Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

10 January 2014

Senator Dick Durbin Says to Put Down Ayn Rand's Books

Senator Dick Durbin of the Democrat Socialist Party of the highly indebted state of Illinois, has told Senate Republicans to put down their Ayn Rand books and get to work on the socialist agenda, including perpetual unemployment insurance payouts.  He claims that if Republicans want to help the public, they should vote to take money by force from those who are working and give it to those who have largely stopped looking for work.  We know that many have stopped looking for work because Big Government has so degraded the economy with endless similar takings of income and wealth that private sector job creators have largely stopped creating jobs.  Labor force participation is the lowest it has been since that great failed Democrat Jimmy Carter was in the White House.  Durbin's solution is to take still more money by force from those who are working and give it to those who are not!

Durbin's solution is immoral, as Ayn Rand most ably made evident to rational thinkers who have read her books despite the vilification of collectivists.  Durbin's solution has been the modus operandi throughout this never-ending Great Socialist Recession, now starting its seventh year and likely to continue for at least one year after Obama has retired.  We can expect a 10-year recession due to such continuous nonsense as Durbin is backing.  So, any rational observer can clearly see that the Democrat Socialist Party solutions do not solve the problem, but instead are the problem.  It is always interesting to observe that extended attempts to ignore morality always end in disasters, such as this great American Lost Decade.  But then, as Ayn Rand said, one needs a moral code in order to assure one's survival and in order to flourish in life.  In other words, the practical man is a moral man and a moral man is a practical man.  Those who believe it is practical not to be moral are horribly mistaken.  So do read Ayn Rand.

Dick Durbin has never created more jobs than those of a small law practice in Springfield, Illinois, which he started after passing the bar in late 1969.  He mostly ran his private practice as a sideline while working for the Illinois legislature and running for offices in losing campaigns until he finally became a Representative in 1982.  One of his winning campaign issues was that he would solve unemployment problems.  He has yet to figure out how that is done.

It is a strange thing that so many people are now helpless to find work when most people were once capable of creating their own jobs in America.  Apparently for many Americans that enterprising spirit is dead.  Perhaps that is the main problem with employment today.

Does a loving Father tell his children that he does not care whether they learn to read and write or not?  Does he tell his children that they need not bother to learn to add, subtract, multiply, and divide numbers?  Does he tell them they are not to have chores to do, so that they will be happier?  Does he say that he does not care what they will do with their lives because he will always take good care of them?  No, he pushes his children to learn the skills they will need to take good care of themselves.  Yet Dick Durbin is telling us that we should not care about the effort our children make, we should without reservation promise to always care for them.  Well, as any good parent knows, you have to make demands of your children.  You have to raise them so that they will understand the need for work and the pleasures that being a competent worker provide.  If you are a loving parent, you push your children to become competent in managing their own lives and in choosing their own values.  You teach them the morals and the many skills they will need to live well.  You teach them that pride and happiness are well-earned when they abide by their morality and manage their lives well.

If this is the path we follow with those whom we love best, then how is it that anyone can entertain Dick Durbin's claims that it is better to treat your fellow Americans the way a poor parent would raise a spoiled brat with no hope of ever becoming a real adult?  How can it be wise to take the advice of such a fool then to put down Ayn Rand's books?

So, visit the Atlas Society and read about Ayn Rand's ideas if you have not.  Then buy her books and read them carefully.  Think deeply about all you know about life and evaluate her ideas as objectively as you can.  It is the practical and moral thing to do!  It will also be a most appropriate reply to the self-destructive and wrongheaded advice of Senator Dick Durbin.

Soaking Electricity Customers with Taxes in Maryland

I just received my January electricity bill for electricity used in the 33 days from 5 December 2013 to 7 January 2014 for my laboratory.  The total BG&E bill was for $158.20, which was a very small bill compared to months when we are running air conditioning.  Our heating is with natural gas.  The bill breaks down as follows:

BG&E Distribution and Account Services = $119.92
Electricity Generation Charges = $16.08
Maryland Taxes = $22.20

My laboratory paid 1.38 times more in taxes than it paid for the actual generation of the electricity we used!  Taxes were 14.0% of my total bill.

Of these taxes, the biggest single tax is the Maryland Universal Service Program charge which is a flat monthly fee of $10.29 to provide welfare aid to the poor.  Interestingly, this fee of $10.29 is also subjected to the 6% sales tax, so this is really a charge of $10.91 each month.  Note that this is discriminatory against very small businesses, since it is a fixed fee.  It is also, as are other charges on the bill, a disincentive to reduce one's energy use since it is not proportional to energy use.

Another tax is the Francise Tax, which is proportional to the number of kWh used.  That tax is also subjected to the 6% sales tax!  The remaining tax is an Environmental Surcharge, which was the only tax not subjected to the 6% sales tax.

The 14% taxation is not the whole story.  The state of Maryland buys into the same ideas on energy that Obama does.  Gov. Martin O'Folley does everything he can to increase energy costs.  BG&E and electricity generation companies have to pay the high costs of the solar and wind generation schemes favored by the Progressive Elitists, as well as biomass fuels.  Fortunately, these increased costs have been offset by the lowered cost of natural gas and a program which allows one to buy electricity supplied by companies other than BG&E.

09 January 2014

Increasing Mobility of Low Income People to Higher Incomes

I am going to comment on an article by W. Bradford Wilcox posted at the American Enterprise Institute on income mobility in the United States.  He has presented some data of Harvard economist Raj Chetty, a principal investigator at the Equality of Opportunity Project, based on local variations of local income growth, the share of single mother households locally, and local government spending.  The mobility is question here was actually one with a very high bar.  A child born into a lowest quintile household has to be a highest quintile earner by age 30.  Most highest quintile earners are well into their careers and tend to be much older 30.

Wilcox has fit these data sets with linear functions.  The data are interesting, though the linear fits are problematic for two of his three plots of the data.  In light of the recent renewal of Obama's redistributionist efforts, only partially and even falsely carried out by ObamaVaporCare, this is a good time to talk about what really affects income mobility.

The first plot, which is reasonably fit with a linear function, is:

This is not surprising.  Where income growth is strong in America, labor is more valued and those who want to work hard have many opportunities to make money.  Of course Obama's anti-business policies, high energy costs, excessive regulations, and the costs of ObamaVaporCare decrease income growth and are therefore likely to decrease income mobility on the national scale.  Nonetheless, local government efforts to suppress the free market will still leave a strong imprint on local mobility variations.  There is no question that it is much easier to start a business in some areas than in others, as an example with important affects on mobility.

Another critical effect on income mobility is:

Clearly an increasing share of households run by a single mother has a very negative effect on income mobility for their children.  The linear fit here is nonsense.  The proper fit is with a hyperbolic curve, which indicates a much stronger impact of single mother households on income mobility than a linear effect.  It has long been understood that there was a strong effect, but this data makes it very clear how strong and dominant that effect is.  It is well-understood that entitlement programs tend to increase the number of single mother households, so most of Obama's likely efforts to decrease income inequality will likely make it worse.  One of the many impacts of his policies already has been to increase energy costs, which really hurts those with little income badly.  How local government welfare programs are run will have a big impact on the number of single mother households.  Generally, the more money spent on such programs, the more single mother households.

The third plot is:


The thought here was that local government spending supports education, so with better local education systems, income mobility would be increased.  There probably is some such effect in some school districts, but we also know that generally increased spending on schools does not really correlate well with greater learning.  In some school districts, the people do have a high regard for education, but in many other districts it is just another labor union entitlement program to gain the teachers union votes.  Many inner city school systems are well-funded, but horribly managed.  So it is not surprising that the data does not follow any definable dependence in this case.  The data more nearly resembles a hand print with the palm pressed firmly and the fingers splayed out and pressing lightly.  Indeed, the thumb is nearly straight up, indicating that one can get virtually any result from spending $2,000 per capita on income mobility.  Clearly, neither local government spending nor local education spending is the primary effect on income mobility.  This is not to say that real learning is not important.  That I am sure is a critical effect.  But, sad to say, real learning is not something Obama is interested in.

Income mobility depends upon the opportunity to earn a living, which is heavily dependent upon government policies not shutting down or over-regulating opportunities.  Because freedom of contract is heavily suppressed in the USA, many opportunities to earn are decreased.  One such egregious way to decrease opportunity to earn and to develop a career is to increase the minimum wage.  Doing so hurts the under-educated the most by keeping them from getting their first jobs.  This keeps them from acquiring skills and from establishing a record as a worthy employee.  It forces many to turn to crime.  The high costs of providing health insurance under ObamaCare and the minimum wage increases that took effect just before and during the start of the Great Socialist Recession have already had a disproportionate impact on ensuring the unemployment and part-time employment of those in the lowest quintile income households.  Obama has been no friend to the small businesses that often hire young people and give them their first opportunity to prove themselves.

It is another Obama farce to claim that he is going to do something to increase income mobility and to reduce income inequality.  As always, he will cause effects opposed to those he claims he will achieve.  Of course his main purpose in this income inequality rhetoric is to distract the American People from the disasters he has already caused in the economy and with our medical care.