Magna Carta

While Prince John was the stereotypical evil prince, he was in fact evil, and continued this when he became king when his brother Richard died without any children. The 25 most important Barons of the land were in open revolt against King John. The English kings’ hold on the throne was always a little tenuous, but John was less popular than most. This probably explains how and why the Robin Hood legend came to be and grew so strong. The English Barons got together and forced John to accept certain limits to his power. For the first time the king would be subject, theoretically at least, to the laws of England. One of the rights given, not just to the Barons (eventually) but to every man was this:

29. NO Freeman shall be taken or imprisoned, or be disseised of his Freehold, or Liberties, or free Customs, or be outlawed, or exiled, or any other wise destroyed; nor will We not pass upon him, nor condemn him, but by lawful judgment of his Peers, or by the Law of the land. We will sell to no man, we will not deny or defer to any man either Justice or Right.

While the Magna Carta was in effect for only a few months, various version of it were signed by various kings over the centuries. The Magna Carta led to the 4th amendment of the American Constitution:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

In other words your home is safe from government unless there is a probable cause or a warrant signed by a judge. That was the law until recently. Now, at least in Indiana, that is no longer the case. The government can, for no reason, enter your home illegally and you can do nothing about it. Here is how the New York Times describes it:

Overturning a common law dating back to the English Magna Carta of 1215, the Indiana Supreme Court ruled Thursday that Hoosiers have no right to resist unlawful police entry into their homes. In a 3-2 decision, Justice Steven David writing for the court said if a police officer wants to enter a home for any reason or no reason at all, a homeowner cannot do anything to block the officer's entry.

In the words of one blogger we are less free today than in Medieval England. 

To return to our boiling frogs analogy: Do you feel the heat as the water gradually boils away our freedoms? I have posted several outrages on my facebook page.  

The church fined $4000 dollars for trimming their own trees on their own property.

A modest raiser of rabbits in Nixa, Missouri, is facing a fine of $90,000 for raising rabbits without a federal license. If the fine is not paid immediately, the fine will be raised to $4 million. They sold $4600 worth of bunnies over the years.

Magicians who pull a rabbit out of their hat need a government license.

A farmer threatened with a $100,000 dollar (Canadian) fine if he removes carp from his flooded field without a fishing license.

Or the man who spent years in prison for importing lobsters in plastic bags instead of boxes.

Finally, here are 12 absurd government regulations.  

Do you feel the heat yet? The fact we are not approaching our government with metaphorical pitchforks in hand tells a lot about us Americans and how we are deceived by Babylon the Great.

Folks, when will we wake up?

A New Robin Hood

Robin Hood is a popular icon. Even my Russian wife knew who he was, as they read Ivanhoe. We don't read Ivanhoe, but they do!

Robin Hood is a popular icon around the world. To quote my wife: "He lived in the forest and robbed bad people." This is a good summary and very fitting with the old Soviet Union's philosophy. "To rob from the rich and give to the poor" could actually be used to summarize many of the political pundit class—the talking heads on Sunday morning "news" shows. These pundits actually express the sentiment with different words. Since they do not wish to admit to "robbing," better talking points are used. Somehow not robbing them is the same as giving them money! But what the government actually does is rob from one kind of rich in order to help one kind of poor. This is what Robin Hood did too.

There is a strong ethnic component to the Robin Hood story. William the Conqueror in 1066 invaded England and defeated the Saxon King Harold. William and his men replaced the Saxon aristocracy with their own men. They were from northern France and spoke French. (As an aside the reason it is pig in the farm but pork on the plate is that the Saxon peasants kept their word—pig—but the Normans kept their word—pork, and both stayed in the resultant English language.)

So Robin Hood would rob the Normans, and give to the Saxons. Robin Hood was actually a part of the aristocracy himself—just the Saxon part of the aristocracy. The reason for the rebellion was that Richard the Lion Hearted was off fighting his wars, and ignoring the people. The “King far away” was a figure of awe, but his brother, Prince John, being close at hand was the stereotypical evil brother. Prince John eventually became King John, as Richard, to put it politely, was not interested in women and had no children. (I will write about King John in my next blog post.)

Our modern Robin Hood government robs some rich people, but gives subsidies and tax breaks to other rich people. Let me give you two examples. If you or I speculate in the stock market we face a maximum tax rate of about 50% (Federal and State). But if someone has a spare $5 million lying around they can give it to a hedge fund, which makes the same kind of investments, but pays a tax rate of 20%.  Estate tax is another way this is done. The wealthy person is subject to the tax, but the very wealthy person is not. The Kennedys have their money in a generation-skipping trust fund headquartered in the Fiji islands. They pay no estate tax.

Another aspect of the “robbing from the rich” is that those active in the robbing, Robin and his Merry Men, needed to eat too. So naturally they kept a portion of the money stolen for themselves. As the Robin Hood in Shrek tells us:

Merry Men: [singing] Ta da, da da da da - whoo! 

Monsieur Hood: I steal from the rich and give to the needy... 

Merry Man: He takes a wee percentage...

Monsieur Hood: But I'm not greedy - I rescue pretty damsels, man I'm good!

Merry Men: What a guy, ha ha, Monsieur Hood!

I am not sure why Robin Hood in Shrek is French, but it is funny. What is not so funny is the growing percentage the government takes to feed the government's many merry men. The original Robin Hood stole from the government and gave to the victims of the government. Today our modern Robin Hood government steals from everyone, stealing less from the favored classes, keeps a huge percentage, and yes, does help people. But most of this help is giving to the middle class not the poor. The middle class votes more often.

We need a new Robin Hood like the original story book hero, who robs from the government and returns it to the taxpayers.

Social Security and Medicare

Here are a few links on Social Security and Medicare from this week.

From Bloomberg:

 

Medicare, to stay solvent for the next 75 years, would have to immediately raise payroll taxes by 24 percent, or cut current benefit payments by 17 percent, Cori Uccello, a senior health fellow with the American Academy of Actuaries in Washington, said in a phone interview.

Because of the power of compound interest, the longer reform is postponed the greater the problem. What about Medicare and Social Security?

 

While Medicare won’t have sufficient funds to pay full benefits starting in 2024, five years earlier than last year’s estimate, Social Security’s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection, the U.S. government said today in an annual report.

The   Washington Times  expands this:

The trustees stressed that exhaustion of the trust funds doesn’t mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.

From the Ways and Means Committee of the House which oversees these issues:

“Today’s report makes it clearer than ever that doing nothing is not an option. The failure to act means current as well as future beneficiaries, will face significant cuts even sooner than previously estimated.”

While this is blindingly obvious,  apparently Newt Gingrich is blind. 

While it may be too late for many readers, relying on government is a weak option. Personally I recognized twenty five years ago that I was being lied to and took appropriate steps. I am not fully ready yet, but I am close.

If you are young then you need to begin preparation for leaving your future reliance on the system of Babylon the Great. This includes steps like driving a used car, renting instead of buying and saving the difference, and being careful financially. If you are on Social Security now, you are probably safe. But if you are 10 to 20 years from retirement, as I am, you should be concerned.

What do you do? What should anyone do? As I said in one of the first posts in this blog, and what I plan on as a theme here: "Do The Best You Can." (DTBYC) Leaving Babylon the Great and its economic system is difficult, but it is not impossible.

The Huckleberry Hound Theory of Government

I was a member of the Huckleberry Hound Fan Club in the first grade—50 years ago. I do not remember how many box tops it cost. I got a membership card and a ring! I kept the membership card all the way to high school until it became too frayed to keep. Even back then it fit my sense of the absurd. 

Now my second grader is watching Boomerang Zoo on TV most mornings, so I caught an old episode of HH. Huck is the Purpil Pumpernickel. He could not spell worth a darn, the King said. Huck would rob from the rich, mostly the government, and give to the people, my kind of guy! Huck gave a speech like he was a politician running for office:

Huck:    I will build roads. 

Crowd: Yeah

Huck:    I will have free schools.

Crowd: Yeah! 

Huck:    I will have old age pensions.

Crowd: Yeah!!

Huck:    Of course we will have taxes.

Crowd: Boo!!!!!!

As the preacher said in Ecclesiastes 1: 

⁹ What has been will be again, 
   what has been done will be done again; 
   there is nothing new under the sun. 
¹⁰ Is there anything of which one can say, 
   “Look! This is something new”? 
It was here already, long ago; 
   it was here before our time.

Lord Maynard Keynes famously said that in the long run we are all dead. He was right of course, and he is dead. But we are alive and living with the consequences of his philosophy, the Huckleberry Hound Theory of Government. Even if a bar offers a “free” lunch, you will pay for it in the drinks you buy. We are like a drunk staggering to our next drink without the understanding that we are in trouble. We must think that government is magic, rainbows, and unicorns. Instead we need to understand that unless we cut the deficit, the market place will refuse to buy our bonds, and at that point the cuts will be made in an unorderly fashion. It is ironic that the writers of this cartoon understood the realities of government better than either political party will admit today. 

Guardedly Pessimistic

 

 I mentioned one of the biggest mutual funds, Pimco, and its continual pessimistic outlook on treasury debt, in my “I Love Lucy” blog post over the weekend. Pimco is upping its bet that treasuries will drop in value. 

(Reuters) - PIMCO’s Bill Gross, the manager of the world’s largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the company’s website on Monday.

While this is a modest increase in Pimco’s negative treasury bets, the article mentions that this is the plan for Pimco, to gradually ratchet up the position. 

But even so, I am still guardedly pessimistic because of the speech that Speaker Boehner gave at the club of New York:

So let me be as clear as I can be.  Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase.  And the cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions.  They should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future.  And with the exception of tax hikes — which will destroy jobs — everything is on the table.  That includes honest conversations about how best to preserve Medicare, because we all know, with millions of Baby Boomers beginning to retire, the status quo is unsustainable.  

Boehner understands the seriousness of the problem. But the math will force taxes up eventually.  He is wrong about that. When you realize that to balance the budget with cuts alone means a cut of 42%, you see the need for tax increases. I do not see Social Security being cut that much, and every time you exempt a part of the budget from cuts the result is that the cut must be more severe elsewhere. The reductions in spending increases that Ryan proposed to Medicare were not well received. 

Eric Anderson, in his blog “Universe of Lies,” drew an analogy of being in a car headed for a precipice. While all Boehner is suggesting is that we slow down as we head for the cliff, even that is progress. 

We will see over the next few months if we have politicians or statesmen. I am guardedly pessimistic.