BREAKING: Hillary Clinton to Drop Out and Endorse Gary Johnson

Secretary Clinton is going to ask all of her supporters to vote for Gary Johnson, sources inside the campaign say, in an effort to give her supporters a candidate that can both support their stated views of inclusiveness AND actually win the presidency, considering the current state of the race and the scandals.

Johnson, who leads in the polls with active military, independents, and millennials, seems to be the country's best shot at getting a president who advocates being responsible with money, while having no interest in telling you how to live your life.

Clinton, sources have confided only to Going Galt, is concerned that the most recent email scandal will prevent most of the country from being able to vote for her with a clear conscience.

On Friday, FBI Director James Comey submitted a letter to Congress, and the Select Committee on Intelligence, alerting the nation that the FBI found more emails that "appear to be pertinent to the investigation" into Clinton. Director Comey had previously testified that the investigation is complete, but an unrelated investigation has not turned up previously undiscovered evidence.

The FBI is investigating Anthony Weiner for texting sexual content to an underage girl. In the investigation, the FBI searched a computer owned by Huma Abedin, Weiners wife and top aide to Clinton. The FBI claims that there are tens of thousands of additional emails on Abedin's laptop. The content of the emails is unknown, at this time.

This is not good news for Secretary Clinton, who has been accused of misdeed after misdeed this election season. This is the second instance of email scandal--in the first, Clinton carelessly mishandled classified documents; some say it's a scandal all by itself that many people have done far less than Clinton, and received far more punishment. In the "Pay for Play" scandal, Clinton stands accused of selling influence inside the American government, in exchange for "donations" to the Clinton Foundation, which some say is just a profit-making enterprise for the Clinton family, and their friends.

Mr. Trump, Clinton's primary opponent this cycle, likewise has battled a series of accusations. After a decade-old recording was released showing the businessman discussing coming onto women (very strongly), a dozen women came forward accusing him of inappropriately touching them over the years.

Meanwhile, Gary Johnson, the Libertarian Party nominee, while certainly a weird guy, manages to both keep his hands to himself AND not be corrupt.

Still, it's an unusual turn of events. The Clinton campaign has been quite supportive of measures that would lead to more war for the United States, and Johnson has, instead, been very vocal about avoiding war, simplifying taxes and regulations, and growing the economy.

We're left with the speculation that, perhaps, Secretary Clinton has one opinion she shares publicly, and one she keeps in confidence--and we, at Going Galt, thank her if this is her "private" opinion.

The Long Awaited Deficit Post

I really don't think that our congress will agree to a reasonable solution to the federal governments budget woes. I imagine that, come January 1, 2013, there will be increased taxes, increased debt ceiling, and increased spending.

President Obama wants to increase taxes on the rich. Let's take a look at what this actually means:

There are almost 138 million tax returns with positive AGI (and these are the returns who pay income taxes. Some are single people, some are joint filers). The top 5% of Americans have a combined income of just under $2.5 trillion, and pay $508 billion in taxes.

Here's my data (source):



The US Governments budget deficit for 2012 is $1.3 trillion. If we want to eliminate this deficit, we could confiscate half of the remaining income from this small group every year without growing the total debt (as long as spending doesn't grow--fat chance). To do this, the effective tax rate (which is different than the "marginal tax rate") would be 73%. Does anyone really think it makes sense to take that much of anyone's money? This is pre-FICA, Social Security, property tax, sales tax, and all those other taxes that governments like to hit us with.

This means that a household that currently makes a very comfortable $154k/year now makes around 40. Okay, not the end of the world, right? But who are these people? Doctors, lawyers, and small business people (among others, yes). If you went through ten years of post-high school education, and suddenly, the return on investment is wiped out, how do you pay those loans back?

It's simply not realistic to get this money from this small group. Even if Congress raised taxes on the top 50% of Americans, the average effective tax rate would almost triple, from 12.5% to 31.7%. Raise your hand if you want your own takes to go up this much during a recession.

At the end of the day, taxes would have to go up an unreasonable amount to bridge the gap. But what about spending?

This has been covered by a lot of people, so I'll keep it brief: there have been very, very few years in which the US Government has spend less than it's brought in. Only eleven years since 1940. As a percentage of GDP, "revenues" have been very stable: between 15 and 20; spending, 17-22. This is bad news.

So the question becomes: after fixing this huge deficit/debt situation, which is better: a high tax/high expenditure government, or a low tax/low expenditure government?

First, taxes. Pretty much everyone agrees that raising taxes on goods like cigarettes will lead to fewer people smoking them, as they become more expensive. Economic data largely show this to be true. Apply the same concept to everything else: if you want less of it, tax it. What happens if we tax soft drinks? People will drink less. Alcohol? Same. And labor? It's intuitive. Everyone will work to aquire an income to a certain point. After that, you have to decide where you want to spend the next marginal hour: watch TV, work, start a new business, spend time with your kids. If you're suddenly taking home two thirds or less of what that previous hour would have given you, your decision could be different. That could mean that the business you thought about starting becomes too risky, and the rest of us never get to use that product.

Next, spending. Most of the studies I have seen show that government spending actually hurts the economy. I'll let smarter people than myself spell it out:

In addition to crowding out private spending, government outlays may also crowd out interest-sensitive investment.¹¹ Government spending reduces savings in the economy, thus increasing interest rates. This can lead to less investment in areas such as home building and productive capacity, which includes the facilities and infrastructure used to contribute to the economy's output.
An NBER paper that analyzes a panel of OECD countries found that government spending also has a strong negative correlation with business investment.¹² Conversely, when governments cut spending, there is a surge in private investment. Robert Barro discusses some of the major papers on this topic that find a negative correlation between government spending and GDP growth.¹³ Additionally, in a study of 76 countries, the University of Vienna's Dennis C. Mueller and George Mason University's Thomas Stratmann found a statistically significant negative correlation between government size and economic growth.

Emphasis mine. RTWT.

If we want economic growth, we need to have low taxes and low government spending. Economic growth is what allows the poor in the US to live as kings could not even 100 years ago. It's the development that brought us cars and planes, air conditioning and TV, refrigerators and the ability to buy things from our mobile phones at the click of a button. Economic growth is what we need to bounce back from this recession, and more spending and taxes will only make us worse.

I really hope my prediction at the top of the page is wrong, but the political class seems to be content to kick the can down the road until this government is bankrupt, so they can blame someone else.

Private Police Forces

This is the first in what I intend to be a long line of posts exploring how (or if) the free market would give us better solutions than government. 

Of course we will start with what many consider to be an "extreme" option. Even most libertarians I know would say that one legitimate role of government is to protect the population from crime and violence. Let's start with the arguments against, and the responses to it.

1) Private police forces would only serve the wealthy. The simplest response to that: this is what happens now. As The Daily tells us, those who live in Detroit (a city known for not being wealthy) are not getting police protection (HT to Reason). Mara Gay writes:

The last time Brown, 73, called the Detroit police, they didn’t show up until the next day. So she applied for a permit to carry a handgun and says she’s prepared to use it against the young thugs who have taken over her neighborhood, burglarizing entire blocks, opening fire at will and terrorizing the elderly with impunity.

 Average response time for police in Detroit is 24 minutes, according to Gay, which is more than double many other major cities.

Worse, government police forces spend their time harassing innocent people. According to the ACLU, New York City's stop and frisk policy means that nine innocent people get harrassed in order to catch one small time drug user.

The effect of all this is that the poor don't get any of the benefits of having police, and are actually oppressed by them. In fact, The Washington DC court of appeals has ruled that the police are under no obligation to protect you.

2) Poor people could not afford a private police force. This is almost an extention of #1, but worth answering. Gay states in The Daily that Detroiters are paying $10-$200 a month. According the National Center for Policy Analysis, it IS much more expensive in some cities, but the reason for that are regulations that severely restrict who may act as private security. Some cities only allow off-duty police officers to act as security, and costs can be $30 an hour. It would seem that government interference in this case makes the poor worse off.

3) Government police need to be the ones to solve the crimes. Also valid, but how are they doing at that? One thing I don't ever want to happen to me is murder. But if that ever happens, I want them to catch the bastard. Unfortunately:

Despite dramatic improvements in DNA analysis and forensic science, police fail to make an arrest in more than one-third of all homicides. National clearance rates for murder and manslaughter have fallen from about 90 percent in the 1960s to below 65 percent in recent years.

The majority of homicides now go unsolved at dozens of big-city police departments, according to a Scripps Howard News Service study of crime records provided by the FBI.

The FBI goes on to say the reason: crimes of passion (with an easy to identify assailant) have been replaced by gang and drug related murders.

4) If we have private police forces, they'll start acting like warring gangs to increase their territory. Sounds to me like this is another area in which they would then be acting like governments currently do. It's certainly possible that, as private police forces gain popularity, that they may decide to use violence to eliminate the competition. After a period of consolidation, we'd end up in the exact same situation that we are in today. However, this is all highly hypothetical. Should we really choose the devil we know, given all the clear victories that would come with the change? The danger, in this situation, is that we would lose control over who protects us, right? Do we have control now?

Verdict: Putting the protection of citizens in the hands of a political class means that this protection becomes politicized. If you don't like how the politicians run things, well, you get one chance every two, four, or six years to weigh that against the hundreds of other things that they've done, and choose to keep them or not. If you employ a private company, you can make that change any day. A privatized force will, and does, deliver many advantages, and does appear to be the superior choice.

Obamacare As a Job Creator

I promise I'm working in something interesting for you about the budget (never thought "interesting" and "budget" could be in the same sentence). 

In the meantime, check this out. From Coyote: 

most of my competitors are small businesses that are exempt from the Obamacare hammer.  To compete, I must make sure my company is exempt as well.  This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt.  We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least (ed: more than his annual profit), and I am pretty sure the cost of more training will be less than that.

At least they're "creating jobs," right?

If you're not already reading Aretae...

Start. The guy is way more thoughtful than I am:

The top 8 predictive factors (that I know) impacting a person's quality of life (across many dimensions) are (in order, as I understand it):

Location (country/state/etc. -- see here for instance)
Patience
Self-Efficacy
Social/Emotional Intelligence
IQ
(roughly tied with 5) Conscientiousness
Resilience
Optimism

RTWT: http://aretae.blogspot.com/2012/11/social-science-news-oty.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+Aretae+(Aretae)&m=1

The Twinkie is Dead. Long Live the Twinkie.

Unless you live under a rock, you’ve heard that Hostess isgoing out of business. It’s possible that you are one of those who are making afortune selling Twinkies for hundreds of dollars. If so, great! I've never really been one to march against someone trying to make a buck. UnlessI’m buying from you.

The story, perpetuated by the same media that made you thinkMitt Romney and Barack Obama are different, is this: Hostess is going out ubbizzniz! Nozzz!!!!eleventy!!!1111! Twinkies will never be around again! This isworse than Zombieland!

My version: Ok, world. Take a deep breath. Yes, Hostess has filed for bankruptcy. But this does not mean what you think it means. Theconventional wisdom is that, when a company goes out of business, POOF!, all of its assets and productsvanish, never to be seen again on this earth. If this were the case, I wouldnot currently be waiting for a flight back to Michigan, to see my family. 

Airlines have been in and out of bankruptcy for years.Here’s the key: demand for flights has not gone down. I still want to flyaround the country to see friends and family. And so do you. Or maybe it’svacation that you like. Either way, you’re getting there by one of thegreatest human transportation machines that have ever existed, instead of horseand buggy, precisely because bankruptcy does NOT mean that in-demand thingsvanish.

Do you know any individuals or families that have filed for bankruptcy?Did they vanish as a result? Obviously, corporations are not people, but it’sinteresting to note that they don’t vanish, either. As Coyote often notes, bankruptcy is a process, notan end (and now I just feel like I'm reiterating what his post says). It’s a process that allows abusiness to try to reorganize so thatit may hold on for dear life. It ishopefully something that prevents death.

In a bankruptcy, someone is going to lose. Here’s the catch:most will lose less than they would if the firm went out of business. This processis supervised by an intermediary (a court) to make sure everyone is treatedfairly, and follows hundreds of years of precedent in who gets the most back.Hostess has stated their intent to sell all of their assets to the highestbidder. The formula for the Twinkie is an asset, and mostly likely will be boughtby someone.

Many of those employees will likely have a hard time findingjobs in their current cities. The lenders to Hostess will lose a lot of money. Butthe Twinkie is going to live. Calm your @$$ down.

And if you really want one, make your own.

Has the Grand Old Party Become the Old Useless Party?

Republicans lost what should have been the easiest win for the White House since Carter. Discussing what is next for the party is making for great political theater across the nation.

Some people think that Romney lost (and GOP lost seats in the Senate) because Americans don't buy the economic message:

the vital issue of this election was clearly the economy, and the Grand Old Party’s Grand Old economic ideas just didn’t sufficiently convince the American population. Their liberal economic notions suggested a form of trickledown economics more appropriate to a previous age, unable to ensure future advancement. I believe the inadequacy of this ideology was exposed to many Americans through the Great Recession; there is now a more common acceptance that the capitalist system is flawed and requires to be kept in check by at least a moderate form of government intervention. Mitt Romney’s policy to decrease business regulations {ed: I don't remember hearing anything about this--Romney said in the debate that he LOVES regulation} therefore didn’t sit too well with many Americans. However, I do not believe that more traditional, economically liberal policies are set to come to an end in the States; they just need to modernise, to encapsulate the American notions of individual freedom and liberty in a 21st Century context. 

Pundits want the GOP to make changes in order to "stay relevant," but these pundits seem to recommend the changes that they personally would like to see, as opposed to asking "What does this party need to do to drive more votes?"

Many people are saying that the socially conservative issues need an overhaul. The two issues that get the most play/votes are: abortion and gay marriage. Let's look at both.

Marriage: It's certainly the case that gay marriage is going to be a reality. SCOTUS is likely to hear a challenge to the Defense of Marriage Act in the spring, and the Obama administration has not been fighting it. A candidate would have to win the nomination from a party where 74% of the people think gay marriage should not be legal, then win in a general election with half of Americans in support of legal gay marriage, including 57% of independents. This is a difficult conundrum.

Abortion: My feeling (and I don't yet have data to support this, so feel free to post in the comments) is that, when it comes to gay marriage, most of the passion is on the "pro" side. On this issue, there is passion on both sides. Gallop says that pro-life Americans are at an all time high, but Rassmusen reports that pro-choice voters are at an all time high. And voters trump non voters, every time.

Even some Right to Life groups show that most Americans would support abortion under some circumstances. In this poll, only 20% think that it should be illegal, no matter what.

But here's what's interesting. Remember Richard Mourdock, who, while running for Senate, famously said that "even if life begins in that horrible situation of rape, that it is something that God intended to happen"? Well, he lost to a pro-life Democrat, Joe Connelly. In Indiana. 

The issue this year was the economy, and Romney just didn't do a good job of articulating why his plan was better. He didn't talk about social issues, either. There was really no reason to vote for the former governor this year, other than he was not Obama. As a Republican or independent, if you don't see differences between the two candidates, why vote for either? If the GOP is to win in 2016, there's no secret. The party doesn't really have to change, either. All they have to do is successfully nominate a candidate that can raise enthusiasm in the base, and among some independents. It's all about the candidate.