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Nov 22, 2010

The Five Stages of Understanding the TSA

Fred:  I loved flying. I wanted to fly everywhere.
Mike:  That was before the TSA.
Fred:  I can't change the TSA. I must accept it.
Mike:  Maybe you should change the government that created the TSA.
Fred:  That hope supports my will to go on.

Psychologist Elisabeth Kübler-Ross described the five stages of grief when coming to understand and accept a great loss. This process may help to accept the Transportation Security Administration.

Denial: This can't be as stupid as it seems. The TSA must have thought about this, and it must have come to a sensible determination of what is needed for our safety. I will show that I am strong by complying with the rules.

Anger: This is so degrading, useless, and a waste. Why me? It is obvious that I am not a terrorist. I'm travelling with my family. My 3 year old isn't a terrorist. Don't they have eyes, or a bit of common sense? What is the sense in these rules? I'm flying from New York to Kansas, for crying out loud.

Bargaining: OK, I'll go through the machine. Just don't pick me out for special treatment. If I'm very cooperative, I can hold on to my 3 year old, right? And you won't fondle her, right? I'll give you my toothpaste if you let her keep the teddy bear, right?

Depression: This is terrible, but what can I do? I will comply. I will just think happy thoughts as (ugh, oomph) he does what is required, and not more I hope. Is anyone looking? It doesn't really matter. This will all be over in a little while. I can't do anything about this. I will just hope that they improve their policy in the future. I'll wait. It might get better, or maybe not, who cares.

Acceptance: I see. The TSA is part of bigger government policy. Beyond the TSA, there is a government that wants to do so much good. And, now they are doing it to me. I wanted a government which would "nudge" people into proper choices. I now see they have that power, and no restraint.

They won't stop themselves, and I don't have the power to stop them. Even "we" don't have that power for now. My concern can't be just the TSA. I must be concerned about government power in general.

This is an example of what the government is willing to do to thousands of citizens in the open. What must government agencies be doing behind the scenes in thousands of ways?

I must endure the TSA for now. My fellow citizens must endure all of those government agencies for now. If I accept that government always goes too far, I will have the courage to take away most government power. Instead, I will support policies that I can accept or reject as an individual. I want a choice other than government management, and I will support politicians who will limit the government.


The TSA is over-defending against visible, political threats. They are not motivated to do things more efficiently or to guide the public to a rational evaluation of threats. So, the expense for "security theater" grows without limit, as real safety remains constant. They are always fighting the last threat.

A bureaucrat has only one fear, that he will be responsible for the same attack twice and be fired. He can spend any amount of money on any number of different failures without penalty.

Front-facing TSA security looks for things, not to identify people. Even pilots are searched. The point is, the TSA doesn't know that the person in the uniform is really a pilot. They consciously ignore any information such as country of birth. They explain that identification cards can be forged or stolen.

The approach in Israel is to examine each passenger for identiy and demeanor. That system has done a great job without strip-searching everyone in line.

TSA's double standard
11/22/10 - Salon.com. The TSA relies on ID cards when it applies security to airfield workers.

[edited]:  All airfield workers are fingerprinted, checked for a criminal background, and checked against terror watch lists. They are subject to random physical checks by the TSA.

However, a Kennedy airport worker told me: "All I need is to swipe my Port Authority ID through a turnstile. The door to the 'sterile area' is not watched by TSA or any hired security. I have not been randomly searched in three years. We only see TSA people when they get food at the cafeteria."

Time to abolish the TSA as we know it
01/07/10 - Washington Examiner (Search for $7 billion)

[edited]:  One concerned bystander in Newark, N.J. told an (absent, sleeping?) TSA worker that someone just walked past him when he wasn't looking. That forced 10,000 people to go back through a security line and shut down air traffic all along the East Coast.

Jeffrey Goldberg demonstrated that anyone can print a fake boarding pass and carry a bottle labeled "saline solution", then enter our "secure" terminals with dangerous chemicals.

Airport Security: Bin Laden's Victory   03/03/10 - Forbes.

[edited]:  We have paid hundreds of billions of dollars in lost time and productivity.

I am willing to go through some inconvenience and expense to stay safe. But we have to ask:

•  Are all these extra security policies keeping us any safer?

•  Assuming yes, are they worth the time, hassle and cost? Could something else be done without so diminishing our productivity [and personal liberty -ag]  ?

Yearly Cost of Airline security

Passengers: 615 million
TSA budget:  $7 billion
Passenger Waiting time at $30/hour: $20 billion 
Personal "cost" of scanning and searching: ?

Direct cost per passenger:   $7 B / .615 B  = $11.38
Including indirect costs :  $27 B / .615 B  = $43.90

Expert Bruce Schneier:  TSA Scans Won't Catch Anybody
11/19/10 - Popular Mechanics interviews Bruce Schneier [edited]:

PM: Has there been a case since 9/11 of an attempted hijacker being thwarted by airport security?

Schneier: None that we've heard of. The TSA says "Oh, we're not allowed to talk about successes." But, they talk about successes all the time. If they had caught someone, especially during the Bush years, you could be sure we'd know about it. That means there weren't any. Because the threat was imaginary.

It's not much of a threat. As excess deaths go, it's way down in the noise. More than 40,000 people die each year in car crashes. That is a 9/11 every month. The threat is highly overblown.

Most of the costs of airport security "theater" would be better spent on anti-terror intelligence. That would make us all more secure from all types of possible attack.

Bruce Schneier has collected links to his posts about the TSA and airline security. Some of the links:

•  Airport Pasta-Sauce Interdiction Considered Harmful
•  The TSA's Useless Photo ID Rules
•  Airline Security a Waste of Cash
•  Airplane Security and Metal Knives
•  Interview of TSA Director Kip Hawley   (2007)

The Brains of TSA

An anecdote about a past head of the TSA, Kip Hawley. A long line for food at a barbeque stumped him. How about those long TSA lines at the airport?

Nov 20, 2010

Health Insurance Thirst Mandate

His Benevolence:   I have decided to banish thirst from the land.

Advisor:   Of course Sire. Tell me more.

His Benevolence:   All health insurance will henceforth include unlimited purchases of refreshing drink, like Coke, Pepsi, and 7-Up. The peasants will slake their thirst and be reimbursed by the insurance companies. No co-pay.

Advisor:   Your name will be legend. Sire, will you be paying for this bounty?

His Benevolence:   The insurance companies will pay.

Advisor:   Yes Sire. To do so, they will have to collect more from the peasants. Probably much more, to satisfy the peasant's unbounded thirst. Will you be lightening your taxes?

His Benevolence:   Shall you feel the whip? The taxes remain.

Advisor:   Of course Sire. The peasants will have to do their best in their gratitude.

His Benevolence:   Whatever. Let it be so. I now grow tired of this subject.

Advisor:   I will inform the scribes.

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Medical Necessity vs Mandates
11/18/10 - InsureBlog
Washington state mandated birth control as "a medical necessity" to be covered by health insurance. So, premiums for everyone will go up to pay for the additional services.

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Free Birth Control
07/26/11 - John Goodman's Health Policy Blog

Free birth control isn’t really free. It will raise insurance costs. How mandates for free services work in reality.

[edited, restated]:  New individual policies sold under ObamaCare would offer new benefits used by more participants. This would increase the average premium by 27-30%, assuming other factors are constant.

The new coverages will cost 18-21% in added premium, and lowered cost-sharing (no copay) will increase use of these services for an additional 9% in premiums.

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Company Paid Health Insurance is Part of Your Salary

People are already personally paying for their "employer-paid" insurance. They don't buy it directly so (1) it doesn't attach to them when they change jobs, (2) and they can't shop for the insurance they might want.

Nov 14, 2010

Fed Imposes $600 Billion Tax

Fred:  I see you collect coins.
Mike:  They are more valuable when more rare.

Fred:  What if the government produced some more of the rare ones, so you couldn't tell the difference?
Mike:  They would be devaluing the coin market. I would lose money.

Fred:  You can relax. The government is only creating more dollars.
Mike:  Bummer! I collect dollars too.

Quantitative Easing is a $600 Billion Tax Increase
11/13/10 - Chicago Boyz by Shannon Love

[edited excerpt]:  The Fed (Federal Reserve Bank) is taking (stealing) $600 billion dollars of real value from your pocket and using that value to buy US Treasury bonds. This funds the Federal government without saying the word "tax".

The transfer of real value goes from You, to the Fed, to the Government. It’s a damn tax increase craftily carried out using the finance system.

Instead of taxing just American citizens or those doing business in America, it taxes everyone who holds either dollar bills or bank accounts denominated in dollars.

Worst of all, it’s stupid. You can’t fix the economy by tricking people into taking economic action against their own self-interest

Money is a Bit Mysterious

Money is hard to understand because it does not really represent a specific, real value. You can exchange it for many things, but you don't have a guarantee about what it will buy. For example, you can use money to buy a coffeemaker. You will have a choice of many prices and styles in a free market, but you have no guarantee that you can buy what you want at the price you expect.

Money can keep a constant value if it is treated with respect and honor by the government and banks which create the money.

The exchange of money and goods in a free market is a bit mysterious. This exchange is the result of the productivity and preferences of millions of people. Pure reason does not tell us what prices should be. But, we observe that money and goods settle into a balance (an equilibrium) where prices and preferences are fairly stable.

Pizza, Prices, and New Money

For example, compare a pizza for $10.00 to a hamburger for $3.00. This ratio of 10 to 3 is probably stable, even if the price level is not. If the pizza rises to $12.00, we would expect the hamburger to rise to $3.60. The ratio 10 to 3 comes from the average preferences of people. The particular prices depend on the amount of money available compared to the supply of hamburger, buns, dough, and cheese, and the work of preparation.

The Federal Reserve Bank is creating $600 billion and using it to buy US Treasury bonds. Yes, it really is just creating the money. Poof! There is the money. This is almost as easy as typing $600,000,000,000 into its computers, and it shows up as money in its account.

The Fed buys Treasury bonds. Those Treasury bonds are a promise by the US Treasury to pay back that $600 billion. The government has $600 billion more cash to spend on whatever it wants.

The government becomes the "first spender" of that new money. That is a nice privilege if you can get it. Government workers take their new dollars and buy hamburgers for $3.00 each. The hamburger stand happily sells more hamburgers. Soon, their suppliers see they are running out of beef and buns, and they raise their prices to balance their supplies against the new demand from that fresh money.

As hamburgers rise in price, people express their preferences for pizza compared to hamburgers, and are willing to pay more for pizza. Eventually, the prices of pizza and hamburgers come to the same ratio of 10 to 3, but at a higher general price level of $12 to $3.60.

The Federal Reserve created the $600 billion in new money out of nothing. But, it can't produce the meat and buns for hamburgers and other goods out of nothing. More dollars are used to buy the same amounts of real goods, so prices go up until the new amount of money balances the goods available.

Bad Economic Theory   vs   Reality

The Fed is following Keynesian economic theory. It would argue that this extra money causes people to work harder and produce more, encouraging "the economy" to produce more goods. The government considers the spending of this new money to be an increase in GDP (Gross Domestic Product). So, there would be no inflation, and prices would stay nearly the same.

In reality, "the economy" refers to people. People work to produce and exchange real things, not just pieces of paper called money. People work to support and enjoy their lives, not to increase an accounting measure called GDP. The government can pay people with that new money, but there are no additional real goods available for those people to buy as their payment in real things.

The first spenders and receivers get full value for the new money. People farther along the network of exchange get less value as prices go up. People who have long-term savings in dollars are last in line. They get the fully diluted, reduced value for their dollars when they eventually buy real goods at higher prices.

Useless   vs   Useful GDP

Here is a subtle point. These monetary manipulations by the government may actually increase the production of real things, for a while. Government economists congratulate themselves. Yet, we citizens should be unhappy.

Say that you work for the government or provide it with goods and services, and suppose that the government has no real goods to pay to you. That is, it has spent its tax revenue and has borrowed all that it dares.

It might command you to "volunteer" a few days of your time for no pay, to work on government projects. You would add to GDP by producing real goods and services, without being paid. People would be alarmed at this system of forced work, even if they had no other job at the time.

Instead, the government can do much the same thing by creating new money through the Fed. They pay you instead of making you work for free. You might add to the real goods and services of the society, if what you do for the government is actually useful. Useful or not, government accountants add your pay to GDP, and GDP goes up in the official accounts.

The problem is that the government is consuming your production for its purposes, and your production is not available to pay you real things. You will get your real things from the production of others when you spend the new money. There are now more dollars available to buy the same goods as before. Prices go up for the goods that you receive as your real pay.

Instead of forcing you to work for the government, the government has fooled everyone into working for less real payment than they think they are getting. That is a tax.

Hidden Tax

Inevitably, the government extracts $600 billion dollars of value from the society, and the people pay that bill as a hidden tax on the real value of their bank accounts. Or, they see prices go up before they get their next raise, giving them a bit less for their work. People who save dollars feel inflation the most. The government is taxing them after the fact, on top of whatever taxes they originally paid on their income.

The government says: "We have not raised your taxes. A small amount of inflation is good for the economy, producing increased salaries". This is a fraud on people who produce. Yes, their salaries go up, somewhat behind increasing prices.

Money loses value when it is treated as a tool of the government, to take value from the people while pretending that government actions have not caused inflation. Or, amazingly, Fed Chairman Bernanke has announced that he wants to cause higher inflation (for the good of us all). Money creation as the Fed is doing it causes inflation, and this is a fraud on the public trust.

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So how bad is quantitative easing?
11/14/10 - Cubachi   (Via Riehl World View)

Sarah Palin (don't laugh) sums up the situation nicely. Newt Gingrich and German Finance Minister Wolfgang Schaeuble agree. See also an Xtranormal video where two dogs discuss the true meaning of quantitative easing (creating money).

Cubachi  [edited]:   Fed Chairman Bernanke wants quantitative easing to raise inflation to 2% annually. The problem is that we already have inflation. This will make prices for goods soar even higher. Interest rates have gone up since Bernanke’s announcement; not what he expected.

Secret Walmart Survey Shows Inflation Now
11/11/10 - CNBC reports on current inflation:

[edited]  Walmart is the world’s largest retailer. Their new survey showed a 0.6% price increase in the last two months, according to MKM Partners. At that rate, prices would be 3.6% higher a year from now, 80% higher than what the Fed has proposed.

Jim Iuorio of TJM Institutional Services:
  “I suspect that when Bernanke thinks about reflation he has a difficult time looking beyond real estate. The Fed thinks that inflation is somehow unimportant when it is not driven by higher wages. It is quite important to people who see their homes going down in value and the food and energy they need going up in price.”

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The Goals of Quantitative Easing
11/15/10 - Cafe Hayek by economist Don Boudreaux

[edited]  The LA Times reports that interest rates went up last week on Treasury, corporate, and municipal bonds.

This is a direct and predictable consequence of the Fed’s diarrhea of dollar creation. The Fed's goal might well be “to keep longer-term interest rates depressed”,  but economies reflect realities and not mere intentions.

Market participants understand that this huge increase in the supply of dollars will spark higher inflation. Lenders thus insist on higher long-term interest rates to compensate them for the falling value of the dollar.

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Let's Counterfeit Our Way to Wealth
Feb 2009 - Easy Opinions

The thinking of economist John M. Keynes in 1935 has an outsized influence on the policies of our government. He said that increased spending was good for a recession. As you might expect, governments heartily agree because they use any difficulty as an excuse to raise taxes and spend money on their friends.

Unfortunately, Keynes was a crackpot. He said that government spending gives a multiplied return to the society. Unfortunately, that comes from a mistake counting transactions as if the entire value of each transaction creates wealth, instead of merely valuing or identifying wealth.

Obama's economic team claims that there is a 1.5 wealth multiplier on government spending. They say that the government can spend our way to prosperity. If that were true, we could all profit from encouraging people to counterfeit money.

That is what the Fed is doing as the master counterfeiter for the economy. Bernanke thinks that creating money and spending it through government is going to multiply our wealth. Somehow. In a way that has not been demonstrated.

Nov 11, 2010

Eliminate Earmarks

Lobbyist:  Earmarks of $16.5 billion are a tiny part of the deficit, about 1%.
Congressman:  Yeah, I'll just take a tiny $20 million for my friends and myself.

Eliminating Earmarks
11/10/10 - Cato@Liberty by Jim Harper

[edited]:  Earmarks are not a huge part of the federal budget, but we should end them. Senator Tom Coburn (R-Okla.) calls them a “gateway drug to federal spending addiction,” which is a folksy way of talking about political “log-rolling.” Former Congressman Joe Scarborough (R-Fla.) has seen it first-hand. He explains (video 4:00) how House and Senate leaders use earmarks to buy votes on legislation they want passed.

If earmarks go away as a tool for wheeling-and-dealing in Congress, members and senators will be less likely to sell out the country as a whole with bloated spending bills and Rube-Goldberg regulatory projects for the benefit of some local interest or campaign contributor.

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Earmarks Are the Gateway Drug to Big Government Addiction
11/22/10 - Cato@Liberty by Daniel Mitchell
See also the 5:40 video at the link.

For Earmarks

Washington Post by Mark Greenberg [edited]

The $16.5 billion Congress spent on earmarks in fiscal year 2009 is only about 1% of the $1.4 trillion deficit in 2009.  [About 1/1000th of total yearly spending.]

Party leaders must appeal to lawmakers’ interests as well as their principles to get votes. They must offer incentives like earmarks to win votes on difficult issues.

An amazing argument. Party leaders need earmarks to buy the votes of congressmen where reason and principle are not enough motivation. Probably the fundamentals of the proposed law are lacking. Earmarks keep congressmen from much caring.

Against Earmarks

Daniel Mitchell [edited]:  Earmarks increase indirectly the upward pressure on federal spending. Lawmakers support their party leaders on the spending committees in order to get earmarks. Earmarks seduce members into treating the federal budget as a good thing to be milked for their state and district projects.

Yes, it is possible that congressional leaders will use earmarks to pass legislation shrinking the burden of government. I’m not holding my breath.

Earmarks are utterly corrupt, although legal. They finance a racket of big payoffs to special interests, who give big fees to lobbyists, who give big contributions to politicians. Everyone wins except the taxpayers. Those lobbyists are often former staffers and Members.

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Transparency Killed The Earmarks
12/17/10 - Hot Air by Ed Morrissey  (via Instapundit)

[edited]  Porkbusters helped to kill these earmarks. The porkers abandoned their earmarks when the outrage became high enough and transparency identified the offenders.

As a result, we will see a reduction in spending, thanks to the new GOP majority in the House. The omnibus spending bill was chock-full of earmarks and funding for big-government programs.

It won’t be passed into law now. Legislators have no incentive to pass massive new spending if they cannot promote their own home-district projects. The overall spending will become the focus, as it should have been all along.

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The Political Manual: Adequate Compensation

There is a bit of risk arranging for extra compensation, but not out of line with the other risks you have taken. A few unlucky politicians go to jail. You could be in an auto accident tomorrow, or have a nasty confrontation with a deranged constituent. It may help to imagine your friends and competitors pointing and laughing if you manage to be poor when you retire from politics.

Nov 7, 2010

Comment - Caring and Reality

11/07/10 - Comment by Anonymous at Daily Pundit:

[edited]:  I remember talking to a colleague from San Francisco at a meeting right after the 2008 elections. She was all excited about the Democratic takeover because she cared about the poor and believed that all the world should provide social services the way San Francisco does.

I pointed out that California and San Francisco were both hemorrhaging money, destroying jobs, and were fundamentally unsustainable systems.

She said “I know, I know. I’ve heard all that. But, you know, I just love it here so much and I don’t want anything to change. Something will come up and it will get fixed. I just have to believe it.”

And I’m the one who is supposed to be an illiterate, stupid, conservative who just doesn’t understand how anything works.

Nov 5, 2010

Quip - Why more taxes for Obama?

Obama has repeatedly promised that families earning less than $250,000 will see no increase in their taxes. He does want taxes increased on wealthier families.

I notice that all of his proposed programs and policies are supposed to save money. Even the TARP and GM bailouts are supposed to be paid back with interest.

So I wonder, how is Obama going to use those extra taxes? He won't need them.