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WASHINGTON -- Even by the standards of Washington, this is one sick, twisted and deceitful deal. Quite possibly, it is a whole new low, even for the federal government. 

Had we innocent, taxpaying citizens not long ago lost our capacity to be outraged by the disgraceful manner in which this place operates, we would already be in all-out political revolt. Against President Obama. Against Democrats in Congress. And, especially, Republicans.

Literally, revolutionary wars have been fought over less.

Last week, while many Americans spent hard-saved money on long overdue vacations, the snakes and weasels inside the federal bureaucracy schemed until they hatched an evil plan. It would feather their own nests with more of your money, protect themselves from the ravages of the laws they foist upon us, desecrate our Constitution and then smear us with insult so putrid it would make a roadside vulture gag.

All the legal, constitutional and parliamentary maneuvering is enough to confuse Albert Einstein, but here is the bottom line: Congress and staff managed to get themselves exempted from one of the most punishing aspects of Obamacare.

Yes, you should be sharpening the tines of your pitchforks.

Back when the President and his henchmen rammed Obamacare through Congress, Republicans inserted a key provision requiring that whatever Frankenstein healthcare boondoggle got yoked upon the hardworking American people would also be yoked around the necks of every congressman and staffer on Capitol Hill. President Obama, being the slick fellow that he is, made sure it did not apply to him or anybody working for him in the White House.

The noble idea was that if they were seizing control of our titanic -- yet still largely functioning --health care system and started ramming into every passing iceberg, then, by God, they were not going to get to be first in line for the life boats. No, they were going to go down with the ship.

If Obamacare was good enough for the American people, it should be good enough for Congress.

Well, that was BEFORE the bill passed, when they still needed to get it through. Now, it simply will not do.

It turns out that the healthcare packages currently provided to Congress and their staff are so generous and the squalor that will be caused by Obamacare is so terrible that the healthcare law simply cannot be applied to such precious people.

The thought is so terrifying that staffers from both parties in both chambers of Congress declared they would quit if forced to endure Obamacare. To those of us paying the bills around here, this sounded like a great idea.

But the federal bureaucracy blanched in terror. There would be a mass exodus of "talent," they shrieked. There will be a "brain drain!" 

After all, without these people, who would come up with all these fantastic new laws like, say, Obamacare? 

I mean, if it was "talent" and "brains" that got us into this mess, maybe it's time to try something else. Like letting them all quit. Or exempting all Americans from Obamacare.

Instead, after personal pleas made directly to President Obama, his administration quietly ruled last week in the dead of August that Congress and staff would be exempted.

Now they will dispute this and say that, indeed, they are being forced out of their cushy government health insurance plans and into the Obamacare health exchanges. This much is true. But there is a dirty, dirty secret. You are still paying for their insurance.

If a regular citizen makes $100,000 a year working for a private company and loses his insurance because of  Obamacare, he must pay out of his pocket for the insurance he will be forced to purchase from the exchanges.

However, if you are a sainted Congressional staffer earning $100,000 a year and enter the exchanges, guess who picks up the tab for your new insurance plan? That's right, your employer, the federal government, the lowly taxpayer.

In other words, under Obamacare, the only people forced into the exchanges whose insurance will still be paid for by their employer will be members of Congress and their staff.

Not only is this sneaky, self-dealing and cynical, it is a dishonest bait-and-switch. And once again, we lowly taxpayers are the suckers who get stuck with the bill, get chained down by their terrible laws and laughed at all the way to the hospital.

 

You know that the NSA and other government agencies are spying on all Americans.

But is the government just passively spying on us like some giant peeping Tom?  Or doing something with that information?

Favoring “Friends”

U.S. intelligence agencies have given information gained through spying to a handful of giant corporations for many years.  This trend is accelerating.

Harassing “Enemies”

While the NSA is the best-known spy agency at the moment, the IRS, FBI, and many other agencies also conduct their own mass spying on Americans.

Reuters recently broke the story that information gained through spying on Americans is funneled through a special unit within the Drug Enforcement Agency, and then distributed to federal, state and local agencies nationwide.

The agencies are instructed to “launder” the information by pretending that they got it from normal gumshoe investigations, and not spying.

Reuters notes that laundered information gained through spying is being used to prosecute petty crimes, including taxes and drugs … and neither the defense attorneys or even the judges are being told the real source of the information

Top NSA whistleblower William Binney – the former head of the National Security Agency’s global digital data gathering program, and a 32-year veteran of that agency who was a “legend” among NSA workers – says that the NSA database is used to harass and even frame anyone the government doesn’t like.

Another high-level NSA whistleblower (Russell Tice, who worked on satellite spying for the agency for two decades) says that the NSA is spying on – and blackmailing – top government officials and military officers (and see this; and this PBS interview).

Indeed, because government spying has always focused on crushing dissent, it is safe to assume that the government will use the information it gathers.

Propaganda

We’ve long reported that the government censors and manipulates social media. More proof here and here.

The Guardian reported in 2011:

The US military is developing software that will let it secretly manipulate social media sites by using fake online personas to influence internet conversations and spread pro-American propaganda.

 

A Californian corporation has been awarded a contract with United States Central Command (Centcom), which oversees US armed operations in the Middle East and Central Asia, to develop what is described as an “online persona management service” that will allow one US serviceman or woman to control up to 10 separate identities based all over the world.

 

***

 

The Centcom contract stipulates that each fake online persona must have a convincing background, history and supporting details, and that up to 50 US-based controllers should be able to operate false identities from their workstations “without fear of being discovered by sophisticated adversaries”.

 

***

 

Once developed, the software could allow US service personnel, working around the clock in one location, to respond to emerging online conversations with any number of co-ordinated messages, blogposts, chatroom posts and other interventions. Details of the contract suggest this location would be MacDill air force base near Tampa, Florida, home of US Special Operations Command.

 

Centcom’s contract requires for each controller the provision of one “virtual private server” located in the United States and others appearing to be outside the US to give the impression the fake personas are real people located in different parts of the world.

 

It also calls for “traffic mixing”, blending the persona controllers’ internet usage with the usage of people outside Centcom in a manner that must offer “excellent cover and powerful deniability”.

 

***

 

Centcom confirmed that the $2.76m contract was awarded to Ntrepid, a newly formed corporation registered in Los Angeles. It would not disclose whether the multiple persona project is already in operation or discuss any related contracts.

The army told the Guardian that it was not targeting Americans:

Centcom spokesman Commander Bill Speaks said: “The technology supports classified blogging activities on foreign-language websites to enable Centcom to counter violent extremist and enemy propaganda outside the US.”

 

He said none of the interventions would be in English, as it would be unlawful to “address US audiences” with such technology, and any English-language use of social media by Centcom was always clearly attributed. The languages in which the interventions are conducted include Arabic, Farsi, Urdu and Pashto.

 

Centcom said it was not targeting any US-based web sites, in English or any other language, and specifically said it was not targeting Facebook or Twitter.

(Of course, the government has also repeatedly said it’s not spying on Americans … but we know that’s untrue.)

But things have changed dramatically since the Guardian article was written in 2011.

Michael Hastings – the reporter who mysteriously died in a fiery car crash – wrote last year:

An amendment that would legalize the use of propaganda on American audiences is being inserted into the latest defense authorization bill, BuzzFeed has learned.

 

The amendment would “strike the current ban on domestic dissemination” of propaganda material produced by the State Department and the independent Broadcasting Board of Governors, according to the summary of the law at the House Rules Committee’s official website.

 

The tweak to the bill would essentially neutralize two previous acts—the Smith-Mundt Act of 1948 and Foreign Relations Authorization Act in 1987—that had been passed to protect U.S. audiences from our own government’s misinformation campaigns.

 

The bi-partisan amendment is sponsored by Rep. Mac Thornberry from Texas and Rep. Adam Smith from Washington State.

 

***

 

Thornberry warned that in the Internet age, the current law “ties the hands of America’s diplomatic officials, military, and others by inhibiting our ability to effectively communicate in a credible way.”

 

The bill’s supporters say the informational material used overseas to influence foreign audiences is too good to not use at home, and that new techniques are needed to help fight Al-Qaeda, a borderless enemy whose own propaganda reaches Americans online.

 

***

 

“I just don’t want to see something this significant – whatever the pros and cons – go through without anyone noticing,”

 

***

 

The new law would give sweeping powers to the government to push television, radio, newspaper, and social media onto the U.S. public. “It removes the protection for Americans,” says a Pentagon official who is concerned about the law. “It removes oversight from the people who want to put out this information. There are no checks and balances. No one knows if the information is accurate, partially accurate, or entirely false.”

 

According to this official, “senior public affairs” officers within the Department of Defense want to “get rid” of Smith-Mundt and other restrictions because it prevents information activities designed to prop up unpopular policies—like the wars in Iraq and Afghanistan.

 

***

 

The Pentagon spends some $4 billion a year to sway public opinion already ….

 

***

 

The evaporation of Smith-Mundt and other provisions to safeguard U.S. citizens against government propaganda campaigns is part of a larger trend within the diplomatic and military establishment.

 

In December, the Pentagon used software to monitor the Twitter debate over Bradley Manning’s pre-trial hearing [the Federal Reserve is monitoring the web for criticism as well]; another program being developed by the Pentagon would design software to create “sock puppets” on social media outlets; and, last year, General William Caldwell, deployed an information operations team under his command that had been trained in psychological operations to influence visiting American politicians to Kabul.

 

A U.S. Army whistleblower, Lieutenant Col. Daniel Davis, noted recently in his scathing 84-page unclassified report on Afghanistan that there remains a strong desire within the defense establishment “to enable Public Affairs officers to influence American public opinion when they deem it necessary to “protect a key friendly center of gravity, to wit US national will,” he wrote, quoting a well-regarded general.

Foreign Policy reported last month that the bill passed … and propaganda within the U.S. is now legal:

But if anyone needed a reminder of the dangers of domestic propaganda efforts, the past 12 months provided ample reasons. Last year, two USA Today journalists were ensnared in a propaganda campaign after reporting about millions of dollars in back taxes owed by the Pentagon’s top propaganda contractor in Afghanistan. Eventually, one of the co-owners of the firm confessed to creating phony websites and Twitter accounts to smear the journalists anonymously. [Background.]

 

Additionally, just this month, The Washington Post exposed a counter propaganda program by the Pentagon that recommended posting comments on a U.S. website run by a Somali expat with readers opposing Al-Shabaab. “Today, the military is more focused on manipulating news and commentary on the Internet, especially social media, by posting material and images without necessarily claiming ownership,” reported The Post.

So if it seems like there are disruptors everywhere on the Internet defending the “official” view … you might not be imagining it.

Non-mainstream liberal and conservative websites have both been complaining for years that trolls are defending mainstream government policies.

Cyber-Warfare

A high-level intelligence source said, “we hack everyone everywhere”.

While Edward Snowden’s revelations so far have focused on hacking foreign countries, it is worth asking whether the government is hacking political dissenters in the U.S. For example, the largest German newspaper – Süddeutsche Zeitung – alleges that the U.S. government helped Monsanto attack the computers of activists opposed to genetically modified food.

Track ‘Em and Whack ‘Em

The NSA is also helping to assassinate people.   The Washington Post reports:

On the line with the SEAL was the drone operator and a “collector,” an NSA employee at the agency’s gigantic base at Fort Gordon in Augusta, Ga. The collector was controlling electronic surveillance equipment in the airspace over the part of Afghanistan where the CIA had zeroed in on one particular person. The SEAL pleaded with the collector to locate the cellphone in Afghanistan that matched the phone number that the SEAL had just given him, according to someone with knowledge of the incident who spoke on the condition of anonymity because of the sensitivity of the issue.

 

The collector had never before done such a thing. Before even intercepting a cellphone conversation, he was accustomed to first confirming that the user was the person he had been directed to spy on. The conversation would then be translated, analyzed, distilled and, weeks later, if deemed to be interesting, sent around the U.S. intelligence community and the White House.

 

On that day, though, the minutes mattered.

 

“We just want you to find the phone!” the SEAL urged. No one cared about the conversation it might be transmitting.

 

The CIA wanted the phone as a targeting beacon to kill its owner.

 

The NSA collector in Georgia took what was then considered a gigantic leap — from using the nation’s most sophisticated spy technology to record the words of presidents, kings and dictators to using it to kill a single man in a terrorist group.

 

The revolutionary significance of that and other similar operations was quickly grasped by intelligence officials. With analysts and technicians from the National Geospatial-Intelligence Agency, the NSA subsequently assembled a team in the basement of its headquarters called the Geolocation Cell, or Geo Cell. Its purpose was to track people, geographically, in real time.

 

***

 

A motto quickly caught on at Geo Cell: “We Track ’Em, You Whack ’Em.”

 

***

 

At the same time, the NSA supported a parallel effort by CIA paramilitary units and clandestine Joint Special Operations Command (JSOC) teams tasked with capturing or killing al-Qaeda leaders, deemed “high-value targets.” NSA analysts and collectors moved into the JSOC commander’s new and growing operational headquarters in Balad, Iraq, which also serviced Afghanistan.

 

***

 

By September 2004, a new NSA technique enabled the agency to find cellphones even when they were turned off. JSOC troops called this “The Find,” and it gave them thousands of new targets, including members of a burgeoning al-Qaeda-sponsored insurgency in Iraq, according to members of the unit.

Daily Kos notes:

So the NSA and CIA have been targeting drone strikes at cellphones without first taking the time to be clear who is carrying the phone and what they might be doing.  That’s how you end up blowing up weddings, political meetings, and groups of teenagers hanging out at a cafe.

 

Equally disturbing the NSA is collecting and storing information on every American with a cell phone that would allow them to quickly carry out their assassination via drone.  (I should also add that if you have a 4G enabled tablet, it would seem the government can follow it even when turned off).  Among the things the government absolutely should not be doing is secretly tracking citizens in a way that would allow for their extrajudicial killing.

 

It is time we renewed the ban on the US government performing assassinations.  Once that capability has been created it is far to easy to abuse.

It’s worth noting that the same unaccountable agency which decides who should be killed by drones also spies on all Americans.

Postscript:   It’s Not Very Reassuring When …

Given the trends in America towards loss of Constitutional rights, the potential abuse of information gained through spying is troubling.  We’re not saying that the government is doing every rotten thing you can imagine.  And we’re not saying that the sky is falling.

But the following trends together they show that unchecked power could lead to bad results:

• The government can – on a whim – label any American as a potential terrorist

• Any criticism of government – even by Americans living on U.S. soil – could be labeled as terrorism by the American government

• People who criticize those in power, they may be smeared by the government and targeted for arrest (and see this)

• Indeed, because the core things which reporters do could be considered terrorism, in modern America, they could even targeted under counter-terrorism laws.  The American government has been instrumental in locking up journalists in America, Yemen and elsewhere when for the crime of embarrassing the U.S. government

• The Department of Justice told a federal court that the courts cannot review the legality of the government’s assassination by drone of Americans abroad

• One of the nation’s top constitutional and military law experts said that Obama claims the power to assassinate any American without charge and at his own discretion

• The director of the FBI said he’d have to “check” to see if the president had the authority to assassinate Americans on U.S. soil

• Former Department of Justice lawyer John Yoo – the guy who wrote the memo justifying torture, even of children, which was used to justify torture of innocent people, including children – said that the president has the power to assassinate Americans on U.S. soil in times of war

• The Attorney General of the United States confirmed the president can assassinate Americans living on U.S. soil.    After a hurricane of protest, the Attorney General pretended to “clarify” that only “enemy combatants” would be assassinated on U.S. soil.  But that phrase is so broad as to be meaningless … and provides no real protection for American citizens

When Obama announced last Friday that he’d reform NSA spying, we showed that it wasn’t wise to trust him.

Friday, Obama promised an independent group or experts would investigate spying:

Today, Obama appointed James Clapper to head the “independent group” of “outside experts”.

Clapper is the same guy who lied to Congress about spying … falsely claiming that the government wasn’t spying on the American people. And – as the Director of National Intelligence – he’s the U.S. spy-in-chief.

EmptyWheel notes:

Neither Obama nor the Intelligence Committees get to hear from this Group themselves. It all goes through James Clapper.

 

***

 

It took exactly 72 hours for that good idea to fizzle into a navel gaze directed by the guy who lies to Congress.

TechDirt notes:

[Obama] asking Clapper to first create and set up this “outside” and “independent” review group… and then to have the group report its findings back to Clapper. The same strong defender of the program who flat out lied to Congress about it. If this was about “restoring the trust” of the American people that the government isn’t pulling a fast one over on them, President Obama sure has a funny way of trying to rebuild that trust. This seems a lot more like giving the concerns of the American public a giant middle finger.

Will Wheaton tweets:

President Obama putting Clapper in charge of the #NSA commission *that reports back to Clapper* is a giant Fuck You to America.

The government does the same thing every time it gets caught with its pants down: appoints a commission comprised of insiders the government can trust to implement damage control and deflect political pressure.

It happened with the attacks at Pearl Harbor, the Iran-Contra scandal, the financial crisis, 9/11, and many other political scandals.

For example – as explored in the book The Commission by respected journalist Philip Shenon – the Executive Director of the 9/11 Commission was an administration insider whose area of expertise is the creation and maintenance of “public myths” thought to be true, even if not actually true. He wrote an outline of what he wanted the report to say very early in the process, controlled what the Commission did and did not analyze, then limited the scope of the Commission’s inquiry so that the overwhelming majority of questions about 9/11 remained unasked (see this article and this article).

9/11 Commissioner John Lehman said:

We purposely put together a staff that had – in a way – conflicts of interest.

 

***

 

All of the staff had, to a certain extent, some conflict of interest.

Visit NBCNews.com for breaking news, world news, and news about the economy

Top constitutional and military law expert Jonathan Turley stated:

 

[The 9/11 Commission] was a commission that was really made for Washington – a commission composed of political appointees of both parties that ran interference for those parties – a commission that insisted at the beginning it would not impose blame on individuals.

The same could be said of virtually all commissions formed in the wake of political scandals … including Clapper’s “spying” commission.

We've tried to make similar points a few times in the past about our concern with the Obama administration going after whistleblowers and the journalists who publish their leaks by using the Espionage Act more than all other Presidents in history, combined (more than twice as much, actually). But the NY Times has a great piece highlighting how the federal government now seems to completely blur the lines between being a leaker and a spy.

“Obama apparently cannot distinguish between communicating information to the enemy and communicating information to the press,” Mr. Goodale wrote. “The former is espionage, the latter is not.”

This is dangerous for a whole host of reasons -- including having an informed and knowledgeable public. But it's also dangerous from a First Amendment standpoint. Remember, the First Amendment protects freedom of expression and freedom of the press -- and both are closely linked when we're talking about whistleblowers leaking information to the public via the press. When we start turning the leakers and the press into "spies" we make that much more difficult, and as a result we have a less free society, and a much more controlling and abusive government.

Of course, some would argue that this is the goal. The very same article quotes former Bush administration apologist lawyer John Yoo -- infamous in part because of his tortured legal defense, twisting the clear meaning and intent of the Geneva Conventions in order to pretend that the US could use torture as an interrogation technique without violating the rules. Not surprisingly, Yoo doesn't have any problem at all with condemning leakers as spies.

“Manning’s defenders will say that Manning only leaked information to the 21st-century equivalent of a newspaper, and that he could not have known that Al Qaeda would read it,” Professor Yoo wrote in National Review Online.

“But WikiLeaks is not The New York Times or The Wall Street Journal, and it does not have First Amendment rights,” he added. “Manning communicated regularly with WikiLeaks’ founder and would have known about the group’s anarchic, anti-U.S. mission.”

Of course, Yoo is either woefully ignorant or flat out lying -- neither of which makes him look good. First of all, the Manning/Lamo transcripts make it quite clear that Manning had very little communications with Assange. But, even more important, as research from professor Yochai Benkler made clear, prior to Manning's leaks, Wikileaks was not seen as anti-US in its mission at all. Its earlier leaks had been focused on mostly corporate and government malfeasance around the globe (mostly outside the US), such as with Bank Julius Baer. As Benkler explained:

When you read the hundreds of news stories and other materials published about WikiLeaks before early 2010, what you see is a young, exciting new media organization. The darker stories about Julian Assange and the dangers that the site poses developed only in the latter half of 2010, as the steady release of leaks about the U.S. triggered ever-more hyperbolic denouncements from the Administration (such as Joe Biden's calling Assange a “high-tech terrorist”), and as relations between Assange and his traditional media partners soured.

In early 2010, when Manning did his leaking, none of that had happened yet. WikiLeaks was still a new media phenom, an outfit originally known for releasing things like a Somali rebel leader’s decision to assassinate government officials in Somalia, or a major story exposing corruption in the government of Daniel Arap Moi in Kenya. Over the years WikiLeaks also exposed documents that shined a light on U.S. government practices, such as operating procedures in Camp Delta in Guantanamo or a draft of a secretly negotiated, highly controversial trade treaty called the Anti-Counterfeiting Trade Agreement. But that was not the primary focus. To name but a few examples, it published documents that sought to expose a Swiss Bank’s use of Cayman accounts to help rich clients avoid paying taxes, oil related corruption in Peru, banking abuses in Iceland, pharmaceutical company influence peddling at the World Health Organization, and extra-judicial killings in Kenya. For its work, WikiLeaks won Amnesty International's New Media award in 2009 and the Freedom of Expression Award from the British magazine, Index of Censorship, in 2008.

Furthermore, the idea that Yoo has that Wikileaks somehow "does not have First Amendment rights" because it's "not the NY Times or the Wall Street Journal" makes no sense. It's just assuming that because one brand is established and another is new that the established one automatically has greater rights than the old one. That's an argument based on nothing more than historical bias, rather than any sort of recognition of reality. Wikileaks was never focused on the US, but was focused on revealing conspiracies of all kinds -- that the US just happened to be involved in many speaks more to problems with the way the US government works, than to Wikileaks itself.

But there's a larger, more troubling, point in all of this. When we redefine whistleblower and leaker to the point that they're considered "spies," and, at the same time, accuse journalists and media outlets of being co-conspirators and not being covered by the same basic rights that we supposedly honor in this country, the further and further we get from the basic ideals of a free and fair society. Again, those in power don't seem to much care for a free and fair society -- because they're in power. But for people who would like to have a government that actually represents the people, this should be a major concern.

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When Lavabit announced its sudden decision to shut down yesterday, many of its customers were actually fairly perturbed that they were given no notice, and no way to retrieve their mail before it went away. While I can certainly understand that emotional response to losing your email account like that, it seems rather obvious that there was no real choice here. If Lavabit had alerted customers that they had a day or a week or whatever before the service shut down, it seems quite likely from the hints given that the government would have stepped in with an order to preserve the information it was clearly seeking access to.

Given that, it's noteworthy that another secure email provider, Silent Circle, chose to announce its own plans to close down its secure email service hours later. Silent Circle isn't facing the same hidden court orders/government demands, but it recognized that it would likely come some day soon -- and thus it was better to shut down ahead of time, before the government forced it to make the same decision. I'm somewhat surprised that Silent Circle didn't at least give its customers a day or whatever to close out their email, but rather the company flat out destroyed its servers, noting:

"Gone. Can't get it back. Nobody can."

The company is still offering other secure tools that feature end-to-end encryption such that there's nothing they can hand over to the government.

In discussing this, I saw some people point out that another service, CryptoCloud, has actually had it as a part of its privacy policy for over five years that it would shut down rather than let the government get direct access to accounts:

If a court orders us to allow them to secretly place surveillance "sniffers" on a specific account, we will fight this order to the highest judicial authority possible. If we lose, we will shut down the business and call it a day. End of story.

Still, this kind of thing is showing how these ridiculous surveillance policies from the US government are doing massive harm to US businesses, basically making them either lie to their customers and violate their privacy, or to shut down completely. It's going to drive many, many users to overseas services. Is that really worth it?

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Daniel J. Mitchell

President Obama promised he would unite the world…and he’s right.

Representatives from all parts of the globe have bitterly complained about an awful piece of legislation, called the Foreign Account Tax Compliance Act (FATCA), that was enacted back in 2010.

They despise this unjust law because it extends the power of the IRS into the domestic affairs of other nations. That’s an understandable source of conflict, which should be easy to understand. Wouldn’t all of us get upset, after all, if the French government or Russian government wanted to impose their laws on things that take place within our borders?

But it’s not just foreign governments that are irked. The law is so bad that it is causing a big uptick in the number of Americans who are giving up their citizenship.

Here are some details from a Bloomberg report.

Americans renouncing U.S. citizenship surged sixfold in the second quarter from a year earlier… Expatriates giving up their nationality at U.S. embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, according to Federal Register figures published today. That brought the first-half total to 1,810 compared with 235 for the whole of 2008. The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.

I’m glad that the article mentions that American law is so out of whack with the rest of the world.

We should be embarrassed that our tax system—at least with regard to the treatment of citizens living abroad and the treatment of tax exiles—is worse than what they have in nations such as France.

And while there was an increase in the number of Americans going Galt after Obama took office, the recent increase seems to be the result of the FATCA legislation.

Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport. …Fatca…was estimated to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.

I very much doubt, by the way, that the law will collect $8.7 billion over 10 years.

And it’s worth noting that President Obama initially claimed that his assault on “tax havens” would generate $100 billion every year. If you don’t believe me, click here and listen to his words at the 2:30 mark.

So we started with politicians asserting they could get $100 billion every year. Then they said only $8.7 billion over ten years, or less than $1 billion per year.

And now it’s likely that revenues will fall because so many taxpayers are leaving the country. This is yet another example of how the Laffer Curve foils the plans of greedy politicians.

You may be tempted to criticize these overseas Americans, but I’ve talked to several hundred of them in the past few years and you can’t begin to imagine how their lives are made more difficult by the illegitimate extraterritorial laws concocted by Washington. Bloomberg has a few more details.

For individuals, the costs are also rising. Getting a mortgage or acquiring life insurance is becoming almost impossible for American citizens living overseas, Ledvina said. “With increased U.S. tax reporting, U.S. accounting costs alone are around $2,000 per year for a U.S. citizen residing abroad,” the tax lawyer said. “Adding factors, such as difficulty in finding a bank to accept a U.S. citizen as a client, it is difficult to justify keeping the U.S. citizenship for those who reside permanently abroad.”

Imagine what your life would be like if you had trouble opening a bank account or conducting all sorts of other financial activities. Things that are supposed to be routine, but are now nightmares.

I collected some of the statements from these overseas Americans. I encourage you to visit this link and get a sense of what they have to endure.

And then keep in mind that all of these problems would disappear if we had the right kind of tax system, such as the flat tax, and didn’t let the tentacles of the IRS extend beyond America’s borders.

P.S. Based on people I’ve met in my international travels, I’d guess that, for every American that officially gives up their citizenship, there are probably a dozen more living overseas who simply drop off the radar screen. Many of these people can’t afford—or can’t stand—to deal with the onerous requirements imposed by hacks, bullies, and lightweights in Washington.

P.P.S. Remember the Facebook billionaire who moved to Singapore to escape being an American taxpayer? Many of us—including me—instinctively find this unsettling. But if we believe that folks should have the freedom to move from California to Texas to benefit from better tax policy, shouldn’t they also have the freedom to move to another nation?

The same is true for companies.

If our tax law is bad, we should lower tax rates and adopt real reform.

Unless, of course, you think it’s okay to blame the victim.

INTERIOR SECY: I Don't Want Any Climate-Change Deniers in My Dept...


(Third column, 19th story, link)

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FEINSTEIN: You're Not a Real Journalist Unless You Draw a Salary...


(Second column, 10th story, link)

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Related stories:

Bezos the press baron: Are wealthy owners the saviors of journalism?

Cato President John Allison writes to a politician (HT the Wall Street Journal):

Dear Senator [Dick] Durbin:

Your letter of August 6, 2013 is an obvious effort to intimidate those organizations and individuals who may have been involved in any way with the American Legislative Exchange Council (ALEC).

While Cato is not intimidated because we are a think tank—whose express mission is to speak publicly to influence the climate of ideas—from my experience as a private-sector CEO, I know that business leaders will now hesitate to exercise their constitutional rights for fear of regulatory retribution.

Your letter thus represents a blatant violation of our First Amendment rights to freedom of speech and to petition the government for a redress of grievances. It is a continuation of the trend of the current administration and congressional leaders, such as yourself, to menace those who do not share your political beliefs—as evidenced by the multiple IRS abuses which have recently been exposed.

Your actions are a subtle but powerful form of government coercion.

We would be glad to provide a Cato scholar to testify at your hearing to discuss the unconstitutional abuse of power that your letter symbolizes.

Sincerely,

John A. Allison

Cato’s Justin Logan, writing at Politico, explains that Charles Krauthammer, the neocons at the American Enterprise Institute, and many other folks are mistaken to describe Sen. Rand Paul (R-KY), Rep. Justin Amash (R-MI), and other like-minded tea-partyish politicians as “isolationists.”

My brilliant GMU Econ colleague Bryan Caplan writes on Citizenists.

Arnold Kling insightfully reviews Nicco Mele’s The End of the Big.

Mike Munger remembers my late colleague Charles Rowley.

John Stossel does a show on the Battle of the Sexes.

Here’s another of my brilliant GMU Econ colleagues, Alex Tabarrok, on how liberalization promotes economic growth.

Here’s a quick yet valuable lesson from Bob Murphy on some of the pitfalls encountered when interpreting statistics.

The best mob story ever told does not involve Al Capone or Bugsy Segal or John Gotti. It involves a mobster few American have ever heard of, Greg Scarpa by name

Upon searching our site, to my surprise, we've actually discussed the intersection of trademark law and sports team mascots in the past. There was the University of Oregon's duck mascot, who looked a bit too much like Disney's Donald Duck for the company's taste, though it ended up dropping its trademark claim. Or there was the time that automaker Dodge went after a high school that copied its logo for their team mascot. While neither case seemed particularly necessary or a good use of anyone's time, they also lacked the kind of true hilarity that aggressive trademark protection, even when entirely understandable, can produce. For that, you need a company or organization that is so brain-addled from at least a century of successlessness that they'd take a minor trademark dispute and not only go way beyond a reasonable effort to protect its good name, but would also do so with an in-person exchange best suited for a bad comedy movie.

Ladies and gentlemen, I give you the Chicago Cubs. The Cubbies, for those of you who don't know this, are one of only a few Major League Baseball teams that don't have a team mascot. Or, rather, they don't have an official team mascot. What they had, however, was a weirdo named Jon Paul Weier, who dressed up in a bear suit and team uniform as "Billy Cub" (groan). That is, they had Billy Cub until recently, when the team sent him a 100-page cease-and-desist letter ordering him to suspend all mascotting duties.

Citing allegations of trademark infringement, the League sent Weier a 100-plus page letter, ordering him to stop wearing the Billy Cub costume, and engaging in “unabated Mascot Activities.”

Now, before we all get up in arms about how Weir should be defended from the rich, evil Cubs, let me expand on my earlier indication that Weier is a strange guy. Fans have complained that Billy Cub occasionally enjoys following anyone who snaps a photo of him in public with demands for tips. Also, he sometimes like to use ethnic slurs and foul language. These complaints have commonly come with the indication that Billy Cub is an official team-sanctioned mascot. In other words, this is trademark protection done right.

But being on the right side of intellectual property protection doesn't mean the Cubs aren't behaving with a silliness more typical of a Monty Python sketch. A 100-page letter? For a jackass in a costume? Oh, and it gets even better.

After consulting with a lawyer, [Weier] ignored it. And the next day, he said he was confronted by a Cubs executive.

“Someone came up to me, very angry, and said, ‘Did you not get our letter?’ ”

Problem was, Weier was in costume and in character at the time. And since Billy doesn’t speak, he says he just stood there, gesturing and shrugging, as the executive in question got angrier.

It's hard to imagine a scene more funny than a Chicago Cubs executive vociferously arguing with a pantomiming grown man in a bear costume. In the end, yes, Billy Cub should go away, but there has to be a better way to spend Cubs employees' time than writing novellas to racist bear-men and engaging in one-sided arguments with them to boot.



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… is from page 14 of the 1992 Liberty Fund edition of John Taylor‘s 1822 tract, Tyranny Unmasked:

The justice of leaving wealth to be distributed by industry, is a sound sponsor for social harmony; whilst the injustice of compelling one class to work for another, as naturally excites rapacity and indignation, and is equally a sponsor for hostility.

**Written by Doug Powers

So much for having an all-knowing Nobel Prize-winning progressive economist on your staff.

From Big Journalism:

After purchasing the Boston Globe in 1993 for a then-record $1.1 billion, the financially troubled New York Times just announced it sold the 141 year-old paper to Boston Red Sox owner John Henry for a mere $70 million. That’s a straight 93% loss. Figuring in two decades of inflation would only make it worse — as does the fact the Times retains the Globe’s pension liabilities, estimated at over $100 million.

Rumor has it that the only reason John Henry bought the Boston paper was because of an emotional “for sale” ad the NYT ran in the Globe to spur bids:

Here’s one analysis of the sale:

NYT shrewdly sells Boston Globe for a 93% loss. Please lecture us more about how we should run the economy.—
Razor (@hale_razor) August 03, 2013

The old school dinosaur media in general is dead but won’t lie down:

The Globe is not the only paper to sell for a heavily discounted price. In April 2012, Philadelphia’s newspapers sold for $55 million after selling for $515 million in 2006. In October, The Tampa Tribune sold for $9.5 million. During recent talks about the sale of the Tribune Company’s portfolio of newspapers, analysts estimated that the entire newspaper company, including The Los Angeles Times and The Chicago Tribune, was worth only $623 million.

And dropping every day.

**Written by Doug Powers

Twitter @ThePowersThatBe

More than two years ago, I wrote a post about Thomas Sowell’s book Intellectuals and Society.  Although the book isn’t about nutrition, Sowell’s observations about how and why intellectuals embrace ideas certainly apply to nutrition policies dreamed up by government do-gooders.  Here’s part of what I wrote back then:

Sowell has nothing against smart people, you understand. He’s one heck of a smart guy himself. As he points out in the book, intellectuals are fond of accusing people who oppose their pie-in-the-sky ideas of being “anti-intellectual,” when in fact the naysayers are often common-sense types who oppose basing policies on the latest intellectual fashions and prefer something resembling proof. It’s the attitude towards proof, says Sowell, that separates intellectuals from others who work in practical fields that also require high intelligence.

In intellectual circles, where the talent that Sowell refers to as “verbal virtuosity” is highly prized, new theories are often applauded merely for being bold, exciting, challenging, or exquisitely expressed. (And if the theory suggests intellectuals should be in charge of the rest of us, it will likely be hailed as all of the above.) Once a theory is adopted by a critical mass of intellectuals — thus becoming part of what Sowell calls “the vision of the anointed” — those who dare disagree will likely be scoffed at and dismissed … without a genuine debate centered around little annoyances like proof and evidence.

Intelligent people in practical fields, however, must rely on proof. If an engineer proposes a new theory on structural integrity, it doesn’t matter if the theory is bold, exciting, or exquisitely expressed … if the bridge falls down, the engineer’s career is toast. I was once hired to re-design the security module of a large database program because the previous programmer’s module ended up shutting down the entire system. Nobody cared how bold his design was or how eloquently he could explain why it should have worked. It didn’t work. Period. End of story. Bring on the next programmer.

As Sowell explains, if intellectuals were limited to dazzling each other with their ideas at cocktail parties and in university classrooms, they’d merely be annoying.  Unfortunately, intellectuals often dazzle government officials too.   Now we have a dangerous combination:  people who don’t believe their ideas should be subject to proof getting together with people who have the power of compulsion.  The end result is worthless (or worse) legislation based on theories that haven’t actually been tested.

Which brings me to a recent article from CBS news titled Giving McDonald’s eaters calorie guides did not curb bad eating habits:

Educating people on the number of calories they should eat may not help them make better choices.

A new study published July 18 in the American Journal of Public Health showed that providing people with calorie guidelines did not help them make better food choices, even when calorie counts for each item were available on the menu.

Several states and cities in the U.S. require that chain restaurants reveal calorie information for their items. Congress has already passed legislation to develop a national calorie labeling system in order to aid health care reform.

However, previous studies have shown that listing calories hasn’t exactly helped Americans trim down their waistlines.

You mean a bunch of legislators jumped in and passed a law without bothering to wait for evidence that the law would provide any benefits?  Well, I am shocked.  To quote Senator McGovern, a senator doesn’t the luxury of waiting for every last shred of evidence to come in.  Or any evidence at all, apparently.

People don’t eat less when you shove calorie counts in their faces.  That’s exactly what I predicted when intellectuals and government do-gooders started pushing calorie counts as a tool to stop the rise in obesity.  They apparently believe fat people are automatons who mindlessly go around eating too much.  Shove a calorie count in their faces, and by gosh, they’ll say to themselves, “Whoa!  I had no idea I was scarfing down so many calories!  Give me the salad, please.”

That belief is, of course, utter hogwash.  When I was filming the street-interview scenes for Fat Head, I showed dozens of people a Quarter Pounder with Cheese, large fries and a large Coke, then asked them to guess how many calories were in the meal.  Some guessed about right, but most people guessed too high.  Almost nobody guessed too low.  People who order calorie-laden meals know they’re ordering calorie-laden meals, no matter what the intellectuals think.

But for the sake of argument, let’s suppose that when people are confronted with calorie counts, they eat less at McDonald’s and other restaurants.  Would that lead to a reduction in the obesity rate?  Nope.  Research has shown that the number of calories people consume over the course of a week is remarkably consistent.  When people eat large meals, they compensate by eating smaller meals later.  When they skip meals, they make up the difference over the next day or so.

In other words, how much they eat is driven by the complex relationship between appetite, energy balance and hormonal signals described by Dr. William Lagakos in The poor, misunderstood calorie.  Informing people (whether they want to be informed or not) that their McDonald’s meal is 1,000 calories won’t make a bit of difference in how much weight they ultimately gain or lose.

Back to the article:

It hasn’t helped that fast food and restaurant food still remain calorie-laden. A 14-year study showed that fast food restaurants have only made minimal improvements to the nutritional value of their items, and 25 percent of Americans eat fast food two or more times a week.

Allow me to engage in the logical thinking the reporter didn’t:  If 25 percent of Americans eat fast food two or more times per week, that means 75 percent of Americans don’t eat fast food two or more times per week.  So the sentence It hasn’t helped that fast food and restaurant food still remain calorie-laden makes no sense.  Fast-food restaurants are not the reason a majority of Americans are (by government standards) overweight.

“The general inability of calorie labeling to result in an overall reduction in the number of calories consumed has already been pretty widely shown,” study author Julie Downs, an associate research professor of social and decision sciences in the Dietrich College of Humanities and Social Sciences at Carnegie Mellon University, said to HealthDay. “So that’s nothing new. But in the face of that, there has been the growing thought that perhaps the problem is that people don’t know how to use the information without some framework, some guidance.”

I see.  Since we believe people are generally stupid, we’ve now decided just showing them calorie counts isn’t enough.  We also have to teach them how many calories they should consume in a day.  That must be right, because it’s the kind of bold, exciting idea that appeals to intellectuals.  Let’s see how it works out in practice:

To see if teaching people how many calories they should eat would help, 1,094 consumers aged 18 and older at two New York McDonald’s locations were provided information on recommended calorie intake before they ordered.

A third of the customers were given a flyer that said women and men should limit their calorie consumption to 2,000 and 2,400 calories per day respectively; another third got a flyer saying a single meal should contain between 650 and 800 calories; and a third were not given any information at all.

After they ordered, researchers looked at the customers’ food receipts and had them fill out a post-meal survey.The researchers discovered that giving people calorie guidelines did not make a significant difference in how they read and used the calorie listings on menus. In fact, people who were given calorie guidelines ate 49 more calories on average than those who did not get guidelines at all.

Head.  Bang.  On.  Desk.

So even if we coach people on how many calories they should (ahem) consume before confronting them with calorie counts, they still don’t eat less.   And yet the geniuses in Congress will nonetheless march ahead with a law requiring calorie counts on restaurant menus.  Businesses will pass the cost of compliance onto the consumers, and taxpayers will likely end up supporting new employees in some federal agency whose job will be to enforce compliance with a law that won’t accomplish anything.

Proof?  Nawww.  We The Anointed don’t need no stinkin’ proof before we impose our ideas on you. Proof is for engineers and software programmers, not intellectuals and government officials.

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One important function of private charitable organizations is that they are supposed to help protect us from the growth of an expanding, coercive, and confiscatory taxpayer-funded welfare state by providing private charitable activities that compete with government-provided social services. As Ben Zycher explained in an op-ed in IBD last January (and featured on CD), charitable organizations can help create a “buffer between the citizenry and the state”:

Private organizations, are voluntary and compete with government agencies in the provision of various services, they have powerful incentives to protect their activities and freedoms from efforts by government to expand its powers. Substantial benefits that the institutions of civil society yield in terms of the protection of our freedoms from the coercive and confiscatory power of the state.

In an op-ed in Thursday’s WSJ (How Big Government Co-Opted Charities), James Pierson argues that instead of helping to stop the growth of the coercive and confiscatory power and growth of the welfare state, the not-for-profit sector has increasingly become a “junior partner in administering the welfare state” (emphasis added):

Debate continues in Washington over limiting the charitable deduction for the wealthy to help balance the budget. Billionaires Warren Buffett and Bill Gates, in addition to influential advocacy groups like Independent Sector, an umbrella organization of 600 charities, insist that the charitable deduction is vital to preserve America’s vibrant voluntary tradition. Yet the nonprofit sector has problems beyond the charitable deduction. For much of U.S. history, nonprofits have operated as a check on government by providing private avenues to serve the public interest. Unfortunately, American charities—and more broadly, the entire nonprofit sector—have become a creature of big government.

For decades, the U.S. government has administered research, welfare, housing and educational programs through a system of grants to state and local governments, colleges and universities, hospitals, research organizations, consulting firms and not-for-profit advocacy groups. In the past 50 years, federal spending has exploded 36-fold, to about $3.6 trillion in 2012 from $100 billion in 1962. Meantime, the number of federal civilian employees has expanded modestly in comparison—to 2.8 million in 2011 from 2.5 million in 1962. The reason the federal government can increase its spending without adding many employees is because it subcontracts so many of its functions to ostensibly private institutions. This system has gradually turned much of the not-for-profit sector into a junior partner in administering the welfare state.

The publication Giving USA, which tracks charitable spending, reports that the government now supplies one-third of all funds raised by not-for-profit organizations. In 2010, the nonprofit sector got $215 billion in government grants and contracts. These funds were directed primarily to advocacy groups, social service organizations and nonacademic research institutions. According to a recent report by the Chronicle of Philanthropy, government funding of such charities grew by 77% between 2000 and 2010, while private support for such groups grew by just 47%.

These are reputable institutions, and many of the programs they sponsor are important. Nevertheless, in view of their dependence upon government funds, no one can seriously maintain that these groups are “independent.” Instead, they form one of the more powerful lobbying forces in Washington for increasing government spending, especially spending on tax-exempt groups.

The cozy relationship between nonprofits and the government should make us question the value of the charitable deduction in an era of expanding government. The original purpose of the deduction was to encourage charitable giving based on the belief that strong voluntary associations would reduce the need for government support. It no longer serves that purpose, given that private charities have become advocates for bigger government.

Whether or not we keep the charitable tax break is a question that should be judged broadly in terms of the role we want charities to play in our system of limited government. Those committed to preserving the charitable deduction and the integrity of not-for-profit organizations would be well advised to liberate the charitable sector from its self-defeating dependence on government.

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