and that this info was being stored and kept for five years at the
NSA. But, it seems inconsistent to on the one hand decry Snowden as a traitor
when our own government is telling us this information has been available to
our elected leaders.
Rubin then goes after Paul’s reference to violations of the
fourth amendment. She makes the blanket statement that “Paul’s view of the
program…is almost certainly wrong.[2]”
It doesn’t appear to be so cut and dry given the ACLU’s recent suit against the
government. According to Jameel Jaffer, the deputy legal director of the ACLU,
“The program goes far beyond even the permissive limits set by the Patriot Act
and represents a gross infringement of the freedom of association and the right
to privacy”[3].
Rubin seems to be relying on how the Supreme Court in the past ruled that
personal information is covered by privacy laws but not that fact that
communication happens. The problem with this is, how then does the NSA handle
this information? There needs to be some sort of data collection beyond the
phone numbers or else their only reason to get more information on a particular
phone number would be that this number called that number multiple times, or
this particular country a bunch of times. If the metadata is only phone numbers,
it’s just a mash of numbers that are meaningless. Is calling someone in Saudi
Arabia probable cause for terroristic activity and grounds for an additional
FISA court warrant to gather more information? What about corporations that
make frequent phone calls across the globe; does an NSA analyst see their phone
number then make a judgment call saying that this number called that number so
we need to access all their records? When all you have is numbers and no
additional information, as the President claims, the numbers are useless. There
needs to be some sort of assigned meaning to the information. The only way to
gather that information is to start requesting data from companies like
Facebook, Microsoft, and Google.
It is true that intelligence gathering techniques are
sensitive, but it is also important for Americans to know the truth about what
is being given to the government and it is even more important for the
government to be operating within the Constitution.
Next, Rubin attacks Paul’s comparison of Edward Snowden and
Martin Luther King’s acts of civil disobedience. This is something I can get
behind. I think that relating these two individuals together is a bit of a
stretch given the different circumstances. But, Rubin takes things way
overboard. She sees a parallel between Snowden and Julius Rosenberg, a man who
was executed for leaking nuclear technology to the Soviet Union[4].
Okay, let’s look at her analogy and see if it fits. Snowden leaked information
to the media about a NSA spying program that was already in part public
knowledge. It was given to the Guardian
and has been expanded upon due to new interviews. Rosenberg and his wife gave military
weapons technology to the Soviet Union, including information on the Manhattan
Project. Also, according to the LA Times, the Rosenbergs “succeeded in handing
over top military data on sonar and on radar that was used by the Russians to
shoot down American planes in the Korean and Vietnam wars”[5].
Rubin relates these together by saying “Snowden [sic] didn’t deliver U.S. secrets to al-Qaeda operatives directly,
but rather put them out into the worldwide media for all to see. The method may
be different, but the crime is the same.” Seriously! How is this crime the
same? The method with which it was given and the content delivered was totally
different. The Rosenbergs delivered military technology that was used to kill
Americans, technology with the capability of destroying entire cities. The
Rosenbergs were confirmed Soviet spies! Snowden told the public that the NSA is
collecting metadata on phone records and have the ability to dig up the rest of
your records if they choose. One involves surveillance and the other
destruction and American lives lost. Rubin then caps it off by saying, “Frankly,
this lark by Paul is way nuttier than most of what his father said and did.” But
his father, Ron Paul, has been criticizing the administration and giving thanks
for the actions of Snowden[6]!
This belief that revealing the metadata collection program
and the NSA’s ability to access personal information from various companies
will give the upper hand to terrorists seems ridiculous. I highly doubt
terrorists in Saudi Arabia or Afghanistan are communicating their plans over
Verizon phones, or broadcasting this information on their Facebook pages. These
people surely know firsthand that their actions are being watched at all times
and know to be careful. Also, the issue isn’t about spying and gathering
intelligence on terrorists abroad, it’s about obtaining thousands of records on
Americans.
Rubin’s take on Snowden and Paul are way off base. With the
outrage from the right and left over spying, it doesn’t make sense to single
out only Paul. Given the fact that Rubin ends her article with a reference to
Paul seeking presidential election, and then criticizing how he reads the Constitution,
there appears to be an ulterior motive.
This is a smear piece against someone who has gathered a significant
following since he came to office and is challenging the Republican
establishment. The benefit of having someone such as Paul leading the executive
branch is that he actually believes in freedom and limited government. It seems
like all politicians who come to office run on these fundamental ideals; and
then when they hit the beltway, all is lost. We can only be thankful for men
like Rand Paul who are able to stick to their guns amidst torrents of criticism
like we see from journalists like Rubin.
Tuesday, June 18, 2013
The Syria Mistake
Amid growing controversies, the Obama administration has adopted a
common political tactic: get involved in a war. The President previously said
there was a ‘red line’ for President Assad of Syria and that, if crossed, the
United States would support the FSA (Free Syrian Army) rebels in Syria. Last
week it was reported that the Assad regime used chemical weapons on the rebels
and the United States will now support the FSA with small arms and other
support[1].
It is still unclear how extensive American support for the rebels will be given
that we have only been told small arms will be sent, but it has been reported
that 300 marines are now in Syria for the transfer of arms[2].
Also, the CIA will be responsible for arming and training the rebels[3].
Russia has come forward saying the evidence the US has against the
Assad regime isn’t conclusive and Putin is backing Assad[4].
The question that needs to be addressed is, why is the United States
getting involved in a civil war in Syria? Typically, the US gets involved in
the interest of national security. This isn’t the case with Syria; the
expressed reason for sending military aid to Syria is because there is evidence
that Assad used chemical weapons on the FSA rebels. The fact remains that the
conflict is staying contained within the nation and there hasn’t been an
increased threat of terrorism against the US.
Also, reports say the casualties of this civil war are in the area of
93,000 people[5]
and the amount killed by chemical weapons is around 100 to 150[6].
This hardly seems to justify intervention solely on the basis of evidence of
chemical weapons use.
There have also been reports that individuals fighting with the Syrian
rebels have links to Al Qaeda. Back in December of 2010, the London Telegraph
reported that multiple groups pledged allegiance to Jabhat Al-Nusra, which the
White House has linked to Al Qaeda[7].
Since this link has been made, the US is trying to say they will ensure that
weapons will not fall into the wrong hands. I for one don’t trust this claim,
given that the US wasn’t even able to track its own guns from the Fast and
Furious program[8].
Without having a presence on the ground to control the flow of arms, there is
no telling where these weapons could end up. Also, if the US does decide to
give anti-aircraft weapons to the rebels, these could easily be sold to radical
Islamists in the region once the war is over.
Given that the allegiance of the rebels is questionable at best, it’s
hard to understand why someone like John McCain is pushing for arming the
rebels with anti-aircraft and anti-tank weapons[9].
The record of the US arming rebel forces isn’t exactly a good one. The last
time we funded weapons to rebel groups without direct intervention we ended up
back there fighting the people we supplied, Al Qaeda. In 2001 USA Today
reported that the United States gave 25 sniper rifles to the fighters in
Afghanistan to be used fighting the Soviet Union[10].
During the 80s and early 90s the US was pumping weapons to these rebel forces
to fight against the Soviets, and we ended up having to go there to fight
against the very people we supplied. It was American foreign policy from Carter
to Reagan to expand what was known as “Operation Cyclone” which had the CIA
supply weapons to the Mujahedeen in Afghanistan[11].
We don’t even need to go that far back to see that arming the rebel
opposition might not give us the benefits we desire. In October of 2011, Gaddafi was removed from
power in Libya. It hasn’t exactly gone as well as one would hope; according to
the Daily Mail, “Up to 3,000 surface-to-air missiles have gone missing in Libya
since the conflict - and spy chiefs say
the state has become the 'Tesco' of the world's illegal arms trade”[12]. Then we have the regime change in Egypt,
where there hasn’t exactly been stability; millions of people there “have
signed a national petition demanding the president resign” and violence is
expected to erupt again[13].
It has been demonstrated that small scale intervention in local rebel
groups are ineffective in the past and the present. It is still unclear the
true motives behind President Obama’s reasons for sending aid to the FSA
rebels. The very fact that Saudi Arabia
will be supplying the Syrian rebels with anti-aircraft missiles[14]
makes me think we might be on the wrong side. But the other side means we would
back the Assad government, allying with Russia, which also doesn’t seem like a
good idea. But that’s the issue; there isn’t a side that needs to be chosen.
This sort of small scale intervention on behalf of small rebel groups doesn’t
end well. It ends up being a way in which large nations use small nations to
war against each other. Given the lack of a threat to the United States there
isn’t proper justification for intervention. The United States has been engaged
in conflicts across the globe for decades. It’s time to stop policing the
world.
Friday, June 14, 2013
NSA vs Privacy
Ever since the Guardian broke the story of the NSA spying on Americans,
the issue of privacy has been forced into the spotlight. Before this incident,
the concept seemed to not be of much concern to the average American. We are
now learning that people have very different views of privacy across the
political spectrum. Ever since Edward Snowden leaked information about the NSA’s
PRISM program, news outlets are reporting what the political leaders of our
nation think about this man and the merits of the program. House Speaker John
Boehner has labeled him as a “traitor[1]”,
and Diane Feinstein said the leak was an act of ‘treason’[2].
However, not all of our leaders in Congress agree with this assessment. Representatives
like Rand Paul are trying to combat the NSA with a constitutional challenge[3]
and the ACLU has already filed a lawsuit against the government[4]. There hasn't been much debate about the
definition of privacy and what the 4th amendment looks like in the
digital age, especially when it comes to privacy vs. security.
In order to have a better understanding of privacy we need to return to
the context in which the 4th amendment was penned. From here we can
draw parallels to modern times and come to a consensus. One of the best ways to
get an understanding of the founders’ concept of privacy is to look back at the
laws and treatises written in that day, and the University of Chicago’s The Founders’ Constitution provides us
with that material. According this this
book, one of the documents that influenced the Bill of Rights was the Virginia
Declaration of Rights. Section 10 of the Declaration says,
That
general warrants, whereby any officer or messenger may be commanded to search
suspected places without evidence of a fact committed, or to seize any person
or persons not named, or whose offence is not particularly described and
supported by evidence, are grievous and oppressive, and ought not to be
granted.[5]
This gives us a clear view of what privacy means to those in the state
of Virginia in 1776 when this was written.
Unless there is specific factual evidence, searches and seizures ‘ought
not to be granted’. The state of Vermont
had a section similar to Virginia and it reads,
That
the people have a right to hold themselves, their houses, papers and
possessions, free from search and seizure; and therefore warrants, without
oaths or affirmations first made, affording a sufficient foundation for them…
ought not to be granted.[6]
Again, the commonality between these two state laws
places an emphasis on ‘evidence’ or ‘sufficient foundation’ for any search or
seizure. It is clear that these had an
impact on our current 4th amendment.
The
right of the people to be secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures, shall not be violated, and no
warrants shall issue, but upon probable cause, supported by oath or
affirmation, and particularly describing the place to be searched, and the
persons or things to be seized.[7]
The question is, do we still believe this today?
The answer seems to be yes and no. The tricky part is, what does this
look like when the United States is engaged in a “War on Terror”? General
consensus is that we the people must be willing to give up some of our freedom
for the sake of security. The question
is how much freedom we are willing to give up for the sake of ‘security.’ Pew
research released the results of a poll with the question “Should the
government be able to monitor everyone’s email to prevent possible terrorism?”
and 45% of Americans said yes[8].
In essence, this means that almost half of the American public is willing to
let the government snoop around their emails to prevent “possible terrorism”.
The question implies that there is no evidence to back these searches; there is
no ‘probable cause’ as required by the 4th amendment. This is a
major deviation from what Americans believed when the Bill of Rights was
written. Fortunately, the United States wasn't founded as a pure democracy and
there are laws that protect us from the ‘tyranny of the majority.’
Since it is obvious that many Americans do not care about the federal
government obtaining ‘meta-data,’ the issue comes back to legality. Given the
continuing wars and the Patriot Act, it’s hard to draw the line between
security and privacy. Once we started fighting a war tactic (terrorism) we
opened the doors to pursue individuals around the globe and even in our own
country. Before the Patriot Act was passed there wasn't much debate about the
repercussions of passing this legislation. In 2001, when the Patriot Act was
passed, it was easy to see that many wanted this broad power given to the
government because of the state of the nation. There were anthrax attacks, 9/11
had occurred only one month before, and America had rallied behind the President.
However, that threat level is no longer on our minds. And while the threat
level has decreased, the abuse of the law has grown. According to NBC News, the
FBI increased its use of the Patriot Act by 1,000% last year[9],
prompting the author of the Patriot Act to come forward and say that this
administration has taken it too far[10].
The reassuring speeches representatives like Boehner and Feinstein give to us
about ‘checks and balances’ in the system lose their credibility when the FISA
court has only struck down 0.3% of surveillance requests[11]. But the damage has been done. The government
has woven a web of precedent that grant them authority to increase their power
when there is a ‘threat’ of terrorism and the government isn't obligated to
tell the American people how or why they are collecting this information.
So what is the next step? There needs to be a challenge to the NSA’s
PRISM program and their authority to track American citizens. Under the Bush
administration, people like John Yoo were advocating for warrantless
wiretapping of foreign nationals and the communication between Pakistan,
Afghanistan and the United States[12]. This makes sense as long as the people being
tracked are not citizens of the United States and are not protected by the Bill
of Rights. The director of the NSA, Keith Alexander, testified in front of the
Senate defending the program as thwarting terrorist activity in the US[13]. However, it appears evident that more than
just phone records are being accessed and we do not know exactly what the NSA
is obtaining. It is clear that during the time when the 4th
amendment was written, the government required probable cause. By obtaining
information on every American and then claiming to connect the dots on ‘dozens’
of threats, millions of people have had their information obtained and stored
by the NSA for 5 years without reason. The path that Rand Paul and the ACLU are
taking appears to be the best course of action. The baseless seizure of
American records is clearly in violation of the 4th amendment due to
its lack of ‘probable cause.’ We cannot allow the government to view the people
as guilty until proven innocent. We understand the threat of terrorism is real,
but when the government tells us we are always under this threat as long as
terrorists are trying to attack us, we will never get our freedoms back.
Who am I?
My name is Derek and I am a graduate of Liberty University's
Helms School of Government. For four years I studied politics and policy at
Liberty and also spent time as an intern at The Heritage Foundation. Like many
today, I am a recent college grad (swimming in debt) who is frustrated with the
current state of our nation. Because of this I have chosen this avenue to
express my concerns as well as praise for those in power.
The focus of this blog is to give my opinion on current
affairs from a libertarian point of view. I enjoy researching news
stories and am getting into some data analysis by teaching myself SPSS, which
will hopefully be featured here if the statistics don't destroy me.
I hope you will come back frequently and follow me on Twitter (Right_Side_Blog) for updates and links to articles I find interesting!
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