31 March 2010


Stephen Kershnar
The Breaking Point
Dunkirk-Fredonia Observer
March 28, 2010

The U.S. is rapidly approaching a breaking point when it will have to do one of three: lose a significant amount of wealth, cut government benefits or workers, or eliminate its foreign empire. It is not even clear that the third option is enough to eliminate the bloodletting. One thing is for sure, the solution will be painful.

The U.S. has spent itself into a hole. The government at all three levels (federal, state, and local) now spends more than 40 cents of every dollar produced in this country. According to www.usgovernmentspending.com, total spending is at a postwar high of 43% of the economy (gross domestic product) in 2009. The Heritage Foundation analyses show just how much spending is out of control. In 2008, the government at all levels spent $41,219 per household. This crazy level occurred because federal spending grew nearly seven times faster than people’s average (median) income from 1970-2008. In recent years, the problem has continued. Between 2002 and 2008, the federal government increased spending by roughly 7% per year (2 ½ times the inflation rate). Has your income increased at this clip?

This spending explosion has not been matched by an increase in revenue. The federal deficit was roughly 9.9% of the GDP in 2009 ($1.4 trillion) and is estimated to be 10.6% in 2010. The debt (sum of past and present deficits) is now enormous. The total federal debt was 86% of GDP in 2009 and is estimated to be 98% in 2010. Government projections show gargantuan deficits continuing into the next few years. To see the problem, consider what you would tell someone who makes $100,000 a year, owes $100,000, and plans to continue borrowing money to support his profligate lifestyle. Because 44% of the debt is owed to people and institutions in foreign countries, the debtors can’t easily be stiffed without a sharp increase in interest rates or painful cutoff of credit. The interest on the debt is 8% of the budget (2008 figure). As a result, the debt will feed on itself.

Given that the middle class and rich already pay so much of the revenue, this problem cannot be avoided by further soaking the rich. Already the top 50% of income earners pay 97% of the income-tax revenue (2007 National Taxpayers Foundation figure). That is, the bottom half of earners pay next to nothing (less than 3%) of income-tax revenue. Because the income taxes, corporate taxes, and estate and gift taxes constitute 59% of federal revenue, the upper classes already carry too much of the government weight.

Here’s the rub. To cut the spending, a powerful constituency or the U.S. foreign empire will have to take a hit. First, consider entitlement programs (Social Security, Medicare, and Medicaid). They constitute 66% of federal spending. Medicare (Hospital Insurance program) and Social Security will be in the red by 2011, if they are not already. Any attempt to cut Social Security and Medicare (or Medicare patients in Obamacare) will run into a political buzz saw as the numerous and well organized older voters clamor to get what they were promised.

Second, consider government workers. According to a Cato Institute scholar Chris Edwards, government workers are well paid relative to private workers. Specifically, they make 34% more in wages and 70% more in benefits. This gaps shrinks but does not go away once you control for skills. They also have more secure jobs. Private workers are three times more likely to be discharged than government ones. Politically, government workers are a potent army. They are five times more likely to be unionized and constitute over half of total union membership. Their power can be seen in that even with anger at government at a fevered pitch, no national figure is calling for deep cuts to their ranks. It can also be seen in that fixing even the most obvious problem, incarceration (the U.S. has 5% of the world’s population but 25% of its prisoners), runs into strong union opposition.

Third, consider the U.S. foreign empire. Consider work done by columnist Pat Buchanan citing research by Arthur Vance and Chalmers Johnson. The U.S spends more on defense than the next 10 nations combined and has more firepower than the next 13 navies combined. U.S. troops are stationed in 148 countries and 11 territories, including 100,000 in Iraq, 100,000 in or headed to Afghanistan, 50,000 in Germany, 35,000 in Japan, and 28,000 in Korea. When the budgets for the Pentagon, two wars, foreign aid, intelligence agencies, contractors in Iraq and Afghanistan, and new embassies are added up, it is roughly $1 trillion per year. Even if we were to cut all of this spending to $0, this would still not balance the budget. And even a 50% cut would produce overwhelming opposition from the wealthy and powerful defense lobby.

Because of the hole the U.S. is in and because government spending is backed by some of the most powerful constituencies, the U.S. is unlikely to climb out of the financial hole by cutting spending. Nor can it tax its way out of the hole. But debts must sooner or later be paid. With total government spending at record levels and the rich and middle class already shouldering a heavy load, it simply is not possible to transfer more money from the private sector without keeping the economy in the doldrums, if not tanking it, and making us poorer. As it is, the increasing transfer of resources from the more efficient private sector to the less efficient government acts as a brake on economic progress.

Economic growth is further threatened by the specter of inflation. In recent years, the Federal Reserve has exploded the money supply. In the waning years of the Bush administration, it shot up the monetary base (a key part of the money supply) up by more than 100%. Such an increase has not been seen in 50 years. The coming inflation will not only make us poorer, but will also produce uncertainty that that businesses hate, thereby slowing business growth.

Something has to break. U.S. citizens will have to choose between a significant loss of wealth, serious cuts to entitlements or government workers, or losing their empire. Even the loss of the empire is probably not enough by itself. A breaking point is coming and someone is going to get pounded.

17 March 2010

New York Politics: Corruption

Stephen Kershnar
New York Politicians: Pretty Damn Funny
Dunkirk-Fredonia Observer
March 15, 2010

New York politicians are so sleazy and incompetent that they are fun to watch. Sure, like their Washington counterparts, they’re running things into the ground, but this is a small price to pay for the entertainment.

Consider first the executive branch. Former governor and pompous crusader Eliot Spitzer (D) resigned after being caught with a smoking hot prostitute. When he was the New York State Attorney General, he aggressively pursued those in the prostitution business. He should have been thrown out of work when his office used the police in a plan to spy on and smear Senate Majority Leader Joseph Bruno (R) when Bruno travelled around the state with police escorts. When Spitzer stepped down in 2008, he was replaced by then Lieutenant Governor David Paterson (D). Paterson quickly admitted to adultery and drug use and the media gave him a clean bill of health. Apparently, prostitution-adultery is worse than either police spying or adultery and drug use. Albany is a wise place.

Ben Adler of Newsweek points out that the man the Spitzer administration was using the police to spy on was later convicted in 2009 on felony charges for corruption relating to $3.2 million in consulting fees he received while serving as Senate Majority Leader. My favorite part of his case was the $80,000 he received from a businessman in return for a worthless horse (see New York Daily News). One can see how Bruno might have gotten carried away. An article in www.wikipedia.com asserts that there is at least one building named for Bruno in each of the fourteen towns and two cities that comprise Rensselaer County, New York. Plus, there is a minor league baseball stadium, “Joseph L. Bruno Stadium,” in Troy, New York named after him.

Last month Paterson decided not to run for re-election because of allegations that he was involved in witness tampering and violating gift-rules. Paterson supposedly got New York State Police and staffers to try and talk staffer David W. Johnson’s girlfriend into dropping a domestic-abuse case. Paterson also allegedly lied under oath about soliciting free tickets from the Yankees for World Series games. One can just imagine Spitzer complaining bitterly that high-priced prostitution is much classier than Paterson’s low-rent activities.

In the State Senate that Joseph Bruno previously ran, Attorney General Andrew Cuomo (D) is currently investigating State Senator Pedro Espada (D) for allegedly violating state election, labor, and nonprofit laws. Fellow State Senator Hiram Monserrate (D) was convicted of assaulting his girlfriend and the Senate expelled him. A former NYPD officer, he allegedly slashed his girlfriend’s face with a broken drinking glass during an argument. In 2009, these politicians left the Democratic Party and formed a coalition with the Republicans. Both later returned to the Democrats. Democrats like characters. Adler asserts that the Democrats bought Espada with the Senate Majority Leader position. Monserrate is currently running for his seat again.

Just in case you’re wondering, this is the very same Cuomo who played a major role in the housing crisis that tanked the economy. He spurred Fannie Mae and Freddie Mac to underwrite more subprime mortgages and lower underwriting standards. Obviously with a foul-up so massive, he will be an excellent choice for governor. Having previously been married to Robert Kennedy’s daughter, he combines the Kennedy family’s judgment and the Cuomo family’s competence.

Even the state watchers have to be watched. New York State Comptroller Alan Hevesi (D) resigned in 2006. He did so as part of a plea bargain in which he was found guilty of defrauding the government for his personal use of state employees to help his wife. Given that, as Adler points out, New York City provided a police driver and security escort to Mayor Giuliani’s mistress, Judith Nathan, Hevesi could plausibly claim that everybody was doing it. Adler reports that Cuomo is currently investigating Hevesi for allegations that state pension fund gave contracts to Hesevi’s aides and political allies. My favorite Hevesi corruption allegation was that his aides gave $800,000 to Raymond Harding (Harding pled guilty for taking the money) in return for Harding not running for re-election so Hevesi’s son could win an Assembly seat. He did.

Speaking of Giuliani, his police commissioner, Bernie Kerik (R), was sentenced in 2010 to four years for assorted felonies. This differed from his 2006 conviction for, among other things, accepting a gift from a construction firm trying to do business with the city. Mayor Giuliani (R) recommended Kerik to the Bush Administration to head the Department of Homeland Security.

When it comes to corruption, though, Rep. Charles Rangel (D-NY) is king. This month he stepped down as chairman of the House Ways and Means Committee for taking corporate-sponsored junkets. The New York Post points out that this scandal is not to be confused with the ones surrounding his failure to pay taxes on a Caribbean villa, his failure to disclose more than $500,000 in credit union assets, the sweetheart deal involving four rent-stabilized Harlem apartments, and his use of Congressional office to raise money for a center modestly named after him. He’s still way behind Bruno. Because the four apartments were rent controlled, he paid at least $30,000 less per year than their market value. As a side note, the House has a $100 per year limit on gifts. The New York Times reports that the apartments’ owners also gave to Rangel’s campaigns. He also used one apartment as a campaign office despite the fact that the law disallows it. Rangel was able to afford the villa and other goodies despite working for the government since 1967. While Rangel got all these goodies, Paterson only got Yankee tickets. Unfair.

Funnier than Rangel is the recent resignation of Rep. Eric Massa (D-NY). According to Brian Palmer in www.slate.com, Massa admitted that he groped a male staffer and “tickled him until he couldn’t breathe.” That’s some serious tickling. He obviously is an excellent tickler.

Through sheer hard work, New York has become more corrupt than its two closest competitors: New Jersey and Illinois. As Jonathan Alter pointed out, Illinois managed to have three governors in prison and a fourth, Rod Blagojevich, has been indicted for trying to sell Barack Obama’s Senate seat. Impressive, but New York is more diverse and creative.

While these buffoons take bribes, tank the economy, and tickle away, New York faces a deficit that might be as high as $9 billion dollars. According to the Tax Foundation, as of 2009, it has the second highest state and local tax burden, the second worst business climate, the highest cigarette and gas taxes, and the fifth highest per capita property tax collections (the last is a 2006 figure, the latest available). Its financial mess is no fluke. It shot spending up by 41% over the last decade. With the recession in full force, the overall state budget increased by 8.7% last year and Paterson proposes to increase it again this year (0.6%). The New York Times reports that New York spends more on education per capita than any other state. The same is likely true for per capita spending on Medicaid (it was the highest in 2006 according to The Public Policy Institute). It is an interesting question whether the corruption causes the mismanagement, mismanagement causes the corruption, or some other relation holds.

02 March 2010

Holocaust: Guns & Jews

Stephen Kershnar
Guns, Jews, and the Holocaust
Dunkirk-Fredonia Observer
March 2, 2010

On April 12, 2010, many Jews around the world will celebrate Holocaust Remembrance Day (Yom Hashoah). Among the purposes of the holiday is to understand why the Holocaust happened and what can be done to avoid such slaughter in the future. The Holocaust has a central feature in the Jewish life. It played a large role in the creation of Israel and occupies a central space in the Jewish psyche.

The Nazi horrors are well known. The standard figure is that the Nazis killed roughly 6 million Jews. At death camps like Auschwitz, Treblinka, and Belzec, the murder ran with clocklike precision. The prisoners were efficiently unloaded from trains. The majority’s clothes and other possessions were promptly taken and, in some camps, they were told that they were to take showers or be deloused. According to Auschwitz camp commandant Rudolph Hoss and others, the camps differed in the degree to which they fooled the Jews about what was happening. The Jews were then herded into airtight rooms into which was dumped a poison gas (for example, cyanide-poison Zyklon B). It took up to 20 minutes to die (one estimate was that about a third died immediately), depending on how close an individual was to the gas vent. Jewish prisoners then removed the bodies, took out their gold fillings and cut the women’s hair, and burned them in crematoria. The prisoners hoped that doing this dirty work made them useful and would thereby extend their lives. Burning hundreds of thousands of human bodies produced a foul and nauseating stench that permeated the surrounding towns. Hoss and others claimed that the surrounding communities knew exactly what was going on. Jews were not the only ones on the Nazi to-do list. They also slaughtered millions of Poles and Russians and hundreds of thousands of gays and Gypsies.

Holocaust-level slaughter is not unique. University of Hawaii Professor R. J. Rummel points out that in the 20th Century governments killed roughly 169 million people via mass murder and genocide. This is almost four times more than were killed during this time from international and civil wars and many more than were killed by criminals. Rummel’s ranking of murderous leaders in terms of the number of lives snuffed out is as follows: Joseph Stalin (USSR), Mao Tse-tung (China), Adolf Hitler (Germany), Chiang Kai-shek (China), Vladimir Illich Lenin (USSR), Tojo Hideki (Japan), and Pol Pot (Cambodia). Having two of the top four slaughterers, the Chinese were 30% of the slaughter victims and the current Chinese government is the one created by Mao’s revolution. The Cambodian slaughter was especially bloodthirsty because the communist Khmer Rouge probably slaughtered over 2 million people despite having a population of only about 7 million. The government killed roughly 8% of its population per year in power.

It’s not clear that the current U.S. government and stable European and Asian democracies pose much of a threat of mass murder and genocide. Nevertheless if the concern is to make sure that genocide never again happens, it is worth considering what these murderous regimes had in common. These countries all had socialist ideologies, an absence of democracy, and gun control. All but Hitler’s Germany and Tojo’s Japan were communist countries. Germany and Japan were socialist governments in the sense that the governments exercised a large degree of control over the country’s economy. With the possible exception of Germany, none of these governments arose from a democratic vote and none were democratic when they murdered civilians.

Aaron Zelman and Richard Stevens, authors of “Death by gun Control,” argue that all of these governments had gun-control laws in effect. This included registration and license requirements, bans on private ownership, government list of gun owners, and severe penalties for gun-law violations. For example, Germany under Hitler banned private gun ownership. Zelman and Stevens argue that that slaughter would accompany anti-gun laws is unsurprising. It’s much easier to round up and slaughter unarmed and defenseless people.

In the U.S., Jews have a strong tendency to vote for politicians who support centralizing economic power and imposing gun controls and prohibitions. For example, 77% of Jews voted for Obama. This voting pattern is not unusual. Roughly the same percentage voted for Kerry, Gore, and Clinton. The most high profile Jewish politicians are all on the far left. Examples include Senators Charles Schumer (D-NY), Russ Feingold (D-WI), Barbara Boxer (D-CA), Dianne Feinstein (D-CA) and big-government independents Bernie Sanders (I-VT) and Joe Lieberman (I-CT). These senators enthusiastically supported the government takeover of car and banking companies, increasing government control of medicine, and judges who deny that the Constitution protects an individual’s right to own guns. For example, Jewish Supreme Court justices Stephen Breyer and Ruth Bader Ginsburg argued in District of Columbia v. Heller (2008) that Americans do not have an individual right to own guns. Surprisingly, older Jews (55 and over) appear to have been more likely to support Obama than younger ones (35 and under).

After blacks, Jews are the most liberal ethnic or racial group. They are even more liberal than union members and some academic departments. Leftist Jews might argue that the degree to which they support socializing the American economy is not remotely close to that found in the murderous regimes and that the sort of gun control they support will do little to disarm the American populace. In 2000, the FBI estimated that in the U.S., 60 million people own guns and they own over 200 million of them. Alternatively, they might argue that the risk of genocide in the U.S. is so negligible that other values (for example, social justice) are more important. These arguments are not implausible. If so, then the Jewish voting pattern is consistent with their continuing focus on the Holocaust and celebration of Holocaust Remembrance Day.

Genocide continues. In 1994 in Rwanda, roughly 11% of the country’s population (800,000 Tutsis and Hutu moderates) were killed, many with machetes. In Sudan, more slaughter. The Bashir government disarmed non-Arab groups in 1989. The Sudanese military and the Janjaweed, a Sudanese Arab militia group, have slaughtered large numbers of black Africans in Sudan, particularly in Darfur, where an estimated 400,000 have been slaughtered. Sure enough, the general pattern repeats itself. According to the Cato Institute’s Dave Kopel, in Sudan the totalitarian government made it virtually impossible for private citizens, specifically black Africans, to buy or own guns. Given this and other disasters that are sure to come, the failure of the international community, particularly the United Nations, to push for gun ownership has made populations increasingly vulnerable to such attacks. Perhaps if the international community, and those who love liberty, were to revisit the anti-gun policies that hamstring vulnerable populations, the chance of mass murder will be reduced.