The Frugal Libertarian

It won’t be long before it is once again time for me to sit down and do my taxes.  Nothing gets me all work into a frenzy like seeing the total amount of tax that I paid for the year.  What really gets me going is if I get a large refund.  Don’t get me wrong, I am happy to get some of my own damn money back from the thieves in Washington, but I just can’t stand the fact that I have basically given them an interest free loan all year.  I would always prefer to pay in at tax time than get a big refund.  I am pretty sure that I could have used that money more wisely throughout the year than the government could have.

The average refund every year is somewhere around $2400.  Multiply that by all the taxpayers and the government is getting a significant interest free loan.  I bet most families could use a couple extra hundred dollars every month and they would probably use the money for frugally than when they recieve the large check every spring.  It is easier to spend something you see as a windfall.

A couple hundred dollars could make up a sizable portion of your grocery bill, your utility bills, your fuel cost, or even a medical insurance premium.  So, if your budget is coming up a little short, it may be time to take a good look at your withholdings.  Of course, there is the added bonus of preventing the government from getting their grubby little hands on less of your hard earned money.

Central Bank Biggest Threat to Freedom

More Abuse of Power in Maricopa County

Police Assualt 12 Year Old Girl

Everyone has probably heard that a woman earns 76 cents for every dollar a man earns.  I have always thought that this statistic probably was not telling the whole story and was not justification for some supposedly corrective legislation.   It reminds me of the saying, “A statistician is someone who drowns in a river that averages 3 feet deep”.  So, what is the whole story?  Are we drowning in misleading averages that tell us little about the actual conditions of the river?

Dr. Walter Block, an economics professor at Loyola University New Orleans, believes that the wage gap is the result of the “asymmetrical effects of marriage.”  He explains:

“This institution [of marriage] enhances male earnings and reduces those of females. Why? Because wives do the lion’s share of cooking, cleaning, shopping, child care. This is an example of the basic economic axiom of opportunity, or alternative costs. When anyone does anything, he is to that extent unable to do something else. Since I was in Baltimore, I illustrated this by use of Michael Phelps, world champion swimmer. I opined that he probably wasn’t a world-class cellist, because to achieve that goal in addition to having a lot of talent, you have to spend many hours each day practicing, and he was busy with other (watery) pursuits. Well, women are also busy with activities other than supplying labor to the market, hence their lower productivity [in the market], compared to what it would be if they were never married.”

From what I can ascertain from Dr. Blocks writings, he is not suggested that women are less productive while at work, but instead they are less productive over the total of their careers or working life. This lower productivity takes the form of maternity leaves, extra sick days, working part time, or completely stepping out of their careers for a time to raise a family. It is this overall lower productivity that he sees as the true cause of the wage gap; not systematic discrimination.

He backs up his claim by providing statistics that show if you compare never married women with men, the wage gap almost completely disappears.  I have not look into any of his detailed data, so I can not speak of the validity of that data, but he is not the only one who has come to these conclusions, and I do have anecdotal evidence from my own experience that supports his claims.

I specifically chose a career that would allow me to have a flexible work schedule because I knew that I would eventually want to start a family.  I also considered salary but only for jobs with flexible schedules.  It was one of the most important factors in my decision making process.  I now work only part time so that I can stay home with daughter.  You would have to ask my co-workers to know for sure, but I feel that I am just as productive while at work as I was before having a child (okay maybe not during the first couple months because of sleep deprivation).  But, the fact is that there may be several opportunities that I will miss out on because I am not full-time.  I could miss out on promotions that would require full-time work, I could miss out on a chance to be involved in a project that could help me meet our career ladder criteria, or I could miss out on many other opportunities that I could never foresee.   I have purposely chosen to be more productive in the home than in the marketplace.  Taken all together this makes my earning potential much lower than my husbands, despite the fact we both have similar degrees and have been in the workforce for a similar amount of time.

If Dr. Block is right, than this is good news for women.  It would mean that we are not being held back by discrimination, but instead by our own voluntary choices.  If we want to earn closer to what men do, than we can behave more like men and use our productivity in the marketplace and not at home; the choice is ours, and that after all was our fore mothers’ goal, right?

All this is not to deny the existence of discrimination towards women in the workplace.  It just points out that discrimination is most likely the exception and not the rule and that systematic, widespread discrimination is most likely not the cause of the male-female wage disparity.

Note: Dr. Block recently gave a talk at Loyola University Maryland about this topic.  It has cause quite an uproar.  The University has apologized for his “insensitive remarks”.  People have twisted his words to make him sound like a sexist and racist, but no one has challenge his data or his assertions with anything of their own.  He has even offered to debate and no one has taken him up on his offer.  I think this is political correctness at its worse.  Even if you disagree with his ideas, they are important and need to be discuss.  So much for academic freedom.

What credit crunch?

100% Reserve Banking

The Constitution is Meaningless?

The good news is that the Senate did not pass the Auto bailout bill. The bad news is that it may not matter.  It looks like the Treasury and the White House are ready to use TARP money to help the Auto companies avoid a much needed bankruptcy.

White house press secretary Dana Perino said  “Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms, however, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program — to prevent a collapse of troubled automakers.”  It is good to know that people can so easily abandon their principles in a crisis.  I guess that is how Bush’s humble foriegn policy ideas turned into our current monstrosity after 9/11.

If the ideas of free markets were good before a crisis wouldn’t they be even better during a crisis?  It just goes to show that most of today’s politicians really have no principles.  They just pander to whatever they think will get them re-elected.  But, what is Bush pandering for?  Probably his legacy.  No one wants to be the next Hoover, but that is exactly where he is heading, making the same mistake by advocating massive intervention in the economy.

Lew Rockwell on unemployment.

Walmart and Healthcare

SWAT Team Raids a Rural Food Co-op

Laid off workers of the Republic Windows and Doors factory in Chicago are staging a sit-in to ensure that they receive the pay that they owed.  Now I do not know the details of any contractual obligations that the company may have to the workers, so I have no opinion on whether the workers complaints against the company are legitimate, but I think both the sit-in and the blame being put on Bank of America is silly.

The sit-in just does not seem to serve any purpose.  For a sit-in to be affective it would need to put hardship on whoever it was aimed at.  How does sitting in a closed down factory cause any problems for this company?  Maybe, the bad PR is hurting them, but what does that matter to a company that is broke.  Plus, if someone owed me money I would not go sit in their living room until they paid me, I would sue them.  I can understand that a lawsuit would take time and these workers have bills to pay, but if the company is really broke a sit-in will not be able to force payment.

Blaming Bank of America for the mess because they cut off the companies line of credit is just stupid.  Everyone has been blaming banks for our economic woes because they were loaning money to people who could not afford to pay it back.  Now we are blaming them for NOT loaning money to a company that they believe can not afford to pay it back?

I hope these workers get whatever is owed to them, but seeing this sit-in as some noble example of mistreated workers uniting to stick it to the big bad profit-seeking company is just ridiculous.

The Kansas City Star is officially unreadable.  It appears that the editorial board shares Chris Matthew’s desire to “make… this new presidency work”.  First they gave ridiculous praise for Obama’s vague, expensive economic plan.  They admitted that it was short on details, but it involved “heavy spending”, so it must be a good plan, right?  I guess they are all Keynesian.

They also took time to take a jab at Bush.  I guess they want to get those last couple in before he leaves office.   Apparently his administration is not doing enough even though they have nationalized some of the financial sector, bailed out Fannie and Freddie, and saved AIG.  It is Hoover and FDR all over again.  Hoover got all the blame for doing “nothing”, even with his unprecedented intervention, then FDR is seen as a savior even though his continued intervention prolonged the Great Depression for years.

The Star also approves of Obama’s choices for his economic team.  They call his team a “strong one”, but give little detail of what makes them so strong.  They praise Gietner as Treasury secretary because he is “energetic”.  Who the hell cares how energetic he is?  I can see the history textbooks now.  “Timothy Geitner helped destroy what was left of the American economy late in the first decade of the 21st century by overseeing the complete transition to a fascist economic system that was inevitably unsustainable, but to his defense, he did so with such energy.”

Next the editorial board praised Obama’s choices for his national security team. With Gates continuing as Secretary of Defense and Hillary the neo-con, warhawk, as Secretary of State we can expect very little change in our disastrous foreign policy.  But, that doesn’t keep the Star from being optimistic.  Obama could appoint Hitler Ambassador to Isreal and the Star would hail it as a brilliant choice.  I have a feeling that Obama can do no wrong in their minds.  They have already said that Obama’s Justice Department is a “marked departure” from Bush’s “autocratic, politicized” Justice Department and he is not even in office yet.  Maybe they meant to say that it will be a “marked departure”, but I doubt it.

The Editorial board also approves of Janet Napolitano for Homeland Security secretary. Why?  Because, Obama said she “insists on competence and accountability.”  Well if he says so it must be true.  I find it completely unbelievable that the same paper that publicly trashed the KC Mayor for appointing a rose-loving woman who happened to be a member of The Minutemen (an organization against illegal immigration) to the parks board, would approve of Janet Napolitano.  Napolitano long ignored the the excesses of Sheriff Joe Arpaio. It was not until this year that she finally cut some of his funding so that he has less money to carry out his immigration sweeps.  She had the opportunity to end his horrendous treatment of inmates when she was a U.S. Attorney, but she must have had her sights set on elected office because she was reluctant to investigate “America’s toughest sheriff” who also happens to be very popular despite his gross violation of basic human rights.  Napolitano is said to be “pragmatic” on immigration, but I think a better description would be “willing to pander.”  In 2006 she signed an order sending National Guard troops to help patrol the border.  All this is apparently okay with the Star.  Using your office to enforce immigration laws is okay, but volunteering in a group that aides in the enforcement of immigration laws is not?  What hypocrisy!

I am sure this is just the beginning of the Star’s blanket approval of everything Obama.  Until they can start reporting actual news with something that resembles an objective viewpoint, I will no longer buy their propaganda.

Every time the news reports some new Fed or Treasury scheme to “fix” the economy I cringe.  The economy is the sum total of billions of people’s day to day decisions.  These decisions are made based on the information each person has about various incentives and disincentives.  It is unlikely that anyone at the Fed or the Treasury could ever decide which incentives or disincentives can”stimulate” the economy.

At this point, a recession is inevitable. It is the consequence of The Federal Reserve’s inflation and the malinvestment that followed.   The best thing the government could do is get out of the way and let the market work its magic.

In a previous post I suggested that mortgage companies were not restructuring mortgages that needed restructuring because of the moral hazard create by the government’s interventions, both past and present.  It looks like I might have been on to something.  Now that Paulson has said he will not buy up mortgage-backed securities, some investors are seeing it as a opportunity to buy them up at rock-bottom prices.  This most likely would have happened earlier if the holders of those securities were not sitting around waiting to see what the Treasury was going to do.  Why sell your securities for pennies on the dollar if the government may come to the rescue with other peoples money?

The new investors will be highly motivated to restructure the bad mortgages.  If they buy the securities cheap they have a lot of wiggle room and can still make a profit.

I have little hope that this bailout madness will come to an end anytime soon.  Washington is more shortsighted than a 2 year-old.  They want the instant gratification of telling their constituents that they are doing everything they can to “fix” the “broken” economy.  They can’t understand that the economy is not “broken”.  It is doing exactly what it has to in response to the previous decade of malinvestment.  Trying to stop it is not only futile but dangerous.  You can’t stop it, but you sure can prolong it.