Happy Birthday, Tea Party!

"TAXING CHOICE exposes the fiscal rot 'targeted' taxes represent." --James M. Buchanan, 1986 Nobel Laureate in Economic Sciences

“TAXING CHOICE exposes the fiscal rot ‘targeted’ taxes represent.” –James M. Buchanan, 1986 Nobel Laureate in Economic Sciences

October 16, 2014, marks the 241st anniversary of an event that helped launch the American Revolution against King George III, eventually leading the thirteen colonies to independence from the British Empire. On that same fall day in 1773, the first public assembly to protest the Tea Act convened in Philadelphia. (The more famous Boston Tea Party took place two months later, on December 16.)

At first the Tea Act was less controversial than the Stamp Act, which had required colonists to buy and affix an official stamp on documents related to transferring real property, getting married, or legally enforcing other contractual obligations. However, the men who organized the public meeting about the Tax Act were deeply aggrieved by the Crown’s unilateral decision to export the “hated excise” to its North American colonies. Plans were afoot to block the unloading at Philadelphia of tea shipped on the Polly, but that plan later was aborted when news arrived that while en route the ship’s cargo had been dumped unceremoniously into the water when the vessel was docked in Boston Harbor.

The Philadelphia meeting’s main achievement was to appoint a twelve-man committee charged with asking Britain’s tea agents to resign their commissions. The Tea Act had awarded four firms exclusive rights to import tea into the colonies and imposed a duty (what today we usually call a “tax”) on those imports. The British agents were responsible for collecting the duty and for ferreting out and seizing tea shipments smuggled into America by tax evaders.

Selective excise taxes on distilled spirits, tea, coffee, salt, soap, and other goods had already been imposed in England. Those taxes were highly unpopular. Samuel Johnson, in his authoritative Dictionary of the English Language (1775), defined excise as “a hateful tax levied upon commodities, and adjudged not by common judges of property, but by wretches hired by those to whom the excise is paid.”

Britain’s colonial tea agents were kissing cousins of the wretches who assessed and collected excise taxes on the other side of the pond. Rewarded for carrying out their responsibilities assiduously, the agents often entered private businesses and homes without permission to search for contraband on which taxes had not been paid. In that respect, the agents of the British excise-tax regime seem to have been no more considerate of private-property rights than the heavily armed SWAT teams who enforce today’s war on drugs.

In any case, the public meeting at Philadelphia on October 16, 1773, was one of the sparks that lit the fuse of the Revolutionary War. Perhaps less momentous than rebellion, the Tea Act also helped give Americans a taste for coffee, which Britain did not tax here.

But it also is important to recall that President George Washington’s first treasury secretary, Alexander Hamilton, reintroduced the hated excise not long after the victorious Rebels might have thought they had thrown off King George’s yoke for good. In order to help pay off debts the newly independent state governments had incurred during the Revolution, Mr. Hamilton convinced the president and Congress to agree to impose a selective excise tax on “ardent spirits.”

Hamilton’s action triggered the Whiskey Rebellion, which was quelled without loss of life only after President Washington personally led troops into western Pennsylvania to subdue the tax-protesting corn farmers. Nowadays, the hated excise is alive and well in the nation’s capital and state capitols nationwide.

Do not just “Remember, remember the fifth of November.” October 16th merits commemoration as well.

Georgia’s Ivory Tower Behavior Modification-istas

51411This month a campus-wide smoking ban is supposed to take effect at the University of Georgia. Students objected that the ban was not passed with adequate student or faculty input and planned to protest with a “smoke-in.”

Reasonable people can agree that smoking is not healthy—but forcing smokers to quit is a “cure” that’s worse than the disease. UGA officials aren’t going quite that far, but their rationale for the ban reveals a troubling paternalism that seems as rampant on college campuses as it does the halls of government these days. As the Daily Caller reported:

Several Regents have been outspoken on their support for the ban. “This is about behavior modification. That is what we’re all about in higher education,” Regent Larry Ellis told the Athens Banner-Herald in a January interview.

Chairman Phillip Wilheit has also spoken out. Talking to the Chattanooga Times Free Press, he said, “I personally feel a great responsibility to protect our students from their own devices and also to protect the students from secondhand smoke.”

All this behavior modification mumbo jumbo traces its origins squarely back to progressive and radical theories about education that have far less to do with actually teaching students anything than with indoctrinating them.

The radical years of the 1960s and 1970s come to mind.

Of course today, the former college-campus radicals now hold esteemed positions of power and respectability—that’s one reason why we don’t see them smoking weed and dancing barefoot in the mud as high as a kite anymore. Old age probably has something to do with that, too.

Needless to say, those who long ago relished “fighting the man” are now very much “the man.”

And their present-day “social consciousness” is still as narrow and one-sided as it was back then. It’s just cleaned up a bit to be more mainstream and respectable.

But make no mistake: the last thing the Ivory Tower behavior modification-istas want is for anyone else to have the freedom to choose what they wouldn’t (publicly) choose.

Higher education is supposed to provide students of all ages with the required knowledge and skills they need to complete their chosen degree programs. It is categorically NOT about “modifying” the behavior of grown adults OR protecting them from themselves.

That’s what parents do on behalf of their minor children.

There are better ways to promote healthy living—and one’s point of view—besides extinguishing personal freedom.

If UGA officials had the courage of their anti-smoking convictions, they would have been upfront with current students: As of the current academic year, UGA is a smoke-free campus—and no, you don’t get any meaningful say about that—but be sure your tuition checks are in on time.

If UGA officials were truly as “concerned” about the health and welfare of their students as they claim, they would ban smokers as well as smoking from campus. UGA officials should advertise that smokers and their taxpayer-subsidized tuition dollars are no longer welcome on campus. They would also prominently list all of the other behaviors and beliefs they find objectionable and refuse to accept tuition dollars from those offending parties as well.

What’s more, UGA behavior motification-istas should take their crusade beyond the Ivory Tower walls. They should storm the state legislature and demand that elected officials outlaw all tobacco and e-cigarette products (because even though there may not be any documented harmful health effects, e-cigs sure look a lot like the real thing, and that’s offensive). UGA officials should proclaim that they who represent Big Education no longer want to be the beneficiaries of Big Tobacco or any other Big sin-tax proceeds.

But don’t hold your breath waiting for the buck to stop here—or on any other taxpayer funded college campus.

However much higher education officials may chafe at the idea, theirs is very much a money-driven enterprise, with UGA receiving more than $10,000 per student in state government funding alone.

In the final analysis, dishonest and undemocratic paternalism stinks more than the cigarettes UGA’s trying to ban.

Evading Ebola? Don’t Seal the Border

In its latest report, the United Nations health agency stated some 4,033 people have died of confirmed, suspected, or probable cases of Ebola. So far, 8,399 cases of Ebola have been reported. Most of these cases have occurred in West Africa. The outbreak began in December 2013 in Guinea and has since spread to neighboring Liberia and Sierra Leone. Cases have been reported in Nigeria, Senegal, and Democratic Republic of the Congo.

Screen Shot 2014-10-14 at 9.07.35 AM

Source: The Economist

However, Ebola has made its way to the United States. Thomas E. Duncan, a Liberian man living in Dallas, came to the U.S. having contracted the virus. He later died. One of Duncan’s nurses, 26-year-old Nina Pham, has tested positive for Ebola. Now, a second nurse in Dallas has tested positive for the virus.

With the number of Ebola cases in Africa climbing, and three confirmed cases in the U.S., many are calling for the U.S. to seal its borders. Arkansas Senator Tom Cotton said in a recent statement that, “We’ve got an Ebola outbreak, we have bad actors that can come across the border; we need to seal the border and secure it.”

The idea behind isolating the U.S. is straightforward. If the U.S. government prevents people from traveling to countries with serious outbreaks and bars entry to those who have been in the outbreak zone, then it can prevent the spread of the virus.

When evaluating a government policy, I tell my students to keep in mind something we learn on day one of class. Do the suggested means (policy) work to achieve the desired ends (goals)?

In the case of trying to contain Ebola, the idea of sealing the borders would not only fail to stop the spread of the virus, but would likely make the outbreak worse. One of the major problems in West Africa (as far as Ebola is concerned) is the lack of basic medical care and a dearth of trained medical personnel. Families do not know what to do when someone becomes ill and do not take the needed steps to prevent contracting the virus themselves.

When taking loved ones to the hospital, the situation may not markedly improve. Reports from the most impacted regions in Africa state that local hospitals are overwhelmed. In this recent broadcast, reporters found infected patients waiting outside the hospital, unable to get treatment. Infected patients sat inside cars with family members and even out in the open on the outside of the hospital.

Sealing off borders would only make this situation worse. It would cut off vital supplies and personnel to a region already in dire straits (not to mention it would completely devastate the economy of the region).

Still, some may argue that Africa shouldn’t be our top priority. We should be working to keep Americans safe. We need to keep Ebola away from here. Again, sealing the borders is a bad idea. Health experts and epidemiologists are in unusual agreement that sealing the borders would be a disaster. Keeping personnel from traveling to the region will allow the outbreak to grow. The longer the Ebola outbreak continues, the more likely it is to spread and jump its current geographical boundaries—creating a global pandemic.

Sealing the borders also won’t stop determined people from entering the U.S. Think about it this way. You are exposed to Ebola in country X. You know that if you stay in country X, you are likely to die. If you make it to the U.S. for treatment, however, your survival rate increases significantly. So our choice boils down to the following:

a. Stay in X and probably die

b. Get into the U.S. and probably live

I don’t know about you, but I would be pretty determined to get across the border even if it meant shooting myself out of a cannon. This leads us to a scenario where people are still entering the country with Ebola, but now we don’t know who they are, how many there are, where they are, or when they got here. It’s easy to see how this is more problematic than allowing people to enter normally where we have record of who has entered, when, and where.

Concern about Ebola is understandable. No one likes the idea of a global health crisis, and there is bound to be a variety of suggested remedies. But before we advocate any radical solution to the problem in the name of fear, we must remember to ask, “Does this policy achieve the desired goal?” In the case of sealing the borders, not only do we fail to obtain the desired outcome, but we likely make the problem worse.

Hospital Administrative Costs Are Highest in the United States

The Commonwealth Fund has sponsored yet another study that concludes that the U.S. health system is less efficient than others. This time, the measurement is specifically hospitals’ administrative costs. As always, it recommends single-payer, government monopoly as the solution. Readers of this blog know that I am not about to defend hospitals’ bloated administrative costs. However, the Commonwealth Fund’s scholars go way off-base when it comes to capital costs:

Differences in how hospitals obtain capital funds also appear to affect administrative costs. The combination of direct government grants for capital with separate global operating budgets—as in Scotland and Canada—was associated with the lowest administrative costs. (Wales has recently transitioned to such a system, reversing previous market reforms.) Hospitals in France and Germany, where direct government grants account for a substantial share of hospital capital funding, have relatively low administrative costs despite per patient, DRG-based billing.

Administration is costliest in nations where surpluses from day-to-day operations are the main source of hospital capital funds: the United States and, increasingly, the Netherlands and England. In such health care systems, the need to accumulate capital funds for modernization and expansion stimulates administrators to undertake the additional work that is needed to identify and pursue profit opportunities.

The authors ignore that these surpluses, in U.S. hospitals, are used to pay creditors. Borrowing money from the capital markets, even if at a preferred coupon because the lender does not have to pay tax on his interest income, is more “expensive” than getting a capital grant from the government, which appears to be “free.” Even if we take into account the government’s interest rate to borrow funds, it will be higher than the private non-profit’s rate. However, that is a benefit to society, not a cost. Because investors must look at the credit risk of each project separately, the cost of capital will be more accurately priced. If the capital budget is funded by government grants, there is no telling how the money gets handed out.

It is not clear how much differences in the apparent cost of capital (and the related transaction costs of raising capital) amount to in the Commonwealth Fund study. They need to be pulled out if we are to make good sense of this international comparison.


Jean Tirole, 2014 Nobel Laureate in Economic Sciences

tiroleThe 2014 Nobel Prize in Economic Sciences was awarded to Jean Tirole of the Toulouse School of Economics. According to Reuters, the prize recognizes Professor Tirole’s work aimed at “taming” private business firms through governmental regulatory interventions and antitrust law enforcement.

That summary is true as far as it goes. Professor Tirole indeed spent much of his career examining the causes and consequences of industrial structure. He helped pioneer the application of game theory to the field of study known as industrial organization, which tries to answer questions such as “why are some industries populated by a small number of large firms, while others are more atomistic, or “what are the performance consequences (in terms of output, prices and profits) of the different industrial structures we observe in cross-section at a point in time or in particular industries over time?”

Although he contributed many scholarly articles to peer-reviewed academic journals, Professor Tirole is perhaps best known for the textbook he published in 1988, titled The Theory of Industrial Organization (MIT Press). That text focuses almost exclusively on “monopoly” and variants thereof, such as collusive oligopoly and vertically integrated production processes. It goes on to consider the impacts of such market structures on product differentiation, innovation and strategies that incumbent firms might adopt to achieve and maintain their dominant market positions to the disadvantage of consumers.

But like many of his contemporaries, Professor Tirole treats policy interventions “intended” to restrain the exercise of market power and to protect consumers against its abuse as being designed and implemented by benevolent “public servants,” who survey dispassionately a nation’s industrial economy, identify and then surgically excise the tumors of monopoly, all with laser-sharp eyes on enhancing social welfare. To my knowledge, he never considered Chicago-school criticisms of economic regulation (showing that regulatory agencies tend to be “captured” by the very firms they supposedly are meant to regulate in the “public interest”) or public choice theories (and evidence) showing that the enforcement of the antitrust laws is deformed by special-interest-group politics.

Professor Tirole should be credited with appreciating that governmental intervention predictably fails if it follows a one-size-fits-all approach, imposing the same rules on every member of a particular industry or, indeed, an economy as a whole. But his later work on credit “bubbles”, the recent global financial crisis and ongoing slow recovery from it demonstrates a pro-government mindset in that, according to Reuters, he traces current economic woes to “insufficient government regulation.” Again according to Reuters, “Tirole himself was cautious on the economic prospects of his country, where unemployment is stuck at around 10 percent and whose leaders last month broke the latest in a series of promises to bring public lending to within EU limits.”

Perhaps the $1.1 million he will receive for winning the 2014 Nobel Prize will afford Professor Tirole leisure time to read the public choice literature, which ought to disabuse him of his evident faith in the public sector’s public-spiritedness.

Federal “Open Payments” Website Stumbles Out of the Starting Gate

cacecb778fc692eb87bd08b7e6e61cc5The federal government has launched an intrusive and mischievous Open Payments website, where payments for consulting and similar services provided by doctors to pharmaceutical and medical-device makers are publicized.

Paul Keckley aptly summarizes the recent data dump from the Centers for Medicare & Medicare Services (CMS):

  • In the last five months of 2013, drug manufacturers made 4.4 million payments totaling $3.5B to 546,000 physicians and 1,360 teaching hospitals to encourage acceptance and use of their drugs/devices: $1.49B for research, $1.02B for ownership interests, $380M for speaking/consulting fees, $302M for royalties/licensing, $93M for meals, $74M for travel, and $128M for “other.”
  • Recipients of 40% of these payments were not disclosed due to data problems (data verification/accuracy) per the Center for Medicaid and Medicare Services (CMS). 190,000 of the 4.4 million payments were for investigational drugs not approved for sale, or for drugs pending approval for new uses.
  • 26,000 of the 546,000 physicians were able to review/correct their data before release (physicians and teaching hospitals were given 45 days to review data, correct inaccuracies before the September 30 release).
  • The biggest drug companies had the most interactions with physicians—the Top Five: Pfizer (142,600), Astra Zeneca (111,200), Forest Labs (98,900), Johnson & Johnson (97,000), and Glaxo SmithKline (85,100).

Mr. Keckley also notes that the Open Payments website is not “user friendly.” No kidding! I spent a few minutes noodling around it and got increasingly frustrated. Morning Consult’s polling data tells us that patients are eager to see how much the companies paid their doctors. Fifty-seven percent “strongly agree” or “somewhat agree” that they will look up payments made to their doctor.

Well, good luck to them. I think that few will pay attention to this after the hubbub settles down, and those that do will be sensationalist journalists and “citizen activists” looking to shake down the companies. There is no evidence that this disclosure will improve the quality of care. It might just as likely reduce quality, as doctors fear getting “shamed” and cut back valuable relationships with manufacturers.

Indeed, just a few days after launching the database, the federal government has disclosed more errors, adding up to about $1 billion:

The federal government’s new database of drug and device industry payments to doctors is even more incomplete than has been reported previously.

In a fact sheet posted online, federal officials disclosed that the database, dubbed Open Payments, is missing more than $1 billion in payments made between August and December 2013. These omissions are in addition to information the government has redacted from the payments it has disclosed, citing inconsistencies. (Charles Ornstein, ProPublica)

Open Payments is fundamentally different than Medicare’s recent disclosure of its payments to hospitals and physicians. Medicare payments are taxpayers’ money, and therefore public property. Consulting fees paid to physicians by private businesses are not.

Plenty of researchers receive government grants to propose increased government control of health resources. Is that not a conflict of interest? If we have to have an Open Payments database, those names and amounts should be included, too.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Fallujah Fallout: Who Pays the Price?

iraqi-child5November of this year will mark the ten-year anniversary of the Second Battle of Fallujah. Fallujah, a city west of Baghdad with a population of over 300,000, is known to have observed some of the most intense fighting during the war in Iraq.

After nearly a decade, the situation in Fallujah is still dire. Militants recaptured the region in early 2014 and the city has once again observed heavy conflict as the Iraqi military and militants fight for control of the city.

As the U.S. reenters Iraq, this region continues to experience the fallout from the previous U.S. occupation. Those most impacted are not members of Fallujah’s supposed “terrorist hotbed,” but those who had not even been born during the time of siege.

It has been suggested that modern weapons make conflict “more humane,” that compared to weapons of the past, the current military arsenal allows for a “civilized” form of warfare. But what is happening in Fallujah illustrates this idea is monstrously fallacious. While past weapons were undoubtedly destructive, modern weapons are not inherently more civilized. In fact, the weapons used in Fallujah and other parts of Iraq may wreak havoc on the citizens of these areas for generations to come.

The U.S. invasion of Iraq saw the introduction of a variety of weapons, including the popular SMAW NE (that’s Shoulder-Launched Multipurpose Assault Weapon. The NE stands for “Novel Explosive”). The SMAW NE is a “thermobaric” weapon. In essence, these weapons use high explosives, reactive metals, and the oxygen within the blast area to generate intense, long-lasting, high-heat explosions. The idea is to completely annihilate the target and the surrounding area, inflicting “maximum damage.” (you can see a video of these weapons here).

To create these blasts, the SMAWs use a variety of fuels, ones that may include, among other metals, radioactive uranium. The DOD has declined to release information about the particular content of these weapons. Through the Freedom on Information Act, however, the International Coalition to Ban Uranium Weapons reported that:

 [U.S. Central Command’s] response claimed that depleted uranium munitions had not been used in [the Second Battle of Fallujah]. However their response also pointed out that no records of depleted uranium use in the city were kept prior to July 2004. This means that, if uranium weapons had been used in [the First Battle of Fallujah] in April 2004, no records of their use would be available.

When SMAWs are fired, the particulate matter from the reactive metals and fuels used to power the weapons (uranium or other) are released into the air, water, and soil. The presence of these metals can cause serious health problems, including a myriad of birth defects.

Since the U.S. invasion of Iraq in 2003, the number of birth defects, infant mortality rate, and instances of cancer have skyrocketed. In Fallujah, studies found that half of all they children surveyed, born between 2007 and 2010, had some significant birth defect. Before the invasion, approximately 2% of children in Fallujah were born with serious birth defects.

Before the siege of the city, approximately one in ten pregnancies in Fallujah ended in miscarriage. Between 2007 and 2010, this number increased to one in six. Similar increases were found in other Iraqi cities where the weapons were used.

Infant mortality rates in Fallujah are now four times higher than rates in the neighboring country of Jordan and eight times higher than in Kuwait (80 of 1,000 births in Iraq end in the child’s death compared to 19 in Egypt, 17 in Jordan, and 9.7 in Kuwait).

As the U.S. starts new operations in Iraq and Syria, it is important to remember that these actions have very real consequences—both anticipated and unanticipated. The “necessary collateral damage” mantra, so often employed by proponents of such actions, fails to understand the gravity of these activities. In many cases, the consequences of current military operations may not be fully realized for decades.

Military intervention is often couched as a means to preserve freedom and release innocents from the evils of terrorism. If our aim is truly to provide others with the best possible quality of life, we must consider whether U.S. actions abroad may impose higher costs on foreign populations than those imposed by ISIS, the Taliban, or some other terrorist group. In this case, the argument for military action becomes far less clear. As the case of Fallujah illustrates, those who pay the highest price for U.S. foreign interventions may be those who are undeniably innocent of any crime, other than they were born in area with those who “threaten U.S. interests.”

A New Obamacare Lawsuit from the Former Top Obamacrat

Obama-FacepalmHere’s one from the “you can’t make this up” files:

The Department of Health and Human Services is in the spotlight for claims it is violating the Affordable Care Act.

The lawsuit was filed by Mehri & Skalet attorney Jay Angoff, who used to oversee ACA implementation for HHS. Filed on behalf of a Missouri consumer advocacy group, the suit claims the federal agency is not following through on its obligation to make rate filings for 2015 publicly available in time for the public to comment on them.

Mr. Angoff “used to oversee ACA implementation for HHS.” He used to run Obamacare. Now, he’s running against it. Here’s why:

There is a tension in the Obamacare coalition. Open enrollment begins on November 15, a week and a half after the election. The current story on premiums for benchmark Obamacare plans in 2015 is that they will go down by just under one percent. This comes from a Kaiser Family Foundation survey of cities in only fifteen states. Notwithstanding serious criticism of this claim, the media have swallowed and recycled it. For obvious political reasons, it is necessary for the Obama administration that no further announcements of premium hikes for the rest of the states disturb this comfortable narrative.

On the other hand, lawyers like Mr. Angoff are eager to see rate hikes in the double digits. Obamacare has funded states to empower their insurance commissioners to roll back premiums on political grounds. Lawyers like Mr. Angoff look forward to a tidy business representing “exploited” consumers in such states.

All Obamacare premiums for 2015 should be announced before the November 4 election, so that voters have the freshest information about Obamacare’s consequences. Whether Mr. Angoff’s lawsuit will have an effect in so short a time, only the judge can tell.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Brazil—Back to Normality

rBrazil’s presidential election has confirmed that, after a few weeks in which environmentalist candidate Marina Silva and her “new kind of politics” turned things upside down, everything is back to normal: the governing Workers Party (PT) is a hegemonic force, the Social Democratic Party (PSDB) is a convenient opposition and, despite the increasing impatience with the current state of the country, the emerging middle class is still more afraid of the past than the future. The current President, Dilma Rousseff, and opposition Senator Aécio Neves will face off in the second round on October 26.

With slightly more than 41 percent of the vote, Rousseff has proved that her administration’s dismal record (an average 1.5 percent economic growth, the loss of one-third of the value of the real, and fifty thousand homicides per year) has not diminished her party’s electoral power. Her support dropped in ten states but rose in sixteen others. Thanks to the fact that under three successive PT administrations per capita income has risen by one-quarter on the back of an initially healthy rate of economic growth, populist redistribution, and an artificial credit expansion, the governing party has managed to retain the loyalty of a large chunk of the emerging middle class and the less fortunate.

Using various tools, the PT has created a power structure that makes it very difficult to dislodge it from the presidential palace of Planalto. They include a vast grassroots machinery based on patronage; the control of Congress by co-opting other parties, especially the parasitical Brazilian Democratic Movement (PMDB); the magic of former President Lula da Silva, the man who handpicked Rousseff as his heir; and, last but not least, corruption, in which the PT is careful to involve many other political actors.

Rouseff is happy to face Neves in the runoff even though the latter obtained a surprisingly high 34 percent. That is why Lula, a major factor in every election, had kind words for him in recent days to the detriment of Marina Silva, the environmentalist of African descent with Amazonian roots who emerged as the candidate of the Socialist Party after an accident took the life of her predecessor. The fact that Silva belonged to the PT until 2010, her discourse based on a “new kind of politics”, her attack on excessive government interventionism, and her unexpected ties to part of the business community made her a powerful social and ideological mix that threatened the governing party’s hegemony. The character assassination aimed at her by the government, facilitated by a proportional distribution of TV airtime that gave the president twelve minutes per day and Silva barely two, had a very clear objective—to boost Neves, a more convenient runoff adversary, at her expense. It worked: Silva came in third with 21 percent of the vote. The government knows that Neves’s elitist image and ties to the business community are an easy target for the PT, which thrives on polarization.

Curiously, the business community shares this perception with Rousseff. Once enthralled with the PT’s moderate left-wing politics, they have become Rousseff’s main critics, fearing that the tax-and-spend policies, subsidies, and controls will keep the economy stagnant for years to come. Understanding that Neves would be an easy target for Rousseff, they had bet on a Silva victory, calculating that she would rest on the support of Neves’s party in the second round and later on as President. The erosion of Silva’s numbers in the polls was therefore met with alarm in business circles recently. The signs—the real‘s loss of value, the stock market decline—were unmistakable.

Is Rousseff’s victory in the second round a foregone conclusion? One never knows, especially taking into account the fact that little less than half of the emerging middle class voted for the opposition and that Neves’s and Silva’s votes add up to more than 55 percent. Silva will probably support Neves, but her powers of endorsement are an open question—she lacks a party and an electoral machine. It is by no means clear that those who voted for Silva in support of a new kind of politics will be more attracted by Neves, whom Rousseff will paint with a polarizing brush as she attempts to frame the election as a choice between going back to the past and preserving the PT’s redistributive programs.

NSA Mission Creep: It’s for the Children

It's for the Children

It’s for the Children

In the aftermath of Edward Snowden’s, and numerous other credible whistleblowers‘ irrefutable revelations that the National Security Agency (NSA) and other government agencies are capturing and indefinitely storing millions of innocent Americans’ phone calls, emails, internet transactions, and even movements and whereabouts at any given time—Apple and other tech companies are rightfully responding to their customers’ demands for enhanced encryption to protect their privacy rights.

The concept of rights is apparently unknown to the nation’s top attorney, who wants the government to continue to be able to capture, store, and peruse at its leisure your private emails, phone calls, photos, etc. In a speech last week:

U.S. attorney general Eric Holder said on Tuesday he was worried that attempts by technology companies to increase privacy protections were thwarting attempts to crack down on child exploitation.

Speaking at the biannual Global Alliance Conference Against Child Sexual Abuse Online in Washington, Holder warned that encryption and other privacy technologies are being used by sexual predators to create “more opportunities to entice trusting minors to share explicit images of themselves.”

“Recent technological advances have the potential to greatly embolden online criminals, providing new methods for abusers to avoid detection,” he said. “When a child is in danger, law enforcement needs to be able to take every legally available step to quickly find and protect the child and to stop those that abuse children. It is worrisome to see companies thwarting our ability to do so.”

Government continually sets up strawmen boogie monsters to provide cover for violating our rights, and it’s time for us to act like adults, not scared little children who need the big strong men to keep us safe.

It’s not to protect us from “German [Japanese/Nazi/Communist] spies,” or “the War on Drugs” or “Terrorists who hate our freedoms,” or even “Sexual predators”: it’s for Big Brother.

Let’s just say No.