Eleutherian

Due to an increased work schedule and the necessity of studying for the GRE and foreign languages, I will be posting less frequently. However, in place of short, daily posts, I will post longer, more detailed analysis of current events and various policy issues. I hope you continue to follow.

China holds a lot of U.S. dollars. They essentially fund our continued deficit spending. We hear many reasons as to why they continue to hold and acquire more U.S. currency. We hear almost as many reasons why this is a dangerous situation. Unlike many of these supposed explanations, this analysis is not meant to scare you.

The reason China continues to acquire more and more U.S. dollar assets is because their economy has failed to evolve from the export-driven model that has raised them to where they are today. In order to sell goods in the United States, Chinese companies (or the government) must be willing to accept U.S. dollars as payment. Since China exports a greater monetary value of goods to America than it imports from the U.S., China is left holding excess quantities of dollars (and large quantities at that).

The U.S. government only sees that we import more than we export - and fools themselves into thinking this is a problem. The government has correctly identified one reason for this trade imbalance: China's fixed exchange rate. However, it is mistaken in its attempts to change this.

China manipulates its currency more than most countries. For years, the U.S. government has pressured China to relax its control over the currency (while increasing control over its own currency with each passing year). This is not a healthy solution to the "problem." Because China manipulates its currency, China essentially is forced to extend the United States an unlimited line of credit. China's strictly controlled exchange rate only hurts China.

As for what China does with their dollar reserves - they invest it - and often in (or with) American enterprises at that! In 2008, Chinese state-owned enterprises invested $35.7 billion overseas, including the $14 billion purchase with U.S.-based Alcoa of a 12 percent stake in Anglo-Australian miner Rio Tinto Ltd.

If the U.S. government doesn't shoot itself in the foot by either pressuring China or prevent Chinese companies from investing in the U.S. (which almost always strikes me as absurd), we'll find that China's dollar reserves will eventually make their way back.

Of course, lowering our tax rates will do a great deal toward expediting this process (and have the pleasant effect of decreasing the use of overseas tax havens).

Dwight Filley begins Risk Homeostasis and the Futility of Protecting People from Themselves by stating:

There is a growing body of evidence...that points to the surprising conclusion that most coercive measures intended to increase safety either have no effect or an opposite effect. Thus for example, when the government mandates the use of automobile seat belts, fatality rates do not decrease as expected. This counter-intuitive result is consistent across a broad range of governmental attempts to protect people from themselves.

I firmly support the risk homeostasis theory, and in reading on it lately, I just as strongly believe it applies to the environment. Particularly, environmental homeostasis applies to government mandated fuel economy standards.

Here's a story that may sound familiar. An environmentally conscious person who normally takes mass transportation to work every day buys a Prius (or another highly fuel efficient vehicle). The government may have even influenced the decision by providing an economic subsidy. Now, this person feels better about driving to work over taking mass transit.

Yes, the vehicle travels many miles for every gallon of fuel. However, the mass transportation system is still running. Every efficient gallon of literal fuel adds figurative fuel to the problem. This environmentally conscious person became comfortable in the thought of driving a vehicle with admirably-high fuel efficiency, forgetting the reason why mass transportation was the favored option all those previous years.

When the government manipulates the market, more harm occurs to the environment than would otherwise result from individuals making decisions according to their own free will (i.e. free from coercion). Forcing the automobile industry to increase fuel efficiency standards or providing economic subsidies to individuals who purchase more fuel efficient vehicles distorts the market and changes behavior. Ironically, the government's fuel efficient mandates and market manipulations will lead to increased subsidies for government-run public transportation systems, further hurting taxpayers, the economy, and the environment.

I try not to repost often on this blog, but Greg Mankiw posted a couple gems on judging economic downturns. I will try to condense the two posts:

• Judging Downturns
• Judging Downturns II

The question: Does comparing the decline in real GDP provide the best comparison of recessions?

According to this method, the current recession is the worst since the Great Depression. However, Mankiw is quick to point out:

Note that the phrase the worst since the Great Depression may inadvertently lead the reader to think that we are somehow getting close to the Great Depression in severity. As the chart shows, that is not at all the case.

One might wonder why the unemployment rate was higher in the 1982 downturn if that recession had a smaller decline in GDP. Part of the answer is that the 1982 recession followed closely after the 1980 recession, from which the economy had not fully recovered when the next downturn began.

This second paragraph implies that the 1982 recession may have been more severe than this method indicates. By this logic, the more comparable (using this method) 1957 recession was likely more severe, too (following the 1953 recession so closely).

An economist at an unnamed financial firm responded to the first post, and Mankiw reposted his analysis. The anonymous contributor begins by stating:

I prefer the unemployment rate for historical analysis. In olden days, it was likely better measured than real GDP. And before 1947, there is no quarterly real GDP.

He provided the following chart, depicting the difference between the civilian unemployment rate and the natural rate of unemployment as defined by the CBO.
This method places the current recession at just about the severity of the 1982 recession. As the current unemployment rate will likely continue to increase, it is rather safe to assume this recession will surpass it. However, we must take care to remember Mankiw's words regarding the proximity of the 1982 recession to the 1980 recession.

The contributor continues:

Another way to gauge the slack is to focus on a single demographc. Let's take married men, spouse present. They are the most stable segment of the labor forcce [sic], and here is their unemployment rate:

It has been terrible this time, but not as bad as the early-1980s. Why this time seems worse is the unemployment rate for teenagers is a record high. I think we should give some blame to 3 consecutive annual hikes in the minimum wage.

I have previously posted on the effect of the latest minimum wage increase.

I encourage you to read the full posts, especially the contributor's analysis in the second link.

The Local, an English-language Swedish news site, reported that the Swedish Film Institute gave 500,000 kronor ($69,000) in taxpayer money to fund a feminist pornographic movie:

Engberg has also tried to make feminist porn before, which has resulted in a lesbian porn film and a film of women's' [sic] facial expressions at the point of orgasm. Her vision is to get make [sic] the porn industry more appealing to women, all in the name of feminism. She also claims that women's sexuality is more multi-faceted than men's.

But to argue that girls having sex with girls and women masturbating is somehow a good alternative to mainstream porn feels like a completely alien concept to me, and to many other women. Furthermore, most people would agree that the state should not fund pornography. And when it does, should it really only benefit women, all in the name of equality? If a man had sought and received similar funding for ‘regular’ porn, it wouldn’t have taken long before there was an outcry from supporters of equality between the sexes.

I am glad the author of this article acknowledges that the government should not fund pornography and should not fund initiatives that only benefit certain groups in the name of equality. These are positive developments that demonstrate why Sweden is shifting away from its socialist tendencies at a time when other countries (e.g. the United States) are regressing.

However, the author passed on the opportunity to take this line of thought a step further by stating that the government should not be in the business of funding movies in general (pornographic or not). After all, the classic Swedish Film The Seventh Seal didn't receive public funds.

One of my favorite organizations is the Foundation for Individual Rights in Education (FIRE). I previously posted on their defense of free expression at Bucknell University.

Always on the prowl, FIRE has recently come to the aid of Thomas Thibeault, a recently fired (and suspended, which I'll soon explain) professor at East Georgia College. Prior to his firing/suspension, Prof. Thibeault was a respected professor who never received a negative review and was recently placed on tenure track.

According to The Chronicle of Higher Education, Prof. Thibeault engaged in the following conversation at a routine sexual harassment training session:

The story Mr. Thibeault told related to a conversation he said he'd had with a student a week earlier. She was complaining that she did not want to go to another professor's office because the professor stared at her cleavage. At the meeting, Mr. Thibeault said the student was wearing a very low-cut top "designed to draw attention to her cleavage," according to his written statement. She also had a tattoo on her chest, he said, and her cleavage was "decorated" with glitter (or maybe it was barbecue sauce, he said).

"I told the student that she shouldn't complain if she drew such attention to herself," Mr. Thibeault says he related at the meeting with the vice president. Then he says he asked the vice president what provisions in the college's sexual-harassment policy protected against "complaints which are malicious, or in this case ridiculous."

Mr. Thibeault says Ms. Smith, the vice president, said there were no such provisions, and he says she instructed people to report to the college any stories they had heard about sexual harassment by other professors. Mr. Thibeault says he told Ms. Smith the policy was "flawed."

First, the college believes professors should have no protection against unfounded sexual harassment claims. Second, the college wants professors like Prof. Thibeault to report other professors for unfounded sexual harassment claims. As I told my own college's disciplinary review board during my undergraduate years, "Finger-pointing is not accountability."

Two days after challenging the school's sexual harassment policy, Prof. Thibeault was fired by EGC President John Bryant Black for "sexual harassment," calling Thibealt "a divisive force in the college at a time when the college needed unity." He was given the choice of resigning or being fired. Thibealt, who was denied the right to face his accuser or even here the accusation made against him, refused to resign. Black then threatened him with arrest if he did not leave the campus and not return by 11:30am.

Less than one week later, Thibealt received a letter from Black, stating, "EGC has begun dismissal proceedings....Their charge is to advise me whether or not dismissal proceedings shall be undertaken." Apparently, Black realized he violated Thibealt's right to due process as guaranteed by the Georgia Board of Regents. The dismissal proceedings led to Thibealt's suspension.

Here's a quick summary of events:

• Black fires Thibealt
• Black threatens Thibealt with arrest if he does not leave the campus
• Black informs Thibealt his case is under review
• Black suspends Thibealt

After all of this, Thibealt still has not been informed of either his accuser or the accusation made against him. According to FIRE director Adam Kissel:

It is hard to imagine a worse failure of due process in this case. Nobody knows what the actual allegations are because they are being kept secret, even from Thibeault himself. In the stunning absence of any charges, evidence, or hearings, it is clear that EGC has punished Professor Thibeault for speaking out against a flawed harassment policy.

By November, every classroom (over 3,000) in the Jersey City school district will have a hand sanitizer dispenser in an effort to combat the dreaded swine flu, and teachers will be required to force students to use them multiple times each day.

The worst part of this nonsense is that people are applauding these unnecessary, wasteful, and potentially hazardous decisions. As I previously wrote:

...the difference now is that there is no backlash against the schools for enacting it. Public schools have finally found a parental fear they can exploit...

Students will be forced to apply hand sanitizer before entering class in the morning, before and after lunch, and after every use of the restroom. The school has not stated what the punishment will be for students who decide they don't want to be forced to sanitize their hands and refuse to use it.

After quickly researching the negative side effects of excessive hand sanitizer use, it seems you can easily categorize the products as either alcohol-based and non-alcohol-based. The products without alcohol run the risk of creating drug resistant strains of various diseases - certainly a very bad thing.

Alcohol-based products must contain at least 60% alcohol to effectively kill bacteria (any less and you're just moving the bacteria around on your hands). Excessive use over several years has led to reports of arthritic-like pain. Additionally, this level of alcohol is highly flammable. I feel sorry for the poor students using Bunsen burners after lunch.

Finally, there have been numerous reports of alcohol intoxication from ingesting hand sanitizer. Intoxication can occur by simply licking your hands after applying the hand sanitizer. But it's ok...it's not like children ever put their hands in their mouths...

Besides, as Jersey City Superintendant Dr. Charles T. Epps stated, forcing students to apply hand sanitizer is the "best way to keep them safe."

--

In other news, Chinese universities are forcing international students to take their temperature every day and report the results to the university. Getting ideas New York and New Jersey?

I was at the US Postal Service website (www.usps.com) the other day when I realized - the address is www.usps.com. Wouldn't it be more accurate if the address was www.usps.gov? After all, the US Postal Service is a government-run monopoly (and not a "natural" monopoly, either).

However, the US Postal Service also owns the .gov domain (www.usps.gov - opens in a new tab/window). Perhaps a more suitable domain would be www.usps.monopoly.gov.

The European Union has plans to privatize the postal services of its member countries in the next two years. When will America try to catch-up? I'll have more on privatizing the US postal service in a later post.

I'm steadily making my way through the Libertarian Reading List, and I will share any major findings along the way. I just finished reading The Dispossessed by Ursula K. Le Guin. It was a solid but not outstanding book until the final few chapters, which were amazing for their insight. I will focus this post largely on passages from pg. 293-294. (Note: Shevek is the main character of the book, Takver is his partner [there are no husbands and wives, which are viewed as property], and Odonianism is the label for an anarchic ideology).

Shevek had learned something about his own will these last four years. In its frustration he had learned its strength. No social or ethical imperative equaled it. Not even hunger could repress it. The less he had, the more absolute became his need to be.

He recognized that need, in Odonian terms, as his 'cellular function," the analogic term for the individual's individuality, the work he can do best, therefore his best contribution to society. A healthy society would let him exercise that optimum function freely, in the coordination of all such functions finding its adaptability and strength....With the myth of the State out of the way, the real mutuality and reciprocity of society could give security and stability, only the individual, the person, had the power of moral choice - the power of change, the essential function of life. The Odonian society was conceived as a permanent revolution, and revolution begins in the thinking mind [emphasis added].

The chapter continues:

Fulfillment, Shevek though, is a function of time. The search for pleasure is circular, repetitive, atemporal. The variety seeking of the spectator, the thrill hunter, the sexually promiscuous, always ends in the same place. It has an end. It comes to the end and has to start over. It is not a journey and return, but a closed cycle, a locked room, a cell....

So, looking back on the last four years, Shevek saw them not as wasted, but as part of the edifice that he and Takver were building with their lives. The thing about working with time, instead of against it, he thought, is that it is not wasted. Even pain counts.

Le Guin writes from a largely anarchistic point of view, but The Dispossessed applies equally well to libertarians (I have nothing against anarchism, but this blog focuses mostly on libertarian thought).

A recurring concept in the book is that the end does not justify the means - the end is the means. You cannot achieve peace through violence; you achieve violence that spreads. You cannot achieve economic freedom through control; you achieve control that spreads.

As libertarians, we must not compromise our values in order to achieve partial success. It is our responsibility to be stubborn. We may not accomplish much, but we will not achieve desired ends through undesired means.

I do not know if Le Guin chose "four years" on purpose, paralleling one presidential term, but the lesson applies. Even when politicians are moving the country away from freedom, the time is not wasted. Pain is not wasted.

A recent article by Daniel Griswold stresses the tangible, positive benefits of globalization in our lives. The main problem with promoting economic freedom is that its benefits are not easily visible. Griswold stresses in his article:

The consumer benefits of variety can be harder to quantify than a simple drop in price, but they are just as real. A 2004 study by the National Bureau of Economic Research found that the real incomes of American families are about 3 percent higher because of the greater variety that imports bring. That translates to a real gain of $1,300 per person or more than $5,000 for a family of four just from the expanding varieties that trade has brought to the marketplace.

As I have stressed to environmentalists, you must stress the economic benefits before you can influence people to change their own behavior/beliefs. You cannot (or, at least, should not) force them to change. In this case, proponents of free trade must stress the benefits in as tangible and easy-to-understand manner as possible to win over the minds of economic isolationists.

My friend Kevin over at Questing for Atlantis asked with regard to this Campus Progress comic, "Can you guess what's wrong here?"

It’s the implicit suggestion that any level of unemployment is unacceptable.

The silliness of this idea is so plain on its face that I was hard pressed to believe the cartoon was serious and not a fun bit of satire on leftism taken ad absurdum. Except since it’s on Campus Progress I don’t think that’s too likely.

Anyhow, basic economics lesson. There are a lot of different kinds of unemployment.

• There’s frictional unemployment, people temporarily between jobs and looking for their next job.
• There’s structural unemployment, resulting from a mismatch between the skills sought by the labor demand and the skills possessed by the labor supply.
• There’s seasonal unemployment, a result of people working in industries that only operate at certain times of year. The people in Most Dangerous Catch are a good example.
• There’s classical unemployment stemming from wages set above a market-clearing level

Full post here.

Greg Mankiw's blog pointed me to this development - France is preparing to enact a carbon tax. Now, I've previously written on the merits of a carbon tax over a cap-and-trade system (carbon quota), but France presents an interesting case - they have both.

Also interesting is the title of the BBC News article on the story: France Set to Impose Carbon Tax [emphasis added]. When BBC reported on the EU cap-and-trade (carbon quota) program, they did not describe it as an imposition upon the people. Of course, they may have just chose the word because two-thirds of French voters are against the tax.

Mankiw was quick to point out that the French carbon tax will be revenue neutral either by offsetting current taxes or through a tax rebate. Additionally, the carbon tax will not overlap with any industries covered under the EU carbon quota program.

This Reuters article on Google made me feel all warm inside (Eleutherian warming). Basically, Google has decided to invest money in alternative energy technologies. Yet another private company displays that the government has no business spending taxpayer dollars on research by politically connected researchers.

Bill Weihl, a leading Google energy researcher, stated:

Typically what we're seeing is $2.50 to $4 a watt (for) capital cost. So a 250 megawatt installation would be $600 million to a $1 billion. It's a lot of money.

Weihl's team is attempting to cut the costs of producing key components to as much as one-fourth their current cost. Instead of taxpayer-funded government subsidies for otherwise uncompetitive technology, Google plans to use innovation to allow the technology to complete on its own economic merits. This is libertarian environmentalism that everyone can embrace.

I'm still upset that UBS caved to the U.S. government's demands to break Switzerland's secrecy laws by providing the names of 4,450 UBS clients. However, I'm not nearly as upset as the Swiss. RealClearWorld reports, "The Swiss public is critical of UBS but resentful of outside meddling with its secrecy laws." Great, more people that are upset with the United States over invading privacy.

The author, Alvaro Vargas Llosa, makes a solid point:

Blaming bank secrecy for the illegal origin of funds that find their way to Swiss banks is like advocating press censorship because deceitful politicians give TV interviews to win votes. Governments that blame foreign banks for tax evasion and money laundering are whitewashing their own incompetence. Incidentally, not a few dictators -- Robert Mugabe comes to mind -- with Swiss bank accounts obtained their cash from foreign aid provided by the very governments that accuse those banks of harboring illegal funds.

The United States needs to stop looking to other countries to solve U.S. problems. Most problems involving money held overseas are a result of the cumbersome U.S. tax code. More on this in a future post.

Continuing my assault on political overreactions to swine flu (yes, people are still talking about it), the Massachusetts state assembly is trying to pass legislation that will allow the authorities to ignore your Constitutionally guaranteed liberties in the event of a "pandemic."

According to WorldNetDaily:

[The bill] would allow authorities to forcefully quarantine citizens in the event of a health emergency, compel health providers to vaccinate citizens, authorize forceful entry into private dwellings and destruction of citizen property and impose fines on citizens for noncompliance.

If citizens refuse to comply with isolation or quarantine orders in the event of a health emergency, they may be imprisoned for up to 30 days and fined $1,000 per day that the violation continue.

I wish I could say that I can't believe the state's Senate actually passed this bill. I can only hope the state's House has enough sense to table it - never to be seen again (at least until another over-hyped disease comes around to spur politicians into a liberty-taking frenzy).

Here are a couple of great lines from the proposed bill:

• to require the owner or occupier of premises to permit entry into and investigation of the premises
• to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility
• to decontaminate or cause to be decontaminated, or to destroy any material
• to restrict or prohibit assemblages of persons
• to require a health care facility to provide services or the use of its facility
• to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency
• to collect specimens and perform tests on any animal, living or deceased

I don't want to know how many liberties the Massachusetts government wants to take from its residents through this one bill, but I'm pretty certain the Constitution was designed to protect U.S. citizens from exactly this kind of government intrusion.

Beginning September 13, homeless residents of Utrecht, Netherlands (a beautiful city, in my humble, world-traveling opinion) will become official tour guides of the city. While the homeless residents are licensed by the city (and therefore, not completely a private market solution), I still love this innovative idea.

The nonprofit organization, Altrecht, developed the program with the city of Utrecht. Simone Lensink, a spokeswoman for the organization, described the program:

The idea is for people to rediscover the town and in particular those areas where their guides used to sleep or do drugs. This is a small part of the history of Utrecht.

These are people with a unique background. They had to learn to be social and to be able to tell their story in an interesting and coherent manner

Altrecht recognized that a market existed for "underground" tours of Utrecht. I am sure demand exists in other cities around the world, too. Customers can learn a new side of the cities they visit (or where they already live), and the city's homeless men and women can earn money for performing a real service - not a government handout or fake make-work job.

The Financial Times recently ran an article titled, "Obama speech to pupils riles Republicans." Why are so many Republicans upset over a speech by President Obama to the country's children? After all, when parents began to threaten to keep their children home from school that day, the White House released a transcript of the speech in advance so parents could make an informed decision.

The FT article touched on an interesting point not just about the Republican Party but the minority party (whichever of the two major parties happens to hold the title). Matthew Yglesias from the Centre for American Progress, a left-leaning think-tank, stated:

The opposition party seems to have made a strategic decision to be in opposition.

The article also stated that when Republican president George H.W. Bush made a similar speech to students in 1991, Democrats opposed the decision. This led me to wonder, is the minority party always a party of oppositionists?

Why does the minority party always seem to outright oppose most decisions by the majority party? Why does neither the majority nor minority party provide solid, objective rationales for their policy decisions? Do they honestly believe the subjective, misleading statement they make or do they believe the American people are too stupid to understand objective explanations for policy decisions?

Taking this line of thought further, what would happen if a strong third party received seats in Congress? Would a third party automatically become oppositionists, too? Would a strong Libertarian Party become oppositionists?

Additionally, when does opposition encroach on the majority party's freedom of expression?

John Stossel has set himself apart from the majority of the U.S. press corp - by raising the standards by which he performs his job. In analyzing the government's cash-for-clunkers plan, Stossel states:

It wasn't. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt's teaching in his classic, "Economics in One Lesson":

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

If you weren't struck with an intense bolt of joy upon reading this, perhaps you should peruse more of this blog (or check out books in the Libertarian Reading List). The article is so good, it deserves to be quoted a little more:

Let's start at the beginning. The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

That isn't all. Those car buyers were either going to trade in their used cars soon or they weren't. If they were, Cash for Clunkers simply moved up the schedule. The stimulation of the auto industry occurred earlier. Big deal. But if buyers planned to keep their cars longer, the program imposed costs that are less visible. Without the government incentive to buy cars, consumers would have bought other things -- computers, washing machines, televisions. The manufacturers and sellers of those products didn't get to make those sales. Why should the auto industry get privileges at the expense of others?

Then there are the mechanics who would have serviced those used cars. They've lost business. Some will be laid off. Nor should we forget low-income people who depend on the used-car market for their transportation. The cheap cars they would have bought were destroyed.

Of course, politics is all about the immediate and the visible, so not only will politicians completely ignore this legitimate analysis (except for a few Republicans - but they also support plans with immediate and visible effects when they're in the majority), but they are expanding the program to appliances.

That's right, and just in case you thought purchasing a new microwave and selling the old one at a yard sale, the federal government is cracking down on yard sales!

The campaign is called "Resale Roundup," and it targets any product that has been recalled by its manufacturer. According to the Kansas City Star:

The commission's Internet surveillance unit is monitoring Craigslist and other "top auction and reselling sites" for recalled goods.

If this commission has no better use for its resources, then it does not have a legitimate reason to exist.

Swine flu! *gasp*

Those two words have caused a panic in public schools across the United States. Why? It's basically just the flu with an "exotic" name. Yet, schools are taking extreme measures "for the children" - and parents are letting them get away with it.

In New York (surprise, surprise...), schools are passing new "hands-off" rules. The schools are banning all physical contact. Now, a rule like this is a school's dream-come-true. Several schools have tried to implement similar rules in the past. However, the difference now is that there is no backlash against the schools for enacting it. Public schools have finally found a parental fear they can exploit to allow them to ban all physical contact.

Schools are going so far as to request athletes to limit skin-on-skin contact during practice and games. According to one parent:

Less contact would mean less germs and less illnesses and I think it's a good recommendation.

Only it's not a recommendation - it's a rule. More accurately, it's a punishable offense. Fearful parents see this rule as a means to protect their children. Schools see this as an opportunity to gain further control over the lives of their students.

I read the following headline on The Hill, AFL-CIO, Dems Push New Wall Street Tax, and my first reaction was...why? First, why would anyone propose this tax (during a recession no less!)? Second, why does the AFL-CIO care?

The bill's supporters answer the first question - in their way. Thea Lee, policy director at the AFL-CIO, stated:

It would have two benefits, raise a lot of revenue and discourage speculative financial activity. The big disadvantage of most taxes is that they discourage some really productive activity. This would discourage numerous financial transactions.

At least she recognizes that it will discourage financial transactions, but why does she actually view this as a positive development?

Grover Norquist (say what you will about him, but he really does have some great insights) once said the biggest mistake Democrats have made in recent history was passing legislation to create tax-exempt individual retirement accounts. This reduced the financial dependency of U.S. citizens on not only government welfare programs but also labor union pensions. Realizing their "mistake," this tax is an attempt to regain some lost ground in their control over Americans' lives.

Supporters of this tax are hoping that the average American is too stupid to realize that if an investment firm is making money, the average Americans investing in their funds are making money.

From a previous post:

In 2005, 50.3% of U.S. households owned financial equities such as stock and mutual funds. This is up from 49.5% in 2002 (which may not seem like much but represents an increase of more than 4 million households). As such, taxing these large companies constitutes taxing roughly half of American households.

Due to the popularity of my previous post on abortion, I felt a follow-up was necessary. The previous post focused on the question, "If abortion was illegal, what should be done with the women who have illegal abortions?" This post focuses on the legality of abortion and what rights, if any, do a fetus possess.

Before beginning, a clarification is necessary. The abortion issue is not an argument between pro-choice and pro-life. Rather, it is an argument between pro-choice and anti-choice. Many people who are pro-choice are also pro-life. They would not personally condone or perhaps even recommend an abortion, but they also will not impose their morals on others. Therefore, even if you are anti-abortion, you can still be pro-choice. In this post, I will only use the terms pro-choice and anti-choice.

One of the strongest anti-choice arguments was made by Jim Stone in his essays Why Potentiality Matters (1987) and Why Potentiality Still Matters (1994). Russell Blackford responded to Stone's arguments in a 2002 essay, The Supposed Rights of the Fetus. He summarizes Stone's argument as such:

Stone introduces the idea of "strong potentiality", arguing that a fetus is, in a strong sense, "a potential adult human being". Since he believes that no ethical right to life is entailed merely by membership of the species homo sapiens…he emphasises that certain "goods" are typically enjoyed by adult human beings, including self-awareness, social interaction, and the possibility of moral stature. The argument is that a fetus has the capacity to develop into a being which is capable of enjoying these goods, and that this is prevented by abortion.

Stone's concept of a person, borrowed from John Locke, is that of a being which has "reason, reflection and self-awareness"....Stone's argument, then, can be revised, without any material distortion, along the lines that to abort a fetus is to frustrate its potential to develop into a person and enjoy goods typically available to persons living socially with other persons.

Stone defines weak potentiality as an entity, such as sperm or an unfertilized egg, which cannot become an adult human being by itself. Blackford notes that Stone's definition of strong potentiality required him to also define "normal development." Stone defines this by stating an entity "develops normally if it follows to the end the developmental path primarily determined by its nature which leads to the adult stage of members of its kind."

This definition of "normal development" holds the first flaw (albeit, a minor one) in Stone's argument. By his definition, if a fetus's DNA indicates a disorder which will limit its lifespan so drastically that it will never reach adulthood, then it does not possess strong potentiality and can be aborted.

A second flaw is found in Stone's response to Feinstein's argument:

Without awareness, expectation, belief, desire, aim, and purpose, a being can have no interests; without interests he cannot be benefited; without the capacity to be a beneficiary, he can have no rights.

Stone argues that given Feinstein's argument, it would also be permissible to painlessly kill an infant. However, the 14th Amendment states that only born citizens have the rights granted to individuals by the U.S. Constitution.

A stronger argument against Stone's analysis is made by Blackford:

For example, we could imagine that a powerful computer has been developed, and has been programmed in such a way that it will continually upgrade itself and eventually reach self-awareness. Are we now under an ethical obligation to provide it with electrical power until such a time as it becomes self-aware? Perhaps we must ascribe to the computer a right to continue in existence, without being reprogrammed, once it has become a person, but it is not obvious that we are ethically obliged to supply it with a continuous source of electricity prior to that point.

Yet this device seems to have a "nature" in an analogous sense to the genetic program of a fetus. Unless specifically religious considerations are introduced, or some kind of quasi-religious significance is imputed to functional "design" arising from biological evolution, the situations of the fetus and the advanced computer cannot be distinguished.

Apart from potentiality, there is a fundamental different between morality and legality. Wendy McElroy compares abortion to gambling and drug use - activities that some may consider immoral but are not actual violations of rights. This comparison will upset many people, but let's look at her rationale before angrily judging her.

McElroy rests her argument on the sovereignty of the individual and that the fetus is merely a biological aspect of the pregnant woman's body:

The principle of self-ownership states that every human being, simply by being a human being, has moral jurisdiction over his or her own body. Thus, even if the fetus possesses rights, those rights could never include living within and off of the woman's body, for this would be tantamount to asserting that one human being could own the bodily functions of another...that two people can have rights in one body. The word used to describe a system in which one man has property rights in another is slavery [emphasis added].

You cannot compare this situation to a simple case of trespassing. When a person with rights trespasses on your property, you can ask them to leave before shooting them. You cannot ask a fetus to leave your most private of properties - your body.

McElroy makes a most libertarian argument in support of abortion. Yet, there are still libertarians who oppose its legalization. While Libertarians for Life do not base their beliefs on potentiality, they do believe that rights are granted to the fetus at the moment of conception. First, this does not fit with John Locke's definition of a person (previously stated) or the 14th Amendment, but stronger arguments exist.

In response, McElroy refers to Ayn Rand's fallacy of the stolen concept:

In this fallacy, a word is used while the conceptual underpinnings which are necessary to the definition of the word are denied. Thus, the antiabortionists use the concept of 'rights' without regard for the fact that the fetus is not a discrete individual, the alleged rights conflict, and the rights involve two people claiming control of one body. Whatever version of rights is being attributed to the fetus, it is not the natural rights championed by libertarianism.

According to Blackford:

[A fetus] cannot experience any frustration of its desires, because it has no desires. The mere failure to meet this interest does not inflict any pain. It does not experience fear, so the wrongfulness of our action cannot consist in inflicting upon a entity something that it fears. Nor has it begun a life whose coherence or value may be ruined by being cut short. We do not reveal ourselves as cruel if we terminate the development of a merely potential person painlessly, or with minimal pain. It is difficult, in short, to see why the interest is one that must command our respect. It seems to be a totally theoretical interest. It might unkindly be called a contrived one.

I will end with a funny, yet true, story.

In college, a friend and I engaged a Catholic priest in a debate on abortion during a Newman Club meeting. It was a surprisingly civil, academic debate with my friend and I holding opposing viewpoints from the priest. My friend then engaged the priest in the following dialogue:

[Friend]: "When does a fetus receive a soul?"

[Priest]: "At the moment of conception."

[Friend]: "What happens when the fertilized egg splits and becomes identical twins?"

[Priest]: *stunned blank stare*