Wealth distribution

Progressive/statist/altruists bemoan the maldistribution of wealth. To some extent I do not disagree. There is definitely wealth inequality. The data are unassailable. The issue from my perspective is that progressive/statist/altruists believe they have the solution to the problem when the data suggests they do not.

[Source: The millionaires’ club expands, by Robert J. Samuelson]

Credit Suisse Research has been tracking the world’s wealth since 2000. Since 2008 the Democrat Party controlled either two or all three of the three seats of elected power, the Presidency, the House of Representatives and the Senate. Under the Obama administration – the nearest thing to a socialist government the US has seen in many decades – the maldistribution of wealth has increased, not decreased. During the nation’s economic recovery (i.e., during the Obama administration), the mean net worth of households in the upper 10% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 90% dropped by 4%, according to a Pew Research Center analysis of Census Bureau data. I could speculate as to the origins of this change – and likely would be correct – but the change is dramatic. The change can be directly traced to the Obama administration’s handling of the economic recovery (QE 1, QE 2, QE “infinite,” the “stimulus,” and the massive deficits – see footnote).

The wealth totals calculated by Credit Suisse add the value of people’s homes, businesses and financial assets (stocks, bonds) and subtract their loans. Credit Suisse did a special analysis of wealth inequality and, not surprisingly, found plenty of it.

The United States is far the wealthiest nation – total net worth of $84 trillion, about one-third of the world’s total wealth of nearly $263 trillion. In the United States, the wealthiest 10 percent of Americans own about 75 percent of the personal wealth. Let’s compare this to Sweden, a socialist nation, where the top 10% controls 69 percent of the nation’s wealth. In Switzerland (nearer to socialist than otherwise) the top 10% controls 72 percent of the wealth. In Denmark, a highly socialistic state, the top 10% control 68 percent of the nation’s wealth. While the US share is slightly ahead of these more socialist nations, the socialists are far from touting that they have a solution to the problem.

There is another country worthy of mention. While no longer a “communist” nation they have the longest tradition of communist thought influence. They also have the highest level of wealth inequality. It is “so far above the others that it deserves to be placed in a separate category.” This is Russia. In 2014, the wealthiest 10 percent owned 85 percent of personal wealth.

We can have a goal of deceasing wealth maldistribution, but we must apply the correct solutions. Taking money from “the rich” and distributing it too “the poor” will alter the balance only until the rich become poorer and the poor become poorer still. Socialism and communism are tried and FAILED equations.

Review the ad below that I recently posted. Socialism and wealth redistribution by progressive/statist/altruists is not the solution.

Roy Filly

Footnote:

The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president. That is more than the debt increased under all U.S. presidents from George Washington through Bill Clinton combined, and it is more debt than was accumulated in the first 227 years of this nation’s existence–from 1776 through 2003. The total federal debt first passed the $7-trillion mark on Jan. 15, 2004, after President George W. Bush had been in office almost three years.

By the numbers:

When President Obama took office on Jan. 20, 2009, the total federal debt was $10,626,877,048,913.08. As of the close of business on July 30, 2014, it had risen to $17,618,599,653,160.19–up $6,991,722,604,247.11 from Obama’s first inauguration day. By the close of business on July 31, 2014, it had risen to $17,687,136,723,410.59—up $7,060,259,674,497.51 since Obama first inauguration day. As of June, there were 115,097,000 households in the United States, according to the U.S. Census Bureau. The $17,687,136,723,410.59 in debt the federal government had accumulated as of the end of July equaled $153,671.57 per household. The $7,060,259,674,497.51 in new debt that the federal government has taken on during Obama’s presidency equals $61,341.82 per household.

 

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Government forecasts are inaccurate, specious, fallacious and unsound.

Some of the worst predictions of all time.

I think there is a world market for maybe five computers.

Thomas J. Watson, 1943, Chairman of the Board of IBM

It doesn’t matter what he does, he will never amount to anything.

Albert Einstein’s teacher to his father, 1895

Who the hell wants to hear actors talk?

H. M. Warner, Warner Brothers, 1927

640K ought to be enough for anybody.

Bill Gates, 1981

Louis Pasteur’s theory of germs is ridiculous fiction.

Pierre Pachet, Professor of Physiology at Toulouse, 1872

Computers in the future may weigh no more than 1.5 tons.

Popular Mechanics, 1949

We don’t need you. You haven’t got through college yet.

Hewlett-Packard’s rejection of Steve Jobs

The American colonies have little stomach for revolution.

King George II, 1773

[ObamaCare] puts our budget and economy on a more stable path by reducing the deficit by more than $100 billion over the next ten years – and more than $1 trillion over the second decade – by cutting government overspending and reining in waste, fraud and abuse.

White House Blog, 2010

I hope you enjoyed the above quotes. It is not the first time I have published them.

Our federal government lives on predictions. The problem is that its predictions are usually far off the mark. I anticipate that the prediction about ObamaCare will join the pantheon of misbegotten predictions and rival, “I think there is a world market for maybe five computers,” by the Chairman of IBM. Too bad for us!

[Source: Accuracy of macroeconomic forecasts, by Chris Edwards]

The former chairman of the Council of Economic Advisers, Edward Lazear, has recently written about the inaccuracy of government forecasting models:

My analysis of 1999–2013 reveals that the [Congressional Budget Office]’s real GDP growth forecasts for the next year were off, on average, by 1.7 percentage points, either too high or low. Administration forecasts were similarly off by a slightly larger 1.8 percentage points on average, also too high or too low. Given that the average growth rate during this period was only 2.1%, errors of this magnitude are substantial.

Perhaps most damning: History is a better predictor of annual growth than government forecasts. Simply assuming that GDP growth will be 3.1% in each year—the average annual rate for the 30 years that precede the study period—results in an average forecast error of 1.5 percentage points.

Lazear’s article should be posted above the desk of every reporter and pundit writing about the macroeconomy. And it should be kept in mind by politicians, who often claim that such-and-such policy will create such-and-such number of jobs based on such models.

Big Government is Bad Government. It’s axiomatic. Our government needs to stop spending money it doesn’t have and institute zero-based budgeting (see footnote).

Roy Filly

Footnote:

Zero-based budgeting is an approach to planning and decision-making that reverses the working process of traditional budgeting. In traditional incremental budgeting (Historic Budgeting), departmental managers justify only variances versus past years, based on the assumption that the “baseline” is automatically approved. By contrast, in zero-based budgeting, every line item of the budget must be approved, rather than only changes. Zero-based budgeting requires the budget request be re-evaluated thoroughly, starting from the zero-base. This process is independent of whether the total budget or specific line items are increasing or decreasing.

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Top three myths about capitalism

The following video repudiates three of the false notions about capitalism that progressive/statists commonly spew forth when condemning it. Dr. Miron is a professor at HARVARD, certainly one of the most liberal institutions in this country. The video is short, clarifying, and illuminating.

Roy Filly

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You probably won’t read this but you should.

Several times I have written about my inflation fears – not just inflation but hyperinflation.

http://theruggedindividualist.wordpress.com/2011/11/07/im-a-little-hyper-about-hyperinflation/

http://theruggedindividualist.wordpress.com/2012/07/22/forget-taxmaggedon-it-is-time-to-prepare-for-hyperinflation/

http://theruggedindividualist.wordpress.com/2013/11/16/is-an-american-hyperinflation-possible/

It hasn’t materialized, at least not yet. This lack of inflation has brought out the Keynesian long-knives led by non-other than the economist-turned-moronic-pundit, Paul Krugman. He is the cheerleader for, “If only the stimulus had been larger or quantitative easing had been greater, we wouldn’t be living through the worst economic ‘recovery’ of modern times.”

The author of the piece below had similar concerns, as did many of his economist colleagues. They wrote an “open letter” expressing these concerns. Krugman has now employed his poison pen to belittle these economists. Below is Mr Asness’ retort. It is very balanced and, unfortunately but necessarily, long. Nonetheless, I think you should read it (and, by the by, there are some quite good belly-laughs to be had in the reading). And thanks to HP for sending it to me.

Roy Filly

The Inflation Imputation

By Cliff Asness, AQR Capital Management LLC

In 2010, I co-signed an open letter warning that the Fed’s experiment with an unprecedented level of loose monetary policy – in amount, and in unorthodox method – created a risk of serious inflation. Sporadically journalists and others have noted that this risk has not come to pass, particularly in consumer prices. Recently there has been an article surveying each of us as to why; seeming to relish in, when provided, our various rationales, presumably as they sounded like excuses. It seems none of the responses provided what the authors clearly wanted, a blanket admission of error. I did not comment for that article, continuing my life long attempt not to help reporters who’ve already made up their mind to make fun of me – I help them enough through my everyday actions, they don’t need more!

More articles of similar bent keep showing up. The authors seem to find it amusing that four years of CPI data wouldn’t get people to change their economic views, while ignoring that 80 years of overwhelming evidence has not dissuaded Keynesians from the belief that this time, if they could only run everything, not just most things, they’d really get it right.

Focusing my attention, as was predestined, Paul Krugman lived up to his lifelong motto of “stay classy” with a piece on the subject entitled Knaves, Fools, and Quantitative Easing. Some lesser lights of the Keynesian firmament have also jumped in (collectivists, of course, excel at sharing a meme). Responding to Krugman is as productive as smacking a skunk with a tennis racket. But, sometimes, like many unpleasant tasks, it’s necessary. I will, at least partially, make that error here, while mostly trying to deal with the original issue separate from Paul’s screeds (though one wonders if CPI inflation had risen in the last four years if Paul would be admitting his entire economic framework was wrong – ok, one doesn’t really wonder – and those things never happen to Paul anyway, just ask him).

Let me say up front that this essay will satisfy nobody. Those looking for a blanket admission of error will get part of what they want; a small part. Those hoping I hold the line denying any misstep will also be disappointed. I believe truth, as is often the case in similar situations, lies in the middle of these and I prefer truth, as I see it, to any reader walking away sated.

We indeed warned about the risks of inflation in 2010 and the CPI has been, to put it mildly, benign since then. First, to give the baying crowd just a bit of what it wants (I will take some of it back soon), our bad (I say “our” but obviously I speak only for myself). When you warn of a risk and it doesn’t come to pass I do think you owe the world this admission, even if you later explain what it means to warn of a risk not a certainty, and offer good reasons why despite reasonable worry this particular risk didn’t come to pass. I, and many other signatories, live in the world of economic or political prognostication, in my case money management, where if you get a bit more than half your calls right you are doing quite well, more than a bit more than half, you’re doing fabulously. I’ll put our collective record up against Krugman’s (and the Krug-Tone back-up dancers) any day of the week and twice on days he publish es.

Let’s start with the big one. We did not make a prediction, something we certainly know how to do and have collectively done many times. We warned of a risk. That’s a very specific choice people like the open letter writers, and Paul, have to make all the time, and he knows this, but that doesn’t deter him. Rather, Paul engages in the old debating trick of mentioning this argument himself and dismissing it. This technique worked for Eminem at the end of Eight Mile. But let’s not be fooled by chicanery (silly Paul, you are no Rabbit). If I had wanted to make a prediction, I would have made one. I didn’t, nor did my fellow signatories. Frankly, if there are any economists, aside from those never-uncertain-but-usually-wrong like Paul, who did not think such unprecedented Fed action represented at least a heightened risk, I think it was malpractice on their part. An honest Paul Krugman (we will use this term again below but this is something called a “counter-factual”) would have agreed with our letter but qualified that while heightened, he still didn’t think this risk would come to fruition and that he thought it was a risk worth running. Still, I will give the critics half credit here, accept half blame, and issue a demi mea culpa. By writing the letter we clearly thought this risk was higher than others did, and wished to stress it, and it has not (as most commonly measured) as of now come to bear. Our, and my, (half) bad. I hope that makes the critics (half) happy and they can stop copying each other’s articles over and over again.

Of course being able to call out risks, not just make firm predictions, is quite important. If you believe the risk of an earthquake is 10 times normal, but 10 times normal is still not a high probability, it’s rational to warn of this risk, even if the chance such devastation occurs is still low and you’ll look foolish to some when it, in all likelihood, doesn’t happen. If you can’t point out risks you are left with either silence as an option, or overly and falsely self-confident forecasts. Perhaps the latter may work for former economists turned partisan pundits but the rest of us will have to live with the ex ante and ex post ambiguity of discussing risks. It’s a real subtlety but I think there is truth somewhere in between the current attack meme of “you predicted inflation risk and were wrong and are now hiding behind the word ‘risk’“ and “we only said it was a risk so we cannot be wrong.” I thin k when you boldly forecast a risk you are saying more than “this might happen but either way I can’t be blamed” and something less than “this will happen and I stake my reputation on it.” We should all be mature enough to know the difference, but apparently that ship has sailed…

Not surprisingly, the above stress on risk jibes with my personal view of monetary policy, one that might not be shared by all my co-signatories. I tend to think it matters less than most think, and matters less often than most think. I tend to view it, for finance fans, in a “Modigliani Miller” (MM) framework, where most corporate financing transactions are paper-for-paper, mattering little. But, in the MM framework bankruptcy costs do matter. Therefore most corporate capital structure decisions are irrelevant, except to the extent they increase the chance of serious financial distress, in which everyone but the lawyers lose (in many models this risk must be balanced against the tax advantages of debt).

From this perspective, slight adjustments to the target Fed funds rate based on exquisitely sensitive perceptions of the probability of economic overheating or slowdown probably make little difference (and don’t even start me on the dots), but deflation or excessive inflation are important to avoid as their damage can be great. They are the bankruptcy costs of monetary policy. Thus, I think sounding the alarm, not making a prediction, that experimental and aggressive monetary policy raised one of these risks was appropriate. But, still, I think most people engaged on the topic spend a lot of time talking about monetary policy in the same way dogs spend a lot of time talking, yes in their secret dog language, about the cars they chase. The cars aren’t affected and generally don’t care.

Now, if you thought the above was an excuse on par with, continuing my canine fixation, “the dog ate my inflation,” and not the demi mea culpa I intended, you’re really going to hate the full blown non-conciliatory excuses about to come.

Economically, I think what everyone of any political or economic stripe missed, certainly including myself, was how little money would circulate, how little would be lent and then spent. In econo-geek, how low the money multiplier would be. Money kept by banks at low but positive interest rates at the Fed clearly isn’t doing much of anything, creating inflation as we feared, or helping the economy as they hoped. To the extent inflation worriers like us were wrong, so were those predicting great economic benefits. The Fed clearly wanted this money lent by banks and spent by companies on investment and by people on consumption. They didn’t get that, and we didn’t get the inflation we feared. This is not to say that low interest rates, real and nominal, and high prices for risky assets (and the supposed “wealth effect” that comes with them) were not Fed goals. They clearly were. But it seems these intermediate goals have not had their desired effect on the real economy.

Quantitative easing (QE) and other inventive forms of loose monetary policy have simply been less than hoped or feared. Some may declare Fed policy a great success as we’re not in a depression, but they can’t show any counter-factual, and given that this money has largely sat dormant, albeit presumably lowering risk premia (raising asset prices), it’s likely we’d have a similar record-weak recovery with or without it. How this is a victory for one side of the debate or another is beyond me, but obviously clear to Paul and his back-up singers. Of course, it’s also clear to Paul that the 2009 stimulus package saved us from this same second Great Depression (but more stimulus would of course have been much better). Yep, and if we traded good cash for just one more “clunker” we’d be growing at 5% per annum by now with a normal labor participation rate.

By-the-way, ignored in the critics’ review of the original letter was the line, “In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program…” On this I’m unapologetic. We were right, we’re still right, and thanks to people like Paul we’ve moved in the wrong direction. But that’s a fight for another day.

In a field without a broad set of counter-factuals we all stick too much to our priors and ideologies, and perhaps I’m doing that now. But at least I see it, and that’s always step one. Paul is stuck on step zero (if he ever gets up to “making amends” I will be around but given his history he might never get to me). But, if you’d like to advance past step zero, Paul, we’re still waiting on why Keynesianism failed to fix the Great Depression (no doubt not quite enough stimulus; just one more Hoover Dam would have done it, or, as they called it back then, “Dams for Clunkers”), strongly predicted a deep post-WWII depression, didn’t predict stagflation, and generally was on a the downward spiral to the intellectual dustbin until the great recession resuscitated it, not as a workable intellectual doctrine, but as an excuse for politicians to spend on their constituents and causes.

Also remember, much like when the Germans bombed Pearl Harbor, nothing is over yet. The Fed has not undone its extraordinary loose monetary policy and is just now stopping its direct QE purchases. When monetary policy is back to historic norms, and economic growth is once again strong, a normal number of people are seeking and getting jobs, and inflation has not reared its head, I think we can close the books on this one, still recognizing that forecasting a risk and having it fail to come to bear is not a cardinal sin. But which one of those things has happened yet? Paul, and others, should by now know the folly of declaring victory too early.

At the risk of enraging a whole different group (I promise I’m not denying anything I’m just making an analogy, and one I know is very far from dead on) I’m amazed that a Paul Krugman can look at 15+ years of the earth not warming and feel his beliefs need no modification or explanation, but 4 years of the CPI not inflating is reason not simply to declare victory, but to decry those who disagree with him as “Knaves and Fools.” In fact, rather than also anger Mr. Gore and Steyer, I hope they find this paragraph supportive as I’m saying these debates are rarely settled in either direction in short time frames. Now, if I were cheekier (cheek is not denial!) I’d ask if perhaps our letter was right and the inflation we predicted is in fact occurring in the depths of the ocean? Or, maybe we should ex post relabel our letter a warning of the risk of “extreme price action” including of course the extreme stability we have experienced in CPI these last few years.

Now, while not pointing to the actual ocean it is fascinating where inflation has shown up. Don’t limit your view of inflation to the CPI. No, this isn’t a screed where I claim to have invented my own consumption basket showing inflation is rising at 25% per annum – though some of those screeds are interesting. It’s the far simpler observation that we have indeed observed tremendous inflation in asset prices since this experiment began (of course this was part of the Fed’s intent – but it was meant to stoke real activity not an end unto itself!). Stocks, the spreads on high yield bonds, real estate, you name it. Inflation is hard enough to forecast, but where it lands is even harder. If one counts asset inflation it seems we’ve indeed had tremendous inflation. While admittedly difficult to prove, as is any of this if we’re being honest as economics rarely offers proofs, you’d be hard pressed to find many economist s or Wall Street professionals who don’t see current extremely high asset prices, and low forward looking returns to investors, as at least a partial consequence of the cocktail of QE, loose monetary policy, and financial repression. I understand Paul and others wanting to avoid this as not only does it show that they have no right to crow on inflation, but that the policies they advocate, and we decried, have had little effect on the economy but instead have, at least partially intentionally, exacerbated the inequality Paul spends the other half of his columns excoriating (while of course living himself off the global median income in protest and solidarity).

By-the-way, again the critics somehow manage to skip another prescient forecast in this same short open letter. We explicitly worried that the Fed’s policies “will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.” That’s econo-geek for “will drive financial market prices up and prospective returns down, and create financial instability when the Fed tries to stop.” Again, while this would perhaps not surprise the Fed, which actively desired low interest rates and a “wealth effect,” it seems that a fair reading shows that this much maligned letter wasn’t as wrong as the critics say, and was very right in ways the critics ignore.

Moving on, please recall that many, not all, supporters of QE and very loose monetary policy in general, did so exactly because they thought it would create some inflation, and they thought (and many still think) that’s what the economy needs. We, we the letter signers, are responsible for our own forecasts, but you might forgive us a bit for taking the other side at their word!

Bottom line, the half mea culpa above was not a throw away. When you go out of your way to warn of a risk and after a suitable period that risk has not come to bear, at least where everyone, including you, expected it, you should admit some error, and I do. But there is a still a big difference between pointing out a risk and making a forecast (hence the half admission!). A big reason this risk hasn’t come to fruition is, while not as dangerous so far as we thought, it appears QE was only mostly useless. To the extent even that is only mostly true, where effects did show up, it actually caused rather a lot of inflation, but inflation that went straight into the pockets of those who needed it least and whom Paul wouldn’t swerve his car to avoid. That is, it inflated financial assets, benefited the rich, and enhanced inequality.

So, to those who’ve been waiting for one of us to say it, you can have half the mea culpa you clearly want, but mostly Paul is wrong, and twisting the facts, and doing so as rudely and crassly as possible, yet again. The rest of the JV team of Keynesians who have also jumped on board are doing the same thing, just with more class and less entertainment value than the master.

Now for a real prediction: Paul will continue to be mostly wrong, mostly dishonest about it, incredibly rude, and in a crass class by himself (admittedly I attempt these heights sometimes but sadly fall far short). That is a prediction I’m willing to make over any horizon, offering considerable odds, and with no sneaky forecasts of merely “heightened risks.” Any takers?

Cliff Asness is Founding and Managing Principal of AQR Capital Management, LLC

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The government finds every way possible to pick your pocket.

Big Government has a voracious appetite for cash. It needs to constantly fuel every politicians’ need to “save” us. How do they do that, ask you? With a new costly “program” or bureaucracy, answer I. These all need cash to run. It is hard to find an area of economic endeavor where the government does not impose a tax, a levy, or a fee. They are constantly in search of “untaxed” revenue flows. Currently they have their sticky little fingers hovering over internet sales. However, today’s task is to enlighten you about the inordinate tax for using your new iPhone or Samsung Galaxy Mega.

[Source: Scott Mackey and Joseph Henchman, Wireless Taxation in the United States 2014, Tax Foundation]

Americans pay 17 percent in federal, state and local cell phone taxes, according to a new study from Scott Mackey and Joseph Henchman of the Tax Foundation. On average, wireless customers pay states and local governments an average tax rate of 11.23 percent, in addition to a 5.82 percent federal tax rate.

(As you can see from the table in the footnote, the average American’s cellphone tax is greater than the average income tax – RF).

Notably, the cell phone tax is twice the amount of taxes on other consumer goods and services, and some customers (in Washington, Nebraska, New York, Florida, Illinois, Rhode Island and Missouri) pay taxes worth more than one-fifth of their cell phone bill. The amount of taxes vary between states:

  • Washington (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent) and Illinois (15.81 percent) impose the highest state and local wireless taxes.

Your cell phone tax grew three times faster than did taxes on other goods and services just since 2005.

Mackey and Henchman contend the wireless taxes disproportionately burden low-income families, the majority of whom only have wireless phone service. Wireless service is critical in today’s economy. Aren’t these the statist/altruists that are the self-proclaimed protectors of the poor?

Big Government equals Bad Government. It is axiomatic! And if you are “poor” don’t believe for a moment that Big Government is on your side. You are simply their excuse to expand their sphere of influence in an ever increasing circle.

Roy Filly

Footnote:

Table 1. Summary of Federal Income Tax Data, 2011
Number of Returns* AGI ($ millions) Income Taxes Paid ($ millions) Group’s Share of Total AGI (IRS) Group’s Share of Income Taxes Income Split Point Average Tax Rate
All Taxpayers 136,585,712 8,317,188 1,042,571 100% 100.0%
Top 1% 1,365,857 1,555,701 365,518 18.7% 35.1% > $388,905 23.5%
1-5% 5,463,429 1,263,178 223,449 15.2% 21.4% 17.7%
Top 5% 6,829,286 2,818,879 588,967 33.9% 56.5% > $167,728 20.9%
5-10% 6,829,285 956,099 122,696 11.5% 11.8% 12.8%
Top 10% 13,658,571 3,774,978 711,663 45.4% 68.3% > $120,136 18.9%
10-25% 20,487,857 1,865,607 180,953 22.4% 17.4% 9.7%
Top 25% 34,146,428 5,640,585 892,616 67.8% 85.6% > $70,492 15.8%
25-50% 34,146,428 1,716,042 119,844 20.6% 11.5%   7.0%
Top 50% 68,292,856 7,356,627 1,012,460 88.5% 97.1%  > $34,823 13.8%
Bottom 50% 68,292,856 960,561 30,109 11.55% 2.89%  < $34,823 3.13%
*Does not include dependent filers.
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Not every billionaire is a “robber baron.”

The man in this ad embodies the reason tens of millions of people have emigrated to the United States. Millions more sneak across our borders. By contrast, they sneak out of communist countries (or think of other ingenious methods to extricate themselves from the yolk of communism – see joke in footnote). Why is that, ask you? Watch the following video, answer I.

And thanks to CG for sending this to me.

Roy Filly

Footnote:

Castro was delivering a speech in Plaza de Revolucion before 200,000 sweating countrymen. Toward the end of the first hour, a beverage vendor plying his trade passes through the crowd and hollers, ”Coco y Pina!” as he hawks a popular mixture of coconut milk and pineapple juice.

Fidel glares, but says nothing.

Toward the end of the second hour, the same vendor appears. “Coco y Pina! Coco y Pina!”

Fidel pauses in midsentence, but regains his poise.

About midway through the third hour, the vendor appears once more. “Coco y Pina . . . “

Fidel gestures wildly and roars into the microphone.

“The next guy who shouts ‘Coco y Pina’ is going to get his butt kicked to Miami.”

Two hundred thousand people roar, “COCO Y PINA!!!”

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When “promises” are more important than your oath of office!

Barack Hussein Obama, our President-lite, will still be in office for two more years. Too bad for us. It was more important to him to fulfill a campaign promise than to protect America from an existential threat – Islamic extremism in the form of ISIS. He threw away a war that had been won! Have you taken a good look at the “coalition” he has cobbled together for his fight to “degrade and ultimately destroy” ISIS lately. There are possibly 5 aircraft in the “fight” besides our own.

Presidential Oath of Office:

I do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.

The campaign against ISIS finally has a name. Some poorly trained “wordsmith” and  “grammarian” has chosen “Inherent Resolve” as the appellation for whatever it is that we are doing in Iraq and Syria. Inherent means existing as a permanent, essential, or characteristic attribute. Resolve is to decide firmly on a course of action. I can see neither attribute in the President’s chosen course of action. Someone must develop a “resolve” to accomplish a goal. It is not remotely “inherent!”

And thanks to BC for sending this to me.

Roy Filly

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You gotta’ watch this!

Those who fight corruption should be clean themselves.

Vladimir Putin

When the United States of America needs to take the advice of Vladimir Putin, we have a problem. I respect the police. But this is NUTS! Civil forfeiture is a very real and very troubling activity. The following John Oliver video makes the subject material quite humorous, but still remarkably alarming (fairly long but worth watching to the end).

I am confident that my readers have heard of and support criminal asset forfeiture (i.e., taking illegal profits or ill-gotten possessions from drug dealers). However, unlike criminal asset forfeiture, with civil forfeiture, a property owner need not be found guilty of a crime - or even charged – to permanently lose his/her cash, car, home, or other property. And according to a new report published by the Institute for Justice, “Policing for Profit: The Abuse of Civil Asset Forfeiture,” most state laws are written in such a way as to encourage police agents to pursue this type of profit instead of seeking the neutral administration of justice.

Once one gives public officials a legal means to grab money – they grab! Additional data on civil forfeiture can be found in the footnote.

Roy Filly

Footnote:

From: Asset seizures fuel police spending, the Washington Post

Police agencies have used hundreds of millions of dollars taken from Americans under federal civil forfeiture law in recent years to buy guns, armored cars and electronic surveillance gear. They have also spent money on luxury vehicles, travel and a clown named Sparkles.

The details are contained in thousands of annual reports submitted by local and state agencies to the Justice Department’s Equitable Sharing Program, an initiative that allows local and state police to keep up to 80 percent of the assets they seize. The Washington Post obtained 43,000 of the reports dating from 2008 through a Freedom of Information Act request.

The documents offer a sweeping look at how police departments and drug task forces across the country are benefiting from laws that allow them to take cash and property without proving a crime has occurred. The law was meant to decimate drug organizations, but The Post found that it has been used as a routine source of funding for law enforcement at every level

Brad Cates, a former director of asset forfeiture programs at the Justice Department, said the spending identified by The Post suggests police are using Equitable Sharing as “a free floating slush fund…” It has enabled police to sidestep the traditional budget process…

The Post analysis found that since 2008, more than 500 departments and drug task forces have reported receiving the equivalent of 20 percent of their annual spending plans at least once. Nearly 100 have done so in at least three of the past six years.

Of the nearly $2.5 billion in spending reported in the forms, 81 percent came from cash and property seizures in which no indictment was filed, according to an analysis by The Post. Owners must prove that their money or property was acquired legally in order to get it back.

There have been 61,998 cash seizures on highways and elsewhere since 9/11 without search warrants or indictments and processed through the Equitable Sharing Program, according to an analysis of Justice data obtained by The Post.

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Learn from these maps. Sad reality.

You can say what you will about the maps below. It may not have come to pass in the brutal sense of the phrase, “ethnic cleansing,” but the effect is the same. There may be a difference with Darfur, the Balkans, Rwanda, Turkey, Nazi Germany, etc. But the statistics speak for themselves and these statistics are a sad reality. I searched a variety of “truth” sites to see if the map below was bogus. I found no evidence that it was.

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Contrast the above with the Arab population in Israel. The Israeli Arab population in 2013 was estimated at 1,658,000, representing 20.7% of the country’s population. Not all Arab Israelis are Muslim, but the vast majority are. The remainder are Arab Christians. Every one of these individuals enjoys exactly the same civil rights as Jewish Israeli citizens.

As well, the news is filled with reports of the targeting of Middle East Christians. Dozens of Christian churches have been burned and when ISIS finds Christians they must either convert, leave, or be beheaded – nice choices.

The transfer of power of Bethlehem from Israel to the Palestinian Authority just before Christmas 1995 inspired a spate of articles on Bethlehem’s diminishing Christian presence. Not long ago Bethlehem had a population that was 80 percent Christian. That majority has now shrunk to a minority that is less than one-third Christian. For the first time in nearly two millennia, the most identifiably Christian town on earth has lost its Christian majority.

In Turkey, the Christian population tallied 2 million in 1920 but now only a few thousand remain. Christians earlier in this century represented about one-third of the Syrian population; now they account for less than 10 percent – and virtually all have left the areas of Syria controlled by ISIS. The Wall Street Journal’s Sept. 29 story on this subject notes that the “Christian population of Iraq stood at around 1.4 million before 2003, but a million Christians have fled in the decade since Saddam Hussein was deposed…”

The map below shows sites of attacks on Christian minorities since January 1, 2010.

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Is the Muslim faith tolerant? It is hard to claim that modern day radicals caused the statistic that there have been no Jews in Saudi Arabia since the Middle Ages or no Jews in Mauritania in recorded history or that the 2 million Christian Turks were present in 1920 but are now nearly gone. The evidence says “no.”

And thanks to PCoop for sending the first map to me.

Roy Filly

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The people of what country are the most enthusiastic supporters of capitalism?

My friends, you are in for a surprise. Shortly I will disclose the country whose population is the most favorably disposed to capitalism. Is it the United States, ask you? No, answer I. And it isn’t Japan or Germany or South Korea or Singapore or Hong Kong.

Sometimes one is shocked by polling data. The following are some statistics gathered by Daniel J. Mitchell over the years:

*Americans are more libertarian than Europeans.

*The French support spending cuts by a 4-1 margin.

*More than 90 percent of Greeks and Italians see government as an obstacle to business.

*Nearly 70 percent of Labor voters in the United Kingdom would favor class-warfare tax policy even if tax revenues didn’t increase. (Progressive/

statist/”altruists” – note the quotes – are vindictive, not altruistic – RF)

*People in 20 out of 21 nations preferred Obama over Romney (but probably not anymore. The whole world has buyers remorse on that blunder, miscalculation, gaffe, faux pas – RF)

*Italians supposedly are more fiscally conservative than Americans. As are Germans.

*But Americans are more likely than anybody else to think there is too much red tape.

Now for the surprise. The nation with the most capitalistic population is a Communist country – no not China. According to Wikipedia, Vietnam “is one of the world’s four remaining single-party socialist states officially espousing communism.” Yet according to a global public opinion survey from Pew Research, citizens of that communist nation are the world’s most pro-capitalist people. Asked to agree or disagree with the statement that people are better off in a free market economy, 95 percent of them chose capitalism.

Roy Filly

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